Exhibit 10.11
6-1162-DLJ-472R2
United Air Lines, Inc.
P.O. Box 66100
Chicago, Illinois 60666
Subject: Letter Agreement No. 6-1162-DLJ-472R2 to
Purchase Agreement No. 1602 -
Certain Contractual Matters
Gentlemen:
Reference is made to Purchase Agreement No. 1602 dated
as of March 1,1990 (the Purchase Agreement) between The
Boeing Company (Boeing) and United Air Lines, Inc.
(Buyer) relating to the sale by Boeing and the purchase
by Buyer of fourteen (14) 767-322ER aircraft (sometimes
referred to as the Aircraft, Firm Aircraft or the
Reconfirmation Aircraft). Further reference is made to
Letter Agreement 1602-5 dated as of March 1,1990 to the
Purchase Agreement relating to the granting of options
to purchase fourteen (14) 767-322ER option aircraft
(the Option Aircraft).
This letter, when accepted by Buyer contemporaneously
with the execution of Supplemental Agreement No. 10 to
the Purchase Agreement, will become part of the
Purchase Agreement and will evidence our further
agreement with respect to the matters set forth below.
All terms used herein and in the Purchase Agreement,
and not defined herein, shall have the same meaning as
in the Purchase Agreement.
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4. Use or Application of Credit Memoranda.
Each credit memorandum issued per paragraph 2
above may be applied by Buyer to the final payment of
the purchase price of the Aircraft, Reconfirmation
Aircraft or Option Aircraft for which such credit
memorandum was issued or in payment for Boeing
proprietary spare parts or other Boeing goods and
services.
5. Certain Advance Payment Matters.
5.1 Notwithstanding Article 5.2, Advance
Payments, of the Purchase Agreement and paragraph 4.3
of Letter Agreement 1602-5, the following advance
payment schedule (the Alternate Advance Payment
Schedule) is substituted for the schedules detailed in
such Article 5.2 and paragraph 4.3. All other terms
and conditions of such Article 5.2 and paragraph 4.3
will remain unchanged, except as set forth in paragraph
5.3 below.
Amount due or paid
Due Date of Payment per Aircraft
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5.2 Boeing shall defer remaining advance
payments required pursuant to the Advance Payment
Schedule set forth in Article 5.2 of the Purchase
Agreement and paragraph 4.3 of Letter Agreement 1602-5
from the normal due date of each such payment to the
date of delivery of the respective Aircraft. Buyer
shall pay interest on the amount of each advance
payment deferred, calculated on the basis of a 365/366
day year from the actual number of days elapsed from
the date each such advance payment is due to the date
such advance payment is paid in full at a fluctuating
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by Citibank, N.A., New York as its base rate, from time
to time, as such bank's base rate may change, each
change in such fluctuating rate to take place
simultaneously with the corresponding change in such
base rate, calculated on the basis of a year of 365/366
days for the actual number of days elapsed. Buyer
shall pay to Boeing such deferred advance payments and
interest due thereon, on the date of delivery of each
Aircraft to which such deferred advance payment applies
and Boeing shall issue a credit memorandum to Buyer in
the amount equal to the accrued interest on deferred
advance payments for each Aircraft upon delivery of
such Aircraft to Buyer. Such credit may be applied by
Buyer as provided in paragraph 4 hereof.
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8. Certain Substitution Rights Regarding New Model
Aircraft.
If Boeing decides to proceed with the
development and production of a derivative of the 767
aircraft (hereinafter referred to as the Model 767X
aircraft for convenience), Buyer may substitute such
Model 767X aircraft, subject to the terms hereof.
Boeing will advise Buyer as soon as possible of its
decision regarding offerability of the Model 767X
aircraft. If Boeing elects to offer the Model 767X
aircraft, Boeing will issue a proposal and business
offer to Buyer as soon as practicable, specifying
available 767X positions, subject to prior sale. If
Buyer accepts such proposal and business offer and
enters into a definitive agreement within thirty (30)
days thereafter, or a later date as mutually agreed
upon, Buyer may substitute Model 767X aircraft for 767-
322ER Option Aircraft and Reconfirmation Aircraft on a
one-for-one basis.
9. Labor Disruption.
It is recognized by the parties that a strike
was commenced against Boeing on October 4, 1989 by its
principal employee union, and was recently concluded.
It is not presently known what the effect of such
strike will be upon Boeing's undertaking set forth in
the Purchase Agreement. However, the effect of such
strike is not expected to delay the delivery of each
Aircraft by more than three (3) months. The parties
agree that any delay in the performance of any
obligation of Boeing under the Purchase Agreement as a
result of such strike shall be deemed an excusable
delay within and subject to the excusable delay
provisions set forth in Article 6 of the Purchase
Agreement.
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12. Non-Disclosure.
Buyer understands that certain commercial and
financial information contained in this letter
agreement is considered by Boeing as privileged and
confidential. Buyer agrees that it will treat such
information as privileged and confidential and will not
without prior written consent of Boeing, disclose such
information to any other person except as may be
required by (i) applicable law or governmental
regulations, or (ii) for financing the Aircraft in
accordance with the provisions of Article 11.2 of the
Purchase Agreement. In connection with any such
disclosure or filing of such information pursuant to
any applicable law or governmental regulations; Buyer
shall request and use its best reasonable efforts to
obtain confidential treatment of such information.
Boeing agrees to cooperate with Buyer in making and
supporting its request for confidential treatment. In
fulfilling its obligations under this paragraph 11,
Buyer shall only be required to use the same degree of
care to prevent unauthorized disclosure and use of the
information contained in this Letter Agreement as Buyer
would use to prevent the disclosure and use of its own
commercial and financial information of the same or
similar nature and which it considers proprietary or
confidential.
If the foregoing correctly sets forth your
understanding of our agreement with respect to the
matters treated above, please indicate your acceptance
and approval below.
Very truly yours,
THE BOEING COMPANY
By /s/ M. Monica Fix
Its Attorney-in-Fact
ACCEPTED AND AGREED TO this
Date: April 13, 1995
UNITED AIR LINES, INC.
By /s/ Douglas A. Hacker
Its Senior Vice President - Finance
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