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EXHIBIT 4.31
UNITED AIR LINES, INC.
ENHANCED PASS THROUGH CERTIFICATES, SERIES 1997-1A
PURCHASE AGREEMENT
December 18, 1997
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December 18, 1997
Xxxxxx Xxxxxxx & Co. Incorporated
BT Alex. Xxxxx Incorporated
Citicorp Securities, Inc.
Credit Suisse First Boston Corporation
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs and Madames:
United Air Lines, Inc., a Delaware corporation (the
"COMPANY"), proposes that First Security Bank of Utah, National Association,
acting not in its individual capacity but solely as Pass Through Trustee (the
"Trustee) under the Pass Through Trust Agreement referred to below, issue and
sell to the several purchasers named in Schedule I hereto (the "INITIAL
PURCHASERS") its Enhanced Pass Through Certificates, Series 1997-1A in the
aggregate principal amounts and with the interest rates and final expected
distribution dates set forth on the cover page of the Final Memorandum (as
defined below) (the "SECURITIES") on the terms and conditions stated herein. The
aggregate principal amount of Securities payable on each such final expected
distribution date is referred to as a "Pass Through Certificate Designation."
The Securities will be issued under a Pass Through Trust Agreement dated as of
December 23, 1997 (the "BASIC PASS THROUGH TRUST AGREEMENT") between the Company
and the Trustee, as supplemented by a Pass Through Trust Supplement, dated as of
December 23, 1997 (a "TRUST SUPPLEMENT"), between the Company and the Trustee
(the Basic Pass Through Trust Agreement as it is to be supplemented by the Trust
Supplement being referred to herein as the "PASS THROUGH TRUST AGREEMENT").
As used in this Agreement, the terms "Aircraft," "Certificate
Owner," "Equipment Notes," "Lease," "Loan Trustee," "Operative Documents,"
"Owner Participant," "Owner Trustee" and "Participation Agreement" shall have
the meanings specified in the 1997 Indentures or the 1994 Indentures as defined
in the Note Purchase
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Agreement, dated as of December 23, 1997, between the Company, the Trustee,
State Street Bank and Trust Company of Connecticut, National Association,
individually for certain purposes and as owner trustee, First Security Bank,
National Association, as indenture trustee, and First Security Bank, National
Association, as subordination agent (the "Note Purchase Agreement").
For purposes hereof, the term "Financing Agreements" shall
mean, collectively, the Note Purchase Agreement, the Pass Through Trust
Agreement, the Primary Liquidity Facilities, the Above-Cap Liquidity Facilities,
the Registration Rights Agreement and the Intercreditor Agreement and the term
"Fundamental Documents" shall mean collectively, the Financing Agreements, each
Operative Document (as defined in the 1994 Indenture) and each Operative
Document (as defined in the 1997 Indenture).
The Securities will be offered without being registered under
the Securities Act of 1933, as amended (the "SECURITIES ACT"), to qualified
institutional buyers in compliance with the exemption from registration
provided by Rule 144A under the Securities Act, in offshore transactions in
reliance on Regulation S under the Securities Act ("REGULATION S") and to
institutional accredited investors (as defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act) that deliver a letter in the form annexed to the
Final Memorandum (as defined below).
The Initial Purchasers and their direct and indirect
transferees will be entitled to the benefits of a Registration Rights Agreement
dated the date hereof between the Company and the Initial Purchasers (the
"REGISTRATION RIGHTS AGREEMENT").
In connection with the sale of the Securities, the Company has
prepared a preliminary offering memorandum (the "PRELIMINARY MEMORANDUM") and
will prepare a final offering memorandum (the "FINAL MEMORANDUM" and, with the
Preliminary Memorandum, each a "MEMORANDUM") including or incorporating by
reference a description of the terms of the Securities, the terms of the
offering and a description of the Company. As used herein, the term "Memorandum"
shall include in each case the documents incorporated by reference therein. The
terms "SUP-
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PLEMENT", "AMENDMENT" and "AMEND" as used herein with respect to a Memorandum
shall include all documents deemed to be incorporated by reference in the
Preliminary Memorandum or Final Memorandum that are filed with the Securities
and Exchange Commission (the "COMMISSION") pursuant to the Securities Exchange
Act of 1934, as amended (the "EXCHANGE ACT"), after the issue date of such
Memorandum and on or prior to the completion of the offering.
1. Representations and Warranties. The Company represents and
warrants to, and agrees with, you that:
(a) (i) Each document, if any, filed or to be filed
pursuant to the Exchange Act and incorporated by reference in either Memorandum
complied or will comply when so filed in all material respects with the Exchange
Act and the applicable rules and regulations of the Commission thereunder and
(ii) the Preliminary Memorandum does not contain and the Final Memorandum, in
the form used by the Initial Purchasers to confirm sales and on the Closing Date
(as defined in Section 4), will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this paragraph do
not apply to statements or omissions in either Memorandum based upon information
relating to any Initial Purchaser furnished to the Company in writing by such
Initial Purchaser through you expressly for use therein.
(b) The Company has been duly incorporated, is
validly existing as a corporation in good standing under the laws of the State
of Delaware, has the corporate power and authority to own or lease its property
and to conduct its business as described in each Memorandum and is duly
qualified to transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole. All of the outstanding shares
of capital stock of the Company have been duly authorized and validly issued and
are fully paid and non-assessable
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and are owned by UAL Corporation, directly, free and clear of any pledge, lien,
security interest, charge, claim, equity or encumbrance of any kind ("Liens").
(c) Each Financing Agreement and each other
Fundamental Document conforms in all material respects to the descriptions
thereof in the Final Memorandum.
(d) This Agreement has been duly authorized,
executed and delivered by the Company.
(e) The Securities have been duly authorized and,
when executed and authenticated in accordance with the provisions of the Pass
Through Trust Agreement and delivered to and paid for by the Initial Purchasers
in accordance with the terms of this Agreement, will be valid and binding
obligations of the Trustee, enforceable in accordance with their terms, except
as enforcement thereof may be limited by bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally and except as enforcement thereof is subject to
general principles of equity (regardless of whether enforcement is considered in
a proceeding in equity or at law) and will be entitled to the benefits of the
Pass Through Trust Agreement and the Registration Rights Agreement and the other
Financing Agreements to which the Trustee is a party.
(f) Each of the Pass Through Trust Agreement and the
Registration Rights Agreement and each of the other Fundamental Documents to
which the Company is a party has been duly authorized, executed and delivered
by, and is a valid and binding agreement of, the Company, enforceable in
accordance with its terms, except as enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and except as
enforcement thereof is subject to general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at law) and
except as rights to
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indemnification and contribution under the Registration Rights Agreement may be
limited under applicable law.
(g) The Equipment Notes to be issued under each 1997
Indenture, when duly executed and delivered by the Company and duly
authenticated by the Indenture Trustee in accordance with the terms of such
1997 Indenture, will be duly issued under such 1997 Indenture and will
constitute the valid and binding obligations of the Company and the holders
thereof will be entitled to the benefits of such 1997 Indenture.
(h) The Equipment Notes to be issued under each 1994
Indenture, when duly executed and delivered by the Company and duly
authenticated by the Indenture Trustee in accordance with the terms of such
1994 Indenture, will be duly issued under such 1994 Indenture and will
constitute the valid and binding obligations of the Owner Trustee and the
holders thereof will be entitled to the benefits of such 1994 Indenture.
(i) The Company is not in default in the performance
or observance of any obligation, agreement, covenant or condition contained in
any contract, indenture, mortgage, loan agreement, note, lease or other
agreement or instrument to which it is a party or by which it may be bound or to
which any of its properties may be subject, except for such defaults that would
not have a material adverse effect on the condition (financial or otherwise),
earnings or business affairs of the Company and its subsidiaries, taken as a
whole. The execution and delivery by the Company of this Agreement, the Pass
Through Trust Agreement and the Fundamental Documents to which the Company is,
or is to be, a party, the consummation by the Company of the transactions
contemplated in this Agreement, the Pass Through Trust Agreement and such
Fundamental Documents, and compliance by the Company with the terms of this
Agreement, the Pass Through Trust Agreement and such Fundamental Documents, do
not and will not result in any violation of the charter or by-laws of the
Company, and do not and will not conflict with, or result in a breach of any of
the terms or provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance (other than Permitted
Liens) upon any property or assets of the Company under (A) any inden-
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ture, mortgage, loan agreement, note, lease or other material agreement or
instrument to which the Company is a party or by which it may be bound or to
which any of its properties may be subject or (B) any existing applicable law,
rule, regulation, judgment, order or decree of any government, governmental
instrumentality or court, domestic or foreign, having jurisdiction over the
Company or any of its properties other than the securities or Blue Sky or
similar laws of the various states and foreign jurisdictions (except, in the
case of either clause (A) or (B), for such conflicts, breaches or defaults or
liens, charges or encumbrances that would not have a material adverse effect on
the condition (financial or otherwise), earnings or business affairs of the
Company and its subsidiaries, taken as a whole).
(j) No authorization, approval, consent, order or
license of or filing with or notice to any government, governmental
instrumentality or court, domestic or foreign, is required on behalf of the
Company for the valid authorization, issuance, sale and delivery of the
Securities and the Equipment Notes, the valid authorization, execution,
delivery and performance by the Company of this Agreement, the Pass Through
Trust Agreement, the Leases and the other Fundamental Documents to which the
Company is, or is to be, a party, or the consummation by the Company of the
transactions contemplated by this Agreement, the Pass Through Trust Agreement,
the Leases and such other Fundamental Documents, except such as are required
under (x) the Securities Act, the Exchange Act, the Trust Indenture Act and the
securities or Blue Sky or similar laws of the various states and of foreign
jurisdictions and except for (y) the Sections of Title 49 of the United States
Code, as amended, relating to aviation (the "Aviation Act") and filings or
recordings with the Federal Aviation Administration (the "FAA") and (z) filings
under the Uniform Commercial Code as in effect in Connecticut and Illinois,
which filings shall have been made or obtained, or duly presented for filing, on
or prior to the Closing Date.
(k) Except as disclosed in the Final Memorandum or
incorporated by reference, there is no action, suit or proceeding before or by
any government, governmental instrumentality or court, domestic or foreign, now
pending or, to the knowledge of the Company,
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threatened against that is required to be disclosed in the Final Memorandum or
that could reasonably be expected to result in any material adverse change in
the condition (financial or otherwise), earnings or business affairs of the
Company and its subsidiaries, taken as a whole, or that could reasonably be
expected to materially and adversely affect the properties or assets of the
Company and its subsidiaries, taken as a whole, or that could reasonably be
expected to materially and adversely affect the consummation of the transactions
contemplated by this Agreement; the aggregate of all pending legal or
governmental proceedings to which the Company is a party or which affect any of
its properties that are not described in the Final Memorandum, including
ordinary routine litigation incidental to its business, would not reasonably be
expected to have a material adverse effect on the condition (financial or
otherwise), earnings or business affairs of the Company and its subsidiaries,
taken as a whole.
(l) The Company has all licenses, permits, orders,
consents, authorizations and approvals, of and from, and has made all filings
(other than those filings described in clauses (x), (y) and (z) of Section
1(j)above) with, all governmental authorities, all self-regulatory organizations
and all courts and other tribunals, necessary to own or lease its properties
and to conduct its business in the manner described in the Memoranda, except to
the extent that the failure to so have would not have a material adverse effect
on the Company and its subsidiaries, taken as a whole.
(m) Since the dates as of which information is given
in the Memoranda, as amended, there has not occurred any material adverse
change, or any development involving a prospective material adverse change, in
the condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from that set
forth in, or incorporated by reference in, the Final Memorandum.
(n) The Company is not, and after giving effect to
the offering and sale of the Securities and the application of the proceeds
thereof as described in the Final Memorandum, will not be an "investment
company" as
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such term are defined in the Investment Company Act of 1940, as amended.
(o) Neither the Company nor any affiliate (as
defined in Rule 501(b) of Regulation D under the Securities Act, an "AFFILIATE")
of the Company has directly, or through any agent, (i) sold, offered for sale,
solicited offers to buy or otherwise negotiated in respect of, any security (as
defined in the Securities Act) which is or will be integrated with the sale of
the Securities in a manner that would require the registration under the
Securities Act of the Securities or (ii) engaged in any form of general
solicitation or general advertising in connection with the offering of the
Securities (as those terms are used in Regulation D under the Securities Act) or
in any manner involving a public offering within the meaning of Section 4(2) of
the Securities Act.
(p) None of the Company, its Affiliates or any person
acting on its or their behalf has engaged or will engage in any directed selling
efforts (within the meaning of Regulation S) with respect to the Securities and
the Company and its Affiliates and any person acting on its or their behalf have
complied and will comply with the offering restrictions requirement of
Regulation S, except no representation, warranty or agreement is made by the
Company in this paragraph with respect to the Initial Purchasers.
(q) It is not necessary in connection with the offer,
sale and delivery of the Securities to the Initial Purchasers in the manner
contemplated by this Agreement to register the Securities under the Securities
Act or to qualify the Indenture under the Trust Indenture Act of 1939, as
amended.
(r) The Securities satisfy the requirements set
forth in Rule 144A(d)(3) under the Securities Act.
(s) Xxxxxx Xxxxxxxx LLP, who have reported upon the
audited consolidated financial statements and the financial statement schedules,
if any, incorporated by reference in the Final Memorandum, are inde-
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pendent public accountants as required by the Securities Act.
(t) The Company is a "citizen of the United States"
within the meaning of Section 40102(a)(15) of Title 49 of the United States
Code, as amended, holding an air carrier operating certificate issued by the
Secretary of Transportation pursuant to Chapter 447 of Title 49 of the United
States Code, as amended, for aircraft capable of carrying 10 or more individuals
or 6,000 pounds or more of cargo.
2. Agreements to Sell and Purchase. Subject to the terms and
conditions contained herein, the Company hereby agrees to sell to the several
Initial Purchasers, and each Initial Purchaser agrees, severally and not
jointly, to purchase from the Company the respective principal amount of
Securities set forth in Schedule I hereto opposite its name at a purchase price
of 99.50% of the principal amount thereof (the "PURCHASE PRICE") plus accrued
interest, if any, to the Closing Date.
The Company hereby agrees that, without the prior written
consent of Xxxxxx Xxxxxxx & Co. Incorporated on behalf of the Initial
Purchasers, it will not, during the period beginning on the date hereof and
continuing to and including the Closing Date, offer, sell, contract to sell or
otherwise dispose of any debt of the Company or warrants to purchase debt of the
Company, in either case substantially similar to the Securities (other than the
sale of the Securities under this Agreement and the sale of The Enhanced Pass
Through Certificates, Series 1997-1B, the Enhanced Pass Through Certificates,
Series 1997-1C and the Enhanced Pass Through Certificates, Series 1997-1D).
3. Terms of Offering. You have advised the Company that the
Initial Purchasers will make an offering of the Securities purchased by the
Initial Purchasers hereunder on the terms to be set forth in the Final
Memorandum, as soon as practicable after this Agreement is entered into as in
your judgment is advisable.
4. Payment and Delivery. Payment for the Securities shall be
made to the Company in Federal or other funds immediately available in New York
City
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against delivery of such Securities for the respective accounts of the several
Initial Purchasers at 10:00 a.m., New York City time, on December 23, 1997, or
at such other time on the same or such other date, not later than December 31,
1997, as shall be designated in writing by you. The time and date of such
payment are hereinafter referred to as the "CLOSING DATE."
Certificates for the Securities shall be in definitive form or
global form, as specified by you, and registered in such names and in such
denominations as you shall request in writing not later than one full business
day prior to the Closing Date. The certificates evidencing the Securities shall
be delivered to you on the Closing Date for the respective accounts of the
several Initial Purchasers, with any transfer taxes payable in connection with
the transfer of the Securities to the Initial Purchasers duly paid, against
payment of the Purchase Price therefor plus accrued interest, if any, to the
date of payment and delivery.
5. Conditions to the Initial Purchasers' Obligations. The
several obligations of the Initial Purchasers to purchase and pay for the
Securities on the Closing Date are subject to the following conditions:
(a) Subsequent to the execution and delivery of this
Agreement and prior to the Closing Date:
(i) there shall not have occurred any
downgrading, nor shall any notice have been given of any intended or
potential downgrading or of any review for a possible change that does
not indicate the direction of the possible change, in the rating
accorded the Company or any of the Company's securities by Xxxxx'x
Investor Services, Inc. ("Moody's") or Standard & Poor's Ratings
Services ("Standard & Poor's");
(ii) the Company's Enhanced Pass Through
Certificates, Series 1997-1A shall be rated "Aa2" by Moody's and "AAA"
by Standard & Poor's; and
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(iii) there shall not have occurred any
change, or any development involving a prospective change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from
that set forth in the Final Memorandum (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement) that, in
your reasonable judgment, is material and adverse and that makes it,
in your reasonable judgment, impracticable to market the Securities on
the terms and in the manner contemplated in the Final Memorandum.
(b) The Initial Purchasers shall have received on the
Closing Date a certificate, dated the Closing Date and signed by the Vice
President and Treasurer or the Vice President-General Counsel and Secretary of
the Company, to the effect set forth in Section 5(a)(i) and to the effect that
the representations and warranties of the Company contained in this Agreement
are true and correct as of the Closing Date and that the Company has complied
with all of the agreements and satisfied all of the conditions on its part to be
performed or satisfied hereunder on or before the Closing Date.
(i) The officer signing and delivering such
certificate may rely upon his or her knowledge (after due inquiry) as
to proceedings threatened.
(c) The Initial Purchasers shall have received on the
Closing Date an opinion of (i) Xxxxx, Xxxxx & Xxxxx, outside counsel for the
Company, dated the Closing Date, substantially to the effect set forth in
Exhibit A-1, (ii) Vedder, Price, Xxxxxxx & Kammholz, outside counsel for the
Company, dated the Closing Date, substantially to the effect set forth in
Exhibit A-2, (iii) the General Counsel or Assistant General Counsel of the
Company, dated the Closing Date, substantially to the effect set forth in
Exhibit A-3, and (iv) Ray, Xxxxxxx & Xxxxxxx, counsel for the Trustee, dated the
Closing Date, substantially to the effect set forth in Exhibit A-4.
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Such opinions shall be rendered to the Initial Purchasers at the request of the
Company and shall so state therein.
(d) The Initial Purchasers shall have received on the
Closing Date an opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel for
the Initial Purchasers, dated the Closing Date, covering opinions delivered
pursuant to such matters as you shall reasonably require and in form and
substance acceptable to you.
(e) The Initial Purchasers shall have received on
each of the date hereof and the Closing Date a letter, dated the date hereof or
the Closing Date, as the case may be, in form and substance satisfactory to the
Initial Purchasers, from Xxxxxx Xxxxxxxx LLP, independent public accountants,
containing statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the financial
statements and certain financial information incorporated by reference into
each Memorandum; provided that the letter delivered on the Closing Date shall
use a "cut-off date" not earlier than Friday, December 19, 1997.
(f) At the Closing Date, all conditions precedent
specified in the Note Purchase Agreement shall have been satisfied; the
representations and warranties of the Company, the Owner Trustee, the Pass
Through Trustee and the Indenture Trustee contained in the Note Purchase
Agreement and each other Fundamental Document shall be accurate as of the
Closing Date (except to the extent that they relate solely to an earlier date in
which case they shall be accurate as of such earlier date) and you shall have
received certificates of the Chief Financial Officer or the Treasurer of the
Company and appropriate officers of the respective Owner Trustees, Pass Through
Trustees and Indenture Trustees, dated as of the Closing Date, to such effect;
and you shall have received a copy of each opinion required to be delivered
under the Note Purchase Agreement and dated as of the Closing Date, and
addressed to you, and of such other documents furnished in connection with the
fulfillment of such conditions as you or your counsel may reasonably request.
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(g) At the Closing Date, counsel for the
Initial Purchasers shall have been furnished with such documents and opinions as
such counsel may reasonably require for the purpose of enabling such counsel to
pass upon the issuance and sale of Securities as herein con templated and
related proceedings, or in order to evi dence the accuracy and completeness of
any of the repre sentations and warranties, or the fulfillment of any of the
conditions, herein contained and all proceedings taken by the Company in
connection with the issuance and sale of Securities as herein contemplated shall
be satis factory in form and substance to you and to counsel for the Initial
Purchasers.
6. Covenants of the Company. In further consideration of the
agreements of the Initial Purchasers contained in this Agreement, the Company
covenants with each Initial Purchaser as follows:
(a) To furnish to you in New York City, without
charge, prior to 10:00 a.m. New York City time on the second business day next
succeeding the date of this Agreement and during the period mentioned in Section
6(c), as many copies of the Final Memorandum, any docu ments incorporated by
reference therein and any supple ments and amendments thereto as you may
reasonably re quest.
(b) Before amending or supplementing either
Memorandum, to furnish to you a copy of each such proposed amendment or
supplement and not to use any such proposed amendment or supplement to which you
reasonably object.
(c) If, during such period after the date hereof and
prior to the date on which all of the Securi ties shall have been sold by the
Initial Purchasers, any event shall occur or condition exist as a result of
which it is necessary to amend or supplement the Final Memoran dum in order to
make the statements therein, in the light of the circumstances when the Final
Memorandum is deliv ered to a purchaser, not misleading, or if, in the opin ion
of counsel for the Initial Purchasers, it is neces sary to amend or supplement
the Final Memorandum to comply with applicable law, forthwith to prepare and
furnish, at its own expense, to the Initial Purchasers,
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either amendments or supplements to the Final Memorandum so that the statements
in the Final Memorandum as so amended or supplemented will not, in the light of
the circumstances when the Final Memorandum is delivered to a purchaser, be
misleading or so that the Final Memorandum, as amended or supplemented, will
comply with applicable law.
(d) To endeavor, in cooperation with the Initial
Purchasers, to qualify the Securities for offer and sale under the securities or
Blue Sky laws of such jurisdictions as you shall reasonably request.
(e) Whether or not the transactions contemplated in
this Agreement are consummated or, subject to the last paragraph of Section 10,
this Agreement is terminated, to pay or cause to be paid all expenses incident
to the performance of its obligations under this Agreement, including: (i) the
fees, disbursements and expenses of the Company's counsel and the Company's
accountants in connection with the issuance and sale of the Securities and all
other fees or expenses in connection with the preparation of each Memorandum
and all amendments and supplements thereto, including all printing costs
associated therewith, and the delivering of copies thereof to the Initial
Purchasers, in the quantities herein above specified, (ii) all costs and
expenses related to the preparation, issuance, transfer and delivery of the
Securities to the Initial Purchasers, including any transfer or other taxes
payable thereon, (iii) the cost of producing any Blue Sky or legal investment
memorandum in connection with the offer and sale of the Securities under state
securities laws and all expenses in connection with the qualification of the
Securities for offer and sale under state securities laws as provided in
Section 6(d) hereof, including filing fees and the reasonable fees and
disbursements of counsel for the Initial Purchasers in connection with such
qualification and in connection with the Blue Sky or legal investment
memorandum, (iv) any fees charged by rating agencies for the rating of the
Securities, (v) all legal fees and expenses of counsel to the Initial Purchasers
in connection with the preparation, negotiation, execution and delivery of this
Agreement, the Financing Agreements and the other Fundamental Documents, (vi)
the fees and expenses, if any, incurred in connection with the admission
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of the Securities for trading in any appropriate market system, (vii) the costs
and charges of the Trustee and any transfer agent, registrar or depositary,
(viii) the costs and expenses of the Company relating to investor presentations
on any "road show" undertaken in connection with the marketing of the offering
of the Securities, including, without limitation, expenses associated with the
production of road show slides and graphics, travel and lodging expenses of the
representatives and officers of the Company and (ix) all other cost and expenses
incident to the performance of the obligations of the Company hereunder or under
the Fundamental Documents for which provision is not otherwise made in this
Section. It is understood, however, that except as provided in this Section,
Section 8, and the last paragraph of Section 10, the Initial Purchasers will
pay all of their costs and expenses, transfer taxes payable on resale of any of
the Securities by them and any advertising expenses connected with any offers
they may make.
(f) Neither the Company nor any Affiliate will sell,
offer for sale or solicit offers to buy or otherwise negotiate in respect of any
security (as defined in the Securities Act) which could be integrated with the
sale of the Securities in a manner which would require the registration under
the Securities Act of the Securities.
(g) Not to solicit any offer to buy or offer or sell
the Securities by means of any form of general solicitation or general
advertising (as those terms are used in Regulation D under the Securities Act)
or in any manner involving a public offering within the meaning of Section 4(2)
of the Securities Act.
(h) While any of the Securities remain "restricted
securities" within the meaning of the Securities Act, to make available, upon
request, to any seller of such Securities the information specified in Rule
144A(d)(4) under the Securities Act, unless the Company is then subject to
Section 13 or 15(d) of the Exchange Act.
(i) None of the Company, its Affiliates or any person
acting on its or their behalf (other than the Initial Purchasers) will engage in
any directed
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selling efforts (as that term is defined in Regulation S) with respect to the
Securities, and the Company and its Affiliates and each person acting on its or
their behalf (other than the Initial Purchasers) will comply with the offering
restrictions requirement of Regulation S.
(j) During the period of two years after the Closing
Date, the Company will not, and will not permit any of its affiliates (as
defined in Rule 144A under the Securities Act) to resell any of the Securities
which constitute "restricted securities" under Rule 144A that have been
reacquired by any of them, except in compliance with the Securities Act.
7. Offering of Securities; Restrictions on Transfer. (a) Each
Initial Purchaser, severally and not jointly, represents and warrants that such
Initial Purchaser is a qualified institutional buyer as defined in Rule 144A
under the Securities Act (a "QIB"). Each Initial Purchaser, severally and not
jointly, agrees with the Company that (i) it will not solicit offers for, or
offer or sell, such Securities by any form of general solicitation or general
advertising (as those terms are used in Regulation D under the Securities Act)
or in any manner involving a public offering within the meaning of Section 4(2)
of the Securities Act and (ii) it will solicit offers for such Securities only
from, and will offer such Securities only to, persons that it reasonably
believes to be (A) in the case of offers inside the United States, (1) QIBs or
(2) other institutional accredited investors (as defined in Rule 501(a)(1),
(2), (3) or (7) under the Securities Act ("INSTITUTIONAL ACCREDITED INVESTORS")
that, prior to their purchase of the Securities, deliver to such Initial
Purchaser a letter substantially in the form set forth in Appendix III to the
Memorandum and (B) in the case of offers outside the United States, to persons
other than U.S. persons ("FOREIGN PURCHASERS," which term shall include dealers
or other professional fiduciaries in the United States acting on a discretionary
basis for foreign beneficial owners (other than an estate or trust)) in
reliance upon Regulation S under the Securities Act that, in each case, in
purchasing such Securities are deemed to have represented and agreed as provided
in the Final Memorandum under the caption "Transfer Restrictions".
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(b) Each Initial Purchaser, severally and not
jointly, represents, warrants, and agrees with respect to offers and sales
outside the United States that:
(i) such Initial Purchaser understands that
no action has been or will be taken in any jurisdiction by the Company
that would permit a public offering of the Securities, or possession or
distribution of either Memorandum or any other offering or publicity
material relating to the Securities, in any country or jurisdiction
where action for that purpose is required;
(ii) such Initial Purchaser will comply with
all applicable laws and regulations in each jurisdiction in which it
acquires, offers, sells or delivers Securities or has in its
possession or distributes either Memorandum or any such other material,
in all cases at its own expense;
(iii) the Securities have not been
registered under the Securities Act and may not be offered or sold
within the United States or to, or for the account or benefit of, U.S.
persons except in accordance with Rule 144A or Regulation S under the
Securities Act or pursuant to another exemption from the registration
requirements of the Securities Act;
(iv) such Initial Purchaser has offered the
Securities and will offer and sell the Securities (A) as part of their
distribution at any time and (B) other wise until 40 days after the
later of the commencement of the offering and the Closing Date, only
in accordance with Rule 903 of Regulation S or as otherwise permitted
in Section 7(a); accordingly, neither such Initial Purchaser, its
Affiliates nor any persons acting on its or their behalf have engaged
or will engage in any directed selling efforts (within the meaning of
Regulation S) with respect to the Securities, and any such Initial
Purchaser, its Affiliates
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and any such persons have complied and will comply with the offering
restrictions requirement of Regulation S;
(v) such Initial Purchaser has (A) not
offered or sold and, prior to the date six months after the Closing
Date, will not offer or sell any Securities to persons in the United
Kingdom except to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as principal
or agent) for the purposes of their businesses or otherwise in
circumstances which have not resulted and will not result in an offer
to the public in the United Kingdom within the meaning of the Public
Offers of Securities Regulations 1995; (B) complied and will comply
with all applicable provisions of the Financial Services Xxx 0000 with
respect to anything done by it in relation to the Securities in, from
or otherwise involving the United Kingdom, and (C) only issued or
passed on and will only issue or pass on in the United Kingdom any
document received by it in connection with the issue of the Securities
to a person who is of a kind described in Article 11(3) of the
Financial Services Xxx 0000 (Investment Advertisements) (Exemptions)
Order 1996 or is a person to whom such document may otherwise lawfully
be issued or passed on;
(vi) such Initial Purchaser understands
that the Securities have not been and will not be registered under the
Securities and Exchange Law of Japan, and represents that it has not
offered or sold, and agrees not to offer or sell, directly or
indirectly, any Securities in Japan or for the account of any resident
thereof except pursuant to any exemption from the registration
requirements of the Securities and Exchange Law of Japan and otherwise
in compliance with applicable provisions of Japanese law; and
(vii) such Initial Purchaser agrees that, at
or prior to confirma-
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tion of sales of the Securities, it will have sent to each distributor,
dealer or person receiving a selling concession, fee or other
remuneration that purchases Securities from it during the
restricted period a confirmation or notice to substantially the
following effect:
"The Securities covered hereby have not been registered under
the U.S. Securities Act of 1933 (the "Securities Act") and may not be offered
and sold within the United States or to, or for the account or benefit of, U.S.
persons (i) as part of their distribution at any time or (ii) otherwise until 40
days after the later of the commencement of the offering and the closing date,
except in either case in accordance with Regulation S (or Rule 144A if
available) under the Securities Act. Terms used above have the meaning given to
them by Regulation S." Terms used in this Section 7(b) have the meanings given
to them by Regulation S.
8. Indemnity and Contribution. (a) The Company agrees to
indemnify and hold harmless each Initial Purchaser and each person, if any, who
controls any Initial Purchaser within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in either Memorandum (as
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto), or caused by any omission or alleged omission to state
therein a material fact necessary to make the statements therein in the light of
the circumstances under which they were made not misleading, except insofar as
such losses, claims, damages or liabilities are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information relating to any Initial Purchaser furnished to the Company in
writing by such Initial Purchaser through you expressly for use therein.
(b) Each Initial Purchaser agrees, severally and not
jointly, to indemnify and hold harmless the
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Company, its directors, its officers and each person, if any, who controls the
Company within the meaning of either Section 15 of the Securities Act or Section
20 of the Exchange Act to the same extent as the foregoing indemnity from the
Company to such Initial Purchaser, but only with reference to information
relating to such Initial Purchaser furnished to the Company in writing by such
Initial Purchaser through you expressly for use in either Memorandum or any
amendments or supplements thereto.
(c) In case any proceeding (including any
governmental investigation) shall be instituted involving any person in respect
of which indemnity may be sought pursuant to Section 8(a) or 8(b), such person
(the "INDEMNIFIED PARTY") shall promptly notify the person against whom such
indemnity may be sought (the "INDEMNIFYING PARTY") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding
and shall pay the fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the right
to retain its own counsel, but the fees and expenses of such counsel shall be at
the expense of such indemnified party unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such counsel or
(ii) the named parties to any such proceeding (including any impleaded parties)
include both the indemnifying party and the indemnified party and representation
of both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the fees and expenses of more than one
separate firm (in addition to any local counsel) for all such indemnified
parties and that all such fees and expenses shall be reimbursed as they are
incurred. Such firm shall be designated in writing by Xxxxxx Xxxxxxx & Co.
Incorporated, in the case of parties indemnified pursuant to Section 8(a), and
by the Company, in the case of parties indemnified pursuant to Section 8(b). The
indemnifying party shall not be liable for any
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settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment. Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel as contemplated by the second and third sentences of this paragraph,
the indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
(d) To the extent the indemnification provided for in
Section 8(a) or 8(b) is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
each indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Initial Purchasers on
the other hand from the offering of the Securities or (ii) if the allocation
provided by clause 8(d)(i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause 8(d)(i) above but also the relative fault of the Company on the one
hand and of the Initial Purchasers on the other hand in connection with the
statements or omissions that resulted in such losses,
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claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Initial Purchasers on the other hand in connection with the offering of
the Securities shall be deemed to be in the same respective proportions as the
net proceeds from the offering of the Securities (before deducting expenses)
received by the Company and the total discounts and commissions received by the
Initial Purchasers, in each case as set forth in the Final Memorandum, bear to
the aggregate offering price of the Securities. The relative fault of the
Company on the one hand and of the Initial Purchasers on the other hand shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Company or by the
Initial Purchasers and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Initial Purchasers' respective obligations to contribute pursuant to this
Section 8 are several in proportion to the respective principal amount of
Securities they have purchased hereunder, and not joint.
(e) The Company and the Initial Purchasers agree
that it would not be just or equitable if contribution pursuant to this Section
8 were determined by pro rata allocation (even if the Initial Purchasers were
treated as one entity for such purpose) or by any other method of allocation
that does not take account of the equitable considerations referred to in
Section 8(d). The amount paid or payable by an indemnified party as a result of
the losses, claims, damages and liabilities referred to in Section 8(d) shall be
deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8, no Initial Purchaser shall be required to
contribute any amount in excess of the amount by which the total price at which
the Securities resold by it in the initial placement of such Securities were
offered to investors exceeds the amount of any damages that such Initial
Purchaser has otherwise been required to pay by reason of such untrue or alleged
untrue statement or
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omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 8 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
(f) The indemnity and contribution provisions
contained in this Section 8 and the representations, warranties and other
statements of the Company contained in this Agreement shall remain operative and
in full force and effect regardless of (i) any termination of this Agreement,
(ii) any investigation made by or on behalf of any Initial Purchaser or any
person controlling any Initial Purchaser or by or on behalf of the Company, its
officers or directors or any person controlling the Company and (iii) acceptance
of and payment for any of the Securities.
9. Termination. This Agreement shall be subject to termination
by notice given by you to the Company, if (a) after the execution and delivery
of this Agreement and prior to the Closing Date (i) trading generally shall have
been suspended or materially limited on or by, as the case may be, any of the
New York Stock Exchange, the American Stock Exchange or the National Association
of Securities Dealers, Inc., (ii) trading of any securities of the Company shall
have been suspended on any exchange or in any over-the-counter market, (iii) a
general moratorium on commercial banking activities in New York shall have been
declared by either Federal or New York State authorities or (iv) there shall
have occurred any outbreak or escalation of hostilities or any change in
financial markets or any calamity or crisis that, in your reasonable judgment,
is material and ad verse and (b) in the case of any of the events specified in
clauses 9(a)(i) through 9(a)(iv), such event, singly or together with any other
such event, makes it, in your reasonable judgment, impracticable to market the
Securities on the terms and in the manner contemplated in the Final Memorandum.
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10. Effectiveness; Defaulting Initial Purchasers. This
Agreement shall become effective upon the execution and delivery hereof by the
parties hereto.
If, on the Closing Date, any one or more of the Initial
Purchasers shall fail or refuse to purchase Securities that it or they have
agreed to purchase hereunder on such date, and the aggregate principal amount of
Securities which such defaulting Initial Purchaser or Initial Purchasers agreed
but failed or refused to purchase is not more than one-tenth of the aggregate
principal amount of Securities to be purchased on such date, the other Initial
Purchasers shall be obligated severally in the proportions that the principal
amount of Securities set forth opposite their respective names in Schedule I
bears to the aggregate principal amount of Securities set forth opposite the
names of all such non-defaulting Initial Purchasers, or in such other pro
portions as you may specify, to purchase the Securities which such defaulting
Initial Purchaser or Initial Purchasers agreed but failed or refused to purchase
on such date; provided that in no event shall the principal amount of Securities
that any Initial Purchaser has agreed to purchase pursuant to this Agreement be
increased pursuant to this Section 10 by an amount in excess of one-ninth of
such principal amount of Securities without the written consent of such Initial
Purchaser. If, on the Closing Date any Initial Purchaser or Initial Purchasers
shall fail or refuse to purchase Securities which it or they have agreed to
purchase hereunder on such date and the aggregate principal amount of Securities
with respect to which such default occurs is more than one-tenth of the
aggregate principal amount of Securities to be purchased on such date, and
arrangements satisfactory to you and the Company for the purchase of such
Securities are not made within 36 hours after such default, this Agreement shall
terminate without liability on the part of any non-defaulting Initial Purchaser
or of the Company. In any such case either you or the Company shall have the
right to postpone the Closing Date, but in no event for longer than seven
business days, in order that the required changes, if any, in the Final
Memorandum or in any other documents or arrangements may be effected. Any action
taken under this paragraph shall not relieve any defaulting Initial
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Purchaser from liability in respect of any default of such Initial Purchaser
under this Agreement.
If this Agreement shall be terminated by the Initial
Purchasers, or any of them, because of any failure or refusal on the part of
the Company to comply with the terms or to fulfill any of the conditions of this
Agreement, or if for any reason the Company shall be unable to perform its
obligations under this Agreement, in either case other then in connection with a
termination specified in Section 9, the Company will reimburse the Initial
Purchasers or such Initial Purchasers as have so terminated this Agreement with
respect to themselves, severally, for all out-of-pocket expenses (including the
fees and disbursements of their counsel) reasonably incurred by such Initial
Purchasers in connection with this Agreement or the offering contemplated
hereunder.
11. Counterparts. This Agreement may be signed in any number
of counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
12. Applicable Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
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13. Headings. The headings of the sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed a
part of this Agreement.
Very truly yours,
UNITED AIR LINES, INC.
By: /s/ XXXXXX X. XXXXXX
------------------------------------------
Name: XXXXXX X. XXXXXX
Title: VICE PRESIDENT AND TREASURER
Accepted as of the date hereof
Xxxxxx Xxxxxxx & Co. Incorporated
BT Alex. Xxxxx Incorporated
Citicorp Securities, Inc.
Credit Suisse First Boston Corporation
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Acting severally on behalf of themselves and the
several Initial Purchasers named in Schedule I hereto.
By: Xxxxxx Xxxxxxx & Co. Incorporated
By: /s/ Xxxxxx X. Xxxxxx, Xx.
------------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Principal
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