Supplemental Agreement No. 5
to
Purchase Agreement No. 1485
between
The Boeing Company
and
UNITED AIR LINES, INC.
Relating to Boeing Model 757-222 Aircraft
THIS SUPPLEMENTAL AGREEMENT, entered into as of the
13th day of April 1995, by and between THE BOEING COMPANY, a
Delaware corporation (hereinafter called Boeing), and UNITED
AIR LINES, INC., a Delaware corporation with its principal
office in Elk Grove Township, Illinois (hereinafter called
Buyer);
W I T N E S S E T H:
WHEREAS, the parties hereto entered into Purchase
Agreement 1485 dated as of October 25, 1988, relating to
Boeing Model 757-222 aircraft, which agreement, as amended,
together with all exhibits and specifications attached
thereto and made a part thereof, is hereinafter called the
'Purchase Agreement,' (all capitalized terms used herein,
unless otherwise specifically defined herein, shall have the
meaning given to them in the Purchase Agreement) and
WHEREAS, Buyer [*CONFIDENTIAL MATERIAL OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] four (4)
Model 757 Aircraft contained in this Purchase Agreement in
lieu of [*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 hereto agree as
follows:
1. ARTICLE 1, Subject Matter of Sale, is hereby deleted
in its entirety and replaced with a new Article 1 as
follows:
'ARTICLE 1. Subject Matter of Sale, Boeing shall
sell and deliver to Buyer, and Buyer shall purchase from
Boeing, ninety-four (94) Boeing Model 757-222 aircraft.
Such aircraft are referred to individually and collectively
as the 'Block A Aircraft', 'Block B Aircraft', 'Block C
Aircraft', 'Block D Aircraft', 'Block E Aircraft', 'Block F
Aircraft (as such aircraft are allocated variously among the
separate groupings defined as Blocks A,B,C,D,E and F in
Article 2 of this Purchase Agreement (or in Letter Agreement
1485-5 hereto)), 'Aircraft' or 'AIRCRAFT'. The Block A, B,
C, D and F Aircraft will be manufactured by Boeing in
accordance with Boeing Detail Specification D6-44010-68
dated February 29, 1988 and the Block E Aircraft will be
manufactured by Boeing in accordance with Boeing Detail
Specification D6-44010-68, Rev. H, dated November 29, 1993
(as described in Exhibit A attached hereto) as they may be
modified from time to time in accordance with the terms and
conditions of Article 7 herein. Such Detail Specifications
as so modified are by this reference incorporated in this
Agreement and is hereinafter referred to as the 'Detail
Specification' or 'Detail Specifications' as applicable. In
connection with the sale and purchase of the Aircraft,
Boeing shall also deliver to Buyer other things under this
Agreement including data, documents, training and services.
2. ARTICLE 2, Delivery of Aircraft; Title and Risk of
Loss, is hereby modified by inserting between the schedules
contained in section 2.1 for the Block D Aircraft and the
Block F Aircraft the following schedule:
'Block E Aircraft
April 1996 One (1)
May 1996 One (1)
June 1996 Two (2)'
3. ARTICLE 3, Price of Aircraft, is hereby modified by
inserting after Article 3.1 (i)(c) and immediately before
3.1 (ii) the following:
'(d) [*CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT],'
4. ARTICLE 5, Payment, is hereby modified by inserting
between the schedules contained in Article 5.1 for the Block
D Aircraft and the Block F Aircraft the following schedule:
'Block E Aircraft
April 1996 [*CONF.TREAT.REQ.]
May 1996
June 1996
June 1996 [*CONF.TREAT.REQ.]'
5. In order to separate the Blocks A, B, C, D and F
configuration from the Block E configuration, Exhibit A to
the Purchase Agreement is hereby deleted and replaced with
two new Exhibits A-1 and A-2, which are Attachments No. 1
and 2 hereto, and incorporated herein by this reference.
6. In order to separate the Blocks A, B, C, and D Engine
Price Adjustment provisions [*CONFIDENTIAL MATERIAL OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
from the Block E Engine Price Adjustment provisions
[*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT], page 6 of Exhibit D is hereby
deleted in its entirety and replaced by the new language
contained in Attachment No. 3 hereto, which contains a new
page 6. Such new page 6 is the same as the previous page 6
except that the new page 6 now includes references to Block
A,B,C,D, and F. Exhibit D is also hereby modified by adding
to the end of such Exhibit D the Engine Price Adjustment
provisions for the Block E Aircraft which are contained in
Attachment 4 hereto. Such Attachments No. 3 and 4 are
incorporated herein by this reference.
7. Boeing and Buyer agree that for purposes of Paragraph
1.2 of Letter Agreement No. 6-1162-TML-388, the four 757
Aircraft which are the subject of this Supplemental
Agreement [*CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT].
8. The four 757 Aircraft which are the subject of this
Supplemental Agreement are
[*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT]
Such deposit will be applied to the advance payments
owed Boeing for the 757 Aircraft which are the subject of
this Supplemental Agreement.
9. Paragraph 3.3 of Letter Agreement No. 6-1162-TML-388
provides that the
[*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT]
10. Buyer agrees that the invoice for each of the four
(4) 757 Aircraft which are the subject of this Supplemental
Agreement will contain a [*CONFIDENTIAL MATERIAL OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] pursuant
to paragraph No. 13 of Letter Agreement No. 6-1162-TML-1205.
11. Boeing and Buyer agree that the provisions of
paragraph 4, Adjustment Credits, to Letter Agreement No. 6-
1162-TML-388[*CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] which are
the subject of this Supplemental Agreement.
12. Boeing agrees to [*CONFIDENTIAL MATERIAL OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] pursuant
to paragraph 7 of Letter Agreement No. 6-1162-TML-1205 in
the[*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT].
13. It is hereby agreed that this Supplemental Agreement
shall be treated as privileged and confidential under the
terms of Letter Agreement 6-162-GKW-132.
14. The Purchase Agreement shall be deemed to be
supplemented to the extent herein provided and as so
supplemented shall continue in full force and effect.
EXECUTED IN DUPLICATE as of the day and year first above
written.
THE BOEING COMPANY UNITED AIR LINES, INC.
By: /s/ M. Monica Fix By: /s/ Douglas A. Hacker
Its: Attorney-In-Fact Its: Senior Vice President- Finance
Attachment No. 1
Supplemental Agreement No. 5
Purchase Agreement No. 1485
EXHIBIT A-1
to
PURCHASE AGREEMENT NO. 1485
between
THE BOEING COMPANY
and
UNITED AIR LINES, INC.
BLOCKS A, B, C, D and F AIRCRAFT CONFIGURATION
The Detail Specification, referred to in Article 1 of
the Purchase Agreement for the Blocks A, B, C, D and F
Aircraft, is Boeing Detail Specification D6-44010-68 dated
even date herewith. Such Detail Specification shall be
comprised of Boeing Detail Specification D6-44010, dated
February 29, 1988, as amended to incorporate the changes set
forth in the Change Requests listed below, including the
effects of such changes on Manufacturer's Empty Weight (MEW)
and Operating Empty Weight (OEW). Such Change Requests are
set forth in Boeing Document D6-48159. As soon as
practicable, Boeing shall furnish to Buyer copies of the
Detail Specification, which copies shall reflect such
changes. It is understood and agreed that the basic price
of the Blocks A, B, C, D and F Aircraft, as set forth in
Article 3 of this Agreement, reflects and includes all
applicable price effects of such changes.
Attachment No. 2
Supplemental Agreement No. 5
Purchase Agreement No. 1485
EXHIBIT A-2
to
PURCHASE AGREEMENT NO. 1485
between
THE BOEING COMPANY
and
UNITED AIR LINES, INC.
BLOCK E AIRCRAFT CONFIGURATION
The Detail Specification, referred to in Article 1 of
the Purchase Agreement for the Block E Aircraft, is Boeing
Detail Specification D6-44010-68, Rev. H, dated November 29,
1993, as defined for airplanes NE091 through NE094 and as
revised to include Pratt & Whitney (PW PW2037 engines and
which includes a Maximum Takeoff Gross Weight of 230,000
pounds.
ENGINE PRICE ADJUSTMENT - PRATT & WHITNEY
BLOCKS A, B, C, D and F AIRCRAFT
(a) The basic price of each Block A, B, C, D and F
Aircraft set forth in Article 3.1 of the Purchase Agreement
includes an aggregate price for PW2037 engines and all
accessories, equipment and parts therefor provided by the
engine manufacturer (collectively in this Exhibit D called
'Engines') of[*CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]. The
adjustment in Engine price applicable to each Block A, B, C,
D and F Aircraft ('Engine Price Adjustment' herein) shall be
determined at the time of each Block A, B, C, D and F
Aircraft (hereinafter 'Aircraft') delivery in accordance
with the following formula:
Pa = (P + F) (AA + BB + CC) - P
(b) The following definitions shall apply herein:
Pa = Engine Price Adjustment
P = Aggregate Engine Base Price [*CONFIDENTIAL
MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
A REQUEST FOR CONFIDENTIAL TREATMENT]
AA = .60 x L
$13.09
BB = .30 x M
l03.9
CC = .10 x E
92.3
In determining the value of AA, BB and CC, the ratio of L
divided by $13.09, M divided by 103.9 and E divided by 92.3
shall be expressed as a decimal and rounded to the nearest
ten-thousandth but the decimal value resulting from
multiplying such ratios by the respective constants (.60,
.30 and .10) shall not be rounded. The value of the sum of
AA + BB + CC shall also be rounded to the nearest ten-
thousandth.
L = Labor Index, which is the 'Hourly Earnings of
Aircraft Engines and Engine Parts Production
Workers, SIC 3724 published by the Bureau of
Labor Statistics, U.S. Department of Labor, for
the seventh month preceding the month of scheduled
Aircraft delivery.
ENGINE PRICE ADJUSTMENT - PRATT & WHITNEY
BLOCK E AIRCRAFT
(a) The Aircraft Basic Price of each Block E Aircraft set
forth in this Agreement includes an aggregate price for
PW2037 engines and all accessories, equipment and parts
therefor provided by the engine manufacturer (collectively
in this Exhibit B called 'Engines') of[*CONFIDENTIAL
MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]. The adjustment in Engine price
applicable to each Block E Aircraft ('Engine Price
Adjustment' herein) will be determined at the time of each
Block E Aircraft (hereinafter 'Aircraft') delivery in
accordance with the following formula:
Pa = (P + F) (AA + BB + CC) - P
(b) The following definitions will apply herein:
Pa = Engine Price Adjustment
P = Aggregate Engine Base Price as set
forth in paragraph (a) above.
AA = .60 x L
$17.13
BB = .30 x M
120.2
CC = .10 x E
74.7
In determining the value of AA, BB and CC, the ratio of L
divided by $17.13, M divided by 120.2 and E divided by 74.7
will be expressed as a decimal and rounded to the nearest
ten-thousandth but the decimal value resulting from
multiplying such ratios by the respective constants (.60,
.30 and .10) will not be rounded. The value of the sum of
AA + BB + CC will also be rounded to the nearest
ten-thousandth.
L = Labor Index, which is the 'Hourly
Earnings of Aircraft Engines and Engine Parts
Production Workers, SIC 3724' published by the
Bureau of Labor Statistics, U.S. Department of
Labor, for the seventh month preceding the
month of scheduled Aircraft delivery.
$17.13 = Published Labor Index (SIC 3724) for
December, 1993.
M = Material Index, which is the 'Producer
Price Index - Code 10, Metals and Metal
Products,' (Base Year 1982 = 100) published by
the Bureau of Labor Statistics, U.S.
Department of Labor, for the seventh month
preceding the month of scheduled Aircraft
delivery.
120.2 = Published Material Index (Code 10) for
December, 1993.
E = Fuel Index, which is the 'Producer
Price Index - Code 5, Fuels and Related
Products and Power' (Base Year 1982 = 100)
published for the Bureau of Labor Statistics,
U.S. Department of Labor, for the seventh
month preceding the month of scheduled
Aircraft delivery.
74.7 = Published Fuel Index (Code 5) for
December, 1993.
F = 0.005 (N)(P). Where N = the calendar
year of scheduled Engine delivery, minus 1994.
For purposes of this calculation, Engine
delivery is assumed to be 3 months prior to
the month of scheduled Aircraft delivery.
The Engine Price Adjustment will not be made if it would
result in a decrease in the aggregate Engine base price.
(c) The value of the Labor, Material and Fuel Index used
in determining the Engine Price Adjustment will be those
published by the Bureau of Labor Statistics, U.S. Department
of Labor as of a date 30 days prior to the scheduled
Aircraft delivery to Buyer. Such Index values will be
considered final and no revision to the Engine Price
Adjustment will be made after Aircraft delivery for any
subsequent changes in published Index values.
(d) If the Bureau of Labor Statistics, U. S. Department
of Labor, (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, Pratt & Whitney
Aircraft (P&WA) agrees to meet with Boeing and 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.
Appropriate revision of the Engine Price Adjustment
provisions set forth above will be made to accomplish this
result for affected Engines.
In the event the Engine Price Adjustment escalation
provisions of this Agreement are made non-enforceable or
otherwise rendered null and void by any agency of the United
States Government, P&WA agrees to meet with Boeing and
jointly agree, to the extent that they may lawfully do so,
to adjust equitably the Purchase Price of any affected
Engine(s) to reflect an allowance for increases in labor,
material and fuel costs that occurred from December, 1993 to
the seventh month preceding the month of scheduled delivery
of the applicable Aircraft.
NOTES: Any rounding of a number, as required under this
Exhibit D 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.
Supplemental Agreement to Purchase Agreement No. 1485 - The Boeing Co. and United Air Lines Inc.
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