Exhibit 4.5
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT, dated as of December 30, 1996, is
executed and delivered by UAL Corporation, a Delaware corporation
(the "Guarantor"), and The First National Bank of Chicago as the
initial Guarantee Trustee (as defined herein) for the benefit of
the Holders (as defined herein) from time to time of the
Preferred Securities (as defined herein) of UAL Corporation
Capital Trust I, a Delaware statutory business trust (the
"Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of
Trust (the "Declaration"), dated as of December 30, 1996 among
the trustees of the Issuer named therein, UAL Corporation, as
Sponsor, and the Holders from time to time of undivided
beneficial interests in the assets of the Issuer, the Issuer is
issuing as of the date hereof in accordance with the Offer (as
defined herein) $74,982,600 aggregate liquidation amount of its
13-1/4% Trust Originated Preferred Securities (the "Preferred
Securities") representing undivided beneficial interests in the
assets of the Issuer and having the terms set forth in Exhibit B
to the Declaration;
WHEREAS, the Preferred Securities will be issued by the
Issuer upon deposit of the Guarantor's Debentures (as defined
herein) with the Issuer as trust assets; and
WHEREAS, as incentive for the Holders to exchange Depositary
Shares ("Depositary Shares") representing 1/1,000 of a share of
the 12-1/4% Series B Preferred Stock of the Guarantor for
Preferred Securities pursuant to the Offer, the Guarantor desires
to irrevocably and unconditionally agree, to the extent set forth
herein, to pay to the Holders of the Preferred Securities the
Guarantee Payments (as defined herein) and to make certain other
payments on the terms and conditions set forth herein.
WHEREAS, the Guarantor is also executing and delivering a
guarantee agreement (the "Common Securities Guarantee Agreement")
in substantially identical terms to this Guarantee Agreement for
the benefit of the holders of the Common Securities (as defined
herein), except that if an event of default under the Indenture
has occurred and is continuing, the rights of holders of the
Common Securities to receive Guarantee Payments under the Common
Securities Guarantee Agreement are subordinated to the rights of
Holders to receive Guarantee Payments under this Guarantee
Agreement.
NOW, THEREFORE, in consideration of the exchange of
Depositary Shares for Preferred Securities, which exchange the
Guarantor hereby agrees shall benefit the Guarantor, the
Guarantor executes and delivers this Guarantee Agreement for the
benefit of the Holders from time to time of the Preferred
Securities.
ARTICLE I
SECTION 1.1 Definitions. (a) Capitalized terms used in
this Guarantee Agreement but not defined in the preamble above
have the respective meanings assigned to them in this Section
1.1;
(b) a term defined anywhere in this Guarantee Agreement has
the same meaning throughout;
(c) all references to "the Guarantee Agreement" or "this
Guarantee Agreement" are to this Guarantee Agreement as modified,
supplemented or amended from time to time;
(d) all references in this Guarantee Agreement to Articles
and Sections are to Articles and Sections of this Guarantee
Agreement unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Guarantee Agreement unless otherwise
defined in this Guarantee Agreement or unless the context
otherwise requires; and
(f) a reference to the singular includes the plural and
vice versa.
"Affiliate" has the same meaning as given to that term in
Rule 405 of the Securities Act of 1933, as amended, or any
successor rule thereunder.
"Commission" means the United States Securities and Exchange
Commission.
"Common Securities" means the securities representing
undivided beneficial interests in the assets of the Issuer,
having the terms set forth in Exhibit C to the Declaration.
"Covered Person" means any Holder of Preferred Securities.
"Debentures" means the series of Junior Subordinated
Debentures issued by the Guarantor under the Indenture and
entitled the "13-1/4% Junior Subordinated Debentures due 2026".
"Distributions" means the periodic distributions and other
payments payable to Holders of Preferred Securities in accordance
with the terms of the Preferred Securities set forth in Exhibit B
to the Declaration.
"Event of Default" means a default by the Guarantor on any
of its payment or other obligations under this Guarantee
Agreement.
"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Preferred
Securities, to the extent not paid or made by the Issuer: (i) any
accrued and unpaid Distributions and the redemption price,
including all accrued and unpaid Distributions to the date of
redemption (the "Redemption Price"), with respect to the
Preferred Securities called for redemption by the Issuer but if
and only to the extent that in each case the Guarantor has made a
payment to the Trust of interest or principal on the Debentures
and (ii) upon a voluntary or involuntary dissolution, winding-up
or termination of the Issuer (other than in connection with the
distribution of Debentures to Holders or the redemption of all
the Preferred Securities upon the maturity or redemption of the
Debentures as provided in the Declaration), the lesser of (a) the
aggregate of the liquidation amount and all accrued and unpaid
Distributions on the Preferred Securities to the date of payment,
to the extent the Issuer has funds available therefor, and (b)
the amount of assets of the Issuer remaining available for
distribution to Holders in liquidation of the Issuer (in either
case, the "Liquidation Distribution"). If an event of default
under the Indenture has occurred and is continuing the rights of
holders of the Common Securities to receive payments under the
Common Securities Guarantee Agreement are subordinated to the
rights of Holders to receive Guarantee Payments.
"Guarantee Trustee" means The First National Bank of Chicago
until a Successor Guarantee Trustee has been appointed and
accepted such appointment pursuant to the terms of this Guarantee
Agreement, and thereafter means each such Successor Guarantee
Trustee.
"Holder" shall mean any holder, as registered on the books
and records of the Issuer, of any Preferred Securities; provided,
however, that in determining whether the holders of the requisite
percentage of Preferred Securities have given any request,
notice, consent or waiver hereunder, "Holder" shall not include
the Guarantor or any entity directly or indirectly controlling or
controlled by or under direct or indirect common control with the
Guarantor.
"Indemnified Person" means the Guarantee Trustee, any
Affiliate of the Guarantee Trustee, and any officers, directors,
shareholders, members, partners, employees, representatives or
agents of the Guarantee Trustee.
"Indenture" means the Indenture dated as of December 20,
1996 between the Guarantor and The First National Bank of
Chicago, as trustee, as supplemented by the board resolution or
supplemental indenture pursuant to which the Debentures are to be
issued.
"Majority in liquidation amount of the Preferred Securities"
means, except as otherwise required by the Trust Indenture Act,
Holder(s) of outstanding Preferred Securities voting together as
a single class, who are the record owners of Preferred Securities
whose liquidation amount (including the stated amount that would
be paid on redemption, liquidation or otherwise, plus accrued and
unpaid Distributions to the date upon which the voting
percentages are determined) represents more than 50% of the
liquidation amount of all outstanding Preferred Securities.
"Offer" means the offer by the Issuer to exchange Preferred
Securities for outstanding Depositary Shares in consideration for
the deposit by the Guarantor of Debentures as trust assets of the
Issuer, all as described in a Prospectus dated November 21, 1996.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association,
joint stock company, limited liability company, trust,
unincorporated association, or government or any agency or
political subdivision thereof, or any other entity of whatever
nature.
"Preferred Securities" has the meaning set forth in the
first recital clause above.
"Redemption Price" means the amount payable on redemption of
the Preferred Securities in accordance with the terms of the
Preferred Securities.
"Responsible Officer" means, with respect to the Guarantee
Trustee, the chairman of the board of directors, the president,
any vice-president, any assistant vice-president, the secretary,
any assistant secretary, the treasurer, any assistant treasurer,
any trust officer or assistant trust officer or any other officer
of the Guarantee Trustee customarily performing functions similar
to those performed by any of the above designated officers and
also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that
officer's knowledge of and familiarity with the particular
subject.
"Successor Guarantee Trustee" means a successor Guarantee
Trustee possessing the qualifications to act as a Guarantee
Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application. (a) This
Guarantee Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Guarantee
Agreement and shall, to the extent applicable, be governed by
such provisions.
(b) If and to the extent that any provision of this
Guarantee Agreement limits, qualifies or conflicts with the
duties imposed by Sections 310 to 317, inclusive, of the Trust
Indenture Act, such imposed duties shall control.
(c) The application of the Trust Indenture Act to this
Guarantee Agreement shall not affect the nature of the Preferred
Securities as equity securities representing undivided beneficial
interests in the assets of the Issuer.
SECTION 2.2 Lists of Holders of Preferred Securities. (a)
The Guarantor shall provide the Guarantee Trustee with such
information as is required under Section 312(a) of the Trust
Indenture Act at the times and in the manner provided in Section
312(a).
(b) the Guarantee Trustee shall comply with its obligations
under Sections 310(b), 311 and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Guarantee Trustee. Within 60
days after May 15 of each year, the Guarantee Trustee shall
provide to the Holders of the Preferred Securities such reports
as are required by Section 313 of the Trust Indenture Act, if
any, in the form, in the manner and at the times provided by
Section 313 of the Trust Indenture Act. The Guarantee Trustee
shall also comply with the requirements of Section 313(d) of the
Trust Indenture Act.
SECTION 2.4 Periodic Reports to Guarantee Trustee. The
Guarantor shall provide to the Guarantee Trustee, the Commission
and the Holders of the Preferred Securities, as applicable, such
documents, reports and information, if any, as required by
Section 314(a)(1)-(3) of the Trust Indenture Act and the
compliance certificates required by Section 314(a)(4) and (c) of
the Trust Indenture Act, any such certificates to be provided in
the form, in the manner and at the times required by Section
314(a)(4) and (c) of the Trust Indenture Act (provided that any
certificate to be provided pursuant to Section 314(a)(4) of the
Trust Indenture Act shall be provided within 120 days of the end
of each fiscal year of the Issuer).
SECTION 2.5 Evidence of Compliance with Conditions
Precedent. The Guarantor shall provide to the Guarantee Trustee
such evidence of compliance with any conditions precedent, if
any, provided for in this Guarantee Agreement which relate to any
of the matters set forth in Section 314(c) of the Trust Indenture
Act. Any certificate or opinion required to be given pursuant to
Section 314(c) shall comply with Section 314(e) of the Trust
Indenture Act.
SECTION 2.6 Events of Default; Waiver. (a) Subject to
Section 2.6(b), Holders of Preferred Securities may by vote of at
least a Majority in liquidation amount of the Preferred
Securities, (A) direct the time, method and place of conducting
any proceeding for any remedy available to the Guarantee Trustee,
or exercising any trust or power conferred upon the Guarantee
Trustee or (B) on behalf of the Holders of all Preferred
Securities waive any past Event of Default and its consequences.
Upon such waiver, any such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been
cured, for every purpose of this Guarantee Agreement, but no such
waiver shall extend to any subsequent or other default or Event
of Default or impair any right consequent thereon.
(b) The right of any Holder of Preferred Securities to
receive payment of the Guarantee Payments in accordance with this
Guarantee Agreement, or to institute suit for the enforcement of
any such payment, shall not be impaired without the consent of
each such Holder.
SECTION 2.7 Disclosure of Information. The disclosure of
information as to the names and addresses of the Holders of the
Preferred Securities in accordance with Section 312 of the Trust
Indenture Act, regardless of the source from which such
information was derived, shall not be deemed to be a violation of
any existing law, or any law hereafter enacted which does not
specifically refer to Section 312 of the Trust Indenture Act, nor
shall the Guarantee Trustee be held accountable by reason of
mailing any material pursuant to a request made under Section
312(b) of the Trust Indenture Act.
SECTION 2.8 Conflicting Interest. The Declaration shall be
deemed to be specifically described in this Guarantee Agreement
for the purposes of clause (i) of the first provision contained
in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Guarantee Trustee.
(a) This Guarantee Agreement shall be held by the Guarantee
Trustee in trust for the benefit of the Holders of the Preferred
Securities. The Guarantee Trustee shall not transfer its right,
title and interest in the Guarantee Agreement to any Person
except a Successor Guarantee Trustee on acceptance by such
Successor Guarantee Trustee of its appointment to act as
Guarantee Trustee or to a Holder of Preferred Securities
exercising his or her rights pursuant to Section 5.4. The right,
title and interest of the Guarantee Trustee to the Guarantee
Agreement shall vest automatically in each Person who may
hereafter be appointed as Guarantee Trustee in accordance with
Article IV. Such vesting and cessation of title shall be
effective whether or not conveyancing documents have been
executed and delivered.
(b) If an Event of Default occurs and is continuing, the
Guarantee Trustee shall enforce this Guarantee Agreement for the
benefit of the Holders of the Preferred Securities.
(c) This Guarantee Agreement and all moneys received by the
Trust hereunder in respect of the Guarantee Payments will not be
subject to any right, charge, security interest, lien or claim of
any kind in favor of, or for the benefit of, the Guarantee
Trustee or its agents or their creditors.
(d) The Guarantee Trustee shall transmit, after the
occurrence of an Event of Default, by first class mail, postage
prepaid, to the holders of the Preferred Securities, as their
names and addresses appear upon the register, notice of all
Events of Default known to the Guarantee Trustee, unless such
defaults shall have been cured before the giving of such notice;
provided that the Guarantee Trustee shall be protected in
withholding such notice if and so long as the board of directors,
the executive committee, or a trust committee of directors and/or
Responsible Officers of the Guarantee Trustee in good faith
determine that the withholding of such notice is in the interests
of the Holders of the Preferred Securities. The Guarantee
Trustee shall not be deemed to have knowledge of any default
except any default as to which the Guarantee Trustee shall have
received written notice or a Responsible Officer charged with the
administration of this Guarantee Agreement shall have obtained
written notice.
(e) The Guarantee Trustee shall not resign as a Trustee
unless a Successor Guarantee Trustee has been appointed and
accepted that appointment in accordance with Article IV.
SECTION 3.2 Certain Rights and Duties of the Guarantee
Trustee. (a) The Guarantee Trustee, before the occurrence of an
Event of Default and after the curing of all Events of Default
that may have occurred, shall undertake to perform only such
duties as are specifically set forth in this Guarantee Agreement,
and no implied covenants shall be read into this Guarantee
Agreement against the Guarantee Trustee. In case an Event of
Default has occurred (that has not been cured or waived pursuant
to Section 2.6(a)), the Guarantee Trustee shall exercise such of
the rights and powers vested in it by this Guarantee Agreement,
and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs.
(b) No provision of this Guarantee Agreement shall be
construed to relieve the Guarantee Trustee from liability for its
own negligent action, its own negligent failure to act or its own
willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and
after the curing or waiving of all such Events of Default that
may have occurred:
(A) the duties and obligations of the Guarantee
Trustee shall be determined solely by the express provisions of
this Guarantee Agreement, and the Guarantee Trustee shall not be
liable except for the performance of such duties and obligations
as are specifically set forth in this Guarantee Agreement, and no
implied covenants or obligations shall be read into this
Guarantee Agreement against the Guarantee Trustee; and
(B) in the absence of bad faith on the part of
the Guarantee Trustee, the Guarantee Trustee may conclusively
rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates or opinions
furnished to the Guarantee Trustee and conforming to the
requirements of this Guarantee Agreement; but in the case of any
such certificates or opinions that are specifically required to
be furnished to the Guarantee Trustee by any provision hereof,
the Guarantee Trustee shall be under a duty to examine the same
to determine whether or not they conform to the requirements of
this Guarantee Agreement;
(ii) The Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of
the Guarantee Trustee, unless it shall have proved that the
Guarantee Trustee was negligent in ascertaining the pertinent
facts;
(iii) the Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good
faith in accordance with the direction of the Holders of
Preferred Securities as provided herein relating to the time,
method and place of conducting any proceeding for any remedy
available to the Guarantee Trustee, or exercising any trust or
power conferred upon the Guarantee Trustee under this Guarantee
Agreement; and
(iv) no provision of this Guarantee Agreement shall
require the Guarantee Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the performance
of any of its duties or in the exercise of any of its rights or
powers if it shall have reasonable ground for believing that the
repayment of such funds or liability is not reasonably assured to
it under the terms of this Guarantee Agreement or adequate
indemnity against such risk or liability is not reasonably
assured to it.
(c) Subject to the provisions of Section 3.2(a) and (b):
(i) Whenever, in the administration of this Guarantee
Agreement, the Guarantee Trustee shall deem it desirable that a
matter be proved or established prior to taking, suffering or
omitting any action hereunder, the Guarantee Trustee (unless
other evidence is herein specifically prescribed) may, in the
absence of bad faith on its part, request and rely upon a
certificate, which shall comply with the provisions of Section
314(e) of the Trust Indenture Act, signed by any authorized
officer of the Guarantor;
(ii) the Guarantee Trustee (A) may consult with
counsel (which may be counsel to the Guarantor or any of its
Affiliates and may include any of its employees) selected by it
in good faith and with due care and the written advice or opinion
of such counsel with respect to legal matters shall be full and
complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in
reliance thereon and in accordance with such advice and opinion
and (B) shall have the right at any time to seek instructions
concerning the administration of this Guarantee Agreement from
any court of competent jurisdiction;
(iii) The Guarantee Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either
directly or by or through agents or attorneys and the Guarantee
Trustee shall not be responsible for any misconduct or negligence
on the part of any agent or attorney appointed by it in good
faith and with due care;
(iv) The Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in it
by this Guarantee Agreement at the request or direction of any
Holders of Preferred Securities, unless such Holders shall have
offered to the Guarantee Trustee reasonable security and
indemnity against the costs, expenses (including attorneys' fees
and expenses) and liabilities that might be incurred by it in
complying with such request or direction; provided that nothing
contained in this clause (iv) shall relieve the Guarantee Trustee
of the obligation, upon the occurrence of an Event of Default
(which has not been cured or waived), to exercise such of the
rights and powers vested in it by this Guarantee Agreement, and
to use the same degree of care and skill in this exercise, as a
prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs; and
(v) Any action taken by the Guarantee Trustee or its
agents hereunder shall bind the Holders of the Preferred
Securities and the signature of the Guarantee Trustee or its
agents alone shall be sufficient and effective to perform any
such action; and no third party shall be required to inquire as
to the authority of the Guarantee Trustee to so act, or as to its
compliance with any of the terms and provisions of this Guarantee
Agreement, both of which shall be conclusively evidenced by the
Guarantee Trustee's or its agent's taking such action.
SECTION 3.3 Not Responsible for Recitals or Issuance of
Guarantee. The recitals contained in this Guarantee shall be
taken as the statements of the Guarantor and the Guarantee
Trustee does not assume any responsibility for their correctness.
The Guarantee Trustee makes no representations as to the validity
or sufficiency of this Guarantee Agreement.
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.1 Qualifications. (a) There shall at all times
be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business
under the laws of the United States of America or any State or
Territory thereof or of the District of Columbia, or a
corporation or Person permitted by the Commission to act as an
institutional trustee under the Trust Indenture Act, authorized
under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least $50,000,000, and subject
to supervision or examination by federal, state, territorial or
District of Columbia authority. If such corporation publishes
reports of condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority referred
to above, then for the purposes of this Section 4.1(a)(ii), the
combined capital and surplus of such corporation shall be deemed
to be its combined capital and surplus as set forth in its most
recent report of condition so published.
If at any time the Guarantee Trustee shall cease to satisfy
the requirements of clauses (i)-(ii) above, the Guarantee Trustee
shall immediately resign in the manner and with the effect set
out in Section 4.2. If the Guarantee Trustee has or shall
acquire any "conflicting interest" within the meaning of Section
310(b) of the Trust Indenture Act, the Guarantee Trustee and the
Guarantor shall in all respects comply with the provisions of
Section 310(b) of the Trust Indenture Act.
SECTION 4.2 Appointment, Removal and Resignation of
Guarantee Trustee. (a) Subject to Section 4.2(b), the Guarantee
Trustee may be appointed or removed without cause at any time by
the Guarantor.
(b) The Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) until a Successor Guarantee
Trustee possessing the qualifications to act as Guarantee Trustee
under Section 4.1(a) has been appointed and has accepted such
appointment by written instrument executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the
Guarantee Trustee being removed.
(c) The Guarantee Trustee appointed to office shall hold
office until his or her successor shall have been appointed or
until its removal or resignation.
(d) The Guarantee Trustee may resign from office (without
need for prior or subsequent accounting) by an instrument (a
"Resignation Request") in writing signed by the Guarantee Trustee
and delivered to the Guarantor, which resignation shall take
effect upon such delivery or upon such later date as is specified
therein; provided, however, that no such resignation of the
Guarantee Trustee shall be effective until a Successor Guarantee
Trustee possessing the qualifications to act as Guarantee Trustee
under Section 4.1(a) has been appointed and has accepted such
appointment by instrument executed by such Successor Guarantee
Trustee and delivered to Guarantor and the resigning Guarantee
Trustee.
(e) If no Successor Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section
4.2 within 60 days after delivery to the Guarantor of a
Resignation Request, the resigning Guarantee Trustee may petition
any court of competent jurisdiction for appointment of a
Successor Guarantee Trustee. Such court may thereupon, after
such notice, if any, as it may deem proper and prescribe, appoint
a Successor Guarantee Trustee.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee. The Guarantor irrevocably and
unconditionally agrees to pay in full to the Holders the
Guarantee Payments (without duplication of amounts theretofore
paid by the Issuer) regardless of any defense, right of set-off
or counterclaim which the Issuer may have or assert. The
Guarantor's obligation to make a Guarantee Payment may be
satisfied by direct payment of the required amounts by the
Guarantor to the Holders or by causing the Issuer to pay such
amounts to the Holders.
SECTION 5.2 Waiver of Notice. The Guarantor hereby waives
notice of acceptance of this Guarantee Agreement and of any
liability to which it applies or may apply, presentment, demand
for payment, any right to require a proceeding first against the
Issuer or any other Person before proceeding against the
Guarantor, protest, notice of nonpayment, notice of dishonor,
notice of redemption and all other notices and demands.
SECTION 5.3 Obligations Not Affected. The obligations,
covenants, agreements and duties of the Guarantor under this
Guarantee Agreement shall in no way be affected or impaired by
reason of the happening from time to time of any of the
following:
(a) the release or waiver, by operation of law or
otherwise, of the performance or observance by the Issuer of any
express or implied agreement, covenant, term or condition
relating to the Preferred Securities to be performed or observed
by the Issuer;
(b) the extension of time for the payment by the Issuer of
all or any portion of the Distributions (other than an extension
of time for payment of Distributions that results from the
extension of any interest payment period on the Debentures),
Redemption Price, Liquidation Distribution or any other sums
payable under the terms of the Preferred Securities or the
extension of time for the performance of any other obligation
under, arising out of, or in connection with, the Preferred
Securities;
(c) any failure, omission, delay or lack of diligence on
the part of the Holders to enforce, assert or exercise any right,
privilege, power or remedy conferred on the Holders pursuant to
the terms of the Preferred Securities, or any action on the part
of the Issuer granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution,
sale of any collateral, receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization,
arrangement, composition or readjustment of debt of, or other
similar proceedings affecting, the Issuer or any of the assets of
the Issuer;
(e) any invalidity of, or defect or deficiency in, the
Preferred Securities;
(f) the settlement or compromise of any obligation
guaranteed hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a
guarantor, it being the intent of this Section 5.3 that the
obligations of the Guarantor hereunder shall be absolute and
unconditional under any and all circumstances. There shall be no
obligation of the Holders to give notice to, or obtain consent
of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4 Enforcement of Guarantee. The Guarantor and
the Guarantee Trustee expressly acknowledge that (i) this
Guarantee Agreement will be deposited with the Guarantee Trustee
to be held for the benefit of the Holders; (ii) the Guarantee
Trustee has the right to enforce this Guarantee Agreement on
behalf of the Holders; (iii) Holders representing not less than a
Majority in liquidation amount of the Preferred Securities have
the right to direct the time, method and place of conducting any
proceeding for any remedy available in respect of this Guarantee
Agreement, including the giving of directions to the Guarantee
Trustee, or exercising any trust or other power conferred upon
the Guarantee Trustee under this Guarantee Agreement, and (iv)
any Holder may institute a legal proceeding directly against the
Guarantor to enforce such Holder's rights under this Guarantee
Agreement, without first instituting a legal proceeding against
the Issuer, the Guarantee Trustee, or any other Person and
without prior notice to the Guarantee Trustee.
SECTION 5.5 Guarantee of Payment. This Guarantee Agreement
creates a guarantee of payment and not merely of collection.
This Guarantee Agreement will not be discharged except by payment
of the Guarantee Payments in full (without duplication of amounts
theretofore paid by the Issuer).
SECTION 5.6 Subrogation. The Guarantor shall be subrogated
to all rights of the Holders against the Issuer in respect of any
amounts paid to the Holders by the Guarantor under this Guarantee
Agreement; provided, however, that the Guarantor shall not
(except to the extent required by mandatory provisions of law) be
entitled to enforce or exercise any rights which it may acquire
by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this
Guarantee Agreement, if, at the time of any such payment, any
amounts are due and unpaid under this Guarantee Agreement. If
any amount shall be paid to the Guarantor in violation of the
preceding sentence, the Guarantor agrees to hold such amount in
trust for the Holders and to pay over such amount to the Holders.
SECTION 5.7 Independent Obligations. The Guarantor
acknowledges that its obligations hereunder are independent of
the obligations of the Issuer with respect to the Preferred
Securities and that the Guarantor shall be liable as principal
and as debtor hereunder to make Guarantee Payments pursuant to
the terms of this Guarantee Agreement notwithstanding the
occurrence of any event referred to in subsections (a) through
(g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions. So long as any
Preferred Securities remain outstanding, the Guarantor will not
declare or pay any dividend on, or redeem, purchase, acquire or
make a distribution or liquidation payment with respect to, any
of its common stock or preferred stock or any other securities
similar to the Preferred Securities or the Debentures, or make
any guarantee payments with respect thereto, if at such time (i)
the Guarantor shall be in default with respect to its Guarantee
Payments or other payment obligations hereunder, (ii) there shall
have occurred and be continuing any event of default under the
Indenture or (iii) the Guarantor shall have given notice of its
selection of an Extension Period (as defined in the Indenture)
and such period, or any extension thereof, is continuing;
provided that the Guarantor will be permitted to pay dividends
(and cash in lieu of fractional shares) upon the mandatory
conversion of any of its preferred stock in accordance with the
terms of such stock. In addition, so long as any Preferred
Securities remain outstanding, the Guarantor (i) will remain the
sole direct or indirect owner of all of the outstanding Common
Securities and shall not cause or permit the Common Securities to
be transferred except to the extent such transfer is permitted
under Section 9.1(c) of the Declaration; provided that any
permitted successor of the Guarantor under the Indenture may
succeed to the Guarantor's ownership of the Common Securities and
(ii) will not take any action which would cause the Issuer to
cease to be treated as a grantor trust for United States federal
income tax purposes except in connection with a distribution of
Debentures as provided in the Declaration.
SECTION 6.2 Subordination. This Guarantee Agreement will
constitute an unsecured obligation of the Guarantor and will rank
(i) subordinate and junior in right of payment to all other
liabilities of the Guarantor, except those made pari passu or
subordinate by their terms, and (ii) senior to all capital stock
now or hereafter issued by the Guarantor and to any guarantee now
or hereafter entered into by the Guarantor in respect of any of
its capital stock.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination. This Guarantee Agreement shall
terminate and be of no further force and effect upon full payment
of the Redemption Price of all Preferred Securities, upon the
distribution of Debentures to Holders of Preferred Securities and
Common Securities in exchange for all of the Preferred Securities
and Common Securities or upon full payment of the amounts payable
in accordance with the Declaration upon liquidation of the
Issuer. Notwithstanding the foregoing, this Guarantee Agreement
will continue to be effective or will be reinstated, as the case
may be, if at any time any Holder must restore payment of any
sums paid with respect to the Preferred Securities or this
Guarantee Agreement.
ARTICLE VIII
LIMITATION OF LIABILITY; INDEMNIFICATION
SECTION 8.1 Exculpation. (a) No Indemnified Person shall
be liable, responsible or accountable in damages or otherwise to
the Guarantor or any Covered Person for any loss, damage or claim
incurred by reason of any act or omission performed or omitted by
such Indemnified Person in good faith and in a manner such
Indemnified Person reasonably believed to be within the scope of
the authority conferred on such Indemnified Person by this
Guarantee Agreement or by law, except that an Indemnified Person
shall be liable for any such loss, damage or claim incurred by
reason of such Indemnified Person's negligence or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in
relying in good faith upon the records of the Guarantor and upon
such information, opinions, reports or statements presented to
the Guarantor by any Person as to matters the Indemnified Person
reasonably believes are within such other Person's professional
or expert competence and who has been selected with reasonable
care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the
assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which
Distributions to Holders of Preferred Securities might properly
be paid.
SECTION 8.2 Indemnification. (a) To the fullest extent
permitted by applicable law, the Guarantor shall indemnify and
hold harmless each Indemnified Person from and against any loss,
damage or claim incurred by such Indemnified Person by reason of
any act or omission performed or omitted by such Indemnified
Person in good faith and in a manner such Indemnified Person
reasonably believed to be within the scope of authority conferred
on such Indemnified Person by this Guarantee Agreement, except
that no Indemnified Person shall be entitled to be indemnified in
respect of any loss, damage or claim incurred by such Indemnified
Person by reason of negligence or willful misconduct with respect
to such acts or omissions.
(b) To the fullest extent permitted by applicable law,
expenses (including legal fees) incurred by an Indemnified Person
in defending any claim, demand, action, suit or proceeding shall,
from time to time, be advanced by the Guarantor prior to the
final disposition of such claim, demand, action, suit or
proceeding upon receipt by the Guarantor of an undertaking by or
on behalf of the Indemnified Person to repay such amount if it
shall be determined that the Indemnified Person is not entitled
to be indemnified as authorized in Section 8.2(a).
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns. All guarantees and
agreements contained in this Guarantee Agreement shall bind the
successors, assigns, receivers, trustees and representatives of
the Guarantor and shall inure to the benefit of the Holders of
the Preferred Securities then outstanding. Except in connection
with a consolidation, merger or sale involving the Guarantor that
is permitted under Article Eight of the Indenture, the Guarantor
shall not assign its obligations hereunder.
SECTION 9.2 Amendments. Except with respect to any changes
which do not adversely affect the rights of Holders (in which
case no consent of Holders will be required), this Guarantee
Agreement may only be amended with the prior approval of the
Holders of not less than a Majority in liquidation amount of the
Preferred Securities. The provisions of Section 12.2 of the
Declaration concerning meetings of Holders shall apply to the
giving of such approval.
SECTION 9.3 Notices. Any notice, request or other
communication required or permitted to be given hereunder shall
be in writing, duly signed by the party giving such notice, and
delivered, telecopied or mailed by first class mail as follows:
(a) if given to the Guarantor, to the address set forth
below or such other address as the Guarantor may give notice of
to the Holders:
UAL Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Secretary
(b) if given to the Guarantee Trustee, to the address set
forth below or such other address as the Guarantee Trustee may
give notice of to the Holders:
The First National Bank of Chicago
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Corporate Trust Administration
(c) if given to any Holder of Preferred Securities, at the
address set forth on the books and records of the Issuer.
All notices hereunder shall be deemed to have been given
when received in person, telecopied with receipt confirmed, or
mailed by first class mail, postage prepaid except that if a
notice or other document is refused delivery or cannot be
delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been
delivered on the date of such refusal or inability to deliver.
SECTION 9.4 Genders. The masculine, feminine and neuter
genders used herein shall include the masculine, feminine and
neuter genders.
SECTION 9.5 Benefit. This Guarantee Agreement is solely
for the benefit of the Holders and subject to Section 3.1(a) is
not separately transferable from the Preferred Securities.
SECTION 9.6 Governing Law. THIS GUARANTEE AGREEMENT SHALL
BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
SECTION 9.7 Counterparts. This Guarantee Agreement may be
executed in counterparts, each of which shall be an original; but
such counterparts shall together constitute one and the same
instrument.
THIS GUARANTEE AGREEMENT is executed as of the day and year
first above written.
UAL CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
and Chief Financial
Officer
THE FIRST NATIONAL BANK OF
CHICAGO, as Guarantee Trustee
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President