Exhibit 4.15
PARTICIPATION AGREEMENT
(2001-1 747-1)
Dated as of August 22, 2001
among
UNITED AIR LINES, INC.,
Owner,
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
in its capacity as
Pass Through Trustee under each of the
Pass Through Trust Agreements,
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
as Subordination Agent
and
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
In its Individual Capacity and as Indenture Trustee
____________________________________
United Air Lines, Inc.
One Boeing Model 747-422 Aircraft
Bearing U.S. Registration No. N117UA
____________________________________
TABLE OF CONTENTS
Page
SECTION 1. CERTAIN DEFINITIONS....................................................... 2
SECTION 2. PURCHASE OF EQUIPMENT NOTES............................................... 2
SECTION 3. EQUIPMENT NOTES........................................................... 3
SECTION 4. CONDITIONS................................................................ 3
SECTION 5. OWNER'S REPRESENTATIONS, WARRANTIES AND INDEMNITIES....................... 4
SECTION 6. REPRESENTATIONS, WARRANTIES AND COVENANTS................................. 12
SECTION 7. OTHER DOCUMENTS............................................................ 18
SECTION 8. NOTICES; CONSENT TO JURISDICTION........................................... 19
SECTION 9. MISCELLANEOUS.............................................................. 20
SCHEDULES
SCHEDULE I Names and Addresses
SCHEDULE II Noteholders, Equipment Notes, Original Principal Amount,
Interest Rate and Maturity Date
SCHEDULE III Description of Pass Through Trust Agreements
i
PARTICIPATION AGREEMENT (2001-1 747-1)
THIS PARTICIPATION AGREEMENT (2001-1 747-1) dated as of August 22, 2001,
(this "Agreement") among (i) UNITED AIR LINES, INC., a Delaware corporation (the
"Owner"), (ii) STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL
ASSOCIATION, a national banking association, not in its individual capacity,
except as otherwise provided herein, but solely as trustee under each of the
Pass Through Trust Agreements (as defined below), (iii) STATE STREET BANK AND
TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, a national banking
association, in its individual capacity and as Indenture Trustee (the "Indenture
Trustee") under the Indenture (as defined below) and (iv) STATE STREET BANK AND
TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, a national banking
association, not in its individual capacity but solely as subordination agent
and trustee (the "Subordination Agent") under the Intercreditor Agreement (as
defined below).
W I T N E S S E T H:
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WHEREAS, Owner is the owner of the Boeing Model 747-422 aircraft more
particularly described in the initial Indenture Supplement dated the Closing
Date for which it desires to obtain financing;
WHEREAS, pursuant to the Trust Indenture and Mortgage (2001-1 747-1) dated
as of August 22, 2001 (the "Indenture") between Owner and the Indenture Trustee,
Owner proposes to issue up to six Series of Equipment Notes in the form set
forth in Exhibit A to the Indenture, which Equipment Notes are to be secured by
the mortgage and security interest in the Aircraft created pursuant to the
Indenture by the Owner in favor of the Indenture Trustee;
WHEREAS, the Series ▇-▇, ▇▇▇▇▇▇ ▇-▇, Series A-3, Series B, Series C and
Series D Equipment Notes, as applicable, will be issued on the Closing Date to
the Subordination Agent as nominee for the Pass Through Trustee for the
applicable Pass Through Trust as evidence of the Owner's indebtedness to each
such Pass Through Trustee;
WHEREAS, pursuant to the Basic Pass Through Trust Agreement and each of the
supplements thereto set forth in Schedule III hereto (the "Pass Through Trust
Agreements"), on the Closing Date a separate grantor trust (collectively, the
"Pass Through Trusts" and, individually, a "Pass Through Trust") will be created
to facilitate certain of the transactions contemplated hereby, including,
without limitation, the issuance and sale of credit enhanced pass through
certificates pursuant thereto (collectively, the "Pass Through Certificates") to
provide a portion of the financing of the Aircraft;
WHEREAS, the proceeds from the issuance and sale of the Pass Through
Certificates will be applied by the Pass Through Trustee to purchase from the
Owner, on behalf of each Pass Through Trust, the Series ▇-▇, ▇▇▇▇▇▇ ▇-▇, Series
A-3, Series B, Series C and Series D
[Participation Agreement (2001-1 747-1)]
Equipment Notes, as applicable, issued under the Indenture and bearing the same
interest rate as the Pass Through Certificates issued by such Pass Through
Trust;
WHEREAS, concurrently with the execution and delivery of this Agreement,
(i) Westdeutsche Landesbank Girozentrale, acting through its New York branch
(the "Liquidity Provider"), has entered into five revolving credit agreements
(each, a "Liquidity Facility"), in each case for the benefit of the holders of
the Pass Through Certificates of the United Air Lines 2001-1A-1 Pass Through
Trust, the United Air Lines 2001-1A-2 Pass Through Trust, the United Air Lines
2001-1A-3 Pass Through Trust, the United Air Lines 2001-1B Pass Through Trust
and the United Air Lines 2001-1C Pass Through Trust, with the Subordination
Agent, as agent for the Pass Through Trustee on behalf of each such Pass Through
Trust; and (ii) the Pass Through Trustees, the Liquidity Provider and the
Subordination Agent entered into the Intercreditor Agreement, dated as of the
date hereof (the "Intercreditor Agreement"); and
WHEREAS, capitalized terms are used herein as defined in Section 1 hereof.
NOW THEREFORE, in consideration of the mutual agreements herein contained,
the parties hereto agree as follows:
SECTION 1. Certain Definitions. The terms "Owner," "Pass Through
-------------------
Trustee," "Subordination Agent," "Liquidity Provider" and the "Indenture
Trustee" shall have the further meanings attributed thereto in the Indenture
and, except as otherwise defined in this Agreement, terms used herein in
capitalized form shall have the meanings attributed thereto in the Indenture.
Unless the context otherwise requires, any reference herein to any of the
Operative Documents refers to such document as it may be amended from time to
time in accordance with its terms and the terms of each other agreement
restricting the amendment thereof.
SECTION 2. Purchase of Equipment Notes. (a) Subject to the satisfaction
---------------------------
or waiver of the conditions set forth herein and in the Note Purchase Agreement
on the date hereof or on such other date agreed to by the parties hereto (the
"Closing Date"):
(i) the Pass Through Trustee for each Pass Through Trust listed
on Schedule II hereto shall pay to the Owner the purchase price set forth
on Schedule II hereto of the Equipment Note being issued to such Pass
Through Trust;
(ii) the Owner shall issue, pursuant to Article 2 of the
Indenture, to the Subordination Agent, as nominee for the Pass Through
Trustee for each of the Pass Through Trusts listed on Schedule II hereto,
an Equipment Note of the maturity and principal amount and bearing the
interest rate set forth on Schedule II hereto opposite the name of such
Pass Through Trust.
(b) [Intentionally Omitted]
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[Participation Agreement (2001-1 747-1)]
(c) The closing (the "Closing") of the issuance of the Series A-1,
Series A-2, Series A-3, Series B, Series C and Series D Equipment Notes, as
applicable, described in this Agreement shall take place at the offices of
Vedder, Price, ▇▇▇▇▇▇▇ & Kammholz, ▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, at
10:00 a.m. (Chicago time) on the Closing Date, or at such other place as the
parties hereto may agree.
(d) All payments pursuant to this Section 1 shall be made in
immediately available funds to such accounts and at such banks as the parties
hereto shall designate in writing not less than one Business Day prior to the
Closing Date.
(e) Owner may elect to postpone the issuance of a series of Equipment
Notes pursuant to Section 2.02(b) of the Pass Through Trust Agreement.
(f) In order to facilitate the transactions contemplated hereby, the
Owner has entered into the Note Purchase Agreement, and, subject to the terms
and conditions hereof, the Owner will enter into each of the Pass Through Trust
Agreements and will undertake to perform certain administrative and ministerial
duties under such Pass Through Trust Agreements.
SECTION 3. Equipment Notes. On the Closing Date, the Owner shall execute,
---------------
and the Indenture Trustee shall authenticate and deliver to the applicable
Noteholder, an Equipment Note of such Series in the principal amount and bearing
the interest rate set forth opposite the name of such Noteholder on Schedule II
hereto. Subject to the terms hereof, of the Pass Through Agreements and of the
other Operative Agreements, all such Equipment Notes shall be dated and
authenticated as of the Closing Date (and shall bear interest therefrom), shall
be registered in such names as shall be specified by the Noteholder and shall be
paid in the manner and at such places as are set forth in the Indenture.
SECTION 4. Conditions. (a) Conditions Precedent. The obligations of each
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Pass Through Trustee to make the payment described in Section 2(a)(i), are
subject to the satisfaction (or waiver) prior to or on the Closing Date of the
conditions specified in Section 3 of the Note Purchase Agreement.
(b) Conditions Precedent to the Obligations of Owner. It is agreed
that the obligations of Owner to participate in the transactions contemplated
hereby and to enter into the Operative Documents to which it is a party are all
subject to the fulfillment to the satisfaction (or waiver) of Owner prior to or
on the Closing Date of the conditions set forth in Section 3(b) of the Note
Purchase Agreement and the following conditions precedent:
(i) The representations and warranties of the Indenture Trustee,
the Pass Through Trustees and the Subordination Agent contained in Section
6 hereof shall be true and accurate as of the Closing Date as though made
on and as of such date except to the extent that such representations and
warranties relate solely to an earlier date (in which event such
representations and warranties shall have been true and accurate on and as
of such earlier date) and Owner shall have received a certificate signed by
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[Participation Agreement (2001-1 747-1)]
the Chairman of the Board, the President, any Vice President or any
Assistant Vice President or other authorized representative of the
Indenture Trustee, the Pass Through Trustees and the Subordination Agent,
respectively, certifying as to the foregoing matters with respect to the
Indenture Trustee, the Pass Through Trustees and the Subordination Agent,
respectively.
(ii) No action or proceeding shall have been instituted nor
shall governmental action be threatened before any court or governmental
agency, nor shall any order, judgment or decree have been issued or
proposed to be issued by any court or governmental agency at the time of
the Closing Date to set aside, restrain, enjoin or prevent the completion
and consummation of this Agreement or the transactions contemplated hereby.
(iii) No change shall have occurred after the date of the
execution and delivery of this Agreement in applicable law or regulations
thereunder or interpretations thereof by appropriate regulatory authorities
which, in the opinion of Owner, would make it a violation of law or
regulations for Owner to enter into any transaction contemplated by the
Operative Documents.
SECTION 5. Owner's Representations, Warranties and Indemnities. (a)
---------------------------------------------------
Representations and Warranties. Owner represents and warrants to the Indenture
Trustee, the Pass Through Trustees and the Liquidity Provider that as of the
Closing Date:
(i) Owner is a corporation duly organized and validly
existing in good standing pursuant to the laws of the State of Delaware,
having organizational identification number 0697327; is a Certificated Air
Carrier; has the State of Delaware as its "location" (as such term is
defined in Article 9 of the Uniform Commercial Code of the State of
Delaware as in effect on the date hereof) and its true and complete name as
indicated on the public record of the State of Delaware is "United Air
Lines, Inc." and its mailing address is as set forth in Schedule I hereto;
is duly qualified to do business as a foreign corporation in each
jurisdiction in which it has intrastate routes or has its principal office
or a major overhaul facility, except where the failure to be so qualified
would not have a material adverse effect on the ability of Owner to perform
its obligations under the Owner Documents (as defined below); holds all
material licenses, certificates, permits and franchises from the
appropriate agencies of the United States of America and/or all other
governmental authorities having jurisdiction, necessary to authorize Owner
to carry on scheduled passenger service, in each case as presently
conducted, and has the corporate power and authority to enter into and
perform its obligations under this Agreement, the Indenture, the initial
Indenture Supplement, the Equipment Notes, the Pass Through Trust
Agreements and all other documents executed by Owner in connection herewith
or therewith (collectively, the "Owner Documents");
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[Participation Agreement (2001-1 747-1)]
(ii) the execution, delivery and performance by Owner of the
Owner Documents have been duly authorized by all necessary corporate action
on the part of Owner, do not require any stockholder approval, or approval
or consent of any trustee or holders of any indebtedness or obligations of
Owner except such as have been duly obtained, and none of the execution,
delivery and performance by Owner of such Owner Documents contravenes any
law, judgment, governmental rule, regulation or order binding on Owner or
the certificate of incorporation or by-laws of Owner or contravenes the
provisions of, or constitutes a default under, or results in the creation
of any Lien (other than Permitted Liens) upon the property of Owner under:
(x) its certificate of incorporation or bylaws; or (y) any indenture,
mortgage, chattel mortgage, deed of trust, conditional sales contract, bank
loan or credit agreement or other agreement or instrument to which Owner is
a party or by which it or its properties may be bound or affected, unless
such contravention, default or Lien pertains to an agreement of the type
listed in clause (y) of this Section and, individually or in the aggregate,
would be reasonably unlikely to have a material adverse effect on the
ability of the Owner to perform its obligations under the Owner Documents;
(iii) neither the execution and delivery by Owner of the Owner
Documents nor the performance by Owner of its obligations thereunder
require the consent or approval of, the giving of notice to, the
registration with, or the taking of any other action in respect of any
federal, state, local or foreign government authority or agency, except for
(A) the qualification of the Pass Through Trust Agreements under the Trust
Indenture Act of 1939, as amended, pursuant to an order of the Securities
and Exchange Commission, (B) the registrations and filings referred to in
Section 5(a)(v), (C) authorizations, consents, approvals, actions, notices
and filings required to be obtained, taken, given or made which have been
duly obtained and are in full force and effect or the failure of which to
obtain, take, give or make would not be reasonably likely to have a
material adverse effect on the financial condition, properties or results
of operations of the Owner or on the ability of the Owner to perform its
obligations under the Owner Documents, (D) any normal periodic and other
reporting requirements under the applicable rules and regulations of the
FAA to the extent required to be given or obtained only after the Closing
Date, and (E) the recordings with the FAA described in the opinion referred
to in Section 4(a)(ix);
(iv) each of the Owner Documents has been duly executed and
delivered by Owner and constitutes legal, valid and binding obligations of
Owner enforceable against Owner in accordance with the terms thereof,
except as the same may be limited by (a) applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or similar laws affecting
the enforcement of creditors' rights generally, (b) by general principles
of equity, whether considered in a proceeding at law or in equity, (c) in
the case of indemnity provisions contained in such documents, public policy
considerations, and (d) in the case of the Indenture, applicable laws which
may affect the remedies provided in the Indenture, which laws, however, do
not make the
5
remedies provided in the Indenture inadequate for practical realization of
the benefits intended to be afforded thereby ;
(v) except for (A) the filing for recording pursuant to the
Federal Aviation Act of the Indenture and the Indenture Supplement attached
thereto and made a part thereof, (B) the taking of possession by the
Indenture Trustee of the original counterparts of the Indenture and the
Indenture Supplement attached thereto, (C) the registration of the Aircraft
with the FAA pursuant to the Federal Aviation Act in the name of the Owner,
(D) the affixation of the nameplates referred to in Section 4.01(c) of the
Indenture and (E) the filing of financing statements (and continuation
statements at periodic intervals) with respect to the security and other
interests created by such documents under the Uniform Commercial Code of
Delaware, no further action, including any filing or recording of any
document is necessary or advisable in order to perfect the security
interest in favor of the Indenture Trustee in the Owner's interest in the
Aircraft in any applicable jurisdiction in the United States and, on the
Closing Date, after giving effect to such filings, the Indenture Trustee
will have a duly perfected first priority security interest in all of
Owner's right, title and interest in and to the Aircraft, subject only to
Permitted Liens;
(vi) there has not occurred any event which constitutes an
Indenture Default or an Indenture Event of Default which is presently
continuing and there has not occurred any event which constitutes or would,
with the passage of time or the giving of notice, or both, constitute an
Event of Loss with respect to the Airframe or any Engine;
(vii) the Owner has good and marketable title to the Aircraft,
free and clear of all Liens, other than Permitted Liens, and the FAA ▇▇▇▇
of Sale conveying title to the Owner has been duly filed with the FAA;
(viii) neither Owner nor anyone acting on behalf of Owner has
offered any interest in any Pass Through Certificate or any Equipment Note
in a manner which would violate the Securities Act of 1933, as amended, the
regulations thereunder, administrative and judicial interpretation thereof;
(ix) the Aircraft has been duly certified by the FAA as to type
and airworthiness and such certification remains in full force and effect;
(x) neither Owner nor any subsidiary of Owner is an
"investment company" or a company "controlled by an investment company"
within the meaning of the Investment Company Act of 1940, as amended;
(xi) except for the proceedings described in the discussion of
Legal Proceedings in Owner's Annual Report on Form 10-K for the year ended
December 31, 2000 and subsequently filed Form 10-Qs filed prior to the
Closing Date, there are no pending or, to the knowledge of Owner,
threatened actions or proceedings before any
6
[Participation Agreement (2001-1 747-1)]
court or administrative agency which individually (or in the aggregate in
the case of any group of related lawsuits) is expected to have a material
adverse effect on the ability of Owner to perform its obligations under the
Owner Documents or that seek to set aside, restrain, enjoin or prevent the
consummation of this Agreement, the other Fundamental Documents or the
transactions contemplated hereby or thereby;
(xii) none of the proceeds from the issuance of the Equipment
Notes will be used directly or indirectly by Owner to purchase or carry any
"margin stock" as such term is defined in Regulation T or U of the Board of
Governors of the Federal Reserve System;
(xiii) Owner agrees to give each of the Indenture Trustee and
the Pass Through Trustees at least 30 days' prior written notice of any
change in its name on the public record of the State of Delaware or of its
"location" (as such term is defined in Article 9 of the Uniform Commercial
Code of the State of Delaware as in effect on the date hereof);
(xiv) the Indenture Trustee, as a secured party under the
Indenture (for the benefit of the Noteholders), is entitled to the benefits
of Section 1110 of the United States Bankruptcy Code with respect to the
Aircraft;
(xv) the statements of financial position of Owner as of
December 31, 2000 and June 30, 2001 and the related statements of earnings
and cash flow of Owner for the year and six months then ended, fairly
present the financial condition of Owner as at such dates and the results
of operations and cash flow of Owner for the periods ended on such dates,
in accordance with generally accepted accounting principles consistently
applied (except as may be stated in the notes thereto), and subject in the
case of the June 30, 2001 statements, to normal year-end audit adjustments,
and since June 30, 2001, there has been no material adverse change in such
condition or operations, except for such matters timely disclosed in press
releases issued by UAL Corporation or Owner or in public filings, effective
as of the date hereof, with the Securities and Exchange Commission under
the Securities Exchange Act of 1934, as amended, by UAL Corporation or
Owner.
(b) General Indemnity. Owner hereby agrees to indemnify, on an after-
tax basis, each Indemnitee against, and agrees to protect, save and keep
harmless and shall pay on demand each of them from (whether or not the
transactions contemplated herein or in any of the other Operative Documents or
the Pass Through Trust Agreements are consummated), any and all Expenses and
Taxes imposed on, incurred by or asserted against any Indemnitee, in any way
relating to or arising out of (A) the Operative Documents and any Permitted
Lease, or the enforcement of any of the terms of any thereof; or (B) the
manufacture, design, purchase, resale, acceptance or rejection of the Airframe
or any Engine or Parts; or (C) the Aircraft (or any portion thereof) or any
Engine whether or not installed on the Airframe or any airframe on which an
7
[Participation Agreement (2001-1 747-1)]
Engine is installed whether or not arising out of the finance, refinance,
ownership, delivery, nondelivery, storage, lease, possession, use, non-use,
operation, maintenance, modification, alteration, condition, sale, replacement,
substitution, disposition, registration, reregistration or airworthiness of the
Aircraft (or any portion thereof) including, without limitation, latent or other
defects, whether or not discoverable, strict tort liability and any damage to
property or the environment, death or injury to any person and any claim for
patent, trademark or copyright infringement; or (D) the offer, sale, holding,
transfer or delivery of the Equipment Notes or the Pass Through Certificates,
whether before, on or after the applicable Issuance Date (the indemnity in this
clause (D) to extend also to any person who controls an Indemnitee, its
successors, assigns, employees, directors, officers, servants and agents within
the meaning of Section 15 of the Securities Act of 1933, as amended); or (E) the
Pass Through Documents and each Pass Through Trust Agreement (and any amendments
thereto), or the enforcement of any of the terms of any thereof; provided, with
respect to an Indemnitee, that the foregoing indemnity shall not extend to any
Expense to the extent resulting from or arising out of one or more of the
following:
(1) any representation or warranty by such Indemnitee
or any Related Indemnitee (as defined below) thereof in any
Fundamental Documents being incorrect; or
(2) the failure by such Indemnitee or any Related
Indemnitee thereof to perform or observe any agreement,
covenant or condition in any of the Fundamental Documents;
or
(3) the willful misconduct or the gross negligence of
such Indemnitee or any Related Indemnitee thereof (other
than gross negligence imputed to such Indemnitee or any
Related Indemnitee thereof solely by reason of its interest
in the Aircraft); or
(4) a disposition (voluntary or involuntary) by such
Indemnitee of all or any part of its interest in any
Equipment Note or any of all or any part of its interest in
the Fundamental Documents, other than during the continuance
of an Indenture Event of Default or in connection with the
exercise of remedies under any Fundamental Documents or
pursuant to the exercise by Owner of its option to redeem or
refinance the Equipment Notes; or
(5) any Tax; provided, however, this Clause (5) shall
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not apply to (A) Taxes taken into consideration in making
any payments on an after-tax basis or (B) any license,
documentation, registration or filing fees imposed upon or
in connection with the execution, delivery, registration or
filing of the Indenture; or
8
[Participation Agreement (2001-1 747-1)]
(6) in the case of the Indenture Trustee in its
individual capacity, any Expense to the extent attributable
to the failure of the Indenture Trustee to distribute funds
received and distributable by it in accordance with the
Indenture, (B) in the case of the Subordination Agent in its
individual capacity, any Expense to the extent attributable
to the failure of the Subordination Agent to distribute
funds received and distributable by it in accordance with
the Intercreditor Agreement, or (C) in the case of any Pass
Through Trustee in its individual capacity, any Expense to
the extent attributable to the failure of such Pass Through
Trustee to distribute funds received and distributable by it
in accordance with the Pass Through Trust Agreement to which
it is a party; or
(7) other than during the continuation of an Indenture
Event of Default, the authorization or giving or withholding
of any future amendments, supplements, waivers or consents
by such Indemnitee or any Related Indemnitee thereof with
respect to any of the Fundamental Documents unless such
amendments, supplements, waivers or consents are requested
by Owner or are required pursuant to the terms of the
Fundamental Documents (unless the same results from the
actions of such Indemnitee or Related Indemnitee); or
(8) except to the extent attributable to acts or
events occurring on or prior thereto, acts or events which
occur after the termination of the Indenture in accordance
with Section 10.01 thereof; or
(9) any Expense to the extent attributable to the
offer or sale by such Indemnitee or any Related Indemnitee
of any interest in the Aircraft, any Equipment Note, any
Pass Through Certificate or any similar interest in
violation of the Securities Act, other applicable federal,
state or foreign securities laws or any other law on or
prior to the applicable Issuance Date; or
(10) any Expense or other amount which such Indemnitee
expressly agrees to pay or such Indemnitee expressly agrees
shall not be paid by or be reimbursed by Owner; or
(11) any Expense that is an ordinary and usual
operating or overhead expense; or
(12) any Expense resulting from any Lien on the
Aircraft which such Indemnitee or any of its Related
Indemnitees is required to discharge under the Fundamental
Documents;
9
[Participation Agreement (2001-1 747-1)]
(13) activities or transactions of such Indemnitee not
arising out of or resulting from, or attributable to the
transactions contemplated by the Fundamental Documents;
(14) Expenses under Clauses (D) or (E) hereof to the
extent such Expenses exceed the Owner's Pro Rata Share of
such Expenses; or
(15) if such Indemnitee shall be a Noteholder or any
Related Indemnitee, for any Expense incurred by or asserted
against such Indemnitee as a result of any "prohibited
transaction" within the meaning of Section 406 of ERISA or
Section 4975(c)(1) of the Code.
For purposes of this Section 5(b), if such Indemnitee is a Pass Through
Trustee, the Subordination Agent or the Indenture Trustee or a director,
officer, employee, agent, servant or Affiliate of any thereof, a Person shall be
considered a "Related Indemnitee" with respect to any such Person if such Person
is a Pass Through Trustee, the Subordination Agent or the Indenture Trustee or a
director, officer, employee, agent, servant or Affiliate of any thereof.
For purposes of this Section 5(b), "Owner's Pro Rata Share" means as of any
time a fraction, the numerator of which is the principal balance then
outstanding of Equipment Notes and the denominator of which is the aggregate
principal balance then outstanding of all "Notes" (as such term is defined in
the Intercreditor Agreement).
Notwithstanding clause 5(b)(5) above, Owner further agrees that any payment
or indemnity pursuant to this Section 5(b) in respect of any "Expenses" shall be
in an amount which, after deduction of all Taxes required to be paid by such
recipient with respect to such payment or indemnity under the laws of any
federal, state or local government or taxing authority in the United States, or
under the laws of any taxing authority or governmental subdivision of a foreign
country, or any territory or possession of the United States or any
international authority, shall be equal to the excess, if any, of (A) the amount
of such Expense over (B) the current net reduction in Taxes actually realized by
such recipient resulting from the accrual or payment of such Expense.
Nothing in this Section 5(b) shall be construed as a guaranty by Owner of
payments due pursuant to the Pass Through Certificates or of the residual value
of the Aircraft.
If a claim is made against an Indemnitee involving one or more Expenses and
such Indemnitee has notice thereof, such Indemnitee shall promptly after
receiving such notice give notice of such claim to Owner; provided that the
failure to provide such notice shall not release Owner from any of its
obligations to indemnify hereunder except to the extent that such failure
results in an additional Expense to Owner (in which case Owner shall not be
responsible for such additional Expense) or Owner is prejudiced in the conduct
of or precluded from conducting a meritorious contest of such claim; provided
further that no payment by Owner to an Indemnitee pursuant to this Section 5(b)
shall be deemed to constitute a waiver or release of any right or
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[Participation Agreement (2001-1 747-1)]
remedy which the Owner may have against such Indemnitee for any actual damages
as a result of the failure by such Indemnitee to give Owner such notice. Owner
shall be entitled, at its sole cost and expense, acting through counsel
reasonably acceptable to the respective Indemnitee, (A) in any judicial or
administrative proceeding that involves solely a claim for one or more Expenses,
to assume responsibility for and control thereof, (B) in any judicial or
administrative proceeding involving a claim for one or more Expenses and other
claims related or unrelated to the transactions contemplated by the Fundamental
Documents, to assume responsibility for and control of such claim for Expenses
to the extent that the same may be and is severed from such other claims (and
such Indemnitee shall use reasonable efforts to obtain such severance), and (C)
in any other case, to be consulted by such Indemnitee with respect to judicial
proceedings subject to the control of such Indemnitee and to be allowed, at
Owner's sole expense, to participate therein. Notwithstanding any of the
foregoing to the contrary, Owner shall not be entitled to assume responsibility
for and control of any such judicial or administrative proceedings if (i) an
Indenture Event of Default shall have occurred and be continuing, (ii) if such
proceedings will involve a material risk of the sale, forfeiture or loss of, or
the creation of any Lien (other than a Permitted Lien) on, the Aircraft, the
Indenture Estate or any part thereof unless Owner shall have posted a bond or
other security reasonably satisfactory to the relevant Indemnitees in respect to
such risk or (iii) if such proceedings could, in the reasonable judgment of the
Indemnitee, entail any risk of criminal liability. The Indemnitee may
participate at its own expense and with its own counsel in any judicial
proceeding controlled by Owner pursuant to the preceding provisions; provided,
that such Indemnitee's participation does not, in the reasonable opinion of the
independent counsel appointed by the Owner or its insurers to conduct such
proceedings, interfere with the defense of such case.
The Indemnitee shall supply Owner, at Owner's expense, with such
information reasonably requested by Owner as is necessary or advisable for Owner
to control or participate in any proceeding to the extent permitted by this
Section 5(b). In no event shall any Indemnitee enter into a settlement or other
compromise with respect to any Expense (i) unless (x) the Indemnitee has given
Owner at least 30 days' prior written notice of the nature and scope of the
proposed settlement or compromise and (y) such Indemnitee has received Owner's
prior written consent, which consent shall not be unreasonably withheld or
delayed, or (ii) unless such Indemnitee waives its right to be indemnified with
respect to such Expense under this Section 5(b).
The Owner shall supply the Indemnitee with such information reasonably
requested by the Indemnitee as is necessary or advisable for the Indemnitee to
control or participate in any proceeding to the extent permitted by this Section
5(b).
Upon payment of any Expense pursuant to this Section 5(b), Owner, without
any further action, shall be subrogated to any claims the Indemnitee may have
relating thereto other than claims under Section 9.06 of the Indenture. The
Indemnitee agrees to give such further assurances or agreements and to cooperate
with Owner or its insurers to permit Owner or its insurers to pursue such
claims, if any, to the extent reasonably requested by Owner.
11
[Participation Agreement (2001-1 747-1)]
In the event that Owner shall have paid an amount to an Indemnitee pursuant
to this Section 5(b), and such Indemnitee subsequently shall be reimbursed in
respect of such indemnified amount from any other person, such Indemnitee shall
promptly pay Owner an amount equal to the sum of (I) the amount of such
reimbursement, including interest received attributable thereto, net of taxes
required to be paid by such Indemnitee as a result of any reimbursement
including interest received attributable thereto and (II) any tax benefit
realized by such Indemnitee as a result of any payment to Owner hereunder;
provided, however, that (x) such amount attributable to (I) above shall not be
in excess of the amount of such Expense payment made by Owner plus interest
received attributable thereto and (y) any amount which is payable to Owner by
any Person pursuant to this Section 5(b) shall not be paid to Owner if an
Indenture Default under Section 8.01(a), (e) or (f) of the Indenture or an
Indenture Event of Default shall have occurred and be continuing or if any
payment is due and owing by Owner to such Person hereunder or under any other
Operative Document. Any such amount shall be held by such Person (the Owner
hereby granting a security interest in such amount to such Person) and, during
the continuance of such Indenture Default or Indenture Event of Default, shall
be applied against Owner's obligations hereunder to such Person as and when due.
At such time as there shall not be continuing any such Indenture Default or
Indenture Event of Default or there shall not be due and owing any such payment,
such amount shall be paid to Owner to the extent not previously applied in
accordance with the immediately preceding sentence.
Owner's obligations under the indemnities provided for in this Agreement
shall be those of a primary obligor, whether or not the Person indemnified shall
also be indemnified with respect to the same matter under the terms of any other
document or instrument, and the Person seeking indemnification from Owner
pursuant to any provision of this Agreement may proceed directly against Owner
without first seeking to enforce any other right of indemnification.
(c) Withholding. If Owner advises the Indenture Trustee and the
relevant Noteholder in writing that interest on its Equipment Notes is subject
to United States withholding tax, then the Indenture Trustee shall withhold as
provided in Section 2.10 of the Indenture.
SECTION 6. Representations, Warranties and Covenants.
-----------------------------------------
(a) So long as the Lien of the Indenture shall not have been
discharged and no Indenture Default under Section 8.01(a), (e) or (f) of the
Indenture or any Indenture Event of Default shall have occurred or be
continuing, the Owner may, at its own cost and expense and without the consent
of the Indenture Trustee or any other Person, cause such Aircraft to be
appropriately re-registered in the name of the Owner (or, if appropriate, in the
name of any Permitted Lessee as "lessee") under the laws of (i) any country
listed on Exhibit F to the Indenture with which the United States then maintains
normal diplomatic relations or, if Taiwan, the United States then maintains
diplomatic relations at least as good as those in effect on the Closing Date (a
"Scheduled Country"), or (ii) any other country, in each case subject to the
provisions hereof.
12
[Participation Agreement (2001-1 747-1)]
Prior to any such re-registration under the laws of a Scheduled Country,
the Indenture Trustee shall have received a favorable opinion of counsel
addressed to it to the effect that (i) the laws of the new country of
registration will recognize the Owner's right of ownership with respect to the
Aircraft and will give effect to the Lien and security interest created by the
Indenture and (ii) the Indenture and the Indenture Trustee's Lien and right to
repossession thereunder is valid and enforceable under the laws of such country.
Prior to any such re-registration under the laws of any country other than
the U.S. or a Scheduled Country, the Indenture Trustee shall have received a
favorable opinion of counsel in the new jurisdiction of registry covering the
matters set forth in the preceding paragraph and to the effect that (A) the
terms (including, without limitation, the governing-law, service-of-process and
jurisdictional-submission provisions thereof) of the Indenture are legal, valid,
binding and enforceable in such jurisdiction, (B) that it is not necessary for
the Indenture Trustee to register or qualify to do business in such
jurisdiction, (C) that there is no tort liability of the lender of an aircraft
not in possession thereof under the laws of such jurisdiction other than tort
liability which might have been imposed on such lender under the laws of the
United States or any state thereof (it being understood that, such opinion shall
be waived if insurance reasonably satisfactory to Indenture Trustee is provided,
at Owner's expense, to cover such risk), and (D) (unless Owner shall have agreed
to provide insurance covering the risk of requisition of use or title of the
Aircraft by the government of such jurisdiction so long as the Aircraft is
registered under the laws of such jurisdiction) that the laws of such
jurisdiction require fair compensation by the government of such jurisdiction
payable in currency freely convertible into U.S. Dollars for the loss of use or
title of the Aircraft in the event of the requisition by such government of such
use or title.
In connection with any such re-registration, the Owner shall, at its cost
and to the extent permitted by the laws of such country, cause the interests of
the Indenture Trustee in the Aircraft to be duly registered or recorded under
the laws of such country and at all times thereafter to remain so duly
registered or recorded unless and until changed as provided herein, and shall
cause to be done at all times all other acts (including the filing, recording
and delivery of any document or instrument and the payment of any sum) necessary
or, by reference to prudent industry practice in such country, advisable in
order to establish the Indenture Trustee's interest in and to such Aircraft as
against the Owner, any Permitted Lessee or any third parties in such
jurisdiction.
The Indenture Trustee shall execute and deliver all such documents as the
Owner may reasonably request and otherwise cooperate with the Owner for the
purpose of effecting, continuing or (as provided in this Section 6(a)) changing
the registration of the Aircraft.
The Owner shall pay all reasonable fees and expenses on an after-tax basis
of the Indenture Trustee in connection with any change of registry of the
Aircraft.
13
[Participation Agreement (2001-1 747-1)]
(b) State Street, in its individual capacity, covenants and agrees
that it shall not cause or permit to exist any Lien, arising as a result of (i)
claims against the Indenture Trustee, the Subordination Agent or any Pass
Through Trustee not related to its interest in the Aircraft or the
administration of the Indenture Estate pursuant to the Indenture, (ii) acts of
the Indenture Trustee, the Subordination Agent or any Pass Through Trustee not
permitted by, or failure of the Indenture Trustee, the Subordination Agent or
any Pass Through Trustee to take any action required by, the Fundamental
Documents to the extent such acts arise or such failure arises from or
constitutes gross negligence or willful misconduct, (iii) claims against the
Indenture Trustee, the Subordination Agent or any Pass Through Trustee relating
to Taxes or Expenses which are excluded from the indemnification provided by
Section 5(b) pursuant to said Section 5(b), or (iv) claims against the Indenture
Trustee, the Subordination Agent or any Pass Through Trustee arising out of the
transfer by any such party of all or any portion of its interest in the
Aircraft, the Indenture Estate or the Fundamental Documents other than a
transfer of the Aircraft pursuant to Article 5 or 8 of the Indenture.
(c) State Street, in its individual capacity and as Indenture
Trustee, Subordination Agent and Pass Through Trustee as provided below,
represents to the Owner and the Liquidity Provider as follows:
(i) it is a Citizen of the United States, that it will notify
promptly all parties to this Agreement if in its reasonable opinion its
status as a Citizen of the United States is likely to change and that it
will resign as Indenture Trustee as provided in Section 9.07 of the
Indenture if it should cease to be a Citizen of the United States;
(ii) it is a national banking association and has the full
corporate power, authority and legal right under the laws of the United
States of America to enter into and perform its obligations under the
Fundamental Documents to which it is a party (the "State Street Documents")
and, in its capacity as Indenture Trustee and Pass Through Trustee,
respectively, to authenticate the Equipment Notes and the Pass Through
Certificates;
(iii) the State Street Documents, and the authentication of the
Equipment Notes and the Pass Through Certificates have been duly authorized
by all necessary corporate action on the part of State Street, the
Indenture Trustee, the Subordination Agent and the relevant Pass Through
Trustee, as it shall be a party thereto in any such capacity, and neither
the execution (or, in the case of the Equipment Notes and the Pass Through
Certificates, the authentication) and delivery thereof in any such capacity
nor the performance by it in any such capacity of any of the terms and
provisions thereof will violate any federal or Connecticut law or
regulation relating to the banking or trust powers of State Street or
contravene or result in any breach of, or constitute any default under its
charter or by-laws or the provisions of any indenture, mortgage, contract
or other agreement to which State Street, the Indenture Trustee, the
14
[Participation Agreement (2001-1 747-1)]
Subordination Agent or the Pass Through Trustee is a party or by which it
or its properties may be bound or affected;
(iv) each of the State Street Documents has been duly executed
(or, in the case of the Equipment Notes and the Pass Through Certificates,
authenticated) and delivered by State Street, the Indenture Trustee, the
Subordination Agent and the relevant Pass Through Trustee, as it shall be a
party thereto in any such capacity, and, assuming that each such agreement
is the legal, valid and binding obligation of each other party thereto
(other than State Street, the Indenture Trustee, the Subordination Agent
and the relevant Pass Through Trustee), is the legal, valid and binding
obligation of State Street, the Indenture Trustee, the Subordination Agent
and the relevant Pass Through Trustee, as it shall be a party thereto in
any such capacity, enforceable against it in accordance with its terms;
(v) neither the execution (or, in the case of the Equipment
Notes and the Pass Through Certificates, the authentication) and delivery
by State Street, the Indenture Trustee, the Subordination Agent or any Pass
Through Trustee, as it is a party in any such capacity to any of the State
Street Documents, nor the consummation by it in any such capacity of any of
the transactions contemplated hereby, by the Indenture, by the Pass Through
Trust Agreements, by the Equipment Notes or by the Pass Through
Certificates requires the consent or approval of, the giving of notice to,
or the registration with, or the taking of any other action with respect
to, any Connecticut state or federal governmental authority or agency
regulating the banking, trust or fiduciary powers of State Street;
(vi) there are no Taxes payable by State Street, the Indenture
Trustee, the Subordination Agent or any Pass Through Trustee imposed by the
State of Connecticut or any political subdivision or taxing authority
thereof in connection with the execution (or, in the case of the Equipment
Notes and the Pass Through Certificates, the authentication) and delivery
by it as a party in any such capacity to any State Street Document or the
performance by it as a party in any such capacity of any State Street
Document (other than franchise or other taxes based on or measured by any
fees or compensation received by State Street, the Indenture Trustee, the
Subordination Agent or any Pass Through Trustee, as the case may be, for
services rendered in connection with the transactions contemplated
thereby), and there are no Taxes payable by State Street, the Indenture
Trustee, the Subordination Agent or any Pass Through Trustee imposed by the
State of Connecticut or any political subdivision thereof in connection
with the acquisition, possession or ownership by any Pass Through Trustee
of any of the Equipment Notes (other than franchise or other taxes based on
or measured by any fees or compensation received by a Pass Through Trustee
for services rendered in connection with the transactions contemplated by
the respective Pass Through Trust Agreement);
15
[Participation Agreement (2001-1 747-1)]
(vii) there are no pending or threatened actions or proceedings
against any of State Street, the Indenture Trustee, the Subordination Agent
or the Pass Through Trustees before any court or administrative agency
which individually (or in the aggregate in the case of any group of related
lawsuits) purports to affect the legality, validity or enforceability of,
or which is reasonably likely to materially adversely affect the ability of
State Street, the Indenture Trustee, the Subordination Agent or the Pass
Through Trustees to perform its obligations as a party in any such capacity
under any State Street Document;
(viii) except for the issuance and sale pursuant to the
respective Pass Through Trust Agreement of the Pass Through Certificates
contemplated hereby, neither State Street nor any Pass Through Trustee has
directly or indirectly offered any Equipment Note or Pass Through
Certificate for sale to any Person, or solicited any offer to acquire any
Equipment Note or Pass Through Certificate from any Person, and neither
State Street nor any Pass Through Trustee has authorized anyone to act on
its behalf to offer directly or indirectly any Equipment Note or Pass
Through Certificate for sale to any Person, or to solicit any offer to
acquire any Equipment Note or Pass Through Certificate from any Person, and
no Pass Through Trustee is in default under any respective Pass Through
Trust Agreement;
(ix) on the Closing Date there shall be no Liens attributable
to State Street in respect of all or any part of the Indenture Estate; and
(x) the Equipment Notes to be acquired by the Subordination
Agent are being acquired by it for the account of the applicable Pass
Through Trustee, for investment and not with a view to any resale or
distribution thereof, except that, subject to the restrictions on transfer
set forth in each Pass Through Trust Agreement, the disposition by it of
its Equipment Notes shall at all times be within its control.
Each of the Indenture Trustee, the Subordination Agent and the Pass Through
Trustee covenants and agrees that, so long as no Indenture Event of Default
shall have occurred and be continuing and the Owner has not been duly declared
in default, that such Person shall not (and shall not permit any Affiliate or
other Person claiming by, through or under it to) interfere with the Owner's
continued possession, use and operation of, and quiet enjoyment of, the
Aircraft.
(xi) Each of the Indenture Trustee, the Pass Through Trustee
and the Subordination Agent agrees that it will not transfer any Equipment
Note (or any part thereof) to any entity unless such entity makes (or is
deemed to have made) a representation and warranty as of the date of
transfer that either no part of the funds to be used by it for the purchase
and holding of such Equipment Note (or any part thereof) constitutes assets
of any "employee benefit plan" or that such purchase and holding will not
result in a non-exempt prohibited transaction (under Section 4975 of the
Code and Section 406 of ERISA).
16
[Participation Agreement (2001-1 747-1)]
(d) [Intentionally Omitted].
(e) The Pass Through Trustee covenants and agrees that it shall not
cause or permit to exist a Lien attributable to it with respect to the Aircraft.
The Pass Through Trustee agrees that it will promptly, at its own expense, take
such other action as may be necessary duly to discharge such Lien attributable
to it. The Pass Through Trustee agrees to make restitution to Owner for any
actual diminution of the assets of Owner resulting from such Lien attributable
to it.
(f) State Street, in its individual capacity, covenants and agrees
that it shall not cause or permit to exist any Liens attributable to it with
respect to the Indenture Estate. State Street, in its individual capacity,
agrees that it will promptly, at its own expense, take such action as may be
necessary duly to discharge such Liens. State Street, in its individual
capacity, agrees to make restitution to Owner for any actual diminution of the
assets of the Indenture Estate resulting from such Liens.
(g) The Pass Through Trustee hereby represents, warrants and agrees
that it shall not transfer any interest in any Equipment Note unless and until
the transferee agrees in writing (copies of which shall be provided by the
Indenture Trustee to Owner) to make the representations contemplated to be made
by the Pass Through Trustee in this Agreement and to be bound by the terms of
this Agreement and the Indenture.
(h) So long as the Lien of the Indenture shall not have been
discharged in accordance with the terms thereof, the Owner will not consolidate
with or merge into any other corporation or convey, transfer or lease
substantially all of its assets to any Person unless:
(i) the corporation formed by such consolidation or into which
Owner is merged or the Person which acquires by conveyance, transfer or
lease substantially all of the assets of Owner as an entirety (the
"Successor") shall be a Certificated Air Carrier;
(ii) the Successor shall execute and deliver to the Indenture
Trustee a duly authorized, valid, binding and enforceable agreement in form
and substance reasonably satisfactory to the Indenture Trustee containing
an assumption by such Successor of the due and punctual performance and
observance of each covenant and condition of the Owner Documents to be
performed or observed by Owner;
(iii) the Successor, if its name is other than "United Air Lines,
Inc.", shall file one or more financing statements in the applicable filing
office or offices in accordance with Section 9-508(b)(2) and such other
applicable provisions of the Uniform Commercial Code as in effect in any
applicable jurisdiction in order to ensure that any and all previously
filed financing statements continue to be effective under Article 9 of the
Uniform Commercial Code then in effect in any applicable jurisdiction.
17
[Participation Agreement (2001-1 747-1)]
(iv) immediately after giving effect to such transaction, no
Indenture Event of Default shall have occurred and be continuing; and
(v) Owner shall have delivered to the Indenture Trustee a
certificate signed by the President or any Vice President and by the
Secretary or an Assistant Secretary of Owner, and an opinion of counsel
(which may be Owner's General Counsel) reasonably satisfactory to the
Indenture Trustee, each stating that such consolidation, merger,
conveyance, transfer or lease and the assumption agreement mentioned in
clause (ii) above comply with this Section 6(d) and that all conditions
precedent herein provided for in this Section 6(d) relating to such
transaction have been complied with.
Upon any consolidation or merger, or any conveyance, transfer or lease of
substantially all of the assets of Owner as an entirety in accordance with this
Section 6(h), the Successor shall succeed to, and be substituted for, and may
exercise every right and power of, Owner under the Owner Documents with the same
effect as if such Successor had been named as Owner herein and therein. Nothing
contained herein shall permit any lease or other arrangement for the use,
operation or possession of the Aircraft except in compliance with the applicable
provisions of the Indenture.
(i) So long as the Lien of the Indenture shall not have been
discharged in accordance with the terms thereof, the Owner covenants and agrees
with the Indenture Trustee as follows:
(i) Owner will cause to be done, executed, acknowledged and
delivered all and every such further acts, conveyances and assurances as
the Indenture Trustee shall reasonably require for accomplishing the
purposes of this Agreement and the other Fundamental Documents; provided
that any instrument or other document so executed by Owner will not expand
any obligations or limit any rights of Owner in respect of the transactions
contemplated by any Fundamental Documents; and
(ii) Owner, at its expense, will cause the Indenture and all
supplements and amendments to the Indenture to be promptly filed and
recorded, or filed for recording, to the extent permitted under the Federal
Aviation Act, or required under any other applicable law.
(j) The parties hereto agree that in any case where Owner is
required to deliver legal opinions to any party pursuant to any Operative
Document, such legal opinions may in all cases be subject to such exceptions,
assumptions, qualifications and/or reservations for that relevant jurisdiction
that are considered acceptable in international aircraft finance transactions,
but shall nonetheless be considered sufficient to satisfy Owner's obligations to
deliver such legal opinions.
SECTION 7. Other Documents. So long as the Lien of the Indenture has not
---------------
been terminated, the Pass Through Trustee, the Subordination Agent and the
Indenture Trustee hereby
18
[Participation Agreement (2001-1 747-1)]
agree for the benefit of Owner that without Owner's consent, each such party
will not amend any other provision of any Fundamental Document in a manner
adversely affecting Owner. Each of the Indenture Trustee, the Subordination
Agent and the Pass Through Trustee agree to promptly furnish to Owner copies of
any supplement, amendment, waiver or modification of any of the Fundamental
Documents to which Owner is not a party. The Pass Through Trustee agrees that it
will not take any action in respect of the Indenture Estate except through the
Indenture Trustee pursuant to the Indenture or as otherwise permitted by the
Indenture.
SECTION 8. Notices; Consent to Jurisdiction. (a) All notices, demands,
--------------------------------
instructions and other communications required or permitted to be given to or
made upon any party hereto shall be in writing and shall be personally delivered
or sent by registered or certified mail, postage prepaid, or by telecopier (with
a copy of such notice to follow by registered or certified mail or by prepaid
courier), or by prepaid courier service, and shall be deemed to be given for
purposes of this Agreement on the day that such writing is delivered or received
or if given by certified mail, three Business Days after being deposited in the
mails, in accordance with the provisions of this Section 8(a). Unless otherwise
specified in a notice sent or delivered in accordance with the foregoing
provisions of this Section 8(a), notices, demands, instructions and other
communications in writing shall be given to or made upon the respective parties
hereto at their respective addresses (or to their respective telecopier numbers)
as follows: (A) if to Owner, the Indenture Trustee, the Pass Through Trustees
or the Subordination Agent, to the respective addresses set forth on Schedule I
hereto or (B) if to any subsequent Noteholder addressed to such Noteholder at
its address set forth in the Register maintained pursuant to Section 2.03 of the
Indenture.
(b) EACH PARTY TO THIS AGREEMENT (INCLUDING EACH NOTEHOLDER)
(INDIVIDUALLY A "PARTY" AND COLLECTIVELY "PARTIES") IRREVOCABLY AGREES THAT ANY
LEGAL SUIT, ACTION OR PROCEEDING BROUGHT BY ANY OTHER PARTY, WHICH ARISES SOLELY
OUT OF OR RELATES SOLELY TO THE FUNDAMENTAL DOCUMENTS OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY OR ANY DOCUMENT REFERRED TO HEREIN OR THEREIN,
MAY BE INSTITUTED IN THE CIRCUIT COURT OF THE STATE OF ILLINOIS, ▇▇▇▇ COUNTY OR
THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS AND THAT
THEY HEREBY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY SUCH PROCEEDING; PROVIDED,
HOWEVER, THAT THE FOREGOING PROVISIONS SHALL NOT APPLY TO THIRD PARTY TORT
CLAIMS (BUT SHALL APPLY TO AN INDEMNITY CLAIM WITH RESPECT TO SUCH TORT CLAIM)
AND THAT THE FOREGOING SHALL NOT APPLY TO ANY RIGHT A PARTY MAY HAVE TO SEEK
REMOVAL OF SUCH LEGAL SUIT, ACTION OR PROCEEDING TO FEDERAL COURT OR TO SEEK
CONSOLIDATION OF ANY SEPARATE LEGAL SUITS, ACTIONS OR PROCEEDINGS BROUGHT BY ANY
ONE OR MORE OF THE OTHER PARTIES IN THE SAME OR DIFFERENT JURISDICTIONS. Each
Party hereby waives, and agrees not to assert, by way of motion, as a defense,
or otherwise, in any such suit, action or proceeding, to the extent permitted by
applicable law, that the suit, action or proceeding
19
[Participation Agreement (2001-1 747-1)]
is improper, or that this Agreement or any other Fundamental Document or the
subject matter of any thereof or any of the transactions contemplated hereby or
thereby may be enforced in such courts. The agreement set forth in this Section
8(b) is given solely for the benefit of the Parties and such agreement is not
intended to and shall not inure to the benefit of any other person.
SECTION 9. Miscellaneous. (a) Each of the Pass Through Trustees and, by
-------------
its acceptance of an Equipment Note, each subsequent Noteholder covenants and
agrees that it shall not unreasonably withhold its consent to any consent
requested of the Indenture Trustee under the terms of the Indenture.
(b) The representations, warranties, indemnities and agreements of
Owner, the Indenture Trustee, the Pass Through Trustee, the Subordination Agent
and the Noteholders provided for in this Agreement, and Owner's, Indenture
Trustee's, the Pass Through Trustees', the Subordination Agent's and the
Noteholders' obligations under any and all thereof, shall survive the issuance
of the Equipment Notes and the Pass Through Certificates or the transfer of any
interest by any Noteholder in any Equipment Note or the Indenture Estate and the
expiration or other termination of this Agreement or any other Fundamental
Document.
(c) This Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original,
but all such counterparts shall together constitute but one and the same
instrument. Neither this Agreement nor any of the terms hereof may be
terminated, amended, supplemented, waived or modified, except by an instrument
in writing signed by the party against which the enforcement of the termination,
amendment, supplement, waiver or modification is sought; and no such
termination, amendment, supplement, waiver or modification shall be effective
unless a signed copy thereof shall have been delivered to the Owner and the
Indenture Trustee. The terms of this Agreement shall be binding upon, and inure
to the benefit of and shall be enforceable by, Owner, the Pass Through Trustee,
the Subordination Agent, the Indenture Trustee, the Liquidity Provider and the
Noteholders. THIS AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF ILLINOIS, INCLUDING ALL
MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE. This Agreement is being
delivered in the State of Illinois.
* * *
20
[Participation Agreement (2001-1 747-1)]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers thereunto duly authorized as of the
day and year first above written.
UNITED AIR LINES, INC.,
Owner
By: /s/ ▇▇▇▇▇▇▇ ▇. Kawalsy
---------------------------------
Title: Assistant Treasurer
------------------------------
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
as Indenture Trustee
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Title: Vice President
------------------------------
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
in its capacity as Pass Through
Trustee under each of the Pass
Through Trust Agreements
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Title: Vice President
------------------------------
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
as Subordination Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Title: Vice President
------------------------------
21
[Participation Agreement (2001-1 747-1)]
SCHEDULE I
NAMES AND ADDRESSES
OWNER:
-----
Address for Notices:
If by U.S. Mail
---------------
United Air Lines, Inc.
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Assistant Treasurer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If by Overnight Delivery Service
--------------------------------
United Air Lines, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Assistant Treasurer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
PASS THROUGH TRUSTEE:
--------------------
Address for Notices:
-------------------
State Street Bank and Trust
Company of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Corporate Trust Division
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Schedule I
Page 1
[Participation Agreement (2001-1 747-1)]
SUBORDINATION AGENT:
-------------------
Address for Notices:
State Street Bank and Trust
Company of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Corporate Trust Division
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Address for Payments:
State Street Bank and Trust Company
of Connecticut, National Association
ABA: ▇▇▇▇▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Corporate Trust Department
Acct: 99039901
Ref: United EETC (2001-1 747-1)
Schedule I
Page 2
[Participation Agreement (2001-1 747-1)]
SCHEDULE II
NOTEHOLDERS, EQUIPMENT NOTES, ORIGINAL
PRINCIPAL AMOUNT, INTEREST RATE
AND MATURITY DATE
Original
Equipment Principal Interest
Noteholders Notes Amount Rate Maturity Date
---------------------- ------------- ------------- ------------ -----------------
2001-1A-1 Pass Through A-1 $13,095,831 6.071% March 1, 2008
Trust
2001-1A-2 Pass Through A-2 $43,652,766 6.201% September 1, 2008
Trust
2001-1C Pass Through C $24,080,798 6.831% September 1, 2008
Trust
2001-1D Pass Through D $ 8,365,373 7.371% September 1, 2006
Trust
Schedule II
Page 1
[Participation Agreement (2001-1 747-1)]
SCHEDULE III
DESCRIPTION OF PASS THROUGH TRUST AGREEMENTS
United Air Lines, Inc. 2001-1A-1 Pass Through Trust Agreement
United Air Lines, Inc. 2001-1A-2 Pass Through Trust Agreement
United Air Lines, Inc. 2001-1C Pass Through Trust Agreement
United Air Lines, Inc. 2001-1D Pass Through Trust Agreement
Schedule III
Page 1
