EXHIBIT 10.21(ag)

Supplemental Agreement No. 32

to

Purchase Agreement No. 1951

between

The Boeing Company

and

Continental Airlines, Inc.

Relating to Boeing Model 737 Aircraft

 

 

THIS SUPPLEMENTAL AGREEMENT, entered into as of

December 29, 2004, by and between THE BOEING COMPANY (Boeing) and Continental
Airlines, Inc. (Buyer);

WHEREAS, the parties hereto entered into Purchase Agreement No. 1951 dated July
23, 1996 (the Agreement), as amended and supplemented, relating to Boeing
Model 737-500, 737-600, 737-700, 737-800, and 737-900 aircraft (the Aircraft);

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]

WHEREAS, Boeing and Customer have mutually agreed the

[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT].

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

1. Table of Contents, Articles, Tables and Exhibits:

1.1 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. 32.

2. Letter Agreements:

2.1 Remove and replace, in its entirety, Letter Agreement 1951-3R18, "Option
Aircraft - Model 737-824 Aircraft", with the revised Letter Agreement 1951-3R19
attached hereto,

CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT].

2.2 Remove and replace, in its entirety, Letter Agreement 1951-12R6, "Option
Aircraft - Model 737-924 Aircraft", with the revised Letter Agreement 1951-12R7
attached hereto,

CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT].

3. Distribution of Fund:

3.1 Upon execution of this Supplemental Agreement 32 and purchase agreement
2484, Boeing will

[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT].

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

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

 

THE BOEING COMPANY Continental Airlines, Inc.

 

 

 

By: /S/Michael S. Anderson By: /S/Jeffrey J. Misner

Its: Attorney-In-Fact   Its: Executive Vice President and

Chief Financial Officer

TABLE OF CONTENTS

Page SA

Number Number

ARTICLES

1. Subject Matter of Sale 1-1 SA 5

2. Delivery, Title and Risk
of Loss 2-1

3. Price of Aircraft 3-1 SA 31

4. Taxes 4-1

5. Payment 5-1

6. Excusable Delay 6-1

7. Changes to the Detail
Specification 7-1 SA 5

8. Federal Aviation Requirements and
Certificates and Export License 8-1 SA 5

9. Representatives, Inspection,
Flights and Test Data 9-1

10. Assignment, Resale or Lease 10-1

11. Termination for Certain Events 11-1

 12. Product Assurance; Disclaimer and

Release; Exclusion of Liabilities;

Customer Support; Indemnification

And Insurance 12-1

13. Buyer Furnished Equipment and
Spare Parts 13-1

14. Contractual Notices and Requests 14-1 SA 17

15. Miscellaneous 15-1

 

TABLE OF CONTENTS

Page SA

Number Number

TABLES

1. Aircraft Deliveries and
Descriptions - 737-500 T-1 SA 3

Aircraft Deliveries and
Descriptions - 737-700 T-2 SA 31

Aircraft Deliveries and
Descriptions - 737-800 T-3 SA 31

Aircraft Deliveries and

Descriptions - 737-800 T-4 SA 4

Aircraft Deliveries and
Descriptions - 737-900 T-5 SA 31

EXHIBITS

A-1 Aircraft Configuration - Model 737-724

(Aircraft delivering through July 2004) SA 26

A-2 Aircraft Configuration - Model 737-824

(Aircraft delivering through July 2004) SA 26

A-3 Aircraft Configuration - Model 737-624 SA 1

A-4 Aircraft Configuration - Model 737-524 SA 3

A-5 Aircraft Configuration - Model 737-924

(Aircraft delivering through July 2004) SA 26

A-6 Aircraft Configuration - Model 737-724

(Aircraft delivering in or after

August 2004) SA 31

A-7 Aircraft Configuration - Model 737-824

(Aircraft delivering in or after

August 2004) SA 31

A-8 Aircraft Configuration - Model 737-924

(Aircraft delivering in or after

August 2004) SA 31

B Product Assurance Document SA 1

TABLE OF CONTENTS

SA

Number

EXHIBITS (continued)

C Customer Support Document - Code Two -
Major Model Differences SA 1

C1 Customer Support Document - Code Three -

Minor Model Differences SA 1

D Aircraft Price Adjustments - New
Generation Aircraft (1995 Base Price -

Aircraft delivering through July 2004) SA 1

D1 Airframe and Engine Price Adjustments -

Current Generation Aircraft SA 1

D2 Aircraft Price Adjustments - New
Generation Aircraft (1997 Base Price - Aircraft

delivering through July 2004) SA 5

D3 Aircraft Price Adjustments - New
Generation Aircraft (July 2003 Base Price -

Aircraft delivering in or after August 2004) SA 31

E Buyer Furnished Equipment
Provisions Document SA 20

F Defined Terms Document SA 5

 

TABLE OF CONTENTS

SA

Number

LETTER AGREEMENTS

1951-1 Not Used

1951-2R3 Seller Purchased Equipment SA 5

1951-3R19 Option Aircraft-Model 737-824 Aircraft SA 32

1951-4R1 Waiver of Aircraft Demonstration SA 1

1951-5R2 Promotional Support - New Generation

Aircraft SA 5

1951-6 Configuration Matters

1951-7R1 Spares Initial Provisioning SA 1

1951-8R2 Escalation Sharing - New Generation
Aircraft SA 4

1951-9R15 Option Aircraft-Model 737-724 Aircraft SA 30

1951-11R1 Escalation Sharing-Current Generation
Aircraft SA 4

1951-12R7 Option Aircraft - Model 737-924 Aircraft SA 32

1951-13 Configuration Matters - Model 737-924 SA 5

1951-14 Installation of Cabin Systems Equipment SA 22

 

TABLE OF CONTENTS

SA

Number

RESTRICTED LETTER AGREEMENTS

6-1162-MMF-295 Performance Guarantees - Model

737-724 Aircraft

6-1162-MMF-296 Performance Guarantees - Model

737-824 Aircraft

6-1162-MMF-308R3 Disclosure of Confidential

Information SA 5

6-1162-MMF-309R1 [CONFIDENTIAL MATERIAL OMITTED SA 1

AND FILED SEPARATELY WITH THE

SECURITIES AND EXCHANGE COMMISSION

PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]

6-1162-MMF-311R4 [CONFIDENTIAL MATERIAL OMITTED SA 22

AND FILED SEPARATELY WITH THE

SECURITIES AND EXCHANGE COMMISSION

PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]

6-1162-MMF-312R1 Special Purchase Agreement

Provisions SA 1

6-1162-MMF-319 Special Provisions Relating to the

Rescheduled Aircraft

6-1162-MMF-378R1 Performance Guarantees - Model

737-524 Aircraft SA 3

6-1162-GOC-015R1 [CONFIDENTIAL MATERIAL OMITTED SA 31

AND FILED SEPARATELY WITH THE

SECURITIES AND EXCHANGE COMMISSION

PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]

6-1162-GOC-131R3 Special Matters SA 22

6-1162-DMH-365 Performance Guarantees - Model

737-924 Aircraft SA 5

TABLE OF CONTENTS

SA

Number

RESTRICTED LETTER AGREMEEMENTS (continued)

6-1162-DMH-624 [CONFIDENTIAL MATERIAL OMITTED SA 8

AND FILED SEPARATELY WITH THE

SECURITIES AND EXCHANGE COMMISSION

PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]

6-1162-DMH-680 Delivery Delay Resolution Program SA 9

6-1162-DMH-1020 [CONFIDENTIAL MATERIAL OMITTED SA 14

AND FILED SEPARATELY WITH THE

SECURITIES AND EXCHANGE COMMISSION

PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]

6-1162-DMH-1035 [CONFIDENTIAL MATERIAL OMITTED SA 15

AND FILED SEPARATELY WITH THE

SECURITIES AND EXCHANGE COMMISSION

PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]

6-1162-DMH-1054 [CONFIDENTIAL MATERIAL OMITTED SA 16

AND FILED SEPARATELY WITH THE

SECURITIES AND EXCHANGE COMMISSION

PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]

6-1162-CHL-048 Rescheduled Aircraft Agreement SA 26

6-1162-CHL-195 Restructure Agreement for Model

737NG and 757-300 Aircraft SA 30

TABLE OF CONTENTS

SUPPLEMENTAL AGREEMENTS

DATED AS OF:

Supplemental Agreement No. 1 October 10,1996

Supplemental Agreement No. 2 March 5, 1997

Supplemental Agreement No. 3 July 17, 1997

Supplemental Agreement No. 4 October 10,1997

Supplemental Agreement No. 5 May 21,1998

Supplemental Agreement No. 6 July 30,1998

Supplemental Agreement No. 7 November 12,1998

Supplemental Agreement No. 8 December 7,1998

Supplemental Agreement No. 9 February 18,1999

Supplemental Agreement No. 10 March 19,1999

Supplemental Agreement No. 11 May 14,1999

Supplemental Agreement No. 12 July 2,1999

Supplemental Agreement No. 13 October 13,1999

Supplemental Agreement No. 14 December 13,1999

Supplemental Agreement No. 15 January 13,2000

Supplemental Agreement No. 16 March 17,2000

Supplemental Agreement No. 17 May 16,2000

Supplemental Agreement No. 18 September 11,2000

Supplemental Agreement No. 19 October 31,2000

Supplemental Agreement No. 20 December 21,2000

Supplemental Agreement No. 21 March 30,2001

 

 

TABLE OF CONTENTS

 

 

SUPPLEMENTAL AGREEMENTS

DATED AS OF:

Supplemental Agreement No. 22 May 23, 2001

Supplemental Agreement No. 23 June 29, 2001

Supplemental Agreement No. 24 August 31, 2001

Supplemental Agreement No. 25 December 31, 2001

Supplemental Agreement No. 26 March 29, 2002

Supplemental Agreement No. 27 November 6, 2002

Supplemental Agreement No. 28 April 1, 2003

Supplemental Agreement No. 29 August 19, 2003

Supplemental Agreement No. 30 November 4, 2003

Supplemental Agreement No. 31 August 20, 2004

Supplemental Agreement No. 32 December 29, 2004

 

 

 

 

 

1951-3R19

December 29,2004

 

Continental Airlines, Inc.

1600 Smith Street

Houston, Texas 77002

 

Subject: Letter Agreement No. 1951-3R19 to Purchase Agreement No. 1951 -
Option Aircraft - Model 737-824 Aircraft

 

Ladies and Gentlemen:

This Letter Agreement amends Purchase Agreement No. 1951 dated July 23, 1996(the
Agreement) between The Boeing Company (Boeing) and Continental Airlines, Inc.
(Buyer) relating to Model 737-824 aircraft (the Aircraft). This Letter Agreement
supersedes and replaces in its entirety Letter Agreement 1951-3R18 dated
November 4, 2003.

All terms used and not defined herein shall have the same meaning as in the
Agreement.

In consideration of Buyer's purchase of the Aircraft, Boeing hereby agrees to
manufacture and sell up to

[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] additional
Model 737-824 Aircraft (the Option Aircraft) to Buyer, on the same terms and
conditions set forth in the Agreement, except as otherwise described in
Attachment A hereto, and subject to the terms and conditions set forth below.

1. Delivery.

The Option Aircraft will be delivered to Buyer during or before the months set
forth in the following schedule:

Month and Year Number of

of Delivery   Option Aircraft

[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]

Price
.

The basic price of the Option Aircraft shall be

[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]

 

3. Option Aircraft Deposit.

In consideration of Boeing's grant to Buyer of options to purchase the Option
Aircraft as set forth herein, Buyer has paid a deposit to Boeing of $

[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] for each
Option Aircraft (the Option Deposit) prior to the date of this Letter Agreement.
If Buyer exercises an option herein for an Option Aircraft, the amount of the
Option Deposit for such Option Aircraft will be credited against the first
advance payment due for such Option Aircraft pursuant to the advance payment
schedule set forth in Article 5 of the Agreement.

If Buyer does not exercise its option to purchase a particular Option Aircraft
pursuant to the terms and conditions set forth herein, Boeing shall be entitled
to retain the Option Deposit for such Option Aircraft.

 

4. Option Exercise.

To exercise its option to purchase the Option Aircraft, Buyer shall give written
notice thereof to Boeing on or before the first business day of the month in
each Option Exercise Date shown below:

Option Aircraft Option Exercise Date

[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]

5. Contract Terms.

Within thirty (30) days after Buyer exercises an option to purchase Option
Aircraft pursuant to paragraph 4 above, Boeing and Buyer will use their best
reasonable efforts to enter into a supplemental agreement amending the Agreement
to add the applicable Option Aircraft to the Agreement as a firm Aircraft (the
Option Aircraft Supplemental Agreement).

In the event the parties have not entered into such an Option Aircraft
Supplemental Agreement within the time period contemplated herein, either party
shall have the right, exercisable by written or telegraphic notice given to the
other within ten (10) days after such period, to cancel the purchase of such
Option Aircraft.

6. Cancellation of Option to Purchase.

Either Boeing or Buyer may cancel the option to purchase an Option Aircraft if
any of the following events are not accomplished by the respective dates
contemplated in this Letter Agreement, or in the Agreement, as the case may be:

(i) purchase of the Aircraft under the Agreement for any reason not attributable
to the canceling party;

(ii) payment by Buyer of the Option Deposit with respect to such Option Aircraft
pursuant to paragraph 3 herein; or

(iii) exercise of the option to purchase such Option Aircraft pursuant to the
terms hereof.

Any cancellation of an option to purchase by Boeing which is based on the
termination of the purchase of an Aircraft under the Agreement shall be on a
one-for-one basis, for each Aircraft so terminated.

Cancellation of an option to purchase provided by this letter agreement shall be
caused by either party giving written notice to the other within ten (10) days
after the respective date in question. Upon receipt of such notice, all rights
and obligations of the parties with respect to an Option Aircraft for which the
option to purchase has been cancelled shall thereupon terminate.

If an option is cancelled as provided above, Boeing shall promptly refund to
Buyer, without interest, any payments received from Buyer with respect to the
affected Option Aircraft. Boeing shall be entitled to retain the Option Deposit
unless cancellation is attributable to Boeing's fault, in which case the Option
Deposit shall also be returned to Buyer without interest.

7. Applicability.

Except as otherwise specifically provided, limited or excluded herein, all
Option Aircraft that are added to the Agreement by an Option Aircraft
Supplemental Agreement as firm Aircraft shall benefit from all the applicable
terms, conditions and provisions of the Agreement.

 

If the foregoing accurately reflects your understanding of the matters treated
herein, please so indicate by signature below.

Very truly yours,

THE BOEING COMPANY

 

 

By /S/ Michael S. Anderson 

Its     Attorney-In-Fact   

 

ACCEPTED AND AGREED TO this

Date:  December 29       , 2004

CONTINENTAL AIRLINES, INC.,

 

 

By  /S/ Jeffrey J. Misner  

Its Executive Vice President and Chief Financial Officer

 

 

Attachment

Model 737-824 Aircraft

1. Option Aircraft Description and Changes.

1.1 Aircraft Description. The Option Aircraft are described by Boeing Detail
Specification D6-38808-43 Revision D, dated October 2, 2001, as amended and
revised pursuant to the Agreement.

1.2 Changes. The Option Aircraft Detail Specification shall be revised to
include:

(1) Changes applicable to the basic Model 737-800 aircraft which are developed
by Boeing between the date of the Detail Specification and the signing of a
Supplemental Agreement for the Option Aircraft.

(2) Changes mutually agreed upon.

(3) Changes required to obtain a Standard Certificate of Airworthiness.

1.3 Effect of Changes. Changes to the Detail Specification pursuant to the
provisions of the clauses above shall include the effects of such changes upon
Option Aircraft weight, balance, design and performance.

2. Price Description.

2.1 Price Adjustments.

2.1.1 Base Price Adjustments. The Base Airplane Price (pursuant to Article 3 of
the Agreement) of the Option Aircraft will be adjusted to Boeing's and the
engine manufacturer's then-current prices as of the date of execution of the
Supplemental Agreement for the Option Aircraft.

2.1.2 Special Features. The price for Special Features incorporated in the
Option Aircraft Detail Specification will be adjusted to Boeing's then-current
prices for such features as of the date of execution of the Supplemental
Agreement for the Option Aircraft

[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT].

 

2.1.3 Escalation Adjustments. The Base Airplane and Special Features price will
be escalated according to the applicable airframe and engine manufacturer
escalation provisions contained in Exhibit D of the Agreement.

2.1.4 Price Adjustments for Changes. Boeing may adjust the Aircraft Basic Price
and the Advance Payment Base Prices for Option Aircraft for any changes mutually
agreed upon by Buyer and Boeing subsequent to the date that Buyer and Boeing
enter into the Supplemental Agreement for the Option Aircraft.

3. Advance Payments.

If Buyer exercises its right under this letter agreement to acquire an Option
Aircraft, Buyer shall pay to Boeing advance payments for such Option Aircraft
pursuant to the schedule for payment of advance payments provided in the
Agreement.

1951-12R7

December 29, 2004

 

Continental Airlines, Inc.

1600 Smith Street

Houston, TX 77002

 

Subject: Option Aircraft - Model 737-924 Aircraft

Reference: Purchase Agreement No. 1951 dated July 23, 1996 (the Agreement)
between The Boeing Company (Boeing) and Continental Airlines, Inc. (Buyer)
relating to Model 737-924 aircraft (the Aircraft)

 

 

Ladies and Gentlemen:

This Letter Agreement amends and supplements the Agreement. All terms used but
not defined in this Letter Agreement have the same meaning as in the Agreement.
This Letter Agreement supersedes and replaces in its entirety Letter Agreement
1951-12R6 dated August 20, 2004.

Boeing shall

[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
manufacture or sell to Buyer [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT] Model 737-924 aircraft (the Option Aircraft). The
Advance Payment Base Price per aircraft and advance payment schedule are listed
in the Attachment to this Letter Agreement (the Attachment). If in the future
Buyer agrees to acquire and Boeing agrees to manufacture and sell to Buyer any
additional Option Aircraft, then the following provisions shall apply.

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 737 aircraft which are developed by
Boeing between the date of the Detail Specification and the signing of the
supplemental agreement to purchase the Option Aircraft;

(ii) Changes required to obtain required regulatory certificates; and

(iii)Changes mutually agreed upon.

1.3 Effect of Changes: Changes to the Detail Specification pursuant to the
provisions of the clauses above shall include the effects of such changes upon
Option Aircraft weight, balance, design and performance.

2. Price.

2.1 The pricing elements of the Option Aircraft are listed in the Attachment.

2.2 Price Adjustments.

2.2.1 Special Features. The price for Special Features selected for the Option
Aircraft will be adjusted to Boeing's current prices as of the date of execution
of the supplemental agreement for the Option Aircraft.

2.2.2 Escalation Adjustments. The Base Airplane Price and the price of Special
Features for Option Aircraft delivering before

[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT], will be
escalated on the same basis as the Aircraft.

2.2.3 Base Price Adjustments. The Base Airplane Price of the Option Aircraft
delivering before

[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT], will be
adjusted to Boeing's then current prices as of the date of execution of the
supplemental agreement for the Option Aircraft.

 

3. Payment.

3.1 Buyer has paid a deposit to Boeing in the amount shown in the Attachment for
each Option Aircraft (the Option Deposit) prior to the date of this Letter
Agreement. If Buyer exercises an option, the Option Deposit applicable to such
aircraft will be credited against the first advance payment due for such
aircraft. If Buyer does not exercise an option,

[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT].

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.

4.1 To exercise its option to purchase the Option Aircraft, Buyer shall give
written notice thereof to Boeing on or before the first business day of the
month in each Option Exercise Date shown below:

Option Aircraft Option Exercise Date

[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]

4.2 If Boeing must make production decisions which are dependent on Buyer
exercising an option earlier than the Option Exercise Date, Boeing may
accelerate the Option Exercise Date in which case Boeing shall give Buyer prior
written notice thereof and such acceleration shall be subject to Buyer's
agreement. If Boeing and Buyer fail to agree to a revised Option Exercise Date,
either party may terminate the option

[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT].

5. Contract Terms.

Boeing and Buyer 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 a supplemental agreement to the Agreement, and
other terms and conditions as may be agreed upon. In the event the parties have
not entered into a supplemental 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].

Applicability
.

Except as otherwise specifically provided, limited or excluded herein, all
Option Aircraft that are added to the Agreement by an Option Aircraft
supplemental agreement as firm Aircraft shall benefit from all the applicable
terms, conditions and provisions of the Agreement.

Very truly yours,

THE BOEING COMPANY

 

 

By /S/ Michael S. Anderson             

Its           Attorney-In-Fact           

 

ACCEPTED AND AGREED TO this

Date:       December 29, 2004

CONTINENTAL AIRLINES, INC.

 

 

By /S/ Jeffrey J. Misner                 

Its Executive Vice President and Chief Financial Officer

 

Attachment

ATTACHMENT TO

LETTER AGREEMENT 1951-12R7 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]