Document:

FIRST AMENDMENT

Exhibit 10.2
CONFORMED VERSION

WAIVER, CONSENT AND ELEVENTH AMENDMENT

TO REVOLVING CREDIT, TERM LOAN AND

GUARANTY AGREEMENT

            WAIVER,
CONSENT AND ELEVENTH AMENDMENT, dated as of April 8, 2005 (the "Amendment"),
to the REVOLVING CREDIT, TERM LOAN AND GUARANTY AGREEMENT, dated as of
December 24, 2002, among UNITED AIR LINES, INC., a Delaware corporation
(the "Borrower"), a debtor and a debtor-in-possession in a case
pending under Chapter 11 of the Bankruptcy Code, UAL CORPORATION, a Delaware
corporation and the parent company of the Borrower (the "Parent")
and all of the direct and indirect subsidiaries of the Borrower and the
Parent signatory thereto (the "Subsidiaries" and together with the
Parent, each a "Guarantor" and collectively the "Guarantors"),
each of which Guarantors referred to in this paragraph is a debtor and
a debtor-in-possession in a case pending under Chapter 11 of the Bankruptcy
Code, JPMORGAN CHASE BANK, N.A. (formerly known as JPMorgan Chase Bank),
a national banking corporation ("JPMCB"), CITICORP USA, INC., a
Delaware corporation ("Citi"), THE CIT GROUP/BUSINESS CREDIT, INC.,
a New York corporation ("CIT Group"), GENERAL ELECTRIC CAPITAL CORPORATION,
a Delaware corporation ("GECC"), each of the other financial institutions
from time to time party hereto (together with JPMCB, Citi, CIT Group and
GECC, the "Lenders"), JPMORGAN CHASE BANK, N.A. and CITICORP USA,
INC., as co-administrative agents (together, the "Agents") for the
Lenders and JPMORGAN CHASE BANK, N.A., as paying agent (in such capacity,
the "Paying Agent") for the Lenders.

W I T N E S S E T H:

           
WHEREAS, the Borrower, the Guarantors, the Lenders, the Paying Agent
and the Agents are parties to that certain Revolving Credit, Term Loan
and Guaranty Agreement, dated as of December 24, 2002 (as heretofore amended,
modified or supplemented, and as in effect on the date hereof, the "Credit
Agreement");

           
WHEREAS, the Borrower and the Guarantors have requested that from and
after the Effective Date (as hereinafter defined), the Lenders agree (A)
to waive the Events of Default described in Article II hereof, (B) to consent
to certain modifications of the Security and Pledge Agreement and the Aircraft
Mortgage, in each case as more fully set forth in Article III hereof and
(C) that the Credit Agreement be amended as set forth in Article IV, all
subject to and upon the terms and conditions set forth herein;

           
NOW, THEREFORE, the parties hereto hereby agree as follows:

 

 

ARTICLE I. Definitions

1.    As used herein, all terms that are defined in the
Credit Agreement shall have the same meanings herein.

 

ARTICLE II. Waivers

            2.  
Waiver. The Lenders hereby waive any Events of Default that might
occur or have occurred as a result of (i) the Borrower's and the Guarantors'
failure to timely provide copies of the notices such entities received
in connection with the PBGC's effort to involuntarily terminate the United
Airlines Pilot Defined Benefits Pension Plan, as required pursuant to Section
5.01(h) of the Credit Agreement, (ii) the Borrower's failure to satisfy
the condition that no Event of Default shall have occurred and be continuing
at the time of a continuation of a Eurodollar Loan insofar as the Events
of Default described in this Article II had occurred and were continuing
at the time any Eurodollar Loans may have been continued and (iii) the
Borrower's and the Guarantors' failure to provide written notice required
pursuant to Section 5.05 of the Credit Agreement as a result of the Events
of Default described in clauses (i) and (ii) of this paragraph.

 

ARTICLE III. Consents

           
3.    Consent to Amendment to Security and Pledge
Agreement. The Lenders hereby consent to, and authorize the Collateral
Agent to execute, an amendment to the Security and Pledge Agreement, substantially
in the form of Exhibit A attached hereto.

            4.  
Consent to Amendment to Aircraft Mortgage. The Lenders hereby consent
to, and authorize the Collateral Agent to execute, an amendment to the
Aircraft Mortgage, substantially in the form of Exhibit B attached hereto,
permitting the Borrower to lease Engines and Spare Engines (each as defined
in the Aircraft Mortgage) on a short-term basis (up to 120 days) to repair
customers and other third party air carriers under certain circumstances.

 

 

ARTICLE IV. Amendments

            5.  
Amendments to Section 1.01. Section 1.01 of the Credit Agreement
is hereby amended by:

                   
(A)    deleting the definition of each of the following
terms: "Collateral Documents", and "Orders", appearing therein,
and inserting the following new definitions in appropriate alphabetical
order:

"Collateral Documents" shall mean, collectively, the Security
and Pledge Agreement, the Aircraft Mortgage (including, without limitation,
any Mortgage Supplement), the SGR Security Agreement, the Mortgage Amendment,
Mortgage Amendment No. 2, Mortgage Amendment No. 3, Mortgage Amendment
No. 4 and other agreements, instruments or documents that create or purport
to create a Lien in favor of the Collateral Agent for the benefit of the
Lenders.
"Orders" shall mean the Interim Order and the Final Order of
the Bankruptcy Court referred to in Sections 4.01(b) and 4.02(d) and the
Seventh Amendment Order, the Eighth Amendment Order, the Tenth Amendment
Order and the Eleventh Amendment Order.

                   
; (B) inserting the following new definitions of the terms "AWAC",
"Mortgage Amendment No. 4" and "Eleventh Amendment Order"
in appropriate alphabetical order:

"AWAC" shall mean Air Wisconsin Airlines Corporation, a Delaware
corporation.
"Mortgage Amendment No. 4" shall mean that certain Fourth Amendment
to the Aircraft Mortgage dated as of April __, 2005.

"Eleventh Amendment Order" shall mean an order of the Bankruptcy
Court in form and substance reasonably satisfactory to the Agents approving
the execution of the Waiver, Consent and Eleventh Amendment dated as of
April __, 2005.

                   
; (C) amending the definition of the term "EBITDAR" by replacing
sub-clause (a)(xiv) appearing therein with the following new sub-clause:

"(xiv) a one time adjustment to EBITDAR for an expense in an amount
not in excess of $84,000,000 incurred as a result of replacing services
provided by AWAC on forward-looking terms that are more economically favorable
to the Borrower than the terms of the AWAC service arrangement existing
as of January 25, 2005"

                   
; and (D) amending the definition of the term "Ineligible Collateral
and Reserve Amount" by replacing sub-clause (f) appearing therein with
the following new sub-clause:

 "(f) an amount equal to the Orderly Liquidation Value of aircraft,
engines and spare engines that have been leased or sub-leased to third
parties, or spare parts that have been loaned to or exchanged with third
parties;"

            6.  
Amendment to Section 5.22. Section 5.22 of the Credit Agreement
is hereby amended by (A) deleting the word "Agent" appearing therein and
inserting in lieu thereof the word "Agents" and (B) deleting the date "March
31, 2005" appearing therein and inserting in lieu thereof the date "on
or before July 31, 2005".
            7.  
Amendment to Section 6.01. Section 6.01 of the Credit Agreement
is hereby amended by deleting the words "and April 15, 2005," appearing
in sub-clause (xx) thereof and inserting in lieu thereof the words ", April
15, 2005, July 15, 2005 and September 15, 2005,".

            8.  
Amendment to Section 6.03. Clause (xv) of Section 6.03 of the Credit
Agreement is hereby amended by inserting at the end thereof the words "at
any one time outstanding".

            9.  
Amendment to Section 7.01. Section 7.01 of the Credit Agreement
is hereby amended by deleting the words "and April 15, 2005" appearing
in sub-clause (r) thereof and inserting in lieu thereof the words ", April
15, 2005, July 15, 2005 and September 15, 2005".

 

ARTICLE V. Miscellaneous

            10.  
Conditions to Amendment and Consent Effective Date. The waivers
set forth in Article II of this Amendment, the consents in Article III
of this Amendment and the amendments set forth in Article IV of this Amendment
shall not become effective until the date (the "Effective Date")
on which the following conditions precedent shall have been satisfied (or
waived by the Required Lenders):
                   
(A)    Execution. This Amendment shall have been
executed by the Borrower, the Guarantors and the Required Lenders and each
Agent shall have received evidence reasonably satisfactory to it of such
execution.

                   
(B)    Bankruptcy Court Order; Payment of Fees. (i)
The Bankruptcy Court shall have entered an order reasonably satisfactory
in form and substance to the Agents (x) approving the terms of this Amendment
to the extent required by the Bankruptcy Code and (y) authorizing the payment
by the Borrower of the fees referred to in that certain Eleventh Amendment
Fee Letter dated the date hereof and (ii) such amendment and other fees
shall have been paid in cash to the Paying Agent within one Business Day
after entry of the order referred to above.

                   
(C)    Opinions of Counsel. The Agents and the Collateral
Agent shall have received a favorable written opinion of McAfee & Taft,
special counsel to the Agents, dated the Amendment Effective Date, with
respect to the Liens of the Aircraft Mortgage, and reasonably satisfactory
in form and substance to the Collateral Agent.

                   
(D)    Corporate and Judicial Proceedings. All corporate
and judicial proceedings and all instruments and agreements in connection
with the transactions among the Borrower, the Guarantors, the Agents and
the Lenders contemplated by this Amendment shall be reasonably satisfactory
in form and substance to the Lenders, and the Agents and the Lenders shall
have received all information and copies of all documents and papers, including
records of corporate and judicial proceedings, which the Agents may have
reasonably requested in connection herewith, such documents and papers
where appropriate to be certified by proper corporate, governmental or
judicial authorities.

                   
(E)    Mortgage Amendment. The Borrower shall have
duly executed and delivered to the Collateral Agent a Fourth Amendment
to the Aircraft Mortgage, in substantially the form of Exhibit B, and the
Collateral Agent shall have received evidence that such mortgage amendment
has been recorded with the FAA.

            11.  
Ratification. Except to the extent hereby amended, the Credit Agreement
and each of the Loan Documents remain in full force and effect and are
hereby ratified and affirmed.

            12.  
Costs and Expenses. The Borrower agrees that its obligations set
forth in Section 10.05 of the Credit Agreement shall extend to the preparation,
execution and delivery of this Amendment, including the reasonable fees
and disbursements of special counsel to the Agents.

            13.  
Representations and Warranties. The Borrower represents and warrants
to the Lenders, to induce the Lenders to enter into this Amendment, that
no Event of Default or event with the passage of time would constitute
an Event of Default (other than the Events of Default described in Article
II herein) exists on the date hereof and that each of the representations
and warranties made by the Borrower in the Credit Agreement and each other
Loan Document are true and correct in all material respects as of the date
hereof except where such representation or warranty relates to a specific
date, in which such representation or warranty shall be true and correct
in all material respects as of such date.

            14.  
References. This Amendment shall be limited precisely as written
and shall not be deemed (a) to be a consent granted pursuant to, or a waiver
or modification of, any other term or condition of the Credit Agreement
or any of the instruments or agreements referred to therein or (b) to prejudice
any right or rights which the Agents or the Lenders may now have or have
in the future under or in connection with the Credit Agreement or any of
the instruments or agreements referred to therein. Whenever the Credit
Agreement is referred to in the Credit Agreement or any of the instruments,
agreements or other documents or papers executed or delivered in connection
therewith, such reference shall be deemed to mean the Credit Agreement
as modified by this Amendment.

            15.  
Counterparts. This Amendment may be executed in any number of counterparts
and by the different parties hereto in separate counterparts, each of which
when so executed and delivered shall be deemed to be an original and all
of which taken together shall constitute but one and the same instrument.
A fax copy of a counterpart signature page shall serve as the functional
equivalent of a manually executed copy for all purposes.

            16.  
Applicable Law. This Amendment shall be governed by, and construed
in accordance with, the laws of the State of New York.

 

[SIGNATURE PAGES TO FOLLOW]

            IN
WITNESS WHEREOF, the parties hereto have caused this Waiver, Consent
and Eleventh Amendment to be duly executed as of the day and the year first
written.

 

 
	BORROWER:
	 
	UNITED AIR LINES, INC.
By: /s/ Frederic F. Brace 

Name: Frederic F. Brace

Title: Executive Vice President & CFO

	 
	 
	GUARANTORS:
	 
	UAL CORPORATION
By: /s/ Frederic F. Brace 

Name: Frederic F. Brace

Title: Executive Vice President & CFO 

	 
	 
	UAL LOYALTY SERVICES, LLC
By: /s/ Steven M. Rasher 

Name: Steven M. Rasher

Title: Senior Vice President, General 

Counsel & Secretary

	 
	 
	UAL COMPANY SERVICES, INC.
By: /s/ Frederic F. Brace 

Name: Frederic F. Brace

Title: Vice President and Treasurer

	 
	 
	CONFETTI, INC.
By: /s/ Steven M. Rasher 

Name: Steven M. Rasher

Title: Senior Vice President, General 

Counsel & Secretary

	 

	 
	MILEAGE PLUS HOLDINGS, INC.
By: /s/ Steven M. Rasher 

Name: Steven M. Rasher

Title: Senior Vice President, General 

Counsel & Secretary

	 
	 
	MILEAGE PLUS MARKETING, INC.
By: /s/ Steven M. Rasher 

Name: Steven M. Rasher

Title: Senior Vice President, General Counsel & Secretary

	 
	 
	MYPOINTS.COM, INC. 
By: /s/ Steven M. Rasher 

Name: Steven M. Rasher

Title: Senior Vice President, General Counsel & Secretary

	 
	 
	CYBERGOLD, INC.
By: /s/ Steven M. Rasher 

Name: Steven M. Rasher

Title: Senior Vice President, General Counsel & Secretary

	 
	 
	ITARGET.COM, INC.
By: /s/ Steven M. Rasher 

Name: Steven M. Rasher

Title: Senior Vice President, General Counsel & Secretary

	 

	 
	MYPOINTS OFFLINE SERVICES, INC.
By: /s/ Steven M. Rasher 

Name: Steven M. Rasher

Title: Senior Vice President, General Counsel & Secretary 

	 
	 
	UAL BENEFITS MANAGEMENT, INC.
By: /s/ Frederic F. Brace 

Name: Frederic F. Brace

Title: President

	 
	 
	UNITED BIZ JET HOLDINGS, INC.
By: /s/ Steven M. Rasher 

Name: Steven M. Rasher

Title: Senior Vice President, General Counsel & Secretary

	 
	 
	BIZJET CHARTER, INC.
By: /s/ Steven M. Rasher 

Name: Steven M. Rasher

Title: Senior Vice President, General Counsel & Secretary

	 
	 
	BIZJET FRACTIONAL, INC.
By: /s/ Steven M. Rasher 

Name: Steven M. Rasher

Title: Senior Vice President, General Counsel & Secretary

	 

	 
	BIZJET SERVICES, INC.
By: /s/ Steven M. Rasher 

Name: Steven M. Rasher

Title: Senior Vice President, General Counsel & Secretary

	 
	 
	KION LEASING, INC.
By: /s/ Frederic F. Brace 

Name: Frederic F. Brace

Title: President

	 
	 
	PREMIER MEETING AND TRAVEL SERVICES, INC. 
By: /s/ Frederic F. Brace 

Name: Frederic F. Brace

Title: Vice President and Treasurer

	 
	 
	UNITED AVIATION FUELS CORPORATION
By: /s/ Frederic F. Brace 

Name: Frederic F. Brace

Title: Vice President

	 
	 
	UNITED COGEN, INC.
By: /s/ Paul Lovejoy 

Name: Paul R. Lovejoy

Title: Senior Vice President & Secretary

	 

	 
	MILEAGE PLUS, INC.
By: /s/ Frederic F. Brace 

Name: Frederic F. Brace

Title: Vice President

	 
	 
	UNITED GHS, INC.
By: /s/ Frederic F. Brace 

Name: Frederic F. Brace

Title: President

	 
	 
	UNITED WORLDWIDE CORPORATION
By: /s/ Frederic F. Brace 

Name: Frederic F. Brace

Title: President

	 
	 
	UNITED VACATIONS, INC.
By: /s/ Frederic F. Brace 

Name: Frederic F. Brace

Title: Vice President

	 
	 
	FOUR STAR LEASING, INC.
By: /s/ Frederic F. Brace 

Name: Frederic F. Brace

Title: President

	 

	 
	AIR WIS SERVICES, INC.
By: /s/ Frederic F. Brace 

Name: Frederic F. Brace

Title: President

	 
	 
	AIR WISCONSIN, INC.
By: /s/ Frederic F. Brace 

Name: Frederic F. Brace

Title: President

	 
	 
	DOMICILE MANAGEMENT SERVICES, INC.
By: /s/ Paul Lovejoy 

Name: Paul R. Lovejoy

Title: Senior Vice President & Secretary

	 
	 
	LENDERS:
	 
	JPMORGAN CHASE BANK
By: /s/ Matthew H. Massie 

Name: Matthew H. Massie

Title: Managing Director 

	 
	CITICORP USA, INC.
By: /s/ James J. McCarthy 

Name: James J. McCarthy

Title: Vice President and Director

	 

	
	CIT/BUSINESS CREDIT INC.
By: /s/ Vincent Belcastro 

Name: Vincent Belcastro

Title: Vice President

	 
	 
	GENERAL ELECTRIC CAPITAL CORPORAION
By: /s/ Roger P. Tauchman 

Name: Roger P. Tauchman

Title: Duly Authorized Signatory

	 
	 
	ARES VI CLO LTD.
By: ARES CLO Management VI, L.P.,

Investment Manager

By: ARES CLO GP VI, LLC,

Its Managing Member

By: /s/ David A. Sachs 

Name: David A. Sachs

Title: Vice President

	 
	 
	ARES VII CLO LTD.
By: ARES CLO Management VII, L.P.,

Investment Manager

By: ARES CLO GP VII, LLC,

Its General Partner

By: /s/ David A. Sachs 

Name: David A. Sachs

Title: Vice President

	 
	 

	ARES VIII CLO LTD.
By: ARES CLO Management VIII, L.P.,

Its Investment Manager

By: ARES CLO GP VIII, LLC,

Its General Partner

By: /s/ David A. Sachs 

Name: David A. Sachs

Title: Vice President

	 
	 
	ARES IX CLO LTD.
By: ARES CLO Management IX, L.P.,

Its: Investment Manager

By: ARES CLO GP IX, LLC,

Its: Its General Partner

By: /s/ David A. Sachs 

Name: David A. Sachs

Title: Vice President

	
	ARES ENHANCED LOAN INVESTMENT STRATEGY, LTD.
By: ARES Enhanced Loan Management, L.P.,

Its: Investment Manager

By: ARES Enhanced Loan GP, LLC,

Its: Its General Partner

By: /s/ David A. Sachs 

Name: David A. Sachs

Title: Vice President

	 
	ARES LEVERAGED INVESTMENT FUND II, L.P.
By: ARES Management II, L.P.,

Its: Its: General Partner

By: /s/ David A. Sachs 

Name: David A. Sachs

Title: Vice President

	 
	 
	ARES TOTAL VALUE FUND, L.P.
By: ARES Total Value Management LLC

Its: General Partner

By: /s/ David A. Sachs 

Name: David A. Sachs

Title: Vice President

	 
	 
	AVL LOAN FUNDING LLC
By: AVL Loan Funding LLC for itself or as agent for AVL2 Loan Funding
LLC

By: /s/ Dominic Blea 

Name: Dominic Blea

Title: Attorney-In-Fact

	 
	 
	AZURE FUNDING
By: /s/ Henry J. Sandlass 

Name: Henry J. Sandlass

Title: Managing Director

	 
	BUSHNELL CBNA LOAN FUNDING LLC 
By: Bushnell CBNA Loan Funding LLC, for itself or as agent for Bushnell
CFPI Loan Funding LLC 

By: /s/ Janet Haack 

Name: Janet Haack

Title: Attorney-In-Fact

	 
	 
	CANADIAN IMPERIAL BANK OF COMMERCE
By: /s/ John O'Dowd 

Name: John O'Dowd

Title: Authorized Signatory

By: /s/ [ILLEGIBLE]

Name: 

Title: Authorized Signatory

	 
	 
	CASPIAN CAPITAL PARTNERS, L.P.
By: Mariner Investment Group

By: /s/ Charles R. Howe II 

Name: Charles R. Howe II

Title: Treasurer

	CITIBANK, N.A.
By: /s/ Shawn Hendrickson 

Name: Shawn Hendrickson

Title: Attorney-In-Fact

	 
	COSTANTINUS EATON VANCE CDO V, LTD.
By: Eaton Vance Management

as Investment Advisor

By: /s/ Michael B. Botthof 

Name: Michael B. Botthof

Title: Vice President

	

DUNES FUNDING LLC
By: /s/ Meredith J. Koslick 

Name: Meredith J. Koslick

Title: Assistant Vice President

	 
	EATON VANCE CDO III, LTD.
By: Eaton Vance Management

as Investment Advisor

By: /s/ Michael B. Botthof 

Name: Michael B. Botthof

Title: Vice President

	 
	EATON VANCE CDO VI, LTD.
By: Eaton Vance Management

as Investment Advisor

By: /s/ Michael B. Botthof 

Name: Michael B. Botthof

Title: Vice President

 
	EATON VANCE FLOATING-RATE INCOME TRUST
By: Eaton Vance Management

as Investment Advisor

By: /s/ Michael B. Botthof 

Name: Michael B. Botthof

Title: Vice President

	

EATON VANCE INSTITUTIONAL SENIOR LOAN FUND 
By: Eaton Vance Management

as Investment Advisor

By: /s/ Michael B. Botthof 

Name: Michael B. Botthof

Title: Vice President

	 
	 
	EATON VANCE LIMITED DURATION INCOME FUND
By: Eaton Vance Management

as Investment Advisor

By: /s/ Michael B. Botthof 

Name: Michael B. Botthof

Title: Vice President

	 
	 
	EATON VANCE SENIOR FLOATING-RATE TRUST
By: Eaton Vance Management

as Investment Advisor

By: /s/ Michael B. Botthof 

Name: Michael B. Botthof

Title: Vice President

	 

	 
	EATON VANCE SENIOR INCOME TRUST
By: Eaton Vance Management

as Investment Advisor

By: /s/ Michael B. Botthof 

Name: Michael B. Botthof

Title: Vice President

	 
	 
	EATON VANCE SHORT DURATION DIVERSIFIED INCOME FUND
By: Eaton Vance Management 

as Investment Advisor

By: /s/ Michael B. Botthof 

Name: Michael B. Botthof

Title: Vice President

	 
	 
	FIRST TRUST/FOUR CORNERS SENIOR FLOATING RATE INCOME
FUND II, 

as Lender
By: Four Corners Capital Management LLC,

as Sub-Adviser

By: /s/ Vijay Srinivasan 

Name: Vijay Srinivasan

Title: Assistant Vice President

	 
	 
	FORTRESS PORTFOLIO TRUST, as Lender
By: Four Corners Capital Management LLC,

as Investment Manager

By: /s/ Vijay Srinivasan 

Name: Vijay Srinivasan

Title: Assistant Vice President

	 

	 
	GRAYSON & CO.
By: Boston Management and Research

as Investment Advisor

By: /s/ Michael B. Botthof 

Name: Michael B. Botthof

Title: Vice President

	

HARCH CLO II LIMITED
By: /s/ Michael E. Lewitt 

Name: Michael E. Lewitt

Title: Authorized Signatory

	 
	 
	INDOSUEZ CAPITAL FUNDING III, LIMITED
By: /s/ Alexander B. Kenna 

Name: Alexander B. Kenna

Title: Authorized Signatory

	 
	 
	INDOSUEZ CAPITAL FUNDING VI, LTD.
By: Lyon Capital Management LLC

as Collateral Manager

By: /s/ Alexander B. Kenna 

Name: Alexander B. Kenna

Title: Director

	 
	 
	LAUREL RIDGE CAPITAL LP
By: /s/ Van Nguyen 

Name: Van Nguyen

Title: Managing Partner

	 

	 
	LIGHTPOINT CLO 2004-1 & PREMIUM LOAN TRUST I, LTD.

PREMIUM LOAN TRUST I, LTD.
By: /s/ Thomas A. Kramer 

Name: Thomas A. Kramer

Title: Senior Managing Director & Chief 

Executive Officer

	

MARINER LDC
By: Mariner Invesment Group

By: /s/ Charles R. Howe II 

Name: Charles R. Howe II

Title: Treasurer

	 
	 
	MARINER OPPORTUNITIES FUND, L.P.
By: Mariner Investment Group

By: /s/ Charles R. Howe II 

Name: Charles R. Howe II

Title: Treasurer

	 
	 
	MUIRFIELD TRADING LLC
By: /s/ Meredith J. Koslick 

Name: Meredith J. Koslick

Title: Assistant Vice President

	 
	 
	OLYMPIC CLO I LTD
By: /s/ Kevin J. Hickam 

Name: Kevin J. Hickam

Title: Managing Director

Centre Pacific, LLC

	 
	ORIX FINANCE CORP. I
By: /s/ Christopher L. Smith 

Name: Christopher L. Smith

Title: Authorized Representative

	

SECURITY BENEFIT LIFE INSURANCE

COMPANY, as Lender
By: Four Corners Capital Management LLC,

as Sub-Adviser

By: /s/ Vijay Srinivasan 

Name: Vijay Srinivasan

Title: Assistant Vice President

	 
	 
	SENIOR DEBT PORTFOLIO
By: Boston Management and Research

as Investment Advisor

By: /s/ Michael B. Botthof 

Name: Michael B. Botthof

Title: Vice President

	 
	 
	SPECTRUM INVESTMENT PARTNERS, LP
By: Spectrum Group Management LLC

as General Partner

By: /s/ Jeffrey A. Schaffer 

Name: Jeffrey A. Schaffer

Title: Managing Member

	 
	 
	STANWICH LOAN FUNDING LLC
By: /s/ Meredith J. Koslick 

Name: Meredith J. Koslick

Title: Assistant Vice President

	 
	STONEHILL INSTITUTIONAL PARTNERS,

L.P.
By: /s/ Christopher Wilson 

Name: Christopher Wilson

Title: General Partner

	 
	 
	STEDMAN CBNA LOAN FUNDING LLC
By: Stedman CBNA Loan Funding LLC, for itself or as agent for Stedman
CFPI Loan Funding LLC 

By: /s/ Janet Haack 

Name: Janet Haack

Title: Attorney-In-Fact

 

TORONTO DOMINION (NEW YORK), LLC

By: /s/ Masood Fikree 

Name: Masood Fikree

Title: Authorized Signatory

	 
	 
	TRS FORE LLC
By: /s/ Alice L. Wagner 

Name: Alice L. Wagner

Title: Vice President

	 
	 
	TRS STARK LLC
By: /s/ Alice L. Wagner 

Name: Alice L. Wagner

Title: Vice President

	 

	 
	TRUMBULL THC2 LOAN FUNDING LLC, 
By: Trumbull THC2 Loan Funding LLC, for itself or as agent for Trumbull
THC2 CFPI Loan Funding LLC

By: /s/ Janet Haack 

Name: Janet Haack

Title: Attorney-In-Fact

	 
	 
	U.A.L. INVESTORS, L.L.C.
By: Farallon Capital Management, L.L.C.,

its Manager

By: /s/ Derek Schier 

Name: Derek Schier

Title: Managing Member

	 
	 
	UBS AG, STAMFORD BRANCH
By: /s/ Wilfred V. Saint 

Name: Wilfred V. Saint

Title: Director

By: /s/ Richard L. Tavrow 

Name: Richard L. Tavrow

Title: Director

	 
	 
	WATERSHED CAPITAL INSTITUTIONAL

PARTNERS, L.P.
By: WS Partners, L.L.C.,

Its General Partner

By: /s/ Meridee Moore 

Name: Meridee Moore

Title: Senior Managing Member

	 

	 
	WATERSHED CAPITAL PARTNERS, L.P.
By: WS Partners, L.L.C.,

Its General Partner

By: /s/ Meridee Moore 

Name: Meridee Moore

Title: Senior Managing Member

	 
	 
	WATERSHED CAPITAL PARTNERS

(OFFSHORE), LTD.
By: Watershed Asset Management L.L.C.,

Its Investment Manager

By: /s/ Meridee Moore 

Name: Meridee Moore

Title: Senior Managing Member

	 
	 
	WIND RIVER CLO I LTD.
By: McDonnell Investment Management, LLC,

as Manager

By: /s/ Kathleen A. Zarn 

Name: Kathleen A. Zarn

Title: Vice President

 

 
EXHIBIT A

TO ELEVENTH AMENDMENT

FORM OF FIRST AMENDMENT TO

SECURITY AND PLEDGE SECURITY AGREEMENT
FIRST AMENDMENT TO SECURITY AND PLEDGE AGREEMENT

            FIRST
AMENDMENT, dated as of April 8, 2005 (the "Amendment"), to the SECURITY
AND PLEDGE AGREEMENT (the "Agreement"), dated as of December 24,
2002, made by UNITED AIR LINES, INC. ("United"), a Delaware corporation,
UAL CORPORATION, a Delaware corporation (the "Parent"), all of the
direct and indirect subsidiaries of United and the Parent (together with
United and the Parent, each a "Grantor" and collectively the "Grantors,
each such Grantor being a debtor and a debtor-in-possession in a case pending
under Chapter 11 of the Bankruptcy Code), to JPMORGAN CHASE BANK and CITICORP
USA, INC., acting as co-collateral agents (together, the "Collateral
Agent").

W I T N E S S E T H:

           
WHEREAS, the Grantors entered into a Revolving Credit, Term Loan and
Guaranty Agreement, dated as of December 24, 2002 (as heretofore amended,
modified, restated, extended or otherwise supplemented, and as in effect
on the date hereof, the "Credit Agreement") among the Borrower,
the Guarantors party thereto, the Collateral Agent and the Lenders from
time to time party thereto; and

           
WHEREAS, unless otherwise defined herein, terms defined in the Agreement
are used herein as defined therein; and

           
WHEREAS, the Borrower has requested that various amendments to the
Credit Agreement be effected pursuant to a Waiver, Consent and Eleventh
Amendment to the Credit Agreement dated as of the date hereof (the "Eleventh
Amendment"), and the Grantors have requested that certain amendments
be made to the Agreement pursuant to this Amendment;

           
NOW, THEREFORE, the parties hereto hereby agree as follows:

            17.  
Amendments to Subsection 4(b). Subsection 4(b) of the Agreement
is hereby amended by inserting at the end of the first sentence appearing
therein the words ", other than to the extent that the legal name of any
such Grantor shall have changed in accordance with a corporate restructuring
or other transaction which is (A) not prohibited by Article VI of the Credit
Agreement and (B) carried out in accordance with the requirements appearing
in Section 5(e) of this Agreement."

            18.  
Amendment to Subsection 4(e). Subsection 4(e) of the Agreement is
hereby amended in its entirety to read as follows:

 

"The Pledged Shares (i) have been duly authorized and validly issued
and are fully paid and non-assessable, provided that the Grantors
do not represent or warrant that the Pledged Shares representing ownership
interests in (A) Covia LLC, (B) UAL Loyalty Services, LLC, (C) any limited
liability company other than Covia LLC and UAL Loyalty Services, LLC and
(D) corporations or other entities incorporated or formed in Guam, Bermuda
and Mexico are fully paid and non-assessable, and (ii) in the case of Pledged
Shares representing membership interests in any limited liability company
other than Covia LLC and UAL Loyalty Services, LLC, are not subject under
any operating agreement or other organizational document governing such
Pledged Shares to any requirement that the Grantor owning such membership
interests make any capital or equity call or contribution. None of the
Pledged Shares have been issued or transferred in violation of the securities
registration, securities disclosure or similar laws of any jurisdiction
to which such issuance or transfer is subject."

                   
19.    Amendment to Section 5. Section 5 of the Agreement
is hereby amended by adding the following new Section 5(e):

 

"(e) Each Grantor agrees to furnish updated versions of Schedule 1(l)
or Schedule 4(b) to this Agreement (in each case to be reasonably satisfactory
to the Collateral Agent) in connection with the consummation of any corporate
restructuring or other transaction which is not prohibited by Article VI
of the Credit Agreement to the extent that updating such schedules is necessary
to permit each Grantor to make the representations and warranties set forth
in Section 4, provided that, no such corporate restructuring or
other transaction shall be consummated unless the Grantors shall have provided
the Collateral Agent with (A) at least fifteen (15) days' prior written
notice of any such restructuring or other transaction and (B) prior to
the effective date of such proposed corporate restructuring or other transaction,
any documentation reasonably requested by the Collateral Agent to preserve
the pledges, liens and security interests granted in favor of the Collateral
Agent under this Agreement (including, without limitation, drafts of any
updated Schedules (in each case to be reasonably satisfactory to the Collateral
Agent) to this Agreement, replacement stock certificates if the name of
any Issuer is to be modified in connection with such restructuring or other
transaction and acknowledgements executed by any relevant Grantor as to
the pledges, liens and security interests granted in favor of the Collateral
Agent under this Agreement). Upon delivery of any updated Schedule in accordance
with the preceding sentence, the Schedule then in effect shall be replaced
in its entirety by the updated Schedule, and all representations and warranties
under this Agreement with respect to such Schedule shall thereafter relate
to the updated Schedule."

                   
20.    This Amendment shall not become effective until the
later of (a) the date on which this Amendment shall have been executed
by the Grantor and each Collateral Agent and each Collateral Agent shall
have received evidence satisfactory to it of such execution and (b) the
date on which the Collateral Agent shall have received evidence reasonably
satisfactory to it that each condition precedent to the effectiveness of
the Eleventh Amendment has occurred (or been waived) and remains in effect.
                   
21.    Except to the extent hereby amended, the Agreement
remains in full force and effect and is hereby ratified and affirmed.

                   
22.    The Borrower and each Guarantor agrees that its obligations
set forth in Section 10.05 of the Credit Agreement shall extend to the
preparation, execution and delivery of this Amendment, including the reasonable
fees and disbursements of special counsel to the Agents under the Credit
Agreement.

                   
23.    This Amendment shall be limited precisely as written
and shall not be deemed (a) to be a consent granted pursuant to, or a waiver
or modification of, any other term or condition of the Agreement or any
other Loan Document, (b) to prejudice any right or rights which the Collateral
Agents or the Lenders may now have or have in the future under or in connection
with the Agreement, the Credit Agreement, any Loan Document or any of the
instruments or agreements referred to therein. Whenever the Agreement is
referred to in the Agreement, any Loan Document or any of the instruments,
agreements or other documents or papers executed or delivered in connection
therewith, such reference shall be deemed to mean the Agreement as modified
by this Amendment.

                   
24.    This Amendment may be executed in any number of counterparts
and by the different parties hereto in separate counterparts, each of which
when so executed and delivered shall be deemed to be an original and all
of which taken together shall constitute but one and the same instrument.

                   
25.    This Amendment shall be governed by, and construed
in accordance with, the laws of the State of New York.

 

[SIGNATURE PAGES TO FOLLOW]

            IN
WITNESS WHEREOF, the parties hereto have caused this First Amendment
to Security and Pledge Agreement to be duly executed as of the day and
the year first written.

 

[signatures omitted in conformed version of Eleventh Amendment]

EXHIBIT B

TO ELEVENTH AMENDMENT

FORM OF FOURTH AMENDMENT TO

AIRCRAFT MORTGAGE
FOURTH AMENDMENT TO AIRCRAFT, spare engineS

AND SPARE PARTS

MORTGAGE AND SECURITY AGREEMENT

            THIS
FOURTH AMENDMENT TO AIRCRAFT, SPARE ENGINES AND SPARE PARTS MORTGAGE AND
SECURITY AGREEMENT dated as of April __, 2005 (this "Mortgage Amendment")
made by UNITED AIR LINES, INC., a Delaware corporation and a debtor-in-possession
under Chapter 11 of the Bankruptcy Code (the "Grantor"), in favor
of JPMORGAN CHASE BANK, N.A. (formerly known as JPMorgan Chase Bank)and
CITICORP USA, INC., acting as co-collateral agents (together, the "Collateral
Agent").

 

W I T N E S S E T H

            WHEREAS,
the Grantor and the Collateral Agent entered into that certain Aircraft,
Spare Engines and Spare Parts Mortgage and Security Agreement, dated as
of December, 24, 2002 (as heretofore amended, restated, extended, supplemented
or otherwise modified in writing from time to time, herein called the "Mortgage";
capitalized terms used herein but not defined shall have the meaning ascribed
to them in the Mortgage) in order to secure the Obligations of the Grantor
under that certain Revolving Credit, Term Loan and Guaranty Agreement,
dated as of December 24, 2002 (as amended, restated, extended, supplemented
or otherwise modified in writing from time to time, herein called the "Credit
Agreement"), among the Grantor, a debtor and a debtor-in-possession
in a case pending under Chapter 11 of the Bankruptcy Code, UAL Corporation,
a Delaware corporation and the parent company of the Grantor (the "Parent")
and all of the direct and indirect subsidiaries of the Grantor and the
Parent signatory thereto (the "Subsidiaries" and together with the
Parent, each a "Guarantor" and collectively the "Guarantors"),
each of which Guarantors referred to in this paragraph is a debtor and
a debtor-in-possession in a case pending under Chapter 11 of the Bankruptcy
Code (the cases of the Borrower and the Guarantors, each a "Case"
and collectively, the "Cases"), JPMorgan Chase Bank, N.A. (formerly
known as JPMorgan Chase Bank), a national banking corporation ("JPMorgan
Chase"), Citicorp USA, Inc., a Delaware corporation ("Citi"),
JPMorgan Chase Bank, N.A. (successor by merger to Bank One, NA), a national
banking corporation ("Bank One"), The CIT Group/Business Credit,
Inc., a New York corporation ("CIT Group"), each of the other financial
institutions from time to time party thereto (together with JPMorgan Chase,
Citi, Bank One and CIT Group, the "Lenders"), JPMorgan Chase and
Citi, as co-administrative agents (together, the "Agents") for the
Lenders and JPMorgan Chase as paying agent (in such capacity, the "Paying
Agent") for the Lenders;
           
WHEREAS, the Mortgage was filed for recordation with the Federal Aviation
Administration along with the Aircraft, Spare Engines and Spare Parts Mortgage
and Security Agreement Supplement No. 1 ("Mortgage Supplement No. 1")
on December 24, 2002, and the Mortgage and Mortgage Supplement No. 1 were
recorded by the Federal Aviation Administration on February 26, 2003 as
Conveyance No. MM024558;

           
WHEREAS, the Mortgage was previously supplemented by the Aircraft,
Spare Engines and Spare Parts Mortgage and Security Agreement Supplement
No. 2, dated March 19, 2003, executed by Grantor, recorded by the Federal
Aviation Administration on March 26, 2003 and assigned Conveyance No. YY036809;

           
WHEREAS, the Mortgage was previously supplemented by the Aircraft,
Spare Engines and Spare Parts Mortgage and Security Agreement Supplement
No. 3, dated July 11, 2003, executed by Grantor, recorded by the Federal
Aviation Administration on August 1, 2003, as Conveyance No. H109394;

           
WHEREAS, the Mortgage was previously supplemented by the Aircraft,
Spare Engines and Spare Parts Mortgage and Security Agreement Supplement
No. 4, dated March 12, 2004, executed by Grantor, recorded by the Federal
Aviation Administration on April 23, 2004 and assigned Conveyance No. U083669;

           
WHEREAS, the Mortgage was previously supplemented by the Aircraft,
Spare Engines and Spare Parts Mortgage and Security Agreement Supplement
No. 5, dated August 25, 2004, executed by Grantor, recorded by the Federal
Aviation Administration on October 29, 2004 and assigned Conveyance No.
FF003509;

           
WHEREAS, the Mortgage was previously supplemented by the Aircraft,
Spare Engines and Spare Parts Mortgage and Security Agreement Supplement
No. 6, dated October 13, 2004, executed by Grantor, recorded by the Federal
Aviation Administration on November 18, 2004 and assigned Conveyance No.
ZZ030843;

           
WHEREAS, the Mortgage was previously supplemented by the Aircraft,
Spare Engines and Spare Parts Mortgage and Security Agreement Supplement
No. 7, dated October 29, 2004, executed by Grantor, recorded by the Federal
Aviation Administration on November 18, 2004 and assigned Conveyance No.
GG033321;

           
WHEREAS, the Mortgage was previously supplemented by the Aircraft,
Spare Engines and Spare Parts Mortgage and Security Agreement Supplement
No. 8, dated November 10, 2004, executed by Grantor, recorded by the Federal
Aviation Administration on December 16, 2004 and assigned Conveyance No.
H112344;

           
WHEREAS, the Mortgage was previously supplemented by the Aircraft,
Spare Engines and Spare Parts Mortgage and Security Agreement Supplement
No. 9, dated November 30, 2004, executed by Grantor, recorded by the Federal
Aviation Administration on December 16, 2004 and assigned Conveyance No.
R065812;

           
WHEREAS, the Mortgage was previously supplemented by the Aircraft,
Spare Engines and Spare Parts Mortgage and Security Agreement Supplement
No. 10, dated February 22, 2005, executed by Grantor, recorded by the Federal
Aviation Administration on March 24, 2005 and assigned Conveyance No. M006119;

           
WHEREAS, the Mortgage was previously amended by the First Amendment
to Aircraft, Spare Engines and Spare Parts Mortgage and Security Agreement
dated as of May 7, 2004 (the "First Mortgage Amendment"), executed
by Grantor and the Collateral Agent, recorded by the Federal Aviation Administration
on June 28, 2004 as Conveyance No. XX026858;

           
WHEREAS, the Mortgage was previously amended by the Second Amendment
to Aircraft, Spare Engines and Spare Parts Mortgage and Security Agreement
dated as of September 1, 2004 (the "Second Mortgage Amendment"),
executed by Grantor and the Collateral Agent, recorded by the Federal Aviation
Administration on October 20, 2004 as Conveyance No. FF003475;

           
WHEREAS, the Mortgage was previously amended by the Third Amendment
to Aircraft, Spare Engines and Spare Parts Mortgage and Security Agreement
dated as of February 22, 2005 (the "Third Mortgage Amendment"),
executed by Grantor and the Collateral Agent, recorded by the Federal Aviation
Administration on March 24, 2005 as Conveyance No. M006120;

           
WHEREAS, a listing of the Airframes, Engines, Spare Engines and Spare
Parts Locations currently subject to the Mortgage is attached as Exhibit
1 to this Mortgage Amendment;

           
WHEREAS, the parties to the Credit Agreement have entered into certain
amendments to the Credit Agreement;

           
WHEREAS, (a) a copy of the Credit Agreement as in effect on December
24, 2002 was attached to the Mortgage as Exhibit C, (b) an unexecuted composite
conformed copy of the Credit Agreement reflecting modifications made to
the Credit Agreement through and including the Seventh Amendment to Revolving
Credit, Term Loan and Guaranty Agreement dated as of May 7, 2004 was added
as Exhibit D to the Mortgage pursuant to the First Mortgage Amendment,
(c) Exhibit D to the Mortgage was replaced with an updated unexecuted composite
conformed copy of the Credit Agreement reflecting modifications made to
the Credit Agreement through and including the Waiver, Consent and Eighth
Amendment to Revolving Credit, Term Loan and Guaranty Agreement dated as
of July 22, 2004 pursuant to the Second Mortgage Amendment, and (d) Exhibit
D to the Mortgage was further replaced with an updated unexecuted composite
conformed copy of the Credit Agreement reflecting modifications made to
the Credit Agreement through and including the Waiver, Consent and Tenth
Amendment to Revolving Credit, Term Loan and Guaranty Agreement dated as
of February 22, 2004 pursuant to the Third Mortgage Amendment;

           
WHEREAS, the parties to the Credit Agreement have entered into that
certain Waiver, Consent and Eleventh Amendment to Revolving Credit, Term
Loan and Guaranty Agreement dated as of April 8, 2005 (the "Eleventh
Amendment"); and

           
WHEREAS, in connection with the execution of the Eleventh Amendment,
the Grantor and the Collateral Agent have agreed that the Mortgage shall
be amended as set forth herein subject to and upon the terms and conditions
set forth herein.

           
NOW, THEREFORE, the parties hereto hereby agree as follows:

                   
26.    Amendment to Witnesseth Section. The fourth
paragraph appearing in the Witnesseth section of the Mortgage is hereby
amended to read in its entirety as follows:

           
WHEREAS, pursuant to that certain Revolving Credit, Term Loan and Guaranty
Agreement, dated as of December 24, 2002 (as previously amended, restated,
extended, supplemented or otherwise modified by that certain Waiver and
Amendment Letter dated as of February 7, 2003, that certain First Amendment
to Revolving Credit, Term Loan and Guaranty Agreement dated as of February
10, 2003, that certain Second Amendment to Revolving Credit, Term Loan
and Guaranty Agreement dated as of February 10, 2003, that certain Correction
Letter dated as of February 14, 2003, that certain Third Amendment to Revolving
Credit, Term Loan and Guaranty Agreement dated as of February 18, 2003,
that certain Fourth Amendment to Revolving Credit, Term Loan and Guaranty
Agreement dated as of March 27, 2003, that certain Waiver and Fifth Amendment
to Revolving Credit, Term Loan and Guaranty Agreement dated as of May 15,
2003, that certain Waiver and Sixth Amendment to Revolving Credit, Term
Loan and Guaranty Agreement dated as of October 10, 2003, that the Seventh
Amendment to Revolving Credit, Term Loan and Guaranty Agreement dated as
of May 7, 2004, that certain Waiver and Eighth Amendment to Revolving Credit,
Term Loan and Guaranty Agreement dated as of July 21, 2004, that certain
Waiver, Consent and Ninth Amendment to Revolving Credit, Term Loan and
Guaranty Agreement dated as of November 5, 2004, that certain Waiver, Consent
and Tenth Amendment to Revolving Credit, Term Loan and Guaranty Agreement
dated as of January 26, 2005, and that certain Waiver, Consent and Eleventh
Amendment to Revolving Credit, Term Loan and Guaranty Agreement dated as
of April 8, 2005 (the "Eleventh Amendment"), and as may be further
amended, restated, extended, supplemented or otherwise modified in writing
from time to time, the "Credit Agreement"; a copy of the Credit
Agreement as executed on December 24, 2002 is attached hereto as Exhibit
C; an unexecuted conformed copy of the Credit Agreement as amended through
and including the Eleventh Amendment is attached hereto as Exhibit D),
among the Grantor, UAL Corporation, the parent company of the Grantor (the
"Parent"), each of the direct and indirect Subsidiaries of the Grantor
from time to time party thereto, JPMorgan Chase Bank, N.A. (formerly known
as JPMorgan Chase Bank), Citicorp USA, Inc. and the other lenders from
time to time party thereto (collectively, the "Lenders"), JPMorgan
Chase Bank, N.A., (formerly known as JPMorgan Chase Bank) as Paying Agent,
and JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase Bank) and
Citicorp USA, Inc. (each, as a Co-Administrative Agent and Co-Collateral
Agent), the Lenders have agreed to make the Loans to and issue Letters
of Credit on behalf of the Grantor;

                   
27.    Amendments to Section 2.01. Section 2.01(b)
of the Mortgage is hereby amended by (A) deleting the word "or" appearing
at the end of sub-section (vi) appearing therein; (B) deleting the period
appearing at the end of sub-section (vii) appearing therein and inserting
the word "or" at the end of such sub-section; and (C) inserting the following
new sub-section (viii) immediately following sub-section (vii):

 

"(viii) Notwithstanding anything to the contrary contained in Section
2.01(b)(vii), enter into a non-consecutive short term lease (i.e., for
a lease term of no longer than 120 days) of such Engine or Spare Engine
with any repair customer of the Grantors or any other Person which is a
Certificated Air Carrier or a Foreign Air Carrier, provided that,
(A) the aggregate number of Engines and Spare Engines leased as permitted
pursuant to this Section 2.01(b)(viii) at any one time shall not exceed
five (5) Engines or Spare Engines, (B) the aggregate Orderly Liquidation
Value of the Engines and Spare Engines leased at any time as permitted
pursuant to this Section 2.01(b)(viii) shall not exceed $17,000,000, (C)
the lease documentation for any Engine or Spare Engine leased as permitted
pursuant to this Section 2.01(b)(viii) shall (1) contain an acknowledgement
by the lessee party thereto of the perfected Lien of the Collateral Agent
under this Mortgage on such Engine or Spare Engine, (2) provide that the
Grantor shall be entitled to perform a boroscope examination on such Engine
or Spare Engine at the end of the lease period and (3) provide that the
lessee of such Engine or Spare Engine shall be responsible for a use fee
per cycle and a use fee per hour with respect to its utilization of such
Engine or Spare Engine during the term of the lease, (D) the Grantor shall
provide the Collateral Agent with (1) written notice of such lease no less
than one (1) day prior to the transfer of the Engine or Spare Engine subject
to such lease, (2) copies of the lease documentation with respect to each
such lease and (3) on or before the last Business Day of each month a report
identifying each Engine and Spare Engine subject to leases permitted pursuant
to this Section 2.01(b)(viii) and the Orderly Liquidation Value of such
leased Engines and Spare Engines and (E) the lessee under such lease is
not subject to a proceeding or final order under applicable bankruptcy,
insolvency or reorganization laws on the date the lease is entered into,"

                   
28.    Amendment to Exhibits. The Mortgage is hereby
amended by replacing Exhibit D thereto with Exhibit 2 to this Mortgage
Amendment.
                   
29.    Conditions to Amendment Effectiveness. The
amendments set forth in this Mortgage Amendment shall not become effective
until the date and time at which this Mortgage Amendment is filed for recordation
with the Federal Aviation Administration Aircraft Registry.

                   
30.    Costs and Expenses. The Grantor agrees that
its obligations set forth in Section 10.05 of the Credit Agreement shall
extend to the preparation, execution and delivery of this Mortgage Amendment,
including the reasonable fees and disbursements of special counsel to the
Agents (as defined in the Credit Agreement).

                   
31.    Representations and Warranties. The Grantor
represents and warrants to the Collateral Agent, to induce the Collateral
Agent to enter into this Mortgage Amendment, that each of the representations,
warranties and covenants made by the Grantor in the Mortgage are true and
correct in all material respects as of the date hereof except where such
representation or warranty relates to a specific date, in which such representation
or warranty shall be true and correct as of such date.

                   
32.    References. This Mortgage Amendment shall
be limited precisely as written and shall not be deemed (a) to be a consent
granted pursuant to, or a waiver or modification of, any other term or
condition of the Mortgage or any of the instruments or agreements referred
to therein or (b) to prejudice any right or rights which the Collateral
Agent may now have or have in the future under or in connection with the
Mortgage or any of the instruments or agreements referred to therein. Whenever
the Mortgage is referred to in the Mortgage, the Credit Agreement or any
of the instruments, agreements or other documents or papers executed or
delivered in connection therewith, such reference shall be deemed to mean
the Mortgage as modified by this Mortgage Amendment.

                   
33.    Counterparts. This Mortgage Amendment may
be executed in any number of counterparts and by the different parties
hereto in separate counterparts, each of which when so executed and delivered
shall be deemed to be an original and all of which taken together shall
constitute but one and the same instrument.

                   
34.    Applicable Law. This Mortgage Amendment shall
be governed by, and construed in accordance with, the laws of the State
of New York to the full extent provided in Section 6.05 of the Mortgage.

                   
35.    This Mortgage Amendment shall be construed as supplemental
to the Mortgage and shall form a part thereof, and the Mortgage is hereby
incorporated by reference herein and is hereby ratified, approved and confirmed.

 

 

[SIGNATURE PAGES TO FOLLOW]

           
IN WITNESS WHEREOF, the Grantor and the Collateral Agent have caused
this Fourth Amendment to Aircraft, Spare Engines and Spare Parts Mortgage
and Security Agreement to be duly executed by their respective officers
thereunto duly authorized.

UNITED AIR LINES, INC., as Grantor
By: ______________________________

Name:

Title:

 
JPMORGAN CHASE BANK, N.A., as Co-Collateral Agent
By: ______________________________

Name:

Title:

 
CITICORP USA, INC., as Co-Collateral Agent
By: ______________________________

Name:

Title:

 

Exhibit
1 to

Mortgage Amendment

DESCRIPTION OF AIRFRAMES, ENGINES,

SPARE ENGINES AND SPARE PARTS LOCATIONS
[omitted in conformed version of Eleventh Amendment]

Exhibit
2 to

Mortgage Amendment

 

 

 

EXHIBIT D

TO

AIRCRAFT, SPARE ENGINES AND SPARE PARTS

MORTGAGE AND SECURITY AGREEMENT

COMPOSITE CONFORMED CREDIT AGREEMENT

(THROUGH ELEVENTH AMENDMENT)

[omitted in conformed version of Eleventh Amendment]Bankruptcy Exit Agreement

Exhibit 10.3
Letter 05-01

(Bankruptcy Exit Agreement)

LETTER OF AGREEMENT

by and between

UAL CORP.,

UNITED AIR LINES, INC.

and

THE AIR LINE PILOTS

in the service of

UNITED AIR LINES, INC.

as represented by

THE AIR LINE PILOTS ASSOCIATION, INTERNATIONAL

            THIS
LETTER OF AGREEMENT, dated as of January 1, 2005, is made and entered into
in accordance with the Railway Labor Act by and between UAL Corp. (hereinafter
referred to as "UAL"), UNITED AIR LINES, INC. (hereinafter referred to
as the "Company") and the AIR LINE PILOTS ASSOCIATION, INTERNATIONAL (hereinafter
referred to as "ALPA" or the "Association").

            WHEREAS
UAL, the Company and the Association have reached agreement concerning
the revisions to their current collective bargaining agreement (the "2003
Pilot Agreement" and, as revised by this Letter of Agreement, the "Revised
2003 Pilot Agreement") necessary for the Company to emerge from Chapter
11; and

            WHEREAS
certain of the revisions shall become effective as of January 1, 2005 (the
"Effective Date"), assuming the complete satisfaction of the conditions
described in paragraph 15 below prior to January 31, 2005 and others shall
become effective on the effective date (the "Exit Date") of a plan of reorganization
proposed by UAL (the "Plan of Reorganization"); and

            WHEREAS
the Company has represented to the Association that the Company has concluded
that UAL cannot attract the exit financing necessary to emerge from Chapter
11 absent the termination of all of the Company's defined benefit plans;

            THEREFORE
the parties to this Letter of Agreement hereby agree as follows:

            1. 

Contract Extension. The amendable date of the Revised 2003 Pilot
Agreement shall be December 31, 2009. Section 22.D of the Revised 2003
Pilot Agreement shall read in its entirety as follows:

 

This Agreement shall continue in full force and effect through and
including December 31, 2009 and shall renew itself without change each
succeeding January 1st thereafter, unless written notice of
intended change is served in accordance with Section 6, Title I, of the
Railway Labor Act by either party upon the other at least thirty (30) but
not more than two hundred seventy (270) days prior to December 31, 2009
or any year thereafter. The parties shall commence direct negotiations
with respect to such notices no later than thirty (30) days following the
delivery of such notice. In the event a new tentative collective bargaining
agreement has not been concluded by August 1, 2009 (or August 1st
of any year thereafter if applicable), and the services of the National
Mediation Board (the "Board") have not previously been invoked, the parties
shall, no later than August 1, 2009 (or August 1st of any year
thereafter if applicable), jointly invoke the services of the Board under
Section 5 of the Act.

            2. 

Hourly Pay Rates. The rates for hourly pay (the "Hourly Rates")
under Section 3-B of the 2003 Pilot Agreement shall be reduced by 11.8%
on the Effective Date, and the reduced Hourly Rates shall thereafter be
increased by 1.5% on May 1, 2006, by 1.5% on May 1, 2007, by 1.5% on May
1, 2008 and by 1.5% on May 1, 2009 (as provided in the 2003 Pilot Agreement).
In addition to the increases contained in the preceding sentence, the Hourly
Rates shall be increased by 1% on January 1, 2008. The Hourly Rates under
Section 3-B of the Revised 2003 Pilot Agreement are set forth in Exhibit
A to this Letter of Agreement.
            3. 

Other Contract Changes. Certain other provisions of the 2003 Pilot
Agreement shall be revised on the Effective Date as described on Exhibits
B-1, B-2 and B-3 to this Letter of Agreement.

            4. 

Defined Benefit Pension Plan.

                   
a.    In the event the Company seeks judicial approval to
terminate the United Airlines Pilot DefinedBenefit

           
Pension Plan (the "A Plan") under 29 U.S.C §1341(c) following April
11, 2005, then, on and after May 11,

           
2005, (i) the Association shall waive any claim it may have that the termination
of the A Plan would violate the

           
terms and conditions of the existing collective bargaining agreement between
the Company and the Association,

           
and (ii) the Association shall not otherwise oppose the Company's efforts
to terminate the A Plan under 29 U.S.C

           
§1341(c); provided, however, that nothing in this Letter of Agreement
shall be construed, deemed or

           
characterized by UAL or the Company as any agreement of any form by the
Association that the A Plan should

           
be terminated;

                   
b.    The Company: (i) shall not terminate or agree to terminate
the A Plan effective at any time prior to the

           
earlier of (A) ten (10 ) days before the Exit Date and (B) the last date
that any of the Company's other defined

           
benefit pension plans are terminated (the "Pension Termination Date") and
(ii) shall oppose any effort by any other

           
person or entity to terminate the A Plan effective at any time prior to
the Pension Termination Date;

                   
c.    The A Plan shall remain in full force and effect unless
(i) the bankruptcy court issues an order declaring

           
that the Company has met the requirements for plan termination under 29
U.S.C. §1341(c)(2)(B)(ii), and (ii) any

           
of the following has occurred: (A) no timely notice of appeal of the order
has been filed, (B) the order has been

           
affirmed following the exhaustion of all appeals, or (C) the Exit Date
has occurred and the Plan of Reorganization

           
has become effective without provision for the continuation of any such
appeals; and

                   
d.    Notwithstanding any termination of A Plan retirement
benefits, any and all of the Company's

           
indemnification obligations under or applicable to the A Plan shall remain
in full force and effect without regard to

           
Section 22 of the Revised 2003 Pilot Agreement.

            5. 

Pension Contributions. In the event that the A Plan is terminated
pursuant to 29 U.S.C §1341 or §1342 following judicial approval
of such termination:

                   
a.    The Company shall make an additional monthly contribution
(the "C Plan Contribution") to the United

           
Airlines Pilot Directed Account Plan (the "PDAP") of six percent (6%) of
pilot compensation (as measured under

           
the PDAP) beginning with the earlier of (i) June 1, 2005 or (ii) the first
day of the calendar month following the

           
Exit Date (with a pro rated C Plan Contribution for the period between
the Exit Date and the first of the month

           
following the Exit Date); provided, however, that in the event the Exit
Date follows June 1, 2005, C Plan

           
Contributions will accrue from June 1, 2005 through the Exit Date and be
contributed in a single lump sum

           
payment to the PDAP on the Exit Date;

                   
b.    Prior to the Exit Date, the Company and the Association
shall adopt a mutually-acceptable qualified or

           
non-qualified plan arrangement to accept contributions that cannot be allocated
to pilot defined contribution

           
accounts under Section 415 of the Internal Revenue Code;

                   
c.    At any time prior to January 1, 2007, the Association
may elect, on an irrevocable basis, to amend the

           
Revised 2003 Pilot Agreement, effective January 1, 2008, (i) to increase
the C Plan Contribution from six percent

           
(6%) to seven percent (7%) of pilot compensation (as measured under the
PDAP) and (ii) to reduce the Hourly

           
Pay Rates under Section 3-B of the Revised 2003 Pilot Agreement by one
percent (1%);

                   
d.    The C Plan Contribution shall be in addition to the
nine percent (9%) of pilot compensation contributed

           
to the PDAP under the 2003 Pilot Agreement; and

                   
e.    Following the Exit Date, the Company shall not establish
or re-establish any single-employer defined

           
benefit plan for any UAL or Company employee group unless the pilot group
is provided the option of electing to

           
receive a comparable defined benefit plan in lieu of the C Plan Contribution.

            6. 

Profit Sharing. The Revised 2003 Pilot Agreement shall provide
for the pilot group to participate in the revised profit sharing program
described in Exhibit C to this Letter of Agreement.

            7. 

Convertible Notes. In the event that the A Plan is terminated pursuant
to 29 U.S.C §1341 or §1342 following judicial approval of such
termination, the Revised 2003 Pilot Agreement and the Plan of Reorganization
shall provide for the issuance of $550 million of UAL convertible notes,
as described in Exhibit D to this Letter of Agreement, to a trust or other
entity designated by the Association. The terms of the UAL convertible
notes described in Exhibit D shall be subject to mutually-acceptable modifications
to optimize implementation for all parties from an accounting, securities
law and tax law perspective.

            8. 

Distribution Agreement. The Plan of Reorganization shall provide
the pilot group with a distribution of UAL equity securities as provided
in the amended distribution agreement described in Exhibit E to this Letter
of Agreement.

            9. 

Additional Non-Labor Savings. Prior to the Exit Date, the Association
and the Company shall develop, and the Company shall begin pursuit of,
a mutually-acceptable business improvement program reasonably projected
to produce at least $150 million of annual savings in non-labor costs in
addition to the savings contained in the Gershwin 5F business plan dated
as of November 4, 2004 (the "Business Plan").

           10. 

Administrative Claim. The Association shall accrue and be entitled
to a stipulated, approved and allowed claim of administration under 11
U.S.C §503(b) in the amount of the actual cash savings provided to
the Company under this Letter of Agreement from the Effective Date through
the earlier of (i) the termination of this Letter of Agreement under paragraph
16 below or (ii) the Exit Date (the "Administrative Claim"). The Administrative
Claim shall be extinguished upon the Exit Date unless the Association has
terminated the Letter of Agreement under paragraph 16 below.

           11. 

Indemnity. UAL and the Company shall provide indemnification on
the Effective Date as described in Exhibit F to this Letter of Agreement.

           12. 

Plan Release and Exculpation. The Plan of Reorganization shall
include a plan exculpation and release provision (which provision shall
be at least as comprehensive as the plan exculpation and release provision
under the Plan of Reorganization for the debtor or any other person) for
the Air Line Pilots Association, International, the United Master Executive
Council of the Air Line Pilots Association, International, and each of
their current or former (a) members, (b) officers, (c) committee members,
(d) employees, (e) advisors, (f) attorneys, (g) accountants, (h) investment
bankers, (i) consultants, (j) agents and (k) other representatives with
respect to any liability such person or entity may have in connection with
or related to the UAL bankruptcy cases, the formulation, preparation, negotiation,
dissemination, implementation, administration, confirmation or consummation
of any of the Plan of Reorganization, the disclosure statement concerning
the Plan of Reorganization, the 2003 Pilot Agreement, this Letter of Agreement,
the Revised 2003 Pilot Agreement or any contract, employee benefit plan,
instrument, release or other agreement or document created, modified, amended
or entered into in connection with either the Plan of Reorganization or
any agreement between the Company, UAL and the Association, or any other
act taken or omitted to be taken in connection with the United bankruptcy.

           13. 

Assumption of the Pilot Agreement. The Revised 2003 Pilot Agreement
(other than with respect to the A Plan if the A Plan is terminated) shall
be assumed under 11 U.S.C. §365 under the Plan of Reorganization.

           14. 

Bankruptcy Actions. The Company and the Association shall take
the following actions to seek the approval of this Letter of Agreement
by the bankruptcy court in In Re UAL Corporation et al., Case No. 02-B-48191
(Bankr. N.D. Ill.) (the "Bankruptcy Cases"):

                   
a.    the Company shall file a motion for approval of the
Letter of Agreement under 11 U.S.C. §363, in form

           
and substance reasonably acceptable to the Association, by no later than
January 21, 2005;

                   
b.    the Company shall provide, to the extent reasonably
practicable, the Association's counsel with copies

           
of, and a reasonable opportunity to comment on, all motions, applications,
proposed orders, pleadings and

           
supporting papers prepared by the Company for filing with the bankruptcy
court relating to court approval of this

           
Letter of Agreement; and

                   
c.    both the Company and the Association shall support
and seek the approval of this Letter of Agreement

           
in the Bankruptcy Cases without condition, qualification or exception;
shall use their best efforts to obtain the

           
support of the Official Committee of Unsecured Creditors and other parties
and stakeholders for the Letter of

           
Agreement; and shall take every reasonable action necessary to obtain judicial
approval of this Letter of

           
Agreement in the Bankruptcy Cases without condition, qualification or exception,
including the filing of motions,

           
objections and appeals.

           15. 

Conditions to Effectiveness. This Letter of Agreement shall become
effective as of January 1, 2005, subject to the occurrence of all of the
following prior to January 31, 2005: (a) acceptance by the United Master
Executive Council of the Association, (b) United pilot membership ratification
under the Association's Constitution and By-Laws, (c) if required, approval
by the Company's Board of Directors, (d) execution by the President of
the Association, and (e) withdrawal of the Company's motion to reject the
2003 Pilot Agreement under 11 U.S.C. §1113.

           16. 

Termination Rights. This Letter of Agreement may be terminated
by the Association, by written notice from the Association to the Company
(the "Termination Notice"), given before or after the Effective Date but
no later than the Exit Date, but in no event later than sixty (60) days
following the occurrence of any of the following events:

                   
a.    failure of the court to issue final judicial approval
of this Letter of Agreement, without condition,

           
qualification or exception, by January 31, 2005;

                   
b.    a court of competent jurisdiction enters a final,
non-appealable judicial order that the Company is not

           
entitled to the termination of the A Plan under 29 U.S.C §1341(c);

                   
c.    failure of the Company to implement, through binding
agreement or final judicial order effective no later

           
than June 1, 2005, revisions to (i) the labor contracts of the Company's
other unionized employees and (ii) the

           
wages, benefits and working conditions of the Company's salaried and management
employees so that the

           
aggregate revisions in (i) and (ii) are reasonably projected to produce
at least $1.0 billion in average annual cas

           
savings in labor and pension costs for the Company from January 1, 2005
through and including January 1, 2010,

           
unless such action is cured to the reasonable satisfaction of the Association
within twenty (20) days of the

           
Termination Notice;

                   
d.    the filing by UAL or United of, support by UAL or
United for, or judicial confirmation or approval of

           
(as the case may be), a plan of reorganization or a proposed disclosure
statement which (i) contains any material

           
term that is materially inconsistent with the Revised 2003 Pilot Agreement
or this Letter of Agreement or (ii)

           
proposes or confirms a capital structure or ownership structure that is
not reasonably acceptable to the

           
Association unless, in either case (i) or (ii), such action is cured to
the reasonable satisfaction of the Association

           
within twenty (20) days of the Termination Notice; or

                   
e.    any other material breach of the Company's or UAL's
obligations under this Letter of Agreement unless

           
such breach is cured to the reasonable satisfaction of the Association
within twenty (20) days of the Termination

           
Notice.

In the event of such termination, (A) the Administrative Claim shall
be paid on the Exit Date, (B) this Letter of Agreement shall otherwise
become null and void in its entirety, and (C) the parties shall thereafter
be governed by the 2003 Pilot Agreement (including the A Plan) and without
regard to this Letter of Agreement.

           17. 

Fees and Expenses. The Company shall reimburse the Association
for fees and expenses incurred in connection with this Letter of Agreement
as described on Exhibit G to this Letter of Agreement.

           18. 

Agreement. This Letter of Agreement is a final, binding and conclusive
commitment and agreement between UAL, the Company and the Association.
Notwithstanding anything to the contrary in this Letter of Agreement, judicial
approval of this Letter of Agreement shall constitute approval and allowance
of the Administrative Claim and shall otherwise have the same meaning and
effect as the judicial approval of the 2003 Pilot Agreement in the Bankruptcy
Cases signed on April 30, 2003.

           19. 

Amendments; Waiver. This Letter of Agreement may be amended, modified,
superseded or canceled and any of its provisions may be waived only by
a written instrument executed by all parties or, in the case of a waiver,
by the party waiving compliance. Except as otherwise expressly provided
in paragraph 16 above with respect to the delivery of a notice of termination,
the failure of any party at any time to require performance of any provision
of this Letter of Agreement shall not affect the right of that party at
a later time to enforce the same or a different provision. No waiver by
any party of a right under this Letter of Agreement shall be deemed or
construed as a further or continuing waiver of any such right with respect
to the same or a different provision of this Letter of Agreement.

           20. 

Notices. Any notice or other communication given under to the terms
of this Letter of Agreement must be in writing and shall be deemed to have
been duly given on the day it is delivered by hand, on the day it is sent
by facsimile with confirmation of receipt by the transmitting machine,
on the business day after it is sent by a national overnight mail service
(delivery charge prepaid), or on the third business day after it is mailed
first class, postage prepaid, in any case to the following addresses:

 
	If to the Company:	United Airlines, Inc.

1200 East Algonquin Road

Elk Grove Township, Illinois 60007

Attention: Paul Lovejoy

Facsimile: 847-700-4099
	with copies to:	Kirkland & Ellis

200 East Randolph Drive

Chicago, Illinois 60601

Attention: James H.M. Sprayregen

Facsimile: 312-861-2200
	If to the Association:	United Master Executive Council

Air Line Pilots Association, International

9550 West Higgins Road, Suite 1000

Rosemont, IL  60018

Attention: Master Chairman

Facsimile: 847-292-1777

 

 

 
	with copies to:	Cohen, Weiss and Simon, LLP

330 West 42nd Street

25th Floor

New York, New York 10036

Attention: Babette Ceccotti 

Facsimile: 212-695-5436

 
or to such other address or to such other person as any party shall
have last designated by written notice provided to the other parties in
the manner set forth in this paragraph.
           21. 

Counterparts. This Letter of Agreement may be executed in two or
more counterparts, all of which shall be considered one and the same instrument,
and each of which shall be deemed an original.  Each party to this
Letter of Agreement has agreed to permit the use of faxed or otherwise
electronically transmitted signatures in order to expedite the consummation
of the transactions contemplated hereby.

           22. 

Headings; Construction.  The paragraph headings in this Letter
of Agreement have been inserted for convenience of reference only and do
not restrict or otherwise modify any of the terms or provisions of this
Letter of Agreement. Unless otherwise expressly provided, the words "including"
or "includes" in this Letter of Agreement do not limit the preceding words
or terms and shall be deemed to be followed by the words "without limitation."

           23. 

Exhibits. This Letter of Agreement includes all of Exhibits A through
G hereto. Except as otherwise expressly set forth therein, all capitalized
terms in Exhibits A through G shall have the meanings defined in this Letter
of Agreement.

           24. 

Fair and Equitable Pension Treatment. In the event the Company
implements, or reaches agreement with respect to, a legislative or other
pension funding solution that permits the continuation or maintenance of
any of the Company's defined benefit plans following the Pension Termination
Date, the pilots will receive the full benefit of that legislative or other
solution to maintain the pilot A Plan in the same status (e.g., frozen
or active) as any other surviving plan so long as the pilot labor and pension
savings contributed to the restructuring remain fair and proportional to
other employee groups' labor and pension savings contributed to the restructuring
in the manner contemplated under the Business Plan in light of any such
legislative or other pension funding solution.

 

 

(Signature page to follow)

            IN
WITNESS WHEREOF, the parties have signed this Letter of Agreement this
__ day of January, 2005.

 

	WITNESS:

 

 

 

 

 

 

 

 

 

 

 

 
 
	FOR UNITED AIR LINES, INC.

 

 
Peter B. Kain

Vice President - Labor Relations

FOR UAL CORPORATION

 

 

Glenn F. Tilton

Chairman, President and CEO 

	 
	WITNESS:

 

 

 

 

 

 

 

 

 

 

 
 
	FOR THE AIR LINE PILOTS ASSOCIATION, INTERNATIONAL

 

 
Duane E. Woerth, President

 

 

Mark Bathurst, Chairman

United Master Executive Council

Exhibit A

Revised Pay Rates

Section 3-B "Hourly Rates" is modified to read as follows:

3-B-1 Effective January 1, 2005 the hourly rates for Captains and First
Officers shall be as follows. The hourly rates, overrides, and incentive
pay established in this Section 3 shall govern all aspects of pilot compensation.

 

3-B-1-a Hourly Rates

Captains

	 	
B747-400
	
B777
	
B767/757
	
A320/319
	
B737-300

	1yr	
166.91
	
166.91
	
136.79
	
116.24
	
116.24

	2yr	
167.86
	
167.86
	
137.83
	
117.24
	
117.24

	3yr	
168.74
	
168.74
	
139.10
	
118.28
	
118.28

	4yr	
169.66
	
169.66
	
140.03
	
119.40
	
119.40

	5yr	
170.62
	
170.62
	
141.13
	
120.52
	
120.52

	6yr	
171.50
	
171.50
	
142.18
	
121.58
	
121.58

	7yr	
172.45
	
172.45
	
143.13
	
122.67
	
122.67

	8yr	
173.59
	
173.59
	
144.33
	
123.75
	
123.75

	9yr	
174.55
	
174.55
	
145.28
	
124.68
	
124.68

	10yr	
175.97
	
175.97
	
146.78
	
126.23
	
126.23

	11yr	
177.31
	
177.31
	
148.36
	
127.68
	
127.68

	12yr	
178.91
	
178.91
	
149.75
	
129.21
	
129.21

First Officers

	 	
B747-400
	
B777
	
B767/757
	
A320/319
	
B737-300

	1yr	
30.73
	
30.73
	
30.73
	
30.73
	
30.73

	2yr	
70.00
	
70.00
	
57.47
	
48.89
	
48.89

	3yr	
101.24
	
101.24
	
83.36
	
70.97
	
70.97

	4yr	
107.06
	
107.06
	
88.36
	
75.34
	
75.34

	5yr	
109.29
	
109.29
	
90.39
	
77.19
	
77.19

	6yr	
111.81
	
111.81
	
92.70
	
79.27
	
79.27

	7yr	
114.42
	
114.42
	
94.96
	
81.39
	
81.39

	8yr	
117.18
	
117.18
	
97.42
	
83.53
	
83.53

	9yr	
118.17
	
118.17
	
98.35
	
84.41
	
84.41

	10yr	
119.57
	
119.57
	
99.73
	
85.77
	
85.77

	11yr	
120.93
	
120.93
	
101.19
	
87.08
	
87.08

	12yr	
122.20
	
122.20
	
102.28
	
88.25
	
88.25

3-B-1-b deleted

 
3-B-2 Effective May 1, 2006 the hourly rates for Captains and
First Officers shall be as follows:

3-B-2-a Hourly Rates

Captains

	 	
B747-400
	
B777
	
B767/757
	
A320/319
	
B737-300

	1yr	
169.42
	
169.42
	
138.84
	
117.99
	
117.99

	2yr	
170.38
	
170.38
	
139.90
	
119.00
	
119.00

	3yr	
171.27
	
171.27
	
141.19
	
120.06
	
120.06

	4yr	
172.21
	
172.21
	
142.13
	
121.19
	
121.19

	5yr	
173.18
	
173.18
	
143.25
	
122.32
	
122.32

	6yr	
174.07
	
174.07
	
144.31
	
123.41
	
123.41

	7yr	
175.03
	
175.03
	
145.27
	
124.51
	
124.51

	8yr	
176.20
	
176.20
	
146.49
	
125.61
	
125.61

	9yr	
177.16
	
177.16
	
147.46
	
126.55
	
126.55

	10yr	
178.61
	
178.61
	
148.98
	
128.12
	
128.12

	11yr	
179.97
	
179.97
	
150.59
	
129.60
	
129.60

	12yr	
181.59
	
181.59
	
152.00
	
131.15
	
131.15

First Officers

	 	
B747-400
	
B777
	
B767/757
	
A320/319
	
B737-300

	1yr	
31.19
	
31.19
	
31.19
	
31.19
	
31.19

	2yr	
71.05
	
71.05
	
58.34
	
49.63
	
49.63

	3yr	
102.76
	
102.76
	
84.61
	
72.03
	
72.03

	4yr	
108.66
	
108.66
	
89.68
	
76.47
	
76.47

	5yr	
110.93
	
110.93
	
91.75
	
78.35
	
78.35

	6yr	
113.49
	
113.49
	
94.09
	
80.46
	
80.46

	7yr	
116.13
	
116.13
	
96.39
	
82.61
	
82.61

	8yr	
118.93
	
118.93
	
98.88
	
84.78
	
84.78

	9yr	
119.94
	
119.94
	
99.83
	
85.68
	
85.68

	10yr	
121.37
	
121.37
	
101.23
	
87.06
	
87.06

	11yr	
122.74
	
122.74
	
102.70
	
88.38
	
88.38

	12yr	
124.03
	
124.03
	
103.81
	
89.57
	
89.57

 
3-B-2-b deleted

 

 

 

 
3-B-3 Effective May 1, 2007 the hourly rates for Captains and First
Officers shall be as follows:

3-B-3-a Hourly Rates

Captains

	 	
B747-400
	
B777
	
B767/757
	
A320/319
	
B737-300

	1yr	
171.96
	
171.96
	
140.92
	
119.76
	
119.76

	2yr	
172.94
	
172.94
	
141.99
	
120.79
	
120.79

	3yr	
173.84
	
173.84
	
143.30
	
121.86
	
121.86

	4yr	
174.79
	
174.79
	
144.26
	
123.01
	
123.01

	5yr	
175.78
	
175.78
	
145.40
	
124.16
	
124.16

	6yr	
176.68
	
176.68
	
146.48
	
125.26
	
125.26

	7yr	
177.66
	
177.66
	
147.45
	
126.37
	
126.37

	8yr	
178.84
	
178.84
	
148.69
	
127.49
	
127.49

	9yr	
179.82
	
179.82
	
149.67
	
128.45
	
128.45

	10yr	
181.29
	
181.29
	
151.22
	
130.04
	
130.04

	11yr	
182.67
	
182.67
	
152.85
	
131.54
	
131.54

	12yr	
184.32
	
184.32
	
154.28
	
133.11
	
133.11

First Officers

	 	
B747-400
	
B777
	
B767/757
	
A320/319
	
B737-300

	1yr	
31.66
	
31.66
	
31.66
	
31.66
	
31.66

	2yr	
72.12
	
72.12
	
59.21
	
50.37
	
50.37

	3yr	
104.30
	
104.30
	
85.87
	
73.12
	
73.12

	4yr	
110.29
	
110.29
	
91.03
	
77.62
	
77.62

	5yr	
112.59
	
112.59
	
93.13
	
79.53
	
79.53

	6yr	
115.19
	
115.19
	
95.50
	
81.67
	
81.67

	7yr	
117.87
	
117.87
	
97.83
	
83.85
	
83.85

	8yr	
120.72
	
120.72
	
100.36
	
86.05
	
86.05

	9yr	
121.74
	
121.74
	
101.32
	
86.96
	
86.96

	10yr	
123.19
	
123.19
	
102.75
	
88.36
	
88.36

	11yr	
124.59
	
124.59
	
104.24
	
89.71
	
89.71

	12yr	
125.89
	
125.89
	
105.37
	
90.92
	
90.92

 
3-B-3-b deleted

 

 

 

 
3-B-4 Effective January 1, 2008 the hourly rates for Captains and First
Officers shall be as follows:

3-B-4-a Hourly Rates

Captains

	 	
B747-400
	
B777
	
B767/757
	
A320/319
	
B737-300

	1yr	
173.68
	
173.68
	
142.33
	
120.96
	
120.96

	2yr	
174.67
	
174.67
	
143.41
	
122.00
	
122.00

	3yr	
175.57
	
175.57
	
144.74
	
123.08
	
123.08

	4yr	
176.54
	
176.54
	
145.70
	
124.24
	
124.24

	5yr	
177.54
	
177.54
	
146.85
	
125.40
	
125.40

	6yr	
178.45
	
178.45
	
147.94
	
126.51
	
126.51

	7yr	
179.43
	
179.43
	
148.93
	
127.64
	
127.64

	8yr	
180.63
	
180.63
	
150.18
	
128.77
	
128.77

	9yr	
181.62
	
181.62
	
151.17
	
129.73
	
129.73

	10yr	
183.10
	
183.10
	
152.73
	
131.34
	
131.34

	11yr	
184.50
	
184.50
	
154.37
	
132.86
	
132.86

	12yr	
186.16
	
186.16
	
155.82
	
134.45
	
134.45

First Officers

	 	
B747-400
	
B777
	
B767/757
	
A320/319
	
B737-300

	1yr	
31.98
	
31.98
	
31.98
	
31.98
	
31.98

	2yr	
72.84
	
72.84
	
59.80
	
50.87
	
50.87

	3yr	
105.34
	
105.34
	
86.73
	
73.85
	
73.85

	4yr	
111.40
	
111.40
	
91.94
	
78.39
	
78.39

	5yr	
113.72
	
113.72
	
94.06
	
80.32
	
80.32

	6yr	
116.34
	
116.34
	
96.46
	
82.49
	
82.49

	7yr	
119.05
	
119.05
	
98.81
	
84.68
	
84.68

	8yr	
121.93
	
121.93
	
101.37
	
86.91
	
86.91

	9yr	
122.96
	
122.96
	
102.34
	
87.83
	
87.83

	10yr	
124.42
	
124.42
	
103.78
	
89.25
	
89.25

	11yr	
125.83
	
125.83
	
105.29
	
90.61
	
90.61

	12yr	
127.15
	
127.15
	
106.42
	
91.83
	
91.83

 
3-B-4-b deleted

 

 

 
3-B-5 Effective May 1, 2008 the hourly rates for Captains and First
Officers shall be as follows:

3-B-5-a Hourly Rates

Captains

	 	
B747-400
	
B777
	
B767/757
	
A320/319
	
B737-300

	1yr	
176.28
	
176.28
	
144.47
	
122.77
	
122.77

	2yr	
177.29
	
177.29
	
145.57
	
123.83
	
123.83

	3yr	
178.21
	
178.21
	
146.91
	
124.92
	
124.92

	4yr	
179.19
	
179.19
	
147.89
	
126.10
	
126.10

	5yr	
180.20
	
180.20
	
149.05
	
127.28
	
127.28

	6yr	
181.12
	
181.12
	
150.16
	
128.41
	
128.41

	7yr	
182.13
	
182.13
	
151.16
	
129.55
	
129.55

	8yr	
183.34
	
183.34
	
152.43
	
130.70
	
130.70

	9yr	
184.34
	
184.34
	
153.44
	
131.68
	
131.68

	10yr	
185.85
	
185.85
	
155.02
	
133.31
	
133.31

	11yr	
187.26
	
187.26
	
156.69
	
134.85
	
134.85

	12yr	
188.95
	
188.95
	
158.16
	
136.46
	
136.46

First Officers

	 	
B747-400
	
B777
	
B767/757
	
A320/319
	
B737-300

	1yr	
32.46
	
32.46
	
32.46
	
32.46
	
32.46

	2yr	
73.93
	
73.93
	
60.70
	
51.64
	
51.64

	3yr	
106.92
	
106.92
	
88.03
	
74.95
	
74.95

	4yr	
113.07
	
113.07
	
93.32
	
79.57
	
79.57

	5yr	
115.42
	
115.42
	
95.47
	
81.53
	
81.53

	6yr	
118.09
	
118.09
	
97.91
	
83.72
	
83.72

	7yr	
120.84
	
120.84
	
100.29
	
85.95
	
85.95

	8yr	
123.75
	
123.75
	
102.89
	
88.22
	
88.22

	9yr	
124.80
	
124.80
	
103.87
	
89.15
	
89.15

	10yr	
126.28
	
126.28
	
105.33
	
90.58
	
90.58

	11yr	
127.72
	
127.72
	
106.87
	
91.97
	
91.97

	12yr	
129.06
	
129.06
	
108.02
	
93.21
	
93.21

3-B-5-b deleted

 

 

 

 
3-B-6 Effective May 1, 2009 the hourly rates for Captains and First
Officers shall be as follows:

3-B-6-a Hourly Rates

Captains

	 	
B747-400
	
B777
	
B767/757
	
A320/319
	
B737-300

	1yr	
178.93
	
178.93
	
146.64
	
124.61
	
124.61

	2yr	
179.95
	
179.95
	
147.75
	
125.68
	
125.68

	3yr	
180.88
	
180.88
	
149.11
	
126.80
	
126.80

	4yr	
181.87
	
181.87
	
150.11
	
127.99
	
127.99

	5yr	
182.91
	
182.91
	
151.29
	
129.19
	
129.19

	6yr	
183.84
	
183.84
	
152.41
	
130.34
	
130.34

	7yr	
184.86
	
184.86
	
153.43
	
131.49
	
131.49

	8yr	
186.09
	
186.09
	
154.72
	
132.66
	
132.66

	9yr	
187.11
	
187.11
	
155.74
	
133.65
	
133.65

	10yr	
188.64
	
188.64
	
157.35
	
135.31
	
135.31

	11yr	
190.07
	
190.07
	
159.04
	
136.87
	
136.87

	12yr	
191.79
	
191.79
	
160.53
	
138.51
	
138.51

First Officers

	 	
B747-400
	
B777
	
B767/757
	
A320/319
	
B737-300

	1yr	
32.94
	
32.94
	
32.94
	
32.94
	
32.94

	2yr	
75.04
	
75.04
	
61.61
	
52.41
	
52.41

	3yr	
108.53
	
108.53
	
89.35
	
76.08
	
76.08

	4yr	
114.76
	
114.76
	
94.72
	
80.76
	
80.76

	5yr	
117.15
	
117.15
	
96.90
	
82.75
	
82.75

	6yr	
119.86
	
119.86
	
99.38
	
84.98
	
84.98

	7yr	
122.65
	
122.65
	
101.80
	
87.24
	
87.24

	8yr	
125.61
	
125.61
	
104.43
	
89.54
	
89.54

	9yr	
126.68
	
126.68
	
105.43
	
90.49
	
90.49

	10yr	
128.18
	
128.18
	
106.91
	
91.94
	
91.94

	11yr	
129.63
	
129.63
	
108.47
	
93.35
	
93.35

	12yr	
130.99
	
130.99
	
109.64
	
94.60
	
94.60

Renumber balance of Section 3-B

 

 

Exhibit B-1

Other Contract Revisions

        1.    Section
3-B-10-a "Late Night Flying" deleted

        2.    Section
5-G-1-e-(1)-(d) deleted

        3.    Section
5-G-1-e-(2) modified to read as follows:

                           
5-G-1-e-(2) A pilot functioning as a reserve will not be scheduled
into a day(s) off.

        4.    Section
20-J-4-d deleted

        5.    Section
22-A-2 add this LOA

        6.    Letter
Of Agreement 04-09 "PBS Contract Modifications" change to 20-E-2-b is modified
to read as follows:

20-E-2-b In equipment domiciles which have both international
and domestic trips, the senior 50% of the pilots whose lines will be vacated
for OE lines will be subject to assignments as reserves per domestic reserve
rules. The junior 50% of the pilots whose lines will be vacated for OE
lines are subject to assignments as reserves per international reserve
rules. If an odd number of OE lines exist, the odd line will be identified
as a domestic regular reserve line for days off consideration.

        7.    The contractual
provisions identified in paragraphs 2, 3, 4 and 6 above will take effect
on the first day of the

              
month following the Effective Date.

 

 

Exhibit B-2

Other Contract Revisions

(Retiree Life Insurance)

          January 1, 2005
Captain Mark Bathurst, Chairman

UAL-MEC Air Line Pilots Association

9550 West Higgins Suite 1000

Rosemont, Illinois 60018

 
Dear Mark:
 
During the negotiations which led to the Letter of Agreement 05-01 (Bankruptcy
Exit), the parties agreed that the following change will apply to pilots
who, on January 1, 2005, are active (including paid leave), receiving Pilot
Disability Income benefits, furloughed, on medical leave of absence, on
military leave or on other approved leave:

 
No retiree life insurance will be payable upon the death of any pilot
who retires after January 1, 2005.

If this letter accurately reflects our agreement, please sign and
return three (3) copies for our files.

 

 
Sincerely,

 
_____________________

Peter B. Kain

Vice President - Labor

Accepted and agreed to this

______ day of January 2005

 

 

 
_________________________________

Captain Mark Bathurst, Chairman

UAL-MEC Air Line Pilots Association

 

 

Exhibit B-3

Success Sharing

Section 3-M-1-e of the 2003 Pilot Agreement
shall be revised to read in its entirety as follows:

Pilots will receive the following cash incentive
payments based on United's actual performance under the annual incentive
program (with linear interpolation between the performance points):
Threshold Performance: 0.5% of Wages

Target Performance 1.0% of Wages

Maximum Performance 2.0% of Wages

Exhibit C

Profit Sharing

	Effective Date of Profit Sharing Plan:	As of January 1, 2005 (so that the first year
covered by the profit sharing plan shall be calendar year 2005).
	Profit Sharing Pool:	In the event that the Company has more than
$10 million in Pre-Tax Earnings in the relevant calendar year, 7.5% of
Pre-Tax Earnings in 2005 and 2006 and 15% of Pre-Tax Earnings in each calendar
year thereafter.
	Pre-Tax Earnings:	UAL consolidated net income as determined in
accordance with GAAP, but excluding (i) consolidated federal, state and
local income tax expense (or credit); (ii) unusual, special, or non-recurring
charges, (iii) charges with respect to the grant, exercise or vesting of
equity, securities or options granted to UAL and United employees, and
(iv) expense associated with the profit sharing contributions.
	Eligibility:	All domestic employees of UAL Corp. or United
Airlines, Inc. (including all pilots) who have completed one year of service
as of December 31st of the year for which Pre-Tax Earnings are
being measured.
	Allocation:	For each eligible employee, a pro rata share
of the Profit Sharing Pool for each calendar year based on the ratio of
the employee's Considered Earnings for the year to the aggregate amount
of Considered Earnings for all eligible employees that year.
	Considered Earnings:	As currently defined in the Company's Success
Sharing Plan (i.e., base pay, overtime, holiday pay, longevity pay, sick
pay, vacation pay, shift differential, premiums, pre-tax contributions
to a 401(k) plan, pre-tax medical plan contributions, and flexible spending
account contributions but not expense reimbursement, incentive or profit
sharing payments, imputed income or other similar awards or allowances).
	Payment Date:	By no later than April 30th of the
following year. 
	Distribution:	In cash, subject to 401(k) deferrals.
	Relationship to Other Programs:	Incremental to the Success Sharing Plan; in
lieu of the existing profit sharing plan described in Section 3-M-2 of
the 2003 Pilot Agreement.
	Documentation:	Implementing documentation reasonably acceptable
to the Association.
	Duration:	Continuing unless and until terminated in a
future pilot collective bargaining agreement.

 

Exhibit D

Convertible Notes

	Issuer:	Reorganized UAL Corp.
	Guarantor:	United Airlines, Inc.
	Issue:	[___]% Senior Subordinated Convertible Notes
Due 2021 (the "Notes") to be issued no later than 180 days following
the Exit Date (the "Issuance Date").
	Initial Holder:	A trust or similar non-permanent vehicle for
the benefit of eligible United pilots; the Notes or the value of the Notes
to be distributed to such pilots or pilot retirement accounts as soon as
reasonably practicable given tax, accounting, securities and market considerations;
all rights of the Notes to be exercised by individual pilots while the
notes remain in the trust. Distribution mechanics, eligibility and allocation
among such pilots to be reasonably determined by the Association.
	Principal Amount:	$550,000,000 in denominations of $1,000.
	Term:	15 years from the Issuance Date.
	Amortization:	None prior to maturity; full principal to be
repaid at the maturity date except to the extent converted or prepaid. 
	Interest Rate:	Semi-annually in arrears, in cash, at an annual
rate of [__]%1; provided, however, that (i) the first full year
of interest from the Issuance Date may be paid in cash or in kind at the
option of the Issuer; (ii) if such interest is paid in kind, it will be
in Common Stock, but only to the extent there exists Common Stock that
is exempt from registration under 11 U.S.C. § 1145; and (iii) if such
interest is paid in kind, it shall be delivered to the Holders under applicable
market terms at issuance for public convertible debt securities of this
type (e.g., any notice period and stock payment premium). 
	Security:	None.
	Ranking:	Junior to the Reorganized UAL exit facility,
customary secured indebtedness, indebtedness contemplated under a plan
of reorganization, and other mutually agreed-upon indebtedness; pari passu
to all current and future UAL or United Airlines senior unsecured debt;
senior to all current and future subordinated debt.
	Conversion Rights:	The Holder may convert any number of the Notes
into the Issuer's common stock (the "Common Stock"), at any time,
at the Conversion Price.
	Conversion Price:	The product of (x) 125% and (y) the average
closing price of the Common Stock for the sixty consecutive trading days
following the Exit Date. 
	Transferability:	To the greatest extent feasible under applicable
law, the Notes and the Common Stock shall be issued under 11 U.S.C. §1145,
and the Notes and the Common Stock into which they shall be convertible
shall be freely transferable by the Holders without registration under
the Securities Act of 1933.
	Common Stock:	When delivered, the Common Stock into which
Notes may convert shall be fully paid and non-assessable. Issuer shall
use its best efforts to list the Common Stock on a national stock exchange
or NASDAQ prior to the Issuance Date. 
	Call Rights:	No call for five years from the Issuance Date;
thereafter, callable in cash or Common Stock if the Common Stock has traded
at no less than 125% of the Conversion Price for the sixty (60) consecutive
trading days prior to the call date.
	Put Rights:	Soft put right on the fifth and tenth anniversary
of the Issuance Date for all principal and accrued interest as of such
date; payable in cash or shares of Common Stock.
	Mandatory Prepayments:	Mandatory prepayment upon a "fundamental change"
with a customary make whole premium, if any, for public convertible debt
securities of this type; no prepayment obligations for mergers in which
the Issuer is the surviving entity; no make whole premium in other mergers. 
	Anti-Dilution Protections:	The Conversion Price will be subject to customary
anti-dilution adjustments, including upon (i) stock or extraordinary cash
dividends, (ii) reclassifications, subdivisions or combinations of the
Common Stock, (iii) the issuance of rights or warrants to all holders of
Common Stock convertible into or exercisable for Common Stock at less than
the then-current market price, (iv) distribution of the capital stock of
an Issuer subsidiary to holders of the Common Stock and (v) any other distributions
of assets by the Issuer to holders of the Common Stock.
	Mergers and Business Combinations:	The Notes will enjoy customary adjustments and
protections in the event the Common Stock is converted into, reclassified
into or exchanged for cash, other assets or securities.
	Other Terms and Conditions:	The Notes are intended to be public
market securities and to trade at par value. The documentation of the Notes
shall include such other terms and conditions as are customarily found
in public market convertible securities of this type.
	Implementation:	Implementing documentation reasonably acceptable
to the Association and the Company.
	Distribution:	The Association and the Company will coordinate
any distribution of the Notes so that such distribution does not unreasonably
interfere with capital markets activities of the UAL or the Company. The
Association's investment bankers will be the exclusive distribution agent
for the Notes. 

 

Exhibit E

Amended Distribution Agreement

        1.    Section
2 of Letter of Agreement 03-07 to the 2003 Pilot Agreement (the "Distribution
Agreement") is hereby

amended to read in its entirety as follows:

In consideration for the pilot contract revisions under the Section
1113 Restructuring Agreement reached between UAL, the Company, and ALPA
effective May 1, 2003 (the "2003 Restructuring Agreement"), which modifies
the parties' 2000 collective bargaining agreement ("2000 Agreement") and
resolves numerous union grievances concerning the administration of the
2000 Agreement, and in consideration of the pilot contract revisions under
the revisions to the 2003 Pilot Agreement effective in 2005 (the "Revised
2003 Pilot Agreement"), any plan of reorganization proposed or supported
by UAL and the Company as proposed and/or amended from time to time (the
"Plan"), shall provide that, on or as soon as reasonably practicable after
the effective date of such Plan, the pilot group will receive a percentage
distribution of the equity, securities and/or other consideration provided
to general unsecured creditors under the Plan (the "Distribution") calculated
by the following formula:

 
A/(A+B), where:

 
A is the sum of (i) $2,742,574,581, representing the
dollar value of 30 months of average cost reductions under the 2003 Restructuring
Agreement as reasonably measured under Labor Model 1.1A FINAL, and (ii)
$300,000,000, representing the dollar value of 20 months of cost reductions
under the Revised 2003 Pilot Agreement (the "ALPA Amount"); and

 
B is the total amount of all other allowed prepetition
general unsecured claims against the Debtors (UAL and its 27 debtor subsidiaries).
2.    Section 3 of the Distribution Agreement is hereby
amended to read in its entirety as follows:

 
In the event the other employees of the Company receive a Distribution
in excess of $865,000,000 in connection with the 2005 labor cost reductions
(the "Other Employee Distribution"), then the $300,000,000 amount described
in paragraph 2 of this Distribution Agreement shall instead equal the product
of (x) $300,000,000 and (y) a fraction, the numerator of which is the actual
amount of the Other Employee Distribution and the denominator of which
is $865,000,000.
        3.   
Except as revised in the preceding paragraphs, the Distribution Agreement
shall remain unchanged and in full force and effect.

 

 

Exhibit F

Indemnity Agreement

            1. 

Indemnification. UAL and the Company (collectively, "United") hereby
indemnify and hold harmless the Association, its members, officers, committee
members, agents, employees, counsel, financial advisors and representatives
(each, an "Indemnified Person") from any and all losses, damages, fines,
penalties, taxes, expenses, claims, lawsuits, or administrative charges
of any sort whatsoever (including reasonable attorney's fees and costs
arising in connection with the investigation and defense of any such matter)
relating to, concerning or connected with the negotiation or implementation
of this Letter of Agreement (any such event, a "Claim"), except to the
extent that a Claim against an Indemnified Person is finally determined
by a court of competent jurisdiction to have resulted from the gross negligence,
fraud or willful misconduct of such Indemnified Person.

            2. 

Indemnification Procedure.

                   
a.    An Indemnified Person must give prompt notice to the
Company of the facts and circumstances that

           
may constitute a Claim under this Indemnity Agreement; provided, however,
that any delay by an Indemnified

           
Person in giving such notice shall not relieve United of its obligations
under this Indemnity Agreement except to the

           
extent that such delay causes material damage or prejudice to United.

                   
b.    United shall be entitled to participate in judicial,
administrative proceeding concerning an actual or

           
potential Claim (an "Action") and, upon ten (10) days notice to the applicable
Indemnified Person, may assume

           
the defense of such Claim with counsel reasonably satisfactory to the Indemnified
Person. Following any

           
assumption of the defense of an Action by United, United shall not be liable
for any subsequent fees of legal

           
counsel or other expenses incurred by the Indemnified Person in connection
with the defense of such Action,

           
subject to reimbursement for actual out-of-pocket expenses incurred by
the Indemnified Person as the result of a

           
request for cooperation or assistance by United; provided, however, that
if, in the reasonable opinion of outside

           
counsel to the Indemnified Person, there exists an actual, material conflict
of interest between the United and the

           
Indemnified Person, United shall be liable for the legal fees and expenses
of separate counsel to the Indemnified

           
Person; provided, further, that the Indemnified Person shall have the right
to participate in the defense of an

           
Action with its own counsel at its own expense.

                   
c.    No compromise or settlement of any Action shall be
binding on United for purposes of United's

           
obligations under this Indemnity Agreement without United's express written
consent, which consent shall not be

           
unreasonably withheld. United shall not compromise or settle any Action
or otherwise admit to any liability for any

           
Claim on a basis that would reasonably be expected to adversely affect
the future activity or conduct of the

           
Indemnified Person without the prior written consent of the Indemnified
Person, which consent shall not be

           
unreasonably withheld.

                   
d.    In the event United assumes the defense of any Action
under this Indemnity Agreement, United shall (i)

           
keep the Association and the applicable Indemnified Person informed of
material developments in the Action, (ii)

           
promptly provide the Association and such Indemnified Person with copies
of all pleadings, responsive pleadings,

           
motions and other similar legal documents and papers received in connection
with the Action, (iii) permit the

           
Association and such Indemnified Person and their counsel, to the extent
practicable, to confer on the defense of

           
the Action, and (iv) permit the Association and such Indemnified Person
and their counsel,  to the extent

           
practicable, an opportunity to review all legal papers to be submitted
prior to their submission. The parties shall

           
provide to each others such assistance as may be reasonably required to
insure the proper and adequate defense

           
of the Action, and each party shall use its good faith efforts and cooperate
with each other party to avoid the

           
waiver of any privilege of another party.

            3. 

Plan of Reorganization; Survival. This indemnity agreement shall
be assumed under the Plan of Reorganization and shall continue in full
force and effect thereafter without regard to the terms of Section 22 of
the Revised 2003 Pilot Agreement.

 

 

Exhibit G

Fees and Expenses

            1.   
The Company shall reimburse the Associatin for the reasonable, actual fees
and out-of-pocket expenses incurred by the Association in connection with
the review, design, negotiation, approval and ratification of this Letter
of Agreement (its "Expenses") including:

                   
a.    reasonable flight pay loss incurred by the Association
in review and negotiation of this Letter of

           
Agreement and Special MEC Meetings or LEC Meetings called for the purpose
of reviewing, approving or

           
ratifying the Letter of Agreement ; and

                   
b.    the reasonable, actual fees and expenses of the Association's
outside legal, pension, and other

           
professional advisors (in each case based on normal hourly rates for actual
time expended).

up to a maximum, aggregate total of $2.5 million. Of the total reimbursement
for Expenses, $1 million shall be paid on the Effective Date, and the remaining
$1.5 million will be paid on the Exit Date.

            2.   
On the Exit Date, the Company shall also pay, or reimburse the Association
for paying, the expenses incurred by the Association's investment bankers
in connection with the Letter of Agreement and a structuring fee for the
Association's investment bankers.

            3.   
The Company shall seek judicial approval for its obligations under this
Exhibit G at the same time that it seeks judicial approval of this Letter
of Agreement.

            4.The
parties acknowledge and agree that the Company's agreement to reimburse
the Association for fees and expenses under this Letter of Agreement is
a result of the special collective bargaining circumstances created by
the parties' desire to negotiate modifications to the pilot collective
bargaining agreement as part of the Company's bankruptcy reorganization.

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