Document:

FIRST AMENDMENT TO

EXHIBIT 10.17(b)

FIRST AMENDMENT TO

CONTINENTAL AIRLINES, INC.

ANNUAL EXECUTIVE BONUS PROGRAM

WHEREAS, the Continental Airlines, Inc. Annual Executive Bonus Program (the "Program") has heretofore been adopted by the Human Resources Committee (the "Committee") of the Board of Directors of Continental Airlines, Inc. (the "Company") to implement in part the Performance Award provisions of the Continental Airlines, Inc. Incentive Plan 2000; and

WHEREAS, the Committee is authorized to amend the Program; and

WHEREAS, the Committee desires to amend the Program in certain respects;

NOW, THEREFORE, the Program shall be amended as follows, effective as of November 30, 2004:

1.The first paragraph of Section 5 of the Program shall be deleted and the following shall be substituted therefor:
"The Program will be administered by the Committee, which at all times will consist of not less than two persons, each of whom is an "outside director" within the meaning of section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"). The action of a majority of the members of the Committee will be the act of the Committee.  The Committee shall, promptly upon adoption of the Program in the case of the period from April 1, 2004 to December 31, 2004, and within 90 days after the beginning of the fiscal year in the case of each fiscal year of the Company beginning on or after January 1, 2005, establish in writing the Entry ROBIC Margin, the Target ROBIC Margin, the Stretch ROBIC Margin, the Target Incentive Percentage, the Stretch Incentive Percentage and the Cash Hurdle for such fiscal year for purposes of this Program."

2.As amended hereby, the Program is specifically ratified and reaffirmed.

IN WITNESS WHEREOF, the undersigned officer of the Company acting pursuant to authority granted to him by the Committee has executed this instrument on this 30th day of November 2004.
CONTINENTAL AIRLINES, INC.

 

By: /s/ Jeffery A. Smisek
Jeffery A. Smisek

1920049v1             Executive Vice PresidentFIRST AMENDMENT TO

EXHIBIT 10.18(c)

FIRST AMENDMENT TO

CONTINENTAL AIRLINES, INC.

LONG TERM INCENTIVE AND RSU PROGRAM

WHEREAS, the Continental Airlines, Inc. Long Term Incentive and RSU Program (the "Program") has heretofore been adopted by the Human Resources Committee (the "Committee") of the Board of Directors of Continental Airlines, Inc. (the "Company") to implement in part the Performance Award provisions of the Continental Airlines, Inc. Incentive Plan 2000; and

WHEREAS, the Committee is authorized to amend the Program; and

WHEREAS, the Committee desires to amend the Program in certain respects;

NOW, THEREFORE, the Program shall be amended as follows, effective as of November 30, 2004:

1.The second paragraph of Section 3.1 of the Program shall be deleted and the following shall be substituted therefor:
"The Committee shall, promptly upon adoption of the Program in the case of all Performance Periods commencing on April 1, 2004, and within 90 days after the first day of each Performance Period commencing on or after January 1, 2005, establish in writing (for NLTIP Awards) the applicable Target EBITDAR Margin and Stretch EBITDAR Margin (such that at all times the Stretch EBITDAR Margin shall be higher than the Target EBITDAR Margin, which in turn shall be higher than the Entry EBITDAR Margin) and the Cash Hurdle for each such Performance Period, and (for RSU Awards) the applicable Target Price for each such Performance Period, in each case for purposes of this Program."

2.The first sentence of Section 4.2 of the Program shall be deleted and the following shall be substituted therefor:
"The Company shall provide an Award Notice to each Eligible Employee who becomes a Participant with respect to a Performance Period within 90 days after such Eligible Employee becomes such a Participant; provided, however, that Award Notices for the Performance Periods that begin on April 1, 2004 shall be provided on or before May 15, 2004."

3.The first sentence of Section 7.1 of the Program shall be deleted and the following shall be substituted therefor:
"Subject to the terms of this Section 7.1, the Committee may amend the Program at any time and from time to time, and the Committee may at any time terminate the Program (in its entirety or as it applies to one or more specified Subsidiaries) with respect to Performance Periods that have not commenced as of the date of such Committee action; provided, however, that, except as provided in the following sentence, the Program may not be amended in a manner that would impair the rights of any Participant with respect to any outstanding Award without the consent of such Participant.  Notwithstanding anything in the Program or an Award Notice to the contrary, if the Committee determines that the provisions of new Section 409A of the Code apply to the Program and that the terms of the Program and/or any Award Notice do not, in whole or in part, satisfy the requirements of such section, then the Committee, in its sole discretion, may unilaterally modify the Program and any such Award Notice with respect to Awards for Performance Periods beginning on or after January 1, 2005, in such manner as it deems appropriate to comply with such section and any regulations or guidance issued thereunder."

4.As amended hereby, the Program is specifically ratified and reaffirmed.

IN WITNESS WHEREOF, the undersigned officer of the Company acting pursuant to authority granted to him by the Committee has executed this instrument on this 30th day of November 2004.
CONTINENTAL AIRLINES, INC.

 

By: /s/ Jeffery A. Smisek
Jeffery A. Smisek

Executive Vice President

1920445v2Exhibit 10

Exhibit 10.19

CONTINENTAL AIRLINES, INC.

Non-Employee Director Compensation Summary

Effective February 28, 2005, members of our board of directors who are not full-time employees of Continental Airlines, Inc. receive the following compensation: 

	$24,500 per year, plus an additional $25,000 for members of the Audit Committee ($40,000 for the chairperson of the Audit Committee); 

	$1,400 ($2,100 for the chairperson) for each board and committee meeting physically attended (other than an Audit Committee meeting);

	$2,000 ($3,000 for the chairperson) for each Audit Committee meeting physically attended;

	$700 for each board meeting attended by telephone; 

	$350 for each committee meeting attended by telephone ($500 for each Audit Committee meeting attended by telephone); 

	stock options to purchase 5,000 shares of common stock at the grant date fair market value following each annual stockholders meeting and upon election to the board if they are first elected to the board other than at an annual stockholders meeting; and 

	lifetime flight benefits, comprised of space-available personal and family flight passes, a travel card permitting positive space travel by the director, the director's family and certain other individuals (which is taxable to the director, subject to the reimbursement of certain of such taxes by the company), frequent flyer cards and airport lounge cards ("Flight Benefits").

As previously reported, the non-employee members of the Board of Directors have elected to forego their annual grant of 5,000 stock options that would otherwise be awarded in connection with their re-election to the board at the Company's 2005 Annual Meeting of Shareholders to be held on June 16, 2005. 

In addition, non-employee directors who conduct Continental business in their capacities as directors on Continental's behalf at the request of the board or the Chairman of the Board are paid (i) for telephone participation in board and committee meetings as if they were physically present, if their conducting that business makes it impractical for them to attend the meeting in person, and (ii) $3,000 per day spent outside the United States while conducting that business. 

 All directors, including those who are full-time employees who serve as directors, receive reimbursement of expenses incurred in attending meetings.  Directors also receive travel privileges on some other airlines through arrangements entered into between Continental and such airlines.EXHIBIT 10

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:

1.1Remove 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:

2.1Remove 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].

2.2Remove 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:

3.1Upon 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 COMPANYContinental 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

PageSA

NumberNumber

ARTICLES

1.Subject Matter of Sale1-1SA 5

2.Delivery, Title and Risk

of Loss2-1

3.Price of Aircraft3-1SA 31

4.Taxes4-1

5.Payment5-1

6.Excusable Delay6-1

7.Changes to the Detail

Specification7-1SA 5

8.Federal Aviation Requirements and

Certificates and Export License8-1SA 5

9.Representatives, Inspection,

Flights and Test Data9-1

10.Assignment, Resale or Lease10-1

11.Termination for Certain Events11-1

	Product Assurance; Disclaimer and

Release; Exclusion of Liabilities;

Customer Support; Indemnification

And Insurance12-1

13.Buyer Furnished Equipment and

Spare Parts13-1

14.Contractual Notices and Requests14-1SA 17

15.Miscellaneous15-1

 

TABLE OF CONTENTS

PageSA

NumberNumber

TABLES

1.Aircraft Deliveries and

Descriptions - 737-500T-1SA 3

Aircraft Deliveries and

Descriptions - 737-700T-2SA 31

Aircraft Deliveries and

Descriptions - 737-800T-3SA 31

Aircraft Deliveries and

Descriptions - 737-800T-4SA 4

Aircraft Deliveries and

Descriptions - 737-900T-5SA 31

EXHIBITS

A-1Aircraft Configuration - Model 737-724 

(Aircraft delivering through July 2004)SA 26

A-2Aircraft Configuration - Model 737-824 

(Aircraft delivering through July 2004)SA 26

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

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

A-5Aircraft Configuration - Model 737-924 

(Aircraft delivering through July 2004)SA 26

A-6Aircraft Configuration - Model 737-724 

(Aircraft delivering in or after 

August 2004)SA 31

A-7Aircraft Configuration - Model 737-824

(Aircraft delivering in or after 

August 2004)SA 31

A-8Aircraft Configuration - Model 737-924

(Aircraft delivering in or after 

August 2004)SA 31

BProduct Assurance DocumentSA 1

TABLE OF CONTENTS

SA

Number
EXHIBITS (continued)

CCustomer Support Document - Code Two - 

Major Model DifferencesSA 1

C1Customer Support Document - Code Three -

Minor Model DifferencesSA 1

DAircraft Price Adjustments - New 

Generation Aircraft (1995 Base Price - 

Aircraft delivering through July 2004)SA 1

D1Airframe and Engine Price Adjustments - 

Current Generation AircraftSA 1

D2Aircraft Price Adjustments - New 

Generation Aircraft (1997 Base Price - Aircraft 

delivering through July 2004)SA 5

D3Aircraft Price Adjustments - New 

Generation Aircraft (July 2003 Base Price - 

Aircraft delivering in or after August 2004)SA 31

EBuyer Furnished Equipment

Provisions DocumentSA 20

FDefined Terms DocumentSA 5

 
TABLE OF CONTENTS

SA

Number

LETTER AGREEMENTS

1951-1Not Used

1951-2R3Seller Purchased EquipmentSA 5

1951-3R19Option Aircraft-Model 737-824 AircraftSA 32

1951-4R1Waiver of Aircraft DemonstrationSA 1

1951-5R2Promotional Support - New Generation

AircraftSA 5

1951-6Configuration Matters

1951-7R1Spares Initial ProvisioningSA 1

1951-8R2Escalation Sharing - New Generation 

AircraftSA 4

1951-9R15Option Aircraft-Model 737-724 AircraftSA 30

1951-11R1Escalation Sharing-Current Generation 

AircraftSA 4

1951-12R7Option Aircraft - Model 737-924 Aircraft SA 32

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

1951-14Installation of Cabin Systems Equipment  SA 22

 

TABLE OF CONTENTS

SA

Number

RESTRICTED LETTER AGREEMENTS

6-1162-MMF-295Performance Guarantees - Model 

737-724 Aircraft

6-1162-MMF-296Performance Guarantees - Model 

737-824 Aircraft

6-1162-MMF-308R3Disclosure of Confidential 

InformationSA 5

6-1162-MMF-309R1[CONFIDENTIAL MATERIAL OMITTEDSA 1

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

6-1162-MMF-311R4[CONFIDENTIAL MATERIAL OMITTEDSA 22

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

6-1162-MMF-312R1Special Purchase Agreement

ProvisionsSA 1

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

Rescheduled Aircraft

6-1162-MMF-378R1Performance Guarantees - Model

737-524 AircraftSA 3

6-1162-GOC-015R1[CONFIDENTIAL MATERIAL OMITTEDSA 31

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

6-1162-GOC-131R3Special MattersSA 22

6-1162-DMH-365Performance Guarantees - Model

737-924 AircraftSA 5

TABLE OF CONTENTS

SA

Number

RESTRICTED LETTER AGREMEEMENTS (continued)

6-1162-DMH-624[CONFIDENTIAL MATERIAL OMITTEDSA 8

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

6-1162-DMH-680Delivery Delay Resolution ProgramSA 9

6-1162-DMH-1020[CONFIDENTIAL MATERIAL OMITTEDSA 14

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

6-1162-DMH-1035[CONFIDENTIAL MATERIAL OMITTEDSA 15

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

6-1162-DMH-1054[CONFIDENTIAL MATERIAL OMITTEDSA 16

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

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

6-1162-CHL-195Restructure Agreement for Model

737NG and 757-300 Aircraft   SA 30

TABLE OF CONTENTS

SUPPLEMENTAL AGREEMENTSDATED AS OF:

Supplemental Agreement No. 1October 10,1996

Supplemental Agreement No. 2March 5, 1997

Supplemental Agreement No. 3July 17, 1997

Supplemental Agreement No. 4October 10,1997

Supplemental Agreement No. 5May 21,1998

Supplemental Agreement No. 6July 30,1998

Supplemental Agreement No. 7November 12,1998

Supplemental Agreement No. 8December 7,1998

Supplemental Agreement No. 9February 18,1999

Supplemental Agreement No. 10March 19,1999

Supplemental Agreement No. 11May 14,1999

Supplemental Agreement No. 12July 2,1999

Supplemental Agreement No. 13October 13,1999

Supplemental Agreement No. 14December 13,1999

Supplemental Agreement No. 15January 13,2000

Supplemental Agreement No. 16March 17,2000

Supplemental Agreement No. 17May 16,2000

Supplemental Agreement No. 18September 11,2000

Supplemental Agreement No. 19October 31,2000

Supplemental Agreement No. 20December 21,2000

Supplemental Agreement No. 21March 30,2001 

 

 

TABLE OF CONTENTS

 

 

SUPPLEMENTAL AGREEMENTSDATED AS OF:

Supplemental Agreement No. 22May 23, 2001 

Supplemental Agreement No. 23June 29, 2001 

Supplemental Agreement No. 24August 31, 2001

Supplemental Agreement No. 25December 31, 2001

Supplemental Agreement No. 26March 29, 2002

Supplemental Agreement No. 27November 6, 2002

Supplemental Agreement No. 28April 1, 2003

Supplemental Agreement No. 29August 19, 2003 

Supplemental Agreement No. 30November 4, 2003 

Supplemental Agreement No. 31August 20, 2004

Supplemental Agreement No. 32December 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 AircraftOption 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.

1.1Aircraft 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.

1.2Changes.  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.

1.3Effect 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.

2.1Price Adjustments.

2.1.1Base 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.

2.1.2Special 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].

 

2.1.3Escalation 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.

2.1.4Price 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.

1.2Changes:  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.

1.3Effect 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.

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

2.2Price Adjustments.

2.2.1Special 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.

2.2.2Escalation 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.

2.2.3Base 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.

3.1Buyer 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].

3.2Following 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.

4.1To 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 AircraftOption Exercise Date

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

4.2If 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]

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