Supplemental Agreement No. 4 to Purchase Agreement No. 1663 between The Boeing Company and UNITED AIR LINES, INC. Relating to Boeing Model 777-222 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, (hereinafter called Buyer); W I T N E S S E T H: ------------------- WHEREAS, the parties hereto entered into an agreement dated as of December 18, 1990, relating to Boeing Model 777-222 aircraft (hereinafter referred to as the 'Aircraft'), which agreement, as amended, together with all exhibits and specifications attached thereto and made a part thereof which is hereinafter called 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 to supplement the Purchase Agreement as follows: 1. Article 1, 'Subject Matter of Sale', is hereby deleted in its entirety and replaced with a new Article 1, which is Attachment No. 1 hereto. 2. Article 2, 'Delivery of Aircraft; Title and Risk of Loss', is hereby deleted in its entirety and replaced with a new Article 2 which is Attachment No. 2 hereto. 3. Article 5, 'Payment', is hereby deleted in its entirety and replaced with a new Article 5 which is Attachment No. 4 hereto. 4. The two 'B' Market 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] as such term is defined in Letter Agreement No. 6-1162-TML-1205 to nine (9) 737 Aircraft in Purchase Agreement No. 1595, [*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] will be applied to the advance payments owed Boeing for the two 'B' Market Aircraft which are the subject of this Supplemental Agreement. An adjustment for the amount owed by Buyer [*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] for each of [*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] 777 aircraft, is reflected in paragraph 6 below. 6. Paragraph 6 of Letter Agreement No. 6-1162-RCN-859 provides that the advance payments paid by Buyer will be based on the [*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] The calculations are based on a June 3, 1996 settlement date. [*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] *See Paragraph no. 5 The difference will be refunded to Buyer in accordance with paragraph 6.D. of Letter Agreement No. 6-1162-TML-1205. P.A. No. 1663 S4-2 7. In consideration of Buyer's purchase of the 777 Aircraft, which are the subject of this Supplemental Agreement, 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 [*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] 8. Buyer agrees that the invoice for each of the two (2) 'B' Market 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 13 of Letter Agreement No. 6-1162-TML-1205. 9. Buyer agrees that the credit memorandum applicable to the two (2) 'B' Market Aircraft, which are the subject of this Supplemental Agreement, and discussed in Letter Agreement 6-1162- RCN-859 will include: [*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] 10. This Supplemental Agreement, including all of the Attachments, will be treated as privileged and confidential information pursuant to the terms of Letter Agreement No. 6-1162- DLJ-832. 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 A. Hacker ------------- --------------------- Douglas A. Hacker Its: Attorney-In-Fact Its: Senior Vice President and Chief Financial Officer P.A. No. 1663 S4-3 Attachment No. 1 Supplemental Agreement No. 4 Purchase Agreement No. 1663 United Air Lines, Inc. Page 1 ARTICLE 1. Subject Matter of Sale. ---------------------- 1.1.1 'A' Market Aircraft Description'. Boeing shall sell and deliver to Buyer, and Buyer shall purchase from Boeing, sixteen (16) Boeing Model 777-222 'A' Market Aircraft. Such aircraft are referred to individually and collectively as the 'Aircraft' or 'AIRCRAFT' or 'the 'A' Market Aircraft'. The 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] (as modified and described in Exhibit A-1 attached hereto) as it may be modified from time to time in accordance with the terms and conditions of Article 7 herein. Such Detail Specification as so modified is by this reference incorporated in this Agreement and is hereinafter referred to as the 'Detail Specification' or 'the 'A' Market Detail Specification.' 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. 1.1.2 'B' Market Aircraft Description'. Boeing shall sell and deliver to Buyer, and Buyer shall purchase from Boeing, twenty (20) Boeing Model 777-222 'B' Market Aircraft. Such aircraft are referred to individually and collectively as the 'Block A 'B' Market Aircraft', 'Block B 'B' Market Aircraft', 'Aircraft' or 'AIRCRAFT' or 'the 'B' Market Aircraft'. The 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] (as modified and described in Exhibit A-2 attached hereto) as it may be modified from time to time in accordance with the terms and conditions of Article 7 herein. Such Detail Specification as so modified is by this reference incorporated in this Agreement and is hereinafter referred to as the 'Detail Specification' or 'the 'B' Market Detail Specification.' 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. 1.2 Performance Guarantees. Any performance guarantees applicable to the Aircraft shall be expressly included in this Agreement. P.A. No. 1663 S4-1 Attachment No. 2 Supplemental Agreement No. 4 Purchase Agreement No. 1663 United Air Lines, Inc. Page 2 ARTICLE 2. Delivery of Aircraft: Title and Risk of Loss. -------------------------------------------- 2.1 Time of Delivery. Each Aircraft shall be delivered to Buyer assembled and ready for flight, and Buyer shall accept delivery of such Aircraft during or, if mutually agreed, before the months set forth in the following schedule: 'Month and Year of Delivery Quantity of Aircraft ----------- -------------------- 'A' Market Aircraft ------------------ May 1995 Three (3) June 1995 Two (2) July 1995 One (1) September 1995 One (1) October 1995 One (1) November 1995 One (1) December 1995 Two (2) February 1996 One (1) April 1996 One (1) May 1996 One (1) June 1996 One (1) July 1996 One (1) 'B' Market Aircraft ------------------ Block A 'B' Market Aircraft --------------------------- [*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] P.A. No. 1663 S4-1 Attachment No. 2 Supplemental Agreement No. 4 Purchase Agreement No. 1663 United Air Lines, Inc. Page 2 Block B 'B' Market Aircraft --------------------------- [*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] If Boeing gives Buyer at least ten (10) days' advance notice of the delivery date for an Aircraft, and delivery is delayed beyond such date due to Buyer's fault or responsibility, Buyer shall promptly reimburse Boeing for all costs and expenses incurred by Boeing as a result of such delay, including but not limited to reasonable amounts for storage, insurance, taxes, preservation or protection of the Aircraft, and interest on payments due. 2.2 Place of Delivery. Each Aircraft shall be delivered at an airport in the State of Washington selected by Boeing or at such alternate site as may be mutually agreed upon in writing. If delivery is made at an alternate site at Buyer's request, Buyer shall promptly reimburse Boeing for any increased costs incurred by Boeing as a result thereof. 2.3 Title and Risk of Loss. Title to and risk of loss of each Aircraft shall pass from Boeing to Buyer upon delivery of such Aircraft but not prior to thereto. 2.4 Documents of Title. Upon delivery of and payment for each Aircraft, Boeing shall deliver to Buyer a bill of sale duly conveying to Buyer good title to such Aircraft free and clear of all liens, claims, charges and encumbrances of every kind whatsoever, and such other appropriate documents of title as Buyer may reasonably request. P.A. No. 1663 S4-2 Attachment No. 3 to Supplemental Agreement No. 4 Purchase Agreement No. 1663 1663-5 Page 4 ARTICLE 5. Payment. ------- 5.1 Advance Payment Base Price. The advance payment base price of each Aircraft, depending on the month and year of scheduled delivery, is indicated below: Month and Year of Advance Payment Base Scheduled Delivery Price per Aircraft ------------------ ------------------ 'A' Market Aircraft ------------------- May 1995 June 1995 July 1995 September 1995 October 1995 [*CONFIDENTIAL MATERIAL November 1995 OMITTED AND FILED December 1995 SEPARATELY WITH THE February 1996 SECURITIES AND EXCHANGE April 1996 COMMISSION PURSUANT TO A May 1996 REQUEST FOR CONFIDENTIAL June 1996 TREATMENT] July 1996 'B' Market Aircraft ------------------- Block A 'B' Market Aircraft --------------------------- [*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] Block B 'B' Market Aircraft --------------------------- [*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] Attachment No. 3 to Supplemental Agreement No. 4 Purchase Agreement No. 1663 1663-5 Page 4 Such advance payment base prices will be used to determine the amount of the first advance payment to be made by Buyer on each Aircraft pursuant to the provisions of Article 5.2. The advance payment base price of each Aircraft has been established using currently available forecast of the escalation factors used by Boeing and applicable to the scheduled month and year of Aircraft delivery. The advance payment base prices will be further increased or decreased by Boeing not later than twenty-five (25) months prior to the scheduled month of delivery, as required to reflect the effects of the then-current forecasted escalation factors used by Boeing in accordance with Exhibit D. The advance payment base price of each Aircraft, including any adjustments made thereto, as contemplated herein, is referred to as the 'Advance Payment Base Price.' 5.2 Advance Payments. Buyer shall pay to Boeing advance payments for each Aircraft on the dates indicated in the schedule below. The advance payment amount for an Aircraft due on a payment date shall be equal to (i) the sum of the advance payment percentages given in such schedule through the payment date multiplied by the Advance Payment Base Price for the Aircraft provided to Buyer pursuant to Article 5.1 for such payment date, less (ii) the sum of the advance payment amounts paid by Buyer to Boeing on such Aircraft up to such payment date. Attachment No. 3 to Supplemental Agreement No. 4 Purchase Agreement No. 1663 1663-5 Page 4 Due Date of Payment Amount Due per Aircraft ------------------- ----------------------- Upon execution of a definitive purchase agreement 24 months prior to the first day of the scheduled delivery month of the Aircraft 21 months prior to the first day of the scheduled delivery month of the Aircraft [*CONFIDENTIAL MATERIAL 18 months prior to the first OMITTED AND FILED day of the scheduled delivery SEPARATELY WITH month of the Aircraft THE SECURITIES AND EXCHANGE COMMISSION 15 months prior to the first PURSUANT TO A REQUEST day of the scheduled delivery FOR CONFIDENTIAL month of the Aircraft TREATMENT] 12 months prior to the first day of the scheduled delivery month of the Aircraft 9 months prior to the first day of the scheduled delivery month of the Aircraft 6 months prior to the first day of the scheduled delivery month of the Aircraft [*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] 5.3 Payment for Aircraft. Concurrently with delivery of each Aircraft, Buyer shall pay to Boeing the Purchase Price thereof, less the total amount of advance payments theretofore received by Boeing for such Aircraft under Article 5.2. 5.4 Repayment of Advance Payments. If this Agreement is terminated with respect to any Aircraft (i) by Buyer under Article 6.2, (ii) by Buyer under Article 11, or (iii) by failure of Buyer to provide Boeing with written notice pursuant to Article 6.4, then Boeing shall promptly repay to Buyer, without interest, any advance payments received by Boeing from Buyer here under with respect to any Aircraft so terminated. If this Agreement is terminated by Boeing under Article 6.2, then Boeing shall promptly repay Attachment No. 3 to Supplemental Agreement No. 4 Purchase Agreement No. 1663 1663-5 Page 4 to Buyer with interest any advance payments received by Boeing from Buyer hereunder with respect to any Aircraft so terminated. 5.5 Payment in United States Funds. All prices and payments set forth in this Agreement are in United States Dollars. All payments required under this Agreement shall be made in United States Dollars and in immediately available funds by (i) transfer to the party to receive payment of a cashier's check drawn on a member bank, located at Seattle, Washington, of the United States Federal Reserve System mutually acceptable to the parties, or (ii) unconditional deposit to the account of the party to receive payment in a bank in the United States mutually acceptable to the parties. Buyer shall comply with all applicable monetary and exchange control regulations, and shall obtain any necessary authority from the governmental agency administering such regulations in order to enable Buyer to make payments at the time and place and in the manner and medium specified herein. Supplemental Agreement No. 4 Purchase Agreement No. 1663 [*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
Supplemental Agreement to Purchase Agreement No. 1663 - United Air Lines Inc. and The Boeing Co.
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