First Refusal Agreement - UAL Corp. and the Air Line Pilots Association International


                           FIRST REFUSAL AGREEMENT

                    This Agreement (the 'Agreement') has been made
          and entered into as of this 12th day of July, 1994 by and
          among UAL Corporation, a Delaware corporation (the
          'Company'), The Air Line Pilots Association,
          International ('ALPA'), pursuant to its authority as the
          collective bargaining representative for the crafts or
          class of pilots employed by United Airlines, Inc.
          ('United'), and The International Association of
          Machinists and Aerospace Workers ('IAM'), pursuant to its
          authority as the collective bargaining representative for
          the crafts or classes of mechanics and related employees,
          ramp and stores employees, food service employees,
          dispatchers and security officers employed by United, and
          the Salaried/Man-agement Employee Director (as defined in
          Article FIFTH, Section 1.66 of the Restated Certificate
          (as defined below)) on behalf of the salaried and
          management employees of United who are not represented by
          any collective bargaining organization (the 'SAM') (ALPA,
          IAM and the SAM, together, the 'Employee Groups').

                    WHEREAS, pursuant to the terms of and schedules
          to the Agreement and Plan of Recapitalization, dated as
          of March 25, 1994, by and among the Company, ALPA and the
          IAM (as amended, the 'Recapitalization Agreement'),
          including the terms of the restated certificate of
          incorporation of the Company to be effective as of the
          Effective Time (as defined in the Recapitalization
          Agreement) (the 'Restated Certificate'), neither (i) a
          Non-Dilutive Issuance (as defined in Article FIFTH,
          Section 3.4(b)(vii) of the Restated Certificate) nor (ii)
          the issuance of Permitted Bankruptcy Equity (as defined
          in Article FIFTH, Section 3.4(b)(vii)(B) of the Restated
          Certificate) (a 'Bankruptcy Issuance') shall constitute
          an Other Extraordinary Matter (as defined in Article
          FIFTH, Section 3.4(b) of the Restated Certificate) if,
          among other things, such issuance is subject to the right
          of first refusal provided for hereunder; and

                    WHEREAS, the parties hereto have entered into
          this Agreement in order to effectuate the terms and
          intent of the Recapitalization Agreement and the Restated
          Certificate with respect to the Company's grant of such
          right of first refusal to the Employee Groups in
          connection with such Non-Dilutive Issuance and/or such
          Bankruptcy Issuance;

                    NOW, THEREFORE, in consideration of the
          foregoing premises, the mutual covenants herein contained
          and other good and valuable consideration the receipt of
          which is hereby acknowledged, the parties hereto hereby
          agree as follows:

                    1.   Right of First Refusal.

                         A.   If, during the term of this
          Agreement, the Company proposes to issue Equity
          Securities (as defined in Article FIFTH, Section 1.37 of
          the Restated Certificate) pursuant to a transaction which
          would constitute an Other Extraordinary Matter pursuant
          to Article FIFTH, Section 3.4(b) of the Restated
          Certificate or would not constitute an Other
          Extraordinary Matter pursuant to Article FIFTH, Section
          3.4(b)(vii)(A) or (B) of the Restated Certificate (a
          'Proposed Equity Issuance'), the Company, prior to making
          such Proposed Equity Issuance, shall provide each of the
          Employee Groups with a written statement of the specific
          terms of such Proposed Equity Issuance (the 'Proposed
          Sale Notice').  Each of the Employee Groups shall then
          have 30 days to provide to the Company a binding
          commitment to purchase up to its respective Proportionate
          Percentage (as defined in subsection D below) of the
          Equity Securities proposed to be issued in such Proposed
          Equity Issuance on terms that are Equivalent (as defined
          in subsection E below) to the terms set forth in the
          Proposed Sale Notice (the 'Purchase Commitment'), and the
          Company shall not consummate the Proposed Equity Issuance
          during such 30 day period.  If the Company consummates a
          Proposed Equity Issuance within 180 days of the end of
          the 30 day notice period with respect thereto, it shall
          honor all the timely Purchase Commitments and shall
          reduce the amount of securities offered pursuant to the
          Proposed Equity Issuance by the amount of securities
          covered by such Purchase Commitments.

                         B.   In addition to and not in limitation
          of the foregoing, if one or more Employee Groups submit a
          Purchase Commitment within the 30 day period provided for
          in subsection A above and any other Employee Group either
          (i) indicates in writing during such period that it does
          not intend to submit a Purchase Commitment for all of its
          Proportionate Percentage of the Proposed Equity Issuance
          or (ii) does not submit a Purchase Commitment for all of
          its Proportionate Percentage of the Proposed Equity
          Issuance within such 30 day period, then the Company,
          prior to consummating a Proposed Equity Issuance, must
          provide each of the Employee Groups that submitted a
          Purchase Commitment for all of its Proportionate
          Percentage of the Proposed Equity Issuance with the
          opportunity to provide an additional purchase commitment
          with respect to the portion of the Proposed Equity
          Issuance that is not subject to a Purchase Commitment (an
          'Additional Purchase Commitment') within the last to
          expire of (a) 15 days after receipt of written notice
          from the Company of the opportunity to make an Additional
          Purchase Commitment and (b) the unexpired portion of the
          30 day period referred to in subsection A above which
          remains after receipt of written notice from the Company
          that any portion of the Proposed Equity Issuance is not
          subject to a Purchase Commitment from any other Employee
          Group (such longer period, the 'APC Period').  The
          Company shall not consummate the Proposed Equity Issuance
          during such APC Period and if the Company consummates a
          Proposed Equity Issuance within 180 days of the end of
          the notice period referred to in the preceding sentence,
          it shall honor all the timely Additional Purchase
          Commitments and shall reduce the amount of securities
          offered pursuant to the Proposed Equity Issuance to any
          person or entity other than the Employee Groups by the
          amount of securities covered by such Additional Purchase
          Commitments.

                         C.   Notwithstanding anything set forth in
          subsection B to the contrary, if more than one Employee
          Group submit Additional Purchase Commitments which in the
          aggregate are in excess of the securities being offered
          pursuant to the Proposed Equity Issuance, the Company
          shall accept such Additional Purchase Commitments in
          proportion to the relative proportion that such Employee
          Groups Proportionate Percentages bear to each other;
          provided, however, that in no event shall any Employee
          Group be obligated to purchase Equity Securities in
          excess of the amount set forth in its Additional Purchase
          Commitment.

                         D.   For the purposes of this Agreement,
          'Proportionate Percentage' shall mean, for each of the
          Employee Groups, the following:

                                   ALPA:     46.23%
                                   IAM:      37.13%
                                   SAM:      16.64%

                         E.   For the purpose of this Agreement,
          'Equivalent' shall mean, in connection with a Proposed
          Equity Issuance, a Purchase Commitment on substantially
          the same terms as that set forth in a Proposed Sale
          Notice.  If any Proposed Sale Notice provides for
          consideration other than cash to be paid to the Company
          (the 'Non-Cash Consideration'), a Purchase Commitment
          must provide for consideration to be paid to the Company,
          whether in cash or otherwise, with a fair market value,
          as determined by the board of directors of the Company,
          equal to the Non-Cash Consideration to be paid to the
          Company pursuant to the Proposed Sale Notice in order for
          such Purchase Commitment to be deemed Equivalent for the
          purpose of subsection A above.

                         F.   In the event that no Employee Group
          submits a Purchase Commitment within the time period
          provided for in subsection A above or the Purchase
          Commitments and Additional Purchase Commitments, if any,
          submitted are for less than all of the securities being
          offered in the Proposed Equity Issuance, the Company may
          then consummate the Proposed Equity Issuance of such
          securities not subject to Purchase Commitments or
          Additional Purchase Commitments only upon the terms set
          forth in the Proposed Sale Notice.  Such Proposed Equity
          Issuance may not be consummated unless it is consummated
          (i) within 180 days after the later of the 30 day period
          provided for in subsection A above or, if applicable, the
          APC Period provided for in subsection B above and (ii) on
          the specific terms set forth in the Proposed Sale Notice. 
          Any subsequent Proposed Equity Issuance proposed by the
          Company shall be subject to each of the provisions and
          requirements of this Section 1 as if the prior Proposed
          Equity Issuance that was not consummated for any reason
          never was proposed by the Company.

                         G.   Notwithstanding anything contained in
          this Section 1 to the contrary, the provisions of this
          Section 1 shall be inapplicable to issuances of Equity
          Securities in accordance with Article FIFTH,
          Subsection 3.4(b)(vii)(C) of the Restated Certificate.

                         H.   The Salaried/Management Employee
          Director may consult with the senior executive of United
          having responsibility for human resources concerning the
          exercise of any rights under this Agreement.  The Company
          shall assist the Salaried/Management Director in the
          exercise of such rights, including providing
          administrative and logistical support in disseminating
          Proposed Sale Notices to the Salaried/Management
          Employees and collating and processing any Purchase
          Commitments and Additional Purchase Commitments received
          from such employees and, if requested, shall similarly
          assist ALPA and the IAM.

                         I.   To the extent consistent with its
          policies and practices, United may, but shall not be
          obligated to, assist the SAM Employee Group (to the same
          extent that either of the other Employee Groups assists
          its members) in the exercise of their rights under this
          Agreement in order to enable them to consummate their
          Purchase Commitments made hereunder.

                    2.   Term.  This Agreement shall terminate and
          be of no further force or effect upon the Termination
          Date (as defined in the Restated Certificate).

                    3.   Assignments.  All right, title and
          interest in and to, and all benefits and obligations
          arising under, this Agreement may be assigned in whole or
          in part by any of the Employee Groups to any of the
          Existing Plans and/or the ESOPs (as defined in
          Article FIFTH, Sections 1.41 and 1.39 of the Restated
          Certificate, respectively) without the consent of any
          other party hereto and may not otherwise be assigned.

                    4.   Binding Effect.  The provisions of this
          Agreement shall be binding upon and inure to the benefit
          of the parties hereto and their respective successors and
          assigns.  This Agreement is being entered into for the
          benefit of the parties hereto (other than the Salaried/
          Management Director) and for the Employee Groups named
          herein.  The Salaried/Management Director is not a party
          to this Agreement in a personal capacity but only in the
          capacity of the Salaried/Management Director as the
          nominal representative of the SAM Employee Group to
          acknowledge their acceptance of the benefits of this
          Agreement.  Upon the replacement of the individual named
          herein as the Salaried/Management Director, each such
          successor to the office of Salaried/Management Director,
          rather than the individual named herein, shall be
          authorized to act hereunder as the Salaried/Management
          Director.  The parties hereto, on behalf of themselves
          and the Employee Groups that they represent, agree that
          the Salaried/Management Director, and the successor
          Salaried/Management Directors, shall not have any
          personal liability under this Agreement.

                    5.   Governing Law.  This Agreement shall be
          construed in accordance with and governed by the laws of
          the State of Delaware without regard to the conflicts of
          laws principles thereof.

                    6.   Counterparts.  This Agreement may be
          signed in any number of counterparts, each of which shall
          be an original, with the same effect as if the signature
          thereto and hereto were upon the same instrument.

                    7.   Specific Performance.  The parties hereto
          agree that if any of the provisions of this Agreement
          were not performed in accordance with their specific
          terms or were otherwise breached, irreparable damage
          would occur, no adequate remedy of law would exist and
          damages would be difficult to determine, and that the
          parties shall be entitled to specific performance of the
          terms hereof, in addition to any other remedy at law or
          equity.

                    8.   Amendments.  This Agreement may not be
          amended or modified unless such amendment or modification
          is approved in writing by each of the parties hereto.

                    9.   Entire Agreement.  This Agreement
          constitutes the entire agreement between the parties
          hereto with respect to the subject matter hereof and,
          except as otherwise contemplated hereby, supersedes all
          other prior agreements and understandings, both written
          and oral, between the parties hereto with respect to the
          subject matter hereof.


                    IN WITNESS WHEREOF, the parties hereto have
          executed this Agreement as of the date first above
          written.

                                      UAL CORPORATION

                                      By: /s/ James M. Guyette
                                         _________________________
                                      AIR LINE PILOTS ASSOCIATION,
                                         INTERNATIONAL

                                      By: /s/ Roger D. Hall   
                                          _________________________




                                      INTERNATIONAL ASSOCIATION OF
                                         MACHINISTS AND AEROSPACE
                                         WORKERS


                                      By: /s/ Ken Thiede   
                                          __________________________


                                      /s/ Joseph V. Vittoria
                                      ______________________________
                                      Joseph V. Vittoria
                                      Salaried/Management Employee
                                      Director (not personally but
                                      as representative of the
                                      Salaried/Management Employees)