As filed with the Securities and Exchange Commission on November 9, 1999
Registration No. 333-_____
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933
--------------------------
UNITED AIR LINES, INC.
(Exact name of Registrant as specified in its charter)
Delaware 36-2675206
(State of (I.R.S. Employer
incorporation) Identification No.)
1200 East Algonquin Road
Elk Grove Village, IL 60007
Mailing Address: P.O. Box 66100
Chicago, Illinois 60666
(847) 700-4000
(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
Francesca M. Maher
Senior Vice President, General Counsel and Secretary
United Air Lines, Inc.
P.O. Box 66100
Chicago, Illinois 60666
(847) 700-4000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
Elizabeth A. Raymond
Mayer, Brown & Platt
190 S. LaSalle Street
Chicago, Illinois 60603
(312) 782-0600
Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of this registration statement
as determined in light of market conditions and other factors.
If the only securities being registered on this Form are being
offered under dividend or interest reinvestment plans, please check the
following box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis under Rule 415 under the
Securities Act of 1933 (the "Securities Act"), other than securities
offered only in connection with dividend or interest reinvestment plans,
check the following box. [X]
If this Form is filed to register additional securities for an
offering under Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed under Rule 462(c)
under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made under
Rule 434, please check the following box.[ ]
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<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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Proposed Proposed
Maximum Maximum
Title of Each Class of Amount to Be Offering Aggregate Amount of
Securities Being Registered Registered (1) Price Per Unit Offering Price(1) Registration Fee (2)
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt Securities
Pass Through Certificates $1,500,000,000 100% $1,500,000,000 $417,000
===========================================================================================================
</TABLE>
(1) Estimated solely for purposes of determining the registration fee.
(2) A filing fee of $197,064.42 was previously paid in connection with the
Debt Securities, Equipment Trust Certificates and Pass Through
Certificates included herein remaining from UAL Corporation and the
Company's Registration Statement on Form S-3 (No.33-57192).
<PAGE>
Under Rule 429 under the Securities Act, the Prospectuses filed as
part of this Registration Statement relate to the securities registered
hereby and to the remaining unsold $630,606,135 amount of Debt Securities
and Pass Through Certificates previously registered by United Air Lines,
Inc. under its Registration Statement on Form S-3 (No. 33-57192).
The Registrant hereby amends this Registration Statement on such
date or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that
this Registration Statement shall thereafter become effective in accordance
with Section 8(a) of the Securities Act or until the Registration Statement
shall become effective on such date as the Commission, acting under said
Section 8(a), may determine.
<PAGE>
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE
MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT
AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY
THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
Subject to Completion, Dated November 9, 1999
PROSPECTUS
United Air Lines, Inc.
1200 East Algonquin Road
Elk Grove Village, IL 60007
Mailing Address: P.O. Box 66100
Chicago, Illinois 60666
(847) 700-4000
[COMPANY LOGO]
DEBT SECURITIES
----------------------
United Air Lines, Inc., may offer up to $1,500,000,000 of
unsecured debt securities in one or more series from time to time under
this prospectus and one or more prospectus supplements.
We will pay interest on the debt securities on the dates and at
the rates specified in a prospectus supplement. We will pay principal on
the debt securities in scheduled amounts and on the dates specified in a
prospectus supplement. Unless otherwise indicated in a prospectus
supplement, we will not list the debt securities on any national securities
exchange.
===============================================================================
United will provide specific terms of these securities in
supplements to this prospectus. You should read this prospectus
and the prospectus supplement carefully before you invest.
===============================================================================
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities
or passed upon the adequacy or accuracy of this prospectus.
Any representation to the contrary is a criminal offense.
===============================================================================
The date of this Prospectus is November__,1999.
<PAGE>
ABOUT THIS PROSPECTUS
This registration statement contains two forms of prospectus to be
used in connection with offerings of debt securities or pass through
certificates. No prospectus will be used to consummate sales of securities
unless accompanied by a prospectus supplement that describes the securities
offered.
You should rely only on the information contained or incorporated
by reference in this prospectus or a prospectus supplement. United has not
authorized any other person to provide you with different information. If
anyone provides you with different or inconsistent information, you should
not rely on it. United is not making an offer to sell these securities in
any jurisdiction where the offer or sale is not permitted. You should
assume that the information appearing in this prospectus or any prospectus
supplement, as well as information United has previously filed with the
Securities and Exchange Commission and incorporated by reference, is
accurate as of the date on the front of those documents only. United's
business, financial condition, results of operations and prospects may have
changed since those dates.
WHERE YOU CAN FIND MORE INFORMATION
United Air Lines, Inc. files reports, proxy statements and other
information with the SEC. You may access United's SEC filings over the
Internet at the SEC's web site at http://www.sec.gov. You may also read and
copy any document United files at the SEC's public reference room at 450
Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330 to obtain information on the operation of the public
reference room.
United has filed a registration statement on Form S-3 relating to
the securities with the SEC under the Securities Act of 1933. For further
information on United and the securities, you should refer to the
registration statement and its exhibits. This prospectus and the related
prospectus supplement summarize material provisions of contracts and other
documents that United refers you to. Since the prospectus and the related
prospectus supplement may not contain all the information that you may find
important, you should review the full text of these documents. United has
included copies of these documents as exhibits to the registration
statement or incorporated them by reference into this prospectus.
INCORPORATION OF INFORMATION UNITED FILES WITH THE SEC
United is "incorporating by reference" certain information it
files with the SEC into this prospectus, which means:
o incorporated documents are considered part of this prospectus;
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o United can disclose important information to you by referring
you to those documents; and
o information that United files with the SEC will
automatically update and supersede this prospectus.
United incorporates by reference its Annual Report on Form 10-K
for the fiscal year ended December 31, 1998, its Quarterly Reports on Form
10-Q for the fiscal quarters ended March 31, 1999 and June 30, 1999, and
its Current Report on Form 8-K dated October 19, 1999, which United filed
with the SEC under the Securities Exchange Act of 1934.
United also incorporates by reference each of the following
documents that United will file with the SEC after the date of the initial
filing of the registration statement with the SEC and prior to
effectiveness of the registration statement or after the date of this
prospectus but before the end of the offering of the securities:
o Reports filed under Sections 13(a) and (c) of the 1934 Act,
o Definitive proxy or information statements filed under
Section 14 of the 1934 Act in connection with any subsequent
stockholders' meeting, and
o Any reports filed under Section 15(d) of the 1934 Act.
You may request a copy of any filings referred to above, at no
cost, by writing or telephoning United at the following address:
Corporate Secretary's Office
United Air Lines, Inc. - WHQLD
P.O. Box 66100
Chicago, Illinois 60666
(847) 700-4453.
THE COMPANY
UAL Corporation was incorporated under the laws of the State of
Delaware on December 30, 1968. The world headquarters of UAL are located at
1200 East Algonquin Road, Elk Grove Township, Illinois 60007. UAL's mailing
address is P.O. Box 66100, Chicago, Illinois 60666. The telephone number
for UAL is (847) 700-4000.
UAL is a holding company and its principal subsidiary is United
Air Lines, Inc., a Delaware corporation, which is wholly owned. United
accounted for virtually all of the Company's revenues and expenses in 1998.
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United is a major commercial air transportation company, engaged in the
transportation of persons, property and mail throughout the United States
and abroad.
During 1998, United carried, on average, more than 238,000
passengers per day and flew more than 125 billion revenue passenger miles.
It is the world's largest airline as measured by revenue and passenger
miles flown, providing passenger service in 28 countries.
United has a global network of major connecting airports: Chicago,
Denver, San Francisco, Los Angeles, Washington, D.C., Miami, Frankfurt,
London, Tokyo and Toronto. This network of major connecting airports is
designed to fly travelers between North America (domestic segment) and the
Pacific, Latin America and Europe (international segments). Operating
revenues attributed to United's North America segment were approximately
$12.0 billion in 1998, $11.2 billion in 1997, and $10.7 billion in 1996.
Operating revenues attributed to United's international segments were
approximately $5.5 billion in 1998, $6.1 billion in 1997 and $5.6 billion
in 1996.
Since October 1994, United has operated a service, United Shuttle,
within its domestic segment. This service is designed to compete with
low-cost carriers on routes fewer than 750 miles. While United Shuttle is
principally concentrated on the West Coast, it has also expanded into the
Denver market. United Shuttle offers approximately 466 daily flights on 25
routes between 21 cities in the western United States. United Shuttle
provides critical feed traffic, at competitive prices, for United.
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for United is set forth
below for the periods indicated.
Six-months Ended Year Ended December 31
---------------- ----------------------------------------
June 30, 1999 1998 1997 1996 1995 1994
------------- ---- ---- ---- ---- ----
3.15 2.05 2.36 1.76 1.44 1.09
For the computation of the ratio of earnings to fixed charges,
"earnings" has been calculated by adding income before taxes and
extraordinary items, interest expense, undistributed earnings of
affiliates, the portion of rental expense representative of an interest
factor and amortization of capitalized debt expense. Fixed charges consist
of interest expense (including capitalized interest) and the portion of
rental expense representative of an interest factor.
USE OF PROCEEDS
Except as otherwise set forth in the prospectus supplement
relating to a specific issuance of debt securities, United will use the net
proceeds to be received from the sale of the debt securities for general
corporate purposes, including repayment of indebtedness or financing of
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capital expenditures. Pending use, United may temporarily invest the net
proceeds in short-term instruments.
DESCRIPTION OF SECURITIES
The debt securities will be issued under an Indenture between
United and a bank or trust company, as trustee. A form of the Indenture is
included as an exhibit to the registration statement. The following
summaries of some provisions of the Indenture are not complete and are
subject to all the provisions of the Indenture, including definitions of
the terms used in the Indenture. Wherever we refer to particular sections
or defined terms of the Indenture, these sections or defined terms are
automatically incorporated into this prospectus.
The following summarizes the general terms and provisions of the
debt securities. The prospectus supplement relating to the offered
securities will describe the particular terms of the debt securities
offered by any prospectus supplement.
The Indenture does not limit the amount of securities that may be
issued under and provides that debt securities may be issued in one or more
series. The debt securities will be unsecured obligations of United. Unless
otherwise provided in the applicable prospectus supplement, they will rank
equally and ratably with United's other unsecured obligations.
The applicable prospectus supplement will include specific terms
relating to the offering. These terms will include some or all of the
following:
o the title of the offered securities;
o the aggregate principal amount of the offered securities;
o whether the securities will be issued as registered securities,
bearer securities or both;
o the date or dates on which we will pay principal and interest;
o the fixed or variable interest rate(s), if any, of the debt
securities or the method by which we will determine the
interest rate(s);
o the date(s) from which interest will accrue;
o the record dates used in determining who is to be paid interest;
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o whether the interest rate or interest rate formula, as
the case may be, for the offered securities may be reset
at the option of United, and, if so, the date(s) on which
we may reset the interest rate or interest rate formula;
o the place or places where we will pay the principal of and any
premium and interest on the offered securities;
o any terms for redemption, repayment at your option or for
sinking fund payments;
o the denominations in which we will issue the registered
securities if other than denomination of 1,000 and any multiple
of $1,000, and the denominations in which we will issue the
bearer securities if other than the denomination of $5,000;
o the currency or currency units in which the debt securities
are payable, if other than U.S. dollars;
o any provisions for defeasance and covenant defeasance;
o whether the debt securities will be represented by one or more
global securities and, if so, the method of transferring
beneficial interests in the global securities;
o if other than the principal amount of the debt securities,
the portion of the principal amount of the offered securities
which we will pay upon acceleration of the maturity of the
debt securities;
o whether we will list the securities on any stock exchange; and
o any other terms of the debt securities.
We may issue debt securities as "original issue discount
securities," which are securities that we would offer and sell at a
substantial discount below their stated principal amount. We will describe
the federal income tax consequences and other special considerations that
apply to original issue discount securities in the applicable prospectus
supplement. Original issue discount securities include any security that
provides that we must pay an amount less than the principal amount upon the
acceleration of the maturity of the debt security if an event of default
occurs and is continuing.
The Indenture does not contain covenants or other provisions
designed to give you protection if a highly leveraged transaction, change
in credit rating or other similar change occurs.
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Denominations, Registration and Transfer
Unless we provide otherwise in the applicable prospectus
supplement, we will pay principal, any premium and interest on the
securities, and you may register the transfer of securities, at the office
or agency we maintain in New York, New York, and at any other office or
agency we maintain for this purpose. We may issue securities as registered
securities, bearer securities or both. We may also issue securities in the
form of one or more global securities, as described below under "Book-Entry
Securities." Unless we tell you otherwise in a prospectus supplement, we
will issue registered securities denominated in U.S. dollars only in
denominations of $1,000 or any multiple of $1,000 and we will issue bearer
securities denominated in U.S. dollars only in the denomination of $5,000
with coupons attached. We will issue a global security in a denomination
equal to the total principal amount of outstanding securities represented
by the global security. We will specify in the prospectus supplement the
denominations of any securities we issue in a foreign or composite
currency.
We will not offer, sell, resell or otherwise deliver bearer
securities to any location in the United States or its possessions or to a
United States person except in limited circumstances described in
"Limitations on Issuance of Bearer Securities" below.
We will exchange registered securities for other denominations of
registered securities of the same series, principal amount and maturity
date. In addition, if we issue securities as both registered securities and
as bearer securities, at your option upon your written request, and subject
to the terms of the Indenture, we will exchange bearer securities, with all
unmatured coupons, except as provided below, and all matured coupons in
default attached, of that series for registered securities of the same
series of any authorized denominations and of the same principal amount and
maturity date. Unless we tell you otherwise in a prospectus supplement, any
bearer security you surrender in exchange for a registered security between
a regular record date or a special record date and the relevant date for
payment of interest will be surrendered without the coupon relating to that
date for payment of interest attached. We will not pay interest on the
registered security issued in exchange for that bearer security, but will
only pay the holder of the coupon when it is due in accordance with the
terms of the Indenture. Except as provided in a prospectus supplement, we
will not issue bearer securities in exchange for registered securities.
You may present securities for exchange as provided above. You may
present registered securities, other than a global security, for
registration of transfer, with the form of transfer properly signed, at the
office of the security registrar of any transfer agent we designate for
that purpose for any series of securities, without service charge and upon
payment of any taxes and other governmental charges. We will designate the
security registrar and any transfer agent in the prospectus supplement. The
security registrar or the transfer agent will effect any transfer or
exchange when it is satisfied with the documents of title and identity of
the person making the request. We have initially appointed the trustee as
the security registrar under the Indenture. If a prospectus supplement
refers to any transfer agent in addition to the security registrar
initially designated by us for any series of securities, we may at any time
rescind the designation of that transfer agent or approve a change in the
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location through which that transfer agent acts. If securities are issuable
only as registered securities, we must maintain a transfer agent in each
place of payment for that series. If we issue securities as bearer
securities, we must also maintain a transfer agent in a place of payment
for that series outside the United States. We may at any time designate
additional transfer agents for any series of securities.
If we redeem any securities in part, the Indenture does not
require us to:
o issue, register the transfer of or exchange securities
during a period beginning at the open of business 15 days
before we select any securities to be redeemed and ending
at the close of business on the day of mailing of the
relevant notice of redemption, if we issue securities
only as registered securities;
o issue, register the transfer of or exchange securities
during a period beginning at the open of business 15 days
before we select any securities to be redeemed and ending
at the close of business on the day of the first
publication of the notice of redemption, if we issue
securities only as bearer securities;
o issue, register the transfer of or exchange securities
during a period beginning at the open of business 15 days
before we select any securities to be redeemed and ending
at the close of business on the day of the mailing of the
notice of redemption, if we issue securities as both
bearer securities and registered securities and there is
no publication of the notice of redemption;
o register the transfer of or exchange any registered
security, or portion of a registered security, we call
for redemption, except the unredeemed portion of any
registered security we redeem in part; or
o exchange any bearer security we call for redemption,
except that we may exchange a bearer security for a
registered security of the same maturity date if you
immediately surrendered your registered security for
redemption.
We will not charge a service charge for any registration of
transfer or exchange of the securities, but we may require payment of any
amount needed to cover any tax or other governmental charge imposed in
connection with a transfer or exchange.
Payments and Paying Agents
Unless we indicate otherwise in a prospectus supplement, we will
pay principal and any premium and interest on registered securities, other
than a global security, at the office of the paying agent(s) we designate
from time to time. At our option, we may make payment of any interest (1)
by check mailed to the address of the person entitled to the payment as the
address appears in the security register or (2) by wire transfer to an
account maintained by that person as specified in the security register.
Unless otherwise indicated in a prospectus supplement, we will
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pay any installment of interest on registered securities to the person in
whose name the registered security is registered at the close of business
on the regular record date for interest payments.
Unless we indicate otherwise in a prospectus supplement, we will
pay principal and any premium and interest on bearer securities at the
offices of the paying agent(s) outside the United States that we designate
from time to time. At our option, we may pay any interest by check or wire
transfer to an account maintained by the person entitled to payment outside
the United States or its possessions. Unless otherwise indicated in a
prospectus supplement, we will pay interest on bearer securities on any
interest payment date only if you surrender the coupon for that interest
payment date. We will not make any payment on a bearer security at our
office or agency in the United States or its possessions or by check mailed
to any address in the United States or its possessions or by transfer to an
account maintained in the United States or its possessions. We will not
make any payments on bearer securities or their coupons if you present them
to us or our paying agents in the United States or its possessions or make
any other demand for payment to us or our paying agents in the United
States or its possessions. However, we will pay principal and any premium
and interest on bearer securities denominated in U.S. dollars at our paying
agent's office in the United States only if payment of the full amount in
U.S. dollars at all offices or agencies outside the United States or its
possessions is illegal or effectively precluded by exchange controls or
other similar restrictions.
Unless we indicate otherwise in a prospectus supplement, the
trustee will serve as paying agent and the corporate trust office of the
trustee will be designated as our paying agent's office for payments with
respect to debt securities that we issue solely as registered securities.
We will name any paying agent outside the United States and any other
paying agent in the United States for the debt securities in a prospectus
supplement. We may at any time designate additional paying agents or
rescind the designation of any paying agent or approve a change in the
office through which any paying agent acts. If we issue securities only as
registered securities, we must maintain a paying agent in each place of
payment for that series. If we issue securities as bearer securities, we
will maintain:
o a paying agent in each place of payment for that series
in the United States for payments on any registered
securities of that series, and for payments on bearer
securities of that series only in the circumstances
described above;
o a paying agent in each place of payment located outside
the United States where securities of that series and any
attached coupons; if the securities of that series are
listed on The International Stock Exchange, the London
Stock Exchange, the Luxembourg Stock Exchange or any
other stock exchange outside the United States and that
stock exchange requires it, we will maintain a paying
agent in London or Luxembourg or any other required city
outside the United States, for securities of that series;
and
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o a paying agent in each place of payment outside the
United States where you may surrender for registration of
transfer or exchange registered securities and where you
may serve notices to and demands on us.
The paying agent will refund to us all moneys we pay to a paying
agent for the payment of principal of, and any premium and interest on, any
debt security that remains unclaimed at the end of two years after the
principal, any premium or interest became due and payable. After that time,
you may look only to us for payment.
Book-Entry Securities
Unless we provide otherwise in a prospectus supplement, the debt
securities will be represented by one or more certificates. These
certificates are called "global securities." We will deposit the global
security representing the debt securities with a depository. The depository
will initially be The Depository Trust Company. The global security will be
registered in the name of the depository or its nominee. Unless we provide
otherwise in a prospectus supplement, we will not issue debt securities in
definitive form. If the total principal amount of any issue exceeds $200
million, we will issue one certificate for each $200 million of principal
amount and an additional certificate for any remaining principal amount of
that issue.
The Depository Trust Company or "DTC" is a limited-purpose trust
company organized under the New York Banking Law. It is a "banking
organization" within the meaning of the New York Banking Law, a member of
the Federal Reserve System, a "clearing corporation" within the meaning of
the New York Uniform Commercial Code and a "clearing agency" registered
under the provisions of Section 17A of the 1934 Act. DTC holds securities
that its participants deposit with it. DTC also facilitates the settlement
among participants of securities transactions, such as transfers and
pledges, in deposited securities through electronic computerized book-entry
changes in participants' accounts, which eliminates the need for physical
movement of securities certificates. Direct participants of DTC include
securities brokers and dealers, banks, trust companies, clearing
corporations and other organizations. A number of DTC's direct participants
and the New York Stock Exchange, Inc., the American Stock Exchange, Inc.
and the National Association of Securities Dealers, Inc. own DTC. Other
persons, such as securities brokers and dealers, banks and trust companies
that clear through or maintain a custodial relationship with a direct
participant, have access to DTC's book-entry system, either directly or
indirectly. These other entities are referred to as "indirect
participants." The rules applicable to DTC and its participants are on file
with the SEC.
Purchases of debt securities represented by a global security
under DTC's system must be made by or through direct participants. Direct
participants will receive a credit for the debt securities on DTC's
records. The ownership interest of each actual purchaser of each debt
security will be recorded on the direct and indirect participants' records.
Each actual purchaser is referred to as the "beneficial owner" of that
security. Beneficial owners will not receive written confirmation from DTC
of their purchase, but beneficial owners are expected to receive written
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confirmations providing details of the transaction and periodic statements
of their holdings, from the direct or indirect participant through which
the beneficial owner entered into the transaction. Transfers of ownership
interests in the debt securities are to be accomplished by entries made on
the books of participants acting on behalf of beneficial owners. Beneficial
owners will not receive certificates representing their ownership interests
in debt securities, except in the event that use of the book-entry system
for the debt securities is discontinued. The laws of some states require
that certain purchasers of securities take physical delivery of securities
in definitive form. These limits and laws may impair the ability to
transfer beneficial interests in the global security.
So long as the depository for the global security, or its nominee,
is the registered owner of the global security, it will be considered the
sole owner or holder of the debt securities represented by the global
security. Except as provided below, owners of beneficial interests in the
debt securities represented by the global security will not be entitled to
have debt securities represented by the global security registered in their
names, will not receive or be entitled to receive physical delivery of debt
securities in definitive form and will not be considered the owners or
holders of the debt securities under the Indenture.
To facilitate subsequent transfers, all debt securities deposited
by participants with DTC are registered in the name of DTC's partnership
nominee, Cede & Co. The deposit of debt securities with DTC and their
registration in the name of Cede & Co. causes no change in the beneficial
ownership of the debt securities. DTC has no knowledge of the actual
beneficial owners of the debt securities; its records reflect only the
identity of the direct participants to whose accounts the debt securities
are credited, which may or may not be the beneficial owners. The
participants are responsible for keeping account of their holdings on
behalf of their customers. Conveyance of notices and other communications
by DTC to direct participants, by direct participants to indirect
participants and by direct participants and indirect participants to
beneficial owners will be governed by arrangements among them. Those
arrangements are subject to any applicable statutory or regulatory
requirements.
Neither DTC nor Cede & Co. will consent or vote with respect to
debt securities. Under its usual procedures, DTC mails an omnibus proxy to
United as soon as possible after the record date. The omnibus proxy assigns
Cede & Co.'s consenting or voting rights to the direct participants to
whose accounts the debt securities are credited on the record date. A
listing attached to the omnibus proxy will identify those direct
participants.
We will pay principal or any premium and interest on the global
security through the trustee or a paying agent to the depository as the
registered owner of the global security.
Subject to the restrictions discussed under "Limitations on
Issuance of Bearer Securities" below, we expect that the depository upon
receipt of any payment of principal, any premium or interest, will credit
direct participants' accounts with payments in amounts proportionate to
their respective beneficial interests in the principal amount of the global
security for the debt securities as shown on the records of the depository
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or its nominee. We also expect that payments by participants to beneficial
owners will be governed by standing instructions and customary practices,
as is now the case with securities held for the accounts of customers in
bearer form or registered in "street name". The participants, and not DTC,
the paying agent or United, will be responsible for payments to the
beneficial owners. Receipt by beneficial owners of a temporary global
security of payments in respect of the temporary global security will be
subject to restrictions discussed under "Limitations on Issuance of Bearer
Securities" below. United or the paying agent will be responsible for the
payment of principal, any premium and interest to DTC. DTC will be
responsible for the disbursement of these payments to direct participants.
Direct and indirect participants of DTC will be responsible for the
disbursement of these payments to the beneficial owners.
If the depository with respect to a global security is at any time
unwilling or unable to continue as depository and a successor depository is
not appointed by us within 90 days, we will issue certificated notes in
exchange for the debt securities represented by the global security.
The information in this section concerning the depository and the
depository's book-entry system has been obtained from sources that United
believes to be reliable, but United takes no responsibility for the
accuracy of this information.
In addition to holding securities through participants or indirect
participants of DTC in the United States as described above, you may hold
your debt securities through Cedelbank or Euroclear in Europe or indirectly
through organizations that are participants in these systems.
Cedelbank and Euroclear will hold omnibus positions on behalf of
their participants through customers' securities accounts in Cedelbank's
and Euroclear's names on the books of their respective depositaries which
in turn will hold these positions in customers' securities accounts in the
depositaries' names on the books of DTC.
Transfers between Cedelbank participants and Euroclear
participants will occur in accordance with their respective rules and
operating procedures. Cross-market transfers between persons holding
directly or indirectly through DTC, on the one hand, and directly or
indirectly through Cedelbank participants or Euroclear participants, on the
other hand, will be effected in DTC in accordance with DTC rules on behalf
of the relevant European international clearing systems by its depositary.
Cross-market transactions will require delivery of instructions to the
relevant European international clearing system by the counterparty in this
system in accordance with its rules and procedures and within its
established deadlines (European time). If the transaction meets its
settlement requirements, the relevant European international clearing
system will deliver instructions to its depositary to take action to effect
final settlement on its behalf by delivering or receiving securities in
DTC, and making or receiving payment in accordance with normal procedures
for same-day funds settlement applicable to DTC. Cedelbank participants and
Euroclear participants may not deliver instructions directly to the
depositaries.
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Because of time-zone differences, credits of debt securities
received in Cedelbank or Euroclear as a result of a transaction with a DTC
participant will be made during subsequent securities settlement processing
and dated the business day following the DTC settlement date. These credits
or any transactions in the debt securities settled during the securities
settlement processing will be reported to the relevant Euroclear or
Cedelbank participants on the business day following the DTC settlement
date. Cash received in Cedelbank or Euroclear as a result of sales of debt
securities by or through a Cedelbank participant or a Euroclear participant
to a DTC participant will be received with value on the DTC settlement date
but will be available in the relevant Cedelbank or Euroclear cash account
only as of the business day following settlement in DTC.
Cedelbank is incorporated under the laws of Luxembourg as a
professional depository. Cedelbank holds securities for its participating
organizations and facilitates the clearance and settlement of securities
transactions between Cedelbank participants through electronic book-entry
changes in accounts of Cedelbank participants, which eliminates the need
for physical movement of certificates. Transactions may be settled in
Cedelbank in any of 28 currencies, including United States dollars.
Cedelbank provides to Cedelbank participants, among other things, services
for safekeeping, administration, clearance and settlement of
internationally traded securities and securities lending and borrowing.
Cedelbank interfaces with domestic markets in several countries. As a
professional depository, Cedelbank is subject to regulation by the
Luxembourg Monetary Institute. Cedelbank participants are recognized
financial institutions around the world, including underwriters, securities
brokers and dealers, banks, trust companies, clearing corporations and
certain other organizations and may include the underwriters. Indirect
access to Cedelbank is also available to others, such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a Cedelbank participant, either directly or indirectly.
Euroclear was created in 1968 to hold securities for participants
of Euroclear and to clear and settle transactions between Euroclear
participants through simultaneous electronic book-entry delivery against
payment, eliminating the need for physical movement of certificates and any
risk from lack of simultaneous transfers or securities and cash.
Transactions may now be settled in any of 29 currencies, including United
States dollars. Euroclear includes various other services, including
securities lending and borrowing and interfaces with domestic markets in
several countries generally similar to the arrangements for cross-market
transfers with DTC described above. Euroclear is operated by the Brussels,
Belgium office of Morgan Guaranty Trust Company of New York (the "Euroclear
Operator"), under contract with Euro-clear Clearance System S.C., a Belgian
cooperative corporation (the "Cooperative"). All operations are conducted
by the Euroclear Operator, and all Euroclear securities clearance accounts
and Euroclear cash accounts are accounts with the Euroclear Operator, not
the Cooperative. The Cooperative establishes policy for Euroclear on behalf
of Euroclear participants. Euroclear participants include banks (including
central banks), securities brokers and dealers and other professional
financial intermediaries and may include the Underwriters. Indirect access
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to Euroclear is also available to other firms that clear through or maintain
a custodial relationship with a Euroclear participant, either directly or
indirectly.
The Euroclear Operator is the Belgian branch of a New York banking
corporation which is a member bank of the Federal Reserve System. As such,
it is regulated and examined by the Board of Governors of the Federal
Reserve System and the New York State Banking Department, as well as the
Belgian Banking Commission.
The Terms and Conditions Governing Use of Euroclear and the
related Operating Procedures of the Euroclear System and applicable Belgian
law govern securities clearance accounts and cash accounts with the
Euroclear Operator. These terms and conditions govern transfers of
securities and cash with Euroclear, withdrawals of securities and cash from
Euroclear, and receipts of payments with respect to securities in
Euroclear. All securities in Euroclear are held on a fungible basis without
attribution of specific certificates to specific securities clearance
accounts. The Euroclear Operator acts under the terms and conditions only
on behalf of Euroclear participants, and has no record of or relationship
with persons holding though Euroclear participants.
Distributions with respect to debt securities held through
Cedelbank or Euroclear will be credited to the cash accounts of Cedelbank
participants or Euroclear participants in accordance with the relevant
system's rules and procedures, to the extent received by its depositary.
These distributions will be subject to tax reporting in accordance with
relevant United States tax laws and regulations. Cedelbank or the Euroclear
Operator, as the case may be, will take any other action permitted to be
taken by a holder under the Indenture or any other related document on
behalf of a Cedelbank participant or Euroclear participant only in
accordance with its relevant rules and procedures and subject to its
depositary's ability to effect action on its behalf through DTC.
Although DTC, Cedelbank and Euroclear have agreed to the foregoing
procedures in order to facilitate transfers of securities among
participants of DTC, Cedelbank and Euroclear, they are under no obligation
to perform or continue to perform these procedures and these procedures may
be discontinued at any time.
Except as required by law, neither United, the trustee nor the
paying agent will have any liability for any aspect of the records relating
to or payments made on account of beneficial ownership interests of the
debt securities of any series held by Cede & Co., as nominee for DTC, by
Cedelbank or by Euroclear in Europe, or for maintaining, supervising or
reviewing any records relating to the beneficial ownership interests of the
debt securities of any series held by Cede & Co., Cedelbank or Euroclear.
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Limitations on Issuance of Bearer Securities
United States federal tax laws and regulations do not allow us to
deduct interest on debt securities unless we take the following steps:
o Bearer securities may not be offered, sold, resold or
delivered in connection with their original issue in the
United States or its possessions or to United States
persons as defined in the Internal Revenue Code and its
regulations; subject to certification requirements,
bearer securities may be offered or sold to offices
outside of the United States of United States financial
institutions that agree to comply with the requirements
of Section 165(j)(3)(A), (B) or (C) of the Internal
Revenue Code and its regulations; and
o any underwriters, agents and dealers participating in the
offering of securities must agree that they will not
offer any bearer securities for sale or resale in the
United States or its possessions or to United States
persons, other than the financial institutions described
above, nor deliver bearer securities within the United
States or its possessions.
Bearer securities and any attached coupons must bear a legend
substantially similar to the following: "Any United States person who holds
this obligation will be subject to limitations under the United States
income tax laws, including the limitations provided in Sections 165(j) and
1287(a) of the Internal Revenue Code". Under Sections 165(j) and 1287(a) of
the Internal Revenue Code, if you are a United States person, you generally
are not entitled to deduct any loss on bearer securities and must treat any
gain realized on the sale or other disposition, including the receipt of
principal, of bearer securities as ordinary income.
Other restrictions and additional tax considerations may apply to
the issuance and holding of bearer securities. You should consult your tax
advisor about the existence of any tax restrictions.
Notices
Except as otherwise set forth in a prospectus supplement, we will
give notices to holders of bearer securities by publication in a daily
newspaper in the English language of general circulation in New York City
and London. So long as bearer securities are listed on the Luxembourg Stock
Exchange and the Luxembourg Stock Exchange requires it, we will also give
notices in a daily newspaper of general circulation in Luxembourg City or,
if not practical, elsewhere in Western Europe. We expect to make this
publication in The Wall Street Journal, the Financial Times and the
Luxemburger Wort. We will give notices to holders of registered securities
by mail to the addresses of securityholders as they appear in the security
register.
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Events of Default
Any one of the following events will be an event of default for
the debt securities of any particular series:
(1) we fail to pay any interest on the debt security within 30
days after its due date;
(2) we fail to pay principal of, or any premium on, the debt
security within 10 days after its due date;
(3) we fail to deposit any sinking fund or other payment on
the debt security within 10 days after its due date;
(4) we fail to perform or we breach any of our other
covenants or warranties in the Indenture, unless the
covenant or warranty does not apply to your series, for
90 days after we receive written notice stating we are in
breach;
(5) we become bankrupt or insolvent; or
(6) any other event of default provided with respect to debt
securities of that series.
If any event of default with respect to any outstanding series of
the debt securities occurs and is not remedied as provided in the
Indenture, either the trustee or the holders of at least 25% in aggregate
principal amount of that series of the outstanding debt securities may
declare the entire principal amount of that series of debt securities to be
due and payable immediately. This is called a declaration of acceleration.
If any event of default with respect to original issue discount securities,
either the trustee or the holders of at least 25% in aggregate principal
amount of that series of the outstanding debt securities may declare the
portion of the principal amount of the securities of that series specified
in the Indenture to be due and payable immediately. At any time after a
declaration of acceleration has been made, but before a judgment based on
acceleration has been obtained, the holders of a majority of the aggregate
principal amount of that series of outstanding debt securities may, in some
instances, rescind and annul the acceleration.
You should review the applicable prospectus supplement relating to
any series of debt securities that are original issue discount securities
for the particular provisions relating to acceleration of the stated
maturity of a portion of the principal amount of that series of original
issue discount securities upon the occurrence and continuation of an event
of default.
The Indenture provides that, subject to the duty of the trustee
during default to act with the required standard of care, the trustee is
not required to exercise any of its rights or powers under the Indenture at
the request of any of the holders of the debt securities, unless those
holders have offered to the trustee reasonable protection from losses and
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expenses, which is called "indemnity." If an indemnity is given, the
holders of a majority of the principal amount of the outstanding debt
securities of any series may direct the time, method and place of
conducting any legal action for any remedy available to the trustee, or
exercising any of the trustee's powers with respect to that series of the
debt securities.
You will not have the right to take legal action under the
Indenture, unless:
o you give the trustee written notice of an event of default
that is not remedied on time;
o the holders of at least 25% of the principal amount of
that series of outstanding debt securities have made
written request, and offered reasonable indemnity, to the
trustee to take legal action; and
o the trustee has not received from the holders of a
majority of the principal amount of that series of
outstanding debt securities a direction not to take legal
action or otherwise has failed to take legal action
within 60 days.
However, these limitations do not apply to a suit instituted by a
holder of a security to enforce the payment of the principal of, and any
premium or interest on, its debt security on or after the due dates for
those payments.
We are required to furnish to the trustee annually a statement as
to our performance of our obligations under the Indenture and as to any
default in our performance.
Modification and Waiver
We may modify and amend the Indenture only if the trustee and the
holders of at least the majority of the principal amount of each series of
the outstanding debt securities issued under the Indenture and affected by
the modification or amendment consent to the amendment. We may not make the
following amendments without the consent of the holders of all affected
debt securities:
(1) any change to the stated maturity of the principal of, or
any installment of principal of or interest on, any debt
security;
(2) any reduction of the principal amount of any premium, or
unless we indicate otherwise in the applicable prospectus
supplement, interest on any debt security, including, in
the case of an original issue discount security, the
amount payable upon acceleration;
(3) any change in the place or currency of payment of
principal of, or any premium or interest on, any debt
security;
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(4) any changes that impair your right to take legal action
for the enforcement of any payment on any debt security
on or after its stated maturity or, in the case of
redemption, on or after the redemption date; or
(5) any reduction in the percentage of the principal amount
of any series of outstanding debt securities that must
consent to modify or amend the Indenture, to waive
compliance with its provisions or to waive events of
defaults.
The holders of at least a majority of the principal amount of any
series of outstanding debt securities may, on behalf of all holders of that
series, waive our compliance with some of the restrictive provisions of the
Indenture. The holders of at least a majority of the principal amount of
any series of outstanding debt securities may, on behalf of all holders of
that series, waive any past default under the Indenture. However, all
holders of the affected series of outstanding debt securities must consent
in order to waive a default in the payment of principal, any premium or
interest and a default in respect of a covenant or provision of the
Indenture that cannot be modified or amended without the consent of the
holder of each outstanding debt security of that series.
Consolidation, Merger and Sale of Assets
We may consolidate with or merge into any other corporation or
transfer substantially all of our assets to any corporation if:
(1) (A) we are the surviving corporation or (B) any successor
or purchaser is a corporation organized and validly
existing under the laws of the United States of America,
any State or the District of Columbia, and the successor
or purchaser expressly assumes our obligations relating
to the debt securities;
(2) immediately after the transaction, no event of default
has occurred or would occur; and
(3) if our properties or assets become subject to a lien that
is not permitted by the Indenture, we or our successor
grant you a lien on that property that is equal or
superior to the lien resulting from the transaction.
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Defeasance and Covenant Defeasance
The Indenture provides that, if the terms of any debt security
permit, at our option, we:
(1) will be discharged from our obligations under the debt
securities, except for our obligations to register the
transfer of debt securities, replace stolen, lost or
mutilated debt securities, maintain paying agencies and
hold moneys for payment in trust; or
(2) are not required to comply with specified covenants in
the Indenture and the event described in clause (4) under
"--Events of Default" will no longer be an event of
default,
if we deposit with the trustee to hold in trust a sufficient amount of
money or U.S. government obligations to make all required payments on the
debt securities of that series on the dates those payments are due. All
payments must be made in accordance with the terms of that series of debt
securities. We may establish a trust arrangement of this type only if,
among other things:
(a) no event of default has occurred or would occur on the
date of the deposit or on any later date specified in the
Indenture if we become bankrupt or insolvent;
(b) the deposit will not cause the trustee to have any
conflicting interest with any of our other debt
securities;
(c) the defeasance will not violate or be a default under the
Indenture or any of our other agreements; and
(d) we have delivered an opinion of counsel that states that
the holders will not recognize income, gain or loss
for federal income tax purposes as a result of the deposit
or defeasance and will be subject to federal income tax in
the same manner as if the defeasance had not occurred. The
opinion of counsel, in the case of full defeasance
described in clause (1) above, must refer to and be based
upon a published ruling of the Internal Revenue Service, a
private ruling of the Internal Revenue Service addressed
to us, or otherwise be based on a change in federal income
tax law after the date of the Indenture.
If we do not comply with our remaining obligations under the Indenture
after a covenant defeasance and the debt securities of that series are
declared due and payable because of the occurrence of any event of default,
the amount of money and U.S. government obligations on deposit with the
trustee may be insufficient to pay amounts due on the debt securities of
that series at the time of the acceleration. However, we will remain liable
for these payments.
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Concerning the Trustee
The applicable prospectus supplement will name the trustee under
the Indenture. The trustee may act as trustee under our other financings.
The trustee may also perform services for us and our affiliates in the
ordinary course of business and may be a lender bank under our credit
facilities.
PLAN OF DISTRIBUTION
We may sell the debt securities being offered by this prospectus
through agents, through underwriters and through dealers. Debt securities
may be sold to other purchasers directly or through agents or through a
combination of any of these methods of sale.
The securities may be distributed in one or more transactions at a
fixed price or prices, which may be changed, at market prices prevailing at
the time of sale, at prices related to the prevailing market prices or at
negotiated prices.
Offers to purchase debt securities may be solicited by agents
designated by us. The applicable prospectus supplement will name any agent,
who may be deemed to be an underwriter, as that term is defined in the 1933
Act, involved in the offer or sale of the debt securities and will describe
any commissions payable by us to that agent. We may indemnify our agents
against certain liabilities, including liabilities under the 1933 Act. In
addition, our agents or their affiliates may be customers of, extend credit
to, engage in transactions with, or perform services for, us and/or our
affiliates in the ordinary course of business. Unless otherwise indicated
in the applicable prospectus supplement, any agent will be acting on a best
efforts basis for the period of its appointment.
If any underwriters are utilized in the sale, we will enter into
an underwriting agreement with these underwriters at the time of sale to
them. The names of the underwriters and the terms of the transaction will
be described in the applicable prospectus supplement that the underwriters
will use to resell the debt securities in respect of which this prospectus
is delivered to the public. We may indemnify underwriters against certain
liabilities, including liabilities under the 1933 Act. In addition, our
underwriters or their affiliates may be customers of, extend credit to,
engage in transactions with, or perform services for, us and/or our
affiliates in the ordinary course of business.
If dealers are utilized in the sale of the debt securities, we
will sell the debt securities to the dealers as principal. The dealers may
then resell the debt securities to the public at varying prices to be
determined by the dealers at the time of resale. We may indemnify dealers
against certain liabilities, including liabilities under the 1933 Act. In
addition, dealers or their affiliates may be customers of, extend credit
to, engage in transactions with, or perform services for, us and/or our
affiliates in the ordinary course of business.
Unless otherwise indicated in the applicable prospectus
supplement, we do not propose to list the debt securities on a securities
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exchange. If any debt securities are sold to or through underwriters,
dealers or agents, they may make a market in the securities as permitted by
applicable law or regulations. However, no underwriters or dealers will be
obligated to make a market in debt securities. We cannot predict the
activity or liquidity of any trading in the debt securities.
If indicated in an applicable prospectus supplement, we will
authorize underwriters or agents to solicit offers by specified
institutions to purchase offered debt securities from us under delayed
delivery contracts. Delayed delivery contracts provide for payment and
delivery on the date or dates stated in the prospectus supplement. Each
delayed delivery contract will be for an amount not less than, and the
aggregate principal amount of offered debt securities sold under delayed
delivery contracts will be not less nor more than, the amounts stated in
the prospectus supplement. Institutions with whom delayed delivery
contracts, when authorized, may be made include commercial and savings
banks, insurance companies, pension funds, investment companies,
educational and charitable institutions and other institutions, but will in
all cases be subject to our approval. Delayed delivery contracts will not
be subject to any conditions except:
o the purchase by an institution of the offered debt
securities covered by its delayed delivery contracts will
not at the time of delivery be prohibited under the laws
of any jurisdiction in the United States; and
o if the offered debt securities are being sold to
underwriters, we will have sold to the underwriters the
total principal amount of the offered debt securities
less the principal amount covered by delayed delivery
contracts.
Agents and underwriters will have no responsibility for the
delivery or performance of delayed delivery contracts.
LEGAL MATTERS
Unless otherwise indicated in a prospectus supplement, counsel for
United, Mayer, Brown & Platt, Chicago, Illinois and counsel for any
underwriters, dealers and agents will pass upon certain legal matters in
connection with the debt securities offered by this prospectus.
EXPERTS
Unless otherwise indicated in a prospectus supplement, Arthur
Andersen LLP, independent public accountants, have audited the audited
financial statements and schedules included or incorporated by reference in
this prospectus, any prospectus supplement and elsewhere in the
registration statement, as indicated in their audit reports, and the
audited financial statements and schedules are included or incorporated by
reference in this prospectus in reliance upon the authority of that firm as
experts in giving audit reports.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE
MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT
AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY
THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
Subject to Completion, Dated November 9, 1999
PROSPECTUS
- ----------
United Air Lines, Inc.
1200 East Algonquin Road
Elk Grove Village, IL 60007
Mailing Address: P.O. Box 66100
Chicago, Illinois 60666
(847) 700-4000
[COMPANY LOGO]
PASS THROUGH CERTIFICATES
Pass through trusts formed by United may offer for sale up to
$1,500,000,000 of pass through certificates from time to time under this
prospectus and one or more prospectus supplements. Each pass through
certificate will represent an interest in a pass through trust. The
property of the pass through trust will include equipment notes issued by:
o a trust to finance or refinance a portion of the purchase
price of an aircraft that has been or will be leased to
United as part of a leveraged lease transaction; or
o United to finance or refinance all or a portion of the purchase
price of an aircraft owned or to be purchased by United.
Equipment notes issued by a trust are without recourse to United.
Equipment notes issued by United are with recourse to United. For each
aircraft, the owner trustee or United will issue one or more equipment
notes with an interest rate, final maturity date and ranking of priority of
payment described in a prospectus supplement.
The pass through trustee will distribute to the holders of pass
through certificates the interest paid on the equipment notes held in the
related pass through trust on the dates and at the rates indicated in a
prospectus supplement. Holders of pass through certificates will also
receive distributions of the principal paid on the equipment notes in
scheduled amounts and on dates specified in a prospectus supplement. Unless
otherwise indicated in a prospectus supplement, we will not list the pass
through certificates on any national securities exchange.
===============================================================================
United will provide specific terms of these securities in
supplements to this prospectus. You should read this
prospectus and any prospectus supplement carefully
before you invest.
===============================================================================
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or
passed upon the adequacy or accuracy of this prospectus. Any
representation to the contrary is a criminal offense.
===============================================================================
The date of this Prospectus is November__, 1999.
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ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that contains
two forms of prospectus to be used in connection with offerings of debt
securities or pass through certificates. This prospectus provides you with
a general description of pass through certificates that we may offer. Each
time that we sell pass through certificates, we will provide a prospectus
supplement that will contain specific information about the terms of that
offering.
You should rely only on the information contained or incorporated
by reference in this prospectus or a prospectus supplement. United has not
authorized any other person to provide you with different information. If
anyone provides you with different or inconsistent information, you should
not rely on it. United is not making an offer to sell these securities in
any jurisdiction where the offer or sale is not permitted. You should
assume that the information appearing in this prospectus or any prospectus
supplement, as well as information United has previously filed with the
Securities and Exchange Commission and incorporated by reference, is
accurate as of the date on the front of those documents only. United's
business, financial condition, results of operations and prospects may have
changed since those dates.
WHERE YOU CAN FIND MORE INFORMATION
United Air Lines, Inc. files reports, proxy statements and other
information with the SEC. You may access United's SEC filings over the
Internet at the SEC's web site at http://www.sec.gov. You may also read and
copy any document United files at the SEC's public reference room at 450
Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330 to obtain information on the operation of the public reference
room.
United has filed with the SEC under the Securities Act of 1933 a
registration statement on Form S-3 relating to the securities. For further
information on United and the securities, you should refer to the
registration statement and its exhibits. This prospectus and the related
prospectus supplement summarizes material provisions of contracts and other
documents that United refers you to. Since the prospectus and the related
prospectus supplement may not contain all the information that you may find
important, you should review the full text of these documents. United has
included forms of these documents as exhibits to the registration statement
or incorporated them by reference into this prospectus.
INCORPORATION OF INFORMATION UNITED FILES WITH THE SEC
United is "incorporating by reference" certain information it
files with the SEC into this prospectus, which means:
o incorporated documents are considered part of this prospectus;
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o United can disclose important information to you by referring
you to those documents; and
o information that United files with the SEC will
automatically update and supersede this prospectus.
United incorporates by reference its Annual Report on Form 10-K
for the fiscal year ended December 31, 1998, its Quarterly Reports on Form
10-Q for the fiscal quarters ended March 31, 1999 and June 30, 1999, and
its Current Report on Form 8-K dated October 19, 1999, which United filed
with the SEC under the Securities Exchange Act of 1934.
United also incorporates by reference each of the
following documents that United will file with the SEC after the date of
the initial filing of the registration statement with the SEC and prior to
effectiveness of the registration statement or after the date of this
prospectus but before the end of the offering of the securities:
o Reports filed under Sections 13(a) and (c) of the 1934 Act,
o Definitive proxy or information statements filed under
Section 14 of the 1934 Act in connection with any subsequent
stockholders' meeting, and
o Any reports filed under Section 15(d) of the 1934 Act.
You may request a copy of any filings referred to above, at no
cost, by writing or telephoning United at the following address:
Corporate Secretary's Office
United Air Lines, Inc. - WHQLD
P.O. Box 66100
Chicago, Illinois 60666
(847) 700-4453.
REPORTS TO PASS THROUGH CERTIFICATEHOLDERS
The pass through trustee under each pass through trust will
provide the certificateholders of each pass through trust with periodic
statements concerning the distributions made from that pass through trust.
See "Description of the Certificates--Reports to Certificateholders" for a
description of these periodic statements.
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THE COMPANY
UAL Corporation was incorporated under the laws of the State of
Delaware on December 30, 1968. The world headquarters of UAL are located at
1200 East Algonquin Road, Elk Grove Township, Illinois 60007. UAL's mailing
address is P.O. Box 66100, Chicago, Illinois 60666. The telephone number
for UAL is (847) 700-4000.
UAL is a holding company and its principal subsidiary is United
Air Lines, Inc., a Delaware corporation, which is wholly owned. United
accounted for virtually all of the Company's revenues and expenses in 1998.
United is a major commercial air transportation company, engaged in the
transportation of persons, property and mail throughout the United States
and abroad.
During 1998, United carried, on average, more than 238,000
passengers per day and flew more than 125 billion revenue passenger miles.
It is the world's largest airline as measured by revenue and passenger
miles flown, providing passenger service in 28 countries.
United has a global network of major connecting airports: Chicago,
Denver, San Francisco, Los Angeles, Washington, D.C., Miami, Frankfurt,
London, Tokyo, and Toronto. This network of major connecting airports is
designed to fly travelers between North America (domestic segment) and the
Pacific, Latin America and Europe (international segments). Operating
revenues attributed to United's North America segment were approximately
$12.0 billion in 1998, $11.2 billion in 1997, and $10.7 billion in 1996.
Operating revenues attributed to United's international segments were
approximately $5.5 billion in 1998, $6.1 billion in 1997 and $5.6 billion
in 1996.
Since October 1994, United has operated a service, United Shuttle,
within its domestic segment. This service is designed to compete with
low-cost carriers on routes fewer than 750 miles. While United Shuttle is
principally concentrated on the West Coast, it has also expanded into the
Denver market. United Shuttle offers approximately 466 daily flights on 25
routes between 21 cities in the western United States. United Shuttle
provides critical feed traffic, at competitive prices, for United.
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for United is set forth
below for the periods indicated.
Six-months Ended Year Ended December 31
---------------- --------------------------------------
June 30, 1999 1998 1997 1996 1995 1994
------------- ---- ---- ---- ---- ----
3.15 2.05 2.36 1.76 1.44 1.09
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For the computation of the ratio of earnings to fixed charges,
"earnings" has been calculated by adding income before taxes and
extraordinary items, interest expense, undistributed earnings of
affiliates, the portion of rental expense representative of an interest
factor and amortization of capitalized debt expense. Fixed charges consist
of interest expense (including capitalized interest) and the portion of
rental expense representative of an interest factor.
OUTLINE OF PASS THROUGH TRUST STRUCTURE
Each series of pass through certificates will be issued by a
separate pass through trust. Each separate pass through trust will be
formed under a supplemental agreement, between United and the pass through
trustee named in the series supplement, to a Pass Through Trust Agreement
between United and the pass through trustee. All pass through certificates
issued by a particular pass through trust will represent fractional
undivided interests in that pass through trust. The trust property held in
each pass through trust will consist of (a) equipment notes issued by
United in connection with financing or refinancing the purchase of one or
more aircraft, (b) equipment notes issued by one or more trusts in
connection with the financing or refinancing one or more leveraged lease
transactions, as specified in the applicable prospectus supplement, and (c)
any other property described in the applicable prospectus supplement.
United or the owner trustee may issue one or more equipment notes
in connection with each purchase or leveraged lease transaction. Each
equipment note may have different interest rates and final maturity dates
and rankings of priority of payment. Concurrently with the execution and
delivery of each series supplement, the pass through trustee, on behalf of
the related pass through trust, will enter into one or more agreements
under which it will purchase one or more equipment notes. Unless otherwise
provided in a prospectus supplement, the equipment notes that constitute
the property of a pass through trust will have the same interest rates as
the interest rates on the pass through certificates issued by the pass
through trust and the same priority of payment relative to each of the
other equipment notes held by the pass through trust. Unless otherwise
provided in a prospectus supplement, the latest maturity date for the
equipment notes will occur on or before the final distribution date
applicable to the pass through certificates issued by the pass through
trust holding those equipment notes.
For each pass through trust, the total amount of the pass through
certificates will equal the total principal amount of the equipment notes
constituting the trust property of the pass through trust. The pass through
trustee will distribute payments of principal, any premium and interest,
received by it as holder of the equipment notes to the certificateholders
of the pass through trust that hold those equipment notes.
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USE OF PROCEEDS
The pass through trustee will use proceeds from the sale of pass
through certificates issued by a pass through trust to purchase equipment
notes. The equipment notes are or will be issued by:
o a trust to finance or refinance a portion of the purchase
price of an aircraft that has been or will be leased to United,
or
o United to finance or refinance all or a portion of the purchase
price of an aircraft owned or to be purchased by United.
For each leased aircraft, the owner trustee will issue the related
equipment notes, as nonrecourse obligations, and authenticated by a bank or
trust company, as indenture trustee under either a separate supplement to
an existing trust indenture and security agreement between the owner
trustee and the indenture trustee or a separate trust indenture and
security agreement. Each trust indenture and security agreement is referred
to in this prospectus as a "Leased Aircraft Indenture". The owner trustee
will also obtain a portion of the funding for the leased aircraft from an
equity investment of an owner participant(s). A leased aircraft may also be
subject to other financing arrangements that will be described in the
applicable prospectus supplement. In connection with the refinancing of a
leased aircraft, the owner trustee may refinance the existing equipment
notes through the issuance of notes by a separate trust, which will be
described in the applicable prospectus supplement.
We will issue the equipment notes relating to owned aircraft under
either a separate supplement to an existing trust indenture and mortgage or
a separate trust indenture and mortgage. Each trust indenture and mortgage
is referred to in this prospectus as an "Owned Aircraft Indenture". The
term "Indenture" refers to any Leased Aircraft Indenture and any Owned
Aircraft Indenture.
If the pass through trustee does not use the proceeds of any
offering of pass through certificates to purchase equipment notes on the
date of issuance of the pass through certificates, it will hold the
proceeds for the benefit of the holders of the related pass through
certificates under arrangements that we will describe in the applicable
prospectus supplement. If the pass through trustee does not subsequently
use any portion of the proceeds to purchase equipment notes by the date
specified in the applicable prospectus supplement, it will return that
portion of the proceeds to the holders of the related pass through
certificates.
In addition, pass through certificates may be offered subject to
delayed aircraft financing arrangements, such as the following:
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o a pass through trust may purchase equipment notes issued
by an owner trustee prior to the purchase of an aircraft
by the owner trustee or the commencement of the related
Lease to United.
o a pass through trust may purchase equipment notes issued
by United prior to the expected delivery date of an owned
aircraft.
o the funds may be invested with a depositary or
represented by escrow receipts until used to purchase
equipment notes.
In these circumstances, the prospectus supplement will describe
how the proceeds of the pass through certificates will be held or applied
during any delayed aircraft financing period, including any depositary or
escrow arrangements.
FLOW OF PAYMENTS
Each pass through trust may hold equipment notes relating to more
than one aircraft. A prospectus supplement will describe the number of
aircraft included in each offering and the interest rates, final maturity
dates and rankings in respect of priority of payment of the equipment notes
held by each pass through trust.
In a leased aircraft transaction, United will lease each aircraft
from the owner trustee under a separate Lease. United will make scheduled
rent payments for each aircraft under the Lease. As a result of the
assignment under the related Leased Aircraft Indenture of specified rights
of the owner trustee under the Lease, United will make the rent payments
directly to the indenture trustee. From these rent payments, the indenture
trustee will pay to the pass through trustee the interest, principal and
any premium due from the owner trustee (or any separate trust created in
connection with the refinancing of leased aircraft) on the equipment notes
issued under the Indenture and held in the pass through trust. After the
indenture trustee has made the payments on the equipment notes then due,
the indenture trustee will pay the remaining balance to the owner trustee
for the benefit of the related owner participant. The owner participant may
be United or an affiliate of United. The pass through trustee for each pass
through trust will distribute to the related certificateholders payments
received on the equipment notes held in the pass through trust.
In an owned aircraft transaction, United will make scheduled
payments on the equipment notes relating to each aircraft to the indenture
trustee. From these payments, the indenture trustee will pay to the pass
through trustee for each pass through trust the interest, principal and any
premium due on the equipment notes issued under the related Owned Aircraft
Indenture and held in the related pass through trust. The pass through
trustee will distribute to the related certificateholders payments received
on the equipment notes held in the pass through trust.
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In addition, this description generally assumes that, on or before
the date of the sale of any series of pass through certificates, the
related aircraft shall have been delivered and the ownership or lease
financing arrangements for such aircraft shall have been put in place.
However, it is possible that some or all of the aircraft related to a
particular offering of pass through certificates may be subject to delayed
aircraft financing arrangements. In the event of any delayed aircraft
financing arrangements, some terms of the pass through certificates will
differ from the terms described in this prospectus. The applicable
prospectus supplement will reflect the material differences arising from
delayed aircraft financing arrangements.
DESCRIPTION OF THE CERTIFICATES
The discussion that follows is a summary of the terms of the pass
through certificates that we expect will be common to all series and is not
complete. The applicable prospectus supplement will describe most of the
financial terms and other specific terms of a particular series of pass
through certificates. The summary includes descriptions of the material
terms of the Pass Through Agreement. The form of Pass Through Agreement has
been filed as an exhibit to the registration statement of which this
prospectus is a part. The series supplement relating to each series of pass
through certificates and the forms of Indentures, Note Purchase Agreements,
if any, Participation Agreements, Leases, if the pass through certificates
relate to a leased aircraft transaction, intercreditor agreement, if any,
liquidity facility, if any, Trust Agreements and Collateral Agreements, if
any, will be filed with the SEC as exhibits to a post-effective amendment
to this registration statement, a Current Report on Form 8-K, a Quarterly
Report on Form 10-Q or an Annual Report on Form 10-K, as applicable, and
this summary is qualified in its entirety by the detailed information
appearing in each of these documents. This summary makes use of terms
defined in and is qualified in its entirety by reference to the Pass
Through Agreement.
Each prospectus supplement will include a glossary of terms used
in connection with the pass through certificates offered thereby and the
related equipment notes. The applicable prospectus supplement will describe
the particular terms of the Indentures, the pass through certificates, the
Leases and the Participation Agreements relating to any particular offering
of pass through certificates. To the extent that any provision in any
prospectus supplement is inconsistent with any provision of this summary,
the provision of the prospectus supplement will control.
The pass through certificates of each pass through trust will be
issued in fully registered form only. Each pass through certificate will
represent a fractional undivided interest in the separate pass through
trust formed by the Pass Through Agreement and the related series
supplement under which that pass through certificate is issued. The
property of each pass through trust will include (1) the equipment notes
held in that pass through trust, (2) all monies at any time paid on the
equipment notes, (3) all monies due and to become due on the equipment
notes and (4) funds from time to time deposited with the pass through
trustee in accounts relating to that pass through trust. If specified in a
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prospectus supplement, the property of a pass through trust will also
include rights under an intercreditor agreement relating to
cross-subordination arrangements and monies receivable under a liquidity
facility. Each pass through certificate will represent a pro rata share of
the outstanding principal amount of the equipment notes and other property
held in the related pass through trust and will be issued, unless otherwise
specified in a prospectus supplement, in minimum denominations of $1,000
and integral multiples of $1,000 in excess of $1,000.
A prospectus supplement will describe the specific series of pass
through certificates offered by that prospectus supplement, including:
(1) the specific designation and title of the pass through
certificates and the pass through trust;
(2) the pass through trustee for that series of pass through
certificates;
(3) the regular distribution dates and special distribution
dates for the pass through certificates and any cut-off
date for the purchase of an aircraft;
(4) the specific form of the pass through certificates;
(5) whether the pass through certificates will be issued in
accordance with a book-entry system;
(6) a description of:
(a) the equipment notes to be purchased by that pass
through trust, including the period(s) within
which, the price(s) at which, and the terms and
conditions upon which the equipment notes may or
must be repaid in whole or in part, by United or
the related owner trustee;
(b) the payment priority of the equipment notes in
relation to any other equipment notes issued
with respect to the related aircraft;
(c) any additional security or liquidity facilities for
the pass through certificates;
(d) any intercreditor issues among the holders of
equipment notes having different priorities
issued by the same owner trustee;
(e) any provisions for defeasance or covenant
defeasance; and
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(f) any arrangements for the investment or other use
of proceeds of the pass through certificates
prior to the purchase of equipment notes, and
any arrangements relating to any delayed
aircraft financing arrangements;
(7) a description of the related aircraft, including whether
the aircraft is a leased aircraft or an owned aircraft;
(8) a description of the related Participation Agreement or
Note Purchase Agreement and Indenture, including a
description of events of default under the Indenture,
remedies exercisable upon the occurrence of an event of
default and any limitations on the exercise of remedies;
(9) if the pass through certificates relate to leased
aircraft, a description of the related Lease, Trust
Agreement and any Collateral Agreement, including:
(a) the name of the owner trustee;
(b) a description of the events of default under the
Lease, remedies exercisable upon the occurrence
of an event of default and any limitations on
the exercise of remedies; and
(c) any rights of the owner trustee or owner
participant to cure failures of United to pay
rent under the Lease;
(10) the extent, if any, to which the provisions of the
operative documents applicable to the equipment notes may
be amended without the consent of the holders of the
equipment notes, or upon the consent of the holders of a
specified percentage of the total principal amount of the
equipment notes;
(11) a description of the related Indenture;
(12) a description of any intercreditor or subordination
provisions among the holders of pass through
certificates, including any cross-subordination
provisions among the holders of pass through certificates
in separate pass through trusts;
(13) a description of any deposit or escrow agreement, any
liquidity or revolving credit facility or other like
arrangement providing collateralization, credit support
or liquidity enhancement for any series of pass through
certificate or any class of equipment notes; and
(14) any other special terms of the pass through certificates.
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The applicable prospectus supplement will also describe any
special United States federal income tax considerations and any other
special information with respect to that series of pass through
certificates if:
o the pass through certificates are denominated in foreign or
composite currency; or
o the equipment notes are sold at a substantial discount below
the principal amount of the equipment notes.
The equipment notes issued under an Indenture may be held in more
than one pass through trust and any pass through trust may hold equipment
notes issued under more than one Indenture. Unless otherwise provided in a
prospectus supplement, a pass through trust may only hold equipment notes
having the same priority of payment. Equipment notes that have the same
priority of payment are referred to as a "class".
Interest will be passed through to certificateholders of each pass
through trust at the rate payable on the equipment notes held in the pass
through trust, as specified for the pass through trust in the prospectus
supplement.
The pass through certificates represent interests in the related
pass through trust only and all payments and distributions will be made
only from the trust property of the pass through trust. The pass through
certificates do not represent an interest in or obligation of United, the
pass through trustee, any related owner participant, the owner trustee in
its individual capacity or any affiliate of any of them. Each
certificateholder by its acceptance of a pass through certificate agrees to
look solely to the income and proceeds from the trust property of the
related pass through trust as specified in the Pass Through Agreement and
the related series supplement.
The Pass Through Agreement and the Indentures will not contain any
debt covenants or provisions that would give certificateholders protection
in the event of a highly leveraged transaction involving United. However,
the certificateholders of each series will have the benefit of a lien on
the specific aircraft securing the related equipment notes held in the
related pass through trust.
To the extent described in a prospectus supplement, United may
surrender pass through certificates issued by a pass through trust to the
pass through trustee for that pass through trust. In this event, the pass
through trustee will transfer to United an equal principal amount of
equipment notes relating to a particular aircraft designated by United and
will cancel the surrendered pass through certificates.
Denominations, Registration and Transfer
Unless otherwise indicated in a prospectus supplement,
distributions with respect to the pass through certificates will be made,
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and the transfer of pass through certificates will be registrable, at the
office or agency to be maintained by the pass through trustee in New York,
New York, and at any other office or agency maintained by the pass through
trustee for this purpose. We will issue pass through certificates in fully
registered form, unless otherwise indicated in a prospectus supplement.
Unless we tell you otherwise in a prospectus supplement, we will issue pass
through certificates denominated in U.S. dollars only in denominations of
$1,000 and integral multiples of $1,000 in excess of $1,000. We will
specify in the prospectus supplement the denominations of any pass through
certificates we issue denominated in a foreign or composite currency.
We will exchange pass through certificates of any series for other
pass through certificates of the same series, principal amount and maturity
date. You may present pass through certificates, other than a global
security, for registration of transfer, with the form of transfer properly
signed, at the office of the registrar or of any transfer agent designated
by the pass through trustee for this purpose for any series of pass through
certificates and referred to in a prospectus supplement. The registrar or
the transfer agent will effect the transfer or exchange when it is
satisfied with the documents of title and identity of the person making the
request. The Pass Through Agreement designates the pass through trustee as
the registrar. If a prospectus supplement refers to any transfer agent in
addition to the registrar for any series of pass through certificates, the
pass through trustee may at any time rescind the designation of any
transfer agent or approve a change in the location through which any
transfer agent acts. The pass through trustee must maintain a transfer
agent in each place of payment for that series. The pass through trustee
may at any time designate additional transfer agents with respect to any
series of pass through certificates.
No service charge will be made for any registration of transfer or
exchange of the pass through certificates, but the pass through trustee may
require payment of any amount needed to cover any tax or other governmental
charge imposed in connection with the transfer or exchange.
Payments and Paying Agents
Unless otherwise indicated in a prospectus supplement, the pass
through trustee will distribute the amounts on deposit in the applicable
certificate account (1) by check mailed to the address of each
certificateholder of record of that series on the record date with respect
to a regular distribution date as it appears in the register or (2) by wire
transfer to an account maintained by the nominee of the depository.
Unless otherwise indicated in a prospectus supplement, the pass
through trustee will serve as paying agent and the corporate trust office
of the pass through trustee will be designated as the paying agent office
for payments with respect to pass through certificates. We will name in a
prospectus supplement any paying agent outside the United States and any
other paying agent in the United States initially designated by the pass
through trustee for the pass through certificates. The pass though trustee
may at any time designate additional paying agents or rescind the
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designation of any paying agent or approve a change in the office through
which any paying agent acts. The pass through trustee will be required to
maintain a paying agent in each place of payment for that series.
The pass through trustee will repay to the appropriate indenture
trustees all moneys held by the pass through trustee for the payment of
distributions that remain unclaimed at the end of two years after the final
distribution date for the pass through certificates. The pass through
trustee will give written notice of the repayment to the related owner
trustees, the owner participants and United.
Book-Entry Securities
Unless we provide otherwise in a prospectus supplement, the pass
through certificates will be represented by one or more fully registered
certificates. These certificates are called "global securities." Each
global security will be deposited with a depository. The depository will
initially be The Depository Trust Company. The global security will be
registered in the name of the depository or its nominee. Except in the
circumstances described in "Certificated Form" below, no certificateholder
will receive a certificated pass through certificate. If the total
principal amount of any issue of pass through certificates exceeds $200
million, one certificate will be issued for each $200 million of principal
amount and an additional certificate will be issued for any remaining
principal amount of that issue.
The Depository Trust Company or "DTC" is a limited-purpose trust
company organized under the New York Banking Law. It is a "banking
organization" within the meaning of the New York Banking Law, a member of
the Federal Reserve System, a "clearing corporation" within the meaning of
the New York Uniform Commercial Code and a "clearing agency" registered
under the provisions of Section 17A of the 1934 Act. DTC holds securities
that its participants deposit with it. DTC also facilitates the settlement
among participants of securities transactions, such as transfers and
pledges, in deposited securities through electronic computerized book-entry
changes in participants' accounts, which eliminates the need for physical
movement of securities certificates. Direct participants include securities
brokers and dealers, banks, trust companies, clearing corporations and
certain other organizations. A number of DTC's direct participants and the
New York Stock Exchange, Inc., the American Stock Exchange, Inc. and the
National Association of Securities Dealers, Inc. own DTC. Other persons,
such as securities brokers and dealers, banks and trust companies that
clear through or maintain a custodial relationship with a direct
participant, have access to DTC's book-entry system, either directly or
indirectly. These other entities are referred to as "indirect
participants." The rules applicable to DTC and its participants are on file
with the SEC.
Purchases of pass through certificates under the DTC system must
be made by or through direct participants. Direct participants will receive
a credit for the pass through certificates on DTC's records. The ownership
interest of each actual purchaser of each pass through certificate will be
recorded on the direct and indirect participants' records. Each actual
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purchaser is referred to as a "beneficial owner." Beneficial owners will
not receive written confirmation from DTC of their purchase, but beneficial
owners are expected to receive written confirmations providing details of
the transaction and periodic statements of their holdings, from the direct
or indirect participant through which the beneficial owner entered into the
transaction. Transfers of ownership interests in the pass through
certificates will be accomplished by entries made on the books of
participants acting on behalf of beneficial owners. Beneficial owners will
not receive certificates representing their ownership interests in pass
through certificates, except if the use of the book-entry system for the
pass through certificates is discontinued. The laws of some states require
that certain purchasers of securities take physical delivery of securities
in definitive form. These limits and laws may impair the ability to
transfer beneficial interests in the global security.
So long as the depository for the global security, or its nominee,
is the registered owner of the global security, it will be considered the
sole owner or holder of the pass through certificates represented by the
global security. Except as provided below, owners of beneficial interests
in pass through certificates represented by the global security will not be
entitled to have pass through certificates represented by the global
security registered in their names, will not receive or be entitled to
receive physical delivery of pass through certificates in definitive form
and will not be considered the owners or holders of the pass through
certificates under the Pass Through Agreement.
To facilitate subsequent transfers, all pass through certificates
deposited by participants with DTC are registered in the name of DTC's
partnership nominee, Cede & Co. The deposit of pass through certificates
with DTC and their registration in the name of Cede causes no change in the
beneficial ownership of the pass through certificates. DTC has no knowledge
of the actual beneficial owners of the pass through certificates; its
records reflect only the identity of the direct participants to whose
accounts the pass through certificates are credited, which may or may not
be the beneficial owners. The participants will remain responsible for
keeping account of their holdings on behalf of their customers. Conveyance
of notices and other communications by DTC to direct participants, by
direct participants to indirect participants and by direct participants and
indirect participants to beneficial owners will be governed by arrangements
among them. These arrangements are subject to any applicable statutory or
regulatory requirements.
Neither DTC nor Cede will consent or vote with respect to pass
through certificates. Under its usual procedures, DTC mails an omnibus
proxy to the pass through trustee as soon as possible after the record
date. The omnibus proxy assigns Cede & Co.'s consenting or voting rights to
those direct participants to whose accounts the pass through certificates
are credited on the record date. Those direct participants will be
identified in a listing attached to the omnibus proxy.
The pass through trustee or a paying agent, which may also be the
pass through trustee, will make distributions with respect to the pass
through certificates represented by the global security to the depository
as the registered owner of the global security.
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We expect that the depository upon receipt of any distribution
will credit direct participants' accounts with payments in amounts
proportionate to their respective beneficial interests in the global
security for the related pass through certificates as shown on the records
of the depository. We also expect that payments by participants to
beneficial owners will be governed by standing instructions and customary
practices, as is now the case with securities held for the accounts of
customers in bearer form or registered in "street name". The participants,
and not DTC, the paying agent, the pass through trustee, the indenture
trustee, the owner trustee or United, will be responsible for payments to
the beneficial owners. The pass through trustee is responsible for the
payment of distributions with respect to the global security to DTC. DTC is
responsible for the disbursement of these payments to direct participants.
The direct and indirect participants are responsible for the disbursement
of these payments to the beneficial owners.
If the depository with respect to a global security is at any time
unwilling or unable to continue as depository and a successor depository is
not appointed within 90 days, the pass through trustee will issue pass
through certificates in certificated form in exchange for the pass through
certificates represented by the global security.
The information in this section concerning the depository and the
depository's book-entry system has been obtained from sources that United
believes to be reliable, but United takes no responsibility for the
accuracy of the information.
In addition to holding pass through certificates through
participants or indirect participants of DTC in the United States as
described above, you may hold your pass through certificates through
Cedelbank or Euroclear in Europe if they are participants of these systems,
or indirectly through organizations which are participants in these
systems.
Cedelbank and Euroclear will hold omnibus positions on behalf of
their participants through customers' securities accounts in Cedelbank's
and Euroclear's names on the books of their respective depositaries which
in turn will hold these positions in customers' securities accounts in the
depositaries names on the books of DTC.
Transfers between Cedelbank participants and Euroclear
participants will occur in accordance with their respective rules and
operating procedures. Cross-market transfers between persons holding
directly or indirectly through DTC, on the one hand, and directly or
indirectly through Cedelbank participants or Euroclear participants, on the
other hand, will be effected in DTC in accordance with DTC rules on behalf
of the relevant European international clearing systems by its depositary.
Cross-market transactions will require delivery of instructions to the
relevant European international clearing system by the counterparty in this
system in accordance with its rules and procedures and within its
established deadlines (European time). If the transaction meets its
settlement requirements, the relevant European international clearing
system will deliver instructions to its depositary to take action to effect
final settlement on its behalf by delivering or receiving pass through
certificates in DTC, and making or receiving payment in accordance with
normal procedures for same-day funds settlement applicable to DTC.
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Cedelbank participants and Euroclear participants may not deliver
instructions directly to the depositaries.
Because of time-zone differences, credits of pass through
certificates received in Cedelbank or Euroclear as a result of a
transaction with a DTC participant will be made during subsequent
securities settlement processing and dated the business day following the
DTC settlement date. These credits or any transactions in the pass through
certificates settled during the securities settlement processing will be
reported to the relevant Euroclear or Cedelbank participants on the
business day following the DTC settlement date. Cash received in Cedelbank
or Euroclear as a result of sales of pass through certificates by or
through a Cedelbank participant or a Euroclear participant to a DTC
participant will be received with value on the DTC settlement date but will
be available in the relevant Cedelbank or Euroclear cash account only as of
the business day following settlement in DTC.
Cedelbank is incorporated under the laws of Luxembourg as a
professional depository. Cedelbank holds securities for its participating
organizations and facilitates the clearance and settlement of securities
transactions between Cedelbank participants through electronic book-entry
changes in accounts of Cedelbank participants, which eliminates the need
for physical movement of certificates. Transactions may be settled in
Cedelbank in any of 28 currencies, including United States dollars.
Cedelbank provides to Cedelbank participants, among other things, services
for safekeeping, administration, clearance and settlement of
internationally traded securities and securities lending and borrowing.
Cedelbank interfaces with domestic markets in several countries. As a
professional depository, Cedelbank is subject to regulation by the
Luxembourg Monetary Institute. Cedelbank participants are recognized
financial institutions around the world, including underwriters, securities
brokers and dealers, banks, trust companies, clearing corporations and
certain other organizations and may include the underwriters. Indirect
access to Cedelbank is also available to others, such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a Cedelbank participant, either directly or indirectly.
Euroclear was created in 1968 to hold securities for participants
of Euroclear and to clear and settle transactions between Euroclear
participants through simultaneous electronic book-entry delivery against
payment, eliminating the need for physical movement of certificates and any
risk from lack of simultaneous transfers of securities and cash.
Transactions may now be settled in any of 29 currencies, including United
States dollars. Euroclear includes various other services, including
securities lending and borrowing and interfaces with domestic markets in
several countries generally similar to the arrangements for cross-market
transfers with DTC described above. Euroclear is operated by the Brussels,
Belgium office of Morgan Guaranty Trust Company of New York (the "Euroclear
Operator"), under contract with Euro-clear Clearance System S.C., a Belgian
cooperative corporation (the "Cooperative"). All operations are conducted
by the Euroclear Operator, and all Euroclear securities clearance accounts
and Euroclear cash accounts are accounts with the Euroclear Operator, not
the Cooperative. The Cooperative establishes policy for Euroclear on behalf
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of Euroclear participants. Euroclear participants include banks (including
central banks), securities brokers and dealers and other professional
financial intermediaries and may include the Underwriters. Indirect access
to Euroclear is also available to other firms that clear through or
maintain a custodial relationship with a Euroclear participant, either
directly or indirectly.
The Euroclear Operator is the Belgian branch of a New York banking
corporation which is a member bank of the Federal Reserve System. As such,
it is regulated and examined by the Board of Governors of the Federal
Reserve System and the New York State Banking Department, as well as the
Belgian Banking Commission.
The Terms and Conditions Governing Use of Euroclear and the
related Operating Procedures of the Euroclear System and applicable Belgian
law govern securities clearance accounts and cash accounts with the
Euroclear Operator. These terms and conditions govern transfers of
securities and cash with Euroclear, withdrawals of securities and cash from
Euroclear, and receipts of payments with respect to securities in
Euroclear. All securities in Euroclear are held on a fungible basis without
attribution of specific certificates to specific securities clearance
accounts. The Euroclear Operator acts under the terms and conditions only
on behalf of Euroclear participants, and has no record of or relationship
with persons holding though Euroclear participants.
Distributions with respect to pass through certificates held
through Cedelbank or Euroclear will be credited to the cash accounts of
Cedelbank participants or Euroclear participants in accordance with the
relevant system's rules and procedures, to the extent received by its
depositary. These distributions will be subject to tax reporting in
accordance with relevant United States tax laws and regulations. Cedelbank
or the Euroclear Operator, as the case may be, will take any other action
permitted to be taken by a certificateholder under the Pass Through
Agreement or any other related document on behalf of a Cedelbank
participant or Euroclear participant only in accordance with its relevant
rules and procedures and subject to its depositary's ability to effect
action on its behalf through DTC.
Although DTC, Cedelbank and Euroclear have agreed to the foregoing
procedures in order to facilitate transfers of pass through certificates
among participants of DTC, Cedelbank and Euroclear, they are under no
obligation to perform or continue to perform these procedures and these
procedures may be discontinued at any time.
Except as required by law, neither United, the pass through
trustee nor the paying agent will have any liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of the pass through certificates of any series held by Cede & Co,
by Cedelbank or by Euroclear in Europe, or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
Certificated Form. The pass through trustee will issue certificates
in fully registered, certificated form to certificateholders, or their
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nominees, rather than to DTC or its nominee, only if DTC advises the pass
through trustee in writing that it is no longer willing or able to
discharge properly its responsibilities as depository with respect to the
pass through certificates and United is unable to locate a qualified
successor or if United, at its option, elects to terminate the book-entry
system through DTC. In this event, the pass through trustee will notify all
certificateholders through DTC participants of the availability of
certificated pass through certificates. Upon surrender by DTC of the
definitive global certificate representing the series of pass through
certificates and receipt of instructions for reregistration, the pass
through trustee will reissue the pass through certificates in certificated
form to certificateholders or their nominees.
Certificates in certificated form will be freely transferable and
exchangeable at the office of the pass through trustee upon compliance with
the requirements set forth in the Pass Through Agreement and the applicable
series supplements.
Payments and Distributions
United will make scheduled payments of interest and principal on
the equipment notes related to owned aircraft to the indenture trustee
under the related Owned Aircraft Indenture. The indenture trustee will
distribute these interest and principal payments to the pass through
trustee for each of the pass through trusts that hold these equipment
notes.
Upon commencement of the Lease for any leased aircraft, United
will make scheduled rent payments for each leased aircraft under the
related Lease to the owner trustee. These scheduled rent payments to the
indenture trustee under the applicable Indenture will provide the funds
necessary to make the corresponding payments of principal and interest due
from the owner trustee on the equipment notes issued under the Leased
Aircraft Indenture.
Subject to the effect of any cross-subordination provisions set
forth in the applicable prospectus supplement, the pass through trustee
will distribute payments of principal, any premium and interest on the
equipment notes held in each pass through trust, upon receipt, to
certificateholders of that pass through trust on the dates and in the
currency specified in the applicable prospectus supplement, except in cases
when some or all of the equipment notes are in default as described in the
applicable prospectus supplement.
Payments of interest and principal on the equipment notes held in
each pass through trust will be scheduled to be received by the pass
through trustee on the dates specified in a prospectus supplement. These
scheduled payments of interest and principal on the equipment notes are
referred to as "scheduled payments." The dates specified for distributions
of scheduled payments to the pass through trustee in a prospectus
supplement are referred to as "regular distribution dates." Subject to the
effect of any cross-subordination provisions described in a prospectus
supplement, for each pass through trust, the pass through trustee will
distribute on each regular distribution date to the related
certificateholders any scheduled payment received by the pass through
trustee on the regular distribution date.
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If the pass through trustee does not receive a scheduled payment
on or before a regular distribution date but receives the scheduled payment
within five business days after the regular distribution date, the pass
through trustee will distribute the scheduled payment to the
certificateholders on the date received. The pass through trustee will make
each distribution of a scheduled payment to the certificateholders of
record on the fifteenth day prior to each regular distribution date,
subject to any exceptions specified in a prospectus supplement. Subject to
the effect of any cross-subordination provisions described in the
applicable prospectus supplement, each certificateholder will be entitled
to receive a pro rata share of any distribution. If the pass through
trustee receives a scheduled payment more than five business days after a
regular distribution date, it will be treated as a special payment and will
be distributed as described in the next paragraph.
For any pass through trust, any payments of principal, any premium
or interest, other than scheduled payments, received by the pass through
trustee on any of the equipment notes held in the pass through trust will
be distributed on the special distribution dates specified in a prospectus
supplement. These payments received (1) for the prepayment of the equipment
notes, (2) upon the prepayment by the related owner trustee of the
equipment notes following a default, and (3) on account of the sale of the
equipment notes by the pass through trustee are referred to as "special
payments". Prior to any special payment for a pass through trust, the pass
through trustee will notify the certificateholders of record of that pass
through trust of the special payment and the anticipated special
distribution date. The pass through trustee will make each distribution of
a special payment, other than the final distribution, for any pass through
trust to the certificateholders of record on the fifteenth day prior to the
special distribution date, unless otherwise specified in a prospectus
supplement. Subject to the effect of any cross-subordination provisions set
forth in a prospectus supplement, each certificateholder will be entitled
to receive a pro rata share of any distribution of a special payment.
If any distribution date is not a business day, distributions
scheduled to be made on that distribution date will be made on the next
business day and, unless otherwise provided in a prospectus supplement,
without additional interest.
Pool Factors
The "pool factor" for any pass through trust will decline in
proportion to the scheduled repayments of principal on the equipment notes
held in a pass through trust as described in a prospectus supplement.
However, if any equipment notes held in a pass through trust have been
prepaid, a scheduled repayment of principal on the equipment notes has not
been made or specified actions have been taken following a default on the
equipment notes, the pool factor and the pool balance of the pass through
trust will be recomputed after giving effect to that event and notice of
the new computation will be mailed to the certificateholders of that pass
through trust. Each pass through trust will have a separate pool factor.
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Unless otherwise described in a prospectus supplement, the "pool
balance" for each pass through trust indicates, as of any date, the total
original face amount of the pass through certificates less the total amount
of all payments made in respect of the pass through certificates other than
payments of interest or premium on the pass through certificates or
reimbursement of any costs or expenses incurred in connection with the pass
through certificates. The pool balance for each pass through trust as of
any distribution date will be computed after giving effect to the payment
of principal, if any, on the equipment notes or other trust property held
in that pass through trust and the distribution of principal being made on
that date.
Unless otherwise described in a prospectus supplement, the "pool
factor" for each pass through trust as of any distribution date is the
quotient (rounded to the seventh decimal place) computed by dividing (1)
the pool balance, by (2) the total original face amount of the pass through
certificates of the pass through trust. The pool factor for each pass
through trust as of any distribution date will be computed after giving
effect to the payment of principal, if any, on the equipment notes held in
the pass through trust and the distribution of principal being made on that
date. The pool factor for each pass through trust will initially be
1.0000000; the pool factor for each pass through trust will decline as
described above to reflect reductions in the pool balance of the pass
through trust. For any pass through trust, the amount of any
certificateholder's pro rata share of the pool balance of the pass through
trust can be determined by multiplying the original denomination of the
certificateholder's pass through certificate by the pool factor for the
pass through trust as of the applicable distribution date.
Reports to Certificateholders
On each distribution date for a pass through trust, the pass
through trustee will include with each distribution of a scheduled payment
or special payment to certificateholders of record a statement, giving
effect to the distribution being made on that distribution date. The
statement will provide the following information (per $1,000 in aggregate
amount of pass through certificates for the pass through trust, as to (1)
and (2) below):
(1) the amount of the distribution allocable to principal and
allocable to premium, if any;
(2) the amount of the distribution allocable to interest; and
(3) the pool balance and the pool factor for that pass through
trust.
So long as the pass through certificates of any related pass
through trust are registered in the name of Cede & Co., as nominee for DTC,
on the record date prior to each distribution date, the pass through
trustee will request from DTC a securities position listing that will
provide the names of all DTC participants reflected on DTC's books as
holding interests in the pass through certificates of the related pass
through trust on that record date. On each distribution date, the pass
through trustee will mail to DTC and each participant the statement
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described above. The pass through trustee will also make available
additional copies as requested by the DTC participant, to be available for
forwarding to certificateholders.
In addition, after the end of each calendar year, the pass through
trustee will prepare and deliver to each certificateholder of each pass
through trust at any time during the preceding calendar year a report
containing the sum of the amounts of principal, any premium and interest
with respect to each pass through trust for that calendar year or, if that
person was a certificateholder during a portion of that calendar year, for
the applicable portion of that calendar year. The pass through trustee will
prepare this report on the basis of information supplied to the pass
through trustee by the DTC participants, and the pass through trustee will
deliver this report to the DTC participants to be available for forwarding
by the DTC participants to certificateholders.
If pass through certificates of a pass through trust are issued in
certificated form, the related pass through trustee will prepare and
deliver the information described above to each certificateholder of record
of the pass through trust as the name of the certificateholder appears on
the records on the registrar for the pass through trust.
Voting of Equipment Notes
Subject to the effect of any cross-subordination and intercreditor
provisions described in a prospectus supplement, the pass through trustee,
as holder of the equipment notes held in each pass through trust, has the
right to vote and give consents and waivers in respect of those equipment
notes under the related Indentures. The Pass Through Agreement describes:
o the circumstances in which the pass through trustee will
direct any action or cast any vote as the holder of the
equipment notes held in the applicable pass through trust
at its own discretion;
o the circumstances in which the pass through trustee will seek
instructions from the certificateholders of that pass through
trust; and
o if applicable, the percentage of certificateholders required
to direct the pass through trustee to take any action.
Prior to an event of default with respect to any pass through
trust, the principal amount of the equipment notes held in that pass
through trust directing any action or being voted for or against any
proposal will be in proportion to the principal amount of pass through
certificates held by the certificateholders of that pass through trust
taking the corresponding position. If specified in a prospectus supplement,
the right of the pass through trustee to vote and give consents and waivers
with respect to the equipment notes held in the related pass through trust
may, in the circumstances provided in an intercreditor agreement to be
executed by the pass through trustee, be exercisable by another person
specified in the prospectus supplement.
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Events of Default and Certain Rights Upon an Event of Default
The Pass Through Agreement defines an event of default for any
pass through trust as the occurrence and continuance of an event of default
under one or more of the related Indentures. What constitutes an event of
default for a particular pass through trust may be varied by the applicable
series supplement to the Pass Through Trust Agreement and described in the
applicable prospectus supplement. The applicable prospectus supplement will
describe the indenture events of default under the indentures for the
leased aircraft and will include events of default under the related
Leases. If any equipment notes are supported by a liquidity facility or
other credit enhancement arrangement, the events of default or indenture
events of default may include events of default under the liquidity
facility or other credit enhancement arrangement.
Because the equipment notes outstanding under an Indenture may be
held in more than one pass through trust, a continuing indenture event of
default under the Indenture would result in an event of default with
respect to each pass through trust. All the equipment notes issued under
the same Indenture will relate to a specific aircraft. There will be no
cross-collateralization or cross-default provisions in the Indentures,
unless otherwise specified in a prospectus supplement. Consequently, unless
otherwise provided in a prospectus supplement, events resulting in an
indenture event of default under any particular Indenture will not
necessarily result in an indenture event of default occurring under any
other Indenture. If an indenture event of default occurs in fewer than all
of the Indentures related to a pass through trust, the equipment notes
issued under the related Indentures with respect to which an indenture
event of default has not occurred will continue to be held in the pass
through trust and the pass through trustee will continue to distribute
payments of principal of, and any premium and interest on, the equipment notes
to the certificateholders of the pass through trust as originally
scheduled, subject to the terms of any intercreditor, subordination or
similar arrangements applicable to that pass through trust.
Under each Indenture relating to a leased aircraft, the related
owner trustee and the owner participant will have the right under some
circumstances to cure an indenture event of default that results from the
occurrence of a lease event of default under the related Lease. If the
owner trustee or the owner participant chooses to exercise its cure right,
the indenture event of default and consequently the event of default under
any pass through trust holding the related equipment notes will be deemed
to be cured. The prospectus supplement will contain a more detailed
discussion of the rights to cure defaults and the effects of the exercise
of those rights. Unless otherwise provided in a prospectus supplement, in
the case of any pass through certificates or equipment notes entitled to
the benefits of a liquidity facility or similar arrangement, a drawing
under any liquidity facility or arrangement for the purpose of making a
payment of interest as a result of the failure by United to have made a
corresponding payment will not cure an indenture event of default related
to the failure by United.
The ability of the certificateholders of any one pass through
trust to cause the indenture trustee for any equipment notes held in the
pass through trust to accelerate the payment on the equipment notes under
the related Indenture or to direct the exercise of remedies by the indenture
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trustee under the related Indenture will depend, in part, upon the
proportion of the total principal amount of the equipment notes outstanding
under the Indenture and held in the pass through trust to the total
principal amount of all equipment notes outstanding under that Indenture.
In addition, if cross-subordination provisions are applicable to the pass
through certificates, the ability of the certificateholders of any one pass
through trust holding equipment notes issued under related Indentures to
cause the indenture trustee to accelerate the equipment notes or to direct
the exercise of remedies by the indenture trustee under the related
Indenture will depend, in part, on the relative ranking of priority of
equipment notes held in the pass through trust.
Each pass through trust will hold equipment notes with different
terms from those of the equipment notes held in any other pass through
trust. Therefore, the certificateholders of a pass through trust may have
divergent or conflicting interests from those of the certificateholders of
the other pass through trusts holding equipment notes relating to the same
Indenture. In addition, so long as the same institution or an affiliate of
that institution acts as pass through trustee of one or more pass through
trusts holding equipment notes issued under that Indenture, in the absence
of instructions from the certificateholders of any pass through trust, the
pass through trustee for that pass through trust could be faced with a
potential conflict of interest upon an indenture event of default. In that
event, we expect that the pass through trustee would resign as pass through
trustee of one or all of the affected pass through trusts, and a successor
pass through trustee would be appointed.
The prospectus supplement for a series of pass through
certificates will specify whether and under what circumstances the pass
through trustee may or will sell for cash to any person all or part of the
equipment notes held in the related pass through trust. A person other than
the pass through trustee may exercise the right to make a sale if the
applicable series of pass through certificates are subject to any
intercreditor, subordination or similar arrangements, and the proceeds or
any sale will be distributed as prescribed by those arrangements. Any
proceeds received by the pass through trustee upon any sale that are
distributable to the certificateholders of a particular pass through trust
will be deposited in an account established by the pass through trustee for
the benefit of the certificateholders of that pass through trust and will
be distributed to the certificateholders of that pass through trust on a
special distribution date. The market for equipment notes in default may be
very limited and thus, it may not be possible to sell them for a reasonable
price. Furthermore, if the same institution acts as pass through trustee of
multiple pass through trusts, it may be faced with a conflict in deciding
from which pass through trust to sell equipment notes to available buyers.
If the pass through trustee sells any equipment notes with respect to which
an indenture event of default exists for less than their outstanding
principal amount, the certificateholders of the pass through trust will
receive a smaller amount of principal distributions than anticipated and
will not have any claim for the shortfall against United, the pass through
trustee or any other person, including, in the case of any leased aircraft,
the related owner trustee or owner participant. Neither the pass through
trustee nor the certificateholders of that pass through trust could take
any action with respect to any remaining equipment notes held in that pass
through trust as long as no indenture events of default existed with
respect to the remaining equipment notes.
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For any pass through trust, the pass through trustee will deposit
into the special payments account for that pass through trust any amount
distributed to the pass through trustee by the indenture trustee under any
Indenture on account of the equipment notes held in that pass through trust
following an indenture event of default under the Indenture and the pass
through trustee will distribute that amount to the certificateholders of
that pass through trust on a special distribution date. In addition, if an
Indenture provides that the applicable owner trustee or owner participant
may, under circumstances specified in the Indenture, redeem or purchase
some or all of the outstanding equipment notes issued under that Indenture,
the pass through trustee will deposit in the special payments account for
that pass through trust the price paid by the owner trustee or owner
participant to the pass through trustee for any of the equipment notes
issued under that Indenture and held in that pass through trust. The pass
through trustee will distribute the price paid to the certificateholders of
that pass through trust on a special distribution date. Any funds held by
the pass through trustee in the special payments account for that pass
through trust will, to the extent practicable, be invested by the pass
through trustee in permitted investments pending the distribution of these
funds on a special distribution date. The applicable prospectus supplement
will describe these permitted investments.
The Pass Through Agreement provides that the pass through trustee
will, within 90 days after the occurrence of a default under any pass
through trust, notify the certificateholders of the pass through trust by
mail of all uncured or unwaived defaults with respect to the pass through
trust known to it. However, the pass through trustee will be protected in
withholding such notice if it in good faith determines that the withholding
of such notice is in the interests of the certificateholders, except in the
case of default in the payment of principal of, or any premium or interest on,
any of the equipment notes held in the pass through trust. The term
"default" means the occurrence of any event of default with respect to a
pass through trust, except that in determining whether an event of default
has occurred any grace period or notice in connection with that event of
default will be disregarded.
The Pass Through Agreement provides that for each pass through
trust, subject to the duty of the pass through trustee during a default to
act with the required standard of care, the pass through trustee is
entitled to be indemnified by the certificateholders of the pass through
trust before proceeding to exercise any right or power under the pass
through trust or any intercreditor agreement at the request of the
certificateholders.
The applicable prospectus supplement will specify the percentage
of certificateholders entitled to waive, or to instruct the pass through
trustee to waive, any past default or event of default with respect to that
pass through trust and its consequences. The prospectus supplement will
also specify the percentage of certificateholders of that pass through
trust, or of any other pass through trust holding equipment notes issued
under related Indentures, entitled to waive, or to instruct the pass
through trustee or the indenture trustee to waive, any past indenture event
of default under any related Indenture and annul any direction given with
respect to that indenture event of default.
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Subject to any intercreditor agreement, in some cases, the
certificateholders of a majority of the total fractional undivided
interests in a pass through trust (a) may on behalf of all
certificateholders of that pass through trust or (b) if the pass through
trustee is the controlling party under an intercreditor agreement, may
direct the pass through trustee to instruct the applicable indenture
trustee to, waive any past default with respect to that pass through trust
and annul any direction given by the certificateholders to the pass through
trustee or the indenture trustee with respect to the default. However,
subject to any intercreditor agreement, all of the certificateholders of
that pass through trust must consent in order to waive (1) a default in
payment of the principal of, or any premium or interest on, any of the
equipment notes held in the pass through trust and (2) a default in respect
of any covenant or provision of the Pass Through Agreement or the related
series supplement that cannot be modified or amended without the consent of
each certificateholder of the pass through trust affected by the waiver.
Any waiver will be effective to waive any past default if, but only if, the
correlative indenture event of default has been waived under the related
Indenture by the requisite holders of the equipment notes outstanding under
the Indenture.
Modifications of the Pass Through Agreement
The Pass Through Agreement contains provisions permitting United and
the pass through trustee to enter into a supplement to the pass through
trust agreement or any note purchase agreement or any intercreditor,
subordination or similar agreement or liquidity facility, without the
consent of the certificateholders of the pass through trust, to:
(1) provide for the formation of any pass through trust and the
issuance of the related pass through certificates;
(2) evidence the succession of another corporation to United
and the assumption by that corporation of United's
obligations under the Pass Through Agreement, the series
supplement, any note purchase agreement and any
intercreditor, subordination or similar agreement or
liquidity facility;
(3) add to the covenants of United for the benefit of the
related certificateholders;
(4) surrender any right or power conferred upon United in the
Pass Through Agreement or any series supplement, any note
purchase agreement or any intercreditor, subordination or
similar agreement or liquidity facility;
(5) cure any ambiguity or correct or supplement any defective
or inconsistent provision of the Pass Through Agreement
or a series supplement, any note purchase agreement, any
intercreditor agreement or any liquidity facility or make
or modify any other provisions in regard to matters or
questions arising thereunder that will not adversely
affect the interests of the related certificateholders;
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(6) correct or supplement the description of property that
constitutes trust property or the conveyance of the
property to the pass through trustee;
(7) evidence and provide for a successor pass through trustee
for some or all of the pass through trusts or add to or
change any provision of the Pass Through Agreement or any
series supplement, any note purchase agreement, any
intercreditor, subordination or like agreement or
liquidity facility as necessary to facilitate the
administration of the pass through trusts under those
agreements by more than one pass through trustee;
(8) comply with any requirement of the SEC, any applicable
law, rules or regulations of any exchange or quotation
system on which any pass through certificates may be
listed or of any regulatory body;
(9) modify, eliminate or add to the provisions of the Pass
Through Agreement or any series supplement to the extent
necessary to continue to qualify the Pass Through
Agreement or the series supplement, any note purchase
agreement, any intercreditor, subordination or similar
agreement or liquidity facility under the Trust Indenture
Act of 1939, as amended, or any similar federal statute
and add to the pass through agreement or the series
supplement, any note purchase agreement, any
intercreditor, subordination or similar agreement or
liquidity facility other provisions as may be expressly
permitted by the Trust Indenture Act;
(10) provide information to the pass through trustee as
required in the Pass Through Agreement;
(11) add to or change the Pass Through Agreement and any
series supplement to facilitate the issuance of any pass
through certificates in bearer form or to facilitate or
provide for the issuance of any pass through certificates
in global form in addition to or in place of pass through
certificates in certificated form;
(12) provide for the delivery of pass through certificates or
any supplement to the Pass Through Agreement in or by
means of any computerized, electronic or other medium,
including computer diskette;
(13) modify, eliminate or add to the provisions of the Pass
Through Agreement or any applicable series supplement to
reflect the substitution of a replacement aircraft for
any aircraft;
(14) make any other amendments or modifications which will
only apply to any pass through trust established
thereafter; and
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(15) modify any provision under the Pass Through Agreement
that will not adversely affect the interests of the
certificateholders.
No modification may cause the pass through trust to fail to qualify as a
"grantor trust" for federal income tax purposes.
The Pass Through Agreement also provides that United and the pass
through trustee, with the consent of the certificateholders evidencing
fractional undivided interests together representing not less than a
majority in interest of the affected pass through trust, may execute
supplemental agreements adding any provisions to or changing or eliminating
any of the provisions of the Pass Through Agreement, to the extent relating
to the pass through trust, and the applicable series supplement, any note
purchase agreement, any intercreditor, subordination or similar agreement
or any liquidity facility or modifying the rights of the
certificateholders. No supplemental agreement may, however, without the
consent of each affected certificateholder:
(1) reduce the amount of, or delay the timing of, any
payments on the equipment notes held in the pass through
trust, or distributions in respect of any pass through
certificate of the pass through trust; or
(2) change the date or place of payment or change the
currency in which the pass through certificates are
payable other than that provided for in the pass through
certificates;
(3) impair the right of any certificateholder to take legal
action for the enforcement of any payment when due;
(4) permit the disposition of any equipment note included in
the trust property, except as provided in the Pass
Through Agreement or a series supplement, any note
purchase agreement, any intercreditor, subordination or
similar agreement or liquidity facility;
(5) alter the priority of distributions specified in any
relevant intercreditor agreement in a manner materially
adverse to the holders of the pass through certificates
of that series; or
(6) reduce the percentage of the total fractional undivided
interests of the pass through trust that must consent to
approve any supplemental agreement or to waive compliance
with the Pass Through Agreement or to waive events of
default.
Modification, Consents and Waivers Under the Indenture and Related Agreements
The prospectus supplement will specify the pass through trustee's
obligations if the pass through trustee, as the holder of any equipment notes
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held in a pass through trust, receives a request for its consent to any
amendment or modification of or waiver under the Indenture or other documents
relating to the equipment notes, including any Lease.
Cross-Subordination Issues
The equipment notes issued under an Indenture may be held in more
than one pass through trust and a pass through trust may hold equipment
notes issued under more than one related Indenture. Unless otherwise
provided in a prospectus supplement, only equipment notes of the same class
may be held in the same pass through trust. A pass through trust that holds
equipment notes that are junior in priority of payment to the equipment
notes held in another pass through trust formed as part of the same
offering of pass through certificates as a practical matter are
subordinated to the other pass through trust. In addition, the pass through
trustees on behalf of one or more pass through trusts may enter into an
intercreditor or subordination agreement that establishes priorities among
series of pass through certificates or provides that distributions on the
pass through certificates will be made to the certificateholders of a
particular pass through trust before they are made to the
certificateholders of one or more other trusts. For example, an agreement
may provide that payments made to a pass through trust on account of a
subordinate class of equipment notes issued under one Indenture may be
subordinated to the prior payment of all amounts owing to
certificateholders of a pass through trust that holds senior equipment
notes issued under that Indenture or any related Indentures.
A prospectus supplement related to an issuance of pass through
certificates will describe any intercreditor agreement and the
cross-subordination provisions and any related terms, including the
percentage of certificateholders under any pass through trust which are
permitted to (1) grant waivers of defaults under any related Indenture, (2)
consent to the amendment or modification of any related Indentures or (3)
direct the exercise of remedial actions under any related Indentures.
Termination of Pass Through Trusts
The obligations of United and the pass through trustee with
respect to a pass through trust will terminate upon the distribution to the
certificateholders of that pass through trust of all amounts required to be
distributed to them under the Pass Through Agreement and the series
supplement and the disposition of all property held in the pass through
trust. The pass through trustee will notify each certificateholder of
record of the pass through trust by mail of the termination of the pass
through trust, the amount of the proposed final payment and the proposed
date for the distribution of the final payment for the pass through trust.
The final distribution for each certificateholder of the pass through trust
will be made only upon surrender of that certificateholder's pass through
certificates at the office or agency of the pass through trustee specified
in the termination notice.
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Delayed Purchase
If, on the date of issuance of any pass through certificates, all
of the proceeds from the sale of the pass through certificates are not used
to purchase the equipment notes contemplated to be held in the related pass
through trust, the equipment notes may be purchased by the pass through
trustee at any time on or prior to the cut-off date specified in the
prospectus supplement related to the pass through certificates.
In this event, the pass through trustee will hold the proceeds
from the sale of the pass through certificates not used to purchase
equipment notes under an arrangement described in the applicable prospectus
supplement. This arrangement may include:
(1) the investment of the proceeds by the pass through trustee
in specified permitted investments;
(2) the deposit of the proceeds in a deposit or escrow
account held by a separate depositary or escrow agent; or
(3) the purchase by the pass through trustee of debt
instruments issued on an interim basis by United, which
may be secured by a collateral account or other security
or property described in the applicable prospectus
supplement.
The applicable prospectus supplement will describe the
arrangements with respect to the payment of interest on funds so held. If
any proceeds are not subsequently utilized to purchase equipment notes by
the date specified in the applicable prospectus supplement, including by
reason of a casualty to one or more aircraft, the proceeds will be returned
to the holders of the related pass through certificates.
Merger, Consolidation and Transfer of Assets
United may not consolidate with or merge into any other
corporation or transfer all or substantially all of its assets as an
entirety to any other corporation, unless, among other things, United is
the surviving corporation or the successor or transferee corporation
expressly assumes all the obligations of United under the Pass Through
Agreement.
Liquidity Facility
A prospectus supplement may provide that one or more payments of
interest on the pass through certificates of one or more series will be
supported by a liquidity facility issued by an institution identified in
the prospectus supplement. The provider of the liquidity facility may have
a claim senior to the certificateholders' as specified in the prospectus
supplement.
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The Pass Through Trustee; the Indenture Trustee
We will name the pass through trustee for each of the pass through
trusts in a prospectus supplement. The pass through trustee and any of its
affiliates may hold pass through certificates in their own names. The pass
through trustee may act as trustee under other financings by United.
The pass through trustee may resign as trustee under any or all of
the pass through trusts at any time. United may remove the pass through
trustee and appoint a successor trustee, or any certificateholder of the
pass through trust holding pass through certificates for at least six
months may, on behalf of that certificateholder and all others similarly
situated, petition any court of competent jurisdiction for the removal of
the pass through trustee and the appointment of a successor trustee, if the
pass through trustee:
(1) fails to comply with Section 310 of the Trust Indenture
Act, after written request for compliance by United or
any pass through certificateholder of the pass through
trust holding pass through certificates for at least six
months;
(2) ceases to be eligible to continue as pass through trustee;
(3) becomes incapable of acting as pass through trustee, or
(4) is adjudged bankrupt or insolvent.
In addition, the certificateholders holding more than 50% in total
amount of the related pass through certificates may remove the pass through
trustee of any pass through trust at any time.
Unless otherwise provided in the prospectus supplement, in the
case of the resignation or removal of the pass through trustee, United or
the certificateholders holding more than 50% in total amount of the related
pass through certificates may appoint a successor pass through trustee. The
resignation or removal of the pass through trustee for any pass through
trust and the appointment of the successor trustee for the pass through
trust does not become effective until acceptance of the appointment by the
successor trustee. Under the resignation and successor trustee provisions,
it is possible that a different trustee could be appointed to act as the
successor trustee with respect to each pass through trust. All references
in this prospectus to the pass through trustee are to the pass through
trustee acting in that capacity under each of the pass through trusts and
should be read to take into account the possibility that each of the pass
through trusts could have a different successor trustee in the event of a
resignation or removal.
The pass through agreement provides that United will pay, or cause
to be paid, the pass through trustee's fees and expenses and indemnify the
pass through trustee against specified liabilities described in the
prospectus supplement.
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DESCRIPTION OF THE EQUIPMENT NOTES
The discussion that follows is a summary that is not complete and
does not describe every aspect of the equipment notes. Where no distinction
is made between the equipment notes relating to leased aircraft and owned
aircraft or between their respective Indentures, the summary applies to any
equipment note and any Indenture. The prospectus supplement will describe
most of the financial terms and other specific terms of any series of
equipment notes. Because the terms of the specific equipment notes may
differ from the general information provided below, you should rely on the
information in the prospectus supplement instead of the information in this
prospectus if the information in the prospectus supplement is different
from the information below. The applicable prospectus supplement will
describe the specific terms of the equipment notes, the Indentures, the
Participation Agreements, the Leases, if any, and any other agreements,
relating to any particular offering of pass through certificates.
For each owned aircraft, United will issue equipment notes as
direct obligations of United and the indenture trustee will authenticate
the equipment notes under an owned aircraft Indenture. Unless otherwise
specified in a prospectus supplement, all of the equipment notes issued
under the same owned aircraft indenture will relate to a specific owned
aircraft and will not be secured by any other aircraft. The prospectus
supplement will specify owned aircraft relating to each Owned Aircraft
Indenture and the related equipment notes. United will be directly
obligated under each Owned Aircraft Indenture to make payments of principal
of, and any premium and interest on, the related equipment notes.
For each leased aircraft, the owner trustee will issue equipment
notes as nonrecourse obligations of the owner trustee, in each case acting
for a separate owner trust for the benefit of an owner participant, and the
indenture trustee will authenticate the equipment notes under a Leased
Aircraft Indenture. All of the equipment notes issued under the same Leased
Aircraft Indenture will relate to and will be secured by a specific leased
aircraft and will not be secured by any other aircraft. In each case, the
owner trustee will lease the leased aircraft to United under a separate
Lease between the owner trustee and United.
Upon the commencement of the Lease for any leased aircraft, United
will be obligated to make rent payments under the Lease that will be
sufficient to pay the principal of, and accrued interest on, the related
equipment notes when and as due and payable. The equipment notes related to
leased aircraft will not, however, be obligations of, or guaranteed by,
United. United's obligations to pay rent and to cause other payments to be
made under each Lease will be general obligations of United.
For any owned aircraft, if specified in a prospectus supplement,
United may arrange for an owner trustee, acting for an owner trust for the
benefit of an owner participant, to purchase the owned aircraft from us and
lease the aircraft back to us under a "net lease," after the sale of the
related equipment notes to the pass through trustee for each applicable
pass through trust and the offering and sale of the related pass through
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certificates under the prospectus supplement. In addition, if specified in
the prospectus supplement, United may substitute other aircraft, cash
and/or U.S. government securities in place of the owned aircraft securing
the related equipment notes. The prospectus supplement will describe terms
and conditions of any sale and leaseback transaction or substitution.
Equipment Notes may be issued under delayed aircraft financing
arrangements, such as the following:
o the owner trustee may issue equipment notes prior to the purchase
of leased aircraft by the owner trustee or the commencement of the
related Leases.
o United may issue equipment notes prior to the expected delivery date
of the owned aircraft.
The applicable prospectus supplement will describe any delayed
aircraft financing arrangements, including any arrangements for the
collateralization of the related equipment notes with cash, permitted
investments or other property, and any depositary or escrow arrangement
under which the proceeds from the sale of the equipment notes will be
deposited with a third party depositary or escrow agent.
If the anticipated aircraft financing transactions have not been
completed by the date specified in the applicable prospectus supplement,
including if due to a casualty to one or more aircraft, the related
equipment notes will be prepaid at the price specified in the prospectus
supplement. Alternatively, if the Lease related to any equipment notes has
not commenced by the date specified in the prospectus supplement and if the
prospectus supplement so permits, United at its option may convert the
proposed leveraged lease financing into an owned aircraft financing and the
equipment notes, with some modifications, will become equipment notes
issued by United.
The applicable prospectus supplement will describe any refinancing
arrangements with respect to any aircraft, including whether a separate
trust will be created to issue notes.
Principal and Interest Payments
The pass through trustee will pass through interest received by
the pass through trustee on the equipment notes constituting trust property
of each pass through trust to the certificateholders of that pass through
trust on a pro rata basis on the dates and at the rate indicated in a
prospectus supplement. The equipment notes may bear interest at a fixed or
a floating rate or may be issued at a discount.
Each pass through trust will hold equipment notes on which
principal is payable in scheduled amounts and on specified dates as
indicated in a prospectus supplement. The pass through trustee will pass
through principal received by the pass through trustee on the equipment
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notes to the certificateholders of the related pass through trust as
specified in the prospectus supplement.
If any date scheduled for any payment of principal of, or any premium
or interest on, the equipment notes is not a business day, that payment will
be made on the next succeeding business day without any additional
interest, unless otherwise provided in the applicable prospectus
supplement.
Prepayment
A prospectus supplement will describe the circumstances, whether
voluntary or involuntary, under which the related equipment notes may or
must be prepaid prior to the stated maturity date of the equipment notes,
in whole or in part, any premium applicable upon some prepayments and other
terms applying to the prepayment of the equipment notes.
Security
The equipment notes related to leased aircraft issued under each
Leased Aircraft Indenture will be secured by:
(1) an assignment by the related owner trustee to the
indenture trustee of the owner trustee's rights, except
for the limited rights described below and in the
prospectus supplement, under the applicable Lease,
including the right to receive rent and other payments;
and
(2) a security interest granted to the indenture trustee in
the related leased aircraft, subject to the rights of
United under the Lease and other property or rights, if
any, described in the applicable prospectus supplement.
The assignment by the owner trustee to the indenture trustee of
its rights under each Lease will exclude rights of the owner trustee and
the related owner participant relating to:
(1) indemnification by United;
(2) proceeds of public liability insurance payable to the
owner trustee in its individual capacity and to the owner
participant under insurance maintained by United under
the Lease;
(3) proceeds of any insurance policies separately maintained
by the owner trustee in its individual capacity or by the
owner participant;
(4) proceeds of any insurance policies maintained by United
that are not required to be maintained under the Lease;
and
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(5) any rights of the owner trustee or owner participant to
enforce payment of the amounts listed in clauses (1)
through (4) above.
The prospectus supplement will describe any limitations on the
right of the indenture trustee to exercise any of the rights of the owner
trustee under the related Lease, except the right to receive payments of
rent due.
United's obligations in respect of each leased aircraft will be
those of a lessee under a "net lease." Accordingly, United will be
obligated, among other things, to pay all costs of operating and
maintaining the aircraft.
The prospectus supplement will describe the required insurance
coverage for the aircraft.
The equipment notes issued under each owned aircraft indenture
will be secured by a security interest granted to the indenture trustee in
all of United's right, title and interest in and to the related owned
aircraft. Each Owned Aircraft Indenture will require United to pay all
costs of operating and maintaining the aircraft.
Unless otherwise specified in a prospectus supplement, there will be
no cross-collateralization provisions in the Indentures. As a result, unless
otherwise specified in the prospectus supplement, the equipment notes
issued in respect of one of the aircraft will not be secured by any other
aircraft and, in the case of equipment notes related to leased aircraft,
the related Leases. Unless otherwise specified in a prospectus supplement,
there will be no cross-default provisions in the Indentures. As a result,
unless so specified, events resulting in an event of default under any
particular Indenture may not result in an event of default occurring under
any other Indenture.
Section 1110 of the U.S. Bankruptcy Code provides that the right
of lessors, conditional vendors and holders of security interests with
respect to aircraft capable of carrying ten or more individuals or 6,000
pounds or more of cargo used by air carriers operating under certificates
issued by the Secretary of Transportation under Chapter 447 of the
Transportation Code to take possession of the aircraft in compliance with
the provisions of the lease, conditional sale contract or security
agreement, as the case may be, is not affected by:
(a) the automatic stay provision of the Bankruptcy Code,
which provision enjoins the taking of any action against
a debtor by a creditor during the reorganization period;
(b) the provision of the Bankruptcy Code allowing the trustee
in reorganization or the debtor-in-possession to use,
sell or lease property of the debtor during the
reorganization period;
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(c) the confirmation of a plan of reorganization under
Chapter 11 by the bankruptcy court; and
(d) any power of the bankruptcy court to enjoin a repossession.
Section 1110 provides, however, that the right of a lessor,
conditional vendor or holder of a security interest to take possession of
an aircraft in the event of a default may not be exercised for 60 days
following the date of commencement of the reorganization proceedings unless
specifically permitted by the bankruptcy court. These rights to take
possession may not be exercised at all if, within the 60-day period, the
trustee in reorganization or the debtor-in-possession agrees to perform the
debtor's obligations that become due on or after that date and cures all
existing monetary defaults. The prospectus supplement for each offering
will discuss the availability of the benefits of Section 1110 of the
Bankruptcy Code with respect to the related aircraft.
The indenture trustee will invest and reinvest funds, if any, held
from time to time by the indenture trustee with respect to any aircraft,
including funds held as the result of an event of loss to the aircraft or
termination of the Lease, at the direction of United, except, with respect
to a leased aircraft, in the case of a lease event of default under the
applicable Lease or, with respect to an owned aircraft, in the case of an
indenture event of default under the applicable Indenture, in investments
described in the related Indenture. United will pay the amount of any net
loss resulting from any investment directed by it.
Additional Notes
The applicable prospectus supplement specifies any circumstances
and conditions under which United or the owner trustee may finance
modifications, alterations, additions, improvements to, or replacement
parts for, an aircraft through the issuance and sale of additional
equipment notes. A supplement to the related Indenture will establish the
terms, conditions and designations of any additional equipment notes.
Registration of the Aircraft
Unless otherwise specified in a prospectus supplement, United,
except under specified circumstances, must register and keep each aircraft
registered under Title 49 of the United States Code (the "Transportation
Code"), in the name of United, in the case of an owned aircraft, or in the
name of the owner trustee, after commencement of a Lease in the case of a
leased aircraft. United must also record and maintain the recordation of
the Indenture and the Lease, if any, relating to each aircraft under the
Transportation Code. This recordation of the Indenture and the Lease, if
any, relating to each aircraft will give the indenture trustee a security
interest in each aircraft perfected under the Transportation Code, which
perfected security interest will, with limited exceptions, be recognized in
those jurisdictions that have ratified the Convention on the International
Recognition of Rights in Aircraft (the "Convention").
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United may, in specified circumstances, register any aircraft in
countries other than the United States. Each aircraft may be operated by
United, or placed under lease, sublease or interchange arrangements with
carriers domiciled outside of the United States. If an indenture event of
default occurs, the ability of the indenture trustee to realize on its
security interest in the aircraft could be adversely affected as a legal or
practical matter if the aircraft were located outside the United States.
There is no guarantee that, even if that jurisdiction is a party to the
Convention, as a practical matter, the indenture trustee would be able to
realize upon its security interest if an indenture event of default occurs.
Payments and Limitations of Liability
For each leased aircraft, the related owner trustee will lease the
leased aircraft to United for a term expiring on a date not earlier than
the latest maturity date of the equipment notes issued with respect to that
leased aircraft, unless the Lease is previously terminated as permitted by
the terms of the Lease. The owner trustee under the related Indenture will
assign to the indenture trustee the basic rent and other specified payments
of United under each Lease to provide the funds necessary to pay principal
of and interest due from the owner trustee on the equipment notes issued
under that Indenture. Each Lease will provide that under no circumstances
will basic rent payments by United be less than the scheduled payments of
principal and interest on the related equipment notes.
Except when United purchases a leased aircraft and assumes the
equipment notes related to that leased aircraft, the equipment notes
related to leased aircraft will not be obligations of, or guaranteed by,
United. Neither the owner trustee nor the indenture trustee, in their
individual capacities, will be liable to any certificateholder or, in the
case of the owner trustee, in its individual capacity, to United or the
indenture trustee for any amounts payable or for any liability under the
equipment notes or the Indentures, except as provided in the Indentures and
the Participation Agreements and except for the gross negligence or willful
misconduct of the owner trustee. Except when United has assumed any
equipment notes related to a leased aircraft, all amounts payable under the
equipment notes related to leased aircraft, other than payments made in
connection with an optional redemption or purchase of equipment notes by
the related owner trustee or the related owner participant, will be made
only from the assets subject to the lien of the Indenture. These assets
include rent payable by United under the Lease with respect to that leased
aircraft and amounts received under any applicable liquidity facility or
similar arrangement.
Defeasance of the Indentures and the Equipment Notes
Unless otherwise specified in the applicable prospectus
supplement, the obligations under the applicable Indenture of the related
owner trustee or United will be discharged on the date that the owner
trustee or United, as the case may be, deposits with the related indenture
trustee a sufficient amount of money or U.S. government obligations to make
all required payments on the related equipment notes when those payments
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are due. The due dates may include one or more redemption dates. All
payments must be made in accordance with the terms of the equipment notes.
The owner trustee or United, as applicable, will remain obligated to
register the transfer or exchange of equipment notes, to replace stolen,
lost, destroyed or mutilated equipment notes, to maintain paying agencies
and hold money for payment in trust. A discharge may occur only if the
Internal Revenue Service has published a ruling stating that holders of the
equipment notes will not recognize income, gain or loss for federal income
tax purposes as a result of the deposit, defeasance and discharge and will
be subject to federal income tax on the same amounts and in the same manner
and at the same times as would have been the case if the deposit,
defeasance and discharge had not occurred.
The holders of equipment notes will have no beneficial interest in
or other rights with respect to the related aircraft or other assets
subject to the lien of the related Indenture and this lien will terminate:
(1) upon defeasance;
(2) upon payment in full of the principal of, and any premium
and interest on, and all equipment notes issued under the
Indenture on the maturity date; or
(3) upon deposit with the indenture trustee of money
sufficient to pay when due payments of principal of, and any
premium and interest on, the equipment notes, no earlier
than one year before the maturity date.
Assumption of Obligations by United
If specified in the applicable prospectus supplement with respect
to any leased aircraft, United may purchase the leased aircraft before the
end of the term of the related Lease. In connection with this purchase,
United may assume on a full recourse basis all of the obligations of the
owner trustee, other than its obligations in its individual capacity, under
the Indenture with respect to the aircraft, including the obligations to
make payments in respect of the related equipment notes. In this event,
specified provisions of the related Lease, including provisions relating to
maintenance, possession and use of the aircraft, liens, insurance and
events of default will be deemed to be incorporated into the Indenture. The
equipment notes issued under the Indenture will continue to be outstanding
and secured by the aircraft. The applicable prospectus supplement will
describe the terms and conditions of any assumption.
Owner Participant; Revisions to Agreements
If specified in the applicable prospectus supplement, at the time
pass through certificates are issued, United may still be seeking owner
participants for the owner trusts relating to an aircraft. United or an
affiliate will hold the beneficial interest under the owner trust agreement
relating to this aircraft until the date upon which a prospective owner
participant commits to participate in the purchase price of the aircraft.
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The applicable prospectus supplement will specify any deadline to obtain
the commitment of an owner participant. United or its affiliates will
transfer to the owner participant on that date United's or the affiliate's
beneficial interest under the owner trust agreement. Prospective owner
participants may request revisions to the participation agreement, Lease,
trust agreement and Indenture so that the terms of the agreements
applicable to these aircraft may differ from the description of the
agreements contained in the applicable prospectus supplement. The
prospectus supplement will describe the extent to which any terms can be
changed at the request of prospective owner participants.
Indenture Events of Default and Remedies
For any pass through trust, a prospectus supplement will describe
the indenture events of default under the Indentures related to the
equipment notes to be held by the pass through trust, the remedies that the
indenture trustee may exercise with respect to the related aircraft, either
at its own initiative or upon instruction from holders of the related
equipment notes, and other provisions relating to the occurrence of an
indenture event of default and the exercise of remedies.
Liquidity Facility
The applicable prospectus supplement may provide that a "liquidity
facility" will support payments of principal, any premium or interest on, the
equipment notes of one or more series, or distributions in respect of the
pass through certificates of one or more series. A liquidity facility may
include a letter of credit, a revolving credit agreement, an insurance
policy, surety bond or financial guaranty, or any other type of agreement
or arrangement for the provision of liquidity support. The applicable
prospectus supplement will identify the institution or institutions
providing any liquidity facility. Unless otherwise provided in the
applicable prospectus supplement, the provider of any liquidity facility
will have a senior claim on the assets securing the affected equipment
notes and on the trust property of the affected pass through trusts.
Intercreditor Issues
Equipment notes may be issued in different classes, which means
that the equipment notes may have different payment priorities even though
issued by the same owner trustee and relate to the same aircraft. In this
event, the applicable prospectus supplement will describe the priority of
distributions among the equipment notes and any liquidity facilities, the
ability of any class to exercise and enforce any or all remedies with
respect to the related aircraft and, if the equipment notes are related to
leased aircraft, the Lease, and other intercreditor terms and provisions.
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FEDERAL INCOME TAX CONSEQUENCES
The following discussion of the material United States federal
income tax consequences of the purchase, ownership and disposition of the
pass through certificates is directed to initial purchasers of the pass
through certificates at the "issue price" who hold the pass through
certificates as a capital asset. This discussion is based on current
provisions of the Internal Revenue Code of 1986, as amended, called the
"Code", proposed, temporary and final Treasury regulations under the Code,
and published rulings and court decisions, in effect as of the date of this
prospectus. Changes to existing tax laws, regulations, rulings and court
decisions, which could have retroactive effect, may alter the consequences
described below. This discussion does not address federal income tax
consequences applicable to investors that are subject to special treatment
under the United States federal income tax laws, including banks and
thrifts, insurance companies, regulated investment companies, dealers in
securities, holders that will hold the certificates as a position in a
"straddle" for tax purposes or as part of a "synthetic security" or
"conversion transaction" or other integrated investment compromised of the
certificates and one or more other investments, foreign investors, trusts
or estates and pass-through entities with any of these specified investors
as equity holders. You should read this discussion in conjunction with any
additional discussion of federal income tax consequences and additional
opinions included in the applicable prospectus supplement. You should
consult your own tax advisors about the application of the United States
federal income tax laws to your particular situation as well as any tax
consequences arising under the laws of any state, local or foreign
jurisdiction. The pass through trusts are not indemnified for any federal
income taxes that may be imposed upon them. Any income taxes imposed on a
pass through trust could result in a reduction in amounts available for
distribution to certificateholders.
General
The pass through trusts will not themselves be subject to federal
income taxation. Except as discussed in a prospectus supplement, based upon
an interpretation of analogous authorities under existing law, each pass
through trust should be classified as a grantor trust for federal income
tax purposes. We assume in the following discussion that the pass through
trusts will be classified as grantor trusts.
Each certificateholder will be required to report on its federal
income tax return its pro rata share of the gross income from each of the
equipment notes and any other property held in the related pass through
trust, under the certificateholder's usual method of accounting. Each
certificateholder may deduct, consistent with its method of accounting, its
pro rata share of the fees and expenses paid or incurred by the pass
through trust as provided in Section 162 or 212 of the Code. Some fees and
expenses may, however, be borne by parties other than the
certificateholders. The pass through trust may be treated as having
constructively received these fees and expenses so that each
certificateholder would be required to include in income and would be
entitled to deduct its pro rata share of these constructively-received fees
and expenses. Certificateholders who are individuals, estates or trusts
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will be allowed to deduct expenses only to the extent they exceed, together
with the certificateholder's other miscellaneous itemized deductions, 2% of
the certificateholder's adjusted gross income. This deduction may be
reduced further by Section 68 of the Code if an individual's adjusted gross
income exceeds specified levels.
If an equipment note held by a pass through trust is prepaid for
an amount that differs from a certificateholder's aggregate adjusted basis
in the equipment note, the certificateholder will be considered to have
sold his pro rata share of that equipment note, and will recognize any gain
or loss equal to the difference between the certificateholder's adjusted
basis and the amount realized from the prepayment. However, any amount
realized from prepayment which is attributable to accrued interest would be
taxable as interest income if not previously included in income. A
certificateholder's adjusted basis is determined by allocating the purchase
price for the pass through certificate among the equipment notes and other
property in the pass through trust in proportion to their fair market
values at the time of purchase of the pass through certificate. Any gain or
loss will be long-term capital gain or loss if the equipment note has been
held for more than one year. Net capital gains of individuals are, in
general, taxed at lower rates than items of ordinary income. An owner
participant's conveyance of its interest in an owner trust will not
constitute a taxable event to the remaining holders of interests in the
equipment notes. However, if (a) United were to assume an owner trust's
obligations under the equipment notes, or (b) an owner trust were to assume
United's obligations under the equipment notes, the assumption would be
treated for federal income tax purposes as a taxable exchange resulting in
taxable gain or loss to the certificateholders under the rules discussed
above. In calculating the taxable gain or loss, the amount realized will be
equal to the fair market value of a certificateholder's pro rata share of
the equipment notes at that time.
Sales of Pass Through Certificates
A certificateholder who sells a pass through certificate will
recognize capital gain or loss, equal to the difference between the amount
realized on the sale, except for amounts representing accrued interest
taxable as interest income, if not previously included in income, and the
certificateholder's adjusted tax basis in the pass through certificate. In
general, a certificateholder's adjusted tax basis in a certificate will
equal the purchase price for the certificate. Gain or loss will be
long-term capital gain or loss if the pass through certificate was held for
more than one year, except for amounts attributable to property held by
pass through trust for one year or less. Any long-term capital gains are
taxable to corporate taxpayers at ordinary income tax rates and to
individual taxpayers at a maximum rate of 20%. Corporate taxpayers may
deduct capital losses only to the extent of capital gains. Individual
taxpayers may deduct capital losses only to the extent of capital gains
plus $3,000 of other income.
Bond Premium
A certificateholder generally will be considered to have acquired
an interest in an equipment note at a bond premium if the certificateholder's
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tax basis allocable to the equipment note exceeds the remaining principal
amount of the equipment note allocable to the certificateholder's pass
through certificate. A certificateholder may be able to amortize the bond
premium, generally on a constant yield basis, as a reduction to interest
income with corresponding reductions in the certificateholder's tax basis
in the equipment note. You should consult your own tax advisors regarding
the advisability and consequences of an election to amortize any bond
premium on the equipment notes.
Original Issue Discount
Unless specified in the applicable prospectus supplement, the
equipment notes will not be issued with original issue discount unless the
aggregation rules contained in the Treasury regulations apply. Under those
rules, if one investor purchases pass through certificates issued by more
than one pass through trust, some of the investor's interests in the
equipment notes must be combined as a single debt instrument, which, for
purposes of calculating and amortizing any original issue discount, has a
single issue price, maturity date, stated redemption price at maturity and
yield to maturity. If the aggregation rules apply to an investor, the
equipment notes could be treated as having been issued with original issue
discount to that investor. Generally, a holder of a debt instrument issued
with more than a de minimis amount of original issue discount must include
the original issue discount in income for federal income tax purposes as it
accrues, in advance of the receipt of the cash, under a method that takes
into account the compounding of interest. You should consult your own tax
advisors regarding the aggregation and original issue discount rules.
Backup Withholding
Payments made on pass through certificates, and proceeds from the
sale of pass through certificates to or through brokers, may be subject to
a "backup" withholding tax of 31% unless the certificateholder complies
with reporting procedures specified in Treasury regulations or is exempt
from these requirements. Any withheld amounts will be allowed as a credit
against the certificateholder's federal income tax and may entitle the
certificateholder to a refund if the required information is furnished to
the Internal Revenue Service. The Internal Revenue Service may impose
penalties on a certificateholder who is required to supply information but
does not do so in the proper manner. You should consult your own tax
advisors about your eligibility for, and the procedure for obtaining,
exemption from backup withholding.
ERISA CONSIDERATIONS
Unless otherwise indicated in the applicable prospectus supplement, an
employee benefit plan subject to Title I of the Employee Retirement Income
Security Act of 1974 or an individual retirement account or an employee
benefit plan subject to section 4975 of the Internal Revenue Code may,
subject to legal restrictions, purchase and hold pass through certificates.
A fiduciary of an employee benefit plan must determine that the purchase
and holding of a pass through certificate is consistent with its fiduciary
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duties under ERISA and does not result in a non-exempt prohibited
transaction as defined in Section 406 of ERISA or Section 4975 of the
Internal Revenue Code. Employee benefit plans which are governmental plans
(as defined in Section 3(32) of ERISA) and certain church plans (as defined
in Section 3(33) of ERISA) are not subject to the fiduciary responsibility
provisions of ERISA. The pass through certificates may, subject to legal
restrictions, be purchased and held by such plans.
PLAN OF DISTRIBUTION
The pass through certificates may be sold through agents, to or
through underwriters, directly to other purchasers or through agents.
We may effect the distribution of the pass through certificates
from time to time in one or more transactions at a fixed price or prices,
which may be changed, or at market prices prevailing at the time of sale,
at prices related to the prevailing market prices or at negotiated prices.
Agents designated by United from time to time may solicit offers
to purchase pass through certificates. The applicable prospectus supplement
will name any agent involved in the offer or sale of the pass through
certificates and specify any commissions payable by United to that agent.
Unless otherwise indicated in a prospectus supplement, any agent will act
on a best efforts basis for the period of its appointment. The Securities
Act may deem an agent to be an underwriter of the pass through certificates
so offered and sold.
If pass through certificates are sold by means of an underwritten
offering, United will execute an underwriting agreement with an underwriter
or underwriters at the time an agreement for that sale is reached. The
prospectus supplement that the underwriters will use to resell the pass
through certificates to the public will specify the managing underwriter or
underwriters, as well as any other underwriters, and the terms of the
transaction, including any commissions, discounts and any other
compensation of the underwriters and dealers. If underwriters are utilized
in the sale of the pass through certificates, the underwriters will acquire
the pass through certificates for their own account and they may resell the
pass through certificates from time to time in one or more transactions,
including negotiated transactions, at fixed public offering prices or at
varying prices determined by the underwriters at the time of sale. Pass
through certificates may be offered to the public either through
underwriting syndicates represented by managing underwriters or directly by
the managing underwriters. If underwriters are utilized in the sale of the
pass through certificates, unless otherwise indicated in the prospectus
supplement, the underwriting agreement will provide that the obligations of
the underwriters are subject to specified conditions precedent and that the
underwriters with respect to a sale of pass through certificates must
purchase all of the pass through certificates if any are purchased.
If a dealer is utilized in the sale of the pass through
certificates, the pass through certificates will be sold by the pass
through trustee to the dealer as principal. The dealer may then resell the
pass through certificates to the public at varying prices to be determined
by the dealer at the time of resale. The 1933 Act may deem a dealer to be
42
<PAGE>
an underwriter of the pass through certificates so offered and sold. The
applicable prospectus supplement will name the dealer and describe the
terms of the transaction.
Offers to purchase pass through certificates may be solicited
directly and the sale of the pass through certificates may be made directly
to institutional investors or others, who may be deemed to be underwriters
within the meaning of the 1933 Act with respect to any resale of the pass
through certificates. The prospectus supplement will describe the terms of
any sales.
Under agreements which may be entered into by United, underwriters
and agents who participate in the distribution of pass through certificates
may be entitled to indemnification by United against specified liabilities,
including liabilities under the 1933 Act.
Unless otherwise provided in a prospectus supplement, United does
not intend to apply for the listing of any series of pass through
certificates on a national securities exchange. If the pass through
certificates of any series are sold to or through underwriters, the
underwriters may make a market in the pass through certificates, as
permitted by applicable laws and regulations. No underwriter would be
obligated, however, to make a market in the pass through certificates. The
underwriters, in their sole discretion could discontinue any market making
at any time. Accordingly, we can give no assurance as to the liquidity of,
or trading markets for, the pass through certificates of any series.
The underwriters or agents and their associates may be customers
of, engage in transactions with, and perform services for, United in the
ordinary course of business.
If so indicated in the applicable prospectus supplement, agents,
underwriters or dealers may be authorized to solicit offers by some
institutions to purchase pass through certificates at the public offering
prices set forth in the applicable prospectus supplement under delayed
delivery contracts providing for payment and delivery on a specified date
or dates. The applicable prospectus supplement will indicate the commission
that will be paid to agents, underwriters and dealers soliciting purchases
of pass through certificates under delayed delivery contracts accepted by
United.
LEGAL MATTERS
Unless otherwise indicated in a prospectus supplement, Mayer,
Brown & Platt, Chicago, Illinois, counsel for United, and counsel for any
agents, dealers or underwriters will pass upon the legality of the pass
through certificates offered by this prospectus.
EXPERTS
Unless otherwise indicated in a prospectus supplement, Arthur
Andersen LLP, independent public accountants, have audited the audited
financial statements and schedules included or incorporated by reference in
this prospectus, any prospectus supplement and elsewhere in the
registration statement as indicated in their audit reports, and the audited
financial statements and schedules are included or incorporated by
reference in this prospectus in reliance upon the authority of that firm as
experts in giving audit reports.
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following are the estimated expenses of the issuance and
distribution of the securities (other than underwriting discounts and
commissions) being registered, all of which will be paid by the Registrant:
SEC Registration Fee $417,000
Printing and Engraving 200,000
Attorneys' Fees and Expenses 600,000
Trustees' Fees 75,000
Accounting Fees and Expenses 100,000
Blue Sky Fees and Expenses 7,500
Rating Agency Fees 200,000
Miscellaneous 200,000
------------------------------------------------------
Total $1,799,500
All of the above amounts, other than the SEC Registration Fee, are
estimated.
Item 15. Indemnification of Directors and Officers
United's Restated Certificate of Incorporation provides that no
director of United will be personally liable to United or its stockholders
for monetary damages for any breach of fiduciary duty by such director as a
director, except for liability (1) for any breach of the director's duty of
loyalty to United or its stockholders, (2) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation
of law, (3) for unlawful payments of dividends or unlawful stock
repurchases or redemptions as provided in Section 174 of the Delaware
General Corporation Law ("DGCL") or (4) for any transaction from which the
director derived an improper personal benefit.
The above provision is intended to afford directors additional
protection and limit their potential liability from suits alleging a breach
of the duty of care by a director. As a result of the inclusion of such a
provision, stockholders may be unable to recover monetary damages against
directors for actions taken by them that constitute negligence or gross
negligence or that are otherwise in violation of their fiduciary duty of
care, although it may be possible to obtain injunctive or other equitable
relief with respect to such actions. If equitable, remedies are found not
to be available to stockholders in any particular situation, stockholders
may not have an effective remedy against a director in connection with such
conduct.
United's Restated Certificate of Incorporation also provides that
directors and officers of United shall be indemnified against liabilities
arising from their service as directors and officers to the full extent
permitted by law.
Section 145 of the Delaware General Corporation Law ("Section
145") permits indemnification of directors, officers, agents and
controlling persons of a corporation under certain conditions and subject
to certain limitations. Section 145 empowers a corporation to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in
the right of the corporation), by reason of the fact that he is or was a
director, officer, employee or agent of the corporation or another
enterprise if serving at the request of the corporation. Depending on the
character of the proceeding, a corporation may indemnify against expenses,
including attorneys' fees, judgments, fines and amounts paid in settlement
actually and reasonably incurred in connection with such action, suit or
proceeding if the person indemnified acted in good faith and in a manner he
II-1
<PAGE>
reasonably believed to be in or not opposed to, the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. In the case of an
action by or in the right of the corporation, no indemnification may be
made in respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable to the corporation unless and only to the
extent that the Court of Chancery or the court in which such action or suit
was brought shall determine that, despite the adjudication of liability,
such person is fairly and reasonably entitled to indemnity for such
expenses which the court shall deem proper. Section 145 further provides
that to the extent a director or officer of a corporation has been
successful in the defense of any action, suit or proceeding referred to
above or in the defense of any claim, issue or matter therein, he shall be
indemnified against expenses, including attorneys' fees, actually and
reasonably incurred by him in connection therewith.
Item 16. Exhibits
1(a) Form of Underwriting Agreement for Debt Securities of United
1(b) Form of Underwriting Agreement relating to Pass Through
Certificates
4(a)(1) Form of Indenture relating to the Debt Securities of United
4(a)(2) Form of Debt Securities of United (included in Exhibit 4(a)(1))
4(b)(1) Form of Pass Through Trust Agreement
4(b)(2) Form of Pass Through Certificate (included in Exhibit 4(b)(1))
5(a)(1) Opinion of Mayer, Brown & Platt, counsel for United Air Lines,
Inc., relating to Debt Securities
5(a)(2) Opinion of Mayer, Brown & Platt, counsel for United Air Lines,
Inc., relating to Pass Through Certificates
8(a) Tax Opinion of Mayer, Brown & Platt, counsel for United Air Lines,
Inc. (included under the caption "Federal Income Tax Consequences"
in the Prospectus relating to Pass Through Certificates)
12 Computation of Ratio of Earnings to Fixed Charges -- filed as
Exhibit 12.1 to the Company's Annual Report on Form 10-Q as of
the fiscal quarter ended June 30, 1999 and incorporated herein
by reference.
23(a) Consent of Mayer, Brown & Platt, counsel for United Air Lines,
Inc. (included in Exhibits 5(a)(1) and 5(a)(2))
23(d) Consent of Arthur Andersen LLP, independent public accountants
Item 17. Undertakings
The undersigned Registrant hereby undertakes:
(a) (1) To file with the SEC, during any period in which offers or
sales are being made, a post-effective amendment to this Registration
Statement:
II-2
<PAGE>
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the
Registration Statement (or the most recent
post-effective amendment thereof) which,
individually or in the aggregate, represent a
fundamental change in the information set forth
in the Registration Statement. Notwithstanding
the foregoing, any increase or decrease in
volume of securities offered (if the total
dollar value of securities offered would not
exceed that which was registered) and any
deviation from the low or high end of the
estimated maximum offering range may be
reflected in the form of prospectus filed with
the SEC under Rule 424(b) under the Securities
Act of 1933 if, in the aggregate, the changes
in volume and price represent no more than a
20% change in the maximum aggregate offering
price set forth in the "Calculation of
Registration Fee" table in the effective
registration statement;
(iii) To include any material information with respect
to the plan of distribution not previously
disclosed in the Registration Statement or any
material change to such information in the
Registration Statement; provided, however, the
paragraphs (a)(1)(i) and (a)(1)(ii) do not apply
if the Registration Statement is on Form S-3,
Form S-8 or Form F-3 and the information
required to be included in a post-effective
amendment by those paragraphs is contained in
periodic reports filed with or furnished to the
SEC by the Registrant under section 13 or 15(d)
of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective
amendment will be deemed to be a new registration
statement relating to the securities offered therein, and
the offering of such securities at the time will be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which
remain unsold at the termination of the offering.
(b) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the Registrant's
annual report under Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 that is incorporated by
reference in this Registration Statement will be deemed
to be a new registration statement relating to the
securities offered therein, and the offering of such
securities at that time will be deemed to be the initial
bona fide offering thereof.
II-3
<PAGE>
(c) Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the Registrant under
the provisions referred to in Item 15 of this Registration
Statement, or otherwise, the Registrant has been advised
that in the opinion of the SEC such indemnification is
against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit
or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will
be governed by the final adjudication of such issue.
(d) To file an application for the purpose of determining the
eligibility of the trustee to act under subsection (a) of
Section 310 of the Trust Indenture Act of 1939 in
accordance with the rules and regulations prescribed by
the SEC under Section 305(b)(2) of the Trust Indenture
Act of 1939.
II-4
<PAGE>
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and
appoints James E. Goodwin, Douglas A. Hacker and Frederic F. Brace, and
each of them, the true and lawful attorneys-in-fact and agents of the
undersigned, with full power of substitution and resubstitution, for and in
the name, place and stead of the undersigned, in any and all capacities, to
sign any and all amendments (including post-effective amendments) to this
Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and
Exchange Commission, and hereby grants to such attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done, as fully to all
intents and purposes as the undersigned might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any
of them, or their or his substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
SIGNATURES
Under the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized in the City of Elk Grove Village, State of
Illinois, on this 19th day of October, 1999.
UNITED AIR LINES, INC.
By: /s/ JAMES E. GOODWIN
-------------------------
James E. Goodwin
Chairman of the Board and Chief
Executive Officer and Director
Under the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ JAMES E. GOODWIN Chairman and Chief Executive October 19, 1999
- ------------------------ Officer and Director (Principal
James E. Goodwin Executive Officer)
/s/ DOUGLAS A. HACKER Executive Vice President - Finance October 19, 1999
- ------------------------ and Planning and Chief Financial
Douglas A. Hacker Officer (Principal Financial
Officer) and Director
/s/ M. LYNN HUGHITT Vice President and Controller October 19, 1999
- ------------------------ (Principal Accounting Officer)
M. Lynn Hughitt
/s/ RONO DUTTA Director October 19, 1999
- ------------------------
Rono Dutta
II-5
<PAGE>
<CAPTION>
<S> <C> <C>
/s/ CHRISTOPHER D. BOWERS Director October 19, 1999
- -----------------------------
Christopher D. Bowers
/s/ WILLIAM P. HOBGOOD Director October 19, 1999
- -----------------------------
William P. Hobgood
/s/ STUART I. ORAN Director October 19, 1999
- -----------------------------
Stuart I. Oran
/s/ANDREW P. STUDDER Director October 19, 1999
- -----------------------------
Andrew P. Studdert
</TABLE>
II-6
<PAGE>
EXHIBIT INDEX
Exhibits Exhibit Description
- -------- -------------------
1(a) Form of Underwriting Agreement for Debt Securities of United
1(b) Form of Underwriting Agreement relating to Pass Through
Certificates
4(a)(1) Form of Indenture relating to the Debt Securities of United
4(a)(2) Form of Debt Securities of United (included in Exhibit 4(a)(1))
4(b)(1) Form of Pass Through Trust Agreement
4(b)(2) Form of Pass Through Certificate (included in Exhibit 4(b)(1))
5(a)(1) Opinion of Mayer, Brown & Platt, counsel for United Air Lines,
Inc., relating to Debt Securities
5(a)(2) Opinion of Mayer, Brown & Platt, counsel for United Air Lines,
Inc., relating to Pass Through Certificates
8(a) Tax Opinion of Mayer, Brown & Platt, counsel for United Air Lines,
Inc. (included under the caption "Federal Income Tax Consequences"
in the Prospectus relating to Pass Through Certificates)
12 Computation of Ratio of Earnings to Fixed Charges -- filed as
Exhibit 12.1 to the Company's Annual Report on Form 10-Q as of
the fiscal quarter ended June 30, 1999 and incorporated herein
by reference.
23(a) Consent of Mayer, Brown & Platt, counsel for United Air Lines,
Inc. (included in Exhibits 5(a)(1) and 5(a)(2))
23(d) Consent of Arthur Andersen LLP, independent public accountants
i
Exhibit 1(a)
FORM OF UNDERWRITING AGREEMENT
UNITED AIR LINES, INC.
DEBT SECURITIES, SERIES ____-__
UNDERWRITING AGREEMENT
____________ __, ____
<PAGE>
____________ __, ____
[Insert names of Underwriters]
c/o [Insert name of lead manager]
_________________________________
_________________________________
Dear Sirs and Madames:
United Air Lines, Inc., a Delaware corporation (the
"Company"), proposes to issue and sell to the several underwriters named in
Schedule I its Debt Securities, Series ____-__ in the aggregate principal
amounts and with the interest rates and final expected distribution dates
set forth on the cover page of the Prospectus (as defined below) (the
"Securities") on the terms and conditions stated herein. The aggregate
principal amount of Securities payable on each such final expected
distribution date is referred to as a "Debt Securities Designation." The
Securities will be issued under an Indenture, dated as of _________, ____
between the Company and ___________, as the indenture trustee (the
"Indenture Trustee").
Capitalized terms used in this Agreement and not defined
herein shall have the meanings specified in the Indenture.
The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 (File No.
333-____), relating to certain pass through certificates and debt
securities, including the Securities, and the offering thereof from time to
time in accordance with Rule 415 of the Securities Act of 1933, as amended,
and the rules and regulations of the Commission thereunder (collectively,
the "Securities Act"). The Registration Statement includes a basic
prospectus referred to below which, as supplemented from time to time, will
be used in connection with all offerings of such pass through certificates
and debt securities. The Registration Statement as amended at the date
hereof is herein referred to as the "Registration Statement." A prospectus
supplement or supplements reflecting the terms of the Securities, the terms
of the offering thereof and other matters relating to the Securities has
been prepared and has been or will be filed, or transmitted for filing,
together with the basic prospectus referred to below pursuant to Rule 424
under the Securities Act (such prospectus supplement, in the form first
filed on or after the date hereof pursuant to Rule 424, is referred to as
1
<PAGE>
the "Prospectus Supplement" and any such prospectus supplement in the form
or forms filed prior to the Prospectus Supplement is referred to as a
"Preliminary Prospectus Supplement"). The basic prospectus included in the
Registration Statement and relating to all offerings of pass through
certificates and debt securities under the Registration Statement, as
supplemented by the Prospectus Supplement, is called the "Prospectus,"
except that, if such basic prospectus is amended on or prior to the date on
which the Prospectus Supplement is first filed pursuant to Rule 424, the
term "Prospectus" shall refer to such basic prospectus as so amended and as
supplemented by the Prospectus Supplement, in either case including the
documents filed by the Company with the Commission pursuant to the
Securities Exchange Act of 1934, as amended, and the rules and regulations
of the Commission thereunder (collectively, the "Exchange Act"), that are
incorporated by reference therein. Any reference herein to the terms
"amendment" or "supplement" with respect to the Registration Statement, the
Prospectus, any Preliminary Prospectus Supplement or to any preliminary
prospectus shall be deemed to refer to and include any documents filed with
the Commission under the Exchange Act after the date hereof, the date the
Prospectus is filed, or transmitted for filing, with the Commission, or the
date of such Preliminary Prospectus Supplement or preliminary prospectus,
as the case may be, and incorporated therein by reference pursuant to Item
12 of Form S-3 under the Securities Act.
1. Representations and Warranties. The Company
represents and warrants to, and agrees with, you that:
(a) The Company meets the requirements for
use of Form S-3 under the Securities Act; the Registration Statement has
become effective; (i) on the original effective date of the Registration
Statement and on the effective date of the most recent post-effective
amendment thereto, if any, the Registration Statement and any amendments
and supplements thereto complied as to form in all material respects with
the requirements of the Securities Act and did not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading; and (ii) on the date hereof and on the Closing Date (as defined
below), (A) neither the Registration Statement nor any amendment or
supplement thereto will contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, and (B) neither the Prospectus
nor any amendment or supplement thereto will include an untrue statement of
a material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
2
<PAGE>
were made, not misleading, except that the Company makes no representation
or warranty as to statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by or on
behalf of the Underwriters expressly for use in the Registration Statement
or the Prospectus or to statements or omissions in that part of the
Registration Statement which shall constitute the Statement of Eligibility
under the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"), on Form T-1 of the Indenture Trustee.
(b) The documents incorporated by reference
in the Prospectus pursuant to Item 12 of Form S-3 under the Securities Act,
at the time they were or hereafter are filed with the Commission, complied
and will comply as to form in all material respects with the requirements
of the Exchange Act.
(c) The Company has been duly incorporated,
is validly existing as a corporation in good standing under the laws of the
State of Delaware, has the corporate power and authority to own or lease
its property and to conduct its business as described in the Prospectus and
is duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that
the failure to be so qualified or be in good standing would not have a
material adverse effect on the Company and its subsidiaries, taken as a
whole. All of the outstanding shares of capital stock of the Company have
been duly authorized and validly issued and are fully paid and
non-assessable and are owned by UAL Corporation, directly, free and clear
of any pledge, lien, security interest, charge, claim, equity or
encumbrance of any kind ("Liens").
(d) The Indenture conforms in all material
respects to the descriptions thereof in the Prospectus.
(e) This Agreement has been duly authorized,
executed and delivered by the Company.
(f) The Securities have been duly authorized
and, when executed, authenticated and issued in accordance with the
provisions of the Indenture and delivered to and paid for by the
Underwriters in accordance with the terms of this Agreement, will be valid
and binding obligations of the Company, enforceable in accordance with
their terms, except as enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and except as
3
<PAGE>
enforcement thereof is subject to general principles of equity (regardless
of whether enforcement is considered in a proceeding in equity or at law)
and will be entitled to the benefits of the Indenture.
(g) The Indenture has been duly authorized,
executed and delivered by, and is a valid and binding agreement of, the
Company, enforceable in accordance with its terms, except as enforcement
thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally and except as enforcement thereof is subject to
general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law).
(h) The Company is not in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan agreement,
note, lease or other agreement or instrument to which it is a party or by
which it may be bound or to which any of its properties may be subject,
except for such defaults that would not have a material adverse effect on
the condition (financial or otherwise), earnings or business of the Company
and its subsidiaries, taken as a whole. The execution and delivery by the
Company of this Agreement and the Indenture, the consummation by the
Company of the transactions contemplated in this Agreement and the
Indenture, and compliance by the Company with the terms of this Agreement
and the Indenture, do not and will not result in any violation of the
charter or by-laws of the Company, and do not and will not conflict with,
or result in a breach of any of the terms or provisions of, or constitute a
default under, or result in the creation or imposition of any lien, charge
or encumbrance (other than Permitted Liens) upon any property or assets of
the Company under (A) any indenture, mortgage, loan agreement, note, lease
or other material agreement or instrument to which the Company is a party
or by which it may be bound or to which any of its properties, may be
subject or (B) any existing applicable law, rule, regulation, judgment,
order or decree of any government, governmental instrumentality or court,
domestic or foreign, having jurisdiction over the Company or any of its
properties, other than the securities or Blue Sky or similar laws of the
various states and foreign jurisdictions (except, in the case of either
clause (A) or (B), for such conflicts, breaches or defaults or liens,
charges or encumbrances that would not have a material adverse effect on
the condition (financial or otherwise), earnings or business of the Company
and its subsidiaries, taken as a whole).
(i) No authorization, approval, consent,
order or license of or filing with or notice to any government, governmental
4
<PAGE>
instrumentality or court, domestic or foreign, is required on behalf of the
Company for the valid authorization, issuance, sale and delivery of the
Securities, the valid authorization, execution, delivery and performance by
the Company of this Agreement and the Indenture to which the Company is, or
is to be, a party, or the consummation by the Company of the transactions
contemplated by this Agreement and the Indenture, except such as are
required under the Securities Act, the Exchange Act, the Trust Indenture
Act and the securities or Blue Sky or similar laws of the various states
and of foreign jurisdictions.
(j) Except as disclosed in the Prospectus
or incorporated by reference, there is no action, suit or proceeding before
or by any government, governmental instrumentality or court, domestic or
foreign, now pending or, to the knowledge of the Company, threatened
against or affecting the Company that is required to be disclosed in the
Prospectus or that could reasonably be expected to result in a material
adverse change in the condition (financial or otherwise), earnings or
business of the Company and its subsidiaries, taken as a whole, or that
could reasonably be expected to materially and adversely affect the
consummation of the transactions contemplated by this Agreement; the
aggregate of all pending legal or governmental proceedings to which the
Company is a party or which affect any of its properties that are not
described in the Prospectus, including ordinary routine litigation
incidental to its business, would not reasonably be expected to have a
material adverse effect on the condition (financial or otherwise), earnings
or business of the Company and its subsidiaries, taken as a whole.
(k) The Company has all licenses, permits,
orders, consents, authorizations and approvals, of and from, and has made
all filings (other than those filings described in Section 1(i) above)
with, all governmental authorities, all self-regulatory organizations and
all courts and other tribunals, necessary to own or lease its properties
and to conduct its business in the manner described in the Prospectus,
except to the extent that the failure to so have would not have a material
adverse effect on the Company and its subsidiaries, taken as a whole.
(l) Since the dates as of which information
is given in the Prospectus, except as otherwise stated or incorporated by
reference therein or contemplated thereby, there has not occurred any
material adverse change in the condition (financial or otherwise) or in the
earnings or business of the Company and its subsidiaries, taken as a whole.
(m) Arthur Andersen LLP, who have reported
upon the audited consolidated financial statements and the financial statement
5
<PAGE>
schedules, if any, incorporated by reference in the Prospectus, are
independent public accountants as required by the Securities Act.
(n) The Company is a "citizen of the United
States" within the meaning of Section 40102(a)(15) of Title 49 of the
United States Code, as amended, holding an air carrier operating
certificate issued by the Secretary of Transportation pursuant to Chapter
447 of Title 49 of the United States Code, as amended, for aircraft capable
of carrying 10 or more individuals or 6,000 pounds or more of cargo.
2. Agreements to Sell and Purchase. Subject to the terms
and conditions contained herein, the Company hereby agrees to sell to the
several Underwriters, and each Underwriter agrees, severally and not
jointly, to purchase from the Company the respective principal amount of
Securities set forth in Schedule I opposite its name at a purchase price of
_____% of the principal amount thereof (the "Purchase Price") [plus accrued
interest, if any, to the Closing Date].
The Company hereby agrees that, without the prior written
consent of ____________________ on behalf of the Underwriters, it will not,
during the period beginning on the date hereof and continuing to and
including the Closing Date, offer, sell, contract to sell or otherwise
dispose of any debt of the Company substantially similar to the Securities
(other than the sale of the Securities under this Agreement and [insert
other carve-outs]).
3. Terms of Offering. You have advised the Company that
the Underwriters will make an offering of the Securities purchased by the
Underwriters on the terms to be set forth in the Prospectus, as soon as
practicable after this Agreement is entered into as in your judgment is
advisable.
4. Payment and Delivery. Payment for the Securities shall
be made to the Company in Federal or other funds immediately available in
New York City against delivery of such Securities for the respective
accounts of the several Underwriters at 10:00 a.m., New York City time, on
________ __, ____, or at such other time on the same or such other date,
not later than ________ __,____, as shall be designated in writing by you.
The time and date of such payment are referred to as the "Closing Date."
Certificates for the Securities shall be in definitive form
or global form, as specified by you, and registered in such names and in
such denominations as you shall request in writing not later than one full
6
<PAGE>
business day prior to the Closing Date. The certificates evidencing the
Securities shall be delivered to you on the Closing Date for the respective
accounts of the several Underwriters, with any transfer taxes payable in
connection with the transfer of the Securities to the Underwriters duly
paid, against payment of the Purchase Price therefor plus accrued interest,
if any, to the date of payment and delivery.
5. Conditions to the Underwriters' Obligations. The
several obligations of the Underwriters to purchase and pay for the
Securities on the Closing Date are subject to the following conditions:
(a) After the execution and delivery of this
Agreement and prior to the Closing Date:
(i) there shall not have occurred any
downgrading, nor shall any notice have been given of any intended
or potential downgrading or of any review for a possible change
that does not indicate the direction of the possible change, in
the rating accorded the Company or any of the Company's securities
by [Moody's Investor Service, Inc. ("Moody's") or Standard &
Poor's Ratings Services ("Standard & Poor's")];
(ii) the Company's Debt Securities,
Series ____-___ shall be rated "___" by [Moody's] and "___" by
[Standard & Poor's]; and
(iii) there shall not have occurred
any change, or any development involving a prospective change, in
the condition (financial or otherwise), earnings or business of the
Company and its subsidiaries, taken as a whole, from that set forth
in the Prospectus (exclusive of any amendments or supplements thereto
after the date of this Agreement) that, in your reasonable
judgment, is material and adverse and that makes it, in your
reasonable judgment, impracticable to market the Securities on the
terms and in the manner contemplated in the Prospectus.
(b) The Underwriters shall have received on
the Closing Date a certificate, dated the Closing Date and signed by the
[Vice President and Treasurer] or the [Senior Vice President-General
Counsel and Secretary] of the Company, to the effect set forth in Section
5(a)(i) and to the effect that the representations and warranties of the
Company contained in this Agreement are true and correct as of the Closing
7
<PAGE>
Date and that the Company has complied with all of the agreements and
satisfied all of the conditions on its part to be performed or satisfied
hereunder on or before the Closing Date.
(c) The Underwriters shall have received on
the Closing Date an opinion of (i) ____________________, outside counsel
for the Company, dated the Closing Date, substantially to the effect set
forth in Exhibit A-1, (ii) the General Counsel or Assistant General Counsel
of the Company, dated the Closing Date, substantially to the effect set
forth in Exhibit A-2 and (iv) _______________, counsel for the Indenture
Trustee, dated the Closing Date, substantially to the effect set forth in
Exhibit A-3. Such opinions shall be rendered to the Underwriters at the
request of the Company and shall so state therein.
(d) The Underwriters shall have received on
the Closing Date an opinion of _____________, counsel for the Underwriters,
dated the Closing Date, covering such matters as you shall reasonably
require and in form and substance reasonably acceptable to you.
(e) The Underwriters shall have received on
each of the date hereof and the Closing Date a letter, dated the date
hereof or the Closing Date, as the case may be, in form and substance
reasonably satisfactory to the Underwriters, from Arthur Andersen LLP,
independent public accountants, containing statements and information of
the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain financial
information incorporated by reference into the Prospectus.
(f) At the Closing Date, all conditions
precedent specified in the _____________ Agreement shall have been
satisfied; the representations and warranties of the Company and the
Indenture Trustee contained in the _____________ Agreement shall be
accurate as of the Closing Date (except to the extent that they relate
solely to an earlier date in which case they shall be accurate as of such
earlier date) and you shall have received certificates of the Chief
Financial Officer or the Treasurer of the Company and appropriate officers
of the Indenture Trustees, dated as of the Closing Date, to such effect;
and you shall have received a copy of each opinion required to be delivered
under the _____________ Agreement and dated as of the Closing Date, and
addressed to you, and of such other documents furnished in connection with
the fulfillment of such conditions as you or your counsel may reasonably
request.
8
<PAGE>
(g) At the Closing Date, counsel for the
Underwriters shall have been furnished with such documents and opinions as
such counsel may reasonably require.
6. Covenants of the Company. In further consideration of
the agreements of the Underwriters contained in this Agreement, the Company
covenants with each Underwriter as follows:
(a) To furnish to you in New York City,
without charge, as soon as available and during the period mentioned in
Section 6(c), as many copies of the Prospectus, any documents incorporated
by reference therein and any supplements and amendments thereto as you may
reasonably request.
(b) Before amending or supplementing the
Prospectus, to furnish to you a copy of each such proposed amendment or
supplement and not to use any such proposed amendment or supplement to
which you reasonably object.
(c) If, during such period after the first
date of the public offering of the Securities as in the opinion of counsel
for the Underwriters the Prospectus is required by law to be delivered in
connection with sales by an Underwriter, any event shall occur as a result
of which it is necessary to amend or supplement the Prospectus in order to
make the statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if it is
necessary to amend or supplement the Prospectus to comply with law,
forthwith to prepare and furnish, at its own expense, to the Underwriters,
either amendments or supplements to the Prospectus so that the statements
in the Prospectus as so amended or supplemented will not, in the light of
the circumstances when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus, as amended or supplemented, will
comply with law and to cause such amendments or supplements to be filed
promptly.
(d) To endeavor, in cooperation with the
Underwriters, to qualify the Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request, and to maintain such qualifications for so long as required for
the distribution of the Securities; provided, however, that the Company
shall not be obligated to file any general consent to service of process or
to qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to
taxation in respect of doing business in any jurisdiction in which it is
not otherwise so subject.
9
<PAGE>
(e) Whether or not the transactions
contemplated in this Agreement are consummated or, subject to the last
paragraph of Section 9, this Agreement is terminated, to pay or cause to be
paid all expenses incident to the performance of its obligations under this
Agreement, including: (i) the fees, disbursements and expenses of the
Company's counsel and the Company's accountants in connection with the
issuance and sale of the Securities and all other fees or expenses in
connection with the preparation of the Prospectus and all amendments and
supplements thereto, including all printing costs associated therewith, and
the delivering of copies thereof to the Underwriters in the quantities
reasonably specified, (ii) all costs and expenses related to the
preparation, issuance, transfer and delivery of the Securities to the
Underwriters, including any transfer or other taxes payable thereon, (iii)
the cost of producing any Blue Sky or legal investment memorandum in
connection with the offer and sale of the Securities under state securities
laws and all expenses in connection with the qualification of the
Securities for offer and sale under state securities laws as provided in
Section 6(d) hereof, including filing fees and the reasonable fees and
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky or legal investment
memorandum, (iv) any fees charged by rating agencies for the rating of the
Securities, (v) the fees and expenses, if any, incurred in connection with
the admission of the Securities for trading in any appropriate market
system, (vi) the costs and charges of the Indenture Trustee and any
transfer agent, registrar or depositary, and (vii) all other costs and
expenses incident to the performance of the obligations of the Company
hereunder or under the Indenture for which provision is not otherwise made
in this Section. It is understood, however, that except as provided in this
Section 6, Section 7 and the last paragraph of Section 9, the Underwriters
will pay all of their costs and expenses, transfer taxes payable on resale
of any of the Securities by them and any advertising expenses connected
with any offers they may make.
7. Indemnity and Contribution. (a) The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against any and
all losses, claims, damages and liabilities (including, without limitation,
any legal or other expenses reasonably incurred in connection with
defending or investigating any such action or claim) caused by any untrue
statement or alleged untrue statement of a material fact contained in the
Prospectus (as amended or supplemented if the Company shall have furnished
any amendments or supplements thereto), or caused by any omission or
alleged omission to state therein a material fact necessary to make the
statements therein in the light of the circumstances under which they were
10
<PAGE>
made not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information relating to any
Underwriter furnished to the Company in writing by such Underwriter through
you expressly for use therein.
(b) Each Underwriter agrees, severally and
not jointly, to indemnify and hold harmless the Company, its directors, its
officers and each person, if any, who controls the Company within the
meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from the Company
to such Underwriter, but only with reference to information relating to
such Underwriter furnished to the Company in writing by such Underwriter
through you expressly for use in the Prospectus or any amendments or
supplements thereto.
(c) If any proceeding (including any
governmental investigation) shall be instituted involving any person in
respect of which indemnity may be sought pursuant to Section 7(a) or 7(b),
such person (the "indemnified party") shall promptly notify the person
against whom such indemnity may be sought (the "indemnifying party") in
writing and the indemnifying party, upon request of the indemnified party,
shall retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party may
designate in such proceeding and shall pay the fees and disbursements of
such counsel related to such proceeding. In any such proceeding, any
indemnified party shall have the right to retain its own counsel, but the
fees and expenses of such counsel shall be at the expense of such
indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii)
the named parties to any such proceeding (including any impleaded parties)
include both the indemnifying party and the indemnified party and
representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. It is
understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the fees and
expenses of more than one separate firm (in addition to any local counsel)
for all such indemnified parties and that all such fees and expenses shall
be reimbursed as they are incurred. Such firm shall be designated in
writing by ___________________, in the case of parties indemnified pursuant
to Section 7(a), and by the Company, in the case of parties indemnified
pursuant to Section 7(b). The indemnifying party shall not be liable for
any settlement of any proceeding effected without its written consent, but
if settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified
11
<PAGE>
party from and against any loss or liability by reason of such settlement
or judgment. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse
the indemnified party for fees and expenses of counsel as contemplated by
the second and third sentences of this paragraph, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding
effected without its written consent if (i) such settlement is entered into
more than 30 days after receipt by such indemnifying party of the aforesaid
request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release
of such indemnified party from all liability on claims that are the subject
matter of such proceeding.
(d) To the extent the indemnification
provided for in Section 7(a) or 7(b) is unavailable to an indemnified party
or insufficient in respect of any losses, claims, damages or liabilities
referred to therein, then each indemnifying party under such paragraph, in
lieu of indemnifying such indemnified party thereunder, shall contribute to
the amount paid or payable by such indemnified party as a result of such
losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriters on the other hand from the offering of the
Securities or (ii) if the allocation provided by clause 7(d)(i) above is
not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause 7(d)(i) above
but also the relative fault of the Company on the one hand and of the
Underwriters on the other hand in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriters on the other
hand in connection with the offering of the Securities shall be deemed to
be in the same respective proportions as the net proceeds from the offering
of the Securities (before deducting expenses) received by the Company and
the total discounts and commissions received by the Underwriters, in each
case as set forth in the Prospectus, bear to the aggregate offering price
of the Securities. The relative fault of the Company on the one hand and of
the Underwriters on the other hand shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or by the Underwriters and
the parties' relative intent, knowledge, access to information and
12
<PAGE>
opportunity to correct or prevent such statement or omission. The
Underwriters' respective obligations to contribute pursuant to this Section
7 are several in proportion to the respective principal amount of
Securities they have purchased hereunder, and not joint.
(e) The Company and the Underwriters agree
that it would not be just or equitable if contribution pursuant to this
Section 7 were determined by pro rata allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations
referred to in Section 7(d). The amount paid or payable by an indemnified
party as a result of the losses, claims, damages and liabilities referred
to in Section 7(d) shall be deemed to include, subject to the limitations
set forth above, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 7, no
Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Securities underwritten by it
and distributed to the public were offered to the public exceeds the amount
of any damages that such Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 7 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
(f) The indemnity and contribution provisions
contained in this Section 7 and the representations, warranties and other
statements of the Company contained in this Agreement shall remain
operative and in full force and effect regardless of (i) any termination of
this Agreement, (ii) any investigation made by or on behalf of any
Underwriter or any person controlling any Underwriter or by or on behalf of
the Company, its officers or directors or any person controlling the
Company and (iii) acceptance of and payment for any of the Securities.
8. Termination. This Agreement shall be subject to
termination by notice given by you to the Company, if (a) after the
execution and delivery of this Agreement and prior to the Closing Date (i)
trading generally shall have been suspended or materially limited on or by
the New York Stock Exchange, (ii) trading of any securities of the Company
shall have been suspended on any exchange or in any over-the-counter
market, (iii) a general moratorium on commercial banking activities in New
York shall have been declared by either Federal or New York State
13
<PAGE>
authorities or (iv) there shall have occurred any outbreak or escalation of
major hostilities in which the United States is involved or any change in
financial markets or any calamity or crisis that, in your reasonable
judgment, is material and adverse and (b) in the case of any of the events
specified in clauses 8(a)(i) through 8(a)(iv), such event, singly or
together with any other such event, makes it, in your reasonable judgment,
impracticable to market the Securities on the terms and in the manner
contemplated in the Prospectus.
9. Effectiveness; Defaulting Underwriters. This Agreement
shall become effective upon the execution and delivery hereof by the
parties hereto.
If, on the Closing Date, any one or more of the
Underwriters shall fail or refuse to purchase Securities that it or they
have agreed to purchase hereunder on such date, and the aggregate principal
amount of Securities which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate principal amount of Securities to be purchased on such date, the
other Underwriters shall be obligated severally in the proportions that the
principal amount of Securities set forth opposite their respective names in
Schedule I bears to the aggregate principal amount of Securities set forth
opposite the names of all such non-defaulting Underwriters, or in such
other proportions as you may specify, to purchase the Securities which such
defaulting Underwriter or Underwriters agreed but failed or refused to
purchase on such date; provided that in no event shall the principal amount
of Securities that any Underwriter has agreed to purchase pursuant to this
Agreement be increased pursuant to this Section 9 by an amount in excess of
one-ninth of such principal amount of Securities without the written
consent of such Underwriter. If, on the Closing Date any Underwriter or
Underwriters shall fail or refuse to purchase Securities which it or they
have agreed to purchase hereunder on such date and the aggregate principal
amount of Securities with respect to which such default occurs is more than
one-tenth of the aggregate principal amount of Securities to be purchased
on such date, and arrangements satisfactory to you and the Company for the
purchase of such Securities are not made within 36 hours after such
default, this Agreement shall terminate without liability on the part of
any non-defaulting Underwriter or of the Company. In any such case either
you or the Company shall have the right to postpone the Closing Date, but
in no event for longer than seven business days, in order that the required
changes, if any, in the Prospectus or in any other documents or
arrangements may be effected. Any action taken under this paragraph shall
not relieve any defaulting Underwriter from liability in respect of any
default of such Underwriter under this Agreement.
14
<PAGE>
If this Agreement shall be terminated by the
Underwriters, or any of them, because of any failure or refusal on the part
of the Company to comply with the terms or to fulfill any of the conditions
of this Agreement, or if for any reason the Company shall be unable to
perform its obligations under this Agreement, in either case other then in
connection with a termination specified in Section 8, the Company will
reimburse the Underwriters or such Underwriters as have so terminated this
Agreement with respect to themselves, severally, for all out-of-pocket
expenses (including the fees and disbursements of their counsel) reasonably
incurred by such Underwriters in connection with this Agreement or the
offering contemplated hereunder.
10. Counterparts. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same
instrument.
11. Applicable Law. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE
STATE OF NEW YORK.
12. Headings. The headings of the sections of this
Agreement have been inserted for convenience of reference only and shall
not be deemed a part of this Agreement.
Very truly yours,
UNITED AIR LINES, INC.
By: ___________________________
Name:
Title:
Accepted as of the date hereof
[Insert names of Underwriters]
Acting severally on behalf of
themselves and the several
Underwriters named in
Schedule I.
-----------
By: __________________________________
By: __________________________________
Name:
Title:
15
<PAGE>
SCHEDULE I
- ----------------------------------- --------------------------------------
Underwriter Principal Amount of
Securities to be Purchased
- ----------------------------------- --------------------------------------
- ----------------------------------- --------------------------------------
- ----------------------------------- --------------------------------------
- ----------------------------------- --------------------------------------
- ----------------------------------- --------------------------------------
- ----------------------------------- --------------------------------------
- ----------------------------------- --------------------------------------
- ----------------------------------- --------------------------------------
- ----------------------------------- --------------------------------------
Total: _______________________________
16
<PAGE>
Exhibit A-1
to
Underwriting
Agreement
(Debt Securities, Series ____-_)
[Provisions of Opinion of
____________]
17
<PAGE>
Exhibit A-2
to
Underwriting
Agreement
(Debt Securities, Series ____-_)
[Provisions of Opinion of General Counsel or Assistant
General Counsel of United Air Lines, Inc.]
18
<PAGE>
Exhibit A-3
to
Underwriting
Agreement
(Debt Securities, Series ____-_)
[Provisions of Opinion of ____________________]
19
Exhibit 1(b)
FORM OF UNDERWRITING AGREEMENT
UNITED AIR LINES, INC.
PASS THROUGH CERTIFICATES, SERIES ____-__
UNDERWRITING AGREEMENT
___________ __, ______
<PAGE>
________ __, ____
[Insert names of Underwriters]
c/o [Insert name of lead manager]
_________________________________
_________________________________
Dear Sirs and Madames:
United Air Lines, Inc., a Delaware corporation (the
"Company"), proposes that ____________________________, acting not in its
individual capacity but solely as Pass Through Trustee (the "Trustee")
under the Pass Through Trust Agreement referred to below, issue and sell to
the several underwriters named in Schedule I its Pass Through Certificates,
Series ____-__ in the aggregate principal amounts and with the interest
rates and final expected distribution dates set forth on the cover page of
the Prospectus (as defined below) (the "Securities") on the terms and
conditions stated herein. The aggregate principal amount of Securities
payable on each such final expected distribu tion date is referred to as a
"Pass Through Certificate Designation." The Securities will be issued under
a Pass Through Trust Agreement, dated as of __________ __, ____ (the "Basic
Pass Through Trust Agreement"), between the Company and the Trustee, as
supplemented by a Pass Through Trust Supplement, dated as of ________ __,
____ (a "Trust Supplement"), between the Company and the Trustee (the Basic
Pass Through Trust Agreement as supplemented by the Trust Supplement being
referred to as the "Pass Through Trust Agreement").
As used in this Agreement, the terms "Aircraft,"
"Certificate Owner," "Equipment Notes," "Lease," "Indenture Trustee,"
"Operative Documents," "Owner Participant," "Owner Trustee" and
"Participation Agreement" shall have the meanings specified in the
__________ Trust Indenture and Security Agreements, dated as of
____________ __, ____, between [the Company] [the related Owner Trustee]
and the Indenture Trustee (each, an "Indenture") or the Pass Through Trust
Agreement.
[For purposes hereof, the term "Financing Agreements"
shall mean, collectively, the Note Purchase Agreement, the Pass Through
1
<PAGE>
Trust Agreement, the Liquidity Facilities and the Intercreditor Agreement
and the term "Fundamental Documents" shall mean, collectively, the
Financing Agreements and the Operative Documents.]
The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 (File No.
333-____), relating to certain pass through certificates and debt
securities, including the Securities, and the offering thereof from time to
time in accordance with Rule 415 of the Securities Act of 1933, as amended,
and the rules and regulations of the Commission thereunder (collec tively,
the "Securities Act"). The Registration Statement includes a basic
prospectus referred to below which, as supplemented from time to time, will
be used in connection with all offerings of such pass through certificates
and debt securities. The Registration Statement as amended at the date
hereof is herein referred to as the "Registration Statement." A prospectus
supplement or supplements reflecting the terms of the Securities, the terms
of the offering thereof and other matters relating to the Securities has
been prepared and has been or will be filed, or transmitted for filing,
together with the basic prospectus referred to below pursuant to Rule 424
under the Securities Act (such prospectus supplement, in the form first
filed on or after the date hereof pursuant to Rule 424, is referred to as
the "Prospectus Supplement" and any such prospectus supplement in the form
or forms filed prior to the Prospectus Supplement is referred to as a
"Preliminary Prospectus Supplement"). The basic prospectus included in the
Registration Statement and relating to all offerings of pass through
certificates and debt securities under the Registration Statement, as
supplemented by the Prospectus Supplement, is called the "Prospectus,"
except that, if such basic prospectus is amended on or prior to the date on
which the Prospectus Supplement is first filed pursuant to Rule 424, the
term "Prospectus" shall refer to such basic prospectus as so amended and as
supplemented by the Prospectus Supplement, in either case including the
documents filed by the Company with the Commission pursuant to the
Securities Exchange Act of 1934, as amended, and the rules and regulations
of the Commission thereunder (collectively, the "Exchange Act"), that are
incorporated by reference therein. Any reference herein to the terms
"amendment" or "supplement" with respect to the Registration Statement, the
Prospectus, any Preliminary Prospectus Supplement or to any preliminary
prospectus shall be deemed to refer to and include any documents filed with
the Commission under the Exchange Act after the date hereof, the date the
Prospectus is filed, or transmitted for filing, with the Commission, or the
date of such Preliminary Prospectus Supplement or preliminary prospectus,
as the case may be, and incorporated therein by reference pursuant to Item
12 of Form S-3 under the Securities Act.
2
<PAGE>
1. Representations and Warranties. The Company
represents and warrants to, and agrees with, you that:
(a) The Company meets the requirements for
use of Form S-3 under the Securities Act; the Registration Statement has
become effective; (i) on the original effective date of the Registration
Statement and on the effective date of the most recent post-effective
amendment thereto, if any, the Registration Statement and any amendments
and supplements thereto complied as to form in all material respects with
the requirements of the Securities Act and did not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading; and (ii) on the date hereof and on the Closing Date (as defined
below), (A) neither the Registration Statement nor any amendment or
supplement thereto will contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, and (B) neither the Prospectus
nor any amendment or supplement thereto will include an untrue statement of
a material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading, except that the Company makes no representation
or warranty as to statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by or on
behalf of the Underwriters expressly for use in the Registration Statement
or the Prospectus or to statements or omissions in that part of the
Registration Statement which shall constitute the Statement of Eligibility
under the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"), on Form T-1 of the Trustee.
(b) The documents incorporated by reference
in the Prospectus pursuant to Item 12 of Form S-3 under the Securities
Act, at the time they were or hereafter are filed with the Commission,
complied and will comply as to form in all material respects with the
requirements of the Exchange Act.
(c) The Company has been duly incorporated,
is validly existing as a corporation in good standing under the laws of the
State of Delaware, has the corporate power and authority to own or lease
its property and to conduct its business as described in the Prospectus and
is duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that
the failure to be so qualified or be in good standing would not have a
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material adverse effect on the Company and its subsidiaries, taken as a
whole. All of the outstanding shares of capital stock of the Company have
been duly authorized and validly issued and are fully paid and
non-assessable and are owned by UAL Corporation, directly, free and clear
of any pledge, lien, security interest, charge, claim, equity or
encumbrance of any kind ("Liens").
(d) Each [Operative Document] [Fundamental
Document] conforms in all material respects to the descriptions thereof in
the Prospectus.
(e) This Agreement has been duly authorized,
executed and delivered by the Company.
(f) The Securities have been duly authorized
and, when executed and authenticated in accordance with the provisions of
the Pass Through Trust Agreement and delivered to and paid for by the
Underwriters in accordance with the terms of this Agreement, will be valid
and binding obligations of the Trustee, enforceable in accordance with
their terms, except as enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and except as
enforcement thereof is subject to general principles of equity (regardless
of whether enforcement is considered in a proceeding in equity or at law)
and will be entitled to the benefits of the Pass Through Trust Agreement
[and the other Financing Agreements to which the Trustee is a party].
(g) Each of the Pass Through Trust Agreement
and each other [Operative] [Fundamental] Document to which the Company is,
or is to be, a party has been duly authorized, executed and delivered by,
and is a valid and binding agreement of, the Company, enforceable in
accordance with its terms, except as enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or other similar laws now
or hereafter in effect relating to creditors' rights generally and except
as enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceed ing in equity
or at law).
(h) The Equipment Notes to be issued under
each Indenture, when duly executed and delivered by the [Company] [related
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Owner Trustee] and duly authenticated by the Indenture Trustee in
accordance with the terms of such Indenture, will be duly issued under such
Indenture and will constitute the valid and binding obligations of the
Company and the holders thereof will be entitled to the benefits of such
Indenture.
(i) The Company is not in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan agreement,
note, lease or other agreement or instrument to which it is a party or by
which it may be bound or to which any of its properties may be subject,
except for such defaults that would not have a material adverse effect on
the condition (financial or otherwise), earnings or business of the Company
and its subsidiaries, taken as a whole. The execution and delivery by the
Company of this Agreement, the Pass Through Trust Agreement and the
[Operative] [Fundamental] Documents to which the Company is, or is to be, a
party, the consummation by the Company of the transactions contemplated in
this Agreement, the Pass Through Trust Agreement and the [Operative]
[Fundamental] Documents, and compliance by the Company with the terms of
this Agreement, the Pass Through Trust Agreement and the [Operative]
[Fundamental] Documents, do not and will not result in any violation of the
charter or by-laws of the Company, and do not and will not conflict with,
or result in a breach of any of the terms or provisions of, or constitute a
default under, or result in the creation or imposition of any lien, charge
or encumbrance (other than Permitted Liens) upon any property or assets of
the Company under (A) any indenture, mortgage, loan agreement, note, lease
or other material agreement or instrument to which the Company is a party
or by which it may be bound or to which any of its properties, may be
subject or (B) any existing applicable law, rule, regulation, judgment,
order or decree of any government, governmental instrumental ity or court,
domestic or foreign, having jurisdiction over the Company or any of its
properties, other than the securities or Blue Sky or similar laws of the
various states and foreign jurisdictions (except, in the case of either
clause (A) or (B), for such conflicts, breaches or defaults or liens,
charges or encumbrances that would not have a material adverse effect on
the condition (financial or otherwise), earnings or business of the Company
and its subsidiaries, taken as a whole).
(j) No authorization, approval, consent,
order or license of or filing with or notice to any government,
governmental instrumentality or court, domestic or foreign, is required on
behalf of the Company for the valid authorization, issuance, sale and
delivery of the Securities and the Equipment Notes, the valid
authorization, execution, delivery and performance by the Company of this
Agreement, the Pass Through Trust Agreement, the Leases and the other
[Operative] [Fundamental] Documents to which the Company is, or is to be, a
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party, or the consummation by the Company of the transactions contemplated
by this Agreement, the Pass Through Trust Agreement, the Leases and the
other [Operative] [Fundamental] Documents, except such as are required
under (x) the Securities Act, the Exchange Act, the Trust Indenture Act and
the securities or Blue Sky or similar laws of the various states and of
foreign jurisdictions, (y) the Sections of Title 49 of the United States
Code, as amended, relating to aviation (the "Aviation Act") and filings or
recordings with the Federal Aviation Administration (the "FAA") and (z)
filings under the Uniform Commercial Code as in effect in ___________ and
________, which filings shall have been made or obtained, or duly presented
for filing, on or prior to the Closing Date.
(k) Except as disclosed in the Prospectus
or incorporated by reference, there is no action, suit or proceeding before
or by any government, governmen tal instrumentality or court, domestic or
foreign, now pending or, to the knowledge of the Company, threatened
against or affecting the Company that is required to be disclosed in the
Prospectus or that could reasonably be expected to result in a material
adverse change in the condition (financial or otherwise), earnings or
business of the Company and its subsidiaries, taken as a whole, or that
could reasonably be expected to materially and adversely affect the
consummation of the transactions contemplated by this Agreement; the
aggregate of all pending legal or governmental proceedings to which the
Company is a party or which affect any of its properties that are not
described in the Prospectus, including ordinary routine litigation
incidental to its business, would not reasonably be expected to have a
material adverse effect on the condition (financial or otherwise), earnings
or business of the Company and its subsidiaries, taken as a whole.
(l) The Company has all licenses, permits,
orders, consents, authorizations and approvals, of and from, and has made
all filings (other than those filings described in clauses (x), (y) and (z)
of Section 1(j)above) with, all governmental authorities, all
self-regulatory organizations and all courts and other tribunals, necessary
to own or lease its properties and to conduct its business in the manner
described in the Prospectus, except to the extent that the failure to so
have would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(m) Since the dates as of which information
is given in the Prospectus, except as otherwise stated or incorporated by
reference therein or contem plated thereby, there has not occurred any
material adverse change in the condition (financial or otherwise) or in the
earnings or business of the Company and its subsidiaries, taken as a whole.
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(n) Arthur Andersen LLP, who have reported
upon the audited consolidated financial statements and the financial
statement schedules, if any, incorporated by reference in the Prospectus,
are independent public accountants as required by the Securities Act.
(o) The Company is a "citizen of the United
States" within the meaning of Section 40102(a)(15) of Title 49 of the
United States Code, as amended, holding an air carrier operating
certificate issued by the Secretary of Transportation pursuant to Chapter
447 of Title 49 of the United States Code, as amended, for aircraft capable
of carrying 10 or more individuals or 6,000 pounds or more of cargo.
2. Agreements to Sell and Purchase. Subject to the terms
and conditions contained herein, the Company hereby agrees to sell to the
several Underwriters, and each Underwriter agrees, severally and not
jointly, to purchase from the Company the respective principal amount of
Securities set forth in Schedule I opposite its name at a purchase price of
_____% of the principal amount thereof (the "Purchase Price") [plus accrued
interest, if any, to the Closing Date].
The Company hereby agrees that, without the prior written
consent of ____________________ on behalf of the Underwriters, it will not,
during the period beginning on the date hereof and continuing to and
including the Closing Date, offer, sell, contract to sell or otherwise
dispose of any debt of the Company substantially similar to the Securities
(other than the sale of the Securities under this Agreement and [insert
other carve-outs]).
3. Terms of Offering. You have advised the Company that
the Underwriters will make an offering of the Securities purchased by the
Underwriters on the terms to be set forth in the Prospectus, as soon as
practicable after this Agreement is entered into as in your judgment is
advisable.
4. Payment and Delivery. Payment for the Securities shall
be made to the Company in Federal or other funds immediately available in
New York City against delivery of such Securities for the respective
accounts of the several Underwriters at 10:00 a.m., New York City time, on
________ __, ____, or at such other time on the same or such other date,
not later than ________ __,____, as shall be designated in writing by you.
The time and date of such payment are referred to as the "Closing Date."
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Certificates for the Securities shall be in definitive
form or global form, as specified by you, and registered in such names and
in such denominations as you shall request in writing not later than one
full business day prior to the Closing Date. The certificates evidencing
the Securities shall be delivered to you on the Closing Date for the
respective accounts of the several Underwriters, with any transfer taxes
payable in connection with the transfer of the Securities to the
Underwriters duly paid, against payment of the Purchase Price therefor plus
accrued interest, if any, to the date of payment and delivery.
5. Conditions to the Underwriters' Obligations. The
several obligations of the Underwriters to purchase and pay for the
Securities on the Closing Date are subject to the following conditions:
(a) After the execution and delivery of this
Agreement and prior to the Closing Date:
(i) there shall not have occurred any
downgrading, nor shall any notice have been given of any intended
or potential downgrading or of any review for a possible change
that does not indicate the direction of the possible change, in
the rating accorded the Company or any of the Company's securities
by [Moody's Investor Service, Inc. ("Moody's") or Standard &
Poor's Ratings Services ("Stan dard & Poor's")];
(ii) the Company's Pass Through
Certificates, Series ____-___ shall be rated "___" by [Moody's] and
"___" by [Standard & Poor's]; and
(iii) there shall not have occurred any
change, or any development involving a prospective change, in the
condition (financial or otherwise), earnings or business of the
Company and its subsidiaries, taken as a whole, from that set forth
in the Prospectus (exclusive of any amendments or supplements thereto
after the date of this Agreement) that, in your reasonable
judgment, is material and adverse and that makes it, in your
reasonable judgment, impracticable to market the Securities on the
terms and in the manner contemplated in the Prospectus.
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(b) The Underwriters shall have received on
the Closing Date a certificate, dated the Closing Date and signed by the
[Vice President and Treasurer] or the [Senior Vice President-General
Counsel and Secretary] of the Company, to the effect set forth in Section
5(a)(i) and to the effect that the representations and warranties of the
Company contained in this Agreement are true and correct as of the Closing
Date and that the Company has complied with all of the agreements and
satisfied all of the conditions on its part to be performed or satisfied
hereunder on or before the Closing Date.
(c) The Underwriters shall have received on
the Closing Date an opinion of (i) ____________________, outside counsel
for the Company, dated the Closing Date, substantially to the effect set
forth in Exhibit A-1, (ii) the General Counsel or Assistant General Counsel
of the Company, dated the Closing Date, substantially to the effect set
forth in Exhibit A-2 and (iv) _______________, counsel for the Trustee,
dated the Closing Date, substantially to the effect set forth in Exhibit
A-3. Such opinions shall be rendered to the Underwriters at the request of
the Company and shall so state therein.
(d) The Underwriters shall have received
on the Closing Date an opinion of _____________, counsel for the
Underwriters, dated the Closing Date, covering such matters as you shall
reasonably require and in form and substance reason ably acceptable to you.
(e) The Underwriters shall have received on
each of the date hereof and the Closing Date a letter, dated the date
hereof or the Closing Date, as the case may be, in form and substance
reasonably satisfactory to the Underwriters, from Arthur Andersen LLP,
independent public accountants, containing statements and information of
the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain financial
information incorporated by reference into the Prospectus.
(f) At the Closing Date, all conditions
precedent specified in the _____________ Agreement shall have been
satisfied; the representations and warranties of the Company, [the Owner
Trustee,] the Pass Through Trustee and the Indenture Trustee contained in
the _____________ Agreement shall be accurate as of the Closing Date
(except to the extent that they relate solely to an earlier date in which
case they shall be accurate as of such earlier date) and you shall have
received certificates of the Chief Financial Officer or the Treasurer of
the Company and appropriate officers of the respective [Owner Trustees,]
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Pass Through Trustees and Indenture Trustees, dated as of the Closing
Date, to such effect; and you shall have received a copy of each opinion
required to be delivered under the _____________ Agreement and dated as of
the Closing Date, and addressed to you, and of such other documents
furnished in connection with the fulfillment of such conditions as you or
your counsel may reasonably request.
(g) At the Closing Date, counsel for the
Underwriters shall have been furnished with such documents and opinions as
such counsel may reasonably require.
6. Covenants of the Company. In further consideration of
the agreements of the Underwriters contained in this Agreement, the Company
covenants with each Underwriter as follows:
(a) To furnish to you in New York City,
without charge, as soon as available and during the period mentioned in
Section 6(c), as many copies of the Prospectus, any documents incorporated
by reference therein and any supplements and amendments thereto as you may
reasonably request.
(b) Before amending or supplementing the
Prospectus, to furnish to you a copy of each such proposed amendment or
supplement and not to use any such proposed amendment or supplement to
which you reasonably object.
(c) If, during such period after the first
date of the public offering of the Securities as in the opinion of counsel
for the Underwriters the Prospectus is required by law to be delivered in
connection with sales by an Underwriter, any event shall occur as a result
of which it is necessary to amend or supplement the Prospectus in order to
make the statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if it is
necessary to amend or supplement the Prospectus to comply with law,
forthwith to prepare and furnish, at its own expense, to the Underwriters,
either amendments or supplements to the Prospectus so that the statements
in the Prospectus as so amended or supplemented will not, in the light of
the circumstances when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus, as amended or supplemented, will
comply with law and to cause such amendments or supplements to be filed
promptly.
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(d) To endeavor, in cooperation with the
Underwriters, to qualify the Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request, and to maintain such qualifications for so long as required for
the distribution of the Securities; provided, however, that the Company
shall not be obligated to file any general consent to service of process or
to qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to
taxation in respect of doing business in any jurisdiction in which it is
not otherwise so subject.
(e) Whether or not the transactions
contemplated in this Agreement are consummated or, subject to the last
paragraph of Section 9, this Agreement is terminated, to pay or cause to
be paid all expenses incident to the performance of its obligations under
this Agreement, including: (i) the fees, disbursements and expenses of the
Company's counsel and the Company's accountants in connection with the
issuance and sale of the Securities and all other fees or expenses in
connection with the preparation of the Prospectus and all amendments and
supplements thereto, including all printing costs associated therewith, and
the delivering of copies thereof to the Underwriters in the quantities
reasonably specified, (ii) all costs and expenses related to the
preparation, issuance, transfer and delivery of the Securities to the
Underwriters, including any transfer or other taxes payable thereon, (iii)
the cost of producing any Blue Sky or legal investment memorandum in
connection with the offer and sale of the Securities under state securities
laws and all expenses in connection with the qualification of the
Securities for offer and sale under state securities laws as provided in
Section 6(d) hereof, including filing fees and the reasonable fees and
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky or legal investment
memorandum, (iv) any fees charged by rating agencies for the rating of the
Securities, (v) the fees and expenses, if any, incurred in connection with
the admission of the Securities for trading in any appropriate market
system, (vi) the costs and charges of the Trustee and any transfer agent,
registrar or depositary, and (vii) all other costs and expenses incident to
the performance of the obligations of the Company hereunder or under the
[Operative] [Fundamental] Documents for which provision is not otherwise
made in this Section. It is understood, however, that except as provided in
this Section 6, Section 7 and the last paragraph of Section 9, the
Underwriters will pay all of their costs and expenses, transfer taxes
payable on resale of any of the Securities by them and any advertising
expenses connected with any offers they may make.
7. Indemnity and Contribution. (a) The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of either Section 15 of the
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Securities Act or Section 20 of the Exchange Act from and against any and
all losses, claims, damages and liabilities (including, without limitation,
any legal or other expenses reasonably incurred in connection with
defending or investigating any such action or claim) caused by any untrue
statement or alleged untrue statement of a material fact contained in the
Prospectus (as amended or supplemented if the Company shall have furnished
any amendments or supplements thereto), or caused by any omission or
alleged omission to state therein a material fact necessary to make the
statements therein in the light of the circumstances under which they were
made not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information relating to any
Underwriter furnished to the Company in writing by such Underwriter through
you expressly for use therein.
(b) Each Underwriter agrees, severally and
not jointly, to indemnify and hold harmless the Company, its directors, its
officers and each person, if any, who controls the Company within the
meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from the Company
to such Underwriter, but only with reference to information relating to
such Underwriter furnished to the Company in writing by such Underwriter
through you expressly for use in the Prospectus or any amendments or
supplements thereto.
(c) If any proceeding (including any
governmental investigation) shall be instituted involving any person in
respect of which indemnity may be sought pursuant to Section 7(a) or 7(b),
such person (the "indemnified party") shall promptly notify the person
against whom such indemnity may be sought (the "indemnifying party") in
writing and the indemnifying party, upon request of the indemnified party,
shall retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party may
designate in such proceeding and shall pay the fees and disbursements of
such counsel related to such proceeding. In any such proceeding, any
indemnified party shall have the right to retain its own counsel, but the
fees and expenses of such counsel shall be at the expense of such
indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii)
the named parties to any such proceeding (including any impleaded parties)
include both the indemnifying party and the indemnified party and
representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. It is
understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the fees and
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expenses of more than one separate firm (in addition to any local counsel)
for all such indemnified parties and that all such fees and expenses shall
be reimbursed as they are incurred. Such firm shall be designated in
writing by ___________________, in the case of parties indemnified pursuant
to Section 7(a), and by the Company, in the case of parties indemnified
pursuant to Section 7(b). The indemnifying party shall not be liable for
any settlement of any proceeding effected without its written consent, but
if settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified
party from and against any loss or liability by reason of such settlement
or judgment. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse
the indemnified party for fees and expenses of counsel as contemplated by
the second and third sentences of this paragraph, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding
effected without its written consent if (i) such settlement is entered into
more than 30 days after receipt by such indemnifying party of the aforesaid
request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release
of such indemnified party from all liability on claims that are the subject
matter of such proceeding.
(d) To the extent the indemnification
provided for in Section 7(a) or 7(b) is unavailable to an indemnified party
or insufficient in respect of any losses, claims, damages or liabilities
referred to therein, then each indemnifying party under such paragraph, in
lieu of indemnifying such indemnified party thereunder, shall contribute to
the amount paid or payable by such indemnified party as a result of such
losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriters on the other hand from the offering of the
Securities or (ii) if the allocation provided by clause 7(d)(i) above is
not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause 7(d)(i) above
but also the relative fault of the Company on the one hand and of the
Underwriters on the other hand in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriters on the other
hand in connection with the offering of the Securities shall be deemed to
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be in the same respective proportions as the net proceeds from the offering
of the Securities (before deducting expenses) received by the Company and
the total discounts and commissions received by the Underwriters, in each
case as set forth in the Prospectus, bear to the aggregate offering price
of the Securities. The relative fault of the Company on the one hand and of
the Underwriters on the other hand shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or by the Underwriters and
the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The
Underwriters' respective obligations to contribute pursuant to this Section
7 are several in proportion to the respective principal amount of
Securities they have purchased hereunder, and not joint.
(e) The Company and the Underwriters agree
that it would not be just or equitable if contribution pursuant to this
Section 7 were determined by pro rata allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable consider ations
referred to in Section 7(d). The amount paid or payable by an indemnified
party as a result of the losses, claims, damages and liabilities referred
to in Section 7(d) shall be deemed to include, subject to the limitations
set forth above, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 7, no
Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Securities underwritten by it
and distributed to the public were offered to the public exceeds the amount
of any damages that such Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 7 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
(f) The indemnity and contribution provisions
contained in this Section 7 and the representations, warranties and other
statements of the Company contained in this Agreement shall remain
operative and in full force and effect regardless of (i) any termination of
this Agreement, (ii) any investigation made by or on behalf of any
Underwriter or any person controlling any Underwriter or by or on behalf of
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the Company, its officers or directors or any person controlling the
Company and (iii) acceptance of and payment for any of the Securities.
8. Termination. This Agreement shall be subject to
termination by notice given by you to the Company, if (a) after the
execution and delivery of this Agree ment and prior to the Closing Date (i)
trading generally shall have been suspended or materially limited on or by
the New York Stock Exchange, (ii) trading of any securities of the Company
shall have been suspended on any exchange or in any over-the-counter
market, (iii) a general moratorium on commercial banking activities in New
York shall have been declared by either Federal or New York State
authorities or (iv) there shall have occurred any outbreak or escalation of
major hostilities in which the United States is involved or any change in
financial markets or any calamity or crisis that, in your reason able
judgment, is material and adverse and (b) in the case of any of the events
specified in clauses 8(a)(i) through 8(a)(iv), such event, singly or
together with any other such event, makes it, in your reasonable judgment,
impracticable to market the Securities on the terms and in the manner
contemplated in the Prospectus.
9. Effectiveness; Defaulting Underwriters. This Agreement
shall become effective upon the execution and delivery hereof by the
parties hereto.
If, on the Closing Date, any one or more of the
Underwriters shall fail or refuse to purchase Securities that it or they
have agreed to purchase hereunder on such date, and the aggregate principal
amount of Securities which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate principal amount of Securities to be purchased on such date, the
other Underwriters shall be obligated severally in the proportions that
the principal amount of Securities set forth opposite their respective
names in Schedule I bears to the aggregate principal amount of Securities
set forth opposite the names of all such non-defaulting Underwriters, or in
such other proportions as you may specify, to purchase the Securities which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase on such date; provided that in no event shall the principal amount
of Securities that any Underwriter has agreed to purchase pursuant to this
Agreement be increased pursuant to this Section 9 by an amount in excess of
one-ninth of such principal amount of Securities without the written
consent of such Underwriter. If, on the Closing Date any Underwriter or
Underwriters shall fail or refuse to purchase Securities which it or they
have agreed to purchase hereunder on such date and the aggregate principal
amount of Securities with respect to which such default occurs is more than
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one-tenth of the aggregate principal amount of Securities to be purchased
on such date, and arrangements satisfactory to you and the Company for the
purchase of such Securities are not made within 36 hours after such
default, this Agreement shall terminate without liability on the part of
any non-defaulting Underwriter or of the Company. In any such case either
you or the Company shall have the right to postpone the Closing Date, but
in no event for longer than seven business days, in order that the required
changes, if any, in the Prospectus or in any other documents or
arrangements may be effected. Any action taken under this paragraph shall
not relieve any defaulting Underwriter from liability in respect of any
default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the
Underwriters, or any of them, because of any failure or refusal on the part
of the Company to comply with the terms or to fulfill any of the conditions
of this Agreement, or if for any reason the Company shall be unable to
perform its obligations under this Agreement, in either case other then in
connection with a termination specified in Section 8, the Company will
reimburse the Underwriters or such Underwriters as have so terminated this
Agreement with respect to themselves, severally, for all out-of-pocket
expenses (including the fees and disbursements of their counsel) reasonably
incurred by such Underwriters in connection with this Agree ment or the
offering contemplated hereunder.
10. Counterparts. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same
instrument.
11. Applicable Law. THIS AGREEMENT SHALL BE GOV
ERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL
LAWS OF THE STATE OF NEW YORK.
<PAGE>
12. Headings. The headings of the sections of this
Agreement have been inserted for convenience of reference only and shall
not be deemed a part of this Agreement.
Very truly yours,
UNITED AIR LINES, INC.
By: ___________________________
Name:
Title:
Accepted as of the date hereof
[Insert names of Underwriters]
Acting severally on behalf of
themselves and the several
Underwriters named in
Schedule I.
-----------
By: __________________________________
By: __________________________________
Name:
Title:
16
<PAGE>
SCHEDULE I
- ----------------------------------- --------------------------------------
Underwriter Principal Amount of
Securities to be Purchased
- ----------------------------------- --------------------------------------
- ----------------------------------- --------------------------------------
- ----------------------------------- --------------------------------------
- ----------------------------------- --------------------------------------
- ----------------------------------- --------------------------------------
- ----------------------------------- --------------------------------------
- ----------------------------------- --------------------------------------
- ----------------------------------- --------------------------------------
- ----------------------------------- --------------------------------------
Total: _______________________________
17
<PAGE>
Exhibit A-1
to
Underwriting
Agreement
(Pass Through Certificates, Series ____-_)
[Provisions of Opinion of
_____________]
18
<PAGE>
Exhibit A-2
to
Underwriting
Agreement
(Pass Through Certificates, Series ____-_)
[Provisions of Opinion of General Counsel or Assistant
General Counsel of United Air Lines, Inc.]
19
<PAGE>
Exhibit A-3
to
Underwriting
Agreement
(Pass Through Certificates, Series ____-_)
[Provisions of Opinion of ____________________]
20
Exhibit 4(a)(1)
FORM OF INDENTURE
-----------------
============================
UNITED AIR LINES, INC.
TO
[TRUSTEE NAME]
Trustee
---------
INDENTURE
Dated as of [Date]
Debt Securities
============================
<PAGE>
United Air Lines, Inc.
Certain Sections of this Indenture relating to
Sections 3.10 through 3.18, inclusive, of the
Trust Indenture Act of 1939, as amended:
Provision of Trust
Indenture Act of 1939,
as amended Indenture Section
ss.310(a)(1) ......................................... 6.9
(a)(2) ......................................... 6.9
(a)(3) ......................................... Not Applicable
(a)(4) ......................................... Not Applicable
(b) ......................................... 6.8, 6.10
(c) ......................................... Not Applicable
ss.311(a) ........................................ 6.13
(b) ......................................... 6.13
(c) ......................................... Not Applicable
ss.312(a) ........................................ 7.1, 7.2(a)
(b) ......................................... 7.2(b)
(c) ......................................... 7.2(c)
ss.313(a) ........................................ 7.3(a)
(b) ......................................... 7.3(a)
(c) ......................................... 7.3(a)
(d) ......................................... 7.3(b)
ss.314(a) ........................................ 7.4
(a)(4) ......................................... 1.1, 10.4
(b) ......................................... Not Applicable
(c)(1) ......................................... 1.2
(c)(2) ......................................... 1.2
(c)(3) ......................................... Not Applicable
(d) ......................................... Not Applicable
(e) ......................................... 1.2
ss.315(a) ........................................ 6.1
(b) ......................................... 6.2
(c) ......................................... 6.1
(d) ......................................... 6.1
(e) ......................................... 5.14
ss.316(a) ........................................ 1.1
(a)(1)(A) ......................................... 5.2, 5.12
(a)(1)(B) ......................................... 5.13
(a)(2) ......................................... Not Applicable
(b) ......................................... 5.8
(c) ......................................... 1.4(c)
ss.317(a)(1) ........................................ 5.3
(a)(2) ......................................... 5.4
(b) ......................................... 10.3
ss.318(a) ........................................ 1.7
- ---------------------------
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of the Indenture.
i
<PAGE>
|| TABLE OF CONTENTS
Page
RECITALS OF THE COMPANY..........................1
ARTICLE I
Definitions and Other Provisions
of General Application.......................................................1
Section 1.1 Definitions.....................................................1
Act........................................................2
Affiliate..................................................2
Attributable Debt..........................................2
Authenticating Agent.......................................3
Authorized Newspaper.......................................3
Bearer Security............................................3
Board of Directors.........................................3
Board Resolution...........................................3
Book-Entry Security........................................3
Business Day...............................................3
Capital Lease Obligations..................................3
Cedel......................................................3
Commission.................................................4
Common Depository..........................................4
Company....................................................4
Company Request" or "Company Order"........................4
Corporate Trust Office.....................................4
corporation................................................4
covenant defeasance........................................4
CUSIP......................................................4
default....................................................4
Defaulted Interest.........................................4
defeasance.................................................4
Depository.................................................4
Euroclear..................................................4
- --------------------------------
NOTE: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
ii
<PAGE>
Event of Default...........................................4
Holder.....................................................5
Indenture..................................................5
Interest Payment Date......................................5
mandatory sinking fund payment.............................5
Maturity...................................................5
Notice of Default..........................................5
Officers' Certificate......................................5
Opinion of Counsel.........................................5
optional sinking fund payment..............................5
Original Issue Discount Security...........................5
Outstanding................................................5
Paying Agent...............................................6
Person.....................................................7
Place of Payment...........................................7
Predecessor Security.......................................7
Principal Property.........................................7
Redemption Date............................................7
Redemption Price...........................................7
Registered Securities......................................7
Regular Record Date........................................7
Securities.................................................7
Security Register" and "Security Registrar"................7
Special Record Date........................................7
Stated Maturity............................................8
Subsidiary.................................................8
Trust Indenture Act........................................8
Trustee....................................................8
U.S. Government Obligations................................8
Vice President.............................................8
Yield to Maturity..........................................8
Section 1.2 Compliance Certificates and Opinions............................8
Section 1.3 Form of Documents Delivered to Trustee..........................9
Section 1.4 Acts of Holders; Record Dates...................................9
Section 1.5 Notices, Etc. to Trustee and Company...........................11
Section 1.6 Notice to Holders; Waiver......................................11
Section 1.7 Conflict with Trust Indenture Act..............................12
- --------------------------------
NOTE: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
iii
<PAGE>
Section 1.8 Effect of Headings and Table of Contents.......................12
Section 1.9 Successors and Assigns.........................................13
Section 1.10 Separability Clause............................................13
Section 1.11 Benefits of Indenture..........................................13
Section 1.12 Governing Law..................................................13
Section 1.13 Legal Holidays.................................................13
Section 1.14 Language of Notices, Etc.......................................13
Section 1.15 Exemption from Individual Liability............................13
ARTICLE II
Security Forms..............................................................14
Section 2.1 Forms Generally................................................14
Section 2.2 Form of Trustee's Certificate of Authentication................15
Section 2.3 Securities in Global Form......................................15
ARTICLE III
The Securities..............................................................16
Section 3.1 Amount Unlimited; Issuable in Series...........................16
Section 3.2 Denominations..................................................19
Section 3.3 Execution, Authentication, Delivery and Dating.................19
Section 3.4 Temporary Securities...........................................21
Section 3.5 Registration, Registration of Transfer and Exchange............23
Section 3.6 Mutilated, Destroyed, Lost and Stolen Securities...............26
Section 3.7 Payment of Interest; Interest Rights Preserved.................27
Section 3.8 Persons Deemed Owners..........................................28
Section 3.9 Cancellation...................................................29
Section 3.10 Computation of Interest........................................29
Section 3.11 CUSIP Numbers..................................................29
ARTICLE IV
Satisfaction and Discharge..................................................30
Section 4.1 Satisfaction and Discharge of Indenture........................30
Section 4.2 Application of Trust Money.....................................31
- --------------------------------
NOTE: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
iv
<PAGE>
ARTICLE V
Remedies....................................................................31
Section 5.1 Events of Default..............................................31
Section 5.2 Acceleration of Maturity; Rescission and Annulment.............33
Section 5.3 Collection of Indebtedness and Suits for Enforcement by
Trustee......................................................34
Section 5.4 Trustee May File Proofs of Claim...............................34
Section 5.5 Trustee May Enforce Claims Without Possession of Securities....35
Section 5.6 Application of Money Collected.................................35
Section 5.7 Limitation on Suits............................................35
Section 5.8 Unconditional Right of Holders to Receive Principal, Premium
and Interest.................................................36
Section 5.9 Restoration of Rights and Remedies.............................36
Section 5.10 Rights and Remedies Cumulative.................................37
Section 5.11 Delay or Omission Not Waiver...................................37
Section 5.12 Control by Holders.............................................37
Section 5.13 Waiver of Past Defaults........................................37
Section 5.14 Undertaking for Costs..........................................38
Section 5.15 Waiver of Stay or Extension Laws...............................38
ARTICLE VI
The Trustee.................................................................38
Section 6.1 Certain Duties and Responsibilities............................38
Section 6.2 Notice of Defaults.............................................39
Section 6.3 Certain Rights of Trustee......................................39
Section 6.4 Not Responsible for Recitals or Issuance of Securities.........40
Section 6.5 May Hold Securities............................................40
Section 6.6 Money Held in Trust............................................40
Section 6.7 Compensation and Reimbursement.................................40
Section 6.8 Disqualification; Conflicting Interests........................41
Section 6.9 Corporate Trustee Required; Eligibility........................41
Section 6.10 Resignation and Removal; Appointment of Successor..............41
Section 6.11 Acceptance of Appointment by Successor.........................43
Section 6.12 Merger, Conversion, Consolidation or Succession to Business....44
Section 6.13 Preferential Collection of Claims Against Company..............44
Section 6.14 Appointment of Authenticating Agent............................44
- --------------------------------
NOTE: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
v
<PAGE>
ARTICLE VII
Holders' Lists and Reports by Trustee and Company...........................47
Section 7.1 Company to Furnish Trustee Names and Addresses of Holders......47
Section 7.2 Preservation of Information; Communications to Holders.........47
Section 7.3 Reports by Trustee.............................................47
Section 7.4 Reports by Company.............................................48
ARTICLE VIII
Consolidation, Merger, Conveyance, Transfer or Lease........................48
Section 8.1 Company May Consolidate, Etc. Only on Certain Terms............48
Section 8.2 Successor Substituted..........................................49
ARTICLE IX
Supplemental Indentures.....................................................50
Section 9.1 Supplemental Indentures Without Consent of Holders.............50
Section 9.2 Supplemental Indentures with Consent of Holders................51
Section 9.3 Execution of Supplemental Indentures...........................52
Section 9.4 Effect of Supplemental Indentures..............................52
Section 9.5 Conformity with Trust Indenture Act............................52
Section 9.6 Reference in Securities to Supplemental Indentures.............53
ARTICLE X
Covenants...................................................................53
Section 10.1 Payment of Principal, Premium and Interest....................53
Section 10.2 Maintenance of Office or Agency...............................53
Section 10.3 Money for Securities Payments to Be Held in Trust.............54
Section 10.4 Statement by Officers as to Default...........................55
Section 10.5 Existence.....................................................56
Section 10.6 Calculation of Original Issue Discount........................56
Section 10.7 Appointments to Fill Vacancies in Trustee's Office............56
- --------------------------------
NOTE: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
vi
<PAGE>
ARTICLE XI
Redemption of Securities....................................................56
Section 11.1 Applicability of Article......................................56
Section 11.2 Election to Redeem; Notice to Trustee.........................56
Section 11.3 Selection by Trustee of Securities to Be Redeemed.............57
Section 11.4 Notice of Redemption..........................................57
Section 11.5 Deposit of Redemption Price...................................58
Section 11.6 Securities Payable on Redemption Date.........................58
Section 11.7 Securities Redeemed in Part...................................59
ARTICLE XII
Sinking Funds...............................................................59
Section 12.1 Applicability of Article......................................59
Section 12.2 Satisfaction of Sinking Fund Payments with Securities.........60
Section 12.3 Redemption of Securities for Sinking Fund.....................60
ARTICLE XIII
Defeasance and Covenant Defeasance..........................................61
Section 13.1 Applicability of Article; Company's Option to Effect
Defeasance or Covenant Defeasance.............................61
Section 13.2 Defeasance and Discharge......................................61
Section 13.3 Covenant Defeasance...........................................61
Section 13.4 Conditions to Defeasance or Covenant Defeasance...............62
Section 13.5 Deposited Money and U.S. Government Obligations
to be Held in Trust; Other Miscellaneous Provision..........64
Section 13.6 Reinstatement.................................................64
ARTICLE XIV
Meetings of Holders of Securities...........................................65
Section 14.1 Purposes for Which Meetings May Be Called.....................65
Section 14.2 Call, Notice and Place of Meetings............................65
Section 14.3 Persons Entitled to Vote at Meetings..........................65
Section 14.4 Quorum; Action................................................66
- --------------------------------
NOTE: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
vii
<PAGE>
Section 14.5 Determination of Voting Rights; Conduct and Adjournment
of Meetings.................................................67
Section 14.6 Counting Votes and Recording Action of Meetings...............68
||
Exhibit A Form of Security
Exhibit B Forms of Certification
Exhibit B.1 Form of Certificate to be Given by Person Entitled
To Receive Bearer Security
Exhibit B.2 Form of Certificate to be Given by Euroclear and Cedel
in Connection with the Exchange of a Portion of
a Temporary Book-Entry Security
Exhibit B.3 Form of Certificate to be Given by Euroclear and Cedel
to Obtain Interest Prior to an Exchange Date
Exhibit B.4 Form of Certificate to be Given by Beneficial Owners
to Obtain Interest Prior to an Exchange Date
- --------------------------------
NOTE: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
viii
<PAGE>
INDENTURE, dated as of [Date] between United Air Lines,
Inc., a corporation duly organized and existing under the laws of the State
of Delaware (herein called the "Company"), having its principal office at
1200 East Algonquin Road, Elk Grove Village, Illinois 60007, and [Trustee
Name], a [______________], as Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and
delivery of this Indenture to provide for the issuance from time to time of
its unsecured debentures, notes or other evidences of indebtedness (herein
called the "Securities"), to be issued in one or more series as in this
Indenture provided.
All things necessary to make this Indenture a valid
agreement of the Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase
of the Securities by the Holders thereof, it is mutually agreed, for the
equal and proportionate benefit of all Holders of the Securities or of
series thereof, as follows:
ARTICLE I
Definitions and Other Provisions
of General Application
Section 1.1 Definitions.
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as
the singular;
(2) all other terms used herein which are defined in the
Trust Indenture Act, either directly or by reference therein, have
the meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein
have the meanings assigned to them in accordance with generally
accepted accounting principles, and,
1
<PAGE>
except as otherwise herein expressly provided, the term "generally
accepted accounting principles" with respect to any computation
required or permitted hereunder shall mean such accounting
principles as are generally accepted at the date of such
computation; and
(4) the words "herein," "hereof" and "hereunder" and
other words of similar import refer to this Indenture as a whole
and not to any particular Article, Section or other subdivision.
"Act," when used with respect to any Holder, has the meaning
specified in Section 1.4.
"Affiliate" of any specified Person means any other
Person directly or indirectly controlling or controlled by or under direct
or indirect common control with such specified Person. For the purposes of
this definition, "control" when used with respect to any specified Person
means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities,
by contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
["Attributable Debt" means as to any particular lease
under which either the Company or any Restricted Subsidiary is at the time
liable as lessee for a term of more than 12 months and at any date as of
which the amount thereof is to be determined, the total net obligations of
the lessee for rental payments during the remaining term of the lease
(excluding any period for which such lease has been extended or may, at the
option of the lessor, be extended) discounted from the respective due dates
thereof to such determination date at a rate per annum equivalent to the
greater of (a) the weighted-average Yield to Maturity of the Outstanding
Securities, such average being weighted by the principal amount of the
Outstanding Securities of each series or, in the case of Original Issue
Discount Securities, such amount to be the principal amount of such
outstanding Original Issue Discount Securities that would be due and
payable as of the date of such determination upon a declaration of
acceleration of the maturity thereof pursuant to this Indenture and (b) the
interest rate inherent in such lease (as determined in good faith by the
Company), both to be compounded semi-annually. The net total obligations of
the lessee for rental payments under any such lease for any such period
shall be the aggregate amount of the rent payable by the lessee with
respect to such period after excluding amounts required to be paid on
account of maintenance and repairs, services, insurance, taxes,
assessments, water rates and similar charges and contingent rents (such as
those based on sales or monetary inflation). If any lease is terminable by
the lessee upon the payment of a penalty and under the terms of the lease
the termination right is not exercisable until after the determination date
and the amount of such penalty discounted to the determination date as
provided above is less than the net amount of rentals payable after the
time as of which such termination could occur (the "termination time")
discounted to the determination date as provided above, then such
discounted penalty amount shall be used instead of such discounted amount
2
<PAGE>
of net rentals payable after the termination time in calculating the
Attributable Debt for such lease. If any lease is terminable by the lessee
upon the payment of a penalty and such termination right is exercisable on
the determination date and the amount of the net rentals payable under such
lease after the determination date discounted to the determination date as
provided above is greater than the amount of such penalty, the
"Attributable Debt" for such lease as of such determination date shall be
equal to the amount of such penalty.]
"Authenticating Agent" means any Person authorized by the
Trustee pursuant to Section 6.14 to act on behalf of the Trustee to
authenticate Securities of one or more series.
"Authorized Newspaper" means a newspaper, in the English
language or in an official language of the country of publication,
customarily published on each Business Day, whether or not published on
Saturdays, Sundays or holidays, and of general circulation in the place in
connection with which the term is used or in the financial community of
such place. Where successive publications are required to be made in
Authorized Newspapers, the successive publications may be made in the same
or in different newspapers in the same city meeting the foregoing
requirements and in each case on any Business Day.
"Bearer Security" means any Security in the form (to the
extent applicable thereto) established pursuant to [Section 3.1] which is
payable to Bearer.
"Board of Directors" means either the board of directors
of the Company or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified
by the Secretary or an Assistant Secretary of the Company to have been duly
adopted by the Board of Directors and to be in full force and effect on the
date of such certification, and delivered to the Trustee.
"Book-Entry Security" means a Security in the form
prescribed in Sections 2.2 through 2.4 evidencing all or part of a series
of Securities, issued to the Depository or Common Depository, as the case
might be, for such series or its nominee, and registered in the name of
such Depository, Common Depository or their respective nominees.
"Business Day," when used with respect to any Place of
Payment, means each Monday, Tuesday, Wednesday, Thursday and Friday which
is not a day on which banking institutions in that Place of Payment are
authorized or obligated by law or executive order to close.
"Capital Lease Obligations" of either the Company or any
Restricted Subsidiary means the obligations of such Person to pay rent or
other amounts under any lease of (or other arrangement conveying the right
to use) real property, the term of which extends beyond 12 months, which
3
<PAGE>
obligations are required to be classified and accounted for as a capital
lease on a balance sheet of such Person under generally accepted accounting
principles (including Statement No. 13 of Financial Accounting Standards
Board) and, for the purposes of this Indenture, the amount of such
obligation shall be the capitalized amount thereof, determined in
accordance with generally accepted accounting principles (including such
Statement No. 13).
"Cedel" means Centrale de Livraison de Valeurs Mobilieres S.A.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Securities Exchange Act of
1934, as amended, or, if at any time after the execution of this instrument
such Commission is not existing and performing the duties now assigned to it
under the Trust Indenture Act, then the body performing such duties at such
time.
"Common Depository" has the meaning specified in Section 3.4.
"Company" means the corporation named as the "Company" in
the first paragraph of this instrument until a successor corporation shall
have become such pursuant to the applicable provisions of this Indenture,
and thereafter "Company" shall mean such successor corporation.
"Company Request" or "Company Order" means a written
request or order signed in the name of the Company by its Chairman of the
Board, its President, its General Counsel or a Vice President, and by its
Treasurer, an Assistant Treasurer, its Controller or Assistant Controller,
its Secretary or an Assistant Secretary, and delivered to the Trustee.
"Corporate Trust Office" means the principal office of
the Trustee in [City, State] at which at any particular time its corporate
trust business shall be administered, which currently is located at
[_________________________].
"corporation" means a corporation, association, company,
joint-stock company, limited partnership, limited liability company or
business trust.
"covenant defeasance" has the meaning specified in
Section 13.3.
"CUSIP" has the meaning specified in Section 3.11.
"default" has the meaning specified in Section 6.2.
"Defaulted Interest" has the meaning specified in Section 3.7.
"defeasance" has the meaning specified in Section 13.2.
4
<PAGE>
"Depository" means, with respect to the Securities of any
series issuable or issued in whole or in part in the form of one or more
Book-Entry Securities, the Person designated as Depository for such series
by the Company pursuant to Section 3.1, initially The Depository Trust
Company, its nominees and their respective successors, which Person shall
be a clearing agency registered under the Securities Exchange Act of 1934,
as amended.
"Euroclear" means Morgan Guaranty Trust Company of New York,
Brussels Office, as operator of the Euroclear System.
"Event of Default" has the meaning specified in Section 5.1.
"Holder" means a Person in whose name a Security is
registered in the Security Register.
"Indenture" means this instrument as originally executed
or as it may from time to time be supplemented or amended by one or more
indentures supplemental hereto entered into pursuant to the applicable
provisions hereof, including, for all purposes of this instrument, and any
such supplemental indenture, the provisions of the Trust Indenture Act that
are deemed to be a part of and govern this instrument and any such
supplemental indenture, respectively. The term "Indenture" shall also
include the terms of particular series of Securities established as
contemplated by Section 3.1.
"interest," when used with respect to an Original Issue
Discount Security which by its terms bears interest only after Maturity,
means interest payable after Maturity.
"Interest Payment Date," when used with respect to any
Security, means the Stated Maturity of an installment of interest on such
Security.
"mandatory sinking fund payment" has the meaning specified
in Section 12.1.
"Maturity," when used with respect to any Security, means
the date on which the principal of such Security or an installment of
principal becomes due and payable as therein or herein provided, whether at
the Stated Maturity or by declaration of acceleration, call for redemption
or otherwise.
"Notice of Default" has the meaning specified in Section 5.1.
"Officers' Certificate" means a certificate signed by the
Chairman of the Board, the President, the General Counsel or a Vice
President, and by the Treasurer, an Assistant Treasurer, the Controller or
Assistant Controller, the Secretary or an Assistant Secretary, of the
Company, and delivered to the Trustee. One of the officers signing an
Officers' Certificate given pursuant to Section 10.4 shall be the principal
executive, financial or accounting officer of the Company.
5
<PAGE>
"Opinion of Counsel" means a written opinion of counsel,
who may be an employee of or counsel for the Company, and who shall be
acceptable to the Trustee.
"optional sinking fund payment" has the meaning specified in
Section 12.1.
"Original Issue Discount Security" means any Security
which provides for an amount less than the principal amount thereof to be
due and payable upon a declaration of acceleration of the Maturity thereof
pursuant to Section 5.2.
"Outstanding," when used with respect to Securities,
means, as of the date of determination, all Securities theretofore
authenticated and delivered under this Indenture, except:
(i) Securities theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Securities for whose payment or redemption money in
the necessary amount has been theretofore deposited with the
Trustee or any Paying Agent (other than the Company) in trust or
set aside and segregated in trust by the Company (if the Company
shall act as its own Paying Agent) for the Holders of such
Securities; provided, however, that, if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant
to this Indenture or provision therefor satisfactory to the
Trustee has been made;
(iii) Securities which have been paid pursuant to Section
3.6 or in exchange for or in lieu of which other Securities have
been authenticated and delivered pursuant to this Indenture, other
than any such Securities in respect of which there shall have been
presented to the Trustee proof satisfactory to it that such
Securities are held by a bona fide purchaser in whose hands such
Securities are valid obligations of the Company; and
(iv) Securities that have been defeased pursuant to
Section 13.2;
provided, however, that in determining whether the Holders of the
requisite principal amount of the Outstanding Securities have given any
request, demand, authorization, direction, notice, consent or waiver
hereunder, (i) the principal amount of an Original Issue Discount Security
that shall be deemed to be Outstanding shall be the amount of the principal
thereof that would be due and payable as of the date of such determination
upon acceleration of the Maturity thereof pursuant to Section 5.2, (ii) the
principal amount of a Security denominated in one or more foreign
currencies or currency units shall be the U.S. dollar equivalent,
determined in the manner provided as contemplated by Section 3.1 on the
date of original issuance of such Security, of the principal amount (or, in
the case of an Original Issue Discount Security, the U.S. dollar equivalent
on the date of original issuance of such Security of the amount determined
6
<PAGE>
as provided in (i) above) of such Security, and (iii) Securities owned by
the Company or any other obligor upon the Securities or any Affiliate of
the Company or of such other obligor shall be disregarded and deemed not to
be Outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Securities which the Trustee
actually knows to be so owned shall be so disregarded. Securities so owned
which have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Trustee the pledgee's right
so to act with respect to such Securities and that the pledgee is not the
Company or any other obligor upon the Securities or any Affiliate of the
Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company
to pay the principal of or any premium or interest on any Securities on
behalf of the Company.
"Person" means any individual, corporation, partnership,
limited liability company, joint venture, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"Place of Payment," when used with respect to the
Securities of any series, means the place or places where the principal of
and any premium and interest on the Securities of that series are payable
as specified as contemplated by Section 3.1.
"Predecessor Security" of any particular Security means
every previous Security evidencing all or a portion of the same debt as
that evidenced by such particular Security; and, for the purposes of this
definition, any Security authenticated and delivered under Section 3.6 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Security
shall be deemed to evidence the same debt as the mutilated, destroyed, lost
or stolen Security.
"Principal Property" means any manufacturing plant or
foundry located in the United States of America and owned and operated by
the Company or any Restricted Subsidiary on or after the date hereof, and
any manufacturing equipment owned by the Company or any Restricted
Subsidiary on or after the date hereof in such manufacturing plant.
"Manufacturing equipment" means manufacturing equipment in such
manufacturing plant directly used in the production of the Company's
products and parts and components thereof, and shall not include office
equipment, rolling stock and other equipment not directly used in the
production of the Company's products.
"Redemption Date," when used with respect to any Security
to be redeemed, means the date fixed for such redemption by or pursuant to
this Indenture.
"Redemption Price," when used with respect to any
Security to be redeemed, means the price at which it is to be redeemed
pursuant to this Indenture.
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"Registered Securities" means any Security in the form
set forth in Sections 2.2 and 2.3 or established pursuant to Section 2.1
which is registered in the Security Register.
"Regular Record Date" for the interest payable on any
Interest Payment Date on the Securities of any series means the date
specified for that purpose as contemplated by Section 3.1.
"Securities" has the meaning stated in the first recital
of this Indenture and more particularly means any Securities authenticated
and delivered under this Indenture.
"Security Register" and "Security Registrar" have the
respective meanings specified in Section 3.5.
"Special Record Date" for the payment of any Defaulted
Interest means a date fixed by the Trustee pursuant to Section 3.7.
"Stated Maturity," when used with respect to any Security
or any installment of principal thereof or interest thereon, means the date
specified in such Security as the fixed date on which the principal of such
Security or such installment of principal or interest is due and payable.
"Subsidiary" means any corporation of which at least a
majority of the outstanding stock, which under ordinary circumstances (not
dependent upon the happening of a contingency) has voting power to elect a
majority of the board of directors of such corporation (or similar
management body), is owned directly or indirectly by the Company or by one
or more Subsidiaries of the Company, or by the Company and one or more
Subsidiaries.
"Trust Indenture Act" means the Trust Indenture Act of
1939 as in force at the date as of which this instrument was executed;
provided, however, that if the Trust Indenture Act of 1939 is amended after
such date, "Trust Indenture Act" means, to the extent required by any such
amendment, the Trust Indenture Act of 1939 as so amended.
"Trustee" means the Person named as the "Trustee" in the
first paragraph of this instrument until a successor Trustee shall have
become such pursuant to the applicable provisions of this Indenture, and
thereafter "Trustee" shall mean or include each Person who is then a
Trustee hereunder, and if at any time there is more than one such Person,
"Trustee" as used with respect to the Securities of any series shall mean
the Trustee with respect to Securities of that series.
"U.S. Government Obligations" has the meaning specified in
Section 13.4.
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"Vice President," when used with respect to the Company
or the Trustee, means any vice president, whether or not designated by a
number or a word or words added before or after the title "vice president".
"Yield to Maturity" means the yield to maturity,
calculated at the time of issuance of a series of Securities or, if
applicable, at the most recent redetermination of interest on such series
and calculated in accordance with generally accepted financial practice.
Section 1.2 Compliance Certificates and Opinions.
Upon any application or request by the Company to the
Trustee to take any action under any provision of this Indenture, the
Company shall furnish to the Trustee such certificates and opinions as may
be required under the Trust Indenture Act. Each such certificate or opinion
shall be given in the form of an Officers' Certificate, if to be given by
an officer of the Company, or an Opinion of Counsel, if to be given by
counsel, and shall comply with the requirements of the Trust Indenture Act
and any other requirements set forth in this Indenture. In the case of any
such application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture relating to such
particular application or request, however, no additional certificate or
opinion need be furnished.
Every certificate or opinion with respect to compliance
with a condition or covenant provided for in this Indenture shall include
(1) a statement that each individual signing such
certificate or opinion has read such covenant or condition and the
definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such
individual, he has made such examination or investigation as is
necessary to enable him to express an informed opinion as to
whether or not such covenant or condition has been complied with;
and
(4) a statement as to whether, in the opinion of each
such individual, such condition or covenant has been complied
with.
Section 1.3 Form of Documents Delivered to Trustee.
In any case where several matters are required to be
certified by, or covered by an opinion of, any specified Person, it is not
necessary that all such matters be certified by, or covered by the opinion
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of, only one such Person, or that they be so certified or covered by only
one document, but one such Person may certify or give an opinion with
respect to some matters and one or more other such Persons as to other
matters, and any such Person may certify or give an opinion as to such
matters in one or several documents.
Any certificate or opinion of an officer of the Company
may be based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows, or
in the exercise of reasonable care should know, that the certificate or
opinion or representations with respect to the matters upon which his
certificate or opinion is based are erroneous. Any such certificate or
opinion of counsel may be based, insofar as it relates to factual matters,
upon a certificate or opinion of, or representations by, an officer or
officers of the Company stating that the information with respect to such
factual matters is in the possession of the Company, unless such counsel
knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to such matters are
erroneous.
Where any Person is required to make, give or execute two
or more applications, requests, consents, certificates, statements,
opinions or other instruments under this Indenture, they may, but need not,
be consolidated and form one instrument.
Section 1.4 Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this Indenture to be
given or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person
or by agent duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument
or instruments are delivered to the Trustee and, where it is hereby
expressly required, to the Company. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes
referred to as the "Act" of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 6.1) conclusive in favor of the Trustee
and the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of
any such instrument or writing may be proved by the affidavit of a witness
of such execution or by a certificate of a notary public or other officer
authorized by law to take acknowledgments of deeds, certifying that the
individual signing such instrument or writing acknowledged to him the
execution thereof. Where such execution is by a signer acting in a capacity
other than his individual capacity, such certificate or affidavit shall
also constitute sufficient proof of his authority. The fact and date of the
execution of any such instrument or writing, or the authority of the Person
executing the same, may also be proved in any other manner which the
Trustee deems sufficient.
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(c) The Company may, in the circumstances permitted by
the Trust Indenture Act, fix any day as the record date for the purpose of
determining the Holders of Securities of any series entitled to give or
take any request, demand, authorization, direction, notice, consent, waiver
or other action, or to vote on any action, authorized or permitted to be
given or taken by Holders of Securities of such series. If not set by the
Company prior to the first solicitation of a Holder of Securities of such
series made by any Person in respect of any such action, or, in the case of
any such vote, prior to such vote, the record date for any such action or
vote shall be the 30th day (or, if later, the date of the most recent list
of Holders required to be provided pursuant to Section 7.1) prior to such
first solicitation or vote, as the case may be. With regard to any record
date for action to be taken by the Holders of one or more series of
Securities, only the Holders of Securities of such series on such date (or
their duly designated proxies) shall be entitled to give or take, or vote
on, the relevant action.
(d) The ownership of Registered Securities shall be
proved by the Security Register.
(e) The principal amount and serial numbers of Bearer
Securities held by any Person, and the date of holding the same, may be
proved by the production of such Bearer Securities or by a certificate
executed, as depositary, by any trust company, bank, banker or other
depositary, wherever situated, if such certificate shall be deemed by the
Trustee to be satisfactory, showing that at the date therein mentioned such
Person had on deposit with such depositary, or exhibited to it, the Bearer
Securities therein described; or such facts may be proved by the
certificate or affidavit of the Person holding such Bearer Securities, if
such certificate or affidavit is deemed by the Trustee to be satisfactory.
The Trustee and the Company may assume that such ownership of any Bearer
Security continues until (i) another certificate or affidavit bearing a
later date issued in respect of the same Bearer Security is produced, (ii)
such Bearer Security is produced to the Trustee by some other Person, (iii)
such Bearer Security is surrendered in exchange for a Registered Security
or (iv) such Bearer Security is no longer Outstanding. The principal
amounts and serial numbers of Bearer Securities held by any Person, and the
date of holding the same, may also be proved in any other manner which the
Trustee deems sufficient.
(f) Any request, demand, authorization, direction,
notice, consent, waiver or other Act of the Holder of any Security shall
bind every future Holder of the same Security and the Holder of every
Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted or
suffered to be done by the Trustee or the Company in reliance thereon,
whether or not notation of such action is made upon such Security.
Section 1.5 Notices, Etc. to Trustee and Company.
Any request, demand, authorization, direction, notice,
consent, waiver or Act of Holders or other document provided or permitted
by this Indenture to be made upon, given or furnished to, or filed with,
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(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Trustee at its Corporate Trust Office,
Attention: Corporate Trust Trustee Administration, or
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage
prepaid, to the Company addressed to it at the address of its
principal office specified in the first paragraph of this
instrument, Attention: General Counsel or at any other address
previously furnished in writing to the Trustee by the Company.
Section 1.6 Notice to Holders; Waiver.
Except as otherwise expressly provided herein or as
otherwise specified as contemplated by Section 3.1, where this Indenture
provides for notice to Holders of Securities of any event,
(a) such notice shall be sufficiently given to Holders of
Registered Securities if in writing and mailed, first-class postage
prepaid, to each Holder of a Registered Security affected by such event, at
his address as it appears in the Security Register, not later than the
latest date, and not earlier than the earliest date, prescribed for the
giving of such notice; and
(b) such notice shall be sufficiently given to Holders of
Bearer Securities if published in an Authorized Newspaper in The City of
New York and in such other city or cities as may be specified in such
Securities on a Business Day at least twice, the first such publication to
be not earlier than the earliest date, and not later than the latest date,
prescribed for the giving of such notice.
In case by reason of the suspension of regular mail
service or by reason of any other cause it shall be impracticable to give
such notice to Holders of Registered Securities by mail, then such
notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder. In any
case where notice to Holders of Registered Securities is given by mail,
neither the failure to mail such notice, nor any defect in any notice so
mailed, to any particular Holder of a Registered Security shall affect the
sufficiency of such notice with respect to other Holders of Registered
Securities or the sufficiency of any notice to Holders of Bearer Securities
given as provided herein.
In case by reason of the suspension of publication of any
Authorized Newspaper or Authorized Newspapers or by reason of any other
cause it shall be impracticable to publish any notice to Holders of Bearer
Securities as provided above, then such notification to Holders of Bearer
Securities as shall be given with the approval of the Trustee shall
constitute sufficient notice to such Holders for every purpose hereunder.
Neither the failure to give notice by publication to Holders of Bearer
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Securities as provided above, nor any defect in any notice so published,
shall affect the sufficiency of any notice to Holders of Registered
Securities given as provided herein.
Where this Indenture provides for notice in any manner,
such notice may be waived in writing by the Person entitled to receive such
notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders of Securities shall
be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.
Section 1.7 Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts
with a provision of the Trust Indenture Act that is required under such Act
to be a part of and govern this Indenture, the latter provision shall
control. If any provision of this Indenture modifies or excludes any
provision of the Trust Indenture Act that may be so modified or excluded,
the latter provision shall be deemed to apply to this Indenture as so
modified or to be excluded, as the case may be.
Section 1.8 Effect of Headings and Table of Contents.
The Article and Section headings herein, the
reconciliation and tie with certain provisions of the Trust Indenture Act
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
Section 1.9 Successors and Assigns.
All covenants and agreements in this Indenture by the
Company shall bind its successors and assigns, whether so expressed or not.
Section 1.10 Separability Clause.
In case any provision in this Indenture or in the
Securities shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any
way be affected or impaired thereby.
Section 1.11 Benefits of Indenture.
Nothing in this Indenture or in the Securities, express
or implied, shall give to any Person, other than the parties hereto and
their successors hereunder and the Holders, any benefit or any legal or
equitable right, remedy or claim under this Indenture.
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Section 1.12 Governing Law.
This Indenture and the Securities shall be governed by
and construed in accordance with the laws of the State of New York without
giving effect to the conflict of laws provisions thereof.
Section 1.13 Legal Holidays.
In any case where any Interest Payment Date, Redemption
Date or Stated Maturity of any Security shall not be a Business Day at any
Place of Payment, then (notwithstanding any other provision of this
Indenture or of the Securities (other than a provision of the Securities of
any series which specifically states that such provision shall apply in
lieu of this Section)) payment of interest or principal (and premium, if
any) need not be made at such Place of Payment on such date, but may be
made on the next succeeding Business Day at such Place of Payment with the
same force and effect as if made on the Interest Payment Date or Redemption
Date, or at the Stated Maturity; provided, however, that no interest shall
accrue for the period from and after such Interest Payment Date, Redemption
Date or Stated Maturity, as the case may be.
Section 1.14 Language of Notices, Etc.
Any request, demand, authorization, direction, notice,
consent or waiver required or permitted under this Indenture shall be in
the English language, except that any published notice may be in an
official language of the country of publication.
Section 1.15 Exemption from Individual Liability.
No recourse under or upon any obligation, covenant or
agreement of this Indenture, or of any Security, or for any claim based
thereon or otherwise in respect thereof, shall be had against any
incorporator, stockholder, officer or director, as such, past, present or
future, of the Company or of any successor corporation of either, either
directly or through the Company, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty
or otherwise; it being expressly understood that this Indenture and the
obligations issued hereunder are solely the corporate obligations of the
Company and that no such personal liability whatever shall attach to, or is
or shall be incurred by, the incorporators, stockholders, officers or
directors, as such, of the Company or any successor corporation of either,
or any of them, because of the creation of the indebtedness hereby
authorized, or under or by reason of the obligations, covenants or
agreements contained in this Indenture or in any of the Securities or
implied therefrom; and that any and all such personal liability, either at
common law or in equity or by constitution or statute, of, and any and all
such rights and claims against, every such incorporator, stockholder,
officer or director, as such, because of the creation of the indebtedness
hereby authorized, or under or by reason of the obligations, covenants or
agreements contained in this Indenture or in any of the Securities or
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implied therefrom, are hereby expressly waived and released as a condition
of and as a consideration for, the execution of this Indenture and the
issue of such Securities.
ARTICLE II
Security Forms
Section 2.1 Forms Generally.
The Registered Securities, if any, of each series and the
Bearer Securities, if any, of each series and related coupons shall be in
substantially the form set forth in Exhibits A or B, or in such other form
as shall be established by or pursuant to a Board Resolution or in one or
more indentures supplemental hereto, in each case with such appropriate
insertions, omissions, substitutions and other variations as are required
or permitted by this Indenture, and may have such letters, numbers or other
marks of identification and such legends or endorsements placed thereon as
may be required to comply with the rules of any securities exchange or as
may, consistently herewith, be determined by the officers executing such
Securities, as evidenced by their execution of the Securities. If the form
of Securities or coupons of any series is established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the
Company Order contemplated by Section 3.3 for the authentication and
delivery of such Securities or coupons.
Unless otherwise specified as contemplated by Section
3.1, Bearer Securities shall have interest coupons attached.
The Trustee's certificate of authentication shall be in
substantially the form set forth in Section 2.5.
The definitive Securities shall be printed, lithographed
or engraved on steel engraved borders or may be produced in any other
manner, all as determined by the officers executing such Securities, as
evidenced by their execution of such Securities.
Section 2.2 Form of Trustee's Certificate of Authentication.
The Trustee's certificates of authentication shall be in
substantially the following form:
This is one of the Securities of the series designated
therein referred to in the within-mentioned Indenture.
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[Trustee Name]
As Trustee
By:________________________________
Authorized Signatory
Section 2.3 Securities in Global Form.
If Securities of a series are issuable in global form, as
specified as contemplated by Section 3.1, then, notwithstanding clause (10)
of Section 3.1 and the provisions of Section 3.2, any such Security shall
represent such of the Outstanding Securities of such series as shall be
specified therein and may provide that it shall represent the aggregate
amount of Outstanding Securities from time to time endorsed thereon and
that the aggregate amount of Outstanding Securities represented thereby may
from time to time be reduced to reflect exchanges. Any endorsement of a
Security in global form to reflect the amount, or any increase or decrease
in the amount, of Outstanding Securities represented thereby shall be made
by the Trustee in such manner and upon instructions given by such Person or
Persons as shall be specified therein or in the Company Order to be
delivered to the Trustee pursuant to Section 3.3 or Section 3.4; provided,
that such endorsement shall be made by the Common Depository with respect
to temporary global securities in bearer form. Subject to the provisions of
Section 3.3 and, if applicable, Section 3.4, the Trustee shall deliver and
redeliver any Security in permanent global form in the manner and upon
instructions given by the Person or Persons specified therein or in the
applicable Company Order. If a Company Order pursuant to Section 3.3 or 3.4
has been, or simultaneously is, delivered, any instructions by the Company
with respect to endorsement or delivery or redelivery of a Security in
global form shall be in writing but need not comply with Section 1.2 and
need not be accompanied by an Opinion of Counsel.
The provisions of the last sentence of Section 3.3 shall
apply to any Security represented by a Security in global form if such
Security was never issued and sold by the Company and the Company delivers
to the Trustee the Security in global form together with written
instructions (which need not comply with Section 1.2 and need not be
accompanied by an Opinion of Counsel) with regard to the reduction in the
principal amount of Securities represented thereby, together with the
written statement contemplated by the last sentence of Section 3.3.
Notwithstanding the provisions of Sections 2.1 and 3.7,
unless otherwise specified as contemplated by Section 3.1, payment of
principal of and any premium and interest on any Security in permanent
global form shall be made to the Person or Persons specified therein.
Notwithstanding the provisions of Section 3.8 and except
as provided in the preceding paragraph, the Company, the Trustee and any
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agent of the Company and the Trustee shall treat a person as the Holder of
such principal amount of Outstanding Securities represented by a permanent
Book-Entry Security as shall be specified in a written statement of the
Holder of such permanent Book-Entry Security or, in the case of a permanent
Book-Entry Security in bearer form, of Euroclear or Cedel and produced to
the Trustee by such Person.
ARTICLE III
The Securities
Section 3.1 Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There
shall be established in or pursuant to a Board Resolution and, subject to
Section 3.3, set forth, or determined in the manner provided, in an
Officers' Certificate, or established in one or more indentures
supplemental hereto, prior to the issuance of Securities of any series;
(1) the title of the Securities of the series (which
shall distinguish the Securities of the series from Securities of
any other series);
(2) any limit upon the aggregate principal amount of the
Securities of the series which may be authenticated and delivered
under this Indenture (except for Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or
in lieu of, other Securities of the series pursuant to Section
3.4, 3.5, 3.6, 9.6 or 11.7 and except for any Securities which,
pursuant to Section 3.3, are deemed never to have been
authenticated and delivered hereunder);
(3) whether Securities of the series are to be issuable
as Registered Securities, Bearer Securities or both, whether any
Securities of the series are to be issuable initially in temporary
global form and whether any Securities of the series are to be
issuable in permanent global form with or without coupons and, if
so, (i) whether beneficial owners of interests in any such
permanent Book-Entry Security may exchange such interests for
Securities of such series and of like tenor of any authorized form
and denomination and the circumstances under which any such
exchanges may occur, if other than in the manner provided in
Section 3.5, and (ii) the name of the Common Depository or the
Depository, as the case may be, with respect to any Book-Entry
Security;
(4) the Person to whom any interest on any Registered
Security of the series shall be payable, if other than the Person
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in whose name that Security (or one or more Predecessor Securities)
is registered at the close of business on the Regular Record Date
for such interest, the manner in which, or the Person to whom,
any interest on any Bearer Security of the series shall be payable,
if otherwise than upon presentation and surrender of the coupons
appertaining thereto as they severally mature, and the extent to
which, or the manner in which, any interest payable on a temporary
Book-Entry Security on an Interest Payment Date will be paid if
other than in the manner provided in Section 3.4;
(5) the date or dates on which the principal of the
Securities of the series is payable and whether such date or dates
may be extended at the option of the Company;
(6) the rate or rates at which the Securities of the
series shall bear interest, if any, or the method of calculating
such rate or rates of interest, the date or dates from which such
interest shall accrue, the Interest Payment Dates on which any
such interest shall be payable and the Regular Record Date for any
interest payable on any Interest Payment Date;
(7) whether the interest rate or interest rate formula,
as the case may be, for Securities of the series may be reset at
the option of the Company and, if so, the date or dates on which
such interest rate or interest rate formula, as the case may be,
may be reset;
(8) the place or places where, subject to the provisions
of Section 10.2, the principal of and any premium and interest on
Securities of the series shall be payable, any Registered
Securities of the series may be surrendered for registration of
transfer, Securities of the series may be surrendered for exchange
and notices and demands to or upon the Company in respect of the
Securities of the series and this Indenture may be served;
(9) the period or periods within which, the price or
prices at which and the terms and conditions upon which Securities
of the series may be redeemed, in whole or in part, at the option
of the Company;
(10) the obligation, if any, of the Company to redeem,
purchase or repay Securities of the series pursuant to any sinking
fund or analogous provisions or at the option of a Holder thereof
and the period or periods within which, the price or prices at
which and the terms and conditions upon which Securities of the
series shall be redeemed, purchased or repaid, in whole or in
part, pursuant to such obligation;
(11) the denominations in which any Registered Securities
of the series shall be issuable, if other than denominations of
$1,000 and any integral multiple thereof, and the denomination or
denominations in which any Bearer Securities of the series shall
be issuable, if other than the denomination of $5,000;
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(12) the currency, currencies or currency units in which
payment of the principal of and any premium and interest on any
Securities of the series shall be payable if other than the
currency of the United States of America and the manner of
determining the equivalent thereof in the currency of the United
States of America for purposes of the definition of "Outstanding"
in Section 1.1;
(13) if the amount of payments of principal of or any
premium or interest on any Securities of the series may be
determined with reference to an index or formula, the manner in
which such amounts shall be determined;
(14) if the principal of or any premium or interest on
any Securities of the series is to be payable, at the election of
the Company or a Holder thereof, in one or more currencies or
currency units other than that or those in which the Securities
are stated to be payable, the currency, currencies or currency
units in which payment of the principal of and any premium and
interest on Securities of such series as to which such election is
made shall be payable, and the periods within which and the terms
and conditions upon which such election is to be made;
(15) the application, if any, of Section 13.2 or 13.3 to
the Securities of any series;
(16) whether the Securities of the series shall be issued
in whole or in part in the form of one or more Book-Entry
Securities and, in such case, the Common Depository or Depository
with respect to such Book-Entry Security or Securities and the
circumstances under which any Book-Entry Security may be
registered for transfer or exchange, or authenticated and
delivered, in the name of a Person other than such Common
Depository or Depository or their respective nominees, if other
than as set forth in Section 3.5;
(17) if other than the principal amount thereof, the
portion of the principal amount of Securities of the series which
shall be payable upon declaration of acceleration of the Maturity
thereof pursuant to Section 5.2; and
(18) any other terms of the series (which terms shall not
be inconsistent with the provisions of this Indenture).
All Securities of any one series and the coupons
appertaining to any Bearer Securities of such series shall be substantially
identical except, in the case of Registered Securities, as to denomination
and except as may otherwise be provided in or pursuant to the Board
Resolution referred to above and (subject to Section 3.3) set forth, or
determined in the manner provided, in the Officers' Certificate referred to
above or in any such indenture supplemental hereto.
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If any of the terms of the series are established by
action taken pursuant to a Board Resolution, a copy of an appropriate
record of such action shall be certified by the Secretary or an Assistant
Secretary of the Company and delivered to the Trustee at or prior to the
delivery of the Officers' Certificate setting forth the terms of the
series.
Section 3.2 Denominations.
Unless otherwise provided as contemplated by Section 3.1,
with respect to the Securities of any series, the Registered Securities of
a series shall be issuable in denominations of $1,000 and any integral
multiple thereof and any Bearer Securities of a series shall be issuable in
the denomination of $5,000.
Section 3.3 Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company
by its Chairman of the Board, its President or one of its Vice Presidents,
under its corporate seal reproduced thereon attested by its Secretary or
one of its Assistant Secretaries. The signature of any of these officers on
the Securities or coupons may be manual or facsimile.
Securities and coupons bearing the manual or facsimile
signatures of individuals who were at any time the proper officers of the
Company shall bind the Company, notwithstanding that such individuals or
any of them have ceased to hold such offices prior to the authentication
and delivery of such Securities or did not hold such offices at the date of
such Securities.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities of any
Series executed by the Company to the Trustee for authentication, together
with a Company Order for the authentication and delivery of such
Securities, and the Trustee in accordance with the Company Order shall
authenticate and deliver such Securities, provided, however, that, in
connection with its original issuance, no Bearer Security shall be mailed
or otherwise delivered to any location in the United States; and provided,
further, that a Bearer Security may be delivered in connection with its
original issuance only if the Person entitled to receive such Bearer
Security shall have furnished a certificate in the form set forth in
Exhibit B.1 to this Indenture, dated no earlier than 15 days prior to the
earlier of the date on which such Bearer Security is delivered and the date
on which any temporary Security first becomes exchangeable for such Bearer
Security in accordance with the terms of such temporary Security and this
Indenture. If any Security shall be represented by a permanent global
Bearer Security, then, for purposes of this Section and Section 3.4, the
notation of a beneficial owner's interest therein upon original issuance of
such Security or upon exchange of a portion of a temporary Book-Entry
Security shall be deemed to be delivery in connection with its original
issuance of such beneficial owner's interest in such permanent Book-Entry
Security. Except as permitted by Section 3.4 or 3.6, the Trustee shall not
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authenticate and deliver any Bearer Security unless all appurtenant coupons
for interest then matured have been detached and canceled.
If the form or terms of the Securities of the series have
been established in or pursuant to one or more Board Resolutions as
permitted by Sections 2.1 and 3.1, in authenticating such Securities, and
accepting the additional responsibilities under this Indenture in relation
to such Securities, the Trustee shall be entitled to receive, and (subject
to Section 6.1) shall be fully protected in relying upon, an Opinion of
Counsel stating,
(a) if the form of such Securities has been established
by or pursuant to Board Resolution as permitted by Section 2.1, that such
form has been established in conformity with the provisions of this
Indenture;
(b) if the terms of such Securities have been established
by or pursuant to Board Resolution as permitted by Section 3.1, that such
terms have been established in conformity with the provisions of this
Indenture; and
(c) that such Securities, when authenticated and
delivered by the Trustee and issued by the Company in the manner and
subject to any conditions specified in such Opinion of Counsel, will
constitute valid and legally binding obligations of the Company enforceable
in accordance with their terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
equity principles.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 3.1 and of the
immediately preceding paragraph, if all Securities of a series are not to
be originally issued at one time, it shall not be necessary to deliver the
Officers' Certificate otherwise required pursuant to Section 3.1 or the
Company Order and Opinion of Counsel otherwise required pursuant to such
preceding paragraph at or prior to the time of authentication of each
Security of such series if such documents are delivered at or prior to the
authentication upon original issuance of the first Security of such series
to be issued.
Unless otherwise provided for in the form of Security,
each Registered Security shall be dated the date of its authentication, and
each Bearer Security and any temporary Bearer Security in global form shall
be dated as of the date of original issuance of the first Security of such
series to be issued.
No Security shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on
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such Security a certificate of authentication substantially in the form
provided for herein executed by the Trustee by manual signature, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder. Notwithstanding the foregoing, if any Security shall have been
authenticated and delivered hereunder but never issued and sold by the
Company, and the Company shall deliver such Security to the Trustee for
cancellation as provided in Section 3.9, for all purposes of this Indenture
such Security shall be deemed never to have been authenticated and
delivered hereunder and shall never be entitled to the benefits of this
Indenture.
Section 3.4 Temporary Securities.
Pending the preparation of definitive Securities of any
series, the Company may execute, and upon Company Order the Trustee shall
authenticate and deliver, temporary Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any
authorized denomination, substantially of the tenor of the definitive
Securities in lieu of which they are issued, in registered form or, if
authorized in bearer form with one or more coupons or without coupons, and
with such appropriate insertions, omissions, substitutions and other
variations as the officers executing such Securities may determine, as
evidenced by their execution of such Securities. In the case of any series
issuable as Bearer Securities, such temporary Securities may be in global
form.
Except in the case of temporary Securities in global form
(which shall be exchanged in accordance with the provisions of the
following paragraphs), if temporary Securities of any series are issued,
the Company will cause definitive Securities of that series to be prepared
without unreasonable delay. After the preparation of definitive Securities
of such series, the temporary Securities of such series shall be
exchangeable for definitive Securities of such series upon surrender of the
temporary Securities of such series at the office or agency of the Company
in a Place of Payment for that series, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Securities of any
series (accompanied by any unmatured coupons appertaining thereto) the
Company shall execute and the Trustee shall authenticate and deliver in
exchange therefor one or more definitive Securities of the same series, of
any authorized denominations and of the same Stated Maturity and aggregate
principal amount and of like tenor, provided, however, that no definitive
Bearer Security shall be delivered in exchange for a temporary Registered
Security; and provided, further, that a definitive Bearer Security shall be
delivered in exchange for a temporary Bearer Security only in compliance
with the conditions set forth in Section 3.3. Until so exchanged the
temporary Securities of any series shall in all respects be entitled to the
same benefits under this Indenture as definitive Securities of such series
and tenor.
If temporary Securities of any series are issued in
global form, any such temporary Book-Entry Security shall, unless otherwise
provided therein, be delivered to the London office of a depositary or
common depositary (the "Common Depositary"), for the benefit of Euroclear
and Cedel, for credit to the respective accounts of the beneficial owners
of such Securities (or to such other accounts as they may direct).
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Without unnecessary delay but in any event not later than
the date specified in, or determined pursuant to the terms of, any such
temporary Book-Entry Security (the "Exchange Date"), the Company shall
deliver to the Trustee definitive Securities, in aggregate principal amount
equal to the principal amount of such temporary Book-Entry Security, or, if
so specified as contemplated by Section 3.1, a permanent Book-Entry
Security, in either case, executed by the Company. On or after the Exchange
Date such temporary Book-Entry Security shall be surrendered by the Common
Depositary to the Trustee, as the Company's agent for such purpose, to be
exchanged, in whole or from time to time in part, for definitive Securities
without charge and the Trustee shall authenticate and deliver, in exchange
for each portion of such temporary Book-Entry Security, an equal aggregate
principal amount of definitive Securities of the same series of authorized
denominations and of like tenor as the portion of such temporary Book-Entry
Security to be exchanged. The definitive Securities to be delivered in
exchange for any such temporary Book-Entry Security shall be in definitive
bearer form, definitive registered form, permanent global bearer form or
permanent global registered form, or any combination thereof, as specified
as contemplated by Section 3.1, and, if any combination thereof is so
specified, as requested by the beneficial owner thereof; provided, however,
that, unless otherwise specified in such temporary Book-Entry Security,
upon such presentation by the Common Depository, such temporary Book-Entry
Security is accompanied by a certificate dated the Exchange Date or a
subsequent date and signed by Euroclear as to the portion of such temporary
Book-Entry Security held for its account then to be exchanged and a
certificate dated the Exchange Date or a subsequent date and signed by
Cedel as to the portion of such temporary Book-Entry Security held for its
account then to be exchanged, each in the form set forth in Exhibit B.2 to
this Indenture; and provided, further, that definitive Bearer Securities
shall be delivered in exchange for a portion of a temporary Book-Entry
Security only in compliance with the requirements of Section 3.3.
Unless otherwise specified in such temporary Book-Entry
Security, the interest of a beneficial owner of Securities of a series in a
temporary Book-Entry Security shall be exchanged for definitive Securities
of the same series and of like tenor following the Exchange Date when the
account holder instructs Euroclear or Cedel, as the case may be, to request
such exchange on his behalf and delivers to Euroclear or Cedel, as the case
may be, a certificate in the form set forth in Exhibit B.1 to this
Indenture, dated no earlier than 15 days prior to the Exchange Date, copies
of which certificate shall be available from the offices of Euroclear and
Cedel, the Trustee, any Authenticating Agent appointed for such series of
Securities and each Paying Agent. Unless otherwise specified in such
temporary Book-Entry Security, any such exchange shall be made free of
charge to the beneficial owners of such temporary Book-Entry Security,
except that a Person receiving definitive Securities must bear the cost of
insurance, postage, transportation and the like in the event that such
Person does not take delivery of such definitive Securities in person at
the offices of Euroclear or Cedel Definitive Securities in bearer form to
be delivered in exchange for any portion of a temporary Book-Entry Security
shall be delivered only outside the United States.
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Until exchanged in full as hereinabove provided, the
temporary Securities of any series shall in all respects be entitled to the
same benefits under this Indenture as definitive Securities of the same
series and of like tenor authenticated and delivered hereunder, except
that, unless otherwise specified as contemplated by Section 3.1, interest
payable on a temporary Book-Entry Security on an Interest Payment Date for
Securities of such series occurring prior to the applicable Exchange Date
shall be payable to Euroclear and Cedel on such Interest Payment Date upon
delivery by Euroclear and Cedel to the Trustee of a certificate or
certificates in the form set forth in Exhibit B.3 to this Indenture, for
credit without further interest on or after such Interest Payment Date to
the respective accounts of the Persons who are the beneficial owners of
such temporary Book-Entry Security on such Interest Payment Date and who
have each delivered to Euroclear or Cedel, as the case may be, a
certificate in the form set forth in Exhibit B.4 to this Indenture. Any
interest so received by Euroclear and Cedel and not paid as herein provided
shall be returned to the Trustee immediately prior to the expiration of two
years after such Interest Payment Date in order to be repaid to the Company
in accordance with Section 10.3.
Section 3.5 Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust
Office of the Trustee a register (the register maintained in such office
and in any other office or agency of the Company in a Place of Payment
being herein sometimes collectively referred to as the "Security Register")
in which, subject to such reasonable regulations as it may prescribe, the
Company shall provide for the registration of Registered Securities and of
transfers of Registered Securities. The Trustee is hereby appointed
"Security Registrar" for the purpose of registering Securities and
transfers of Securities as herein provided.
Upon surrender for registration of transfer of any
Registered Security of any series at the office or agency in a Place of
Payment for that series as designated pursuant to Section 10.2, the Company
shall execute, and the Trustee shall authenticate and make available for
delivery, in the name of the designated transferee or transferees, one or
more new Registered Securities of the same series, of any authorized
denominations and of the same Stated Maturity and aggregate principal
amount and of like tenor.
At the option of the Holder, Registered Securities of any
series may be exchanged for other Registered Securities of the same series,
of any authorized denominations and of the same Stated Maturity and
aggregate principal amount and of like tenor, upon surrender of the
Securities to be exchanged at such office or agency. Whenever any
Securities are so surrendered for exchange, the Company shall execute, and
the Trustee shall authenticate and deliver, the Securities which the Holder
making the exchange is entitled to receive. Except as otherwise specified
as contemplated by Section 3.1, Bearer Securities may not be issued in
exchange for Registered Securities.
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At the option of the Holder, Bearer Securities of any
series may be exchanged for Registered Securities of the same series of any
authorized denominations and of a like aggregate principal amount and
tenor, upon surrender of the Bearer Securities to be exchanged at any such
office or agency, with all unmatured coupons and all matured coupons in
default thereto appertaining. If the Holder of a Bearer Security is unable
to produce any such unmatured coupon or coupons or matured coupon or
coupons in default, such exchange may be effected if the Bearer Securities
are accompanied by payment in funds acceptable to the Company in an amount
equal to the face amount of such missing coupon or coupons, or the
surrender of such missing coupon or coupons may be waived by the Company
and the Trustee if there is furnished to them such security or indemnity as
they may require to save each of them and any Paying Agent harmless. If
thereafter the Holder of such Security shall surrender to any Paying Agent
any such missing coupon in respect of which such a payment shall have been
made, such Holder shall be entitled to receive the amount of such payment;
provided, however, that, except as otherwise provided in Section 10.2,
interest represented by coupons shall be payable only upon presentation and
surrender of those coupons at an office or agency located outside the
United States. Notwithstanding the foregoing, in case a Bearer Security of
any series is surrendered at any such office or agency in exchange for a
Registered Security of the same series and like tenor after the close of
business at such office or agency on (a) any Regular Record Date and before
the opening of business at such office or agency on the relevant Interest
Payment Date, or (b) any Special Record Date and before the opening of
business at such office or agency on the related proposed date for payment
of Defaulted Interest, such Bearer Security shall be surrendered without
the coupon relating to such Interest Payment Date or proposed date for
payment, as the case may be, and interest or Defaulted Interest, as the
case may be, will not be payable on such Interest Payment Date or proposed
date for payment, as the case may be, in respect of the Registered Security
issued in exchange for such Bearer Security, but will be payable only to
the Holder of such coupon when due in accordance with the provisions of
this Indenture.
Whenever any Securities are so surrendered for exchange,
the Company shall execute, and the Trustee shall authenticate and deliver,
the Securities which the Holder making the exchange is entitled to receive.
Notwithstanding the foregoing, except as otherwise
specified as contemplated by Section 3.1, any permanent Book-Entry Security
shall be exchangeable only as provided in this paragraph. If the beneficial
owners of interests in a permanent Book-Entry Security are entitled to
exchange such interests for Securities of such series and of like tenor and
principal amount of another authorized form and denomination, as specified
as contemplated by Section 3.1, then without unnecessary delay but in any
event not later than the earliest date on which such interests may be so
exchanged, the Company shall deliver to the Trustee definitive Securities
of that series in aggregate principal amount equal to the principal amount
of such permanent Book-Entry Security, executed by the Company. On or after
the earliest date on which such interests may be so exchanged, such
permanent global Securities shall be surrendered from time to time by the
Common Depository or the Depository, as the case may be, and in accordance
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with instructions given to the Trustee and the Common Depository or the
Depository, as the case may be (which instructions shall be in writing but
need not comply with Section 1.2 or be accompanied by an Opinion of
Counsel), as shall be specified in the Company Order with respect thereto
to the Trustee, as the Company's agent for such purpose, to be exchanged,
in whole or in part, for definitive Securities of the same series without
charge. The Trustee shall authenticate and make available for delivery, in
exchange for each portion of such surrendered permanent Book-Entry
Security, a like aggregate principal amount of definitive Securities of the
same series of authorized denominations and of like tenor as the portion of
such permanent Book-Entry Security to be exchanged which (unless the
Securities of the series are not issuable both as Bearer Securities and as
Registered Securities, in which case the definitive Securities exchanged
for the permanent Book-Entry Security shall be issuable only in the form in
which the Securities are issuable, as specified as contemplated by Section
3.1) shall be in the form of Bearer Securities or Registered Securities, or
any combination thereof, as shall be specified by the beneficial owner
thereof; provided, however, that no such exchanges may occur during a
period beginning at the opening of business 15 days before any selection of
Securities of that series to be redeemed and ending on the relevant
Redemption Date; and provided, further, that no Bearer Security delivered
in exchange for a portion of a permanent Book-Entry Security shall be
mailed or otherwise delivered to any location in the United States.
Promptly following any such exchange in part, such permanent Book-Entry
Security shall be returned by the Trustee to the Common Depository or the
Depository, as the case may be, or such other depositary or Common
Depository or Depository referred to above in accordance with the
instructions of the Company referred to above. If a Registered Security is
issued in exchange for any portion of a permanent Book-Entry Security after
the close of business at the office or agency where such exchange occurs on
(a) any Regular Record Date and before the opening of business at such
office or agency on the relevant Interest Payment Date, or (b) any Special
Record Date and before the opening of business at such office or agency on
the related proposed date for payment of interest or Defaulted Interest, as
the case may be, such interest or Defaulted Interest will not be payable on
such Interest Payment Date or proposed date for payment, as the case may
be, in respect of such Registered Security, but will be payable on such
Interest Payment Date or proposed date for payment, as the case may be,
only to the Person to whom interest in respect of such portion of such
permanent Book-Entry Security is payable in accordance with the provisions
of this Indenture.
All Securities issued upon any registration of transfer
or exchange of Securities shall be the valid obligations of the Company,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Securities surrendered upon such registration of transfer
or exchange.
Every Registered Security presented or surrendered for
registration of transfer or for exchange shall (if so required by the
Company or the Trustee) be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
Registrar duly executed, by the Holder thereof or his attorney duly
authorized in writing.
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No service charge shall be made for any registration of
transfer or exchange of Securities, but the Company may require payment of
a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of
Securities, other than exchanges pursuant to Section 3.4, 9.6 or 11.7 not
involving any transfer.
The Company shall not be required (a) to issue, register
the transfer of or exchange Securities of any series during a period
beginning at the opening of business 15 days before any selection of
Securities of that series to be redeemed and ending at the close of
business on (i) if Securities of the series are issuable only as Registered
Securities, the day of the mailing of the relevant notice of redemption and
(ii) if Securities of the series are issuable as Bearer Securities, the day
of the first publication of the relevant notice of redemption or, if
Securities of the series are also issuable as Registered Securities and
there is no publication, the mailing of the relevant notice of redemption,
or (b) to register the transfer of or exchange any Registered Security so
selected for redemption, in whole or in part, except the unredeemed portion
of any Security being redeemed in part, or (c) to exchange any Bearer
Security so selected for redemption except that such a Bearer Security may
be exchanged for a Registered Security of that series and like tenor,
provided that such Registered Security shall be simultaneously surrendered
for redemption.
Section 3.6 Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security or a Security with a mutilated
coupon appertaining to it is surrendered to the Trustee, the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor
a new Security of the same series and of like tenor and principal amount
and bearing a number not contemporaneously outstanding, with coupons
corresponding to the coupons, if any, appertaining to the surrendered
Security.
If there shall be delivered to the Company and the
Trustee (i) evidence to their satisfaction of the destruction, loss or
theft of any Security or coupon and (ii) such security or indemnity as may
be required by them to save each of them and any agent of either of them
harmless, then, in the absence of notice to the Company or the Trustee that
such Security or coupon has been acquired by a bona fide purchaser, the
Company shall execute and the Trustee shall authenticate and deliver, in
lieu of any such destroyed, lost or stolen Security or in exchange for the
Security to which a destroyed, lost or stolen coupon appertains (with all
appurtenant coupons not destroyed, lost or stolen), a new Security of the
same series and of the same Stated Maturity and aggregate principal amount
and of like tenor and bearing a number not contemporaneously outstanding,
with coupons corresponding to the coupons, if any, appertaining to such
destroyed, lost or stolen Security or to the Security to which such
destroyed, lost or stolen coupon appertains.
In case any such mutilated, destroyed, lost or stolen
Security or coupon has become or is about to become due and payable, the
Company in its discretion may, instead of issuing a new Security, pay such
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Security or coupon; provided, however, that the principal of (and premium,
if any) and any interest on Bearer Securities shall, except as otherwise
provided in Section 10.2, be payable only at an office or agency located
outside the United States and, unless otherwise specified as contemplated
by Section 3.1, any interest on Bearer Securities shall be payable only
upon presentation and surrender of the coupons appertaining thereto.
Upon the issuance of any new Security under this Section,
the Company may require the payment by the holder of such mutilated,
destroyed, lost or stolen Security of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Trustee) connected
therewith.
Every new Security of any series, with its coupons, if
any, issued pursuant to this Section in lieu of any destroyed, lost or
stolen Security or in exchange for a Security to which a destroyed, lost or
stolen coupon appertains, shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost
or stolen Security and its coupons, if any, or the destroyed, lost or
stolen coupon shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately
with any and all other Securities of that series and their coupons, if any,
duly issued hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect
to the replacement or payment of mutilated, destroyed, lost or stolen
Securities or coupons.
Section 3.7 Payment of Interest; Interest Rights Preserved.
Except as otherwise provided as contemplated by Section
3.1 with respect to any series of Securities, interest on any Registered
Security which is payable, and is punctually paid or duly provided for, on
any Interest Payment Date shall be paid to the Person in whose name that
Security (or one or more Predecessor Securities) is registered at the close
of business on the Regular Record Date for such interest.
Any interest on any Registered Security of any series
which is payable, but is not punctually paid or duly provided for, on any
Interest Payment Date (herein called "Defaulted Interest") shall forthwith
cease to be payable to the Holder on the relevant Regular Record Date by
virtue of having been such Holder, and such Defaulted Interest may be paid
by the Company, at its election in each case, as provided in Clause (1) or
(2) below:
(1) The Company may elect to make payment of any
Defaulted Interest to the Persons in whose names the Registered
Securities of such series (or their respective Predecessor
Securities) are registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify
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the Trustee in writing of the amount of Defaulted Interest proposed
to be paid on each Registered Security of such series and the date
of the proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of money equal to the aggregate
amount proposed to be paid in respect of such Defaulted Interest
or shall make arrangements satisfactory to the Trustee for such
deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled
to such Defaulted Interest as in this Clause provided. Thereupon
the Trustee shall fix a Special Record Date for the payment of
such Defaulted Interest which shall be not more than 15 days and
not less than 10 days prior to the date of the proposed payment
and not less than 10 days after the receipt by the Trustee of the
notice of the proposed payment. The Trustee shall promptly notify
the Company of such Special Record Date and, in the name and at
the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date
therefor to be mailed, first-class postage prepaid, to each Holder
of Registered Securities of such series at his address as it appears
in the Security Register, not less than 10 days prior to such Special
Record Date. Notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor having been so mailed, such
Defaulted Interest shall be paid to the Persons in whose names the
Registered Securities of such series (or their respective Predecessor
Securities) are registered at the close of business on such Special
Record Date and shall no longer be payable pursuant to the
following Clause (2).
(2) The Company may make payment of any Defaulted
Interest on the Securities of any series in any other lawful
manner not inconsistent with the requirements of any securities
exchange on which such Securities may be listed, and upon such
notice as may be required by such exchange, if, after notice given
by the Company to the Trustee of the proposed payment pursuant to
this Clause, such manner of payment shall be deemed practicable by
the Trustee.
Subject to the foregoing provisions of this Section, each
Security delivered under this Indenture upon registration of transfer of or
in exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such
other Security.
Section 3.8 Persons Deemed Owners.
Except as otherwise provided in Section 2.3, prior to due
presentment of a Registered Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Registered Security is registered as the
owner of such Registered Security for the purpose of receiving payment of
principal of and any premium and (subject to Sections 3.5 and 3.7) any
interest on such Registered Security and for all other purposes whatsoever,
whether or not such Registered Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
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Title to any Bearer Security and any coupons appertaining
thereto shall pass by delivery. Except as otherwise provided in Section
2.3, the Company, the Trustee and any agent of the Company or the Trustee
may treat the bearer of any Bearer Security and the bearer of any coupon as
the absolute owner of such Security or coupon for the purpose of receiving
payment thereof or on account thereof and for all other purposes
whatsoever, whether or not such Security or coupon be overdue, and neither
the Company, the Trustee nor any agent of the Company or the Trustee shall
be affected by notice to the contrary.
Section 3.9 Cancellation.
All Securities and coupons surrendered for payment,
redemption, registration of transfer or exchange or for credit against any
sinking fund payment shall, if surrendered to any Person other than the
Trustee, be delivered to the Trustee and shall be promptly cancelled by it.
The Company may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder which the
Company may have acquired in any manner whatsoever, and may deliver to the
Trustee (or to any other Person for delivery to the Trustee) for
cancellation any Securities previously authenticated hereunder which the
Company has not issued and sold, and all Securities so delivered shall be
promptly cancelled by the Trustee. No Securities shall be authenticated in
lieu of or in exchange for any Securities cancelled as provided in this
Section, except as expressly permitted by this Indenture. All cancelled
Securities and coupons held by the Trustee shall be destroyed by the
Trustee and the Trustee shall deliver a certification of destruction to the
Company quarterly.
Section 3.10 Computation of Interest.
Except as otherwise specified as contemplated by Section
3.1 for Securities of any series, interest on the Securities of each series
shall be computed on the basis of a 360-day year of twelve 30-day months.
Section 3.11 CUSIP Numbers.
The Company in issuing the Securities may use "CUSIP"
numbers (if then generally in use), and, if so, the Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to Holders;
provided, however, that any such notice may state that no representation is
made as to the correctness of such numbers either as printed on the
Securities or as contained in any notice of a redemption and that reliance
may be placed only on the other identification numbers printed on the
Securities, and any such redemption shall not be affected by any defect in
or omission of such numbers.
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ARTICLE IV
Satisfaction and Discharge
Section 4.1 Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of
further effect (except as to any surviving rights of registration of
transfer or exchange of Securities herein expressly provided for), and the
Trustee, at the expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and
delivered (other than (i) coupons appertaining to Bearer
Securities surrendered for exchange for Registered Securities and
maturing after such exchange, whose surrender is not required or
has been waived as provided in Section 3.5, (ii) Securities and
coupons which have been destroyed, lost or stolen and which have
been replaced or paid as provided in Section 3.6, (iii) coupons
appertaining to Securities called for redemption and maturing
after the relevant Redemption Date, whose surrender has been
waived as provided in Section 11.6, and (iv) Securities and
coupons for whose payment money has theretofore been deposited in
trust or segregated and held in trust by the Company and
thereafter repaid to the Company or discharged from such trust, as
provided in Section 10.3) have been delivered to the Trustee for
cancellation; or
(B) all such Securities and, in the case of clauses (i)
and (ii) below, any coupons appertaining thereto, not theretofore
delivered to the Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated
Maturity within one year, or
(iii) are to be called for redemption within one
year under arrangements satisfactory to the Trustee for
the giving of notice of redemption by the Trustee in the
name, and at the expense, of the Company,
and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust
funds in trust for the purpose an amount sufficient to pay and
discharge the entire indebtedness on such Securities and coupons
not theretofore delivered to the Trustee for cancellation, for
principal and any premium and interest to the date of such deposit
(in the case of Securities which have become due and payable) or
to the Stated Maturity or Redemption Date, as the case may be;
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(2) the Company has paid or caused to be paid all other
sums payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture have been complied
with.
Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Company to the Trustee under Section 6.7,
the respective obligations of the Company and the Trustee to any
Authenticating Agent under Section 6.14 and, if money shall have been
deposited with the Trustee pursuant to subclause (B) of clause (1) of this
Section, the obligations of the Trustee under Section 4.2 and the last
paragraph of Section 10.3 shall survive.
Section 4.2 Application of Trust Money.
Subject to provisions of the last paragraph of Section
10.3, all money deposited with the Trustee pursuant to Section 4.1 shall be
held in trust and applied by it, in accordance with the provisions of the
Securities and this Indenture, to the payment, either directly or through
any Paying Agent (including the Company acting as its own Paying Agent) as
the Trustee may determine, to the Persons entitled thereto, of the
principal and any premium and interest for whose payment such money has
been deposited with the Trustee.
ARTICLE V
Remedies
Section 5.1 Events of Default.
"Event of Default," wherever used herein with respect to
Securities of any series, means any one of the following events (whatever
the reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(1) default in the payment of any interest upon any
Security of that series when it becomes due and payable, and
continuance of such default for a period of 30 days; or
(2) default in the payment of the principal of (or
premium, if any, on) any Security of that series when it becomes
due and payable, and continuance of such default for a period of
10 days; or
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(3) default in the deposit of any sinking fund or other
payment required pursuant to the terms of a Security of that
Series as established by or pursuant to a Board Resolution as
permitted by Section 3.1(8), when and as due by the terms of a
Security of that series and continuance of such default for a
period of 10 days; or
(4) default in the performance, or breach, of any
covenant or warranty of the Company in this Indenture (other than
a covenant or warranty a default in whose performance or whose
breach is elsewhere in this Section specifically dealt with or
which has expressly been included in this Indenture solely for the
benefit of series of Securities other than that series, provided
that for purposes of this clause (4) any covenant or agreement on
the part of the Company contained in this Indenture which is not
limited to a series of Securities shall be in respect of all
series of Securities), and continuance of such default or breach
for a period of 90 days after there has been given, by registered
or certified mail, to the Company by the Trustee or to the Company
and the Trustee by the Holder or Holders of at least 25% in
principal amount of the Outstanding Securities of that series a
written notice specifying such default or breach and requiring it
to be remedied and stating that such notice is a "Notice of
Default" hereunder; or
(5) the entry by a court having jurisdiction in the
premises of (A) a decree or order for relief in respect of the
Company in an involuntary case or proceeding under any applicable
Federal or State bankruptcy, insolvency, reorganization or other
similar law or (B) a decree or order adjudging the Company a
bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of
or in respect of the Company under any applicable Federal or State
law, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the Company or
of any substantial part of its property, or ordering the winding
up or liquidation of its affairs, and the continuance of any such
decree or order for relief or any such other decree or order
unstayed and in effect for a period of 60 consecutive days; or
(6) the commencement by the Company of a voluntary case
or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or of any other
case or proceeding to be adjudicated a bankrupt or insolvent, or
the consent by it to the entry of a decree or order for relief in
respect of the Company in an involuntary case or proceeding under
any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or to the commencement of any
bankruptcy or insolvency case or proceeding against it, or the
filing by it of a petition or answer or consent seeking
reorganization or relief under any applicable Federal or State
law, or the consent by it to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar
official of the Company or of any substantial part of its
property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to
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pay its debts generally as they become due, or the taking of
corporate action by the Company in furtherance of any such action;
(7) any event which constitutes an "Event of Default"
under the terms governing Securities of that series established as
provided in Section 3.1.
Section 5.2 Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Securities of any
series at the time Outstanding occurs and is continuing, then in every such
case the Trustee or the Holder or Holders of not less than 25% in principal
amount of the Outstanding Securities of that series may declare the
principal amount (or, if any of the Securities of that series are Original
Issue Discount Securities, such portion of the principal amount of such
Securities as may be specified in the terms thereof) of all of the
Securities of that series to be due and payable immediately, by a notice in
writing to the Company (and to the Trustee if given by Holders), and upon
any such declaration such principal amount (or specified amount) shall
become immediately due and payable.
At any time after such a declaration of acceleration with
respect to Securities of any series has been made and before a judgment or
decree for payment of the money due has been obtained by the Trustee as
hereinafter in this Article provided, the Holders of a majority in
principal amount of the Outstanding Securities of that series, by written
notice to the Company and the Trustee, may rescind and annul such
declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Securities of that
series,
(B) the principal of (and premium, if any, on)
any Securities of that series which have become due
otherwise than by such declaration of acceleration and
any interest thereon at the rate or rates prescribed
therefor in such Securities,
(C) to the extent that payment of such interest
is lawful, interest upon overdue interest at the rate or
rates prescribed therefor in such Securities, and
(D) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel;
and
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(2) all Events of Default with respect to Securities of
that series, other than the non-payment of the principal of
Securities of that series which have become due solely by such
declaration of acceleration, have been cured or waived as provided
in Section 5.13.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Section 5.3 Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company covenants that if
(1) default is made in the payment of any interest on any
Security when such interest becomes due and payable and such
default continues for a period of 30 days, or
(2) default is made in the payment of the principal of
(or premium, if any, on) any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of
the Holders of such Securities and coupons, the whole amount then due and
payable on such Securities and coupons for principal and any premium and
interest and, to the extent that payment of such interest shall be legally
enforceable, interest on any overdue principal and premium and on any
overdue interest, at the rate or rates prescribed therefor in such
Securities, and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel.
If an Event of Default with respect to Securities of any
series occurs and is continuing, the Trustee may in its discretion proceed
to protect and enforce its rights and the rights of the Holders of
Securities of such series by such appropriate judicial proceedings as the
Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to
enforce any other proper remedy.
Section 5.4 Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the
Company (or any other obligor upon the Securities), its property or its
creditors, the Trustee shall be entitled and empowered, by intervention in
such proceeding or otherwise, to take any and all actions authorized under
the Trust Indenture Act in order to have claims of the Holders and the
Trustee allowed in any such proceeding. In particular, the Trustee shall be
authorized to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same; and any
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custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel, and any other amounts due the Trustee under Section
6.7.
No provision of this Indenture shall be deemed to
authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof or
to authorize the Trustee to vote in respect of the claim of any Holder in
any such proceeding.
Section 5.5 Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or
the Securities may be prosecuted and enforced by the Trustee without the
possession of any of the Securities or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the
Trustee shall be brought in its own name as trustee of an express trust,
and any recovery of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, be for the ratable benefit of the Holders
of the Securities in respect of which such judgment has been recovered.
Section 5.6 Application of Money Collected.
Any money collected by the Trustee pursuant to this
Article shall be applied in the following order, at the date or dates fixed
by the Trustee and, in case of the distribution of such money on account of
principal or any premium or interest, upon presentation of the Securities
or coupons, as the case may be, and the notation thereon of the payment if
only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 6.7;
SECOND: To the payment of the amounts then due and unpaid
for principal of and any premium and interest on the Securities
and coupons in respect of which or for the benefit of which such
money has been collected, ratably, without preference or priority
of any kind, according to the amounts due and payable on such
Securities or coupons, as the case may be, for principal and any
premium and interest, respectively; and
THIRD: To the Company.
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Section 5.7 Limitation on Suits.
No Holder of any Security of any series or any related
coupons shall have any right to institute any proceeding, judicial or
otherwise, with respect to this Indenture, or for the appointment of a
receiver or trustee, or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to
the Trustee of a continuing Event of Default with respect to the
Securities of that series;
(2) the Holders of not less than 25% in principal amount
of the Outstanding Securities of that series shall have made
written request to the Trustee to institute proceedings in respect
of such Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities
to be incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute any
such proceeding; and
(5) no direction inconsistent with such written request
has been given to the Trustee during such 60-day period by the
Holders of a majority in principal amount of the Outstanding
Securities of that series;
it being understood and intended that no one or more of such Holders shall
have any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of
any other of such Holders, or to obtain or to seek to obtain priority or
preference over any other of such Holders or to enforce any right under
this Indenture, except in the manner herein provided and for the equal and
ratable benefit of all of such Holders.
Section 5.8 Unconditional Right of Holders to Receive Principal, Premium
and Interest.
Notwithstanding any other provision in this Indenture,
the Holder of any Security or coupon shall have the right, which is
absolute and unconditional, to receive payment of the principal of and any
premium and (subject to Section 3.7) any interest on such Security or
payment of such coupon on the Stated Maturity or Maturities expressed in
such Security or coupon (or, in the case of redemption, on the Redemption
Date) and to institute suit for the enforcement of any such payment, and
such rights shall not be impaired without the consent of such Holder.
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Section 5.9 Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any
proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every
such case, subject to any determination in such proceeding, the Company,
the Trustee and the Holders shall be restored severally and respectively to
their former positions hereunder and thereafter all rights and remedies of
the Trustee and the Holders shall continue as though no such proceeding had
been instituted.
Section 5.10 Rights and Remedies Cumulative.
Except as otherwise provided with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities
or coupons in the last paragraph of Section 3.6, no right or remedy herein
conferred upon or reserved to the Trustee or to the Holders is intended to
be exclusive of any other right or remedy, and every right and remedy
shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing
at law or in equity or otherwise. The assertion or employment of any right
or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 5.11 Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of
any Security or coupon to exercise any right or remedy accruing upon any
Event of Default shall impair any such right or remedy or constitute a
waiver of any such Event of Default or an acquiescence therein. Every right
and remedy given by this Article or by law to the Trustee or to the Holders
may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders, as the case may be.
Section 5.12 Control by Holders.
The Holders of a majority in principal amount of the
Outstanding Securities of any series shall have the right to direct the
time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred on the
Trustee, with respect to the Securities of such series, provided that
(1) such direction shall not be in conflict with any rule
of law or with this Indenture, and
(2) the Trustee may take any other action deemed proper
by the Trustee which is not inconsistent with such direction.
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Section 5.13 Waiver of Past Defaults.
The Holders of not less than a majority in principal
amount of the Outstanding Securities of any series may on behalf of the
Holders of all the Securities of such series waive any past default
hereunder with respect to such series and its consequences, except a
default
(1) in the payment of the principal of or any premium or
interest on any Security of such series, or
(2) in respect of a covenant or provision hereof which
under Article IX cannot be modified or amended without the consent
of the Holder of each Outstanding Security of such series
affected.
Upon any such waiver, such default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to have been
cured, for every purpose of this Indenture; but no such waiver shall extend
to any subsequent or other default or impair any right consequent thereon.
Section 5.14 Undertaking for Costs.
In any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action
taken, suffered or omitted by it as Trustee, a court may require any party
litigant in such suit to file an undertaking to pay the costs of such suit,
and may assess costs against any such party litigant, in the manner and to
the extent provided in the Trust Indenture Act; provided that neither this
Section nor the Trust Indenture Act shall be deemed to authorize any court
to require such an undertaking or to make such an assessment in any suit
instituted by the Company or the Trustee.
Section 5.15 Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully
do so) that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension
law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Indenture; and the Company
(to the extent that it may lawfully do so) hereby expressly waives all
benefit or advantage of any such law and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Trustee,
but will suffer and permit the execution of every such power as though no
such law had been enacted.
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ARTICLE VI
The Trustee
Section 6.1 Certain Duties and Responsibilities.
The duties and responsibilities of the Trustee shall be
as provided by the Trust Indenture Act. Notwithstanding the foregoing, no
provision of this Indenture shall require the Trustee to expend or risk its
own funds or otherwise incur any financial liability in the performance of
any of its duties hereunder, or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing that repayment of
such funds or adequate indemnity against such risk or liability is not
reasonably assured to it. Whether or not therein expressly so provided,
every provision of this Indenture relating to the conduct or affecting the
liability of or affording protection to the Trustee shall be subject to the
provisions of this Section.
Section 6.2 Notice of Defaults.
If a default occurs hereunder with respect to Securities
of any series, the Trustee shall give the Holders of Securities of such
series notice of such default as and to the extent provided by the Trust
Indenture Act; provided, however, that in the case of any default of the
character specified in Section 5.1(4) with respect to Securities of such
series, no such notice to Holders shall be given until at least 30 days
after the occurrence thereof. For the purpose of this Section, the term
"default" means any event which is, or after notice or lapse of time or
both would become, an Event of Default with respect to Securities of such
series.
Section 6.3 Certain Rights of Trustee.
Subject to the provisions of Section 6.1:
(a) the Trustee may rely and shall be protected in acting
or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(b) any request or direction of the Company mentioned
herein shall be sufficiently evidenced by a Company Request or Company
Order and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
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prior to taking, suffering or omitting any action hereunder, the Trustee
(unless other evidence be herein specifically prescribed) may, in the
absence of bad faith on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel of its selection
and the advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at the request
or direction of any of the Holders pursuant to this Indenture, unless such
Holders shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which might be incurred by it
in compliance with such request or direction;
(f) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit, and, if the Trustee shall determine to make
such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or
attorney; and
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney appointed
with due care by it hereunder.
Section 6.4 Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities,
except the Trustee's certificates of authentication, shall be taken as the
statements of the Company, and the Trustee or any Authenticating Agent
assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of
the Securities. The Trustee or any Authenticating Agent shall not be
accountable for the use or application by the Company of Securities or the
proceeds thereof.
Section 6.5 May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent,
any Security Registrar or any other agent of the Company, in its individual
or any other capacity, may become the owner or pledgee of Securities and
coupons and, subject to Sections 6.8 and 6.13, may otherwise deal with the
Company with the same rights it would have if it were not Trustee,
Authenticating Agent, Paying Agent, Security Registrar or such other agent.
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Section 6.6 Money Held in Trust.
Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The
Trustee shall be under no liability for interest on any money received by
it hereunder except as otherwise agreed in writing with the Company.
Section 6.7 Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time such
compensation as shall be agreed to in writing between the Company
and the Trustee for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the
Trustee in accordance with any provision of this Indenture
(including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence
or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless
against, any and all loss, liability or expense, incurred without
negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of the trust or
trusts hereunder, including the costs and expenses of defending
itself against any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder.
Section 6.8 Disqualification; Conflicting Interests.
If the Trustee has or shall acquire a conflicting
interest within the meaning of the Trust Indenture Act, the Trustee shall
either eliminate such interest or resign, to the extent and in the manner
provided by, and subject to the provisions of, the Trust Indenture Act and
this Indenture.
Section 6.9 Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which
shall be a Person that is eligible pursuant to the Trust Indenture Act to
act as such and has a combined capital and surplus of at least $50,000,000
and have an office or agency in New York, New York where Securities may be
presented for payment and for registration of transfer or exchange. If such
Person publishes reports of condition at least annually, pursuant to law or
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to the requirements of said supervising or examining authority, then for
the purposes of this Section, the combined capital and surplus of such
Person shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. If at any time the
Trustee shall cease to be eligible in accordance with the provisions of
this Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
Section 6.10 Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 6.11.
(b) The Trustee may resign at any time with respect to
the Securities of one or more series by giving written notice thereof to
the Company. If the instrument of acceptance by a successor Trustee
required by Section 6.11 shall not have been delivered to the Trustee
within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities of such
series.
(c) The Trustee may be removed at any time with respect
to the Securities of any series by Act of the Holders of a majority in
principal amount of the Outstanding Securities of such series, delivered to
the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 6.8
after written request therefor by the Company or by any Holder who
has been a bona fide Holder of a Security for at least six months,
or
(2) the Trustee shall cease to be eligible under Section
6.9 and shall fail to resign after written request therefor by the
Company or by any such Holder, or
(3) the Trustee shall become incapable of acting or shall
be adjudged a bankrupt or insolvent or a receiver of the Trustee
or of its property shall be appointed or any public officer shall
take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or
liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove
the Trustee with respect to all securities, or (ii) subject to Section
5.14, any Holder who has been a bona fide Holder of a Security for at least
six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee
with respect to all Securities and the appointment of a successor Trustee
or Trustees.
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(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Trustee
for any cause, with respect to the Securities of one or more series, the
Company, by a Board Resolution, shall promptly appoint a successor Trustee
or Trustees with respect to the Securities of that or those series (it
being understood that any such successor Trustee may be appointed with
respect to the Securities of one or more or all of such series and that at
any time there shall be only one Trustee with respect to the Securities of
any particular series) and shall comply with the applicable requirements of
Section 6.11. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee with
respect to the Securities of any Series shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities of
such series delivered to the Company and the retiring Trustee, the
successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment in accordance with the applicable requirements of Section 6.11,
become the successor Trustee with respect to the Securities of such series
and to that extent supersede the successor Trustee appointed by the
Company. If no successor Trustee with respect to the Securities of any
Series shall have been so appointed by the Company or the Holders and
accepted appointment in the manner required by Section 6.11, any Holder who
has been a bona fide Holder of a Security of such series for at least six
months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a
successor Trustee with respect to the Securities of such series.
(f) The Company shall give notice of each resignation and
each removal of the Trustee with respect to the Securities of any series
and each appointment of a successor Trustee with respect to the Securities
of any series to all Holders of Securities of such series in the manner
provided in Section 1.6. Each notice shall include the name of the
successor Trustee with respect to the Securities of such series and the
address of its Corporate Trust Office.
Section 6.11 Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor
Trustee with respect to all Securities, every such successor Trustee so
appointed shall execute, acknowledge and deliver to the Company and to the
retiring Trustee an instrument accepting such appointment, and thereupon
the resignation or removal of the retiring Trustee shall become effective
and such successor Trustee, without any further act, deed or conveyance,
shall become vested with all the rights, powers, trusts and duties of the
retiring Trustee; but, on the request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of its charges, execute
and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held
by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor
Trustee with respect to the Securities of one or more (but not all) series,
the Company, the retiring Trustee and each successor Trustee with respect
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to the Securities of one or more series shall execute and deliver an
indenture supplemental hereto wherein each successor Trustee shall accept
such appointment and which (1) shall contain such provisions as shall be
necessary or desirable to transfer and confirm to, and to vest in, each
successor Trustee all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates, (2) if the retiring Trustee
is not retiring with respect to all Securities, shall contain such
provisions as shall be deemed necessary or desirable to confirm that all
the rights, powers, trusts and duties of the retiring Trustee with respect
to the Securities of that or those series as to which the retiring Trustee
is not retiring shall continue to be vested in the retiring Trustee, and
(3) shall add to or change any of the provisions of this Indenture as shall
be necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein
or in such supplemental indenture shall constitute such Trustees
co-trustees of the same trust and that each such Trustee shall be trustee
of a trust or trusts hereunder separate and apart from any trust or trusts
hereunder administered by any other such Trustee; and upon the execution
and delivery of such supplemental indenture the resignation or removal of
the retiring Trustee shall become effective to the extent provided therein
and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee with respect to the Securities of that or
those series to which the appointment of such successor Trustee relates;
but, on request of the Company or any successor Trustee, such retiring
Trustee shall duly assign, transfer and deliver to such successor Trustee
all property and money held by such retiring Trustee hereunder with respect
to the Securities of that or those series to which the appointment of such
successor Trustee relates.
(c) Upon request of any such successor Trustee, the
Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers
and trusts referred to in paragraph (a) and (b) of this Section, as the
case may be.
(d) No successor Trustee shall accept its appointment
unless at the time of such acceptance such successor Trustee shall be
qualified and eligible under this Article.
Section 6.12 Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Trustee
shall be a party, or any corporation succeeding to all or substantially all
the corporate trust business of the Trustee, shall be the successor of the
Trustee hereunder, provided such corporation shall be otherwise qualified
and eligible under this Article, without the execution or filing of any
paper or any further act on the part of any of the parties hereto. In case
any Securities shall have been authenticated, but not delivered, by the
Trustee then in office, any successor by merger, conversion or
consolidation to such authenticating Trustee may adopt such authentication
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and deliver the Securities so authenticated with the same effect as if such
successor Trustee had itself authenticated such Securities.
Section 6.13 Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of
the Company (or any other obligor upon the Securities), the Trustee shall
be subject to the provisions of the Trust Indenture Act regarding the
collection of claims against the Company (or any such other obligor).
Section 6.14 Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents
with respect to one or more series of Securities which shall be authorized
to act on behalf of the Trustee to authenticate Securities of such series
issued upon original issue and upon exchange, registration of transfer or
partial redemption thereof or pursuant to Section 3.6, and Securities so
authenticated shall be entitled to the benefits of this Indenture and shall
be valid and obligatory for all purposes as if authenticated by the Trustee
hereunder. Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating
Agent and a certificate of authentication executed on behalf of the Trustee
by an Authenticating Agent. Each Authenticating Agent shall be acceptable
to the Company and shall at all times be a corporation organized and doing
business under the laws of the United States of America, any State thereof
or the District of Columbia, authorized under such laws to act as
Authenticating Agent, having a combined capital and surplus of not less
than $50,000,000 and subject to supervision or examination by Federal or
State authority. If such Authenticating Agent publishes reports of
condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section,
the combined capital and surplus of such Authenticating Agent shall be
deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time an Authenticating
Agent shall cease to be eligible in accordance with the provisions of this
Section, such Authenticating Agent shall resign immediately in the manner
and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be
merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which
such Authenticating Agent shall be a party, or any corporation succeeding
to the corporate agency or corporate trust business of an Authenticating
Agent, shall continue to be an Authenticating Agent, provided such
corporation shall be otherwise eligible under this Section, without the
execution or filing of any paper or any further act on the part of the
Trustee or the Authenticating Agent.
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An Authenticating Agent may resign at any time by giving
written notice thereof to the Trustee and to the Company. The Trustee may
at any time terminate the agency of an Authenticating Agent by giving
written notice thereof to such Authenticating Agent and to the Company.
Upon receiving such a notice of resignation or upon such a termination, or
in case at any time such Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section, the Trustee may appoint a
successor Authenticating Agent which shall be acceptable to the Company and
shall mail written notice of such appointment by first-class mail, postage
prepaid, to all Holders of Registered Securities of the series with respect
to which such Authenticating Agent will serve, as their names and addresses
appear in the Security Register. Any successor Authenticating Agent upon
acceptance of its appointment hereunder shall become vested with all the
rights, powers and duties of its predecessor hereunder, with like effect as
if originally named as an Authenticating Agent. No successor Authenticating
Agent shall be appointed unless eligible under the provisions of this
Section.
The Company agrees to pay to each Authenticating Agent
from time to time reasonable compensation for its services under this
Section.
If an appointment with respect to one or more series is
made pursuant to this Section, the Securities of such series may have
endorsed thereon, in addition to the Trustee's certificate of
authentication, an alternative certificate of authentication in the
following form:
This is one of the Securities of the series designated
therein referred to in the within-mentioned Indenture.
[Trustee Name]
As Trustee
By:___________________________
As Authenticating Agent
By :__________________________
Authorized Officer
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ARTICLE VII
Holders' Lists and Reports by Trustee and Company
Section 7.1 Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the
Trustee:
(a) semi-annually, not later than May 1 and November 1 in
each year, a list, in such form as the Trustee may reasonably require, of
the names and addresses of the Holders as of the preceding April 1 or
October 1, as the case may be; and
(b) at such other times as the Trustee may request in
writing, within 30 days after the receipt by the Company of any such
request, a list of similar form and content as of a date not more than 15
days prior to the time such list is furnished;
excluding from any such list names and addresses received by the Trustee in
its capacity as Security Registrar.
Section 7.2 Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as
is reasonably practicable, the names and addresses of Holders contained in
the most recent list furnished to the Trustee as provided in Section 7.1
and the names and addresses of Holders received by the Trustee in its
capacity as Security Registrar. The Trustee may destroy any list furnished
to it as provided in Section 7.1 upon receipt of a new list so furnished.
(b) The rights of the Holders to communicate with other
Holders with respect to their rights under this Indenture or under the
Securities, and the corresponding rights and privileges of the Trustee,
shall be as provided by the Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding
the same, agrees with the Company and the Trustee that neither the Company
nor the Trustee nor any agent of either of them shall be held accountable
by reason of any disclosure of information as to names and addresses of
Holders made pursuant to the Trust Indenture Act.
Section 7.3 Reports by Trustee.
(a) The Trustee shall transmit to Holders such reports
concerning the Trustee and its actions under this Indenture as may be
required pursuant to the Trust Indenture Act at the times and in the manner
provided pursuant thereto. If required by ss. 313(a) of the Trust Indenture
Act, the Trustee shall, within 60 days after each May 15 following the date
of this Indenture deliver to Holders a brief report, dated as of such May
15, which complies with the provisions of such ss. 313(a).
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(b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange
upon which any Securities are listed, with the Commission and with the
Company. The Company will promptly notify the Trustee when any Securities
are listed on any stock exchange.
Section 7.4 Reports by Company.
(a) The Company covenants and agrees to file with the
Trustee, copies within 15 days after the Company is required to file the
same with the Commission, of the annual reports and of the information,
documents and other reports (or copies of such portions of any of the
foregoing as the Commission may from time to time by rules and regulations
prescribe) which the Company may be required to file with the Commission
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of
1934; or, if the Company is not required to file information, documents or
reports pursuant to either of such sections, then to file with the Trustee
and the Commission, in accordance with rules and regulations prescribed
from time to time by the Commission, such of the supplementary and periodic
information, documents and reports, if any, which may be required pursuant
to Section 13 of the Securities Exchange Act of 1934 in respect of a
security listed and registered on a national securities exchange as may be
prescribed from time to time in such rules and regulations.
(b) The Company covenants and agrees to file with the
Trustee and the Commission, in accordance with the rules and regulations
prescribed from time to time by the Commission, such additional
information, documents and reports, if any, with respect to compliance by
the Company with the conditions and covenants provided for in this
Indenture as may be required from time to time by such rules and
regulations.
(c) The Company covenants and agrees to transmit by mail
to all Holders, as the names and addresses of such Holders appear upon the
Security Register, within 30 days after the filing thereof with the
Trustee, such summaries of information, documents and reports required to
be filed by the Company, if any, pursuant to subsections (a) and (b) of
this Section 7.4 as may be required by rules and regulations prescribed
from time to time by the Commission.
ARTICLE VIII
Consolidation, Merger, Conveyance, Transfer or Lease
Section 8.1 Company May Consolidate, Etc. Only on Certain Terms.
The Company shall not consolidate with or merge into any
other corporation or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation, and the Company shall not
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permit any corporation to consolidate with or merge into the Company or
convey, transfer or lease its properties and assets substantially as an
entirety to the Company, unless:
(1) if the Company shall consolidate with or merge into
another corporation or convey, transfer or lease its properties
and assets substantially as an entirety to any corporation, the
corporation formed by such consolidation or into which the Company
is merged or the corporation which acquires by conveyance or
transfer, or which leases, the properties and assets of the
Company substantially as an entirety shall be a corporation, shall
be organized and validly existing under the laws of the United
States of America, any State thereof or the District of Columbia
and shall expressly assume, by an indenture supplemental hereto,
executed and delivered to the Trustee, in form satisfactory to the
Trustee, the due and punctual payment of the principal of and any
premium and interest on all the Securities and the performance or
observance of every covenant of this Indenture on the part of the
Company to be performed or observed;
(2) immediately after giving effect to such transaction,
no Event of Default, and no event which, after notice or lapse of
time or both, would become an Event of Default, shall have
happened and be continuing;
(3) if, as a result of any such consolidation or merger
or such conveyance, transfer or lease, properties or assets of the
Company would become subject to a mortgage, pledge, lien, security
interest or other encumbrance which would not be permitted by this
Indenture, the Company or such successor corporation, as the case
may be, shall take such steps as shall be necessary effectively to
secure the Securities equally and ratably with (or prior to) all
indebtedness secured thereby; and
(4) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such
transaction, such supplemental indenture comply with this Article
and that all conditions precedent herein provided for relating to
such transaction have been complied with.
Section 8.2 Successor Substituted.
Upon any consolidation of the Company with, or merger of
the Company into, any other corporation or any conveyance, transfer or
lease of the properties and assets of the Company substantially as an
entirety in accordance with Section 8.1, the successor corporation formed
by such consolidation or into which the Company is merged or to which such
conveyance, transfer or lease is made shall succeed to, and be substituted
for, and may exercise every right and power of, the Company under this
Indenture with the same effect as if such successor corporation had been
named as the Company herein; and in the event of any such conveyance,
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transfer or lease, the Company (which term shall for this purpose mean the
corporation named as the Company or any successor corporation which shall
have theretofore become such in the manner prescribed in Section 8.1) shall
be discharged from all liability under this Indenture and in respect of the
Securities and may be dissolved and liquidated.
ARTICLE IX
Supplemental Indentures
Section 9.1 Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders of Securities or
coupons, the Company, when authorized by a Board Resolution, and the
Trustee, at any time and from time to time, may enter into one or more
indentures supplemental hereto, in form satisfactory to the Trustee, for
any of the following purposes:
(1) to evidence the succession of another corporation to
the Company and the assumption by any such successor of the
covenants of the Company herein and in the Securities; or
(2) to add to the covenants of the Company for the
benefit of the Holders of all or any series of Securities (and if
such covenants are to be for the benefit of less than all series
of Securities, stating that such covenants are expressly being
included solely for the benefit of such series) or to surrender
any right or power herein conferred upon the Company; or
(3) to add any additional Events of Default with respect
to all or any Securities; or
(4) to add to or change any of the provisions of this
Indenture to provide that Bearer Securities may be registrable as
to principal, to change or eliminate any restrictions on the
payment of principal of or any premium or interest on Bearer
Securities, to permit Bearer Securities to be issued in exchange
for Registered Securities, to permit Bearer Securities to be
issued in exchange for Bearer Securities of other authorized
denominations or to permit the issuance of Securities in
uncertificated form, provided that any such action shall not
adversely affect the interests of the Holders of Securities of any
series or any related coupons in any material respect; or
(5) to add to, change or eliminate any of the provisions
of this Indenture in respect of one or more series of Securities,
provided, that any such addition, change or elimination (i) shall
neither (A) apply to any Security of any series created prior to
the execution of such supplemental indenture and entitled to the
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benefit of such provision nor (B) modify the rights of the Holder
of any such Security with respect to such provision or (ii) shall
become effective only when there is no such Security Outstanding; or
(6) [Reserved]; or
(7) to establish the form or terms of Securities of any
series as permitted by Sections 2.1 and 3.1; or
(8) to evidence and provide for the acceptance of
appointment hereunder by a successor Trustee with respect to the
Securities of one or more series and to add to or change any of
the provisions of this Indenture as shall be necessary to provide
for or facilitate the administration of the trusts hereunder by
more than one Trustee, pursuant to the requirements of Section
6.11(b); or
(9) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other
provision herein, or to make any other provisions with respect to
matters or questions arising under this Indenture, provided that
such action pursuant to this clause (9) shall not adversely affect
the interests of the Holders of Securities of any series in any
material respect.
Section 9.2 Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a
majority in principal amount of the Outstanding Securities of each series
affected by such supplemental indenture, by Act of said Holders delivered
to the Company and the Trustee, the Company, when authorized by a Board
Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders of Securities of such
series under this Indenture; provided, however, that no such supplemental
indenture shall, without the consent of the Holder of each Outstanding
Security affected thereby,
(1) change the Stated Maturity of the principal of, or
any installment of principal of or interest on, any Security, or
reduce the principal amount thereof or the rate of interest
thereon or the rate of accretion of any Original Issue Discount
Security or any premium payable upon the redemption thereof, or
reduce the amount of the principal of an Original Issue Discount
Security that would be due and payable upon a declaration of
acceleration of the Maturity thereof pursuant to Section 5.2, or
change any Place of Payment where, or the coin or currency in
which, any Security or any premium or interest thereon is payable,
or impair the right to institute suit for the enforcement of any
such payment on or after the Stated Maturity thereof (or, in the
case of redemption, on or after the Redemption Date), or
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(2) reduce the percentage in principal amount of the
Outstanding Securities of any series, the consent of whose Holders
is required for any such supplemental indenture, or the consent of
whose Holders is required for any waiver (of compliance with
certain provisions of this Indenture or certain defaults hereunder
and their consequences) provided for in this Indenture, or
(3) modify any of the provisions of this Section, Section
5.8 or Section 5.13, except to increase any such percentage or to
provide that certain other provisions of this Indenture cannot be
modified or waived without the consent of the Holder of each
Outstanding Security affected thereby, provided, however, that
this clause shall not be deemed to require the consent of any
Holder with respect to changes in the references to "the Trustee"
and concomitant changes in this Section, or the deletion of this
proviso, in accordance with the requirements of Sections 6.11(b)
and 9.1(8); or
(4) change any obligation of the Company to maintain an
office or agency in the places and for the purpose specified in
Section 10.2.
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for
the benefit of one or more particular series of Securities, or which
modifies the rights of the Holders of Securities of such series with
respect to such covenant or other provision, shall be deemed not to affect
the rights under this Indenture of the Holders of Securities of any other
series.
It shall not be necessary for any Act of Holders under
this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the
substance thereof.
Section 9.3 Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created
by, any supplemental indenture permitted by this Article or the
modifications thereby of the trusts created by this Indenture, the Trustee
shall be entitled to receive, and (subject to Section 6.1) shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution
of such supplemental indenture is authorized or permitted by this
Indenture. The Trustee may, but shall not be obligated to, enter into any
such supplemental indenture which affects the Trustee's own rights, duties
or immunities under this Indenture or otherwise.
Section 9.4 Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under
this Article, this Indenture shall be modified in accordance therewith, and
such supplemental indenture shall form a part of this Indenture for all
purposes; and every Holder of Securities theretofore or thereafter
authenticated and delivered hereunder shall be bound thereby.
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Section 9.5 Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this
Article shall conform to the requirements of the Trust Indenture Act.
Section 9.6 Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered
after the execution of any supplemental indenture pursuant to this Article
may, and shall if required by the Trustee, bear a notation in form approved
by the Trustee as to any matter provided for in such supplemental
indenture. If the Company shall so determine, new Securities of any series
so modified as to conform, in the opinion of the Trustee and the Company,
to any such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities of such series.
ARTICLE X
Covenants
Section 10.1 Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each
series of Securities that it will duly and punctually pay the principal of
and any premium and interest on the Securities of that series in accordance
with the terms of the Securities, any coupons appertaining thereto and this
Indenture. Unless otherwise specified as contemplated by Section 3.1 with
respect to any series of Securities, any interest due on Bearer Securities
on or before Maturity shall be payable only upon presentation and surrender
of the several coupons for such interest installments as are evidenced
thereby as they severally mature.
Section 10.2 Maintenance of Office or Agency.
If Securities of a series are issuable only as Registered
Securities, the Company will maintain in each Place of Payment for any
series of Securities an office or agency where Securities of that series
may be presented or surrendered for payment, where Securities of that
series may be surrendered for registration of transfer or exchange and
where notices and demands to or upon the Company in respect of the
Securities of that series and this Indenture may be served. Except as
otherwise specified as contemplated by Section 3.1, if Securities of a
series are issuable as Bearer Securities, the Company will maintain (a) in
the United States, an office or agency where any Registered Securities of
that series may be presented or surrendered for payment, where any
Registered Securities of that series may be surrendered for registration of
transfer, where Securities of that series may be surrendered for exchange,
where notices and demands to or upon the Company in respect of the
Securities of that series and this Indenture may be served and where Bearer
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Securities of that series and related coupons may be presented or
surrendered for payment in the circumstances described in the following
paragraph (and not otherwise), (b) subject to any laws or regulations
applicable thereto, in a Place of Payment for that series which is located
outside the United States, an office or agency where Securities of that
series and related coupons may be presented and surrendered for payment;
provided, however, that if the Securities of that series are listed on The
International Stock Exchange, London, the Luxembourg Stock Exchange or any
other stock exchange located outside the United States and such stock
exchange shall so require, the Company will maintain a Paying Agent for the
Securities of that series in London, Luxembourg or any other required city
located outside the United States, as the case may be, so long as the
Securities of that series are listed on such exchange, and (c) subject to
any laws or regulations applicable thereto, in a Place of Payment for that
series located outside the United States an office or agency where any
Registered Securities of that series may be surrendered for registration of
transfer, where Securities of that series may be surrendered for exchange
and where notices and demands to or upon the Company in respect of the
Securities of that series and this Indenture may be served. The Company
will give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the
Company shall fail to maintain any such required office or agency or shall
fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate
Trust Office of the Trustee, except that Bearer Securities of that series
and the related coupons may be presented and surrendered for payment at an
office maintained by the Trustee in London, and the Company hereby appoints
the Trustee as its agent to receive all such presentations, surrenders,
notices and demands.
Except as otherwise specified as contemplated by Section
3.1, no payment of principal, premium or interest on Bearer Securities
shall be made at any office or agency of the Company in the United States
or by check mailed to any address in the United States or by transfer to an
account maintained with a bank located in the United States, provided,
however, that, if the Securities of a series are denominated and payable in
Dollars, payment of principal of and any premium and interest on any Bearer
Security shall be made at the office of the Company's Paying Agent in the
United States, if (but only if) payment in Dollars of the full amount of
such principal, premium, interest or additional amounts, as the case may
be, at all offices or agencies outside the United States maintained for
that purpose by the Company in accordance with this Indenture is illegal or
effectively precluded by exchange controls or other similar restrictions.
The Company may also from time to time designate one or
more other offices or agencies where the Securities of one or more series
may be presented or surrendered for any or all such purposes and may from
time to time rescind such designations; provided, however, that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in each Place of Payment for
Securities of any series for such purposes. The Company will give prompt
written notice to the Trustee of any such designation or rescission and of
any change in the location of any such other office or agency.
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Section 10.3 Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying
Agent with respect to any series of Securities, it will, on or before each
due date of the principal of or any premium or interest on any of the
Securities of that series, segregate and hold in trust for the benefit of
the Persons entitled thereto a sum sufficient to pay the principal and any
premium and interest so becoming due until such sums shall be paid to such
Persons or otherwise disposed of as herein provided and will promptly
notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents
for any series of Securities, it will, prior to each due date of the
principal of or any premium or interest on any Securities of that series,
deposit with a Paying Agent a sum sufficient to pay such amount, such sum
to be held as provided by the Trust Indenture Act, and (unless such Paying
Agent is the Trustee) the Company will promptly notify the Trustee of its
action or failure so to act.
The Company will cause each Paying Agent for any series
of Securities other than the Trustee to execute and deliver to the Trustee
an instrument in which such Paying Agent shall agree with the Trustee,
subject to the provisions of this Section, that such Paying Agent will (i)
comply with the provisions of the Trust Indenture Act applicable to it as a
Paying Agent and (ii) during the continuance of any default by the Company
(or any other obligor upon the Securities of that series) in the making of
any payment in respect of the Securities of that series, and upon the
written request of the Trustee, forthwith pay to the Trustee all sums held
in trust by such Paying Agent for payment in respect of the Securities of
that series.
The Company may at any time, for the purpose of obtaining
the satisfaction and discharge of this Indenture or for any other purpose,
pay, or by Company Order direct any Paying Agent to pay, to the Trustee all
sums held in trust by the Company or such Paying Agent, such sums to be
held by the Trustee upon the same trusts as those upon which such sums were
held by the Company or such Paying Agent; and, upon such payment by any
Paying Agent to the Trustee, such Paying Agent shall be released from all
further liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent,
or then held by the Company, in trust for the payment of the principal of
or any premium or interest on any Security of any series and remaining
unclaimed for two years after such principal, premium or interest has
become due and payable shall be paid to the Company on Company Request, or
(if then held by the Company) shall be discharged from such trust; and the
Holder of such Security shall thereafter, as an unsecured general creditor,
look only to the Company for payment thereof, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all
liability of the Company as trustee thereof, shall thereupon cease;
provided, however, that the Trustee or such Paying Agent, before being
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required to make any such repayment, may at the expense of the Company
cause to be transmitted in the manner and to the extent provided in Section
1.6, notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of
such publication, any unclaimed balance of such money then remaining will
be repaid to the Company.
Section 10.4 Statement by Officers as to Default.
The Company will deliver to the Trustee, within 120 days
after the end of each fiscal year of the Company ending after the date
hereof, an Officers' Certificate, stating whether or not to the best
knowledge of the signers thereof the Company is in default in the
performance and observance of any of the terms, provisions and conditions
of this Indenture (without regard to any period of grace or requirement of
notice provided hereunder) and, if the Company shall be in default,
specifying all such defaults and the nature and status thereof of which
they may have knowledge.
Section 10.5 Existence.
Subject to Article VIII, the Company will do or cause to
be done all things necessary to preserve and keep in full force and effect
its existence, rights (charter and statutory) and franchises; provided,
however, that the Company shall not be required to preserve any such right
or franchise if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the business
of the Company and that the loss thereof is not disadvantageous in any
material respect to the Holders.
Section 10.6 Calculation of Original Issue Discount.
The Company shall file with the Trustee promptly at the
end of each calendar year a written notice specifying the amount of
original issue discount (including daily rates and accrual periods) accrued
on Outstanding Securities as of the end of such year.
Section 10.7 Appointments to Fill Vacancies in Trustee's Office.
The Company, whenever necessary to avoid or fill a
vacancy in the office of the Trustee, will appoint, in the manner provided
in Section 6.10, a Trustee, so that there shall at all times be a Trustee
hereunder.
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ARTICLE XI
Redemption of Securities
Section 11.1 Applicability of Article.
Securities of any series which are redeemable before
their Stated Maturity shall be redeemable in accordance with their terms
and (except as otherwise specified as contemplated by Section 3.1 for
Securities of any series) in accordance with this Article.
Section 11.2 Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities
shall be evidenced by a Board Resolution. In case of any redemption at the
election of the Company, the Company shall, at least 60 days, in the event
of a redemption of less than all the Securities of any series, or at least
45 days, in the event of a redemption of all the Securities of any series,
prior to the Redemption Date fixed by the Company (unless a shorter notice
shall be satisfactory to the Trustee), notify the Trustee of such
Redemption Date, of the principal amount of Securities of such series to be
redeemed and, if applicable, of the tenor of the Securities to be redeemed.
In the case of any redemption of Securities prior to the expiration of any
restriction on such redemption provided in the terms of such Securities or
elsewhere in this Indenture, the Company shall furnish the Trustee with an
Officers' Certificate evidencing compliance with such restriction.
Section 11.3 Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities of any series are to be
redeemed (unless all of the Securities of such series and of a specified
tenor are to be redeemed), the particular Securities to be redeemed shall
be selected not more than 60 days prior to the Redemption Date by the
Trustee, from the Outstanding Securities of such series not previously
called for redemption, by such method as the Trustee shall deem fair and
appropriate and which may provide for the selection for redemption of
portions (equal to the minimum authorized denomination for Securities of
that series or any integral multiple thereof) of the principal amount of
Securities of such series of a denomination larger than the minimum
authorized denomination for Securities of that series. If less than all of
the Securities of such series and of a specified tenor are to be redeemed,
the particular Securities to be redeemed shall be selected not more than 60
days prior to the Redemption Date by the Trustee, from the Outstanding
Securities of such series and specified tenor not previously called for
redemption in accordance with the preceding sentence.
The Trustee shall promptly notify the Company in writing
of the Securities selected for redemption and, in the case of any
Securities selected for partial redemption, the principal amount thereof to
be redeemed.
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For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Securities
shall relate, in the case of any Securities redeemed or to be redeemed only
in part, to the portion of the principal amount of such Securities which
has been or is to be redeemed.
Section 11.4 Notice of Redemption.
Notice of redemption shall be given in the manner
provided in Section 1.6 to the Holders of Securities to be redeemed not
less than 30 nor more than 60 days prior to the Redemption Date.
All notices of redemption shall identify the Securities
to be redeemed (including, subject to Section 3.11, the CUSIP number) and
shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities of any
series are to be redeemed, the identification (and, in the case of
partial redemption of any Securities, the principal amounts) of
the particular Securities to be redeemed,
(4) that on the Redemption Date the Redemption Price will
become due and payable upon each such Security to be redeemed and,
if applicable, that interest thereon will cease to accrue on and
after said date,
(5) the place or places where such Securities, together
in the case of Bearer Securities with all coupons appertaining
thereto, if any, maturing after the Redemption Date, are to be
surrendered for payment of the Redemption Price, and
(6) that the redemption is for a sinking fund, if such is
the case.
Notice of redemption of Securities to be redeemed at the
election of the Company shall be given by the Company or, at the Company's
request, by the Trustee in the name and at the expense of the Company.
Section 11.5 Deposit of Redemption Price.
Prior to any Redemption Date, the Company shall deposit
with the Trustee or with a Paying Agent (or, if the Company is acting as
its own Paying Agent, segregate and hold in trust as provided in Section
10.3) an amount of money sufficient to pay the Redemption Price of, and
(except if the Redemption Date shall be an Interest Payment Date) accrued
interest on, all the Securities which are to be redeemed on that date.
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Section 11.6 Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the
Securities so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified, and from and after such
date (unless the Company shall default in the payment of the Redemption
Price and accrued interest) such Securities shall cease to bear interest
and the coupons for such interest appertaining to any Bearer Securities so
to be redeemed, except to the extent provided below, shall be void. Upon
surrender of any such Security for redemption in accordance with said
notice, together with all coupons, if any, appertaining thereto maturing
after the Redemption Date, such Security shall be paid by the Company at
the Redemption Price, together with accrued interest to the Redemption
Date; provided, however, that installments of interest on Bearer Securities
whose Stated Maturity Date is on or prior to the Redemption Date shall be
payable only at an office or agency located outside the United States
(except as otherwise provided in Section 10.2) and, unless otherwise
specified as contemplated by Section 3.1, only upon presentation and
surrender of coupons for such interest; and provided, further, that, unless
otherwise specified as contemplated by Section 3.1, installments of
interest on Registered Securities whose Stated Maturity Date is on or prior
to the Redemption Date shall be payable to the Holders of such Securities,
or one or more Predecessor Securities, registered as such at the close of
business on the relevant Record Dates according to their terms and the
provisions of Sections 3.5 and 3.7.
If any Bearer Security surrendered for redemption shall
not be accompanied by all appurtenant coupons maturing after the Redemption
Date, such Security may be paid after deducting from the Redemption Price
an amount equal to the face amount of all such missing coupons, or the
surrender of such missing coupon or coupons may be waived by the Company
and the Trustee if there be furnished to them such security or indemnity as
they may require to save each of them and any Paying Agent harmless. If
thereafter the Holder of such Security shall surrender to the Trustee or
any Paying Agent any such missing coupon in respect of which a deduction
shall have been made from the Redemption Price, such Holder shall be
entitled to receive the amount so deducted; provided, however, that
interest represented by coupons shall be payable only at an office or
agency located outside the United States (except as otherwise provided in
Section 10.2) and, unless otherwise specified as contemplated by Section
3.1, only upon presentation and surrender of those coupons.
If any Security called for redemption shall not be so
paid upon surrender thereof for redemption, the principal and any premium
shall, until paid, bear interest from the Redemption Date at the rate
prescribed therefor in the Security.
Section 11.7 Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall
be surrendered at a Place of Payment therefor (with, if the Company or the
Trustee so requires, due endorsement by, or a written instrument of
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transfer in form satisfactory to the Company and the Trustee duly executed
by, the Holder thereof or his attorney duly authorized in writing), and the
Company shall execute, and the Trustee shall authenticate and deliver to
the Holder of such Security without service charge, a new Registered
Security or Securities of the same series and of like tenor, of any
authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal
of the Security so surrendered. If a Book-Entry Security is so surrendered,
such new Security so issued shall be a new Book-Entry Security.
ARTICLE XII
Sinking Funds
Section 12.1 Applicability of Article.
The provisions of this Article shall be applicable to any
sinking fund for the retirement of Securities of a series except as
otherwise specified as contemplated by Section 3.1 for Securities of such
series.
The minimum amount of any sinking fund payment provided
for by the terms of Securities of any series is herein referred to as a
"mandatory sinking fund payment," and any payment in excess of such minimum
amount provided for by the terms of Securities of any series is herein
referred to as an "optional sinking fund payment." If provided for by the
terms of Securities of any series, the cash amount of any sinking fund
payment may be subject to reduction as provided in Section 12.2. Each
sinking fund payment shall be applied to the redemption of Securities of
any series as provided for by the terms of Securities of such series.
Section 12.2 Satisfaction of Sinking Fund Payments with Securities.
The Company (1) may deliver Outstanding Securities of a
series (other than any previously called for redemption), together in the
case of any Bearer Securities of such series with all unmatured coupons
appertaining thereto, and (2) may apply as a credit Securities of a series
which have been redeemed either at the election of the Company pursuant to
the terms of such Securities or through the application of permitted
optional sinking fund payments pursuant to the terms of such Securities, in
each case in satisfaction of all or any part of any sinking fund payment
with respect to the Securities of such series required to be made pursuant
to the terms of such Securities as provided for by the terms of such
series; provided that such Securities have not been previously so credited.
Such Securities shall be received and credited for such purpose by the
Trustee at the Redemption Price specified in such Securities for redemption
through operation of the sinking fund and the amount of such sinking fund
payment shall be reduced accordingly.
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Section 12.3 Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment
date for any series of Securities, the Company will deliver to the Trustee
an Officers' Certificate specifying the amount of the next ensuing sinking
fund payment for that series pursuant to the terms of that series, the
portion thereof, if any, which is to be satisfied by payment of cash and
the portion thereof, if any, which is to be satisfied by delivering and
crediting Securities of that series pursuant to Section 12.2 and will also
deliver to the Trustee any Securities to be so delivered. Not less than 45
days before each such sinking fund payment date the Trustee shall select
the Securities to be redeemed upon such sinking fund payment date in the
manner specified in Section 11.3 and cause notice of the redemption thereof
to be given in the name of and at the expense of the Company in the manner
provided in Section 11.4. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the
manner stated in Sections 11.6 and 11.7.
ARTICLE XIII
Defeasance and Covenant Defeasance
Section 13.1 Applicability of Article; Company's Option to Effect
Defeasance or Covenant Defeasance.
If pursuant to Section 3.1 provision is made for either
or both of (a) defeasance of the Securities of a series under Section 13.2
or (b) covenant defeasance of the Securities of a series under Section
13.3, then the provisions of such Section or Sections, as the case may be,
together with the other provisions of this Article XIII, shall be
applicable to the Securities of such series, and the Company may at its
option by Board Resolution, at any time, with respect to the Securities of
such series, elect to have either Section 13.2 (if applicable) or Section
13.3 (if applicable) be applied to the Outstanding Securities of such
series upon compliance with the conditions set forth below in this
Article XIII.
Section 13.2 Defeasance and Discharge.
Upon the Company's exercise of the above option
applicable to this Section, the Company shall be deemed to have been
discharged from its obligations with respect to the Outstanding Securities
of such series on and after the date the conditions precedent set forth
below are satisfied (hereinafter, "defeasance"). For this purpose, such
defeasance means that the Company shall be deemed to have paid and
discharged the entire indebtedness represented by the Outstanding
Securities of such series and to have satisfied all its other obligations
under such Securities and this Indenture insofar as such Securities are
concerned (and the Trustee, at the expense of the Company, shall execute
proper instruments acknowledging the same), except for the following which
shall survive until otherwise terminated or discharged thereunder: (A) the
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rights of Holders of Outstanding Securities of such series to receive,
solely from the trust fund described in Section 13.4 as more fully set
forth in such Section, payments of the principal of (and premium and
interest, if any, on) such Securities when such payments are due, (B) the
Company's obligations with respect to such Securities under Sections 3.4,
3.5, 3.6, 10.2 and 10.3 and such obligations as shall be ancillary thereto,
(C) the rights, powers, trusts, duties, immunities and other provisions in
respect of the Trustee or any Authenticating Agent hereunder and (D) this
Article XIII. Subject to compliance with this Article XIII, the Company may
exercise its option under this Section 13.2 notwithstanding the prior
exercise of its option under Section 13.3 with respect to the Securities of
such series.
Section 13.3 Covenant Defeasance.
Upon the Company's exercise of the above option
applicable to this Section, the Company shall be released from its
obligations under Section 8.1 (and any covenant applicable to such
Securities that are determined pursuant to Section 3.1 to be subject to
this provision) and the occurrence of an event specified in Section 5.1(4)
(with respect to Section 8.1) (and any other Event of Default applicable to
such Securities that are determined pursuant to Section 3.1 to be subject
to this provision) shall not be deemed to be an Event of Default with
respect to the Outstanding Securities of such series on and after the date
the conditions set forth below are satisfied (hereinafter, "covenant
defeasance"). For this purpose, such covenant defeasance means that, with
respect to the Outstanding Securities of such series, the Company may omit
to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such Section or clause whether
directly or indirectly by reason of any reference elsewhere herein to any
such Section or clause or by reason of any reference in any such Section or
clause to any other provision herein or in any other document, but the
remainder of this Indenture and such Securities shall be unaffected
thereby.
Section 13.4 Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions precedent to
application of either Section 13.2 or Section 13.3 to the Outstanding
Securities of such series:
(1) The Company shall irrevocably have deposited or
caused to be deposited with the Trustee (or another trustee
satisfying the requirements of Section 6.9 who shall agree to
comply with the provisions of this Article XIII applicable to it)
as trust funds in trust for the purpose of making the following
payments, specifically pledged as security for, and dedicated
solely to, the benefit of the Holders of such Securities, (A)
money in an amount, or (B) U.S. Government Obligations which
through the scheduled payment of principal and interest in respect
thereof in accordance with their terms will provide, not later
than one day before the due date of any payment, money in an
amount, or (C) a combination thereof, sufficient, without
reinvestment, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay and
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discharge, and which shall be applied by the Trustee (or other
qualifying trustee) to pay and discharge, the principal of (and
premium and interest, if any on) the Outstanding Securities of
such series on the Maturity of such principal, or premium and
interest, if any. Before such a deposit the Company may make
arrangements satisfactory to the Trustee for the redemption of
Securities at a future date or dates in accordance with Article
XI, which shall be given effect in applying the foregoing. For
this purpose, "U.S. Government Obligations" means securities that
are (x) direct obligations of the United States of America for
the payment of which its full faith and credit is pledged or (y)
obligations of a Person controlled or supervised by and acting as
an agency or instrumentality of the United States of America the
payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America, which, in
either case, are not callable or redeemable at the option of the
issuer thereof, and shall also include a depository receipt
issued by a bank (as defined in section 3(a) (2) of the
Securities Act of 1933, as amended) as custodian with respect to
any such U.S. Government Obligation or a specific payment of
principal of or interest on any such U.S. Government Obligation
held by such custodian for the account of the holder of such
depository receipt, provided that (except as required by law)
such custodian is not authorized to make any deduction from the
amount payable to the holder of such depositary receipt from any
amount received by the custodian in respect of the U.S.
Government Obligation or the specific payment of principal of or
interest on the U.S. Government Obligation evidenced by such
depositary receipt.
(2) No Event of Default or event which with notice or
lapse of time or both would become an Event of Default with
respect to the Securities of such series shall have occurred and
be continuing (A) on the date of such deposit or (B) insofar as
subsections 5.1(5) and 5.1(6) are concerned, at any time during
the period ending on the 121st day after the date of such deposit
or, if longer, ending on the day following the expiration of the
longest preference period applicable to the Company in respect of
such deposit (it being understood that the condition in this
condition shall not be deemed satisfied until the expiration of
such period).
(3) Such defeasance or covenant defeasance shall not (A)
cause the Trustee for the Securities of such series to have a
conflicting interest as defined in Section 6.8 or for purposes of
the Trust Indenture Act with respect to any securities of the
Company or (B) result in the trust arising from such deposit to
constitute, unless it is qualified as, a regulated investment
company under the Investment Company Act of 1940, as amended.
(4) Such defeasance or covenant defeasance shall not
result in a breach or violation of, or constitute a default under,
this Indenture or any other agreement or instrument to which the
Company is a party or by which it is bound.
(5) In the case of an election under Section 13.2, the
Company shall have delivered to the Trustee an Opinion of Counsel
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stating that (x) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling, or (y) since
the date of this Indenture there has been a change in the
applicable Federal income tax law, in either case to the effect
that, and based thereon such opinion shall confirm that, the
Holders of the Outstanding Securities of such series will not
recognize income, gain or loss for Federal income tax purposes as
a result of such defeasance and will be subject to Federal income
tax on the same amounts, in the same manner and at the same times
as would have been the case if such defeasance had not occurred.
(6) In the case of an election under Section 13.3, the
Company shall have delivered to the Trustee an Opinion of Counsel
to the effect that the Holders of the Outstanding Securities of
such series will not recognize income, gain or loss for Federal
income tax purposes as a result of such covenant defeasance and
will be subject to Federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if
such covenant defeasance had not occurred.
(7) Such defeasance or covenant defeasance shall be
effected in compliance with any additional terms, conditions or
limitations which may be imposed on the Company in connection
therewith pursuant to Section 3.1.
(8) The Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that
all conditions precedent provided for relating to either the
defeasance under Section 13.2 or the covenant defeasance under
Section 13.3 (as the case may be) have been complied with.
Section 13.5 Deposited Money and U.S. Government Obligations
to be Held in Trust; Other Miscellaneous Provisions.
Subject to the provisions of the last paragraph of
Section 10.3, all money and U.S. Government Obligations (including the
proceeds thereof) deposited with the Trustee (or other qualifying trustee
- -- collectively, for purposes of this Section 13.5, the "Trustee") pursuant
to Section 13.4 in respect of the Outstanding Securities of such series
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Securities and this Indenture, to the payment, either
directly or through any Paying Agent (but not including the Company acting
as its own Paying Agent) as the Trustee may determine, to the Holders of
such Securities, of all sums due and to become due thereon in respect of
principal (and premium, if any) and interest, but such money need not be
segregated from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against
any tax, fee or other charge imposed on or assessed against the money or
U.S. Government Obligations deposited pursuant to Section 13.4 or the
principal and interest received in respect thereof.
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Anything herein to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or U.S. Government Obligations held by it as provided in
Section 13.4 which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would
then be required to be deposited to effect an equivalent defeasance or
covenant defeasance.
Section 13.6 Reinstatement.
If the Trustee or the Paying Agent is unable to apply any
money in accordance with Section 13.2 or 13.3 by reason of any order or
judgment or any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, then the Company's obligations
under the Securities of such series shall be revived and reinstated as
though no deposit had occurred pursuant to this Article XIII until such
time as the Trustee or Paying Agent is permitted to apply all such money in
accordance with Section 13.2 or 13.3; provided, however, that if the
Company makes any payment of principal of (and premium, if any) or interest
on any such Security following the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Securities
to receive such payment from the money held by the Trustee or the Paying
Agent.
This instrument may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original,
but all such counterparts shall together constitute but one and the same
instrument.
ARTICLE XIV
Meetings of Holders of Securities
Section 14.1 Purposes for Which Meetings May Be Called.
If Securities of a series are issuable as Bearer
Securities, a meeting of Holders of Securities of such series may be called
at any time and from time to time pursuant to this Article to make, give or
take any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be made, given or taken by
Holders of Securities of such series.
Section 14.2 Call, Notice and Place of Meetings.
(a) The Trustee may at any time call a meeting of Holders
of Securities of any series for any purpose specified in Section 13.1, to
be held at such time and at such place in the Borough of Manhattan, The
City of New York, or London as the Trustee shall determine. Notice of every
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meeting of Holders of Securities of any series, setting forth the time and
the place of such meeting and in general terms the action proposed to be
taken at such meeting, shall be given, in the manner provided in Section
1.6, not less than 21 nor more than 180 days prior to the date fixed for
the meeting.
(b) In case at any time the Company, pursuant to a Board
Resolution or the Holders of at least 10% in principal amount of the
Outstanding Securities of any series shall have requested the Trustee to
call a meeting of the Holders of Securities of such series for any purpose
specified in Section 13.1, by written request setting forth in reasonable
detail the action proposed to be taken at the meeting, and the Trustee
shall not have made the first publication of the notice of such meeting
within 21 days after receipt of such request or shall not thereafter
proceed to cause the meeting to be held as provided herein, the Company or
the Holders of Securities of such series in the amount above specified, as
the case may be, may determine the time and the place in the Borough of
Manhattan, The City of New York, or London for such meeting and may call
such meeting for such purposes by giving notice thereof as provided in
subsection (a) of this Section.
Section 14.3 Persons Entitled to Vote at Meetings.
To be entitled to vote at any meeting of Holders of
Securities of any series, a Person shall be (a) a Holder of one or more
Outstanding Securities of such series, or (b) a Person appointed by an
instrument in writing as proxy for a Holder or Holders of one or more
Outstanding Securities of such series by such Holder or Holders. The only
Persons who shall be entitled to be present or to speak at any meeting of
Holders of Securities of any series shall be the Persons entitled to vote
at such meeting and their counsel, any representatives of the Trustee and
its counsel and any representatives of the Company and its counsel.
Section 14.4 Quorum; Action.
The Persons entitled to vote a majority in principal
amount of the Outstanding Securities of a series shall constitute a quorum
for a meeting of Holders of Securities of such series; provided, however,
that if any action is to be taken at such meeting with respect to a consent
or waiver which this Indenture expressly provides must be given by the
Holders of a greater percentage in principal amount of the Outstanding
Securities of a series, the Persons entitled to vote such percentage in
principal amount of the Outstanding Securities of such series shall
constitute a quorum. In the absence of a quorum within 30 minutes of the
time appointed for any such meeting, the meeting shall, if convened at the
request of Holders of Securities of such series, be dissolved. In any other
case the meeting may be adjourned for a period of not less than 10 days as
determined by the chairman of the meeting prior to the adjournment of such
meeting. In the absence of a quorum at any such adjourned meeting, such
adjourned meeting may be further adjourned for a period of not less than 10
days as determined by the chairman of the meeting prior to the adjournment
of such adjourned meeting. Notice of the reconvening of any adjourned
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meeting shall be given as provided in Section 13.2(a), except that such
notice need be given only once not less than five days prior to the date on
which the meeting is scheduled to be reconvened.
Notice of the reconvening of an adjourned meeting shall
state expressly the percentage, as provided above, of the principal amount
of the Outstanding Securities of such series which shall constitute a
quorum.
Except as limited by the proviso to Section 9.2, any
resolution presented to a meeting or adjourned meeting duly reconvened at
which a quorum is present as aforesaid may be adopted by the affirmative
vote of the Holders of a majority in principal amount of the Outstanding
Securities of that series; provided, however, that, except as limited by
the proviso to Section 9.2, any resolution with respect to any consent or
waiver which this Indenture expressly provides must be given by the Holders
of a greater percentage in principal amount of the Outstanding Securities
of a series may be adopted at a meeting or an adjourned meeting duly
convened and at which a quorum is present as aforesaid only by the
affirmative vote of the Holders of such percentage in principal amount of
the Outstanding Securities of that series; and provided, further, that,
except as limited by the proviso to Section 9.2, any resolution with
respect to any request, demand, authorization, direction, notice, consent,
waiver or other action which this Indenture expressly provides may be made,
given or taken by the Holders of a specified percentage, which is less than
a majority, in principal amount of the Outstanding Securities of a series
may be adopted at a meeting or an adjourned meeting duly reconvened and at
which a quorum is present as aforesaid by the affirmative vote of the
Holders of such specified percentage in principal amount of the Outstanding
Securities of that series.
Any resolution passed or decision taken at any meeting of
Holders of Securities of any series duly held in accordance with this
Section shall be binding on all the Holders of Securities of such series
and the related coupons, whether or not present or represented at the
meeting.
Section 14.5 Determination of Voting Rights; Conduct and Adjournment
of Meetings.
(a) Notwithstanding any other provisions of this
Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Holders of Securities of a series in regard to
proof of the holding of Securities of such series and of the appointment of
proxies and in regard to the appointment and duties of inspectors of votes,
the submission and examination of proxies, certificates and other evidence
of the right to vote and such other matters concerning the conduct of the
meeting as it shall deem appropriate. Except as otherwise permitted or
required by any such regulations, the holding of Securities shall be proved
in the manner specified in Section 1.4 and the appointment of any proxy
shall be proved in the manner specified in Section 1.4 or by having the
signature of the person executing the proxy witnessed or guaranteed by any
trust company, bank or banker authorized by Section 1.4 to certify to the
68
<PAGE>
holding of Bearer Securities. Such regulations may provide that written
instruments appointing proxies, regular on their face, may be presumed
valid and genuine without the proof specified in Section 1.4 or other
proof.
(b) The Trustee shall, by an instrument in writing,
appoint a temporary chairman of the meeting, unless the meeting shall have
been called by the Company or by Holders of Securities as provided in
Section 13.2(b), in which case the Company or the Holders of Securities of
the series calling the meeting, as the case may be, shall in like manner
appoint a temporary chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by vote of the Persons entitled
to vote a majority in principal amount of the Outstanding Securities of
such series represented at the meeting.
(c) At any meeting each Holder of a Security of such
series or proxy shall be entitled to one vote for each $1,000 principal
amount of Outstanding Securities of such series held or represented by him;
provided, however, that no vote shall be cast or counted at any meeting in
respect of any Security challenged as not Outstanding and ruled by the
chairman of the meeting to be not Outstanding. The chairman of the meeting
shall have no right to vote, except as a Holder of a Security of such
series or proxy.
(d) Any meeting of Holders of Securities of any series
duly called pursuant to Section 13.2 at which a quorum is present may be
adjourned from time to time by Persons entitled to vote a majority in
principal amount of the Outstanding Securities of such series represented
at the meeting; and the meeting may be held as so adjourned without further
notice.
Section 14.6 Counting Votes and Recording Action of Meetings.
The vote upon any resolution submitted to any meeting of
Holders of Securities of any series shall be by written ballots on which
shall be subscribed the signatures of the Holders of Securities of such
series or of their representatives by proxy and the principal amounts and
serial numbers of the Outstanding Securities of such series held or
represented by them. The permanent chairman of the meeting shall appoint
two inspectors of votes who shall count all votes cast at the meeting for
or against any resolution and who shall make and file with the secretary of
the meeting their verified written reports in duplicate of all votes cast
at the meeting. A record, at least in duplicate, of the proceedings of each
meeting of Holders of Securities of any series shall be prepared by the
secretary of the meeting and there shall be attached to said record the
original reports of the inspectors of votes on any vote by ballot taken
thereat and affidavits by one or more persons having knowledge of the facts
setting forth a copy of the notice of the meeting and showing that said
notice was given as provided in Section 13.2 and, if applicable, Section
13.4. Each copy shall be signed and verified by the affidavits of the
permanent chairman and secretary of the meeting and one such copy shall be
delivered to the Company, and another to the Trustee to be preserved by the
Trustee, the latter to have attached thereto the ballots voted at the
meeting. Any record so signed and verified shall be conclusive evidence of
the matters therein stated.
----------------------------
69
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above
written.
UNITED AIR LINES, INC.
By______________________________
Name:
Title:
Attest:
_______________________
[TRUSTEE NAME], as Trustee
By______________________________
Attest:
________________________
70
<PAGE>
STATE OF ILLINOIS )
) ss.:
COUNTY OF ______ )
On the ___ day of _________, ____, before me personally came
_________________, to me known, who, being by me duly sworn, did depose and
say that he is the ________________________ of United Air Lines, Inc., one
of the corporations described in and which executed the foregoing
instrument; that he knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed
by authority of the Board of Directors of said corporation, and that he
signed his name thereto by like authority.
------------------------------------
STATE OF _____________ )
) ss.:
COUNTY OF ___________ )
On the ____ day of __________, ____, before me personally came
_________________, to me known, who, being by me duly sworn, did depose and
say that he is ________________ of [Trustee Name], one of the corporations
described in and which executed the foregoing instrument; that he knows the
seal of said corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by like
authority.
------------------------------------
71
<PAGE>
EXHIBIT A TO
THE INDENTURE
FORM OF SECURITY
[Form of Face of Security]
[Insert any legend required by the Internal Revenue Code and
the regulations thereunder.]
[This Security is a Book-Entry Security within the
meaning of the Indenture hereinafter referred to and is registered in the
name of a Depository or a nominee of a Depository. This Security is
exchangeable for Securities registered in the name of a person other than
the Depository or its nominee only in the limited circumstances described
in the Indenture and may not be transferred except as a whole by the
Depository to a nominee of the Depository or by a nominee of the Depository
to the Depository or another nominee of the Depository.]
United Air Lines, Inc.
..........................
No. ......... $ ..........
CUSIP No............
United Air Lines, Inc., a corporation duly organized and
existing under the laws of the State of Delaware (herein called the "Company,"
which term includes any successor corporation under the Indenture hereinafter
referred to), for value received, hereby promises to pay to ..................,
or registered assigns, the principal sum of .................... Dollars on
......................... [if the Security is to bear interest prior to
Maturity, insert --, and to pay interest thereon from ......... or from the
most recent Interest Payment Date to which interest has been paid or duly
provided for, semi-annually on ........... and ............ in each year,
commencing ................, at the rate of .....% per annum [or describe
formula to calculate rate], until the principal hereof is paid or made
available for payment [if applicable, insert -- , and (to the extent that
the payment of such interest shall be legally enforceable) at the rate of ....%
per annum on any overdue principal and premium and on any overdue installment
of interest.] The interest so payable, and punctually paid or duly provided
for, on any Interest Payment Date will, as provided in such Indenture, be paid
to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall be the ........... or .........(whether or not a
Business Day), as the case may be, next preceding such Interest Payment Date.
A-1
<PAGE>
Any such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the Holder on such Regular Record Date and
may either be paid to the Person in whose name this Security (or one or
more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed
by the Trustee, notice whereof shall be given to Holders of Securities of
this series not less than 10 days prior to such Special Record Date, or be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities of this
series may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in said Indenture].
[If the Security is not to bear interest prior to
Maturity, insert -- The principal of this Security shall not bear interest
except in the case of a default in payment of principal upon acceleration,
upon redemption or at Stated Maturity and in such case the overdue
principal of this Security shall bear interest at the rate of ________% per
annum (to the extent that the payment of such interest shall be legally
enforceable), which shall accrue from the date of such default in payment
to the date payment of such principal has been made or duly provided for.
Interest on any overdue principal shall be payable on demand. Any such
interest on any overdue principal that is not so paid on demand shall bear
interest at the rate of _______% per annum (to the extent that the payment
of such interest shall be legally enforceable), which shall accrue from the
date of such demand for payment to the date payment of such interest has
been made or duly provided for, and such interest shall also be payable on
demand.]
Payment of the principal of (and premium, if any) and [if
applicable, insert -- any such] interest on this Security will be made at
the office or agency of the Company maintained for that purpose in [City],
in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts [if
applicable, insert --; provided, however, that at the option of the Company
payment of interest may be made by check mailed to the address of the
Person entitled thereto as such address shall appear in the Security
Register].
Reference is hereby made to the further provisions of
this Security set forth on the reverse hereof, which further provisions
shall for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual
signature, this Security shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.
A-2
<PAGE>
IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed under its corporate seal.
UNITED AIR LINES, INC.
By:_____________________
Attest:
_______________________
A-3
<PAGE>
[Form of Reverse of Security]
This Security is one of a duly authorized issue of securities
of the Company (herein called the "Securities"), issued and to be issued in
one or more series under an Indenture, dated as of _____________ (herein
called the "Indenture"), between the Company and [Trustee Name], as Trustee
(herein called the "Trustee," which term includes any successor trustee
under the Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company, the
Trustee and the Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This Security
is one of the series designated on the face hereof[, limited in
aggregateprincipal amount to $_____________].
[If applicable, insert __ The Securities of this series are
subject to redemption upon not less than 30 days' notice by mail, [if
applicable, insert __ (1) on ______ in any year commencing with the year
_____ and ending with the year ______ through operation of the sinking fund
for this series at a Redemption Price equal to 100% of the principal
amount, and (2)] at any time [on or after ___________, 19__], as a whole or
in part, at the election of the Company, at the following Redemption Prices
(expressed as percentages of the principal amount): If redeemed [on or
before _______________, ___%, and if redeemed] during the 12-month period
beginning ________________ of the years indicated,
Redemption Redemption
Year Price Year Price
- ---- ---------- ---- ----------
and thereafter at a Redemption Price equal to ...... % of the principal
amount, together in the case of any such redemption [if applicable, insert
- -- (whether through operation of the sinking fund or otherwise)] with
accrued interest to the Redemption Date, but interest installments whose
Stated Maturity is on or prior to such Redemption Date will be payable to
the Holders of such Securities, or one or more Predecessor Securities, of
record at the close of business on the relevant Record Dates referred to on
the face hereof, all as provided in the Indenture.]
A-4
<PAGE>
[If applicable, insert -- The Securities of this series are
subject to redemption upon not less than 30 days' notice by mail, (1) on
.............. in any year commencing with the year ..... and ending with
the year ..... through operation of the sinking fund for this series at the
Redemption Prices for redemption through operation of the sinking fund
(expressed as percentages of the principal amount) set forth in the table
below, and (2) at any time [on or after ........], as a whole or in part,
at the election of the Company, at the Redemption Prices for redemption
otherwise than through operation of the sinking fund (expressed as
percentages of the principal amount) set forth in the table below: If
redeemed during the 12-month period beginning ............. of the years
indicated,
Redemption Price
For Redemption Redemption Price For
Through Operation Redemption Otherwise
of the Than Through Operation
Year Sinking Fund of the Sinking Fund
- ---- ------------------- ------------------------
and thereafter at a Redemption Price equal to .....% of the principal
amount, together in the case of any such redemption (whether through
operation of the sinking fund or otherwise) with accrued interest to the
Redemption Date, but interest installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such
Securities, or one or more Predecessor Securities, of record at the close
of business on the relevant Record Dates referred to on the face hereof,
all as provided in the Indenture.]
[Notwithstanding the foregoing, the Company may not,
prior to ..........., redeem any Securities of this series as contemplated
by [Clause (2) of] the preceding paragraph as a part of, or in anticipation
of, any refunding operation by the application, directly or indirectly, of
moneys borrowed having an interest cost to the Company (calculated in
accordance with generally accepted financial practice) of less than .....%
per annum.]
[The sinking fund for this series provides for the redemption
on .................. in each year beginning with the year ...............
and ending with the year ................ of [not less than $..........
("mandatory sinking fund") and not more than] $............. aggregate
principal amount of Securities of this series. Securities of this series
acquired or redeemed by the Company otherwise than through [mandatory]
sinking fund payments may be credited against subsequent [mandatory]
sinking fund payments otherwise required to be made [in the inverse order
in which they become due].]
A-5
<PAGE>
[If the Security is subject to redemption, insert -- In
the event of redemption of this Security in part only, a new Security or
Securities of this series and of like tenor for the unredeemed portion
hereof will be issued in the name of the Holder hereof upon the
cancellation hereof.]
[If the Security is not an Original Issue Discount
Security, insert -- If an Event of Default with respect to Securities of
this series shall occur and be continuing, the principal of the Securities
of this series may be declared due and payable in the manner and with the
effect provided in the Indenture.]
[If the Security is an Original Issue Discount Security,
insert -- If an Event of Default with respect to Securities of this series
shall occur and be continuing, an amount of principal of the Securities of
this series may be declared due and payable in the manner and with the
effect provided in the Indenture. Such amount shall be equal to -- insert
formula for determining the amount. Upon payment (i) of the amount of
principal so declared due and payable and (ii) of interest on any overdue
principal and overdue interest (in each case to the extent that the payment
of such interest shall be legally enforceable), all of the Company's
obligations in respect of the payment of the principal of and interest, if
any, on the Securities of this series shall terminate.]
[The Indenture contains provisions for defeasance at any
time of [the entire indebtedness of this Security or] certain restrictive
covenants and Events of Default with respect to this Security [, in each
case] upon compliance with certain conditions set forth therein.]
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities
of each series to be affected under the Indenture at any time by the
Company and the Trustee with the consent of the Holders of a majority in
principal amount of the Securities at the time Outstanding of each series
to be affected. The Indenture also contains provisions permitting the
Holders of specified percentages in principal amount of the Securities of
each series at the time Outstanding, on behalf of the Holders of all
Securities of such series, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture
and their consequences. Any such consent or waiver by the Holder of this
Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this
Security.
No reference herein to the Indenture and no provision of
this Security or of the Indenture shall alter or impair the obligation of
the Company, which is absolute and unconditional, to pay the principal of
and any premium and interest on this Security at the times, place and rate,
and in the coin or currency, herein prescribed.
A-6
<PAGE>
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is
registerable in the Security Register, upon surrender of this Security for
registration of transfer at the office or agency of the Company in any
place where the principal of and any premium and interest on this Security
are payable, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Security Registrar
duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Securities of this series and of
like tenor, of authorized denominations and for the same Stated Maturity
and aggregate principal amount, will be issued to the designated transferee
or transferees.
The Securities of this series are issuable only in
registered form without coupons in denominations of $.......... and any
integral multiple thereof. As provided in the Indenture and subject to
certain limitations therein set forth, Securities of this series are
exchangeable for a like aggregate principal amount of Securities of this
series and of like tenor of a different authorized denomination, as
requested by the Holder surrendering the same.
No service charge shall be made for any such registration
of transfer or exchange, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in
connection therewith.
Prior to due presentment of this Security for
registration of transfer, the Company, the Trustee and any agent of the
Company or the Trustee may treat the Person in whose name this Security is
registered as the owner hereof for all purposes, whether or not this
Security be overdue, and neither the Company, the Trustee nor any such
agent shall be affected by notice to the contrary.
Interest on this Security shall be computed on the basis
of [a 360-day year of twelve 30-day months][the actual number of days
elapsed and a 360-day year].
All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
This Security shall be governed by and construed in
accordance with the laws of the State of New York without giving effect to
the conflict of laws provisions thereof.
A-7
<PAGE>
EXHIBIT B TO
THE INDENTURE
[FORMS OF CERTIFICATION ]
EXHIBIT B.1
[FORM OF CERTIFICATE TO BE GIVEN BY
PERSON ENTITLED TO RECEIVE BEARER SECURITY]
CERTIFICATE
----------------
[Insert title or sufficient description of Securities to be delivered]
This is to certify that the above-captioned Securities (a) [Not
applicable with respect to a Security owned by a financial institution
during the "restricted period" within the meaning of Section
1.163-5(c)(2)(i)(D)(7) of the United States Treasury regulations] are not
being acquired by or on behalf of a United States person or any person
inside the United States or, if a beneficial interest in the Securities is
being acquired by or on behalf of a United States person or any person
inside the United States, that such United States person is a financial
institution within the meaning of Section 1.165-12(c)(1)(v) of the United
States Treasury regulations which agrees to comply with the requirements of
Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code and the
regulations thereunder, or (b) are being acquired by a financial
institution within the meaning of Section 1.165-12(c)(1)(V) of such
regulations for purposes of resale, but not for purposes of resale,
directly or indirectly, to a person inside the United States or to a United
States person. If the undersigned is a dealer, the undersigned agrees to
obtain a similar certificate from each person entitled to delivery of any
of the above-captioned Securities in bearer form purchased from it;
provided, however, that if the undersigned has actual knowledge that the
information contained in such a certificate is false, the undersigned will
not deliver a Security in temporary or definitive bearer form to the person
who signed such certificate notwithstanding the delivery of such
certificate to the undersigned.
As used herein, "United States person" means any citizen or
resident of the United States, any corporation, partnership or other entity
created or organized in or under the laws of the United States and any
estate or trust the income of which is subject to United States Federal
income taxation regardless of its source, and "United States" means the
United States of America (including the States and the District of
Columbia), its territories, its possessions and other areas subject to its
jurisdiction.
B.1-1
<PAGE>
We undertake to advise you by telex if the above statement as to
beneficial ownership is not correct on the date of delivery of the
above-captioned Securities in bearer form as to all of such Securities.
We understand that this certificate may be required in connection
with certain tax legislation in the United States. If administrative or
legal proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to
produce this certificate or a copy thereof to any interested party in such
proceedings.
Dated: _________________
[To be dated on or after
_______________, 19__
(the date determined as
provided in the Indenture)]
[Name of Person Entitled to Receive
Security]
------------------------------------
(Authorized Signatory)
Name:
Title:
B.1-2
<PAGE>
EXHIBIT B.2
[FORM OF CERTIFICATE TO BE GIVEN BY EUROCLEAR AND CEDEL IN
CONNECTION WITH THE EXCHANGE OF A PORTION OF A TEMPORARY BOOK-
ENTRY SECURITY]
CERTIFICATE
----------------
[Insert title or sufficient description of Securities to be delivered]
This is to certify with respect to $principal amount of the
above-captioned Securities (a) that we have received from each of the
persons appearing in our records as persons entitled to a portion of such
principal amount (our "Qualified Account Holders") a certificate with
respect to such portion substantially in the form attached hereto, and (b)
that we are not submitting herewith for exchange any portion of the
temporary global Security representing the above-captioned Securities
excepted in such certificates.
We further certify that as of the date hereof we have not received
any notification from any of our Qualified Account Holders to the effect
that the statements made by such Qualified Account Holders with respect to
any portion of the part submitted herewith for exchange are no longer true
and cannot be relied upon as of the date hereof.
Dated: _________________
[To be dated no earlier than
the Exchange Date]
[Morgan Guaranty Trust Company of New
York, Brussels Office, as Operator of the
Euroclear System]
[Centrale de Livraison de Valeurs
Mobilieres S.A.]
By:_______________________________
B.2-1
<PAGE>
EXHIBIT B.3
[FORM OF CERTIFICATE TO BE GIVEN BY EUROCLEAR AND CEDEL TO OBTAIN
INTEREST PRIOR TO AN EXCHANGE DATE]
CERTIFICATE
----------------
[Insert title or sufficient description of Securities]
We confirm that the interest payable on the Interest Payment Date
on [Insert Date ] will be paid to each of the persons appearing in our
records as being entitled to interest payable on such date from whom we
have received a written certification, dated not earlier than such Interest
Payment Date, substantially in the form attached hereto. We undertake to
retain certificates received from our member organizations in connection
herewith for four years from the end of the calendar year in which such
certificates are received.
We undertake that any interest received by us and not paid as
provided above shall be returned to the Trustee for the above Securities
immediately prior to the expiration of two years after such Interest
Payment Date in order to be repaid by such Trustee to the above issuer at
the end of two years after such Interest Payment Date.
Dated: ________________
[To be dated on or after the
relevant Interest Payment Date]
[Morgan Guaranty Trust Company of New
York, Brussels Office, as Operator of the
Euro-clear System]
[Centrale de Livraison de Valeurs
Mobilieres S.A.]
By:
- -----------------------
B.3-1
<PAGE>
EXHIBIT B.4
[FORM OF CERTIFICATE TO BE GIVEN BY BENEFICIAL OWNERS TO OBTAIN
INTEREST PRIOR TO AN EXCHANGE DATE]
CERTIFICATE
----------------
[Insert title or sufficient description of Securities]
This is to certify that as of the Interest Payment Date on [Insert
Date] and except as provided in the third paragraph hereof, none of the
above-captioned Securities held by you for our account was beneficially
owned by a United States person or, if any of such Securities held by you
for our account were beneficially owned by a United States person, such
United States person either provided an Internal Revenue Service Form W-9
with respect to such interest payment or certified with respect to such
interest payment that it was an exempt recipient as defined in Section
1.6049-4(c)(1)(ii) of the United States Treasury regulations.
As used herein, "United States person" means any citizen or
resident of the United States, any corporation, partnership or other entity
created or organized in or under the laws of the United States and any
estate or trust the income of which is subject to United States Federal
income taxation regardless of its source, and "United States" means the
United States of America (including the States and the District of
Columbia), its territories, its possessions and other areas subject to its
jurisdiction.
This certificate excepts and does not relate to U.S. $_________
principal amount of the above-captioned Securities appearing in your books
as being held for our account as to which we are not able to certify and as
to which we understand interest cannot be credited unless and until we are
able so to certify.
We understand that this certificate may be required in connection
with certain tax legislation in the United States. If administrative or
legal proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to
produce this certificate or a copy thereof to any interested party in such
proceedings.
B.4-1
<PAGE>
Dated: ________________
[To be dated on or after the
15th day before the relevant
Interest Payment Date]
[Name of Person Entitled to Receive
Interest]
-----------------------------------
(Authorized Signatory)
Name:
Title:
[If the withholding agent is not a foreign branch of a financial
institution described in Section 871(h)(4)(B) of the Internal Revenue Code
of 1986, as amended, and a United States person, this certificate must be
signed under penalties of perjury.]
B.4-2
Exhibit 4(b)(1)
FORM OF PASS THROUGH TRUST AGREEMENT
------------------------------------
PASS THROUGH TRUST AGREEMENT
Dated as of [DATE]
between
UNITED AIR LINES, INC.
and
[TRUSTEE NAME],
as Trustee
<PAGE>
TABLE OF CONTENTS
||
ARTICLE I
DEFINITIONS
Section 1.01 Definitions..........................................2
Section 1.02 Compliance Certificates and Opinions................12
Section 1.03 Form of Documents Delivered to Trustee..............13
Section 1.04 Directions of Certificateholders....................13
ARTICLE II
ORIGINAL ISSUANCE OF CERTIFICATES;
ACQUISITION OF EQUIPMENT NOTES
Section 2.01 Amount Unlimited; Issuable in Series................15
Section 2.02 Issuance of Certificates; Acquisition of
Equipment Notes...................................17
Section 2.03 Acceptance by Trustee...............................19
Section 2.04 Limitation of Powers................................19
ARTICLE III
THE CERTIFICATES
Section 3.01 Form, Denomination and Execution of Certificates...20
Section 3.02 Restrictive Legends................................20
Section 3.03 Authentication of Certificates.....................21
Section 3.04 Transfer and Exchange..............................21
Section 3.05 Book-Entry Provisions for Global Certificate.......22
Section 3.06 [Reserved].........................................24
Section 3.07 Mutilated, Destroyed, Lost or Stolen Certificates..24
Section 3.08 Persons Deemed Owners..............................25
Section 3.09 Cancellation.......................................25
Section 3.10 Temporary Certificates.............................25
Section 3.11 Limitation of Liability for Payments...............25
Section 3.12. CUSIP Numbers......................................26
i
<PAGE>
ARTICLE IV
DISTRIBUTIONS; STATEMENTS TO
CERTIFICATEHOLDERS
Section 4.01 Certificate Account and Special Payments Account....26
Section 4.02 Distributions from Certificate Account and Special
Payments Account..................................27
Section 4.03 Statements to Certificateholders....................28
Section 4.04 Investment of Special Payment Moneys................29
ARTICLE V
THE COMPANY
Section 5.01 Maintenance of Corporate Existence..................30
Section 5.02 Consolidation, Merger, etc..........................30
ARTICLE VI
DEFAULT
Section 6.01 Events of Default...................................31
Section 6.02. Incidents of Sale of Equipment Notes................32
Section 6.03 Judicial Proceedings Instituted by Trustee; Trustee
May Bring Suit....................................33
Section 6.04 Control by Certificateholders.......................34
Section 6.05 Waiver of Past Defaults.............................34
Section 6.06 Right of Certificateholders to Receive Payments
Not to Be Impaired................................35
Section 6.07 Certificateholders May Not Bring Suit Except Under
Certain Conditions...............................35
Section 6.08 Remedies Cumulative.................................36
Section 6.09. Discontinuance of Proceedings.......................36
Section 6.10. Undertaking for Costs...............................36
ARTICLE VII
THE TRUSTEE
Section 7.01 Certain Duties and Responsibilities.................37
Section 7.02 Notice of Defaults..................................37
Section 7.03 Certain Rights of Trustee...........................38
ii
<PAGE>
Section 7.04 Not Responsible for Recitals or Issuance
of Certificates..................................39
Section 7.05 May Hold Certificates..............................39
Section 7.06 Money Held in Trust................................39
Section 7.07 Compensation and Reimbursement.....................39
Section 7.08 Corporate Trustee Required; Eligibility............40
Section 7.09 Resignation and Removal; Appointment of Successor..41
Section 7.10 Acceptance of Appointment by Successor.............42
Section 7.11 Merger, Conversion, Consolidation or Succession
to Business......................................43
Section 7.12 Maintenance of Agencies............................43
Section 7.13 Money for Certificate Payments to Be Held
in Trust.........................................45
Section 7.14 Registration of Equipment Notes in Name of
Subordination Agent..............................45
Section 7.15 Representations and Warranties of Trustee..........45
Section 7.16 Withholding Taxes; Information Reporting...........47
Section 7.17 Trustee's Liens....................................47
Section 7.18 Preferential Collection of Claims..................47
ARTICLE VIII
CERTIFICATEHOLDERS' LISTS AND REPORTS BY TRUSTEE
Section 8.01 The Company to Furnish Trustee with Names and
Addresses of Certificateholders...................47
Section 8.02 Preservation of Information; Communications
to Certificateholders.............................48
Section 8.03 Reports by Trustee..................................48
Section 8.04 Reports by the Company..............................48
ARTICLE IX
SUPPLEMENTAL AGREEMENTS
Section 9.01 Supplemental Agreements Without Consent of
Certificateholders................................49
Section 9.02 Supplemental Agreements with Consent of
Certificateholders................................51
Section 9.03 Documents Affecting Immunity or Indemnity...........52
Section 9.04 Execution of Supplemental Agreements................52
Section 9.05 Effect of Supplemental Agreements...................52
Section 9.06 Conformity with Trust Indenture Act.................52
Section 9.07 Reference in Certificates to Supplemental
Agreements.........................................52
iii
<PAGE>
ARTICLE X
AMENDMENTS TO INDENTURES AND NOTE DOCUMENTS
Section 10.01 Amendments and Supplements to Indentures and Other
Note Documents....................................53
ARTICLE XI
TERMINATION OF TRUSTS
Section 11.01 Termination of the Trusts...........................54
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Limitation on Rights of Certificateholders.........55
Section 12.02 Certificates Nonassessable and Fully Paid.........55
Section 12.03 Notices............................................55
Section 12.04 Governing Law......................................56
Section 12.05 Severability of Provisions.........................57
Section 12.06 Trust Indenture Act Controls.......................57
Section 12.07 Effect of Headings and Table of Contents...........57
Section 12.08 Successors and Assigns.............................57
Section 12.09 Benefits of Agreement..............................57
Section 12.10 Legal Holidays.....................................57
Section 12.11 Counterparts.......................................57
Section 12.12 Intention of Parties...............................58
Section 12.13 Registration of Equipment Notes in Name of
Subordination Agent..............................58
Section 12.14 Communication by Certificateholders with other
Certificateholders...............................58
Section 12.15. Normal Commercial Relations........................58
Section 12.16. No Recourse Against Others.........................58
||
Schedule 1 - Indentures
Schedule 2 - Note Purchase Agreement
Exhibit A - Form of Certificate
iv
<PAGE>
Reconciliation and tie between United Air Lines Pass Through Trust
Agreement, dated as of [DATE], and the Trust Indenture Act of 1939. This
reconciliation does not constitute part of the Pass Through Trust
Agreement.
||
Trust Indenture Act Pass Through Trust
of 1939 Section Agreement Section
------------------- ------------------
310(a)(1) 7.08
(a)(2) 7.08
312(a) 3.05; 8.01; 8.02
313(a) 8.03
314(a) 8.04(a) - (c)
(a)(4) 8.04(d)
(c)(1) 1.02
(c)(2) 1.02
(d)(1) 7.13; 11.01
(d)(2) 7.13; 11.01
(d)(3) 2.01
(e) 1.02
315(b) 7.02
316(a)(last sentence) 1.04(c)
(a)(1)(A) 6.04
(a)(1)(B) 6.05
(b) 6.06
(c) 1.04(d)
317(a)(1) 6.03
(b) 7.13
318(a) 12.06
||
v
<PAGE>
PASS THROUGH TRUST AGREEMENT
This PASS THROUGH TRUST AGREEMENT, dated as of [DATE],
between UNITED AIR LINES, INC., a Delaware corporation, and [TRUSTEE NAME],
a [ENTITY TYPE], as Trustee, is made with respect to the formation from
time to time of separate United Air Lines Pass Through Trusts and the
issuance from time to time of separate series of Certificates representing
fractional undivided interests in the respective Trusts.
WHEREAS, from time to time the Company (this and certain
other defined terms used herein are defined in Section 1.01) may enter into
a Trust Supplement with the Trustee named therein pursuant to which such
Trustee shall declare the creation of a separate Trust for the benefit of
the Holders of the series of Certificates to be issued in respect of such
Trust, and the initial Holders of the Certificates of such series, as the
grantors of such Trust, by their respective acceptances of the Certificates
of such series, shall join in the creation of such Trust with the Trustee;
WHEREAS, all Certificates to be issued in respect of each
separate Trust shall be issued as a separate series pursuant to this
Agreement, shall evidence fractional undivided interests in such Trust and
shall have no rights, benefits or interests in respect of any other
separate Trust or the property held therein, subject, however, to the
provisions of any Intercreditor Agreement to which one or more Trusts may
be a party and to any provisions to the contrary in any applicable Trust
Supplement;
WHEREAS, from time to time, pursuant to the terms and
conditions of this Agreement with respect to each separate Trust formed
hereunder, the Trustee on behalf of such Trust shall purchase one or more
issues of Equipment Notes having the identical interest rate as, and final
maturity dates not later than the final Regular Distribution Date of, the
series of Certificates issued in respect of such Trust and, subject to the
terms of any related Intercreditor Agreement and to any terms to the
contrary in any applicable Trust Supplement, shall hold such Equipment
Notes in trust for the benefit of the Certificateholders of such Trust;
WHEREAS, to facilitate the sale of Equipment Notes to,
and the purchase of Equipment Notes by, the Trustee on behalf of each Trust
created from time to time pursuant to this Agreement, the Company has duly
authorized the execution and delivery of this Basic Agreement and each
Trust Supplement as the "issuer," as such term is defined in and solely for
purposes of the Securities Act of 1933, as amended, of the Certificates to
be issued in respect of each Trust and as the "obligor," as such term is
defined in and solely for purposes of the Trust Indenture Act of 1939, as
amended, with respect to all such Certificates and is undertaking to
perform certain administrative and ministerial duties hereunder and is also
undertaking to pay the fees and expenses of the Trustee; and
1
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WHEREAS, this Basic Agreement, as amended or supplemented
from time to time, shall be subject to the provisions of the Trust
Indenture Act of 1939, as amended, and shall, to the extent applicable, be
governed by such provisions;
NOW, THEREFORE, in consideration of the mutual agreements
herein contained, and of other good and valuable consideration the receipt
and adequacy of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. For all purposes of this Basic Agreement,
except as otherwise expressly provided or unless the context otherwise
requires:
(a) the terms used herein that are defined in this
Article I have the meanings assigned to them in this Article I,
and include the plural as well as the singular;
(b) all other terms used herein which are defined in the
Trust Indenture Act, either directly or by reference therein, or
by the rules promulgated under the Trust Indenture Act, have the
meanings assigned to them therein;
(c) all references in this Basic Agreement to designated
"Articles," "Sections," "Subsections" and other subdivisions are
to the designated Articles, Sections, Subsections and other
subdivisions of this Basic Agreement;
(d) the words "herein," "hereof" and "hereunder" and
other words of similar import refer to this Basic Agreement as
whole and not to any particular Article, Section, Subsection or
other subdivision; and
(e) unless the context otherwise requires, whenever the
words "including," "include" or "includes" are used herein, it
shall be deemed to be followed by the phrase "without limitation".
Additional Payments: Means a payment of Make-Whole Amount
and/or Break Amount, if any.
Affiliate: With respect to any specified Person, means
any other Person directly or indirectly controlling or controlled
by or under direct or indirect common control with such Person.
For the purposes of this definition, "control," when used with
respect to any specified Person, means the power to direct the
management and policies of such Person, directly or indirectly,
2
<PAGE>
whether through the ownership of voting securities, by contract or
otherwise, and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
Agent Members: Has the meaning specified in Section 3.05(a).
Agreement: Means, unless the context otherwise requires,
this Basic Agreement as supplemented by the Trust Supplement
creating a particular Trust and establishing the series of
Certificates issued or to be issued in respect thereof, with
reference to such Trust and each series of Certificates, as this
Basic Agreement as so supplemented may be further supplemented
with respect to such Trust and such series of Certificates.
Aircraft: Means an aircraft, including engines therefor,
owned by or leased to the Company and securing one or more Equipment
Notes.
Authorized Agent: With respect to the Certificates of any
series, means any Paying Agent or Registrar for the Certificates of
such series.
Avoidable Tax: Means a state or local tax (i) upon (w)
the Trust, (x) the Trust Property, (y) Certificateholders or (z)
the Trustee for which the Trustee is entitled to seek
reimbursement from the Trust Property, and (ii) which would be
avoided if the Trustee were located in another state, or
jurisdiction within a state, within the United States. A tax shall
not be an Avoidable Tax if the Company or an Owner Trustee, if
any, shall agree to pay, and shall pay, such tax.
Basic Agreement: Means this Pass Through Trust Agreement,
as the same may from time to time be supplemented, amended or
modified, but does not include any Trust Supplement.
Break Amount: If applicable, has the meaning specified
therefor in the Indentures.
Business Day: With respect to the Certificates of any
series, means any day (x) other than a Saturday or Sunday or a day
on which commercial banks are required or authorized to close in
Chicago, Illinois, New York, New York, or, so long as any such
Certificate is outstanding, a city and state in which the Trustee
or any related Indenture Trustee maintains its Corporate Trust
Office or receives and disburses funds and (y) on which dealings
are carried on in the London interbank market.
Cedel: Means Cedel Bank, societe anonyme.
Certificate: Means any one of the Certificates and any such
Certificates issued in exchange therefor or replacement thereof
pursuant to this Agreement.
3
<PAGE>
Certificate Account: With respect to the Certificates of any
series, means the account or accounts created and maintained for such
series pursuant to Section 4.01(a).
Certificateholder or Holder: With respect to the
Certificates of any series, means the Person in whose name a
Certificate of such series is registered in the Register for
Certificates of such series.
Company: Means United Air Lines, Inc., a Delaware
corporation, or its successor in interest pursuant to Section
5.02, or (only in the context of provisions hereof, if any, when
such reference is required for purposes of compliance with the
Trust Indenture Act) any other obligor (within the meaning of the
Trust Indenture Act) with respect to the Certificates.
Controlling Party: If applicable, means the Person entitled
to act as such pursuant to the terms of the Intercreditor Agreement.
Corporate Trust Office: With respect to the Trustee or
any Indenture Trustee, means the office of such trustee in the
city at which at any particular time its corporate trust business
shall be principally administered.
Cut-off Date: With respect to the Certificates of a Trust
of any series, means the date designated as such in the related Trust
Supplement.
Definitive Certificates: Has the meaning specified in
Section 3.05(f).
Depositary: Means The Depository Trust Company, its nominees
and their respective successors.
Direction: Has the meaning specified in Section 1.04(a).
Distribution Date: With respect to the Certificates of any
series, means any Regular Distribution Date or Special Distribution
Date.
Eligible Account: Means an account established by and
with an Eligible Institution at the request of the Trustee, which
institution agrees, for all purposes of the applicable Uniform
Commercial Code ("UCC"), including Article 8 thereof, that (a)
such account shall be a "securities account" (as defined in
Section 8-501 of the UCC), (b) all property credited to such
account shall be treated as a "financial asset" (as defined in
Section 8-102(9) of the UCC), (c) the Trustee shall be the
"entitlement holder" (as defined in Section 8-102(7) of the UCC)
in respect of such account, (d) such Eligible Institution shall
comply with all entitlement orders issued by the Trustee to the
exclusion of any other Person and (e) the "securities intermediary
jurisdiction" (under Section 8- 110(e) of the UCC) shall be the
State of Illinois.
4
<PAGE>
Eligible Institution: Means the corporate trust
department of (a) [ELIGIBLE INSTITUTION NAME], acting solely in
its capacity as a "securities intermediary" (as defined in Section
8-102(14) of the applicable Uniform Commercial Code), or (b) a
depository institution organized under the laws of the United
States of America or any one of the states thereof or the District
of Columbia (or any U.S. branch of a foreign bank), which has a
long-term unsecured debt rating from Moody's Investors Service,
Inc. and Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc., of at least "A-3" or its equivalent.
Equipment Note: With respect to the Certificates of any
series, has the meaning given to "Equipment Note" in the related
Indenture.
ERISA: Means the Employee Retirement Income Security Act of
1974, as amended from time to time, or any successor federal statute.
Escrow Account: With respect to the Certificates of any
series, has the meaning specified in Section 2.02(b).
Escrowed Funds: With respect to the Trusts of any series,
has the meaning specified in Section 2.02(b).
Euroclear: Means the Euroclear System.
Event of Default: Means, in respect of any Trusts of a
series, an Indenture Default under any Indenture pursuant to which
Equipment Notes held by such Trusts were issued.
Financing Documents: With respect to any Equipment Note,
means (i) the related Note Purchase Agreement and Indenture and
(ii) in the case of any Equipment Note related to a Leased
Aircraft, the Lease relating to such Leased Aircraft.
Fractional Cumulative Interest: Means, with respect to
any outstanding Certificate of a series, the principal amount of
such Certificate divided by the aggregate principal amount of all
Certificates of such series issued pursuant to all Trust
Supplements creating Trusts of such series.
Fractional Undivided Interest: Means the fractional
undivided interest in a Trust that is evidenced by a Certificate
relating to such Trust.
Global Certificates: Has the meaning assigned to such term
in Section 3.01(c).
Indenture: With respect to any Trust, means each of the
one or more separate trust indenture and security agreements or
trust indentures and mortgages or similar agreements which relates
to an issue of Equipment Notes to be held in such Trust; as each
5
<PAGE>
such indenture may be amended or supplemented in accordance with
its respective terms; and Indentures means all of such agreements.
Indenture Default: With respect to any Indenture, means any
Indenture Event of Default (as such term is defined in such Indenture).
Indenture Trustee: With respect to any Equipment Note or
the Indenture applicable thereto, means the bank or trust company
designated as indenture trustee under such Indenture, together
with any successor to such Indenture Trustee appointed pursuant
thereto.
Initial Regular Distribution Date: With respect to the
Certificates of any series, means the first Regular Distribution Date
on which a Scheduled Payment is to be made.
Intercreditor Agreement: Means (a) any agreement by and
among the Trustee, as trustee with respect to one or more Trusts,
one or more Liquidity Providers, if applicable, and a
Subordination Agent providing, among other things, for the
distribution of payments made in respect of Equipment Notes held
by such Trusts, or (b) such other agreement or agreements
designated as an "Intercreditor Agreement" in the Trust Supplement
relating to any Trust.
Issuance Date: With respect to the Certificates of a Trust
of any series, means the date of the issuance of the Certificates of
such Trust.
Lease: Means, with respect to each Leased Aircraft, if
any, the lease between an Owner Trustee, as the lessor, and the
Company, as the lessee, referred to in the related Indenture, as
such lease may be amended, supplemented or otherwise modified in
accordance with its terms.
Leased Aircraft: Means, with respect to any Lease, each
aircraft that has been leased to United pursuant to such Lease.
Liquidity Facility: Means, with respect to the
Certificates of any series or any Equipment Notes, (a) any
revolving credit agreement, letter of credit, insurance policy,
surety bond or financial guaranty or similar facility for the
provision of liquidity support relating to the Certificates of
such series between a Liquidity Provider and a Subordination Agent
or one or more other Persons, as amended, replaced, supplemented
or otherwise modified from time to time in accordance with its
terms and, if applicable, the terms of any Intercreditor
Agreement, or (b) such other agreement or agreements designated as
a "Liquidity Facility" in the Trust Supplement relating to any
Trust.
Liquidity Provider: Means, with respect to the
Certificates of any series, a bank, insurance company, financial
institution or other Person that agrees to provide a Liquidity
Facility for the benefit of the holders of Certificates of such
series.
6
<PAGE>
Make-Whole Amount: If applicable, has the meaning specified
therefor in the Indenture.
Note Documents: With respect to the Certificates of any
series, the Equipment Notes with respect to such Certificates and,
with respect to such Equipment Notes, the related Financing
Documents.
Note Purchase Agreement: Means, with respect to the
Certificates of any series, any note purchase, refunding,
participation or similar agreement providing for, among other
things, the purchase of Equipment Notes by the Trustee on behalf
of the relevant Trust; and "Note Purchase Agreements" means all
such agreements.
Officer's Certificate: Means a certificate signed, (a) in
the case of the Company, by the Chairman of the Board of
Directors, the President, any Vice President, the Secretary or the
Treasurer, or (b) in the case of an Owner Trustee or an Indenture
Trustee, a Responsible Officer of such Owner Trustee or such
Indenture Trustee, as the case may be.
Opinion of Counsel: Means a written opinion of legal
counsel who (a) in the case of counsel for the Company may be (i)
an attorney of the Company, (ii) Mayer, Brown & Platt or (iii)
such other counsel designated by the Company and reasonably
acceptable to the Trustee and (b) in the case of counsel for any
Owner Trustee or any Indenture Trustee, may be such counsel as may
be designated by any of them whether or not such counsel is an
employee of any of them, and who shall be reasonably acceptable to
the Trustee.
Outstanding: With respect to Certificates of any series,
means, as of the date of determination, all Certificates of such
series theretofore authenticated and delivered under this
Agreement, except:
(i) Certificates of such series theretofore
canceled by the Registrar or delivered to the Trustee or the
Registrar for cancellation;
(ii) All of the Certificates of such series if
money in the full amount required to make the final
distribution with respect to such series pursuant to
Section 11.01 has been theretofore deposited with the
Trustee in trust for the Holders of the Certificates of
such series as provided in Section 4.01 pending
distribution of such money to such Certificateholders
pursuant to such final distribution payment; and
(iii) Certificates of such series in exchange
for or in lieu of which other Certificates of such series
have been authenticated and delivered pursuant to this
Basic Agreement.
Owned Aircraft: Means each aircraft owned by United.
7
<PAGE>
Owner Participant: With respect to any Equipment Note
relating to a Leased Aircraft, if any, means the "Owner
Participant" as referred to in the Indenture pursuant to which
such Equipment Note is issued and any permitted successor or
assign of such Owner Participant; and Owner Participants at any
time of determination means all of the Owner Participants thus
referred to in the Indentures.
Owner Trustee: With respect to any Equipment Note
relating to a Leased Aircraft, if any, means the "Owner Trustee,"
as referred to in the Indenture pursuant to which such Equipment
Note is issued, not in its individual capacity but solely as
trustee; and Owner Trustees means all of the Owner Trustees party
to any of the Indentures.
Paying Agent: With respect to the Certificates of any
series, means the paying agent maintained and appointed for the
Certificates of such series pursuant to Section 7.12.
Permitted Investments: Means direct obligations of the
United States of America or agencies or instrumentalities thereof
the payment of which is backed by the full faith and credit of the
United States of America and which mature in not more than 60 days
after the date of acquisition thereof or such lesser time as is
required for the distribution of any Special Payments on a Special
Distribution Date.
Person: Means any person, including any individual,
corporation, partnership, limited liability company, joint
venture, association, joint-stock company, trust, trustee,
unincorporated organization, or government or any agency or
political subdivision thereof.
Pool Balance: With respect to the Certificates issued
pursuant to the Trusts of the same series, means, as of any date,
(i) the original aggregate face amount of the Certificates of such
series less (ii) the aggregate amount of all payments made in
respect of such Certificates of such series other than payments
made in respect of interest or Additional Payments thereon or
reimbursement of any costs or expenses incurred in connection
therewith. The Pool Balance as of any Distribution Date, with
respect to the Certificates of such Trusts, shall be computed
after giving effect to the payment of principal, if any, on the
Equipment Notes or other Trust Property held in such Trusts and
the distribution thereof to be made on such Distribution Date.
Pool Factor: With respect to the Certificates issued
pursuant to the Trusts of the same series, means, as of any date,
the quotient (rounded to the seventh decimal place) computed by
dividing (i) the Pool Balance of such series as at such date by
(ii) the original aggregate face amount of the Certificates of
such Trusts. The Pool Factor as of any Distribution Date, with
respect to such Trusts, shall be computed after giving effect to
the payment of principal, if any, on the Equipment Notes or other
Trust Property held in such Trusts and the distribution thereof to
be made on such Distribution Date.
8
<PAGE>
Postponed Notes: Means the Equipment Notes to be held in the
Trust as to which a Postponement Notice shall have been delivered
pursuant to Section 2.02(b).
Postponement Notice: Means, with respect to any Trust or
the related series of Certificates, an Officer's Certificate of
the Company (1) requesting that the Trustee temporarily postpone
the purchase of the related Equipment Notes to a date which is
later than the Issuance Date of such series of Certificates, (2)
identifying the amount of the purchase price of each such
Equipment Note and the aggregate purchase price for all such
Equipment Notes, (3) setting forth the reasons for such
postponement and (4) with respect to each such Equipment Note,
either (a) setting or resetting a new Transfer Date (which shall
be on or prior to the applicable Cut-off Date) for payment by the
Trustee of such purchase price and issuance of the related
Equipment Note, or (b) indicating that such new Transfer Date
(which shall be on or prior to the applicable Cut-off Date) shall
be set by subsequent written notice not less than one Business Day
prior to such new Transfer Date.
Potential Purchasers: Has the meaning specified therefor in
Section 6.01(d).
Purchasing Certificateholders: Has the meaning specified
therefor in Section 6.01(d).
Record Date: With respect to any Trust or the related
series of Certificates, means (i) for Scheduled Payments to be
distributed on any Regular Distribution Date, other than the final
distribution, with respect to such series of Certificates, the
15th day (whether or not a Business Day) preceding such Regular
Distribution Date, and (ii) for Special Payments to be distributed
on any Special Distribution Date, other than the final
distribution, with respect to such series of Certificates, the
15th day (whether or not a Business Day) preceding such Special
Distribution Date.
Register and Registrar: With respect to the Certificates
of any series, means the register maintained and the registrar
appointed for such series pursuant to Sections 3.04 and 7.12.
Registration Statement: Means the Registration Statement
of the Company which covers any of the Certificates, including
post-effective amendments, in each case including the prospectus
and prospectus supplement contained therein, all exhibits thereto
and all material incorporated by reference therein.
Regular Distribution Date: With respect to distributions
of Scheduled Payments in respect of any series of Certificates,
means each date designated as a Regular Distribution Date in this
Agreement; provided, however, that, if any such day shall not be a
Business Day, the related distribution shall be made on the next
Business Day together with additional interest accrued to such
next Business Day at the rate applicable to such series of
Certificates.
9
<PAGE>
Responsible Officer: With respect to any Trustee, any
Indenture Trustee and any Owner Trustee, means any officer in the
Corporate Trust Department of the Trustee, Indenture Trustee or
Owner Trustee or any other officer customarily performing
functions similar to those performed by the persons who at the
time shall be such officers, respectively, or to whom any
corporate trust matter is referred because of his knowledge of and
familiarity with a particular subject.
Scheduled Payment: Means, with respect to any Equipment
Note, except to the extent otherwise provided in the applicable
Trust Supplement, (i) any payment of principal or interest on such
Equipment Note (other than any such payment that is not in fact
received by the Trustee or any Subordination Agent within five
days of the date on which such payment is scheduled to be made) or
(ii) any distribution in respect of principal or interest on such
Equipment Note to the Holders of the Certificates of any series
with funds drawn under the Liquidity Facility for such series
(other than any such payment that is not in fact received by the
Trustee or any Subordination Agent within five days of the date
upon which payment is scheduled to be made), which payment in the
case of clause (i) or clause (ii) represents an installment of
principal on such Equipment Note at the stated maturity of such
installment, or the payment of regularly scheduled interest
accrued on the unpaid principal amount of such Equipment Note, or
both; provided, however, that any payment of principal, Additional
Payment, if any, or interest resulting from the redemption or
purchase of any Equipment Note shall not constitute a Scheduled
Payment.
SEC: Means the Securities and Exchange Commission, as
from time to time constituted or created under the Securities
Exchange Act of 1934, as amended, or, if at any time after the
execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties on such date.
Securities Act: Means the United States Securities Act of
1933, as amended from time to time, or any successor thereto.
Selling Certificateholders: Has the meaning specified
therefor in Section 6.01(d).
Special Distribution Date: With respect to the
Certificates of any series, means each date on which a Special
Payment is to be distributed as specified in this Agreement;
provided, however, that, if any such day shall not be a Business
Day, the related distribution shall be made on the next Business
Day together with additional interest accrued to such next
Business Day at the rate applicable to such series of
Certificates.
Special Payment: Means, except to the extent otherwise
provided in the applicable Trust Supplement, (i) any payment
(other than a Scheduled Payment) in respect of, or any proceeds
of, any Equipment Note held in a Trust or Trust Indenture Estate
(as defined in each Indenture), (ii) the amounts required to be
distributed pursuant to the last paragraph of Section 2.02(b), or
(iii) the amounts required to be distributed pursuant to the
penultimate paragraph of Section 2.02(b).
10
<PAGE>
Special Payments Account: With respect to the
Certificates of any series, means the account or accounts created
and maintained for such series pursuant to Section 4.01(b) and the
related Trust Supplement.
Specified Investments: With respect to any Trust, means,
unless otherwise specified in the related Trust Supplement, each
of (i) direct obligations of, or obligations guaranteed by, the
United States Government or agencies thereof, (ii) open market
commercial paper of any corporation incorporated under the laws of
the United States of America or any State thereof rated at least
P-1 or its equivalent by Moody's Investors Service, Inc. or at
least A-1 or its equivalent by Standard & Poor's Ratings Services,
a division of The McGraw-Hill Companies, Inc., (iii) certificates
of deposit issued by commercial banks organized under the laws of
the United States or of any political subdivision thereof having a
combined capital and surplus in excess of $500,000,000 which banks
or their holding companies have a rating of A or its equivalent by
Moody's Investors Service, Inc. or Standard & Poor's Ratings
Services, a division of The McGraw-Hill Companies, Inc.; provided,
however, that the aggregate amount at any one time so invested in
certificates of deposit issued by any one bank shall not exceed 5%
of such bank's capital and surplus, (iv) U.S. dollar denominated
offshore certificates of deposit issued by, or offshore time
deposits with, any commercial bank described in clause (iii) or
any subsidiary thereof and (v) repurchase agreements with any
financial institution having combined capital and surplus of at
least $500,000,000 with any of the obligations described in
clauses (i) through (iv) as collateral; and, provided further,
that if all of the above investments are unavailable, the entire
amount to be invested may be used to purchase federal funds from
an entity described in clause (iii) above.
Subordination Agent: Has the meaning specified therefor in
any Intercreditor Agreement.
Substitute Aircraft: Means, with respect to any Trust,
any Aircraft of a type specified in this Agreement and, at the
election of the Company, substituted prior to the applicable
Cut-off Date, if any, pursuant to the terms of this Agreement.
Transfer Date: Has the meaning assigned to that term or
any of the terms "Delivery Date", "Funding Date" or "Closing Date"
in a Note Purchase Agreement, and in any event refers to any such
date as it may be changed from time to time in accordance with the
terms of such Note Purchase Agreement.
Triggering Event: If any, has the meaning specified therefor
in the Intercreditor Agreement.
Trust: With respect to the Certificates of any series, means
any trust of such series under this Agreement.
Trustee: Means, with respect to any particular Trust, the
institution executing this Agreement as the Trustee, or its successor
in interest, and any successor or other trustee appointed
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as provided herein (it being understood that the same institution
need not act as the Trustee in respect of all of the Trusts
created pursuant to this Basic Agreement and the Trust
Supplements).
Trust Indenture Act: Except as otherwise provided in
Section 9.06, means the United States Trust Indenture Act of 1939
as in force at the date as of which this Basic Agreement was
executed.
Trust Property: Means, with respect to any Trust, except
to the extent otherwise provided in the applicable Trust
Supplement, (i) subject to any related Intercreditor Agreement,
the Equipment Notes held as the property of such Trust, all monies
at any time paid thereon and all monies due and to become due
thereunder, (ii) debt instruments issued by the Company in
accordance with the first paragraph of Section 2.02(b), (iii)
funds from time to time deposited in the related Escrow Account,
the related Certificate Account and the related Special Payments
Account and, subject to any related Intercreditor Agreement, any
proceeds from the sale by the Trustee pursuant to Article VI
hereof of any Equipment Note referred to in (i) above, (iv) all
rights of such Trust and the Trustee, on behalf of the Trust,
under any Intercreditor Agreement or Liquidity Facility,
including, without limitation, all rights to receive all monies
and other property payable thereunder, and (v) all monies or other
property receivable under any Intercreditor Agreement or Liquidity
Facility for such Trust.
Trust Supplement: Means an agreement supplemental hereto
pursuant to which (i) a separate Trust is created for the benefit
of the Holders of the Certificates of a series, (ii) the issuance
of the Certificates of such series representing fractional
undivided interests in such Trust is authorized and (iii) the
terms of the Certificates of such series are established, as such
agreement may from time to time be supplemented, amended or
otherwise modified.
Trustee's Lien: Has the meaning specified in Section 7.17.
Section 1.02 Compliance Certificates and Opinions. Upon any
application or request (except with respect to matters set forth in Article
II) by the Company, any Owner Trustee or any Indenture Trustee to the
Trustee to take any action under any provision of this Basic Agreement or,
in respect of the Certificates of any series, this Agreement, the Trustee
may request that the Company, such Owner Trustee or such Indenture Trustee,
as the case may be, furnish to the Trustee (i) an Officer's Certificate
stating that, in the opinion of the signers, all conditions precedent, if
any, provided for in this Basic Agreement or this Agreement relating to the
proposed action have been complied with and (ii) an Opinion of Counsel
stating that in the opinion of such counsel all such conditions precedent,
if any, have been complied with, except that in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Basic Agreement or this
Agreement relating to such particular application or request, no additional
certificate or opinion need be furnished.
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Every certificate or opinion with respect to compliance
with a condition or covenant provided for in this Basic Agreement or, in
respect of the Certificates of any series, this Agreement (other than a
certificate provided pursuant to Section 8.04(d)) or any Trust Supplement
shall include:
(i) a statement that each individual signing
such certificate or opinion has read such covenant or
condition and the definitions in this Basic Agreement or
this Agreement relating thereto;
(ii) a brief statement as to the nature and
scope of the examination or investigation upon which the
statements or opinions contained in such certificate or
opinion are based;
(iii) a statement that, in the opinion of each
such individual, he has made such examination or
investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or
condition has been complied with; and
(iv) a statement as to whether, in the opinion
of each such individual, such condition or covenant has
been complied with.
Section 1.03 Form of Documents Delivered to Trustee. In any case
where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters
be certified by, or covered by the opinion of, only one such Person, or
that they be so certified or covered by only one document, but one such
Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters and any such Person may
certify or give an opinion as to such matters in one or several documents.
Where any Person is required to make, give or execute two
or more applications, requests, consents, certificates, statements,
opinions or other instruments under this Basic Agreement or, in respect of
the Certificates of any series, this Agreement, they may, but need not, be
consolidated and form one instrument.
Section 1.04 Directions of Certificateholders. (a) Any direction,
consent, request, demand, authorization, notice, waiver or other action
provided by this Agreement in respect of the Certificates of any series to
be given or taken by Certificateholders (a "Direction") may be embodied in
and evidenced by one or more instruments of substantially similar tenor
signed by such Certificateholders in person or by an agent or proxy duly
appointed in writing; and, except as otherwise expressly provided herein,
such action shall become effective when such instrument or instruments are
delivered to the Trustee and, where it is hereby expressly required
pursuant to this Agreement, to the Company or any Indenture Trustee. Proof
of execution of any such instrument or of a writing appointing any such
agent or proxy shall be sufficient for any purpose of this Agreement and
conclusive in favor of the Trustee, the Company and any Indenture Trustee,
if made in the manner provided in this Section 1.04.
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(b) The fact and date of the execution by any Person of
any such instrument or writing may be proved by the certificate of any
notary public or other officer of any jurisdiction authorized to take
acknowledgments of deeds or administer oaths that the Person executing such
instrument acknowledged to him the execution thereof, or by an affidavit of
a witness to such execution sworn to before any such notary or such other
officer and where such execution is by an officer of a corporation or
association or a member of a partnership, on behalf of such corporation,
association or partnership, such certificate or affidavit shall also
constitute sufficient proof of his authority. The fact and date of the
execution of any such instrument or writing, or the authority of the Person
executing the same, may also be proved in any other reasonable manner which
the Trustee deems sufficient.
(c) In determining whether the Certificateholders of the
requisite Fractional Cumulative Interests of Certificates of any series
Outstanding have given any Direction under this Agreement, Certificates
owned by the Company or any Affiliate thereof shall be disregarded and
deemed not to be Outstanding for purposes of any such determination. In
determining whether the Trustee shall be protected in relying upon any such
Direction, only Certificates which the Trustee knows to be so owned shall
be so disregarded. Notwithstanding the foregoing, (i) if any such Person
owns 100% of the Certificates of any series Outstanding, such Certificates
shall not be so disregarded, and (ii) if any amount of Certificates of such
series so owned by any such Person have been pledged in good faith, such
Certificates shall not be disregarded if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to
such Certificates and that the pledgee is not the Company or any Affiliate
thereof.
(d) The Company may at its option, by delivery of an
Officer's Certificate to the Trustee, set a record date to determine the
Certificateholders in respect of the Certificates of any series entitled to
give any Direction. Notwithstanding Section 316(c) of the Trust Indenture
Act, such record date shall be the record date specified in such Officer's
Certificate, which shall be a date not more than 30 days prior to the first
solicitation of Certificateholders of the applicable series in connection
therewith. If such a record date is fixed, such Direction may be given
before or after such record date, but only the Certificateholders of record
of the applicable series at the close of business on such record date shall
be deemed to be Certificateholders for the purposes of determining whether
Certificateholders of the requisite proportion of Outstanding Certificates
of such series have authorized or agreed or consented to such Direction,
and for that purpose the Outstanding Certificates of such series shall be
computed as of such record date. No such Direction by the
Certificateholders on such record date shall be deemed effective unless it
shall become effective pursuant to the provisions of this Basic Agreement
not later than one year after such record date.
(e) Any Direction by the Holder of any Certificate shall
bind the Holder of every Certificate issued upon the transfer thereof or in
exchange therefor or in lieu thereof, whether or not notation of such
Direction is made upon such Certificate.
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(f) Except as otherwise provided in Section 1.04(c),
Certificates of any series owned by or pledged to any Person shall have an
equal and proportionate benefit under the provisions of this Agreement,
without preference, priority or distinction as among all of the
Certificates of such series.
(g) The Company and the Trustee may make reasonable rules
for action by or at a meeting of Certificateholders.
ARTICLE II
ORIGINAL ISSUANCE OF CERTIFICATES;
ACQUISITION OF EQUIPMENT NOTES
Section 2.01 Amount Unlimited; Issuable in Series. (a) The
aggregate principal amount of Certificates which may be authenticated and
delivered under this Basic Agreement is unlimited. The Certificates may be
issued from time to time in one or more series and shall be designated
generally as the "Pass Through Certificates," with such further
designations added or incorporated in such title for the Certificates of
each series as specified in the related Trust Supplement. Each Certificate
shall bear upon its face the designation so selected for the series to
which it belongs. All Certificates of the same series shall be
substantially identical except that the Certificates of a series may differ
as to denomination and as may otherwise be provided in the Trust Supplement
establishing the Certificates of such series. Each series of Certificates
issued pursuant to this Agreement shall evidence fractional undivided
interests in the related Trust and Fractional Cumulative Interests in all
Trusts of such series and shall have no rights, benefits or interests in
respect of any Trust of any other series or the Trust Property held
therein. All Certificates of the same series shall be in all respects
equally and ratably entitled to the benefits of this Agreement without
preference, priority or distinction on account of the actual time or times
of authentication and delivery, all in accordance with the terms and
provisions of this Agreement.
(b) The following matters shall be established with
respect to the Certificates of each series issued hereunder by a Trust
Supplement executed and delivered by and between the Company and the
Trustee:
(i) the formation of the Trust as to which the
Certificates of such series represent fractional
undivided interests and its series designation (which
designation shall distinguish such Trust from each other
Trust of any other series created under this Basic
Agreement and a Trust Supplement);
(ii) the specific title of the Certificates of
such series (which title shall distinguish the
Certificates of such series from each other series of
Certificates created under this Basic Agreement and a
Trust Supplement);
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(iii) any limit upon the aggregate principal
amount of the Certificates of such series which may be
authenticated and delivered (which limit shall not
pertain to Certificates authenticated and delivered upon
registration of transfer of, or in exchange for, or in
lieu of, other Certificates of the series pursuant to
Sections 3.04, 3.07 and 3.10);
(iv) the Cut-off Date with respect to the
Certificates of such series;
(v) the Regular Distribution Dates applicable
to the Certificates of such series;
(vi) the Special Distribution Dates applicable
to the Certificates of such series and the related Trust;
(vii) if other than as provided in Section
7.12(b), the Registrar or the Paying Agent for the
Certificates of such series, including any Co-Registrar
or additional Paying Agent;
(viii) if other than as provided in Section
3.01, the denominations in which the Certificates of such
series shall be issuable;
(ix) if other than United States dollars, the
currency or currencies (including composite currencies or
currency units) in which the Certificates of such series
shall be denominated or payable;
(x) the specific form of the Certificates of
such series (including the interest rate applicable
thereto);
(xi) a description of the Equipment Notes to be
acquired and held in the related Trust and of the related
Aircraft and the other Note Documents;
(xii) provisions with respect to the terms for
which the definitions set forth in Article I permit or
require further specification in the related Trust
Supplement;
(xiii) any restrictions (including legends) in
respect of ERISA;
(xiv) the acceptance of appointment by the
institution named to act as Trustee with respect to such
Trust, if different from the institution executing this
Basic Agreement or its successor;
(xv) whether such series will be subject to an
Intercreditor Agreement and, if so, the specific
designation of such Intercreditor Agreement and the
rights of Potential Purchasers upon the occurrence of a
Triggering Event;
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(xvi) whether such series will have the benefit
of a Liquidity Facility and, if so, any terms appropriate
thereto;
(xvii) whether there will be a deposit
agreement, escrow agreement or other arrangement prior to
the delivery of one or more Aircraft or the commencement
of the Lease in respect of one or more Aircraft and, if
so, any terms appropriate thereto;
(xviii) the extent, if any, to which the Company
may acquire Certificates and deliver such Certificates or
cash to the respective Trusts and obtain the release of
Equipment Notes or other Trust Property held by such
Trusts;
(xix) if the Certificates of such series are to
be issued in bearer form, the forms thereof and any other
special terms relating thereto;
(xx) any other terms of the Certificates of such
series (which terms shall not be inconsistent with the
provisions of the Trust Indenture Act), including any
terms which may be required or advisable under Untied
States laws or regulations or advisable in connection
with the marketing of Certificates of the series.
(c) At any time and from time to time after the execution
and delivery of this Basic Agreement and a Trust Supplement forming a Trust
and establishing the terms of Certificates of a series, Certificates of
such series shall be executed, authenticated and delivered by the Trustee
to the Person or Persons specified by the Company upon request of the
Company and upon satisfaction of any conditions precedent set forth in such
Trust Supplement or in any other document to which the Trustee is a party
relating to the issuance of the Certificates of such series.
Section 2.02 Issuance of Certificates; Acquisition of Equipment
Notes. (a) Unless otherwise specified in the related Trust Supplement, the
Trustee is hereby directed to execute and deliver the Intercreditor
Agreement, if any, and the related Note Purchase Agreements on or prior to
the Issuance Date of the Certificates of a series, each in the form
delivered to the Trustee by the Company, and is hereby directed to and
shall, subject to the respective terms thereof, perform its obligations
thereunder. Upon request of the Company and the satisfaction of the closing
conditions specified in the related Note Purchase Agreement, the Trustee
shall execute, deliver and authenticate such Certificates equaling in the
aggregate the aggregate principal amount of the Equipment Notes to be
purchased by the Trustee pursuant to the Note Purchase Agreement on the
Transfer Date, and evidencing the entire ownership interest in the related
Trust. The Trustee shall issue and sell such Certificates, in authorized
denominations and in such Fractional Undivided Interests, so as to result
in the receipt by the Trustee of consideration in an amount equal to the
aggregate principal amount of such Equipment Notes and, concurrently
therewith, the Trustee shall purchase, pursuant to the terms and conditions
of the Note Purchase Agreement, the Equipment Notes (except Postponed
Notes, if any) at a purchase price equal to the amount of such
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consideration so received. Except as provided in Sections 3.04 and 3.07,
the Trustee shall not execute, authenticate or deliver Certificates of any
series in excess of the aggregate amount specified in this Section 2.02(a).
The provisions of this Section 2.02(a) are subject to the provisions of
Section 2.02(b) below.
(b) If on or prior to the Issuance Date with respect to a
series of Certificates, the Company shall deliver to the Trustee a
Postponement Notice relating to one or more Postponed Notes, the Trustee
shall postpone the purchase of the Postponed Notes from the consideration
received from the sale of such Certificates and shall promptly deposit
funds in an amount equal to the purchase price of such Postponed Notes (the
"Escrowed Funds") into an escrow account (the "Escrow Account") with the
Trustee to be maintained as a part of the related Trust. The Escrowed Funds
so deposited shall be invested by the Trustee at the direction and risk of,
and for the benefit of, the Company in Specified Investments (i) maturing
no later than any scheduled Transfer Date relating to the Postponed Notes
or (ii) if no such Transfer Date has been scheduled, maturing on the next
Business Day, or (iii) if the Company has given notice to the Trustee that
any Postponed Notes shall not be issued or be available for purchase, with
respect to the portion of the Escrowed Funds relating to such Postponed
Notes, maturing on the next applicable Special Distribution Date, if such
investments are reasonably available for purchase. The Trustee shall make
withdrawals from the Escrow Account only as provided in this Agreement.
Upon request of the Company on one or more occasions and the satisfaction
or waiver of the closing conditions specified in the Note Purchase
Agreement on or prior to the Cut-off Date, the Trustee shall purchase the
applicable Postponed Notes with the Escrowed Funds withdrawn from the
Escrow Account.
The Trustee shall hold all Specified Investments until
the maturity thereof and shall not sell or otherwise transfer Specified
Investments. If Specified Investments held in an Escrow Account mature
prior to any applicable Transfer Date, any proceeds received on the
maturity of such Specified Investments (other than any earnings thereon)
shall be reinvested by the Trustee at the direction and risk of, and for
the benefit of, the Company in Specified Investments maturing as provided
in the preceding paragraph.
On the Initial Regular Distribution Date in respect of
the Certificates of any series, the Company shall pay (in immediately
available funds) to the Trustee an amount equal to (i) the sum of (A) the
interest that would have accrued on any Postponed Notes purchased on or
prior to the Initial Regular Distribution Date if such Postponed Notes had
been purchased on the Issuance Date, from and including the Issuance Date
to but excluding the date of such purchase and (B) the interest that would
have accrued on any Postponed Notes not purchased on or prior to the
Initial Regular Distribution Date (other than any Postponed Notes for which
a Special Distribution Date specified in the next paragraph has occurred on
or prior to the Initial Regular Distribution Date) if such Postponed Notes
had been purchased on the Issuance Date, from and including the Issuance
Date to but excluding the Initial Regular Distribution Date, minus (ii) the
earnings on Specified Investments received by the Trustee from and
including the later of the Issuance Date or the date preceding the Initial
Regular Distribution Date on which an amount has been paid pursuant to the
next paragraph to but excluding the Initial Regular Distribution Date. On
the second Regular Distribution Date, the Company shall pay (in immediately
available funds) to the Trustee an amount equal to (i) the interest that
would have accrued on any Postponed Notes purchased after the Initial
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Regular Distribution Date and on or prior to the Cut-off Date if such
Postponed Notes had been purchased on the Initial Regular Distribution
Date, from and including the Initial Regular Distribution Date to but
excluding the date of such purchase, minus (ii) the earnings on Specified
Investments received by the Trustee from and including the later of the
Initial Regular Distribution Date or the date preceding the second Regular
Distribution Date on which an amount has been paid pursuant to either of
the next two paragraphs to but excluding the second Regular Distribution
Date. The Company shall pay to the Trustee for deposit to the relevant
Escrow Account an amount equal to any losses on such Specified Investments
as incurred.
If, in respect of the Certificates of any series, the
Company notifies the Trustee prior to the Cut-off Date that any Postponed
Notes shall not be issued or be available for purchase on or prior to the
Cut-off Date for any reason, on the next Special Distribution Date for such
Certificates occurring more than 20 days following the date of such notice
(i) the Company shall pay to the Trustee for deposit in the related Special
Payments Account, in immediately available funds, an amount equal to the
interest that would have accrued on the Postponed Notes designated in such
notice at a rate equal to the interest rate applicable to such Certificates
from and including the Issuance Date (if such Special Distribution Date
shall occur on or prior to the Initial Regular Distribution Date) or the
Initial Regular Distribution Date (if such Special Distribution Date occurs
after the Initial Regular Distribution Date) to but excluding such Special
Distribution Date and (ii) the Trustee shall transfer an amount equal to
that amount of Escrowed Funds that would have been used to purchase the
Postponed Notes designated in such notice plus the amount paid by the
Company pursuant to the preceding clause (i) to the related Special
Payments Account for distribution as a Special Payment in accordance with
the provisions hereof.
If, on the Cut-off Date, an amount equal to less than all
of the Escrowed Funds (other than Escrowed Funds referred to in the
preceding paragraph) has been used to purchase Postponed Notes, on the next
Special Distribution Date occurring more than 20 days following the Cut-off
Date (i) the Company shall pay to the Trustee for deposit in the Special
Payments Account, in immediately available funds, an amount equal to the
interest that would have accrued on the Postponed Notes originally
contemplated to be purchased with such unused Escrowed Funds (other than
Escrowed Funds referred to in the preceding paragraph) but not so purchased
at a rate equal to the interest rate applicable to the Certificates from
and including the Initial Regular Distribution Date to but excluding such
Special Distribution Date and (ii) the Trustee shall transfer such unused
Escrowed Funds and the amount paid by the Company pursuant to the preceding
clause (i) to such Special Payments Account for distribution as a Special
Payment in accordance with the provisions hereof.
Section 2.03 Acceptance by Trustee. The Trustee, upon the
execution and delivery of a Trust Supplement creating a Trust and issuing a
series of Certificates, acknowledges its acceptance of all right, title and
interest in and to the Equipment Notes acquired pursuant to Section 2.02
and the related Note Purchase Agreement and declares that the Trustee holds
and shall hold such right, title and interest, together with all other
property constituting the Trust Property of such Trust, for the benefit of
all then present and future Certificateholders of such series, upon the
trusts herein and in such Trust Supplement set forth. By its payment for
and acceptance of each Certificate of such series issued to it under this
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Agreement, each initial Certificateholder of such series as grantor of such
Trust thereby joins in the creation and declaration of such Trust and
grants to the Trustee the powers conferred by this Agreement.
Section 2.04 Limitation of Powers. Each Trust is constituted
solely for the purpose of making the investment in the Equipment Notes
provided for in the related Trust Supplement, and, except as set forth
herein or in this Agreement, the Trustee shall not be authorized or
empowered to acquire any other investments or engage in any other
activities and, in particular, the Trustee shall not be authorized or
empowered to do anything that would cause such Trust to fail to qualify as
a "grantor trust" for federal income tax purposes (including as subject to
this restriction, acquiring any Aircraft (as defined in the respective
related Indentures) by bidding such Equipment Notes or otherwise, or taking
any action with respect to any such Aircraft once acquired).
ARTICLE III
THE CERTIFICATES
Section 3.01 Form, Denomination and Execution of Certificates. (a)
Each Certificate shall represent a fractional undivided interest in a Trust
and shall be substantially in the form set forth as Exhibit A, with such
appropriate insertions, omissions, substitutions and other variations as
are required or permitted by this Agreement and may have such letters,
numbers or other marks of identification and such legends or endorsements
placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such Certificates, as evidenced by their execution of
the Certificates. Any portion of the text of any Certificate may be set
forth on the reverse thereof, with an appropriate reference thereto on the
face of the Certificate.
(b) Except as otherwise provided in the related Trust
Supplement, the Certificates of each series shall be issued only in fully
registered form without coupons and only in denominations of $1,000 or
integral multiples of $1,000 in excess thereof. Each Certificate shall be
dated the date of its authentication.
(c) Except as otherwise provided in the related Trust
Supplement, the Certificates of any series shall be issued initially in the
form of a single permanent global Certificate of such series in registered
form, substantially in the form set forth as Exhibit A (the "Global
Certificate"), duly executed and authenticated by the Trustee as
hereinafter provided. The Global Certificate for each series shall be
registered in the name of Cede & Co., as nominee for the Depositary, and
deposited with the Trustee, as custodian for the Depositary. The aggregate
principal amount of the Global Certificate for any series may from time to
time be increased or decreased by adjustments made on the records of the
Depositary or its nominee, or of the Trustee, as custodian for the
Depositary or its nominee, as hereinafter provided.
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(d) The Definitive Certificates shall be in registered
form and shall be typed, printed, lithographed or engraved or produced by
any combination of these methods or may be produced in any other manner,
all as determined by the officers executing such Certificates, as evidenced
by their execution of such Certificates.
Section 3.02 Restrictive Legends. The Global Certificate of each
series shall also bear the following legend on the face thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE TRUSTEE OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IN
EXCHANGE FOR THIS CERTIFICATE IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE &
CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL CERTIFICATE SHALL BE LIMITED TO TRANSFERS
IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF
THIS GLOBAL CERTIFICATE SHALL BE LIMITED TO TRANSFERS MADE IN
ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 3.05 OF THE
PASS THROUGH TRUST AGREEMENT REFERRED TO HEREIN.
Section 3.03 Authentication of Certificates. (a) The Trustee shall
duly execute, authenticate and deliver Certificates of each series in
authorized denominations equaling in the aggregate the aggregate principal
amount of the Equipment Notes to be purchased by the Trustee pursuant to
the Note Purchase Agreement and evidencing the entire ownership of the
related Trust. Thereafter, the Trustee shall duly execute, authenticate and
deliver the Certificates of a series as herein provided.
(b) No Certificate shall be entitled to any benefit under
this Agreement or be valid or obligatory for any purpose, unless there
appears on such Certificate a certificate of authentication substantially
in the form provided for herein executed by the Trustee by the manual
signature of one of its authorized signatories, and such certificate of
authentication upon any Certificate shall be conclusive evidence, and the
only evidence, that such Certificate has been duly authenticated and
delivered hereunder.
Section 3.04 Transfer and Exchange. The Trustee shall cause to be
kept at the office or agency to be maintained by it in accordance with the
provisions of Section 7.12 a register (the "Register") for each
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series of Certificates in which, subject to such reasonable regulations as
it may prescribe, the Trustee shall provide for the registration of
Certificates of such series and of transfers and exchanges of such
Certificates as herein provided. The Trustee shall initially be the
registrar (the "Registrar") for the purpose of registering Certificates of
each series and transfers and exchanges of such Certificates as herein
provided. A Certificateholder may transfer a Certificate by written
application to the Registrar stating the name of the proposed transferee
and otherwise complying with the terms of this Agreement, including
providing a written certificate or other evidence of compliance with any
restrictions on transfer. No such transfer shall be effected until, and
such transferee shall succeed to the rights of a Certificateholder only
upon, final acceptance and registration of the transfer by the Registrar in
the Register. Prior to the registration of any transfer by a
Certificateholder as provided herein, the Trustee shall treat the person in
whose name the Certificate is registered as the owner thereof for all
purposes, and the Trustee shall not be affected by notice to the contrary.
Furthermore, the Depositary shall, by acceptance of a Global Certificate,
agree that transfers of beneficial interests in such Global Certificate may
be effected only through a book-entry system maintained by the Depositary
(or its agent), and that ownership of a beneficial interest in such
Certificate shall be required to be reflected in a book entry. When
Certificates of a series are presented to the Registrar with a request to
register the transfer or to exchange them for an equal aggregate Fractional
Undivided Interest of Certificates of like series of other authorized
denominations, the Registrar shall register the transfer or make the
exchange as requested if its requirements for such transactions are met. To
permit registrations of transfers and exchanges in accordance with the
terms, conditions and restrictions hereof, the Trustee shall execute and
authenticate Certificates at the Registrar's request. No service charge
shall be made for any registration of transfer or exchange of the
Certificates, but the Trustee may require payment by the transferor of a
sum sufficient to cover any transfer tax or similar governmental charge
payable in connection therewith (other than any such transfer taxes or
other similar governmental charges payable upon exchanges pursuant to
Section 3.10 or 9.07).
Section 3.05 Book-Entry Provisions for Global Certificate. (a)
Members of, or participants in, the Depositary ("Agent Members") shall have
no rights under this Agreement with respect to any Global Certificate of
any series held on their behalf by the Depositary, or the Trustee as its
custodian, and the Depositary may be treated by the Trustee and any agent
of the Trustee as the absolute owner of such Global Certificate for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall
prevent the Trustee or any agent of the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the
Depositary or shall impair, as between the Depositary and its Agent
Members, the operation of customary practices governing the exercise of the
rights of a holder of any Certificate. Upon the issuance of any Global
Certificate of any series, the Registrar or its duly appointed agent shall
record a nominee of the Depositary as the registered holder of such Global
Certificate.
(b) Transfers of any Global Certificate shall be limited
to transfers of such Global Certificate in whole, but not in part, to
nominees of the Depositary, its successor or such successor's nominees.
Beneficial interests in the Global Certificate of any series may be
transferred in accordance with the rules and procedures of the Depositary.
Beneficial interests in the Global Certificate of any series shall be
delivered to all beneficial owners in the form of Definitive Certificates
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of such series, if (i) the Depositary notifies the Trustee that it is
unwilling or unable to continue as Depositary for such Global Certificate
and a successor depositary is not appointed by the Trustee within 90 days
of such notice, (ii) the Company, at its option, advises the Trustee in
writing that it elects to terminate the book-entry system through the
Depositary, or (iii) an Event of Default has occurred and is continuing and
the Registrar has received a request from the Depositary to issue
Definitive Certificates.
(c) Any beneficial interest in one of the Global
Certificates of any series that is transferred to a Person who takes
delivery in the form of an interest in the other Global Certificate of such
series shall, upon such transfer, cease to be an interest in such Global
Certificate and become an interest in the other Global Certificate and,
accordingly, shall thereafter be subject to all transfer restrictions, if
any, and other procedures applicable to beneficial interests in such other
Global Certificate for as long as it remains such an interest.
(d) In connection with the transfer of the entire Global
Certificate of any series to the beneficial owners thereof pursuant to
Section 3.05(b), such Global Certificate shall be deemed to be surrendered
to the Trustee for cancellation, and the Trustee shall execute,
authenticate and deliver, to each beneficial owner identified by the
Depositary in exchange for its beneficial interest in such Global
Certificate, an equal aggregate Fractional Undivided Interest of Definitive
Certificates of like series and of authorized denominations. Neither the
Company, the Registrar, the Paying Agent nor the Trustee shall be liable
for any delay in delivery of such instructions and may conclusively rely
on, and shall be protected in relying on, such registration instructions.
Upon the issuance of Definitive Certificates of such series, the Trustee
shall recognize the Persons in whose names the Definitive Certificates are
registered in the Register as Certificateholders hereunder. Neither the
Company nor the Trustee shall be liable if the Trustee or the Company is
unable to locate a qualified successor Depositary.
(e) [Reserved]
(f) As to the Certificates of any such series, unless and
until definitive, fully registered Certificates (the "Definitive
Certificates") have been issued pursuant to Subsection (b) above:
(1) the provisions of this Section 3.05 shall be in full
force and effect;
(2) the Company, the Paying Agent, the Registrar and the
Trustee may deal with the Depositary for all purposes (including
the making of distributions on the Certificates);
(3) to the extent that the provisions of this Section
3.05 conflict with any other provisions of this Agreement (other
than the provisions of any Trust Supplement expressly amending
this Section 3.05 as permitted by this Basic Agreement), the
provisions of this Section 3.05 shall control;
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(4) the rights of Certificate Owners shall be exercised
only through the Depositary and shall be limited to those
established by law and agreements between such Certificate Owners
and the Agent Members; and Definitive Certificates are issued
pursuant to Subsection (b) above, the Depositary will make
book-entry transfers among the Agent Members and receive and
transmit distributions of principal, interest and premium, if any,
on the Certificates to such Agent Members;
(5) such Certificates of such series may be transferred
in whole, but not in part, and in the manner provided in Section
3.04, by the Depositary holding such Certificates to a nominee of
such Depositary, or by such Depositary to a successor Depositary
that has been selected or approved by the Company or to a nominee
of such successor Depositary; and
(6) whenever this Agreement requires or permits actions
to be taken based upon instructions or directions of
Certificateholders of such series holding Certificates of such
series evidencing a specified percentage of the Fractional
Undivided Interests in the related Trust, the Depositary shall be
deemed to represent such percentage only to the extent that it has
received instructions to such effect from Agent Members owning or
representing, respectively, such required percentage of the
beneficial interest in Certificates of such series and has
delivered such instructions to the Trustee. Neither the Company
nor the Trustee shall have any obligation to determine whether the
Depositary has in fact received any such instructions.
(g) Whenever notice or other communication to the
Certificateholders of such series is required under this Agreement, unless
and until Definitive Certificates shall have been issued pursuant to
Subsection (b) above, the Trustee shall give all such notices and
communications specified herein to be given to Certificateholders of such
series to the Depositary.
(h) Unless and until Definitive Certificates of a series
are issued pursuant to Subsection (b) above, on the Record Date prior to
each applicable Regular Distribution Date and Special Distribution Date,
the Trustee will request from the Depositary a securities position listing
setting forth the names of all Agent Members reflected on the Depositary's
books as holding interests in the Certificates on such Record Date.
(i) The registered holder of the Global Certificate of
any series may grant proxies and otherwise authorize any Person, including
Agent Members and Persons that may hold interests through Agent Members, to
take any action which a Holder is entitled to take under this Agreement or
the Certificates.
(j) The provisions of this Section 3.05 may be made
inapplicable to any series or may be amended with respect to any series in
the related Trust Supplement.
Section 3.06 [Reserved]
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Section 3.07 Mutilated, Destroyed, Lost or Stolen Certificates. If
(a) any mutilated Certificate is surrendered to the Registrar or the
Registrar receives evidence to its satisfaction of the destruction, loss or
theft of any Certificate and (b) there is delivered to the Registrar and
the Trustee such security, indemnity or bond, as may be required by them to
save each of them harmless, then, in the absence of notice to the Registrar
or the Trustee that such destroyed, lost or stolen Certificate has been
acquired by a bona fide purchaser, and provided that the requirements of
Section 8-405 of the Uniform Commercial Code in effect in any applicable
jurisdiction are met, the Trustee shall execute, authenticate and deliver,
in exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate or Certificates of like series, in
authorized denominations and of like Fractional Undivided Interest and
bearing a number not contemporaneously outstanding.
In connection with the issuance of any new Certificate under this
Section 3.07, the Trustee may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the
Trustee and the Registrar) connected therewith. Any duplicate Certificate
issued pursuant to this Section 3.07 shall constitute conclusive evidence
of the appropriate Fractional Undivided Interest in the related Trust, as
if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.
The provisions of this Section 3.07 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect
to the replacement or payment of mutilated, destroyed, lost or stolen
Certificates.
Section 3.08 Persons Deemed Owners. Prior to due presentment of a
Certificate for registration of transfer, the Trustee, the Registrar and
any Paying Agent may treat the Person in whose name any Certificate is
registered (as of the day of determination) as the owner of such
Certificate for the purpose of receiving distributions pursuant to Article
IV and for all other purposes whatsoever, and none of the Trustee, the
Registrar or any Paying Agent shall be affected by any notice to the
contrary. All payments or distributions made to any such Person shall be
valid and, to the extent of the sum or sums so paid, effectual to satisfy
and discharge the liability for moneys payable on any such Certificate.
Section 3.09 Cancellation. All Certificates surrendered for
payment or transfer or exchange shall, if surrendered to the Trustee or any
agent of the Trustee other than the Registrar, be delivered to the
Registrar for cancellation and shall promptly be canceled by it. No
Certificates shall be authenticated in lieu of or in exchange for any
Certificates canceled as provided in this Section 3.09, except as expressly
permitted by this Agreement. All canceled Certificates held by the
Registrar shall be destroyed and a certification of their destruction
delivered to the Trustee.
Section 3.10 Temporary Certificates. Until Definitive Certificates
of any series are ready for delivery, the Trustee shall execute,
authenticate and deliver temporary Certificates of such series. Temporary
Certificates of each series shall be substantially in the form of
Definitive Certificates of such series but may have insertions,
substitutions, omissions and other variations determined to be appropriate
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by the officers executing the temporary Certificates of such series, as
evidenced by their execution of such temporary Certificates. If temporary
Certificates of any series are issued, the Trustee shall cause Definitive
Certificates of like series to be prepared without unreasonable delay.
After the preparation of Definitive Certificates of such series, the
temporary Certificates shall be exchangeable for Definitive Certificates
upon surrender of such temporary Certificates at the Corporate Trust Office
of the Trustee designated for such purpose pursuant to Section 7.12,
without charge to the Certificateholder. Upon surrender for cancellation of
any one or more temporary Certificates, the Trustee shall execute,
authenticate and deliver in exchange therefor a like face amount of
Definitive Certificates of like series, in authorized denominations and of
a like Fractional Undivided Interest. Until so exchanged, the temporary
Certificates shall be entitled to the same benefits under this Agreement as
Definitive Certificates.
Section 3.11 Limitation of Liability for Payments. All payments
and distributions made to Certificateholders of any series in respect of
the Certificates of such series shall be made only from the Trust Property
of the related Trust and only to the extent that the Trustee shall have
sufficient income or proceeds from such Trust Property to make such
payments in accordance with the terms of Article IV. Each
Certificateholder, by its acceptance of a Certificate, agrees that it shall
look solely to the income and proceeds from the Trust Property of the
related Trust for any payment or distribution due to such Certificateholder
pursuant to the terms of this Agreement and that it shall not have any
recourse to the Company, the Trustee, the Indenture Trustees, the Liquidity
Providers, the Owner Trustees or the Owner Participants, except as
otherwise expressly provided herein or in any Intercreditor Agreement.
The Company is a party to this Agreement solely for purposes of
meeting the requirements of the Trust Indenture Act, and therefore shall
not have any right, obligation or liability hereunder, or under the terms
of any Trust Supplement or any Certificates (except as otherwise expressly
provided herein or therein).
Section 3.12. CUSIP Numbers. The Certificates may include "CUSIP"
numbers (if then generally in use), and if so, the Trustee may use the
CUSIP numbers in notices in respect of the Certificates; provided, however,
that any such notice may state that no representation is made as to the
correctness or accuracy of the CUSIP number printed in the notice or on the
Certificates, that reliance may be placed only on the other identification
numbers printed on the Certificates, and any such notice shall not be
affected by any defect or omission of such CUSIP numbers.
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ARTICLE IV
DISTRIBUTIONS; STATEMENTS TO
CERTIFICATEHOLDERS
Section 4.01 Certificate Account and Special Payments Account. (a)
The Trustee shall establish and maintain on behalf of the
Certificateholders of each series a Certificate Account as one or more
non-interest-bearing accounts. The Trustee shall hold such Certificate
Account in trust for the benefit of the Certificateholders of such series,
and shall make or permit withdrawals therefrom only as provided in this
Agreement. On each day when a Scheduled Payment is made to the Trustee
under any Intercreditor Agreement with respect to the Certificates of such
series, the Trustee, upon receipt thereof, shall immediately deposit the
aggregate amount of such Scheduled Payment in the applicable Certificate
Account.
(b) The Trustee shall establish and maintain on behalf of
the Certificateholders of each series a Special Payments Account as one or
more accounts, which shall be non-interest bearing except as provided in
Section 4.04. The Trustee shall hold such Special Payments Account in trust
for the benefit of the Certificateholders of such series and shall make or
permit withdrawals therefrom only as provided in this Agreement or any
Intercreditor Agreement. On each day when one or more Special Payments are
made to the Trustee or the Subordination Agent, as the case may be, as
holder of the Equipment Notes issued under the related Indenture or to the
Trustee under any Intercreditor Agreement with respect to the Certificates
of such series, the Trustee, upon receipt thereof, shall immediately
deposit the aggregate amount of such Special Payments in such Special
Payments Account.
(c) The Trustee shall present (or, if applicable, cause
the Subordination Agent to present) to the related Indenture Trustee to
which an Equipment Note relates such Equipment Note on the date of its
stated final maturity or, in the case of any Equipment Note which is to be
redeemed in whole pursuant to the related Indenture, on the applicable
redemption date under such Indenture.
Section 4.02 Distributions from Certificate Account and Special
Payments Account. (a) Subject to the provisions of any Intercreditor
Agreement, on each Regular Distribution Date with respect to a series of
Certificates or as soon thereafter as the Trustee has confirmed receipt of
the payment of all or any part of the Scheduled Payments due on the
Equipment Notes held in the related Trust on such date, the Trustee shall
distribute out of the applicable Certificate Account the entire amount
deposited therein pursuant to Section 4.01(a). There shall be so
distributed to each Certificateholder of record of such series on the
Record Date with respect to such Regular Distribution Date (other than as
provided in Section 11.01 concerning the final distribution) by check
mailed to such Certificateholder, at the address appearing in the Register,
such Certificateholder's pro rata share (based on the Fractional Cumulative
Interest in the Trusts of such series held by such Certificateholder) of
the total amount in the applicable Certificate Account, except that, with
respect to Certificates registered on the Record Date in the name of the
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nominee of the Depositary (initially, such nominee to be Cede & Co.), such
distribution shall be made by wire transfer in immediately available funds
to the account designated by such nominee.
(b) Subject to the provisions of any Intercreditor
Agreement, on each Special Distribution Date with respect to any Special
Payment with respect to a series of Certificates or as soon thereafter as
the Trustee has confirmed receipt of the Special Payments due on the
Equipment Notes held in the related Trust or realized upon the sale of such
Equipment Notes, the Trustee shall distribute out of the applicable Special
Payments Account the entire amount of such Special Payment deposited
therein pursuant to Section 4.01(b) of such Special Payment. There shall be
so distributed to each Certificateholder of record of such series on the
Record Date with respect to such Special Distribution Date (other than as
provided in Section 11.01 concerning the final distribution) by check
mailed to such Certificateholder, at the address appearing in the Register,
such Certificateholder's pro rata share (based on the Fractional Cumulative
Interest in the Trusts of such series held by such Certificateholder) of
the total amount in the applicable Special Payments Account on account of
such Special Payment, except that, with respect to Certificates registered
on the Record Date in the name of the nominee of the Depositary (initially,
such nominee to be Cede & Co.), such distribution shall be made by wire
transfer in immediately available funds to the account designated by such
nominee.
(c) The Trustee shall, at the expense of the Company,
cause notice of each Special Payment with respect to a series of
Certificates to be mailed to each Certificateholder of such series at his
address as it appears in the Register. Subject to the provisions of any
Intercreditor Agreement, in the event of redemption or purchase of
Equipment Notes held in the related Trust, such notice shall be mailed not
less than 20 days prior to the Special Distribution Date for the Special
Payment resulting from such redemption or purchase, which Special
Distribution Date shall be the date of such redemption or purchase. In the
event that the Trustee receives a notice from the Company pursuant to
Section 2.02(b) that Postponed Notes will not be purchased by the Trustee,
such notice of Special Payment shall be mailed as soon as practicable after
receipt of such notice from the Company and shall state the Special
Distribution Date for such Special Payment, which shall occur 20 days after
the date of such notice of Special Payment or (if such 20th day is not
practicable) as soon as practicable thereafter. In the event that any
Special Payment is to be made pursuant to the last paragraph of Section
2.02(b), such notice of Special Payment shall be mailed on the Cut-off Date
(or, if such mailing on the Cut-off Date is not practicable, as soon as
practicable after the Cut-off Date) and shall state the Special
Distribution Date for such Special Payment, which shall occur 20 days after
the date of such notice of Special Payment or (if such 20th day is not
practicable) as soon as practicable thereafter. In the case of any other
Special Payments, such notice shall be mailed as soon as practicable after
the Trustee has confirmed that it has received funds for such Special
Payment, stating the Special Distribution Date for such Special Payment
which shall occur not less than 20 days after the date of such notice and
as soon as practicable thereafter. Notices mailed by the Trustee shall set
forth:
(i) the Special Distribution Date and the
Record Date therefor (except as otherwise provided in
Section 11.01);
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(ii) the amount of the Special Payment for each
$1,000 face amount Certificate (taking into account any
payment to be made by the Company pursuant to Section
2.02(b)) and the amount thereof constituting principal,
Additional Payments, and interest;
(iii) the reason for the Special Payment; and
(iv) if the Special Distribution Date is the
same date as a Regular Distribution Date for the
Certificates of such series, the total amount to be
received on such date for each $1,000 face amount
Certificate.
If the Additional Payments, if any, payable upon the redemption or purchase
of an Equipment Note has not been calculated at the time that the Trustee
mails notice of a Special Payment, it shall be sufficient if the notice
sets forth the other amounts to be distributed and states that any
Additional Payments received shall also be distributed.
If any redemption of the Equipment Notes held in any
Trust is canceled, the Trustee, as soon as possible after learning thereof,
shall cause notice thereof to be mailed to each Certificateholder of the
related series at its address as it appears on the Register.
Section 4.03 Statements to Certificateholders. (a) On each
Distribution Date with respect to a series Certificates, the Trustee shall
include with each distribution to Certificateholders of the related series
a Scheduled Payment or Special Payment, as the case may be, a statement
setting forth the following information (per $1,000 face amount Certificate
as to (i) and (ii) below):
(i) the amount of such distribution allocable
to principal and the amount allocable to Additional Payments;
(ii) the amount of such distribution allocable to
interest; and
(iii) the Pool Balance and the Pool Factor of
the related Trust.
With respect to the Certificates registered in the name
of Cede & Co., as nominee for the Depositary, on the Record Date prior to
each Distribution Date, the Trustee shall request from the Depositary a
securities position listing setting forth the names of all Agent Members
reflected on the Depositary's books as holding interests in the
Certificates on such Record Date. On each Distribution Date, the Trustee
shall mail to each such Agent Member the statement described above and
shall make available additional copies as requested by such Agent Member
for forwarding to holders of interests in the Certificates.
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(b) Within a reasonable period of time after the end of
each calendar year but not later than the latest date permitted by law, the
Trustee shall furnish to each Person who at any time during such calendar
year was a Certificateholder of record a statement containing the sum of
the amounts determined pursuant to clauses (a)(i) and (a)(ii) above with
respect to the related Trust for such calendar year or, if such Person was
a Certificateholder of record during a portion of such calendar year, for
such portion of such year, and such other items as are readily available to
the Trustee and which a Certificateholder shall reasonably request as
necessary for the purpose of such Certificateholder's preparation of its
United States federal income tax returns. With respect to Certificates
registered in the name of a Depositary or its nominee, such statement and
such other items shall be prepared on the basis of information supplied to
the Trustee by the Agent Members and shall be delivered by the Trustee to
such Agent Members to be available for forwarding by such Agent Members to
the holders of interests in the Certificates in the manner described in
Section 4.03(a).
Section 4.04 Investment of Special Payment Moneys. Any money
received by the Trustee pursuant to Section 4.01(b) representing a Special
Payment which is not to be promptly distributed shall, to the extent
practicable, be invested in Permitted Investments by the Trustee pending
distribution of such Special Payment pursuant to Section 4.02(b). Any
investment made pursuant to this Section 4.04 shall be in such Permitted
Investments having maturities not later than the date that such moneys are
required to be used to make the payment required under Section 4.02(b) on
the applicable Special Distribution Date and the Trustee shall hold any
such Permitted Investments until maturity. The Trustee shall have no
liability with respect to any investment made pursuant to this Section
4.04, other than by reason of the willful misconduct or negligence of the
Trustee. All income and earnings from such investments shall be distributed
on such Special Distribution Date as part of such Special Payment.
ARTICLE V
THE COMPANY
Section 5.01 Maintenance of Corporate Existence. The Company, at
its own cost and expense, shall do or cause to be done all things necessary
to preserve and keep in full force and effect its corporate existence,
rights and franchises, except as otherwise specifically permitted in
Section 5.02; provided, however, that the Company shall not be required to
preserve any right or franchise if the Company shall determine that the
preservation thereof is no longer necessary or desirable in the conduct of
the business of the Company.
Section 5.02 Consolidation, Merger, etc. The Company shall not
consolidate with or merge into any other corporation or convey, transfer or
lease substantially all of its assets as an entirety to any Person unless:
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(a) the corporation formed by such consolidation or into
which the Company is merged or the Person that acquires by
conveyance, transfer or lease substantially all of the assets of
the Company as an entirety shall (i) be a "citizen of the United
States" as defined in 49 U.S.C. 40102(a)(15), as amended, and (ii)
hold an air carrier operating certificate issued by the Secretary
of Transportation pursuant to Chapter 447 of Title 49 of the
United States Code, as amended, for aircraft capable of carrying
10 or more individuals or 6,000 pounds or more of cargo; if and so
long as such status is a condition of entitlement to the benefits
of Section 1110 of the Bankruptcy Reform Act of 1978, as amended
(11 U.S.C. Section 1110); and
(b) the corporation formed by such consolidation or into
which the Company is merged or the Person which acquires by
conveyance, transfer or lease substantially all of the assets of
the Company as an entirety shall execute and deliver to the
Trustee applicable to the Certificates of each series an agreement
in form and substance reasonably satisfactory to the Trustee
containing an assumption by such successor corporation or Person
of the due and punctual performance and observance of each
covenant and condition of this Agreement.
Upon any consolidation or merger, or any conveyance,
transfer or lease of substantially all of the assets of the Company as an
entirety in accordance with this Section 5.02, the successor corporation or
Person formed by such consolidation or into which the Company is merged or
to which such conveyance, transfer or lease is made shall succeed to, and
be substituted for, and may exercise every right and power of, the Company
under this Agreement applicable to the Certificates of each series with the
same effect as if such successor corporation or Person had been named as
the Company herein. No such conveyance, transfer or lease of substantially
all of the assets of the Company as an entirety shall have the effect of
releasing any successor corporation or Person which shall have become such
in the manner prescribed in this Section 5.02 from its liability in respect
of this Agreement, the Note Purchase Agreement and any Financing Document
applicable to the Certificates of such series to which it is a party.
The Trustee may receive an Officer's Certificate and an
Opinion of Counsel of the Company as conclusive evidence that any such
consolidation, merger, conveyance, transfer or lease and any assumption
agreement mentioned in Section 5.02(b) comply with this Section 5.02.
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ARTICLE VI
DEFAULT
Section 6.01 Events of Default. (a) Exercise of Remedies. If in
respect of any Trust, any Event of Default shall occur and be continuing,
then, and in each and every case, so long as such Event of Default shall be
continuing and subject to the provisions of any Intercreditor Agreement,
the Trustee may vote all of the Equipment Notes issued under the related
Indenture and held in such Trust, and, upon the direction of the
Certificateholders holding Certificates evidencing Fractional Undivided
Interests in such Trust aggregating not less than a majority in interest in
such Trust, the Trustee shall vote not less than a corresponding majority
of such Equipment Notes in favor of directing the Indenture Trustee under
such Indenture to declare the unpaid principal amount of the Equipment
Notes then outstanding to which such Event of Default relates and accrued
interest thereon to be due and payable under, and in accordance with the
provisions of, the relevant Indenture. In addition, if an Indenture Event
of Default shall have occurred and be continuing under any Indenture,
subject to the provisions of any Intercreditor Agreement, the Trustee may
in accordance with the relevant Indenture vote the Equipment Notes held in
the Trust to which such Event of Default relates to direct the Indenture
Trustee regarding the exercise of remedies provided in such Indenture.
(b) In addition, after an Event of Default shall have
occurred and be continuing with respect to any Equipment Note, subject to
the provisions of any Intercreditor Agreement, the Trustee may in its
discretion, and upon the direction of the Certificateholders holding
Certificates evidencing Fractional Undivided Interests aggregating not less
than a majority in interest in the related Trust shall, by such officer or
agent as it may appoint, sell, convey, transfer and deliver such Equipment
Note or Equipment Notes, without recourse to or warranty by the Trustee or
any Certificateholder, to any Person. In any such case, the Trustee shall
sell, assign, contract to sell or otherwise dispose of and deliver such
Equipment Note or Equipment Notes in one or more parcels at public or
private sale or sales, at any location or locations at the option of the
Trustee, all upon such terms and conditions as it may reasonably deem
advisable and at such prices as it may reasonably deem advisable, for cash.
If the Trustee so decides or is required to sell or otherwise dispose of
any Equipment Note pursuant to this Section, the Trustee shall take such of
the actions described above as it may reasonably deem most effectual to
complete the sale or other disposition of such Equipment Note, so as to
provide for the payment in full of all amounts due on the related series of
Certificates. Notwithstanding the foregoing, any action taken by the
Trustee under this Section shall not, in the reasonable judgment of the
Trustee, be adverse to the best interests of the Certificateholders of such
series.
(c) If an Intercreditor Agreement is applicable, upon the
occurrence and during the continuation of any Indenture Event of Default
under any Indenture, the Trustee may, to the extent it is the Controlling
Party at such time (as determined pursuant to the related Intercreditor
Agreement), direct the exercise of remedies as provided in such related
Intercreditor Agreement.
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(d) If an Intercreditor Agreement is applicable, by
acceptance of its Certificate, each Certificateholder agrees that at any
time after the occurrence and during the continuation of a Triggering
Event, each Certificateholder of Certificates of certain series (each, a
"Potential Purchaser" and, collectively, the "Potential Purchasers") may
have certain rights to purchase the Certificates of one or more other
series, all as set forth in the Trust Supplement applicable to the
Certificates held by such Potential Purchaser. The purchase price with
respect to the Certificates of any series, and the procedure for such
purchase, shall be specified in such Trust Supplement or the applicable
Intercreditor Agreement. By acceptance of its Certificate, each
Certificateholder (each, a "Selling Certificateholder" and, collectively,
the "Selling Certificateholders") of a series that is subject to purchase
by Potential Purchasers, all as set forth in the Trust Supplement
applicable to the Certificates held by the Selling Certificateholders,
agrees that, at any time after the occurrence and during the continuance of
a Triggering Event, it will, upon payment of the applicable purchase price
by one or more Potential Purchasers (upon such purchase, a "Purchasing
Certificateholder"), forthwith sell, assign, transfer and convey to such
Purchasing Certificateholder (without recourse, representation or warranty
of any kind except for its own acts) all of the right, title, interest and
obligation of such Selling Certificateholder in this Agreement, any related
Intercreditor Agreement, any related Liquidity Facility, the related Note
Documents and all Certificates of such series held by such Selling
Certificateholder (excluding all right, title and interest under any of the
foregoing to the extent such right, title or interest is with respect to an
obligation not then due and payable as respects any action or inaction or
state of affairs occurring prior to such sale) and the Purchasing
Certificateholder shall assume all of such Selling Certificateholder's
obligations under this Agreement, any related Intercreditor Agreement, any
related Liquidity Facility and the related Note Documents. The Certificates
of such series will be deemed to be purchased on the date payment of the
purchase price is made notwithstanding the failure of any Selling
Certificateholder to deliver any Certificates of such series and, upon such
a purchase, (i) the only rights of the Selling Certificateholders will be
to deliver the Certificates to the Purchasing Certificateholder and receive
the purchase price for such Certificates of such series and (ii) if the
Purchasing Certificateholder shall so request, such Selling
Certificateholder will comply with all of the provisions of Section 3.04
hereof to enable new Certificates of such series to be issued to the
Purchasing Certificateholder in such denominations as it shall request. All
charges and expenses in connection with the issuance of any such new
Certificates shall be borne by the Purchasing Certificateholder.
Section 6.02. Incidents of Sale of Equipment Notes. Upon any sale
of all or any part of the Equipment Notes held in the Trust made either
under the power of sale given under this Agreement or otherwise for the
enforcement of this Agreement, the following shall be applicable:
(a) Certificateholders and Trustee May Purchase Equipment
Notes. Any Certificateholder, the Trustee in its individual or any other
capacity or any other Person may bid for and purchase any of the Equipment
Notes held in the Trust, and upon compliance with the terms of sale, may
hold, retain, possess and dispose of such Equipment Notes in their own
absolute right without further accountability.
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(b) Receipt of Trustee Shall Discharge Purchaser. The
receipt of the Trustee making such sale shall be a sufficient discharge to
any purchaser for its purchase money, and, after paying such purchase money
and receiving such receipt, such purchaser or its personal representative
or assigns shall not be obliged to see to the application of such purchase
money, or be in any way answerable for any loss, misapplication
non-application thereof.
(c) Application of Moneys Received Upon Sale. Any moneys
collected by the Trustee upon any sale made either under the power of sale
given by this Agreement or otherwise for the enforcement of this Agreement
shall be applied as provided in Section 4.02. In the event that the
proceeds of such sale of Equipment Notes are less than the principal amount
of the Certificates of such series Outstanding, the Certificateholders
shall have no claim for such shortfall against the Company, the Trustee or
any other Person including the related Owner Trustee or related Owner
Participant, if any.
Section 6.03 Judicial Proceedings Instituted by Trustee; Trustee
May Bring Suit. If there shall be a failure to make payment of the
principal of, Additional Payments, if any, or interest on any Equipment
Note, or if there shall be any failure to pay Rent (as defined in the
relevant Lease) under any Lease when due and payable, then the Trustee, in
its own name and as trustee of an express trust, as holder of such
Equipment Notes, to the extent permitted by and in accordance with the
terms of any Intercreditor Agreement and the Financing Documents (subject,
in the case of Equipment Notes related to the Leased Aircraft to the rights
of the applicable Owner Trustee or Owner Participant to cure any such
failure to pay principal of, Additional Payments, if any, or interest on
any Equipment Note or to pay Rent under any Lease in accordance with the
applicable Indenture and to the rights of the Lessee under any applicable
Lease), shall be entitled and empowered to institute any suits, actions or
proceedings at law, in equity or otherwise, for the collection of the sums
so due and unpaid on such Equipment Notes or under such Lease and may
prosecute any such claim or proceeding to judgment or final decree with
respect to the whole amount of any such sums so due and unpaid.
All rights of action and of asserting claims under this
Agreement, or under any of the Certificates, may be prosecuted and enforced
by the Trustee without the possession of any of such Certificates or the
production thereof in any trial or other proceedings relative thereto, and
any such action or proceedings instituted by the Trustee shall be brought
in its own name as trustee of an express trust, and any recovery of
judgment, subject to the payment of the expenses, disbursements and
compensation of the Trustee, each predecessor Trustee and their respective
agents and attorneys, shall be for the ratable benefit of the
Certificateholders of the related series.
In any proceedings brought by the Trustee (and also any
proceedings involving the interpretation of any provision of this
Agreement, any Trust Supplement or any Intercreditor Agreement to which the
Trustee shall be a party) the Trustee shall be held to represent all the
Certificateholders of the related series, and it shall not be necessary to
make any such Certificateholders parties to any such proceedings.
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Section 6.04 Control by Certificateholders. Subject to Section
6.03 and any Intercreditor Agreement, the Certificateholders holding
Certificates of a series evidencing Fractional Cumulative Interests
aggregating not less than a majority in interest in the Trusts of the
related series shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee with
respect to such Trusts or pursuant to the terms of any Intercreditor
Agreement, or exercising any trust or power conferred on the Trustee under
this Agreement or any Intercreditor Agreement, including any right of the
Trustee as Controlling Party under any Intercreditor Agreement or as holder
of the Equipment Notes in the related Trusts, provided that:
(1) such Direction shall not in the opinion of the
Trustee be in conflict with any rule of law or with this Agreement
and would not involve the Trustee in personal liability or
expense;
(2) the Trustee shall not determine that the action so
directed would be unjustly prejudicial to the Certificateholders
of such series not taking part in such Direction;
(3) the Trustee may take any other action deemed proper
by the Trustee which is not inconsistent with such Direction; and
(4) if an Event of Default under a related Indenture
shall have occurred and be continuing, such direction shall not
obligate the Trustee to vote more than a corresponding majority of
the related Equipment Notes held by the Trust in favor of
directing any action by the related Indenture Trustee with respect
to such Event of Default.
Section 6.05 Waiver of Past Defaults. Subject to any applicable
Intercreditor Agreement, the Certificateholders holding Certificates of a
series evidencing Fractional Cumulative Interests aggregating not less than
a majority in interest in the Trusts of such series (i) may on behalf of
all of the Certificateholders of such series waive any past Event of
Default hereunder or under the related Trust Supplements with respect to
such series and its consequences or (ii) if the Trustee is the Controlling
Party, may direct the Trustee to instruct the applicable Indenture Trustee
to waive any past Indenture Default, or if applicable, the corresponding
Lease default, under the related Indenture with respect to such series and
its consequences, and thereby annul any Direction given by such
Certificateholders or the Trustee to such Indenture Trustee with respect
thereto, except a default:
(1) in the deposit of any Scheduled Payment or Special
Payment under Section 4.01 or in the distribution of any payment
under Section 4.02 on the Certificates of such series;
(2) in the payment of the principal of, Additional
Payments, if any, or interest on the Equipment Notes held in the
Trusts of such series; or
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(3) in respect of a covenant or provision hereof which
under Article X cannot be modified or amended without the consent
of each Certificateholder holding an Outstanding Certificate of
such series affected thereby.
Upon any such waiver, such default shall cease to exist
with respect to the Certificates of such series and any Event of Default
arising therefrom shall be deemed to have been cured for every purpose in
respect of such series and any direction given by the Trustee on behalf of
the Certificateholders of such series to the relevant Indenture Trustee
shall be annulled with respect thereto; but no such waiver shall extend to
any subsequent or other default or Event of Default or impair any right
consequent thereon. Upon any such waiver, the Trustee of such series shall
vote the Equipment Notes issued under the relevant Indenture to waive the
corresponding Indenture Default (and, if applicable, the corresponding
Lease default).
Section 6.06 Right of Certificateholders to Receive Payments Not
to Be Impaired. Anything in this Agreement to the contrary notwithstanding,
including Section 6.07, but subject to any applicable Intercreditor
Agreement, the right of any Certificateholder to receive distributions of
payments required pursuant to Section 4.02 on the applicable Certificates
when due, or to institute suit for the enforcement of any such payment on
or after the applicable Regular Distribution Date or Special Distribution
Date, shall not be impaired or affected without the consent of such
Certificateholder.
Section 6.07 Certificateholders May Not Bring Suit Except Under
Certain Conditions. A Certificateholder of any series shall not have the
right to institute any suit, action or proceeding at law or in equity or
otherwise with respect to this Agreement, for the appointment of a receiver
or for the enforcement of any other remedy under this Agreement, unless:
(1) such Certificateholder previously shall have given
written notice to the Trustee of a continuing Event of Default;
(2) the Certificateholders holding Certificates of such
series evidencing Fractional Cumulative Interests aggregating not
less than 25% shall have requested the Trustee in writing to
institute such action, suit or proceeding and shall have offered
to the Trustee indemnity as provided in Section 7.03(e);
(3) the Trustee shall have refused or neglected to
institute such an action, suit or proceeding for 60 days after
receipt of such notice, request and offer of indemnity; and
(4) no direction inconsistent with such written request
shall have been given to the Trustee during such 60-day period by
the Certificateholders holding Certificates of such series
evidencing Fractional Cumulative Interests aggregating not less
than a majority in interest in the related Trusts.
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Except to the extent provided in any applicable
Intercreditor Agreement or in any applicable Trust Supplement, it is
understood and intended that no one or more of the Certificateholders of
any series shall have any right in any manner whatsoever hereunder or under
each related Trust Supplement or under the Certificates of such series to
(i) surrender, impair, waive, affect, disturb or prejudice any property in
the Trust Property of the related Trust or the lien of any related
Indenture on any property subject thereto, or the rights of the
Certificateholders of such series or the holders of the related Equipment
Notes, (ii) obtain or seek to obtain priority over or preference with
respect to any other such Certificateholder of such series or (iii) enforce
any right under this Agreement, except in the manner herein provided and
for the equal, ratable and common benefit of all the Certificateholders of
such series subject to the provisions of this Agreement.
Section 6.08 Remedies Cumulative. Every remedy given hereunder to
the Trustee or to any of the Certificateholders of any series shall not be
exclusive of any other remedy or remedies, and every such remedy shall be
cumulative and in addition to every other remedy given hereunder or now or
hereafter given by statute, law, equity or otherwise. No delay or omission
by the Trustee or of any such Certificateholder in the exercise of any
right, remedy or power or in the pursuance of any remedy shall impair any
such right, power or remedy or be construed to be a waiver of any default
on the part of the applicable Owner Trustee, if any, or the Company, as the
case may be, or to be an acquiescence therein.
Section 6.09. Discontinuance of Proceedings. If the Trustee or any
Certificateholder of any series institutes any proceeding to enforce any
right, power or remedy under the related Trust, and such proceeding is
discontinued or abandoned for any reason or is determined adversely to the
Trustee or such Certificateholder, then and in every such case the
applicable Owner Trustee, if any, and the applicable Indenture Trustee, the
Trustee, the Certificateholders of such series and the Company shall,
subject to any determination in such proceeding, be restored to their
former positions and rights under such Trust with respect to the Trust
Property and all rights, remedies and powers of the Trustee and such
Certificateholders shall continue as if no such proceeding had been
instituted.
Section 6.10. Undertaking for Costs. All parties to this
Agreement, and each Certificateholder by acceptance of a Certificate, shall
be deemed to have agreed that, in any suit for the enforcement of any right
or remedy under this Agreement, or in any suit against the Trustee for any
action taken, suffered or omitted by it as Trustee, a court may require any
party litigant in such suit to file an undertaking to pay the costs of such
suit, and may assess costs against any such party litigant, in the manner
and to the extent provided in the Trust Indenture Act or by any other
applicable law; provided, however, that neither this Section 6.10 nor the
Trust Indenture Act shall be deemed to authorize any court to require such
an undertaking or to make such an assessment in any suit instituted by the
Company.
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ARTICLE VII
THE TRUSTEE
Section 7.01 Certain Duties and Responsibilities. (a) Except
during the continuance of an Event of Default in respect of a Trust, the
Trustee undertakes to perform such duties in respect of such Trusts as are
specifically set forth in this Agreement, any applicable Intercreditor
Agreement and the Note Documents, and no implied covenants or obligations
shall be read into such agreements against the Trustee.
(b) If an Event of Default in respect of a Trust has
occurred and is continuing, the Trustee shall exercise such of the rights
and powers vested in it by this Agreement in respect of such Trust, and use
the same degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of its own
affairs.
(c) No provision of this Agreement shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that
(i) this Subsection shall not be construed to
limit the effect of Section 7.01(a); and
(ii) the Trustee shall not be liable for any
error of judgment made in good faith by a Responsible
Officer of the Trustee, unless it shall be proved that
the Trustee was negligent in ascertaining the pertinent
facts.
(d) Whether or not herein expressly so provided, every
provision of this Trust Agreement relating to the conduct or affecting the
liability of or affording protection to the Trustee shall be subject to the
provisions of this Section 7.01.
Section 7.02 Notice of Defaults. As promptly as practicable after,
and in any event within 90 days after, the occurrence of any default (as
such term is defined below) hereunder known to the Trustee, the Trustee
shall transmit by mail to the Company, any related Owner Trustees, the
related Owner Participants, the related Indenture Trustees and the
Certificateholders holding Certificates of the related series in accordance
with Section 313(c) of the Trust Indenture Act, notice of such default
hereunder known to the Trustee, unless such default shall have been cured
or waived; provided, however, that, except in the case of a default on the
payment of the principal, Additional Payments, if any, or interest on any
Equipment Note, the Trustee shall be protected in withholding such notice
if and so long as the board of directors, the executive committee or a
trust committee of directors and/or Responsible Officers of the Trustee in
good faith determine that the withholding of such notice is in the
interests of the Certificateholders of the related series. For the purpose
of this Section 7.02 in respect of the Trusts of any series, the term
"default" means any event that is, or after notice or lapse of time or both
would become, an Event of Default in respect of such Trust or a Triggering
Event under any Intercreditor Agreement.
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Section 7.03 Certain Rights of Trustee. Subject to the provisions of
Section 315 of the Trust Indenture Act:
(a) the Trustee may rely and shall be protected in acting
or refraining from acting in reliance upon any resolution,
certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture or other paper
or document believed by it to be genuine and to have been signed
or presented by the proper party or parties;
(b) any request or direction of the Company mentioned
herein shall be sufficiently evidenced by a written description of
the subject matter thereof accompanied by an Officer's Certificate
and an Opinion of Counsel as provided in Section 1.02;
(c) whenever in the administration of this Agreement the
Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action
hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its
part, rely upon an Officer's Certificate of the Company, any
related Owner Trustee or any related Indenture Trustee;
(d) the Trustee may consult with counsel and the advice
of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in
reliance thereon;
(e) the Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Agreement or any
Intercreditor Agreement at the Direction of any of the
Certificateholders pursuant to this Agreement or any Intercreditor
Agreement, unless such Certificateholders shall have offered to
the Trustee reasonable security or indemnity against the cost,
expenses and liabilities which might be incurred by it in
compliance with such Direction;
(f) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture or other paper
or document;
(g) the Trustee may execute any of the trusts or powers
under this Agreement or any Intercreditor Agreement or perform any
duties under this Agreement or any Intercreditor Agreement either
directly or by or through agents or attorneys, and the Trustee
shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it under
this Agreement or any Intercreditor Agreement;
(h) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in
accordance with the Direction of the Certificateholders holding
Certificates of any series evidencing Fractional Cumulative
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Interests aggregating not less than a majority in interest in
the related Trusts relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred upon the Trustee,
under this Agreement or any Intercreditor Agreement; and
(i) the Trustee shall not be required to expend or risk
its own funds in the performance of any of its duties under this
Agreement, or in the exercise of any of its rights or powers, if
it shall have reasonable grounds for believing that repayment of
such funds or adequate indemnity against such risk is not
reasonably assured to it.
Section 7.04 Not Responsible for Recitals or Issuance of
Certificates. The recitals contained herein and in the Certificates of each
series, except the certificates of authentication, shall not be taken as
the statements of the Trustee, and the Trustee assumes no responsibility
for their correctness. Subject to Section 7.15, the Trustee makes no
representations as to the validity or sufficiency of this Basic Agreement
or any Trust Supplement, any Intercreditor Agreement, the Note Purchase
Agreement, any Equipment Notes, the Certificates of any series or any other
Financing Document, except that the Trustee hereby represents and warrants
that this Basic Agreement has been, and each Trust Supplement, any
Intercreditor Agreement, the Note Purchase Agreement and each Certificate
of each series to which such Trustee is a party shall be, executed,
authenticated and delivered by one of its officers who is duly authorized
to execute, authenticate and deliver such document on its behalf.
Section 7.05 May Hold Certificates. The Trustee, any Paying Agent,
Registrar or any of their Affiliates or any other agent in their respective
individual or any other capacity may become the owner or pledgee of
Certificates and, subject to Sections 310(b) and 311 of the Trust Indenture
Act, if applicable, may otherwise deal with the Company, any Owner Trustees
or the Indenture Trustees with the same rights it would have if it were not
Trustee, Paying Agent, Registrar or such other agent.
Section 7.06 Money Held in Trust. Money held by the Trustee or the
Paying Agent in trust hereunder or under any Trust Supplement need not be
segregated from other funds except to the extent required herein or by law
and neither the Trustee nor the Paying Agent shall have any liability for
interest upon any such moneys except as provided for herein or in the
applicable Trust Supplement.
Section 7.07 Compensation and Reimbursement. The Company agrees:
(1) to pay, or cause to be paid, to the Trustee from time
to time reasonable compensation for all services rendered by it
hereunder (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an
express trust);
(2) except as otherwise expressly provided herein or in
any Trust Supplement, to reimburse, or cause to be reimbursed, the
Trustee upon its request for all reasonable out-of-pocket
expenses, disbursements and advances incurred or made by the
Trustee in accordance with any provision of this Basic Agreement
or any Trust Supplement (including the reasonable compensation
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and the expenses and disbursements of its agents and counsel),
except any such expense, disbursement or advance as may be
attributable to its negligence, willful misconduct or bad faith or
as may be incurred due to the Trustee's breach of its
representations and warranties set forth in Section 7.15; and
(3) to indemnify, or cause to be indemnified, the
Trustee, solely in its individual capacity, for, and to hold it
harmless against, any loss, liability, tax (other than any tax
referred to in the next paragraph or any tax attributable to the
Trustee's compensation for serving as such), cost or expense
incurred without negligence, willful misconduct or bad faith on
its part, arising out of or in connection with the acceptance or
administration of any Trust, including the costs and expenses of
(a) defending itself against any claim or liability in connection
with the exercise or performance of any of its powers or duties
hereunder or under any Trust Supplement or (b) contesting the
imposition of any such tax, except in each case for any such loss,
liability, tax, cost or expense incurred by reason of the
Trustee's breach of its representations and warranties set forth
in Section 7.15 or in any Trust Supplement or the Trustee's
failure to perform any of its obligations hereunder or under any
Trust Supplement. The Trustee shall notify the Company promptly of
any claim or tax for which it may seek indemnity. The Company
shall defend the claim and the Trustee shall cooperate in the
defense. The Trustee may have separate counsel with the consent of
the Company and the Company will pay the reasonable fees and
expenses of such counsel. The Company need not pay for any
settlement made or any taxes paid, in settlement or otherwise,
without its consent.
The Trustee shall be entitled to reimbursement from, and
shall have a lien prior to the Certificates of each series upon, the Trust
Property, with respect to such series or the related Trusts for any tax
incurred without negligence, bad faith or willful misconduct, on its part,
arising out of or in connection with the acceptance or administration of
such Trusts (other than any tax attributable to the Trustee's compensation
for serving as such), including any costs and expenses incurred in
contesting the imposition of any such tax. The Trustee shall notify the
Company of any claim for any tax for which it may seek reimbursement. If
the Trustee reimburses itself from the Trust Property of such Trusts for
any such tax, it shall mail a brief report within 30 days setting forth the
circumstances thereof to all Certificateholders of such series as their
names and addresses appear in the Register.
Section 7.08 Corporate Trustee Required; Eligibility. Each Trust
shall at all times have a Trustee which shall be a financial institution
unaffiliated with and independent of the Company, shall be eligible to act
as a trustee under Section 310(a) of the Trust Indenture Act and shall have
a combined capital and surplus of at least $75,000,000 (or a combined
capital and surplus in excess of $5,000,000 and the obligations of which,
whether now in existence or hereafter incurred, are fully and
unconditionally guaranteed by a corporation organized and doing business
under the laws of the United States, any state or territory thereof or of
the District of Columbia and having a combined capital and surplus of at
least $75,000,000). If such corporation publishes reports of conditions at
least annually, pursuant to law or to the requirements of federal, state,
territorial or District of Columbia supervising or examining authority, then
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for the purposes of this Section 7.08, the combined capital and surplus of
such corporation shall be deemed to be its combined capital and surplus as
set forth in its most recent report of conditions so published.
In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section 7.08 to act as
Trustee of any Trust, the Trustee shall resign immediately as Trustee of
such Trust in the manner and with the effect specified in Section 7.09. If
the Trustee has or shall acquire a conflicting interest within the meaning
of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and
subject to the provisions of, the Trust Indenture Act and this Agreement.
Section 7.09 Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee of any Trust pursuant to this Article VII shall become
effective until the acceptance of appointment by the successor Trustee
under Section 7.10.
(b) The Trustee may resign at any time as trustee of any
or all Trusts by giving prior written notice thereof to the Company, the
Authorized Agents, the related Owner Trustees and the related Indenture
Trustees. If an instrument of acceptance by a successor Trustee shall not
have been delivered to the Company, the Authorized Agents, the related
Owner Trustees, the related Indenture Trustees and the Trustee within 30
days after the giving of such notice of resignation, the resigning Trustee
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
(c) The Trustee may be removed at any time as trustee of
the Trusts of any series by Direction of the Certificateholders of the
related series holding Certificates of such series evidencing Fractional
Cumulative Interests aggregating not less than a majority in interest in
such Trusts delivered to the Trustee and to the Company, the related Owner
Trustees and the related Indenture Trustees.
(d) If at any time in respect of the Trusts of any
series:
(i) the Trustee shall fail to comply with
Section 310 of the Trust Indenture Act, if applicable,
after written request therefor by the Company or by any
Certificateholder of the related series who has been a
bona fide Certificateholder for at least six months; or
(ii) the Trustee shall cease to be eligible
under Section 7.08 and shall fail to resign after written
request therefor by the Company or by any such
Certificateholder; or
(iii) the Trustee shall become incapable of
acting or shall be adjudged a bankrupt or insolvent or a
receiver of the Trustee or of its property shall be
appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or
liquidation;
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then, in any case, (i) the Company may remove the Trustee or (ii) any
Certificateholder of the related series who has been a bona fide
Certificateholder for at least six months may, on behalf of itself and all
others similarly situated, petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor Trustee of
such Trust.
(e) If a Responsible Officer of the Trustee shall obtain
actual knowledge of an Avoidable Tax in respect of the Trusts of any series
which has been or is likely to be asserted, the Trustee shall promptly
notify the Company and shall, within 30 days of such notification, resign
as Trustee of such Trust hereunder unless within such 30-day period the
Trustee shall have received notice that the Company has agreed to pay such
tax. Provided that there is a corporation in a jurisdiction where there are
no Avoidable Taxes that is willing to act as Trustee and is eligible under
Section 7.08, the Company shall promptly appoint a successor Trustee of
such Trusts in a jurisdiction where there are no Avoidable Taxes.
(f) If the Trustee shall resign, be removed or become
incapable of acting as trustee of the Trusts of any series or if a vacancy
shall occur in the office of the Trustee of the Trusts for any cause, the
Company shall promptly appoint a successor Trustee of such Trusts. If,
within one year after such resignation, removal or incapability, or other
occurrence of such vacancy, a successor Trustee of such Trusts shall be
appointed by Direction of the Certificateholders of the related series
holding Certificates of such series evidencing Fractional Cumulative
Interests aggregating not less than a majority in interest in such Trusts
delivered to the Company, the related Owner Trustees, the related Indenture
Trustees and the retiring Trustee, and the Company approves such
appointment, which approval shall not be unreasonably withheld, then the
successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment, become the successor Trustee of such Trusts and supersede the
successor Trustee of such Trusts appointed as provided above. If no
successor Trustee shall have been so appointed as provided above and
accepted appointment in the manner hereinafter provided, any
Certificateholder who has been a bona fide Certificateholder of the related
series for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee of such Trust.
(g) The successor Trustee of the Trusts of a series shall
give notice of the resignation and removal of the Trustee and appointment
of the successor Trustee by mailing written notice of such event by
first-class mail, postage prepaid, to the Certificateholders of the related
series as their names and addresses appear in the Register. Each notice
shall include the name of such successor Trustee and the address of its
Corporate Trust Office.
Section 7.10 Acceptance of Appointment by Successor. Every
successor Trustee appointed hereunder shall execute and deliver to the
Company, the Authorized Agents, the Owner Trustees and the Indenture
Trustees and to the retiring Trustee with respect to any or all Trusts an
instrument accepting such appointment, and thereupon the resignation or
removal of the retiring Trustee with respect to such Trusts shall become
effective and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and
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duties of the retiring Trustee; but, on request of the Company or the
successor Trustee, such retiring Trustee shall execute and deliver an
instrument transferring to such successor Trustee all such rights, powers
and trusts of the retiring Trustee and shall duly assign, transfer and
deliver to such successor Trustee all Trust Property held by such retiring
Trustee in respect of such Trusts hereunder, subject nevertheless to its
lien, if any, provided for in Section 7.07. Upon request of any such
successor Trustee, the Company, the retiring Trustee and such successor
Trustee shall execute and deliver any and all instruments containing such
provisions as shall be necessary or desirable to transfer and confirm to,
and for more fully and certainly vesting in, such successor Trustee all
such rights, powers and trusts.
If a successor Trustee is appointed with respect to one
or more (but not all) Trusts, the Company, the predecessor Trustee and each
successor Trustee with respect to any Trust shall execute and deliver a
supplemental agreement hereto which shall contain such provisions as shall
be deemed necessary or desirable to confirm that all the rights, powers,
trusts and duties of the predecessor Trustee with respect to the Trusts as
to which the predecessor Trustee is not retiring shall continue to be
vested in the predecessor Trustee, and shall add to or change any of the
provisions of this Basic Agreement and the applicable Trust Supplements as
shall be necessary to provide for or facilitate the administration of the
Trusts hereunder by more than one Trustee.
It is understood that nothing herein or in any
supplemental agreement or Trust Supplement shall constitute any Trustee a
co-Trustee of the same Trust and that each Trustee shall be the Trustee of
one or more separate Trusts.
No institution shall accept its appointment as a Trustee
hereunder unless at the time of such acceptance such institution shall be
qualified and eligible under this Article VII.
Section 7.11 Merger, Conversion, Consolidation or Succession to
Business. Any corporation into which the Trustee may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party,
or any corporation succeeding to all or substantially all of the corporate
trust business of the Trustee, shall be the successor of the Trustee
hereunder, provided such corporation shall be otherwise qualified and
eligible under this Article VII, without the execution or filing of any
paper or any further act on the part of any of the parties hereto. In case
any Certificates shall have been executed or authenticated, but not
delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
execution or authentication and deliver the Certificates so executed or
authenticated with the same effect as if such successor Trustee had itself
executed or authenticated such Certificates.
Section 7.12 Maintenance of Agencies. (a) With respect to each
series of Certificates, there shall at all times be maintained an office or
agency in the location set forth in Section 12.03 where Certificates of
such series may be presented or surrendered for registration of transfer or
for exchange, and for payment thereof and where notices and demands to or
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upon the Trustee in respect of such Certificates or this Agreement may be
served; provided, however, that, if it shall be necessary that the Trustee
maintain an office or agency in another location with respect to the
Certificates of any series (e.g., the Certificates shall be represented by
Definitive Certificates and shall be listed on a national securities
exchange), the Trustee shall make all reasonable efforts to establish such
an office or agency. Written notice of the location of each such other
office or agency and of any change of location thereof shall be given by
the Trustee to the Company, any Owner Trustees, the Indenture Trustees (in
the case of any Owner Trustee or Indenture Trustee, at its address
specified in the Note Purchase Agreement or such other address as may be
notified to the Trustee) and the Certificateholders of such series. In the
event that no such office or agency shall be maintained or no such notice
of location or of change of location shall be given, presentations and
demands may be made and notices may be served at the Corporate Trust Office
of the Trustee.
(b) There shall at all times be a Registrar and a Paying
Agent hereunder with respect to the Certificates of each series. Each such
Authorized Agent shall be a bank or trust company, shall be a corporation
organized and doing business under the laws of the United States or any
state, with a combined capital and surplus of at least $75,000,000, or a
corporation having a combined capital and surplus in excess of $5,000,000,
the obligations of which are guaranteed by a corporation organized and
doing business under the laws of the United States or any state, with a
combined capital and surplus of at least $75,000,000, and shall be
authorized under such laws to exercise corporate trust powers, subject to
supervision by Federal or state authorities. The Trustee shall initially be
the Paying Agent and, as provided in Section 3.04, Registrar hereunder with
respect to the Certificates of each series. Each Registrar shall furnish to
the Trustee, at stated intervals of not more than six months, and at such
other times as the Trustee may request in writing, a copy of the Register
maintained by such Registrar.
(c) Any corporation into which any Authorized Agent may
be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, consolidation or conversion to which
any Authorized Agent shall be a party, or any corporation succeeding to the
corporate trust business of any Authorized Agent, shall be the successor of
such Authorized Agent hereunder, if such successor corporation is otherwise
eligible under this Section 7.12, without the execution or filing of any
paper or any further act on the part of the parties hereto or such
Authorized Agent or such successor corporation.
(d) Any Authorized Agent may at any time resign by giving
written notice of resignation to the Trustee, the Company, any related
Owner Trustees and the related Indenture Trustees. The Company may, and at
the request of the Trustee shall, at any time terminate the agency of any
Authorized Agent by giving written notice of termination to such Authorized
Agent and to the Trustee. Upon the resignation or termination of an
Authorized Agent or in case at any time any such Authorized Agent shall
cease to be eligible under this Section 7.12 (when, in either case, no
other Authorized Agent performing the functions of such Authorized Agent
shall have been appointed), the Company shall promptly appoint one or more
qualified successor Authorized Agents, reasonably satisfactory to the
Trustee, to perform the functions of the Authorized Agent which has
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resigned or whose agency has been terminated or who shall have ceased to be
eligible under this Section 7.12. The Company shall give written notice of
any such appointment made by it to the Trustee, any related Owner Trustees
and the related Indenture Trustees; and in each case the Trustee shall mail
notice of such appointment to all Certificateholders of the related series
as their names and addresses appear on the Register for such series.
(e) The Company agrees to pay, or cause to be paid, from
time to time to each Authorized Agent reasonable compensation for its
services as the Company and the Trustee may agree in writing from time to
time and to reimburse it for its reasonable expenses to the extent set
forth in Section 7.07(2).
Section 7.13 Money for Certificate Payments to Be Held in Trust.
All moneys deposited with any Paying Agent for the purpose of any payment
on Certificates shall be deposited and held in trust for the benefit of the
Certificateholders entitled to such payment, subject to the provisions of
this Section 7.13. Moneys so deposited and held in trust shall constitute a
separate trust fund for the benefit of the Certificateholders with respect
to which such money was deposited.
The Trustee may at any time, for the purpose of obtaining
the satisfaction and discharge of this Agreement or for any other purpose,
direct any Paying Agent to pay to the Trustee all sums held in trust by
such Paying Agent, such sums to be held by the Trustee upon the same trusts
as those upon which such sums were held by such Paying Agent; and, upon
such payment by any Paying Agent to the Trustee, such Paying Agent shall be
released from all further liability with respect to such money.
Section 7.14 Registration of Equipment Notes in Name of
Subordination Agent. Subject to the provisions of any Intercreditor
Agreement and Section 12.13, the Trustee agrees that all Equipment Notes to
be purchased by any Trust, Specified Investments, if any, to be held by the
Trustee on behalf of a Trust and Permitted Investments, if any, to be held
by the Trustee on behalf of a Trust shall be issued in the name of the
Trustee as trustee for the applicable Trust or its nominee and held by the
Trustee in trust for the benefit of the Certificateholders of such series,
or, if not so held, the Trustee or its nominee shall be reflected as the
owner of such Equipment Notes, Specified Investments or Permitted
Investments, as the case may be, in the register of the issuer of such
Equipment Notes, Specified Investments or Permitted Investments, as the
case may be. In no event shall the Trustee invest in, or hold, Equipment
Notes, Specified Investments or Permitted Investments in a manner that
would cause the Trustee not to have the ownership interest in (or a
securities entitlement with respect to) such Equipment Notes, Specified
Investments or Permitted Investments under the applicable provisions of the
Uniform Commercial Code in effect where the Trustee holds such Equipment
Notes, Specified Investments or Permitted Investments or other applicable
law then in effect.
Section 7.15 Representations and Warranties of Trustee. The Trustee
hereby represents and warrants that:
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(a) the Trustee is a national banking association
organized and validly existing in good standing under the Federal
laws of the United States;
(b) the Trustee has full power, authority and legal right
to execute, deliver, and perform this Basic Agreement, the Trust
Supplements, the Certificates, any Intercreditor Agreement and the
Note Purchase Agreements and has taken all necessary action to
authorize the execution, delivery and performance by it of this
Basic Agreement, the Trust Supplements, the Certificates, any
Intercreditor Agreement and the Note Purchase Agreements;
(c) the execution, delivery and performance by the
Trustee of this Basic Agreement, the Trust Supplements, the
Certificates, any Intercreditor Agreement and the Note Purchase
Agreements (i) shall not violate any provision of United States
federal law or the law of the state of the United States where it
is located governing the banking and trust powers of the Trustee
or any order, writ, judgment, or decree of any court, arbitrator
or governmental authority applicable to the Trustee or any of its
assets, (ii) shall not violate any provision of the articles of
association or by-laws of the Trustee, and (iii) shall not violate
any provision of, or constitute, with or without notice or lapse
of time, a default under, or result in the creation or imposition
of any lien on any properties included in the Trust Property of
any Trust pursuant to the provisions of any mortgage, indenture,
contract, agreement or other undertaking to which it is a party,
which violation, default or lien could reasonably be expected to
have an adverse effect on the Trustee's performance or ability to
perform its duties hereunder or thereunder or on the transactions
contemplated herein or therein;
(d) the execution, delivery and performance by the
Trustee of this Basic Agreement, the Trust Supplements, the
Certificates, any Intercreditor Agreement and the Note Purchase
Agreements shall not require the authorization, consent, or
approval of, the giving of notice to, the filing or registration
with, or the taking of any other action in respect of, any
governmental authority or agency of the United States or the State
of the United States where it is located regulating the banking
and corporate trust activities of the Trustee;
(e) this Basic Agreement, the Trust Supplements, the
Certificates, any Intercreditor Agreement and the Note Purchase
Agreements have been or shall be duly executed and delivered by
the Trustee and constitute or upon such execution and delivery
shall constitute the legal, valid, and binding agreements of the
Trustee, enforceable against it in accordance with their
respective terms, provided that enforceability may be limited by
(i) applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the rights of creditors generally and
(ii) general principles of equity; and
(f) the statements made by it in a Statement of
Eligibility on Form T-1 supplied or to be supplied to the Company
in connection with the registration of any Certificates are and
will be true and accurate subject to the qualifications set forth
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therein; and that such statement complies and will comply in all
material respects with the requirements of the Trust Indenture Act
and the Securities Act.
The representation and warranties set forth above shall
be deemed to be made by the Trustee on each Issuance Date, except as
otherwise provided in the applicable Trust Supplement.
Section 7.16 Withholding Taxes; Information Reporting. As to the
Certificates of any series, the Trustee, as trustee of the related grantor
trust created by this Agreement, shall exclude and withhold from each
distribution of principal, Additional Payments, if any, and interest and
other amounts due under this Agreement or under the Certificates of such
series any and all withholding taxes applicable thereto as required by law.
The Trustee agrees to act as such withholding agent and, in connection
therewith, whenever any present or future taxes or similar charges are
required to be withheld with respect to any amounts payable in respect of
the Certificates of such series, to withhold such amounts and timely pay
the same to the appropriate authority in the name of and on behalf of the
Certificateholders of such series, that it shall file any necessary
withholding tax returns or statements when due, and that, as promptly as
possible after the payment thereof, it shall deliver to each such
Certificateholder appropriate documentation showing the payment thereof,
together with such additional documentary evidence as such
Certificateholders of such series may reasonably request from time to time.
The Trustee agrees to file any other information reports as it may be
required to file under United States law.
Section 7.17 Trustee's Liens. The Trustee in its individual
capacity agrees that it shall, in respect of each Trust created by this
Agreement, at its own cost and expense promptly take any action as may be
necessary to duly discharge and satisfy in full any mortgage, pledge, lien,
charge, encumbrance, security interest or claim ("Trustee's Liens") on or
with respect to the Trust Property of such Trust which is attributable to
the Trustee either (i) in its individual capacity and which is unrelated to
the transactions contemplated by this Agreement, any applicable
Intercreditor Agreement, the Note Purchase Agreement or the Note Documents,
or (ii) as Trustee hereunder or in its individual capacity and which arises
out of acts or omissions which are not contemplated by this Agreement.
Section 7.18 Preferential Collection of Claims. The Trustee shall
comply with Section 311(a) of the Trust Indenture Act, excluding any
creditor relationship listed in Section 311(b) of the Trust Indenture Act.
If the Trustee shall resign or be removed as Trustee, it shall be subject
to Section 311(a) of the Trust Indenture Act to the extent provided
therein.
ARTICLE VIII
CERTIFICATEHOLDERS' LISTS AND REPORTS BY TRUSTEE
Section 8.01 The Company to Furnish Trustee with Names and Addresses
of Certificateholders. The Company shall furnish to the Trustee within 15 days
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after each Record Date with respect to a Scheduled Payment, and at such
other times as the Trustee may request in writing within 30 days after
receipt by the Company of any such request, a list, in such form as the
Trustee may reasonably require, of all information in the possession or
control of the Company as to the names and addresses of the
Certificateholders of each series, in each case as of a date not more than
15 days prior to the time such list is furnished; provided, however, that
so long as the Trustee is the sole Registrar for such series, no such list
need be furnished; and provided, further, that no such list need be
furnished for so long as a copy of the Register is being furnished to the
Trustee pursuant to Section 7.12.
Section 8.02 Preservation of Information; Communications to
Certificateholders. The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Certificateholders of
each series contained in the most recent list furnished to the Trustee as
provided in Section 7.12 or Section 8.01, as the case may be, and the names
and addresses of Certificateholders of each series received by the Trustee
in its capacity as Registrar, if so acting. The Trustee may destroy any
list furnished to it as provided in Section 7.12 or Section 8.01, as the
case may be, upon receipt of a new list so furnished.
Section 8.03 Reports by Trustee. Within 60 days after May 15 of
each year commencing with the first full year following the issuance of any
series of Certificates, the Trustee shall transmit to the
Certificateholders of each series, as provided in Section 313(c) of the
Trust Indenture Act, a brief report dated as of such May 15, if required by
Section 313(a) of the Trust Indenture Act. The Trustee shall also transmit
to Certificateholders such reports, if any, as may be required pursuant to
Section 313(b) of the Trust Indenture Act at the times and in the manner
provided pursuant thereto and to Section 313(c) thereof.
Section 8.04 Reports by the Company. The Company shall:
(a) file with the Trustee, within 30 days after the
Company is required to file the same with the SEC, copies of the annual
reports and of the information, documents and other reports (or copies of
such portions of any of the foregoing as the SEC may from time to time by
rules and regulations prescribe) which the Company is required to file with
the SEC pursuant to Section 13 or Section 15(d) of the Exchange Act; or, if
the Company is not required to file information, documents or reports
pursuant to either of such sections, then to file with the Trustee and the
SEC, in accordance with rules and regulations prescribed by the SEC, such
of the supplementary and periodic information, documents and reports which
may be required pursuant to Section 13 of the Exchange Act in respect of a
security listed and registered on a national securities exchange as may be
prescribed in such rules and regulations;
(b) file with the Trustee and the SEC, in accordance with
the rules and regulations prescribed by the SEC, such additional
information, documents and reports with respect to compliance by the
Company with the conditions and covenants of the Company provided for in
this Agreement, as may be required by such rules and regulations,
including, in the case of annual reports, if required by such rules and
regulations, certificates or opinions of independent public accountants;
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(c) transmit to all Certificateholders, in the manner and
to the extent provided in Section 313(c) of the Trust Indenture Act such
summaries of any information, documents and reports required to be filed by
the Company pursuant to Sections 8.04(a) and (b) as may be required by
rules and regulations prescribed by the SEC; and
(d) furnish to the Trustee, not less often than annually,
a brief certificate from the principal executive officer, principal
financial officer or principal accounting officer as to his or her
knowledge of the Company's compliance with all conditions and covenants of
the Company under this Agreement (it being understood that for purposes of
this Section 8.04(d), such compliance shall be determined without regard to
any period of grace or requirement of notice provided under this
Agreement).
ARTICLE IX
SUPPLEMENTAL AGREEMENTS
Section 9.01 Supplemental Agreements Without Consent of
Certificateholders. Without the consent of the Certificateholders of any
series, the Company may (but shall not be required to), and the Trustee
(subject to Section 9.03) shall, at the Company's request, at any time and
from time to time, enter into one or more agreements supplemental hereto
or, if applicable, to any Intercreditor Agreement, the Note Purchase
Agreement or any Liquidity Facility in form reasonably satisfactory to the
Trustee, for any of the following purposes:
(1) to provide for the formation of a Trust, the
issuance of a series of Certificates and the other matters contemplated by
Section 2.01(b);
(2) to evidence the succession of another corporation to
the Company and the assumption by any such successor of the covenants of
the Company contained herein or of the Company's obligations under any
Intercreditor Agreement, any Note Purchase Agreement or any Liquidity
Facility;
(3) to add to the covenants of the Company for the
benefit of the Certificateholders of any series, or to surrender any right
or power in this Agreement, any Intercreditor Agreement, the Note Purchase
Agreement or any Liquidity Facility conferred upon the Company;
(4) (a) to correct or supplement any provision in this
Agreement, any Intercreditor Agreement, the Note Purchase Agreement or any
Liquidity Facility that may be defective or inconsistent with any other
provision herein or in any Trust Supplement, (b) to cure any ambiguity or
correct any mistake or (c) to modify any other provision with respect to
matters or questions arising under this Agreement, any Intercreditor
Agreement, the Note Purchase Agreement or any Liquidity Facility, provided
that any such action shall not materially adversely affect the interests of
the Certificateholders of any series;
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(5) to modify, eliminate or add to the provisions of this
Agreement to such extent as shall be necessary to continue the
qualification of this Agreement (including any supplemental agreement)
under the Trust Indenture Act or under any similar Federal statute
hereafter enacted, and to add to this Agreement such other provisions as
may be expressly permitted by the Trust Indenture Act, excluding, however,
the provisions referred to in Section 316(a)(2) of the Trust Indenture Act
as in effect at the date as of which this Basic Agreement was executed or
any corresponding provision in any similar Federal statute hereafter
enacted;
(6) to evidence and provide for the acceptance of
appointment under this Agreement by the Trustee or a successor Trustee with
respect to one or more Trusts and to add to or change any of the provisions
of this Agreement as shall be necessary to provide for or facilitate the
administration of the Trusts hereunder and thereunder by more than one
Trustee, pursuant to the requirements of Section 7.10;
(7) to provide the information required under Sections 7.12
and 12.03 as to the Trustee;
(8) to modify or eliminate provisions relating to the
effectiveness of the Registration Statement;
(9) to comply with any requirement of the SEC, any
applicable law, rules or regulations of any exchange or quotation system on
which the Certificates of any series are listed or of any regulatory body;
(10) to add to or change any of the provisions of this
Agreement or any Trust Supplement to such extent as shall be necessary to
facilitate the issuance of Certificates in bearer form or to facilitate or
provide for the issuance of Certificates global form in addition to or in
place of Certificates in certificated form; or
(11) to make or modify any other provision in regard to
matters or questions arising under this Basic Agreement or any related
Trust Supplement, any Intercreditor Agreement or any Liquidity Facility as
the Company may deem necessary or desirable and that will not materially
adversely affect the interests of the related Certificateholders;
(12) to evidence and provide for the acceptance of
appointment by a successor Trustee under this Agreement, any Intercreditor
Agreement, any Note Purchase Agreement, any Indenture or any Liquidity
Facility with respect to one or more Trusts and to add to or change any of
the provisions of this Agreement, any Intercreditor Agreement or any
Liquidity Facility as shall be necessary to provide for or facilitate the
administration of the Trust hereunder and thereunder by more than one
Trustee, pursuant to the requirements of Section 7.10;
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(13) to provide the information required under Section 7.12
and Section 12.03 as to the Trustee;
(14) to provide for the delivery of agreements
supplemental hereto or the Certificates of any series in or by any means of
any computerized, electronic or other medium, including without limitation
by computer diskette;
(15) to correct or supplement the description of any
property constituting property of such Trust;
(16) to modify, eliminate or add to the provisions of
this Basic Agreement or any Trust Supplement in order to reflect the
substitution of a Substitute Aircraft for any aircraft; or
(17) to make any other amendments or modifications
hereto, provided that such amendments or modifications shall only apply to
Certificates of one or more series to be thereafter issued;
provided, however, that no such supplemental agreement shall cause any
Trust to become an association taxable as a corporation for United States
federal income tax purposes.
Section 9.02 Supplemental Agreements with Consent of
Certificateholders. With respect to the Trusts of each series and the
series of Certificates relating thereto, with the consent of the
Certificateholders holding Certificates evidencing Fractional Cumulative
Interests aggregating not less than a majority in interest in such Trust,
by Direction of said Certificateholders delivered to the Company and the
Trustee, the Company may (with the consent of the Owner Trustees, if any,
relating to such Certificates, which consent shall not be unreasonably
withheld), and the Trustee (subject to Section 9.03) shall, enter into an
agreement or agreements supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the
provisions of this Agreement, any Intercreditor Agreement, any Liquidity
Facility, or the Note Purchase Agreement to the extent applicable to such
Certificateholders or of modifying in any manner the rights and obligations
of such Certificateholders under this Agreement, any Intercreditor
Agreement, any Liquidity Facility, or the Note Purchase Agreement;
provided, however, that no such supplemental agreement shall, without the
consent of the Certificateholder of each Outstanding Certificate affected
thereby:
(1) reduce in any manner the amount of, or delay the
timing of, any receipt by the Trustee of payments on the Equipment
Notes held in such Trust or distributions that are required to be
made herein on any Certificate of such series, or change any date
of payment on any Certificate of such series, or change the place
of payment where, or the coin or currency in which, any
Certificate of such series is payable, or impair the right to
institute suit for the enforcement of any such payment or
distribution on or after the Regular Distribution Date or Special
Distribution Date applicable thereto;
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(2) except as permitted by this Agreement or any
applicable Note Purchase Agreement, Intercreditor Agreement or
Liquidity Facility, permit the disposition of any Equipment Note
included in the Trust Property of such Trust or otherwise deprive
such Certificateholder of the benefit of the ownership of the
Equipment Notes in such Trust;
(3) reduce the percentage of the aggregate Fractional
Cumulative Interests of such Trusts which is required for any such
supplemental agreement, or reduce such percentage required for any
waiver of compliance with certain provisions of this Agreement or
certain defaults hereunder and their consequences provided for in
this Agreement; or
(4) alter the priority of distributions specified in the
relevant Intercreditor Agreement, if any, in a manner materially
adverse to the interests of the Certificateholders of any series.
It shall not be necessary for any Direction of such
Certificateholders under this Section 9.02 to approve the particular form
of any proposed supplemental agreement, but it shall be sufficient if such
Direction shall approve the substance thereof.
Section 9.03 Documents Affecting Immunity or Indemnity. If in the
opinion of the Trustee any document required to be executed by it pursuant
to the terms of Section 9.01 or 9.02 has a material adverse effect on any
interest, right, duty, immunity or indemnity in favor of the Trustee under
this Basic Agreement or any Trust Supplement, the Trustee may in its
discretion decline to execute such document.
Section 9.04 Execution of Supplemental Agreements. In executing,
or accepting the additional trusts created by, any supplemental agreement
permitted by this Article IX or the modifications thereby of the trusts
created by this Agreement, the Trustee shall be entitled to receive upon
its request, and shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such supplemental agreement is
authorized or permitted by this Agreement.
Section 9.05 Effect of Supplemental Agreements. Upon the execution
of any supplemental agreement under this Article IX, this Basic Agreement
shall be modified in accordance therewith, and such supplemental agreement
shall form a part of this Basic Agreement for all purposes; and every
Certificateholder of each series theretofore or thereafter authenticated
and delivered hereunder shall be bound thereby to the extent applicable to
such series.
Section 9.06 Conformity with Trust Indenture Act. Every
supplemental agreement executed pursuant to this Article IX shall conform
to the requirements of the Trust Indenture Act as then in effect.
Section 9.07 Reference in Certificates to Supplemental Agreements.
Certificates of each series authenticated and delivered after the execution
of any supplemental agreement applicable to such series pursuant to this
Article IX may bear a notation in form approved by the Trustee as to any
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matter provided for in such supplemental agreement; and, in such case,
suitable notation may be made upon Outstanding Certificates of such series
after proper presentation and demand.
ARTICLE X
AMENDMENTS TO INDENTURES AND NOTE DOCUMENTS
Section 10.01 Amendments and Supplements to Indentures and Other
Note Documents. If the Trustee, as holder (or beneficial owner through the
Subordination Agent) of any Equipment Note in trust for the benefit of the
Certificateholders of any series or as Controlling Party under any
Intercreditor Agreement, receives a request pursuant to Section 9.02 or
Section 6.04 for a consent to any amendment, modification, waiver or
supplement under any related Indenture or other related Note Document,
subject to Section 9.01 hereof, the Trustee shall forthwith send a notice
of such proposed amendment, modification, waiver or supplement to each
Certificateholder of such series registered on the Register as of the date
of such notice. The Trustee shall request from the Certificateholders of
such series a Direction as to (a) whether or not to take or refrain from
taking (or direct the Subordination Agent to take or refrain from taking)
any action which a holder of such Equipment Note has the option to direct,
(b) whether or not to give or execute (or direct the Subordination Agent to
give or execute) any waivers, consents, amendments, modifications or
supplements as a holder of such Equipment Note or a Controlling Party and
(c) how to vote (or direct the Subordination Agent to vote) the Equipment
Notes if a vote has been called for with respect thereto. If such a request
for Certificateholder Direction shall have been made, in directing any
action or casting any vote or giving any consent as the holder of any such
Equipment Notes (or directing the Subordination Agent in any of the
foregoing), (i) other than as Controlling Party, the Trustee shall vote for
or give consent to any such action with respect to such Equipment Note in
the same proportion as that of (A) the aggregate face amounts of all
Certificates of such series actually voted in favor of or for giving
consent to such action by such Direction of Certificateholders to (B) the
aggregate face amount of all Outstanding Certificates and (ii) as
Controlling Party, the Trustee shall vote as directed in such
Certificateholder Direction by the Certificateholders of such series
evidencing a Fractional Cumulative Interest aggregating not less than a
majority in interest in the related Trust. For purposes of the preceding
sentence, a Certificate shall have been "actually voted" if the Holder of
such Certificate has delivered to the Trustee an instrument evidencing such
Holder's consent to such Direction prior to two Business Days before the
Trustee directs such action or casts such vote or gives such consent.
Notwithstanding the foregoing, but subject to Section 6.04 and any
Intercreditor Agreement, the Trustee may, with respect to the Certificates
of any series, in its own discretion and at its own direction, consent and
notify the relevant Indenture Trustee of such consent (or direct the
Subordination Agent to consent and notify such Indenture Trustee of such
consent) to any amendment, modification, waiver or supplement under the
relevant Indenture or any other Note Document, if an Event of Default
hereunder shall have occurred and be continuing, or if such amendment,
modification or waiver shall not adversely affect the interests of the
Certificateholders of such series.
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ARTICLE XI
TERMINATION OF TRUSTS
Section 11.01 Termination of the Trusts. In respect of the Trusts
of each series created by the Basic Agreement as supplemented by a related
Trust Supplement, the respective obligations and responsibilities of the
Company and the Trustee created under this Agreement and such Trusts
created hereby shall terminate upon the distribution to all Holders of the
Certificates of the series of such Trusts and the Trustee of all amounts
required to be distributed to them pursuant to this Agreement and the
disposition of all property held as part of the Trust Property of the
related series of such Trusts; provided, however, that in no event shall
such Trusts continue beyond the final expiration date determined as
provided in such Trust Supplement.
Notice of any termination of the Trusts of a series,
specifying the applicable Regular Distribution Date (or applicable Special
Distribution Date, as the case may be) upon which the Certificateholders of
such series may surrender their Certificates to the Trustee for payment of
the final distribution and cancellation, shall be mailed promptly by the
Trustee to Certificateholders of such series not earlier than the 60th day
and not later than the 15th day preceding such final distribution
specifying (A) the Regular Distribution Date (or Special Distribution Date,
as the case may be) upon which the proposed final payment of the
Certificates of such series shall be made upon presentation and surrender
of Certificates of such series at the office or agency of the Trustee
therein specified, (B) the amount of any such proposed final payment, and
(C) that the Record Date otherwise applicable to such Regular Distribution
Date (or Special Distribution Date, as the case may be) is not applicable,
payments being made only upon presentation and surrender of the
Certificates of such series at the office or agency of the Trustee therein
specified. The Trustee shall give such notice to the Registrar at the time
such notice is given to Certificateholders of such series. Upon
presentation and surrender of the Certificates of such series in accordance
with such notice, the Trustee shall cause to be distributed to
Certificateholders of such series such final payments.
If all of the Certificateholders of such series shall not
surrender their Certificates for cancellation within six months after the
date specified in the above-mentioned written notice, the Trustee shall
give a second written notice to the remaining Certificateholders of such
series to surrender their Certificates for cancellation and receive the
final distribution with respect thereto. No additional interest shall
accrue on the Certificates of such series after the Regular Distribution
Date (or Special Distribution Date, as the case may be) specified in the
first written notice. If any money held by the Trustee for the payment of
distributions on the Certificates of such series shall remain unclaimed for
two years (or such lesser time as the Trustee shall be satisfied, after 60
days' notice from the Company, is one month prior to the escheat period
provided under applicable law) after the final distribution date with
respect thereto, the Trustee shall pay to each Indenture Trustee the
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appropriate amount of money relating to such Indenture Trustee and shall
give written notice thereof to the related Owner Trustees, the Owner
Participants and the Company.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Limitation on Rights of Certificateholders. (a) The
insolvency, death or incapacity of any Certificateholder of any series
shall not operate to terminate this Agreement or the related Trust, nor
entitle such Certificateholder's legal representatives or heirs to claim an
accounting or to take any action or commence any proceeding in any court
for a partition or winding up of the Trust, nor otherwise affect the
rights, obligations, and liabilities of the parties hereto or any of them.
No Certificateholder of any series shall be entitled to revoke the related
Trust.
(b) No transfer, by operation of law or otherwise, of any
Certificate or other right, title and interest of any Certificateholder in
and to the applicable Trust Property or under the related Trust shall
operate to terminate the Trust or entitle such Certificateholder or any
successor or transferee of such Certificateholder to an accounting or to
the transfer to it of legal title to any part of such Trust Property.
Section 12.02 Certificates Nonassessable and Fully Paid. Except as
set forth in the last sentence of this Section 12.02, Certificateholders of
each series shall not be personally liable for obligations of the related
Trusts, the Fractional Undivided Interests represented by the Certificates
of such series shall be nonassessable for any losses or expenses of such
Trust or for any reason whatsoever, and Certificates of such series, upon
authentication thereof by the Trustee pursuant to Section 3.03, are and
shall be deemed fully paid. No Certificateholder of such series shall have
any right (except as expressly provided herein) to vote or in any manner
otherwise control the operation and management of the related Trust
Property, the related Trust, or the obligations of the parties hereto, nor
shall anything set forth herein, or contained in the terms of the
Certificates of such series, be construed so as to constitute the
Certificateholders of such series from time to time as partners or members
of an association. Neither the existence of any Trust nor any provision
herein is intended to or shall limit the liability the Certificateholders
of each series would otherwise incur if such Certificateholders owned the
related Trust Property as co-owners, or incurred any obligations of the
related Trust, directly rather than through the related Trust.
Section 12.03 Notices. (a) Unless otherwise specifically provided
herein or in the applicable Trust Supplement with respect to any Trust, all
notices required under the terms and provisions of this Basic Agreement or
such Trust Supplement with respect to such Trust shall be in English and in
writing, and any such notice may be given by United States mail, courier
service or telecopy, and any such notice shall be effective when delivered
or received or, if mailed, three days after deposit in the United States
mail with proper postage for ordinary mail prepaid,
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if to the Company, to:
U.S. Mail Overnight Delivery Service
United Air Lines, Inc. United Air Lines, Inc.
P.O. Box 66100 1200 East Algonquin Road
Chicago, Illinois 60666 Elk Grove Township, IL 60007
Attn: Vice President and Attn: Vice President and
Treasurer Treasurer
Telecopy: (708) 952-7117
if to the Trustee, to:
[Address]
(b) The Company or the Trustee as to any series of
Certificates, by written notice to the other, may designate additional or
different addresses for subsequent notices or communications.
(c) Any notice or communication to Certificateholders of
any series shall be mailed by first-class mail to the addresses for
Certificateholders of such series shown on the Register kept by the
Registrar. Failure so to mail a notice or communication or any defect in
such notice or communication shall not affect its sufficiency with respect
to other Certificateholders of such series.
(d) If a notice or communication is mailed in the manner
provided above within the time prescribed, it is conclusively presumed to
have been duly given, whether or not the addressee receives it.
Notwithstanding the foregoing, all communications or notices to the Trustee
shall be deemed to be given only when received by a Responsible Officer of
the Trustee.
(e) If the Company mails a notice or communication to the
Certificateholders of such series, it shall mail a copy to the Trustee and
to each Paying Agent for such series at the same time.
(f) The Trustee shall promptly furnish the Company with a
copy of any demand, notice or written communication received by the Trustee
hereunder from any Certificateholder, Owner Trustee or Indenture Trustee.
Section 12.04 Governing Law. THIS BASIC AGREEMENT, ALL TRUST
SUPPLEMENTS AND ALL CERTIFICATES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAWS THEREOF (OTHER THAN SECTION 5-1401 OF THE
NEW YORK GENERAL OBLIGATIONS LAW)) AND THE OBLIGATIONS, RIGHTS AND REMEDIES
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OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE DETERMINED IN ACCORDANCE
WITH SUCH LAWS.
Section 12.05 Severability of Provisions. If any one or more of
the covenants, agreements, provisions or terms of this Agreement shall be
for any reason whatsoever held invalid, then such covenants, agreements,
provisions, or terms shall be deemed severable from the remaining
covenants, agreements, provisions or terms of this Agreement and shall in
no way affect the validity or enforceability of the other provisions of
this Agreement or any Trust, or of the Certificates of any series or the
rights of the Certificateholders thereof.
Section 12.06 Trust Indenture Act Controls. This Agreement is
subject to the provisions of the Trust Indenture Act and if any provision
of this Agreement limits, qualifies or conflicts with another provision
which is required to be included in this Agreement by the Trust Indenture
Act, the required provision shall control. If any provision of this
Agreement modifies or excludes any provision of the Trust Indenture Act
that may be so modified or excluded, the latter provision shall be deemed
to apply to this Agreement as so modified, or to be excluded, as the case
may be, whether or not such provision of this Agreement refers expressly to
such provision of the Trust Indenture Act.
Section 12.07 Effect of Headings and Table of Contents. The
Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
Section 12.08 Successors and Assigns. All covenants, agreements,
representations and warranties in this Agreement by the Trustee and the
Company shall bind and, to the extent permitted hereby, shall inure to the
benefit of and be enforceable by their respective successors and assigns,
whether so expressed or not.
Section 12.09 Benefits of Agreement. Nothing in this Agreement or
in the Certificates of any series, express or implied, shall give to any
Person, other than the parties hereto and their successors hereunder, and
the Certificateholders of each series, any benefit or any legal or
equitable right, remedy or claim under this Agreement.
Section 12.10 Legal Holidays. In any case where any Regular
Distribution Date or Special Distribution Date relating to any Certificate
of any series shall not be a Business Day with respect to such series, then
(notwithstanding any other provision of this Agreement) payment need not be
made on such date, but may be made on the next succeeding Business Day with
the same force and effect as if made on such Regular Distribution Date or
Special Distribution Date, and interest shall accrue during the intervening
period.
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Section 12.11 Counterparts. For the purpose of facilitating
the execution of this Agreement and for other purposes, this Agreement may
be executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and all of which
counterparts shall constitute but one and the same instrument.
Section 12.12 Intention of Parties. The parties hereto intend that
each Trust be classified for U.S. federal income tax purposes as a grantor
trust under Subpart E, Part I of Subchapter J of the Internal Revenue Code
of 1986, as amended, and not as a trust or association taxable as a
corporation or as a partnership. The powers granted and obligations
undertaken pursuant to this Agreement shall be so construed so as to
further such intent.
Section 12.13 Registration of Equipment Notes in Name of
Subordination Agent. The Trustee agrees that all Equipment Notes to be
purchased by any Trust shall be issued in the name of any Subordination
Agent under any Intercreditor Agreement or its nominee and held by such
Subordination Agent in trust for the benefit of the Certificateholders, or,
if not so held, such Subordination Agent or its nominee shall be reflected
as the owner of such Equipment Notes in the register of the issuer of such
Equipment Notes.
Section 12.14 Communication by Certificateholders with other
Certificateholders. Certificateholders of any series may communicate with
other Certificateholders of such series with respect to their rights under
this Basic Agreement, the related Trust Supplements or the Certificates of
such series pursuant to Section 312(b) of the Trust Indenture Act. The
Company, the Trustee and any and all other persons benefitted by this
Agreement shall have the protection afforded by Section 312(c) of the Trust
Indenture Act.
Section 12.15. Normal Commercial Relations. Anything contained in
this Agreement to the contrary notwithstanding, the Trustee and any
Certificateholder, or any bank or other affiliate of any such party, may
conduct any banking or other financial transactions, and have banking or
other commercial relationships, with the Company fully to the same extent
as if this Agreement were not in effect, including without limitation the
making of loans or other extensions of credit to the Company for any
purpose whatsoever, whether related to any of the transactions contemplated
hereby or otherwise.
Section 12.16. No Recourse Against Others. No past, present or
future director, officer, employee, agent, member, manager, trustee or
stockholder, as such, of the Company or any successor Person shall have any
liability for any obligations of the Company or any successor Person,
either directly or through the Company or any successor Person, under the
Certificates or this Agreement or for any claim based on, in respect of or
by reason of such obligations or their creation, whether by virtue of any
rule of law, statute or constitutional provision or by the enforcement of
any assessment or by any legal or equitable proceeding or otherwise. By
accepting a Certificate, each Certificateholder agrees to the provisions of
this Section 12.16 and waives and releases all such liability. Such waiver
and release shall be part of the consideration for the issue of the
Certificates.
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IN WITNESS WHEREOF, the parties have caused this Basic Agreement
to be duly executed by their respective officers thereunto duly authorized
as of the day and year first written above.
UNITED AIR LINES, INC.
By:______________________________
Name:
Title:
[TRUSTEE NAME], as Trustee
By:________________________________
Name:
Title:
S-1 PASS THROUGH TRUST AGREEMENT
<PAGE>
EXHIBIT A
FORM OF CERTIFICATE
REGISTERED $______________________________
Fractional Undivided Interest*
No. R - _____
CUSIP NO. _______________
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE TRUSTEE OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IN
EXCHANGE FOR THIS CERTIFICATE IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE &
CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL CERTIFICATE SHALL BE LIMITED TO TRANSFERS
IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF
THIS GLOBAL CERTIFICATE SHALL BE LIMITED TO TRANSFERS MADE IN
ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 3.05 OF THE
PASS THROUGH TRUST AGREEMENT REFERRED TO HEREIN.
UNITED AIRLINES _____________________ PASS THROUGH TRUST
UNITED AIRLINES _____________________________________ PASS
THROUGH CERTIFICATE, SERIES _________________________
Final Expected Distribution Date: ________________________
A-1
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evidencing a fractional undivided interest in a trust, the property of
which includes certain equipment notes each secured by an Aircraft owned by
or leased to United Air Lines, Inc.
THIS CERTIFIES THAT _______________, for value received,
is the registered owner of a _____________ Dollars ($ dollars) Fractional
Undivided Interest in the United Airlines ______________ Pass Through Trust
(the "Trust") created by [Trustee Name], as trustee (the "Trustee")
pursuant to a Pass Through Trust Agreement, dated as of _______________
(the "Basic Agreement"), as supplemented by Trust Supplement No.
______________________, (collectively, the "Agreement") between the Trustee
and United Air Lines, Inc., a Delaware corporation (the "Company"), a
summary of certain of the pertinent provisions of which is set forth below.
To the extent not otherwise defined herein, the capitalized terms used
herein have the meanings assigned to them in the Agreement. This
Certificate is one of the duly authorized Certificates designated as
"United Airlines Pass Through Certificates, Series __________________" (the
"Certificates"). This Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement.
By virtue of its acceptance hereof, the Certificateholder
of this Certificate assents to and agrees to be bound by the provisions of
the Agreement, any Intercreditor Agreement and the Note Purchase Agreement.
The property of the Trust includes (i) certain Equipment Notes and all
monies at any time paid thereon and all monies due and to become due
thereunder, (ii) funds from time to time deposited in the related Escrow
Account, the related Certificate Account and the related Special Payments
Account, (iii) all rights of such Trust and the Trustee, on behalf of such
Trust, under any Intercreditor Agreement and the Note Purchase Agreement,
including all rights to receive certain payments thereunder and all monies
paid to such Trustee on behalf of such Trust pursuant to any Intercreditor
Agreement or the Note Purchase Agreement; and (iv) all monies receivable by
the Subordination Agent under any Liquidity Facilities for the Trust (
together with the property of all other trusts of the same series the
"Trust Property"). Each issue of the Equipment Notes is secured by, among
other things, a security interest in the Aircraft leased to or owned by the
Company.
The Certificates represent fractional undivided interests
in the Trust, all other trusts of the same series and the Trust Property,
and have no rights, benefits or interest in respect of any assets or
property of any trust of another series.
Interest applicable to this Certificate will be payable
[at __________%] [at a floating rate equal to [____________]].
Subject to and in accordance with the terms of the
Agreement[, any Intercreditor Agreement] and the Note Purchase Agreement,
from and to the extent of funds then available to the Trustee, there shall
be distributed on each ______________________ (a "Regular Distribution
Date"), commencing on _________________, to the Person in whose name this
Certificate is registered at the close of business on the 15th day
preceding such Regular Distribution Date, an amount in respect of the
Scheduled Payments on the Equipment Notes due on such Regular Distribution
A-2
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Date, the receipt of which has been confirmed by the Trustee, equal to the
product of the percentage interest in the Trust (or, if more than one trust
of like series, all such trusts) evidenced by this Certificate and an
amount equal to the sum of such Scheduled Payments. Subject to and in
accordance with the terms of the Agreement, the Intercreditor Agreement and
the Note Purchase Agreement, if Special Payments on the Equipment Notes are
received by the Trustee, from funds then available to the Trustee, there
shall be distributed on the applicable Special Distribution Date, to the
Person in whose name this Certificate is registered at the close of
business on the 15th day preceding the Special Distribution Date, an amount
in respect of such Special Payments on the Equipment Notes, the receipt of
which has been confirmed by the Trustee, equal to the product of the
percentage interest in the Trust (or, if more than one trust of like
series, all such trusts) evidenced by this Certificate and an amount equal
to the sum of such Special Payments so received. If a Regular Distribution
Date or Special Distribution Date is not a Business Day, distribution shall
be made on the next Business Day with the same force and effect as if made
on such Regular Distribution Date or Special Distribution Date and interest
shall accrue during the intervening period. The Trustee shall mail notice
of each Special Payment and the Special Distribution Date therefor to the
Certificateholder of this Certificate. The Certificates are redeemable as
and to the extent provided in the Note Purchase Agreement.
Except as otherwise provided in the Agreement and
notwithstanding the above, the final distribution on this Certificate shall
be made after notice mailed by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate
at the office or agency of the Trustee specified in such notice.
THE AGREEMENT AND THIS CERTIFICATE SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT
REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF (OTHER THAN SECTION
5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW)) AND THE OBLIGATIONS,
RIGHTS AND REMEDIES OF THE HOLDER OF THIS CERTIFICATE SHALL BE DETERMINED
IN ACCORDANCE WITH SUCH LAWS.
Reference is hereby made to the further provisions of
this Certificate set forth in the reverse hereof, which further provisions
shall for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this
Certificate to be duly signed, manually or in facsimile, by its Authorized
Officer.
Dated: __________________ UNITED AIRLINES __________________
PASS THROUGH TRUST
By: [TRUSTEE NAME],
not in its individual capacity but
solely as Trustee
By:____________________________
Name:
Title:
A-3
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FORM OF THE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the
within-mentioned Agreement.
[TRUSTEE NAME],
not in its individual capacity but
solely as Trustee
By:______________________________
Authorized Officer
A-4
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[REVERSE OF CERTIFICATE]
The Certificates do not represent a direct obligation of,
or an obligation guaranteed by, or an interest in, the Company or the
Trustee or any of their affiliates. The Certificates are limited in right
or payment, all as more specifically set forth on the face hereof and in
the Agreement. All payments or distributions made to Certificateholders
under the Agreement shall be made only from the Trust Property and only to
the extent that the Trustee shall have sufficient income or proceeds from
the Trust Property to make such payments in accordance with the terms of
the Agreement. Each Certificateholder of this Certificate, by its
acceptance hereof, agrees that it shall look solely to the income and
proceeds from the Trust Property to the extent available for distribution
to such Certificateholder as provided in the Agreement. This Certificate
does not purport to summarize the Agreement and reference is made to the
Agreement for information with respect to the interests, rights, benefits,
obligations, proceeds and duties evidenced hereby. A copy of the Agreement
may be examined during normal business hours at the principal office of the
Trustee, and at such other places, if any, designated by the Trustee, by
any Certificateholder upon request.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Certificateholders under
the Agreement at any time by the Company and the Trustee with the consent
of the Certificateholders holding Certificates evidencing Fractional
Cumulative Interests aggregating not less than a majority in interest in
the Trust. Any such consent by the Certificateholder of this Certificate
shall be conclusive and binding on such Certificateholder and upon all
future Certificateholders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange hereof or in lieu hereof whether or
not notation of such consent is made upon this Certificate. The Agreement
also permits the amendment thereof, in certain limited circumstances,
without the consent of the Certificateholders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is
registrable in the Register upon surrender of this Certificate for
registration of transfer at the offices or agencies maintained by the
Trustee in its capacity as Registrar, or by any successor Registrar, at its
Corporate Trust Office, duly endorsed or accompanied by a written
instrument of transfer in form satisfactory to the Trustee and the
Registrar duly executed by the Certificateholder hereof or such
Certificateholder's attorney duly authorized in writing, and thereupon one
or more new Certificates of authorized denominations evidencing the same
aggregate Fractional Undivided Interest in the Trust shall be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered
Certificates without coupons in minimum denominations of $1,000 Fractional
Undivided Interest and integral multiples of $1,000 in excess thereof. As
provided in the Agreement and subject to certain limitations therein set
forth, the Certificates are exchangeable for new Certificates of authorized
denominations evidencing the same aggregate Fractional Undivided Interest
in the Trust, as requested by the Certificateholder surrendering the same.
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No service charge shall be made for any such registration
of transfer or exchange, but the Trustee shall require payment by the
Holder of a sum sufficient to cover any tax or governmental charge payable
in connection therewith.
The Trustee, the Registrar, and any agent of the Trustee
or the Registrar may treat the person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Trustee,
the Registrar, nor any such agent shall be affected by any notice to the
contrary.
The obligations and responsibilities created by the
Agreement and the Trust created thereby shall terminate upon the
distribution to Certificateholders of all amounts required to be
distributed to them pursuant to the Agreement and the disposition of all
property held as part of the Trust Property.
A-6
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FORM OF TRANSFER NOTICE
FOR VALUE RECEIVED the undersigned registered holder hereby
sell(s), assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
_________________________________________________________________________
please print or typewrite name and address including zip code of assignee
_________________________________________________________________________
the within Certificate and all rights thereunder, hereby irrevocably
constituting and appointing
_________________________________________________________________________
attorney to transfer said Certificate on the books of the Trustee with full
power of substitution in the premises.
Date: [Name of Transferor]
___________________________________
NOTE: The signature must correspond
with the name as written upon the
face of the within-mentioned
instrument in every particular,
without alteration or any change
whatsoever.
Signature Guarantee:_______________________
A-7
Exhibit 5(a)(1)
[Letterhead of Mayer, Brown & Platt]
November 9, 1999
United Air Lines, Inc.
1200 East Algonquin Road
Elk Grove Village, IL 60007
Ladies and Gentlemen:
We have acted as special counsel for United Air Lines, Inc., a
Delaware corporation ("United" or the "Company"), in connection with the
preparation and filing of a shelf Registration Statement on Form S-3 (the
"Registration Statement") with the Securities and Exchange Commission (the
"SEC") under the Securities Act of 1933, as amended (the "Securities Act").
The Registration Statement relates to up to $1,500,000,000 aggregate
principal amount of Debt Securities (the "Securities"), and Pass Through
Certificates that may be issued by United in one or more series from time
to time on a delayed basis. Each series of Securities will be issued under
the provisions of the Indenture to be entered into between United Air
Lines, Inc. and the indenture trustee (the "Indenture Trustee"),
substantially in the form filed as Exhibit 4(a)(1) to the Registration
Statement (the "Indenture"). The Securities will be sold or delivered as
set forth in the Registration Statement, any amendment thereto, the
prospectus relating to the Securities filed as part of the Registration
Statement (the "Prospectus") and any supplements thereto ("Prospectus
Supplements").
In connection with the opinions expressed below, we have examined
originals, or copies certified to our satisfaction, of such agreements,
documents and certificates of governmental officials and corporate officers
as we have deemed necessary or advisable as a basis for such opinions. We
have also examined (i) the Certificate of Incorporation, as currently in
effect, (ii) the Bylaws of United, as currently in effect, (iii)
Consent of Directors in Lieu of Meeting dated October 12, 1999, relating to the
filing of the Registration Statement, and (iv) the form of the Indenture filed
with the SEC. Unless otherwise defined herein, capitalized terms used herein
have the meanings assigned thereto in the Indenture. In such examination, we
have assumed the genuineness of all signatures, the legal capacity of natural
persons, and the authenticity of all documents submitted to us as originals and
the conformity with the originals of all documents submitted to us as copies.
Further, we have assumed: (i) the due authorization, execution and delivery of
the Indenture by each of the parties thereto, (ii) the due authorization,
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execution, issuance and delivery by United, and the due authentication and
delivery by the Indenture Trustee, of the Securities to be issued under the
Indenture, in accordance with the terms of the Indenture, (iii) that each
person that is a party to the Indenture (other than United) is duly qualified
to engage in the activities contemplated by such documents and has the power,
authority and legal right to enter into and perform its obligations thereunder,
and (iv) that the execution, delivery and performance of the Indenture
and the Securities by each person that is a party thereto (other
than United) do not and will not violate the charter or by-laws of any such
person or any contract to which any such person is a party or by which any
such person is bound and comply with all laws, governmental rules and
regulations applicable to each such person.
In addition, we have assumed (i) a Prospectus Supplement
supplementing the Prospectus will have been prepared and filed with the SEC
describing the Securities; (ii) the Securities issued will be issued and
sold in compliance with applicable federal and state securities laws and
solely in the manner stated in the Registration Statement and the
appropriate Prospectus Supplement; and (iii) a definitive purchase,
underwriting or similar agreement with respect to the Securities will have
been duly authorized and validly executed and delivered by United and the
other parties thereto.
Based on the foregoing, it is our opinion that:
1. United is a corporation duly organized and validly existing in
good standing under the laws of the State of Delaware and is duly
authorized to carry on the business in which it is engaged.
2. The Indenture, when duly authorized, executed and delivered, will
constitute valid and binding agreements of each of the parties
thereto.
3. The Securities, when duly authorized, executed, issued and
delivered by United, and duly authenticated and delivered by the
Indenture Trustee in accordance with the terms of the Indenture
and sold in accordance with the related purchase agreement or
underwriting agreement between United and the purchasers or
underwriters, as the case may be, named therein, will be valid and
binding obligations of United and will be entitled to the benefits
of the Indenture.
The foregoing opinions are subject to (i) bankruptcy, insolvency,
fraudulent transfer, fraudulent conveyance and other similar laws affecting
the rights or remedies of creditors generally, (ii) general principles of
equity including, without limitation, laches and estoppel as equitable
defenses and concepts of materiality, reasonableness, good faith and fair
dealing (regardless of whether enforceability is considered or applied in a
proceeding in equity or at law) and considerations of impracticability or
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impossibility of performance, and defenses based upon unconscionability of
otherwise enforceable obligations in the context of the factual
circumstances under which enforcement thereof is sought, and (iii) the
qualification that the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to equitable defenses and to
the discretion of the court before which any proceeding therefor may be
brought.
In giving the foregoing opinion, we do not purport to be experts
on, or to express any opinion herein concerning, any laws other than the
laws of the State of Illinois, the State of New York, the corporate laws of
the State of Delaware and the federal law of the United States of America,
in each case as in effect on the date hereof, except that we express no
opinion with respect to (i) the laws, regulations or ordinances of any
county, town or municipality or governmental subdivision or agency thereof,
(ii) (x) state securities or blue sky laws, (y) the Investment Company Act
or (z) federal securities laws, including, without limitation, the
Securities Act.
We hereby consent to the filing of this opinion as an exhibit to
the Registration Statement and to the reference to our firm under the
caption "Legal Matters" in the Prospectus, and in any subsequently filed
Prospectus Supplements, relating to the Certificates that constitutes part
of the Registration Statement. This consent is not to be construed as an
admission that we are a person whose consent is required to be filed with
the Registration Statement and Legal Matters under the provisions to the
Securities Act.
Very truly yours,
MAYER, BROWN & PLATT
3
Exhibit 5(a)(2)
[Letterhead of Mayer, Brown & Platt]
November 9, 1999
United Air Lines, Inc.
1200 East Algonquin Road
Elk Grove Village, IL 60007
Ladies and Gentlemen:
We have acted as special counsel for United Air Lines, Inc., a
Delaware corporation ("United" or the "Company"), in connection with the
preparation and filing of a shelf Registration Statement on Form S-3 (the
"Registration Statement") with the Securities and Exchange Commission (the
"SEC") under the Securities Act of 1933, as amended (the "Securities Act").
The Registration Statement relates to up to $1,500,000,000 aggregate amount
of Pass Through Certificates (the "Pass Through Certificates") that may be
issued by United in one or more series from time to time on a delayed
basis. The Pass Through Certificates will be issued under the provisions of
a Pass Through Trust Agreement between United and the pass through trustee
(the "Pass Through Trustee"), filed as Exhibit 4(b)(1) to the Registration
Statement (the "Pass Through Agreement") as supplemented by a separate
Series Supplement for each series of Pass Through Certificates (each, a
"Series Supplement"). The Pass Through Certificates will be sold or
delivered as set forth in the Registration Statement, any amendment
thereto, the prospectus relating to the Pass Through Certificates filed as
part of the Registration Statement (the "Prospectus") and any supplements
thereto ("Prospectus Supplements").
In connection with the opinions expressed below, we have examined
originals, or copies certified to our satisfaction, of such agreements,
documents and certificates of governmental officials and corporate officers
as we have deemed necessary or advisable as a basis for such opinions. We
have also examined (i) the Certificate of Incorporation, as currently in
effect, (ii) the Bylaws of United, as currently in effect, (iii)
Consent of Directors in Lieu of Meeting dated October 12, 1999, relating to
the filing of the Registration Statement, and (iv) the Pass Through Agreement
filed with the SEC. Unless otherwise defined herein, capitalized terms used
herein have the meanings assigned thereto in the Pass Through Agreement. In
such examination, we have assumed the genuineness of all signatures and the
authenticity of all documents submitted to us as originals and the conformity
with the originals of all documents submitted to us as copies. Further, we have
assumed: (i) the due authorization, execution and delivery of the Pass Through
Agreement and each applicable Series Supplement by each of the parties thereto,
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(ii) that the Pass Through Agreement and each applicable Series Supplement have
not been terminated, varied, transferred or assigned, (iii) the due
authorization, execution, issue, delivery and authentication by the Pass
Through Trustee of the Pass Through Certificates to be issued under the
Pass Through Agreement and each applicable Series Supplement, in each case
in accordance with the terms of such Pass Through Agreement and each such
Series Supplement, (iv) that any outstanding equipment trust certificates
previously issued by the owner trustee under any related Indenture have
been delivered to the Indenture Trustee thereunder for cancellation and
have been canceled, (v) that each person (other than United) that is a
party to the Pass Through Agreement and each Series Supplement is duly
qualified to engage in the activities contemplated by such documents and
has the power, authority and legal right to enter into and perform its
obligations thereunder, and (vi) that the execution, delivery and
performance of the Pass Through Agreement, each Series Supplement and the
Pass Through Certificates by each person (other than United) that is a
party thereto do not and will not violate the charter or by-laws of any
such person or any contract to which any such person is a party or by which
any such person is bound and comply with all laws, governmental rules and
regulations applicable to each such person.
In addition, we have assumed (i) a Prospectus Supplement
supplementing the Prospectus will have been prepared and filed with the SEC
describing the Pass Through Certificates; (ii) the Pass Through
Certificates issued will be issued and sold in compliance with applicable
federal and state securities laws and solely in the manner stated in the
Registration Statement and the appropriate Prospectus Supplement; and (iii)
a definitive purchase, underwriting or similar agreement with respect to
the Pass Through Certificates will have been duly authorized and validly
executed and delivered by United and the other parties thereto.
Based on the foregoing, it is our opinion that:
1. United is a corporation duly organized and validly existing in
good standing under the laws of the State of Delaware and is duly
authorized to carry on the business in which it is engaged.
2. The Pass Through Agreement and each applicable series Supplement,
when duly authorized, executed and delivered, will constitute
valid and binding agreements of each of the parties thereto.
3. The Pass Through Certificates, when duly authorized, executed,
issued, delivered and authenticated by the Pass Through Trustee in
accordance with the terms of the Pass Through Agreement and each
applicable Series Supplement and sold in accordance with the
related purchase agreement or underwriting agreement between
United and the purchasers or underwriters, as the case may be,
named therein, will be valid and binding obligations of the Pass
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Through Trustee and will be entitled to the benefits of the Pass
Through Agreement and each applicable Series Supplement.
The foregoing opinions are subject to (i) bankruptcy, insolvency,
fraudulent transfer, fraudulent conveyance and other similar laws affecting
the rights or remedies of creditors generally, (ii) general principles of
equity including, without limitation, laches and estoppel as equitable
defenses and concepts of materiality, reasonableness, good faith and fair
dealing (regardless of whether enforceability is considered or applied in a
proceeding in equity or at law) and considerations of impracticability or
impossibility of performance, and defenses based upon unconscionability of
otherwise enforceable obligations in the context of the factual
circumstances under which enforcement thereof is sought, and (iii) the
qualification that the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to equitable defenses and to
the discretion of the court before which any proceeding therefor may be
brought.
In giving the foregoing opinion, we do not purport to be experts
on, or to express any opinion herein concerning, any laws other than the
laws of the State of Illinois, the State of New York, the corporate law of
the State of Delaware and the federal law of the United States of America,
in each case as in effect on the date hereof, except that we express no
opinion with respect to (i) the laws, regulations or ordinances of any
county, town or municipality or governmental subdivision or agency thereof,
(ii) (x) state securities or blue sky laws, (y) the Investment Company Act
or (z) federal securities laws, including, without limitation, the
Securities Act.
We hereby consent to the filing of this opinion as an exhibit to
the Registration Statement and to the reference to our firm under the
caption "Legal Matters" in the Prospectus, and in any subsequently filed
Prospectus Supplements, relating to the Pass Through Certificates that
constitutes part of the Registration Statement. This consent is not to be
construed as an admission that we are a person whose consent is required to
be filed with the Registration Statement and Legal Matters under the
provisions to the Securities Act.
Very truly yours,
MAYER, BROWN & PLATT
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Exhibit 8(a)
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[Letterhead of Mayer, Brown & Platt]
November 9, 1999
United Air Lines, Inc.
1200 East Algonquin Road
Elk Grove Village, Illinois 60007
Ladies and Gentlemen:
We have acted as special tax counsel for United Air Lines, Inc., a
Delaware corporation ("United"), in connection with the preparation of the
Registration Statement on Form S-3 (as amended, the "Registration
Statement") filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended (the "Act"), for the registration under
the Act of certain series (each, a "Series") of Pass Through Certificates
(the "Certificates"). Each such Series will represent an undivided interest
in a trust (the "Trust") to be formed pursuant to a Supplement to a Pass
Through Trust Agreement between United and the Trustee specified in the
related Prospectus Supplement.
We hereby confirm that the statements set forth in the prospectus
relating to the Certificates (the "Prospectus") forming a part of the
Registration Statement under the heading "Federal Income Tax Consequences",
which statements have been prepared by us, to the extent that they
constitute matters of law or legal conclusions with respect thereto
relating to federal tax matters, are a fair and accurate discussion of all
material federal income tax consequences, and we hereby confirm and adopt
the opinions set forth therein. There can be no assurance, however, that
the tax conclusions presented therein will not be successfully challenged
by the IRS, or significantly altered by new legislation, changes in IRS
positions or judicial decisions, any of which challenges or alterations may
be applied retroactively with respect to completed transactions.
The opinion set forth in this letter is based upon the applicable
provisions of the Internal Revenue Code of 1986, as amended, Treasury
regulations promulgated and proposed thereunder, current positions of the
Internal Revenue Service (the "IRS") contained in published Revenue Rulings
and Revenue Procedures, current administrative positions of the IRS and
existing judicial decisions. No tax rulings will be sought from the IRS
with respect to any of the matters discussed herein.
<PAGE>
In addition, the opinion set forth in this letter is based solely
on the facts and circumstances set forth in the Prospectus. This opinion
shall not apply to any particular issuance of a Series if the facts and
circumstances with respect to such Series vary from those set forth in the
Prospectus.
We hereby consent to the filing of this opinion as an exhibit to
the Registration Statement. In giving such consent, we do not admit that we
are "experts" within the meaning of the term used in the Act or the rules
and regulations of the Securities and Exchange Commission issued
thereunder, with respect to any part of the Registration Statement,
including this opinion as an exhibit or otherwise.
Very truly yours,
s/s
MAYER, BROWN & PLATT
Exhibit 23(d)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this Form S-3 registration statement of our
reports dated February 24, 1999, included (or incorporated by reference) in
United Air Lines, Inc. Form 10-K for the year ended December 31, 1998, and
to all references to our firm included in this registration statement.
ARTHUR ANDERSEN LLP
Chicago, Illinois
November 9, 1999
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