EXHIBIT 10.28
PURCHASE AGREEMENT NUMBER 2211
between
THE BOEING COMPANY
and
CONTINENTAL AIRLINES, INC.
Relating to Boeing Model 767-224ER Aircraft
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
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
TABLE OF CONTENTS
LETTER AGREEMENTS Revised By:
2211-01 Option Aircraft
2211-02 Demonstration Flights
2211-03 Spares Initial Provisioning
2211-04 Flight Crew Training Spares
Parts Support
2211-05 Escalation Sharing
TABLE OF CONTENTS
CONFIDENTIAL LETTER AGREEMENTS Revised By:
6-1162-JMG-0089 Performance Guarantees
6-1162-JMG-0090 Promotion Support
6-1162-JMG-0092 Special Matters
Purchase Agreement No. 2211
between
The Boeing Company
and
Continental Airlines, Inc.
______________________________
This Purchase Agreement No. 2211 dated as of
November 16, 1998 between The Boeing Company (Boeing) and
Continental Airlines, Inc. (Customer) relating to the purchase and
sale of Model 767-224ER aircraft. The terms and conditions of the
Aircraft General Terms Agreement dated as of October 10, 1997
between the parties, identified as AGTA-CAL (AGTA), are hereby
incorporated by reference into this Purchase Agreement.
Article 1. Quantity, Model and Description.
The aircraft to be delivered to Customer will be
designated as Model 767-224ER 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 Aircraft will be delivered to Customer in
accordance with the scheduled months of delivery 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 mutually agreed upon price
adjustments and the Escalation Adjustment.
3.2 Advance Payment Base Prices. The Advance
Payment Base Prices for the Aircraft are listed in Table 1 and were
calculated utilizing the latest escalation factors available to
Boeing on the date of this Purchase Agreement projected to the
month of scheduled delivery.
3.3 Boeing has not yet established the Aircraft
Basic Price for Aircraft scheduled to be delivered after December
31, 2004. The prices listed in Table 1 for such Aircraft are only
to provide Customer with an estimate of the applicable Advance
Payment Base Prices. Accordingly, the Aircraft Basic Price for
such Aircraft will be the sum of the Airframe Price, Optional
Features Prices and the Engine Price first published by Boeing for
the same model of aircraft and engines to be delivered after
December 31, 2004.
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 amounts and payment dates for advance
payments to be made by Customer are set forth in the attached Table
1. Advance payments for each aircraft are due on the first
business day of the months listed in the attached Table 1.
4.3 For any Aircraft whose scheduled month of
delivery is less than 24 months 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 Table 1.
4.4 The Aircraft Price is the total amount Customer
will pay to Boeing at the time of delivery of each Aircraft. Such
Aircraft Price will be calculated at time of delivery using then
available escalation factors to calculate the Escalation
Adjustment. The invoice amount for an Aircraft will show the
Aircraft Price appropriately adjusted to account for previously
received applicable advance payments.
Article 5. Miscellaneous.
5.1 Buyer Furnished Equipment Variables.
Supplemental Exhibit BFE1, which is part of this Purchase
Agreement, contains vendor selection dates, on dock dates and other
variables applicable to the Aircraft.
5.2 Customer Support Variables. Supplemental
Exhibit CS1, which is part of this Purchase Agreement, contains
the variable information applicable to information, training
services and other things furnished by Boeing in support of the
Aircraft.
5.3 Engine Escalation Variables. Supplemental
Exhibit EE1 contains the applicable engine escalation formula, the
engine warranty and the engine patent indemnity for the Aircraft.
5.4 Service Life Policy Component Variables.
Supplemental Exhibit SLP1, which is part of this Purchase
Agreement, lists the airframe and landing gear components covered
by the Service Life Policy for the Aircraft.
5.5 Negotiated Agreement; Entire Agreement. This
Purchase Agreement, including the provisions of Article 8.2 of the
AGTA relating to insurance, and Article 11 of Part 2 of Exhibit C
of the AGTA relating to DISCLAIMER AND RELEASE and EXCLUSION OF
CONSEQUENTIAL AND OTHER DAMAGES, 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, including the AGTA, contains the entire
agreement between the parties and supersedes all previous
proposals, understandings, commitments or representations
whatsoever, oral or written, with respect to the subject matter
hereof, and may be changed only in writing signed by authorized
representatives of the parties.
CONTINENTAL AIRLINES, INC. THE BOEING COMPANY
By /s/ Brian Davis By /s/ J.A. McGarvey
Its Vice President Its Attorney-in-Fact
Table 1 to
Purchase Agreement No. 2211
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]
AIRCRAFT CONFIGURATION
between
THE BOEING COMPANY
and
CONTINENTAL AIRLINES, INC.
Exhibit A to Purchase Agreement Number 2211
AIRCRAFT CONFIGURATION
Dated 11/16/98
relating to
BOEING MODEL 767-224ER AIRCRAFT
The Detail Specification is Boeing Detail Specification
D019T001CAL62E1 dated as of even date herewith. Such Detail
Specification will be comprised of Boeing Configuration
Specification D019T001, revision A, dated June 6, 1997 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 D019TCR1CAL62E-1. 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.
Exhibit A to
Purchase Agreement No. 2211
Page 2
The configuration for Customer's 767-224ER will be developed by
July 1, 1999. For purposes of calculating the Advance Payment Base
Prices listed in Table 1, an estimated amount of [CONFIDENTIAL
MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT] has been assumed for Optional Features. The
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT] includes [CONFIDENTIAL MATERIAL OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] as the price to
install the [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] as the price to
increase the Maximum Takeoff Gross Weight from 345,000 to 395,000
pounds.
AIRCRAFT DELIVERY REQUIREMENTS AND RESPONSIBILITIES
between
THE BOEING COMPANY
and
CONTINENTAL AIRLINES, INC.
Exhibit B to Purchase Agreement Number 2211
AIRCRAFT DELIVERY REQUIREMENTS AND RESPONSIBILITIES
relating to
BOEING MODEL 767-224ER 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. Failure
to obtain such completion deadlines shall not be deemed a breach of
this Purchase Agreement or reduce or amend the parties' obligations
hereunder.
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 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 and address where cargo
is to be shipped after flyaway;
(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 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
767 [CONFIDENTIAL MATERIAL OMITTED
AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COM-
MISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT]
4.5 Flight Crew and Passenger Consumables.
Boeing will provide 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. 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 Bill of Sale, indicating
transfer of title to the Aircraft from Boeing or Boeing's sales
subsidiary, to Customer.
4.7 Delegation of Authority. If specifically
requested in advance by Customer, Boeing will 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. If necessary,
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.
BUYER FURNISHED EQUIPMENT VARIABLES
between
THE BOEING COMPANY
and
CONTINENTAL AIRLINES, INC.
Supplemental Exhibit BFE1 to Purchase Agreement Number 2211
BUYER FURNISHED EQUIPMENT VARIABLES
relating to
BOEING MODEL 767-224ER AIRCRAFT
This Supplemental Exhibit BFE1 contains vendor selection dates, on-
dock dates and other variables applicable to the Aircraft.
1. Supplier Selection.
Customer will select and notify Boeing of the suppliers of
the galley system and inserts, the passenger seats, and the
overhead and audio systems by a date to be mutually agreed to by
the parties during the 767-224 configuration discussions to be held
in the first half of 1999.
2. On-dock Dates
On or before a date to be mutually agreed to by the parties
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.
CUSTOMER SUPPORT VARIABLES
between
THE BOEING COMPANY
and
CONTINENTAL AIRLINES, INC.
Supplemental Exhibit CS1 to Purchase Agreement Number 2211
CUSTOMER SUPPORT VARIABLES
relating to
BOEING MODEL 767-224ER AIRCRAFT
By the time the first Aircraft delivers, Customer will operate a
767-400ER aircraft. Upon Customer's request, Boeing will develop
and schedule a customized Customer Support Program to be furnished
in support of the Aircraft. The customized program will be based
upon and equivalent to the entitlements summarized below.
1. Maintenance Training.
1.1 Maintenance Training Minor Model Differences Course,
if requested, covering operational, structural or
systems differences between Customer's newly-purchased
Aircraft and an aircraft of the same model then
operated by Customer; 1 class of 15 students;
1.2 Training materials, if applicable, will be provided to
each student. In addition, one set of training
materials as used in Boeing's training program,
including visual aids, text and graphics will be
provided for use in Customer's own training program.
2. Flight Training.
Boeing will provide, if requested, one classroom course to
acquaint up to 15 students with operational, systems and
performance differences between Customer's newly-purchased
Aircraft and an aircraft of the same model then operated by
Customer.
Any training materials used in Flight Training, if required,
will be provided for use in Customer's own training program.
3. Planning Assistance.
3.1 Maintenance and Ground Operations.
Upon request, Boeing will provide planning assistance
regarding Minor Model Differences requirements for
facilities, tools and equipment.
3.2 Spares.
Boeing will revise, as applicable, the customized
Recommended Spares Parts List (RSPL) and Illustrated
Parts Catalog (IPC).
4. Technical Data and Documents.
Boeing will revise, as applicable, technical data and
documents provided with previously delivered aircraft.
ENGINE ESCALATION,
ENGINE WARRANTY AND PATENT INDEMNITY
between
THE BOEING COMPANY
and
CONTINENTAL AIRLINES, INC.
Supplemental Exhibit EE1 to Purchase Agreement Number 2211
ENGINE ESCALATION,
ENGINE WARRANTY AND PATENT INDEMNITY
relating to
BOEING MODEL 767-224ER 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 CF6-
80C2 engines and all accessories, equipment and parts provided by
the engine manufacturer. 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:
Pe = (Pb x CPI ) - Pb
CPIb where CPIb is the Base Year Index
as set forth in Table 1 of the
Purchase Agreement
(b) The following definitions will apply herein:
Pe = Engine Price Adjustment
Pb = Engine Base Price (per Aircraft), as set forth in
Table 1 of the Purchase Agreement.
CPI is the Composite Price Index, a value determined using
the Bureau of Labor Statistics, U.S. Department of Labor
actual data in accordance with the formula below. The Index
values utilized in the formula will be the numbers shown in
the actual data for the ninth month prior to the month of
scheduled Aircraft delivery or the ninth month prior to the
Base Year Dollars month set forth in Table 1.
CPI = L +C + M + E
L = The Labor Index will be equal to the quotient
of the value associated with the Aircraft
Delivery Month divided by the value associated
with the Base Year Dollar month in "Hourly
Earnings of Aircraft Engines and Engine Parts
Production Workers" SIC 3724, multiplied by
100 and then by 55%.
C = The Industrial Commodities Index will be equal
to 10% of the Producer Price Index for "all
commodities other than Farm and Foods," Code
3-15 associated with the scheduled Aircraft
delivery month.
M = The Metals and Metal Products Index will be
equal to 25% of the Producer Price Index for
"Metals and Metal Products," Code 10
associated with the scheduled Aircraft
delivery month.
E = The Fuel Index will be equal to 10% of the
Producer Price Index for "Fuel and Related
Products and Power," Code 5 associated with
the scheduled Aircraft delivery month.
The Engine Price Adjustment will not be made if it would result in
a decrease in the Engine Base Price.
(c) The values of the Average Hourly Earnings and Producer Price
Indices used will be those published as of a date 30 days prior to
the scheduled Aircraft delivery to Customer. 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.
(d) 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, or if the U.S. Department of
Labor, Bureau of Labor Statistics (i) substantially revises the
methodology (in contrast to benchmark adjustments or other
corrections of previously published data) or (ii) discontinues
publication of any of the data referred to above, General Electric
Company (GE) agrees to meet jointly with Boeing and Customer, (to
the extent such parties may lawfully do so,) to jointly select a
substitute for the revised or discontinued data; such substitute
data to lead in application to the same adjustment result, insofar
as possible, as would have been achieved by continuing the use of
the original data as it may have fluctuated had it not been revised
or discontinued. If such Engine price escalation provisions,
methodology or data publication are subsequently reinstated, Boeing
will make adjustments consistent with the agreements defined in
this Supplemental Exhibit EE1.
NOTE: The factor (CPI divided by the base year index) by which the
Engine Base 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 Exhibit EE1
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; subject,
however, to Customer's acceptance of the conditions set forth
herein. Accordingly, Boeing hereby extends to Customer and Customer
hereby accepts the provisions of GE's Warranty and Product Support
Plan hereinafter set forth, and such Warranty and Product Support
Plan shall apply to all CF6 turbofan engines including all Modules
and Parts thereof (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 covering the Engines, then the terms of that
Agreement 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 such
CF6 turbofan engines and Customer hereby waives, releases and
renounces all its rights in all such claims, obligations and
liabilities except for the provisions in paragraphs 2.1 (i) and 2.1
(iv) of Part 2 to Exhibit C to the AGTA.
2.1. Title. GE warrants that at the date of delivery, GE
has legal title to and good and lawful right to sell its CF6
engine products and furthermore warrants that such title is
free and clear of all claims, liens and encumbrances of any
nature whatsoever.
2.2. Patents.
2.2.1. GE will handle all claims and defend any suit
or proceeding brought against Customer insofar as
based on a claim that any product or part furnished
under this Purchase Agreement constitutes an
infringement of any patent of the United States, and
will pay all damages and costs awarded therein against
Customer. This paragraph will not apply to any
product or any part manufactured to Customer's design
or to the aircraft manufacturer's design. As to such
product or part, GE assumes no liability for patent
infringement.
2.2.2. GE's liability hereunder is conditioned upon
Customer promptly notifying GE in writing and giving
GE authority, information and assistance (at GE's
expense) for the defense of any suit. In case said
equipment or part is held in such suit to constitute
infringement and the use of said equipment or part is
enjoined, GE shall expeditiously, at its own expense
and at its option, either (1) procure for Customer the
rights to continue using said product or part; (2)
replace the same with satisfactory and noninfringing
product or part; or (3) modify the same so it becomes
satisfactory and noninfringing. The foregoing shall
constitute the sole remedy of Customer and the sole
liability of GE for patent infringement.
2.2.3. The above provisions also apply to products
which are the same as those covered by this Purchase
Agreement and are delivered to Customer as part of the
installed equipment on CF6 powered Aircraft.
2.3. Initial Warranty. GE warrants that CF6 engine
products will conform to GE's applicable specifications and
will be free from defects in material and workmanship prior
to Customer's initial use of such products. The provisions
of the GE CF6 Product Support Plan shall apply.
2.4. Product Support Plan. GE warrants and extends to
Customer the provisions of GE's CF6 Product Support Plan in
effect on the date of the execution of this Purchase
Agreement.
2.5. Warranty Pass On. GE will, upon the written request
of Customer, extend Warranty coverage to Engines, Modules and
Parts sold by Customer to another operator to the extent
only, however, that such coverage exists at the time of such
sale and subject to the provisions of the Warranty.
2.6. Limitations. THE PROVISIONS SET FORTH HEREIN ARE
EXCLUSIVE AND ARE IN LIEU OF ALL OTHER WARRANTIES WHETHER
WRITTEN, ORAL OR IMPLIED. THERE ARE NO IMPLIED WARRANTIES OF
FITNESS OR MERCHANTABILITY. SAID PROVISIONS SET FORTH THE
MAXIMUM LIABILITY OF GE WITH RESPECT TO CLAIMS OF ANY KIND,
INCLUDING NEGLIGENCE, ARISING OUT OF MANUFACTURE, SALE,
POSSESSION, USE OR HANDLING OF THE PRODUCTS OR PARTS THEREOF
OR THEREFOR, AND IN NO EVENT SHALL GE'S LIABILITY TO CUSTOMER
EXCEED THE PURCHASE PRICE OF THE PRODUCT GIVING RISE TO
CUSTOMER'S CLAIM OR INCLUDE INCIDENTAL OR CONSEQUENTIAL
DAMAGES.
SERVICE LIFE POLICY COMPONENTS
between
THE BOEING COMPANY
and
CONTINENTAL AIRLINES, INC.
Supplemental Exhibit SLP1 to Purchase Agreement Number 2211
COVERED SERVICE LIFE COMPONENTS
relating to
BOEING MODEL 767 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. 2211.
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) Main landing gear support structure.
(f) Wing center section lower beams, spanwise beams and
floor beams, but not the seat tracks attached to the
beams.
(g) Wing-to-body structural attachments.
(h) Engine strut support fittings attached directly to
wing primary structure.
(i) 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.
(j) Leading edge device and trailing edge flap support
system.
(k) 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. Sills 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 including
splices.
(b) Front, rear and auxiliary spar chords, webs and
stiffeners, and attachment fittings between vertical
stabilizer and body.
(c) Inspar ribs.
(d) Support structure in the vertical stabilizer for
rudder hinges, reaction links and actuators.
(e) Rudder internal, fixed attachment and actuator support
structure.
(f) Rudder hinges and supporting ribs, excluding bearings.
4. Horizontal Stabilizer.
(a) External skins between front and rear spars.
(b) Front, rear and auxiliary spar chords, webs and
stiffeners.
(c) Inspar ribs.
(d) Stabilizer center section and fittings splicing to
outboard stabilizer including 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.
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 Pratt
& 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) Retraction Links.
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.
(h) Retraction Links.
NOTE: The Service Life Policy does not cover any bearings, bolts,
bushings, clamps, brackets, actuating mechanisms or latching
mechanisms used in or on the SLP Components.
November 16, 1998
2211-01
Continental Airlines, Inc.
1600 Smith
Houston, TX 77002
Subject: Option Aircraft
Reference: Purchase Agreement 2211 (the Purchase Agreement)
between The Boeing Company (Boeing) and Continental
Airlines, Inc. (Customer) relating to Model 767-224ER
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.
Boeing agrees to manufacture and sell to Customer additional Model
767-224ER 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 767
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 Features
Prices selected 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, 2005, will be escalated on the same basis as the Aircraft,
and will be adjusted to Boeing's then-current escalation provisions
as of the date of execution of the definitive agreement for the
Option 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,
2005, 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 767-224ER aircraft and engines for delivery in
the year 2005 and after. When prices and the pricing bases are
established for the Model 767-224ER aircraft delivering in the year
2005 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] months 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. [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
Very truly yours,
THE BOEING COMPANY
By /s/ J. A. McGarvey
Its Attorney-In-Fact
ACCEPTED AND AGREED TO this
Date: November 16, 1998
CONTINENTAL AIRLINES, INC.
By /s/ Brian Davis
Its Vice President
Attachment
Attachment to
Letter Agreement No. 2211-01
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]
November 16, 1998
2211-02
Continental Airlines, Inc.
1600 Smith
Houston, TX 77002
Subject: Demonstration Flights
Reference: Purchase Agreement No. 2211 (the Purchase Agreement)
between The Boeing Company (Boeing) and Continental
Airlines, Inc. (Customer) relating to Model 767-224ER
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
shall have the same meaning as in the Purchase Agreement.
Definition of Terms:
Correction Costs: Customer's or a third party's direct labor costs
and the cost of any material required to correct a Flight
Discrepancy where direct labor costs are equal to the warranty
labor rate in effect between the parties at the time such labor is
expended.
Flight Discrepancy: A failure or malfunction of an Aircraft, or
the accessories, equipment or parts installed on the Aircraft which
results from a defect in the Aircraft, Boeing Product, engine or
Supplier Product or a nonconformance to the Detail Specification
for the Aircraft.
The AGTA provides that each aircraft will be test flown prior to
delivery for the purpose of demonstrating the functioning of such
Aircraft and its equipment to Customer; however, Customer may elect
to waive this test flight. For each test flight waived, Boeing
agrees to provide Customer an amount of jet fuel at delivery that,
together with the standard fuel entitlement, totals [CONFIDENTIAL
MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT] U.S. gallons.
Further, Boeing agrees to reimburse Customer for any Correction
Costs incurred as a result of the discovery of a Flight Discrepancy
during the first flight of the aircraft by Customer following
delivery to the extent such Correction Costs are not covered under
a warranty provided by Boeing, the engine manufacturer or any of
Boeing's suppliers.
Should a Flight Discrepancy be detected by Customer which requires
the return of the Aircraft to Boeing's facilities at Seattle,
Washington, so that Boeing may correct such Flight Discrepancy,
Boeing and Customer agree that title to and risk of loss of such
Aircraft will remain with Customer. Any such correction by Boeing
shall be at no cost to Customer. In addition, it is agreed that
Boeing will have responsibility for the Aircraft while it is on the
ground at Boeing's facilities in Seattle, Washington, as is
chargeable by law to a bailee for mutual benefit, but Boeing shall
not be chargeable for loss of use.
To be reimbursed for Correction Costs, Customer shall submit a
written itemized statement describing any flight discrepancies and
indicating the Correction Cost incurred by Customer for each
discrepancy. This request must be submitted to Boeing's Contracts
Regional Director at Renton, Washington, within ninety (90) days
after the first flight by Customer.
Very truly yours,
THE BOEING COMPANY
By /s/ J. A. McGarvey
Its Attorney-In-Fact
ACCEPTED AND AGREED TO this
Date: November 16, 1998
CONTINENTAL AIRLINES, INC.
By /s/ Brian Davis
Its Vice President
November 16, 1998
2211-03
Continental Airlines, Inc.
1600 Smith
Houston, TX 77002
Subject: Spares Initial Provisioning
Reference: Purchase Agreement No. 2211 (the Purchase Agreement)
between The Boeing Company (Boeing) and Continental
Airlines, Inc. (Customer) relating to Model 767-224ER
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
shall have the same meaning as in the Purchase Agreement.
1. Applicability.
This Letter Agreement will apply to initial provisioning for
the Model 767-224ER 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. This instruction will
be provided in conjunction with the Initial Provisioning Meeting.
In addition, the parties will discuss spares ordering procedures
and other matters related to the provisioning for the Aircraft.
The time and location for such Initial Provisioning Meeting will be
mutually agreed upon between the parties.
3. Initial Provisioning Documentation.
3.1 Provisioning Data. Boeing will furnish Provisioning
Data to Customer on or about [CONFIDENTIAL MATERIAL OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]. 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
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT] 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 reasonably 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 reasonably 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 by [CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
A REQUEST FOR CONFIDENTIAL TREATMENT]; 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 90 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 Vendor Provisioning Items. Customer may place orders
with Boeing for Provisioning Items which are manufactured by
vendors 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 vendor Provisioning Item will be
112% of the vendor's quoted price to Boeing therefor. If Customer
elects to purchase such vendor 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 vendors 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 112% of the vendor's quoted price to Boeing
therefor. 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 105% of the engine manufacturer's
quoted price to Boeing for the engine, and 112% of the engine
manufacturer's quoted price to Boeing for the engine spare parts.
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 [CONFIDENTIAL
MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT] 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 by [CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
A REQUEST FOR CONFIDENTIAL TREATMENT]
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 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. Where appropriate, Boeing will
arrange for shipment of such Spare Parts, which are manufactured by
vendors, directly to Customer from the applicable vendor'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 is rendered obsolete or unusable due to the redesign of
the Aircraft or of any accessory, equipment or part thereof (other
than a redesign at Customer's request), Boeing will 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
Therefor. 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 Peculiar Provisioning Items.
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.
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 bits, 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 8 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 vendor (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 vendor 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.
7.3 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, but in no
case will the Boeing review be completed more than 30 days after
receipt of Customer's notification.
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. The price of each Provisioning
Item repurchased by Boeing pursuant to this Repurchase of
Provisioning Items paragraph will be an amount equal to 100% of the
original invoice price thereof. In the case of Provisioning Items
manufactured by a vendor which were purchased pursuant to
Paragraph 4, Purchase from Boeing of Spare Parts as Initial
Provisioning for the Aircraft, hereof the repurchase price will not
include Boeing's 12% handling charge. Boeing will pay the
repurchase price by issuing a credit memorandum in favor of
Customer which may be applied against amounts due Boeing for the
purchase of aircraft, Spare Parts, services or data.
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. Boeing 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 Paragraph 7,
Repurchase 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 January 1, 1999, 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 15 days 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 as initial provisioning for such
Aircraft and which are undelivered on the date Boeing receives such
written notice.
Very truly yours,
THE BOEING COMPANY
By /s/ J. A. McGarvey
Its Attorney-In-Fact
ACCEPTED AND AGREED TO this
Date: November 16, 1998
CONTINENTAL AIRLINES, INC.
By /s/ Brian Davis
Its Vice President
November 16, 1998
2211-04
Continental Airlines, Inc.
1600 Smith
Houston, TX 77002
Subject: Flight Crew Training Spare Parts Support
Reference: Purchase Agreement No. 2211 (the Purchase Agreement)
between The Boeing Company (Boeing) and Continental
Airlines, Inc. (Customer) relating to Model 767-224ER
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
shall have the same meaning as in the Purchase Agreement.
Definition of Terms:
Flight Crew Training: Flight training occurring immediately
following delivery using Boeing facilities.
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. The Standby Parts list, including part numbers, exact
quantities and on-dock dates, will be established during the spares
provisioning meeting.
Training Aircraft: The Aircraft delivered to Customer 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.
If parts other than those discussed above fail, Boeing will
attempt to provide Replacement Parts for those failed parts in
order to prevent extended down time on the Training Aircraft. If
Boeing is unable to provide Replacement Parts, Customer will be
responsible for providing those parts.
2. Disposition of Removed Parts
Boeing may with Customer consent either:
(i) repair such Removed Parts, at no charge to Customer,
and either retain such parts as Standby Parts or return the Removed
Parts to Customer, at Customer expense; or
(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. Payment for of Replacement Parts
Boeing will invoice Customer for Replacement Parts at
Boeing's standard price for such part.
4. 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.
5. 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 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, or
(iii) invoice Customer for any out-of-pocket 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.
6. 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.
7. 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 /s/ J. A. McGarvey
Its Attorney-In-Fact
ACCEPTED AND AGREED TO this
Date: November 16, 1998
CONTINENTAL AIRLINES, INC.
By /s/ Brian Davis
Its Vice President
November 16, 1998
2211-05
Continental Airlines, Inc.
1600 Smith
Houston, TX 77002
Subject: Escalation Sharing
Reference: Purchase Agreement No. 2211 (the Purchase Agreement)
between The Boeing Company (Boeing) and Continental
Airlines, Inc. (Customer) relating to Model 767-224ER
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.
1. Commitment.
Boeing agrees to share one-half of the escalation, up to a
maximum of [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT] percent, in the last half of the year 1998
according to the terms in paragraph 2 below. This applies to any
of Customer's aircraft which are scheduled to deliver after July 1,
1998. 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 AGTA between Boeing and
Customer, using actual escalation indices published for the
applicable period.
2. Escalation Credit Memo.
2.1 Calculation - Eligible Aircraft Delivering in July
1998 or later.
At the time of delivery of each Eligible Aircraft
delivering in July 1998 or later, Boeing will issue to Customer a
credit memorandum (the 1998 Credit Memorandum) which will be
applied to the Aircraft Price of such Eligible Aircraft. The 1998
Credit Memorandum is calculated as follows:
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
2.2 Eligible Aircraft Delivering 1999 or later.
For Eligible Aircraft delivering during or after the
calendar year 1998, the amount of the Credit Memorandum will be the
amount calculated pursuant to paragraph 2.1 above. This credit
memorandum amount will be escalated from December 1998 to the month
of delivery for Eligible Aircraft delivering after 1998.
3. Advance Payment Base Price.
It is agreed that the Advance Payment Base Prices for the
Eligible Aircraft set forth in the Purchase Agreement include an
estimate for the escalation sharing Credit Memorandum pursuant to
this Letter Agreement.
Very truly yours,
THE BOEING COMPANY
By /s/ J. A. McGarvey
Its Attorney-In-Fact
ACCEPTED AND AGREED TO this
Date: November 16, 1998
CONTINENTAL AIRLINES, INC.
By /s/ Brian Davis
Its Vice President
November 16, 1998
6-1162-JMG-0089
Continental Airlines, Inc.
1600 Smith
Houston, TX 77002
Subject: Aircraft Performance Guarantees
Reference: Purchase Agreement No. 2211 (the Purchase Agreement)
between The Boeing Company (Boeing) and Continental
Airlines, Inc. (Customer) relating to Model 767-
224ER 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.
Boeing agrees to provide Customer with the performance guarantees
in the Attachment hereto. These guarantees are exclusive and
expire upon delivery of the Aircraft to Customer.
Boeing and Customer understand that certain information
contained in this Letter Agreement, including any attachments
hereto, are considered by both parties to be 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.
Very truly yours,
THE BOEING COMPANY
By /s/ J. A. McGarvey
Its Attorney-In-Fact
ACCEPTED AND AGREED TO this
Date: November 16, 1998
CONTINENTAL AIRLINES, INC.
By /s/ Brian Davis
Its Vice President
Attachment to Letter Agreement
No. 6-1162-JMG-0089
CF6-80C2B4F Engines
Page 1
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
November 16, 1998
6-1162-JMG-0090
Continental Airlines, Inc.
1600 Smith
Houston, TX 77002
Subject: Promotion Support
Reference: Purchase Agreement No. 2211 (the Purchase Agreement)
between The Boeing Company (Boeing) and Continental
Airlines, Inc. (Customer) relating to Model 767-
224ER 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.
Boeing agrees to make available to Customer [CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] U.S.
Dollars) for Customer's marketing and promotion programs associated
with the introduction of the first Aircraft into service, and
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT] U.S. Dollars) for each subsequent Aircraft
delivered within two years after the delivery of the first
Aircraft. These programs may include marketing research; tourism
development; corporate identity; direct marketing; video tape, or
still photography; planning, design and production of collateral
materials; management of promotion program and advertising
campaigns.
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 [CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT].
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 /s/ J. A. McGarvey
Its Attorney-In-Fact
ACCEPTED AND AGREED TO this
Date: November 16, 1998
CONTINENTAL AIRLINES, INC.
By /s/ Brian Davis
Its Vice President
November 16, 1998
6-1162-JMG-0092
Continental Airlines, Inc.
1600 Smith
Houston, Texas 77002
Subject: Special Matters
Reference: Purchase Agreement No. 2211 (the Purchase Agreement)
between The Boeing Company (Boeing) and Continental
Airlines, Inc. (Customer) relating to Model 767-
224ER aircraft (the Aircraft)
Ladies and Gentlemen:
This Letter Agreement amends and supplements the Purchase
Agreement. All terms used and not defined in this Letter Agreement
shall have the same meaning as in the Purchase Agreement.
1. Credit Memoranda.
In consideration of Customer's purchase of Model 767-224ER
Aircraft, Boeing shall issue at the time of delivery of each
Aircraft and Option Aircraft, a credit memorandum in an amount
equal to [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]. The credit memorandum is subject to the
same airframe escalation as is used to calculate the Aircraft Price
at the time of delivery. The credit memorandum may be used by
Customer for the purchase of Boeing goods and services or applied
to the balance due at the time of Aircraft delivery.
2. [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
2.2 Option Aircraft. [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. Option Aircraft.
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
7. Aircraft Invoices.
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
8. Assignment of Credits.
Customer may not assign the credit memoranda described in
this Letter Agreement without Boeing's prior written consent
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
9. Confidential Treatment.
Boeing and Customer understand that certain information
contained in this Letter Agreement, including any attachments
hereto, are considered by both parties to be 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.
Very truly yours,
THE BOEING COMPANY
By /s/ J. A. McGarvey
Its Attorney-In-Fact
ACCEPTED AND AGREED TO this
Date: November 16, 1998
CONTINENTAL AIRLINES, INC.
By /s/ Brian Davis
Its Vice President