Supplemental Agreement No. 6
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
30th day of May, 1996, 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
[*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:
P.A. No. 1485 S6-1
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 Aircraft will be manufactured by Boeing in
accordance with Boeing Detail Specification [*CONFIDENTIAL
MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT] the Block E Aircraft will be manufactured by Boeing in
accordance with Boeing Detail Specification [*CONFIDENTIAL
MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT] and the Block F Aircraft will be manufactured by
Boeing in accordance with Boeing Detailed Specification
[*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT] (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 revising the Block F Aircraft schedule to
read:
Block F
-------
[*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
3. Article 3.1 Basic Price, is hereby modified by inserting
after Article 3.1 (i)(d) and immediately before 3.1 (ii) the
following:
[*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
P.A. No. 1485 S6-2
4. Article 3.2 Purchase Price is revised to read:
'3.2 Purchase Price. The Purchase Price of each
Aircraft shall be equal to the sum of the following items as
determined at the time of such Aircraft delivery:
(i) the basic price of such Aircraft;
(ii) the Price Adjustment Due to Economic Fluctuations
Airframe Price Adjustment as determined pursuant to Exhibit D
(Price Adjustment Due to Economic Fluctuations - Airframe and
Engine) attached hereto;
(iii) the Engine Price Adjustment - Pratt & Whitney Blocks
A, B, C and D Aircraft; Engine Price Adjustment- Pratt & Whitney Block E Aircraft; and Engine Price Adjustment -
Pratt & Whitney (1995 Base Price) Block F Aircraft as
determined pursuant to such Exhibit D; and
(iv) such price adjustments applicable to such Aircraft as
may be made pursuant to the provisions of this Agreement,
including Exhibit E (Buyer Furnished Equipment Document) or
other written agreements executed by Boeing and Buyer (the
'Purchase Price').'
4. ARTICLE 5, Payment, is hereby modified by revising the
schedule for the Block F Aircraft contained in Article 5.1 to
read:
'Block F Aircraft
------------------
[*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
5. The Block F Aircraft Configuration is set forth in Exhibit A-
2, which is Attachment No. 1 hereto, and incorporated herein by
this reference.
6. On Page D-1 of Exhibit D, the definition of 'P' is revised
to read:
'P' = Aircraft basic price (as set forth in Article 3.1 of
the Agreement) less the base price of Engines (as
defined in this Exhibit D) in the amount of:
[*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
P.A. No. 1485 S6-3
7. On Page D-3 of Exhibit D, entitled Price Adjustment Due to
Economic Fluctuations, the following 'Months to be Utilized in
Determining the Value of H & W' are added to the table following
the reference to the February 1991 Month of Scheduled Delivery:
Months of Scheduled
Aircraft Delivery as Quantity Months to be Utilized
Set Forth in Article of in Determining the
2.1 of the Agreement Aircraft Value of H & W
-------------------- -------- ---------------
[*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
Reference to the [*CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT
TO A REQUEST FOR CONFIDENTIAL TREATMENT] Months of Scheduled
Aircraft Delivery, their corresponding Quantity of Aircraft and
Months to be Utilized in Determining the Value of H & W are
deleted in their entirety.
8. In order to separate the Blocks A, B, C and D Engine Price
Adjustment Provisions (which are 1987 base year dollars) from the
Block F Engine Price Adjustment Provisions (which are 1995 base
year dollars) page 6 of Exhibit D is hereby deleted in its
entirety and replaced by the new language contained in Attachment
No. 1 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 includes
reference only to the Block A, B, C and D Aircraft. Exhibit D is
also hereby modified by adding to the end of such Exhibit D the
engine Price adjustment provisions for the Block F Aircraft which
are contained in Attachment No. 2 hereto. Such attachments No. 2
and 3 are incorporated herein by reference.
9. Buyer agrees that the invoice for each Block F Aircraft 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.
10. Boeing agrees to [*CONFIDENTIAL MATERIAL OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] for the two
(2) 757 Aircraft pursuant to paragraph 7 of Letter Agreement No.
6-1162-TML-1205 in the aggregate [*CONFIDENTIAL MATERIAL OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
[*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
P.A. No. 1485 S6-4
[*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
13. Paragraph 3.3 of Letter Agreement No. 6-1162-TML-388
provides that the advance payments paid by Buyer will be based on
the Alternate Advance Payment Base Price given below. The
calculations are based on a June 3, 1996 settlement date.
Alternate Amount Credit
Delivery APBP Owed From* Difference
-------- ---- ---- ---- ----------
[*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
See Paragraph no. 11
The difference will be refunded to Buyer in accordance with
paragraph 6.D. of Letter Agreement No. 6-1162-TML-1205.
14. It is hereby agreed that this Supplemental Agreement shall
be treated as privileged and confidential under the terms of
Letter Agreement 6-1162-GKW-132.
P.A. No. 1485 S6-5
15. 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.O. Hurt By: /s/ Douglas Hacker
------------- -----------------
Douglas A. Hacker
Its: Attorney-In-Fact Its: Senior Vice President and
Chief Financial Officer
P.A. No. 1485 S6-6
Attachment No. 1
Supplemental Agreement No. 6
Purchase Agreement No. 1485
Page 7
EXHIBIT A-3
to
PURCHASE AGREEMENT NO. 1485
between
THE BOEING COMPANY
and
UNITED AIR LINES, INC.
BLOCK F AIRCRAFT CONFIGURATION
------------------------------
The Detail Specification, referred to in Article 1 of the
Purchase Agreement for the Block F Aircraft, is Boeing
[*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT] Rev. J, dated January 29, 1996, and as
revised to include Pratt & Whitney [*CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
P.A. No. 1485 S6-7
Attachment No. 2
Supplemental Agreement No. 6
Exhibit D to
Purchase Agreement No. 1485
Page 6
ENGINE PRICE ADJUSTMENT - PRATT & WHITNEY
-----------------------------------------
BLOCKS A, B, C, and D AIRCRAFT
------------------------------
(a) The basic price of each Block A, B, C, and D 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, and D Aircraft ('Engine Price
Adjustment' herein) shall be determined at the time of each Block
A, B, C, and D 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
-----
103.9
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.
P.A. No. 1485 S6-8
Attachment No. 3
Supplemental Agreement No. 6
Purchase Agreement No. 1485
Page 1
ENGINE PRICE ADJUSTMENT - PRATT & WHITNEY
-----------------------------------------
(1995 BASE PRICE) BLOCK F AIRCRAFT
----------------------------------
(a) The basic price of each Block F 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 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 F Aircraft ('Engine Price Adjustment'
herein) shall be determined at the time of each Block 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 as set forth in
paragraph (a) above.
AA = .60 x L
-----
$17.80
BB = .30 x M
-----
130.6
CC = .10 x E
-----
76.6
In determining the value of AA, BB and CC, the ratio of L divided
by $17.80, M divided by 130.6 and E divided by 76.6 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.
P.A. No. 1485 S6-9
Attachment No. 3
Supplemental Agreement No. 6
Purchase Agreement No. 1485
Page 2
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.
$17.80 = Published Labor Index (SIC 3724) for December, 1994.
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.
130.6 = Published Material Index (Code 10) for December, 1994.
E = Fuel Index, which is the 'Producer Price Index
Code 5, Fuels and Related Products and Power' (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.
76.6 = Published Fuel Index (Code 5) for December, 1994.
F = 0.005 (N)(P). Where N = the calendar year of
scheduled Engine delivery, minus 1995. For purposes of
this calculation, Engine delivery is assumed to be
three (3) months prior to the month of scheduled
Aircraft delivery.
The Engine Price Adjustment shall 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 shall be those published
by the Bureau of Labor Statistics, U.S. Department of Labor as of
a date thirty (30) days prior to the scheduled Aircraft delivery
to Buyer. Such Index values shall be considered final and no
revision to the Engine Price Adjustment shall 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
P.A. No. 1485 S6-10
Attachment No. 3
Supplemental Agreement No. 6
Purchase Agreement No. 1485
Page 3
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 shall 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,
1994 to the seventh month preceding the month of scheduled
delivery of the applicable Aircraft.
NOTE: Any rounding of a number, as required under this Exhibit D
with respect to escalation of the Engine price, shall 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 shall be raised to the next
higher number.
P.A. No. 1485 S6-11
Supplemental Agreement No. 6
Purchase Agreement No. 1663
[*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
P.A. No. 1485 S6-12
Supplemental Agreement to Purchase Agreement No. 1485 - United Air Lines Inc. and The Boeing Co.
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