Exhibit 10.48
-------------
6-1162-MDH-666
United Air Lines, Inc.
P.O. Box 66100
Chicago, Illinois 60666
Subject: Delivery Delay Resolution Program
Reference: Purchase Agreement No. 1670 (the Purchase
Agreement) between The Boeing Company (Boeing)
and United Air Lines, Inc. (Buyer) relating
to Model 747-422 aircraft (the Aircraft)
This Letter Agreement amends and supplements the Purchase
Agreement. All terms used but not defined in this Letter
Agreement have the same meaning as in the Purchase Agreement.
1. Revised Delivery of Aircraft
----------------------------
Boeing has found it necessary to reschedule the delivery
month of certain Aircraft (the Delayed aircraft) as set forth
below:
Original Schedule Month Revised Schedule Month
----------------------- ----------------------
December 1997 January 1998
June 1998 August 1998
June 1998 August 1998
September 1998 November 1998
November 1998 December 1998
January 1999 February 1999
March 1999 April 1999
Boeing shall deliver each Delayed Aircraft in accordance with the
terms of the Purchase Agreement during [*CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT].
The calendar interval between the original schedule and revised
schedule described above is the "Delay Period."
P.A. 1670
UNITED AIR LINES, INC.
6-1162-MDH-666 Page 2
Boeing has not yet established its final production plan for all
potentially impacted Aircraft or Delayed Aircraft. To the extent
that additional delivery schedule revisions are required, the
terms and conditions (including, if agreed, appropriate
adjustment to advance payment schedules and the Pool (as defined
below)) relating to such additional delivery schedule revisions
shall be [*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT].
2. Aircraft Purchase Price.
-----------------------
The Purchase Price for the Delayed Aircraft, including the
Airframe and Engine Price Adjustment Due to Economic Fluctuation
set forth in the applicable Exhibit D to the Purchase Agreement,
shall be calculated in accordance with the Purchase Agreement
[*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT].
3. Adjusted Advance Payments Schedule for Aircraft, Delayed
Aircraft and Other Undelivered 757, 767 and 777 Aircraft.
--------------------------------------------------------
3.1 Dollar-Day Pool.
---------------
It is understood and agreed the advance payment schedules
for the Delayed Aircraft specified payment earlier than required
for a delivery on the revised schedule. Therefore, Boeing will
establish a "Dollar-Day Pool" which may be used by Buyer to
revise the advance payment schedules for Aircraft, Delayed
Aircraft or other undelivered 757, 767 or 777 aircraft ordered in
other purchase agreements in effect between Boeing and Buyer to
the extent necessary to adjust for early payments for the Delayed
Aircraft. As shown in Attachment A to this Letter Agreement, the
Dollar-Day Pool amount has been determined by multiplying the
dollar amount of each advance payment made by Buyer for the
Delayed Aircraft, times the number of days the advance payment
was made early, due to delay rescheduling. Subject to the
provisions below, Buyer may draw from the Pool [*CONFIDENTIAL
MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT] to defer advance payments for Aircraft, Delayed
Aircraft or other undelivered 757, 767 or 777 aircraft ordered in
other purchase agreements in effect between Boeing and Buyer, but
may not utilize the Pool to defer final payment of the purchase
price for any aircraft.
P.A. 1670
UNITED AIR LINES, INC.
6-1162-MDH-666 Page 3
3.2 Notification Requirements.
-------------------------
Buyer shall notify Boeing of its utilization of the Pool upon
each such occurrence, and provide a calculation of the Dollar-Day
Pool reduction resulting from such utilization. Within five days
of receipt of Buyer's notification, Boeing will provide their
concurrence with such calculation or otherwise advise Buyer of
their finding.
3.3 Pool Termination.
----------------
Buyer shall exhaust the Pool contents prior to [*CONFIDENTIAL
MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT]. Any Dollar-Day amounts remaining in the Pool as of
that date will be allocated by Boeing at its sole discretion to
Aircraft, Delayed Aircraft or other undelivered 757, 767 or 777
aircraft ordered in other purchase agreements in effect between
Boeing and Buyer, and the Pool shall be terminated.
4. Monetary Adjustment for Delivery Delay.
--------------------------------------
4.1 Undelivered Delayed Aircraft.
----------------------------
Boeing will pay to Buyer on the date of delivery the
settlement amount calculated from the table provided in
Attachment B hereto for each day of delay, beginning with the
[*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT] for delivery of each such Delayed
Aircraft. The settlement amount, so calculated (the Monetary
Adjustment), will be provided to Buyer [*CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT].
4.2 Delivered Delayed Aircraft.
--------------------------
For Delayed Aircraft that have been delivered prior to
execution of this Letter Agreement, Boeing will issue such
Monetary Adjustment [*CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT
TO A REQUEST FOR CONFIDENTIAL TREATMENT].
P.A. 1670
UNITED AIR LINES, INC.
6-1162-MDH-666 Page 4
4.3 Further Delays.
--------------
In the event that delivery of any Delayed Aircraft is
further delayed beyond the Revised Schedule Month shown above,
the Monetary Adjustment provided for such further delay period
shall be [*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT].
5. Advance Payment Credit Memorandum.
---------------------------------
Boeing and Buyer agree advance payments for the Delayed
Aircraft will be paid by Buyer to Boeing in accordance with the
Adjusted Advance Payment Schedules. Notwithstanding such
payment, Boeing and Buyer agree for purposes of [*CONFIDENTIAL
MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT], the advance payments originally due to be paid by
Buyer to Boeing for a Delayed Aircraft prior to the rescheduling
of delivery months as provided in this Letter Agreement shall be
deemed to have been paid by Buyer and received by Boeing in
accordance with [*CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT
TO A REQUEST FOR CONFIDENTIAL TREATMENT].
6. Purchase Agreement Revision.
---------------------------
6.1 Liquidated Damages and Rights of Termination.
--------------------------------------------
With respect to the Delayed Aircraft set forth in
paragraph 1 Revised Delivery of Aircraft above, this Letter
Agreement cancels and supersedes Letter Agreement 6-1162-DLJ-888
to Purchase Agreement No. 1670 entitled "Liquidated Damages and
Rights of Termination", [*CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT
TO A REQUEST FOR CONFIDENTIAL TREATMENT].
6.2 Other Rights and Obligations.
----------------------------
Except as specifically set forth in this Letter
Agreement, the rights and obligations of the parties under the
terms and conditions of the Purchase Agreement, including the
provisions of Article 6, Excusable Delay, remain in full force
and effect.
P.A. 1670
UNITED AIR LINES, INC.
6-1162-MDH-666 Page 5
7. EXCLUSIVE REMEDY.
----------------
THE OBLIGATIONS OF BOEING EXPRESSLY SET FORTH IN THIS
LETTER AGREEMENT ARE EXCLUSIVE AND IN SUBSTITUTION FOR, AND BUYER
HEREBY WAIVES, RELEASES AND RENOUNCES ALL OTHER OBLIGATIONS AND
LIABILITIES OF BOEING AND ALL OTHER RIGHTS, CLAIMS AND REMEDIES
OF BUYER AGAINST BOEING, EXPRESS OR IMPLIED, ARISING BY LAW OR
OTHERWISE WITH RESPECT TO THE [*CONFIDENTIAL MATERIAL OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] AIRCRAFT.
BOEING'S PERFORMANCE OF ITS OBLIGATIONS HEREUNDER SHALL
CONSTITUTE FULL AND FINAL SETTLEMENT AND SATISFACTION OF ALL
CLAIMS OR CAUSES OF ACTION OF BUYER AGAINST BOEING RELATING TO
THE [*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT] AIRCRAFT AND WILL BE REFLECTED IN
[*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT].
8. Confidentiality.
---------------
The terms and conditions of this Letter Agreement shall
be considered to be confidential and shall not be disclosed by
either party (except (a) as reasonably necessary to its
respective employees, insurers, auditors or professional
advisors, (b) as either party may reasonably determine may be
required by applicable provisions of, or rules or regulations
under, applicable securities laws, bankruptcy laws or other laws
or applicable stock exchange rules (in which case the disclosing
party shall provide sufficient notice to and discuss with the
other party the facts of such determination), (c) as requested or
required of either party by oral question, interrogatories,
requests for information or documents, subpoena, civil
investigative demand or any informal or formal investigation by
any government or governmental agency or authority (provided the
disclosing party actually has been issued a valid subpoena, civil
investigative demand, or request for production, has duly sought
a protective order when such an
P.A. 1670
UNITED AIR LINES, INC.
6-1162-MDH-666 Page 6
order is possible and, in any case, has provided sufficient
notice to the other party to allow the other party to seek
protection), or (d) as otherwise agreed to by the parties)
without the prior written consent of the other party.
Very truly yours,
ACCEPTED AND AGREED TO:
Date: September 29, 1998
------------------
THE BOEING COMPANY UNITED AIR LINES, INC.
By /s/ Brian R. Belka By /s/Douglas A. Hacker
-------------- --------------------
Douglas A. Hacker
Its Attorney-in-Fact Its Senior Vice President and
---------------- -------------------------
Chief Financial Officer
P.A. 1670
Attachment A to Letter Agreement 6-1162-MDH-666
Page 1
UNITED AIR LINES, INC.
MONETARY ADJUSTMENT FOR DELIVERY DELAY - PA 1670
December-97 REVISED TO January-98 [*CONFIDENTIAL
MATERIAL
OMITTED
AND FILED
SEPARATELY
WITH THE
SECURITIES
AND EXCHANGE
COMMISSION
PURSUANT
TO A REQUEST
FOR
CONFIDENTIAL
TREATMENT]
MO. PRIOR REVISED # DOLLAR
TO DEL. DATE DEFERRED PAID DAYS $ DAY
_______ _______ ________ _____ _______ ____ ____________
[*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
June-98 REVISED TO August-98 [*CONFIDENTIAL
MATERIAL
OMITTED
AND FILED
SEPARATELY
WITH THE
SECURITIES
AND EXCHANGE
COMMISSION
PURSUANT
TO A REQUEST
FOR
CONFIDENTIAL
TREATMENT]
MO. PRIOR REVISED # DOLLAR
TO DEL. DATE DEFERRED PAID DAYS $ DAY
_______ _______ ________ _____ _______ ____ ____________
[*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
June-98 REVISED TO August-98 [*CONFIDENTIAL
MATERIAL
OMITTED
AND FILED
SEPARATELY
WITH THE
SECURITIES
AND EXCHANGE
COMMISSION
PURSUANT
TO A REQUEST
FOR
CONFIDENTIAL
TREATMENT]
MO. PRIOR REVISED # DOLLAR
TO DEL. DATE DEFERRED PAID DAYS $ DAY
_______ _______ ________ _____ _______ ____ ____________
[*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
Attachment A to Letter Agreement 6-1162-MDH-666
Page 2
UNITED AIR LINES, INC.
MONETARY ADJUSTMENT FOR DELIVERY DELAY - PA 1670
September-98 REVISED TO November-98 [*CONFIDENTIAL
MATERIAL
OMITTED
AND FILED
SEPARATELY
WITH THE
SECURITIES
AND EXCHANGE
COMMISSION
PURSUANT
TO A REQUEST
FOR
CONFIDENTIAL
TREATMENT]
MO. PRIOR REVISED # DOLLAR
TO DEL. DATE DEFERRED PAID DAYS $ DAY
_______ _______ ________ _____ _______ ____ ____________
[*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
November-98 REVISED TO December-98 [*CONFIDENTIAL
MATERIAL
OMITTED
AND FILED
SEPARATELY
WITH THE
SECURITIES
AND EXCHANGE
COMMISSION
PURSUANT
TO A REQUEST
FOR
CONFIDENTIAL
TREATMENT]
MO. PRIOR REVISED # DOLLAR
TO DEL. DATE DEFERRED PAID DAYS $ DAY
_______ _______ ________ _____ _______ ____ ____________
[*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
January-99 REVISED TO February-99 [*CONFIDENTIAL
MATERIAL
OMITTED
AND FILED
SEPARATELY
WITH THE
SECURITIES
AND EXCHANGE
COMMISSION
PURSUANT
TO A REQUEST
FOR
CONFIDENTIAL
TREATMENT]
MO. PRIOR REVISED # DOLLAR
TO DEL. DATE DEFERRED PAID DAYS $ DAY
_______ _______ ________ _____ _______ ____ ____________
[*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
Attachment A to Letter Agreement 6-1162-MDH-666
Page 3
UNITED AIR LINES, INC.
MONETARY ADJUSTMENT FOR DELIVERY DELAY - PA 1670
March-99 REVISED TO April-99 [*CONFIDENTIAL
MATERIAL
OMITTED
AND FILED
SEPARATELY
WITH THE
SECURITIES
AND EXCHANGE
COMMISSION
PURSUANT
TO A REQUEST
FOR
CONFIDENTIAL
TREATMENT]
MO. PRIOR REVISED # DOLLAR
TO DEL. DATE DEFERRED PAID DAYS $ DAY
_______ _______ ________ _____ _______ ____ ____________
[*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
TOTAL DOLLAR DAY [*CONFIDENTIAL
MATERIAL OMITTED AND
FILED SEPARATELY
WITH THE SECURITIES
AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT]
Attachment B to
Letter Agreement No. 6-1162-MDH-666
Purchase Agreement No. 1670
COMPENSATION TABLE
------------------
The following table identifies the daily amount Boeing is
required to pay in settlement to compensate Buyer for the delayed
deliveries.
Delayed Aircraft
----------------
[*CONFIDENTIAL
MATERIAL OMITTED
AND FILED
SEPARATELY WITH
THE SECURITIES
AND EXCHANGE
COMMISSION
Original Revised PURSUANT TO A
Scheduled Scheduled REQUEST FOR
Month of Month of CONFIDENTIAL Daily
Delivery Delivery TREATMENT] Amount
- --------- --------- ----------------- ------
[*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
P.A. 1670