Exhibit 10.21
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PREFERRED STOCK PURCHASE AGREEMENT
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PREFERRED STOCK PURCHASE AGREEMENT dated as of August
12, 1998, between UAL Corporation, a Delaware corporation
("UAL"), and State Street Bank and Trust Company, a Massachusetts
trust company, acting solely in its capacity as trustee under the
Plan defined below and not in its individual capacity (the
"Trustee").
W I T N E S S E T H:
WHEREAS, on July 12, 1994, certain transactions
contemplated by the Agreement and Plan of Recapitalization dated
March 25, 1994 by and among UAL and the unions representing
certain of the employees of United Air Lines, Inc., as amended,
(the "Recapitalization Agreement") were consummated. (The
recapitalization of UAL, as more fully described in the
Recapitalization Agreement, shall hereinafter be referred to as
the "Transaction");
WHEREAS, in connection with the Transaction, UAL
established the UAL Corporation Employee Stock Ownership Plan
(the "Plan"), which consists of an employee stock ownership plan
and a stock bonus plan; and
WHEREAS, a portion of the employee stock ownership plan
(Part A thereof) forms part of the stock bonus plan, includes a
money purchase pension plan and is intended to qualify as an
employee stock ownership plan under Section 4975(e)(7) of the
Internal Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, UAL appointed the Trustee as the trustee of
the UAL Corporation Employee Stock Ownership Plan Trust (the
"Trust"), which was established to hold the assets of the Plan
pursuant to the terms of the Trust Agreement, by and between UAL
and the Trustee (the "Trust Agreement"); and
WHEREAS, Part A of the Plan and Trust Agreement provide
that the assets of the trust created thereunder attributable to
the Plan shall be invested primarily in shares of "employer
securities" of UAL within the meaning of Section 409(l) of the
Code; and
WHEREAS, UAL created a new class of securities
designated as the Class 1 ESOP Convertible Preferred Stock, par
value ($0.01) (the "Class 1 ESOP Convertible Preferred Stock" or
the "ESOP Preferred Stock"); and
WHEREAS, the Recapitalization Agreement provided for,
among other things, the transfer to the Trust of 13,813,282
shares of the Class 1 ESOP Convertible Preferred Stock in a
series of transactions which shall occur during the 69 months
immediately following the Effective Time (as defined in the
Recapitalization Agreement); and
WHEREAS, the parties to the Recapitalization Agreement
have agreed to reduce the number of shares of Class 1 ESOP
Convertible Preferred Stock to be transferred to the Trust so
that the Plan may continue to satisfy Code Section 415; and
WHEREAS, the parties to the Recapitalization Agreement
have agreed to a corresponding increase in the number of shares
of Class 2 ESOP Convertible Preferred Stock to be issued; and
WHEREAS, UAL now wishes to sell and the Trustee now
wishes to purchase 2,011,812 shares of the Class 1 ESOP
Convertible Preferred Stock from UAL, in the amount, at the
purchase price and subject to the other terms and conditions as
set forth in this Agreement;
NOW, THEREFORE, in consideration of these premises and
the mutual promises contained herein, the parties hereto,
intending to be legally bound, hereby agree as follows:
1. Purchase; Purchase Price. Subject to the terms
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and conditions of this Agreement, the Trustee shall purchase on
behalf of the Plan (the "Purchase") from UAL, and UAL shall issue
and sell to the Trustee an aggregate of 2,011,812 shares of Class
1 ESOP Convertible Preferred Stock (the "Shares") for an
aggregate purchase price (the "Purchase Price") of
$622,092,506.64.
2. Closing; Payment. The Purchase shall be
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consummated (the "Closing") at or about August 12, 1998 at the
offices of UAL, or at such time, date or place as shall be fixed
by an agreement of UAL and the Trustee. The date of the Closing
shall hereinafter be referred to as the "Closing Date." At the
Closing, UAL shall deliver to the Trustee a certificate or
certificates representing the Shares, which shall be registered
in the name of the Trustee, as trustee under the Trust, or in the
name of its nominee, against delivery to UAL by the Trustee of a
check for a dollar amount equal to the par value per Share times
the number of Shares described in Section 1 above (the "Cash
Amount"), representing the aggregate par value of the Shares and
a promissory note of the Trust (the "ESOP Note") substantially in
the form set forth in Exhibit A hereto, in an amount equal to the
difference between the Purchase Price and a dollar amount equal
to the par value per Share times the number of Shares described
in Section 1 above. Notwithstanding the foregoing, UAL may, with
the consent of the Trustee, accomplish the transfer of shares to
the Trustee by book entry, in which event a cross receipt in the
form set forth in Exhibit B hereto shall be executed by the
parties. UAL shall pay all stamp and other transfer taxes, if
any, that may be payable in respect of the issuance, sale and
delivery of the Shares and shall be entitled to any refund
thereof, and shall present the Trustee with evidence that such
transfer taxes either have been paid or are not due.
3. Representations and Warranties of UAL. UAL hereby
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represents and warrants to the Trustee as follows:
3.1 UAL has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Delaware with corporate power and authority, including
governmental licenses, authorizations, consents and approvals, to
own, lease and operate its properties and conduct its business
except for licenses, authorizations, consents and approvals the
absence of which will not have a Material Adverse Effect. For
the purposes of this Agreement, "Material Adverse Effect" shall
mean any change or effect the consequence of which is materially
adverse to the condition (financial or otherwise), business,
assets or results of operations of UAL and its Subsidiaries (as
defined below) taken as a whole. UAL is duly qualified as a
foreign corporation to transact business and is in good standing
in each jurisdiction where its ownership or leasing of properties
or the conduct of its business requires such qualification,
except for the jurisdictions where the failure to be so qualified
would not have a Material Adverse Effect.
3.2 Except as set forth in Schedule 3.2 hereto,
the execution, delivery and performance of this Agreement and all
other documents or instruments to be executed or delivered by UAL
in connection with this Agreement are within UAL's powers and
have been duly authorized by all necessary corporate action.
This Agreement and all other documents or instruments to be
executed or delivered by UAL in connection with this Agreement
are, assuming due authorization, execution and delivery by the
Trustee, valid and binding upon UAL and enforceable against UAL
in accordance with their respective terms except as the
enforceability thereof may be limited by the effect of any
applicable bankruptcy, insolvency, fraudulent-conveyance,
reorganization, moratorium and similar laws affecting creditors'
rights generally, ERISA and by general principles of equity
(regardless of whether considered in a proceeding at law or in
equity).
3.3 Except as set forth in Schedule 3.3 hereto,
the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby will not
conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under (i) the Certificate
of Incorporation or Bylaws, each as amended, of UAL or any of its
Subsidiaries (as hereinafter defined), or (ii) except as set
forth in Schedule 3.3(ii) hereto, any provision of any indenture,
mortgage, deed of trust, agreement, instrument, order,
arbitration award, judgment or decree to which UAL or any of its
Subsidiaries is a party or by which any of their respective
assets are bound, or (iii) any material statute, material rule or
material regulation applicable to UAL or any of its Subsidiaries
of any court, bureau, board, agency or other governmental body
having jurisdiction.
3.4 As of the Closing Date, the authorized,
issued and outstanding capital stock of UAL shall be as set forth
in Schedule 3.4 hereto, and UAL shall have no obligations to
issue any additional shares pursuant to any options, warrants,
conversion rights or other arrangements except as set forth in
Schedule 3.4 hereto, and all shares of issued and outstanding
capital stock of UAL shall have been duly authorized and are
fully paid and nonassessable.
3.5 Each Subsidiary is a corporation or
partnership duly incorporated or formed, validly existing and in
good standing under the laws of its jurisdiction of incorporation
or formation, has all requisite power and authority including all
governmental licenses, authorizations, consents and approvals
required to own, lease and operate its properties (except those
the absence of which would not have a Material Adverse Effect)
and to conduct its business and is in good standing in each
jurisdiction where the character of the property owned or leased
by it or the nature of its activities make such qualification
necessary, except for those jurisdictions where failure to be so
qualified would not, individually or in the aggregate, have a
Material Adverse Effect. For purposes of this Agreement,
"Subsidiary" means any entity of which securities or other
ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing
similar functions are directly or indirectly owned by UAL prior
to the Closing Date. All Subsidiaries and their respective
jurisdictions of incorporation or formation are identified on
Schedule 3.5 hereto.
Except as otherwise disclosed on Schedule 3.5, all of
the outstanding capital stock of, or other ownership interests
in, each Subsidiary, is owned by UAL, directly or indirectly,
free and clear of any liens, claims, charges and encumbrances
(collectively "Liens") and free of any other limitation or
restriction (including any restriction on the right to vote, sell
or otherwise dispose of such capital stock or other ownership
interests). Except as disclosed on Schedule 3.5, there are
outstanding (i) no securities of UAL or any Subsidiary
convertible into or exchangeable for shares of capital stock or
other voting securities or ownership interests in any Subsidiary,
and (ii) no options, subscriptions, warrants or other rights,
agreements, arrangements or commitments of any character to
acquire from UAL or any Subsidiary, and no other obligation of
UAL or any Subsidiary to issue, any capital stock, voting
securities or other ownership interests in, or any securities
convertible into or exchangeable or exercisable for any capital
stock, voting securities or ownership interest in, any Subsidiary
(the items in clauses (i) and (ii) being referred to collectively
as the "Subsidiary Securities"). There are no outstanding
obligations of UAL or any Subsidiary to repurchase, redeem or
otherwise acquire any outstanding Subsidiary Securities.
3.6 As of the Closing Date, the Shares (i) shall
have the rights, preferences and qualifications set forth in the
restated Certificate of Incorporation of UAL Corporation, (a copy
of which is attached hereto as Exhibit C), (ii) shall have been
duly and validly authorized and (iii) when issued and delivered
to the Trustee in exchange for the Cash Amount and the ESOP Note,
will be in proper form, validly issued, fully paid and
nonassessable. As of the Closing Date, UAL shall have full right
and authority to issue, sell, transfer, and deliver the Shares
and will effectively transfer to the Trustee, on the Closing
Date, the full right, title and interest therein and thereto,
free and clear of all Liens, except for (A) beneficial interests
accruing to participants in the Plan and their beneficiaries and
(B) any Liens created or imposed by the Trustee on behalf of the
Trust.
3.7 As of the Closing Date, the shares of Common
Stock (as hereinafter defined) into which the Shares are
convertible, shall be duly and validly authorized and reserved
for issuance and, when issued upon such conversion, will be
validly issued, fully paid and nonassessable and upon delivery to
the Trustee, the Trust will acquire full right, title and
interest to such shares of Common Stock free and clear of all
Liens, except for (i) beneficial interests accruing to the
participants in the Plan and their beneficiaries and (ii) any
Liens created or imposed by the Trustee on behalf of the Trust.
3.8 No authorization, approval or consent of, or
filing with, any governmental authority or agency or other third
party, is required in connection with the sale of the Shares by
UAL hereunder or the conversion of the Shares into Common Stock
except for (i) any of such as shall have been made or obtained
prior to the Closing, (ii) any of such relating to the listing on
any securities exchange of any shares of UAL common stock, par
value $.01 per share (the "Common Stock"), to be delivered upon
conversion of Shares and (iii) filings with and/or approvals of
the Internal Revenue Service. The Shares are being issued
pursuant to a valid exemption from registration under the
Securities Act of 1933, as amended (the "Securities Act"), and
applicable state securities laws.
3.9 UAL's filings with the Securities and
Exchange Commission ("Commission") for the years 1995, 1996 and
1997, respectively, at the time they were filed with the
Commission, (i) complied in all material respects with the
requirements of the Securities Act, or the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), as appropriate, and
the Rules and Regulations of the Commission respectively
promulgated thereunder, (ii) in the case of filings under the
Exchange Act, did not contain an untrue statement of a material
fact or omit to state a material fact necessary in order to make
the statements made therein, in light of the circumstances under
which they were made, not misleading and (iii) no registration
statement, as amended or supplemented, if applicable, filed
pursuant to the Securities Act as of the date such statement,
amendment or supplement became effective contained any untrue
statement of a material fact or omitted to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading.
3.10 The consolidated financial statements of UAL,
together with related notes, schedules and reports thereon of
independent public accountants for the years 1995, 1996 and 1997,
respectively (collectively, the "Financial Statements"), included
in UAL's Annual Reports on Form 1O-K and Quarterly Reports on
Form 1O-Q ("Reports") for the years ended December 31, 1995, 1996
and 1997, respectively, all of which Reports previously have been
delivered to the Trustee, present fairly (except as may be
indicated in the notes thereto and subject to normal immaterial
year-end audit adjustments in the case of any unaudited interim
Financial Statements) the consolidated financial position and the
consolidated results of operation of UAL and its consolidated
Subsidiaries at the indicated dates and for the indicated
periods. The Financial Statements have been prepared in
accordance with generally accepted accounting principles
consistently applied throughout the periods involved except as
otherwise noted therein. UAL and its Subsidiaries considered as
one enterprise have no material liabilities or obligations,
contingent or otherwise, that are not fully disclosed in the
Financial Statements or the Reports.
3.11 Except as disclosed on Schedule 3.11 hereto,
since December 31, 1996, (i) there has been no event, and no
state of circumstances has existed, that has had or will, or
could reasonably be expected to, have a Material Adverse Effect,
(ii) there has not been any material transaction entered into by
UAL or any of its Subsidiaries, other than transactions in the
ordinary course of business or other than the transactions
contemplated in this Agreement or the Transaction, and (iii)
except for regular dividends on shares of its outstanding common
stock and preferred stock, there has been no dividend or
distribution of any kind declared, paid or made by UAL on any
class of its capital stock other than the distributions
contemplated by the Transaction.
3.12 Except as set forth in Schedule 3.12 there is
no action, suit or proceeding before or by any court or
government or administrative agency or body, domestic or foreign,
now pending or, to the best knowledge of UAL, threatened against
or affecting UAL or any of its Subsidiaries, which might have a
Material Adverse Effect.
3.13 UAL and its Subsidiaries hold all
certificates, authorizations or permits issued by the appropriate
state, federal or foreign regulatory agencies or bodies necessary
to conduct the business now operated by them the absence of
which, individually or in the aggregate, would have a Material
Adverse Effect, and neither UAL nor any of its Subsidiaries has
received any notice of proceedings relating to the revocation or
modification of any such certificate, authority or permit which,
individually or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a Material
Adverse Effect. UAL and its Subsidiaries are in compliance with
all rules, laws and regulations related to the operation of the
business of UAL and its Subsidiaries, except for instances of
noncompliance which, individually or in the aggregate, would not
have a Material Adverse Effect.
3.14 The Plan has been duly authorized by all
corporate action and Part A constitutes an employee stock
ownership plan within the meaning of Section 4975(e)(7) of the
Code and Section 407(d)(6) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), Part B (that portion
of the stock bonus plan which does not constitute an employee
stock ownership plan) constitutes a stock bonus plan under the
Code and the Plan will qualify under Section 401(a) of the Code
taking into account amendments which may be reasonably requested
by the Internal Revenue Service, but no representation or
warranty is made as to the compliance of the Plan in operation
under the referenced Code and ERISA sections; the Trust Agreement
has been duly authorized by all necessary corporate action on the
part of UAL; all contributions by UAL to the Plan and all
dividends paid on the ESOP Preferred Stock which are used by the
Trust to make the required principal and interest payments with
respect to the ESOP Note will be deductible by UAL or its
Subsidiaries for federal income tax purposes under Section 404 of
the Code (as in effect on the date of the Closing), except to the
extent there are insufficient "earnings and profits" under the
Code for the dividends to be deductible; and the ESOP Preferred
Stock constitutes "employer securities" within the meaning of
Section 409(l) of the Code.
3.15 There is no investment banker, broker or
finder which has been retained by or is authorized to act on
behalf of UAL or any Subsidiary or, to the knowledge of UAL, any
CRS Company who might be entitled to a fee or commission from
UAL, either Union or any affiliate of either of them upon
consummation of the transactions contemplated by this Agreement,
based upon arrangements made by or on behalf of UAL. For the
purposes of this Section 3.15, "CRS Company" and "Union" shall
have the respective meanings assigned to such terms in the
Recapitalization Agreement.
4. Representations and Warranties of The Trustee, as
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Trustee. The Trustee, in its capacity as such, represents and
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warrants as follows:
4.1 The Trustee (i) is a duly organized and
validly existing trust company in good standing and with full
authority to act as Trustee and exercise trust powers under the
laws of the Commonwealth of Massachusetts and (ii) has full
corporate power and authority to execute and deliver the Trust
Agreement and to carry out the transactions contemplated thereby.
4.2 The execution, delivery and performance of
this Agreement will not violate (i) the Trustee's Charter or
Bylaws, each as amended or restated to date, (ii) any provision
of any indenture, mortgage, deed of trust, agreement, instrument,
order, arbitration award, Judgment or decree to which the Trustee
or the Trust is a party or by which it or the Trust or any of
their respective assets are bound, or (iii) any statute, rule or
regulation applicable to the Trustee or the Trust of any court,
bureau, board, agency or other governmental body having
jurisdiction, which conflict, breach or default might have a
material adverse effect.
4.3 This Agreement and the Trust Agreement have
been duly executed and delivered by the Trustee on behalf of the
Trust and, assuming due authorization, execution and delivery by
UAL, each constitutes the legal, valid and binding obligation of
the Trust enforceable against the Trustee in accordance with
their respective terms, except as the enforceability thereof may
be limited by the effect of any applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditors rights generally, ERISA and by
general principles of equity (regardless of whether considered in
a proceeding at law or in equity).
4.4 The Trustee is acquiring the shares on behalf
of the Plan pursuant to the Trust Agreement and the Plan solely
for investment purposes and not with a view toward, or for sale
in connection with, any public distribution thereof; provided,
however, nothing herein shall prohibit the Trustee from disposing
of any or all of the Shares.
4.5 No authorization, approval or consent of any
governmental authority or agency is necessary to be obtained by
the Trustee or the Plan in connection with the purchase of the
Shares by the Trustee on behalf of the Plan hereunder.
4.6 The Trustee, at the expense of UAL, has
retained independent legal counsel knowledgeable in matters
regarding ERISA and Code fiduciary responsibilities and has
retained an independent financial advisor to advise the Trustee
regarding the transactions contemplated by this Agreement.
4.7 The Trustee has not employed any broker,
finder or agent, or agreed to pay or incurred any brokerage fee,
finder's fee, commission or other similar form of compensation in
connection with this Agreement or the transactions contemplated
hereby.
4.8 Trustee has received an opinion of Houlihan,
Lokey, ▇▇▇▇▇▇ and ▇▇▇▇▇, Inc., financial advisor to the Trustee,
to the effect that (i) the Purchase Price is not greater than
fair market value, (ii) the Transaction is fair to the Plan from
a financial point of view, (iii) the conversion price with
respect to the Shares is reasonable and (iv) the interest rate on
the ESOP Note is not unreasonable.
5. Conditions to Closing.
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5.1 Conditions to the Trustee Is Obligation at
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Closing. The obligations of the Trustee hereunder are subject
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to the fulfillment at or before the Closing of each of the
following conditions:
(a) The representations and warranties
contained in Section 3 hereof shall be true on and as of the
Closing Date and, the Trustee shall have been furnished with a
certificate, dated the Closing Date, to such effect, signed by an
authorized officer of UAL.
(b) The Trustee shall have received a cash
contribution to the Plan at least equal to the Cash Amount.
(c) No order of any court or administrative
agency shall be in effect which restrains or prohibits the
transactions contemplated by this Agreement, and no suit, action
or other proceedings by any governmental body or other person
shall have been instituted which questions the validity or
legality of the transactions contemplated by this Agreement which
suit, action or proceeding the Trustee reasonably determines,
upon advice of counsel, is more likely than not to successfully
challenge the validity or legality of the transactions
contemplated by this Agreement or otherwise result in a Material
Adverse Effect.
(d) Neither the Trustee nor UAL shall have
determined in good faith that the purchase of the Shares would
result in a "prohibited transaction" under ERISA or otherwise
violate the provisions of applicable law.
(e) The Trustee shall have received UAL's
most recent annual report on form 10-K and any subsequently filed
Quarterly Reports on Form 10-Q.
(f) The Trustee shall have received from
▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel to the Trustee, an opinion in
substantially the form set forth in Schedule 5.1(f) hereto.
(g) The Trustee shall have received from
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President-Law and Corporate Secretary,
the opinion in substantially the form set forth in Schedule
5.1(g) hereto.
(h) The Trustee shall have received an
opinion of its financial advisor, in substantially the form set
forth in Schedule 5.1(h) hereto.
(i) The Trustee shall have made a good faith
determination that the purchase of the Shares contemplated
hereunder and the consummation of all other transactions
contemplated by the Agreement are prudent and in the best
interests of the Plan participants. In the event the Trustee is
unable to consummate the purchase of the Shares described in
Section 1 hereof at the Purchase Price by reason of the failure
of one or more of the conditions set forth in Sections 5.1(d),
(h) and (i) hereof, the Trustee agrees to negotiate in good faith
with UAL in an attempt to arrive at a purchase price for the
Shares at which the Trustee would consummate the purchase of
Shares contemplated by this Agreement.
(j) UAL shall have certified to the Trustee
that it has determined that it is reasonably likely to have
sufficient earnings and profits such that dividends paid on the
Class 1 ESOP Convertible Preferred Stock are reasonably likely to
be deductible under Section 404 of the Code.
5.2 Conditions to UAL's obligations at Closing.
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The obligations of UAL hereunder are subject to the fulfillment
at or before the Closing of each of the following conditions:
(a) The representations and warranties
contained in Section 4 hereof shall be true on and as of the
Closing and, UAL shall have been furnished with a certificate
dated the Closing Date to such effect, signed by an authorized
officer of the Trustee.
(b) No order of any court or administrative
agency shall be in effect which restrains or prohibits the
transactions contemplated by this Agreement, and no suit, action
or other proceedings by any governmental body or other person
shall have been instituted which questions the validity or
legality of the transactions contemplated by this Agreement which
suit, action or proceeding UAL reasonably determines, upon advice
of counsel, is more likely than not to successfully challenge the
validity or legality of the transactions contemplated by this
Agreement or otherwise result in a Material Adverse Effect.
(c) Neither the Trustee nor UAL shall have
determined in good faith that the purchase of the Shares would
result in a "prohibited transaction" under ERISA or otherwise
violate the provisions of applicable law.
(d) UAL shall have received an opinion of
▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel to the Trustee, in the form set
forth in Schedule 5.2(d) hereto.
(e) The Trustee shall have delivered to UAL
a certification that the conditions set forth in section 5.1(d)
and section 5.1(i) have been satisfied.
6. Covenants of Trustee. The Trustee hereby
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covenants and agrees as follows:
(a) Except as otherwise provided in the ESOP, all
cash contributions (including any earnings on such contributions)
that are received by the Trust and cash dividends (including any
earnings on such dividends) that are received by the Trust with
respect to the Class 1 ESOP Convertible Preferred Stock or Common
Stock issued upon conversion thereof will be, to the extent
permitted by law, applied solely for the purpose of making
principal and interest payments on the ESOP Note.
(b) The Trustee shall not transfer or otherwise
dispose of any shares of Common Stock issued upon conversion of
the Class 1 ESOP Convertible Preferred Stock unless such
securities have been registered under the Securities Act of 1933,
as amended, and any applicable state securities laws or pursuant
to an exemption or exemptions from such registration.
(c) The Trustee agrees that UAL may (with the
consent of the Air Line Pilots Association, International and the
International Association of Machinists and Aerospace Workers if
and to the extent such consent is required by the Plan) extend
the maturity of the ESOP Note for up to four (4) years, provided
that the interest rate on the ESOP Note, as extended, is
determined by the Trustee to be reasonable at the time of
extension.
7. Covenants of UAL. UAL hereby covenants and agrees
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as follows:
(a) So long as any principal or interest amount
of the ESOP Note or any note representing a refinancing of the
ESOP Note remains unpaid, UAL shall use reasonable efforts to
cause Part A of the Plan to maintain its qualification as an
employee stock ownership plan within the meaning of Section
4975(e)(7) of the Code.
(b) So long as any principal or interest amount
of the ESOP Note or any note representing a refinancing of the
ESOP Note remains unpaid, UAL and its Subsidiaries shall make
contributions to the Plan which, when combined with any dividends
received by the Plan that can be used for the payment of such
debt, are sufficient to allow the Trustee to make, in a timely
fashion all scheduled principal and interest payments with
respect to the ESOP Note or any note representing a refinancing
of the ESOP Note; provided, however, that any contribution to the
Plan shall be limited to the extent that such contribution would
cause the aggregate contributions made by UAL and its
Subsidiaries for the relevant Plan year to exceed the limitations
set forth in Sections 404 or 415 of the Code. Any contributions
limited or not made in a timely fashion pursuant to the preceding
sentence shall be (i) carried over and paid to the Plan as soon
as is practicable in connection with contributions to the Plan
and (ii) increased by an amount sufficient for the Trustee to pay
any increased interest or other costs arising under the ESOP Note
from the failure to make any payment thereunder when due. The
Trustee shall be entitled to reimbursement upon demand for
reasonable attorney fees and other reasonable costs of collection
in enforcing the provisions of this Section 7(b).
(c) Registration of the Common Stock. As and if
required by applicable securities laws, UAL shall at all times
maintain an effective registration statement under the Securities
Act and timely comply with the reporting requirements under the
Exchange Act with respect to the shares of Common Stock into
which the Shares are convertible. The Trustee will provide UAL
with any information about the Trustee or such proposed sale
required to be included in such registration statement. The
Trustee will, upon receipt of notice from UAL that any such
registration statement includes an untrue statement of a material
fact or omits to state a material fact required to be stated
therein or necessary to make any statement therein not
misleading, discontinue the distribution of Common Stock
thereunder until such misstatement or omission is eliminated.
The Trustee further agrees not to effect any public
sale or distribution of Common Stock without the consent of UAL
during the seven days prior to or ninety days after any
registration statement relating to an underwritten sale of
securities of UAL has become effective. UAL shall obtain any
other federal, state or local approvals as may be necessary from
time to time to enable the Trust to consummate any desired
conversion or disposition of the shares of Common Stock into
which the Shares are convertible.
8. Restrictive Legend. The Trustee understands that
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the certificates representing the Shares, when issued, will bear
the following legend and that a notation restricting their
transfer will be made on the stock transfer books of UAL:
"The shares of stock represented by this
certificate have not been registered under the
Securities Act of 1933, as amended. Such shares may
not be sold, assigned, pledged or otherwise transferred
in the absence of an effective registration statement
under said Securities Act covering the transfer or an
opinion of counsel satisfactory to the issuer that
registration under said Securities Act is not required.
Notice
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The shares, of stock represented by this
certificate are subject to a security interest in favor
of UAL Corporation."
9. Expenses. Whether or not the transactions
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contemplated by this Agreement shall be consummated, UAL shall,
as provided for in the applicable engagement letter between UAL
and the Trustee (the "Engagement Letter"), pay the expenses
incurred by the Trustee in connection with the authorization,
preparation, negotiation, execution and performance of this
Agreement and related transactions.
10. Integration Amendment. This Agreement (including
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the documents delivered pursuant hereto), together with the Plan,
Trust Agreement and Engagement Letter, constitutes the entire
agreement and understanding between the parties hereto relating
to the purchase of the shares of ESOP Preferred Stock and
supersedes any prior agreement or understanding relating in any
way to the transaction contemplated hereby. This Agreement may be
modified or amended only by a written instrument executed by or
on behalf of the parties hereto. The headings and captions
contained herein are solely for convenience of reference and do
not constitute a part of this Agreement or affect in any way its
meaning or construction.
11. Savings Clause. The invalidity, illegality or
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enforceability of any one or more of the provisions of this
Agreement shall in no way affect or impair the validity and
enforceability of the remaining provisions hereof. In the event
any such provision shall be so declared unenforceable due to its
scope or breadth, it shall be narrowed to the scope or breadth
permitted by law.
12. Counterparts. This Agreement may be executed in
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one or more counterparts, each of which shall be deemed an
original and all of which together shall constitute one and the
same instrument. It shall not be necessary that any single
counterpart hereof be executed by all parties so long as each
party executed at least one counterpart.
13. Governing Law. This Agreement shall be construed
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and enforced in accordance with the laws of Illinois without
regard to any principles of conflicts of law.
14. Survival of Representations, Warranties and
-------------------------------------------
Covenants. All covenants contained in this Agreement (including
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in any certificates delivered hereunder) shall survive the
Closing or, in the case of Section 9, Section 13 and Section 14
hereof, the sooner termination of this Agreement.
Notwithstanding the Closing, or the sooner termination of this
Agreement or any investigation at any time made by or on behalf
of either party, UAL or the Trustee shall be liable for damages
arising from its breaches of representations or warranties under
this Agreement (including in any certificates delivered
hereunder) which breaches shall not be considered waived by
consummation of the transactions contemplated hereby, provided,
however, that UAL and the Trustee shall be liable only to the
extent that notice therefor is asserted by the other in writing
and delivered prior to the expiration of forty-two (42) months
from the Closing or sooner termination of this Agreement.
15. Notices. Any notice or other communication
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required or permitted hereunder shall be in writing, either
delivered by hand, by mail, or by telex, telefax or telegram
(charges prepaid), and any such notice shall be effective when
received at the address specified below (or, if by mail, three
business days after deposited in the U.S. mails, registered or
certified mail, postage prepaid and return receipt requested):
By Mail
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If to UAL: UAL Corporation
--------- P. O. ▇▇▇ #▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Corporate Secretary
By Courier
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UAL Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Corporate Secretary
If to the Trustee: State Street Bank and Trust Company
----------------- Retirement Investment Services
Batterymarch Park III
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: UAL ESOP Administration
With a copy to: ▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
-------------- ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esquire
Addresses may be changed by written notice given pursuant to this
Section. Any notice given hereunder may be given on behalf of
any party by his counsel or other authorized representatives.
16. Successors and Assigns: Assignability. This
-------------------------------------
Agreement shall be binding upon and inure to the benefit of and
be enforceable by the parties hereto, and their respective legal
representatives, successors and assigns. This Agreement (i)
shall not confer upon any person other than the parties hereto
and their respective successors and assigns any rights or
remedies hereunder and (ii) shall not be assignable by operation
of law or otherwise by any party hereto.
17. Further Assurances. Subject to the terms and
------------------
conditions herein provided, each of the parties hereto shall use
all reasonable efforts to take, or cause to be taken, all action
and to do, or cause to be done, all things necessary, proper or
advisable to consummate and make effective the transactions
contemplated by this Agreement.
18. Certain Limitations. The execution and delivery
-------------------
of this Agreement and the performance by the Trustee of this
Agreement have been, or will be, effected by the Trustee solely
in its capacity as Trustee and not individually.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereof have duly
executed and delivered this Agreement as of the date first above
written.
UAL CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------
Title: Senior Vice President & CFO
---------------------------
State Street Bank and Trust Company,
solely in its capacity as Trustee
under the UAL Corporation Employee
Stock Ownership Plan Trust and not
individually
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------
Title: Vice President
--------------