Exhibit 10.3
6-1162-DLJ-891R5
April 11, 1997
United Air Lines, Inc.
P.O. Box 66100
Chicago, Illinois 60666
Subject: Letter Agreement No. 6-1162-DLJ-891R5
to Purchase Agreement No. 1670 -
[*CONFIDENTIAL MATERIAL OMITTED
AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
Gentlemen:
Reference is made to Purchase Agreement No. 1670 dated as of December 18,
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 forty-two (42) Model 747-422 aircraft (hereinafter
referred to as the Aircraft).
Further reference is made to Letter Agreement 1670-5 dated as of even date
herewith to the Purchase Agreement relating to the granting of options to
purchase eleven (11) Model 747-422 option aircraft (the Option Aircraft).
This letter, when accepted by Buyer contemporaneously with the execution of
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.
[*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
P.A. No. 1670 SA-11
K/UAL
United Air Lines, Inc.
6-1162-DLJ-891R5 Page 2
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2. Escalation of Credit Memoranda.
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The actual amount of the credit memoranda to be provided pursuant
to paragraph 1 above shall be determined by escalating the base amount of
such credit by application of the airframe escalation provisions described
in Exhibit D of the Purchase Agreement and Attachment A to Letter Agreement
1670-5 or such Airframe escalation provisions as are applicable to the
Option Aircraft, as such credits are applicable to the Firm Aircraft or
Option Aircraft for which such respective credit is issued.
P.A. No. 1670 SA-11
K/UAL
United Air Lines, Inc.
6-1162-DLJ-891R5 Page 3
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AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
P.A. No. 1670 SA-11
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United Air Lines, Inc.
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is paid in full at a fluctuating rate per annum equal to one percent (1%)
plus the rate of interest announced publicly 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. If Boeing elects
option (ii) above, Buyer shall pay to Boeing [*CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] and interest due thereon,
on the date of delivery of each Aircraft to which [*CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] Boeing shall issue a
credit memorandum to Buyer in the amount equal to the accrued interest on
[*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT].
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AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
7. Program Changes.
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Article 7.2 entitled Program Changes of the Purchase Agreement
is hereby deleted in its entirety.
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AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
9. Changes to Performance Guarantees.
---------------------------------
Boeing may adjust, change or modify performance guarantees
set forth in Letter Agreement 6-1162-DLJ-860 without Buyer's consent with
respect to the Aircraft referred to in Article 2, as specifically permitted
by Letter Agreement 6-1162-DLJ-860 and by Article 7.2 as modified by
paragraph 7 of this Letter Agreement; [*CONFIDENTIAL MATERIAL OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
P.A. No. 1670 SA-11
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United Air Lines, Inc.
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AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
P.A. No. 1670 SA-11
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United Air Lines, Inc.
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11. Non-Disclosure.
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The parties understand that certain commercial and financial
information contained in this letter agreement is considered as privileged
and confidential. The parties agree that they will treat such information
as privileged and confidential and will not, without prior written consent
of the other party, 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, the
parties 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 they 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.D. Hurt
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Its Attorney In Fact
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ACCEPTED AND AGREED TO this
Date: April 11, 1997
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UNITED AIR LINES, INC.
By /s/ Douglas A. Hacker
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Its Senior Vice President and
Chief Financial Officer
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P.A. No. 1670 SA-11
K/UAL