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EXHIBIT 4.17
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Doc. No. 1.01
Aircraft N398UA
________________________________________________________________
FIRST AMENDMENT TO PARTICIPATION AGREEMENT
(1994 737 B)
Dated January 26, 1996
Among
UNITED AIR LINES, INC.,
Lessee,
MS FINANCING INC.,
Owner Participant,
THE MITSUBISHI TRUST AND BANKING CORPORATION,
acting through its New York Branch
and
NATIONAL WESTMINSTER BANK PLC, acting through
its New York or Nassau Branch,
Original Loan Participants,
FIRST SECURITY BANK OF UTAH, NATIONAL ASSOCIATION,
Not in its Individual Capacity,
except as expressly provided herein,
but solely as Owner Trustee,
and
STATE STREET BANK AND TRUST COMPANY,
In its Individual Capacity and as Indenture Trustee
___________________________
United Air Lines, Inc.
1994 737 B Equipment Trust
One Boeing 737-322 Aircraft
_____________________________
_________________________________________________________________
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FIRST AMENDMENT TO PARTICIPATION AGREEMENT
(1994 737 B)
THIS FIRST AMENDMENT TO PARTICIPATION AGREEMENT (1994 737 B)
dated January 26, 1996 (this "Amendment") by and among (i) UNITED AIR LINES,
INC., a Delaware corporation (the "Lessee"), (ii) MS FINANCING INC., a Delaware
corporation (the "Owner Participant"), (iii) FIRST SECURITY BANK OF UTAH,
NATIONAL ASSOCIATION, a national banking association, not in its individual
capacity, except as expressly provided herein, but solely as Owner Trustee
under the Trust Agreement (the "Owner Trustee"), (iv) THE MITSUBISHI TRUST AND
BANKING CORPORATION, acting through its New York Branch, and NATIONAL
WESTMINSTER BANK PLC, acting through its New York or Nassau Branch (each, an
"Original Loan Participant" and, collectively, the "Original Loan
Participants"), and (v) STATE STREET BANK AND TRUST COMPANY, a Massachusetts
trust company, in its individual capacity and as Indenture Trustee under the
Trust Indenture (the "Indenture Trustee"), amends that certain Participation
Agreement (1994 737 B) dated as of September 1, 1994 by and among Lessee, the
Owner Participant, the Owner Trustee, the Existing Original Loan Participants
(as defined below) and the Indenture Trustee (the "Participation Agreement").
WITNESSETH:
WHEREAS, except as otherwise defined in this Amendment,
capitalized terms used herein shall have the meanings attributed thereto in the
Participation Agreement;
WHEREAS, as contemplated by Section 20 of the Participation
Agreement, the outstanding Certificates held by The Mitsubishi Trust and
Banking Corporation, New York Branch and Compagnie Financiere de CIC et de
L'Union Europeenne (the "Existing Original Loan Participants") are being
refinanced by (i) the issuance to the Original Loan Participants of new
Certificates in the aggregate principal amount of $9,759,596.02 to The
Mitsubishi Trust and Banking Corporation and $9,759,596.01 to National
Westminster Bank plc, the proceeds of which are, concurrently with the
execution and delivery of this Amendment, being applied to the payment to the
Existing Original Loan Participants of the outstanding principal amount of the
outstanding Certificates, and (ii) the payment by the Lessee of all accrued and
unpaid interest on the outstanding Certificates to the Existing Original Loan
Participants in an amount equal to $88,507.27 (as a prepayment of the next
payment of Basic Rent under the Lease);
WHEREAS, concurrently herewith the Lessee and the Owner
Trustee are entering into that certain First Amendment to Lease
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[First Amendment to
Participation Agreement (1994 737 B)]
Agreement (1994 737 B) dated the date hereof (the "First Amendment to Lease
Agreement") and that certain Second Amendment to Lease Agreement (1994 737 B)
dated the date hereof (the "Second Amendment to Lease Agreement");
WHEREAS, concurrently herewith the Owner Trustee and the
Indenture Trustee are entering into that certain Third Amendment to Trust
Indenture and Security Agreement (1994 737 B) dated the date hereof (the "Third
Amendment to Trust Indenture");
WHEREAS, in connection with the refinancing of the outstanding
Certificates, the parties hereto desire to amend the Participation Agreement in
certain respects;
NOW, THEREFORE, in consideration of the mutual agreements
herein contained, the parties hereto agree as follows:
SECTION 1. Amendments to Section 7 of the Participation
Agreement. Section 7 of the Participation Agreement is hereby amended as
follows:
(a) Section 7(b)(ii)(14) is hereby amended by deleting
the period at the end thereof and inserting "; and" in lieu thereof.
(b) A new subsection (15) is hereby added, immediately
after Section 7(b)(ii)(14), which Section 7(b)(ii)(15) shall be and read in its
entirety as follows:
"(15) to any Tax imposed on any Indemnitee as a
result of a "prohibited transaction" as defined in Section 406
of ERISA or Section 4975(c)(1) of the Code to the extent such
Tax arises from or is attributable to the incorrectness of a
representation or warranty made by such Indemnitee."
SECTION 2. Amendments to Section 8 of the Participation
Agreement. Section 8 of the Participation Agreement is hereby amended as
follows:
(a) Section 8(o) is hereby amended by inserting,
immediately after the reference to "Section 3(3) of ERISA", the following
phrase:
", or any plan subject to the provisions of Section
4975 of the Code"
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[First Amendment to
Participation Agreement (1994 737 B)]
(b) Section 8(r) is hereby amended to be and to read in
its entirety as follows:
"(r) Subject to compliance by Lessee with all of
its obligations under the Lessee Documents, each of the Owner
Trustee, the Indenture Trustee, each Holder and the Owner
Participant covenants and agrees that, at Lessee's expense on
a net after-tax basis (including, without limitation,
reasonable attorney's fees and expenses of each of such
parties), (i) Lessee may elect to terminate the Lease and to
purchase the Aircraft pursuant to Section 19(b) of the Lease
and that each of such parties will execute and deliver
appropriate documentation transferring all right, title and
interest in the Aircraft to Lessee (without recourse or
warranty except as to Lessor Liens (including for this purpose
Liens that would be Lessor Liens but for the proviso to the
definition of Lessor Liens) with respect to the Owner
Participant) (including without limitation, such bills of sale
and other instruments and documents as Lessee shall reasonably
request to evidence (on the public record or otherwise) such
transfer and the vesting of all right, title and interest in
and to the Aircraft in Lessee), and (ii) Lessee, in connection
with such purchase and subject to the provisions of the second
paragraph of this Section 8(r), may assume (and receive a
credit in an amount equal to the principal amount of the debt
assumed against the purchase price payable by Lessee pursuant
to Section 19(b) of the Lease) the obligations of the Owner
Trustee pursuant to Section 2.15 of the Trust Indenture and
the Certificates (and the Lease, to the extent that the Owner
Trustee's obligations thereunder are incorporated into the
Trust Indenture or the Certificates), and Lessee shall confirm
that its obligations under the Lease shall be direct
obligations to the Indenture Trustee as if set forth in the
Trust Indenture, and that each of the parties shall execute
and deliver appropriate documentation in form and substance
reasonably satisfactory to such parties under which Lessee
will assume such obligations on the basis of full recourse to
Lessee, maintaining the security interest in the Aircraft
created by the Trust
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[First Amendment to
Participation Agreement (1994 737 B)]
Indenture, releasing the Owner Participant and the Owner
Trustee from all future obligations in respect of the
Certificates, the Trust Indenture and all other Operative
Documents and all such other actions (including the furnishing
of legal opinions reasonably requested by any party) as are
reasonably necessary to permit such assumption by Lessee.
If Lessee elects to assume the rights and obligations
of the Owner Trustee in accordance with Section 2.15 of the
Trust Indenture in connection with the purchase by the Lessee
of the Aircraft pursuant to Section 19(b) of the Lease and to
pay the EBO Percentage in installments as permitted thereby,
then:
(A) in addition to the provisions contemplated
above, the Trust Indenture shall be amended (1) to provide for
an additional series of loan certificates (the "EBO
Certificates") to be issued to the Owner Participant on the
EBO Date to evidence the payment of the EBO Price in
installments on the dates specified in Exhibit H to the Lease
(taking into account the credit provided for above), (2) to
provide that the Indenture Trustee will make no distributions
to the Owner Participant or the Owner Trustee or otherwise in
respect of the EBO Certificates prior to the payment in full
of all amounts of principal and interest then due and payable
to the other Holders or, if and so long as an "Event of
Default" under the Trust Indenture with respect to payments
thereunder shall have occurred and be continuing, prior
(unless such Certificates shall have been purchased by the
Owner Participant) to the payment in full of the principal
amount of, and interest accrued on, the Certificates other
than the EBO Certificates, (3) to include the failure to pay
any installments of the EBO Certificates within 10 calendar
days of when due as an Event of Default, (4) to include a
right so long as the EBO Certificates shall be outstanding for
the Owner Participant to purchase the other Certificates under
circumstances similar to, and on the same terms as provided
in, Section 2.14 of the Trust Indenture (it being understood
that upon
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[First Amendment to
Participation Agreement (1994 737 B)]
any assumption pursuant to Section 2.15 of the Trust
Indenture, the provisions of the Trust Indenture intended for
the benefit of the Owner Participant (other than provisions
concerning, but only to the extent applicable to, Excluded
Payments), including, without limitation, Sections 4.03
(excluding the first sentence thereof) and 4.04(a) of the
Trust Indenture providing the Owner Trustee or the Owner
Participant with certain rights, shall be of no further force
and effect), (5) to provide that the Owner Participant and the
Owner Trustee shall have no voting or consent rights under the
Trust Indenture by reason of being the holder of the EBO
Certificates until all other Certificates have either been
paid in full or been purchased by the Owner Participant
(pursuant to the provisions contemplated by clause (A)(4) of
this Section 8(r) by the reference therein to Section 2.14 of
the Trust Indenture), except that without the consent of the
Owner Participant the Trust Indenture could not be amended,
modified or supplemented to reduce the amount or extend the
time of payment of any amount owing or payable under the EBO
Certificates, (6) to confirm that, although the Owner
Participant cannot participate in the exercise of remedies
under the Trust Indenture, it shall not be precluded form
demanding, collecting, suing for or otherwise receiving and
enforcing payment of the EBO Certificates by demand upon
Lessee and (7) to insure that the holders of the EBO
Certificates are entitled to the rights described in clause
(iii) of the proviso in Section 3.01 of the Trust Indenture;
and
(B) upon Lessee's payment in full of all amounts
due on or prior to the EBO Date in accordance with Section
19(b) of the Lease and compliance with all of the conditions
to such assumption in accordance with this Section 8(r) and
Section 2.15 of the Trust Indenture, (1) the Owner Trustee
shall assign the right to the remaining installments of the
EBO Price to the Owner Participant, (2) the EBO Certificates
shall be issued to the Owner Participant in aggregate amount
of such remaining installments of the EBO Price and (3) the
Owner Trustee (AA) shall
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[First Amendment to
Participation Agreement (1994 737 B)]
transfer to Lessee, without recourse or warranty (except as to
the absence of Lessor Liens) and on an "as is" basis, all
right, title and interest of the Owner Trustee in and to the
Aircraft and (BB) shall furnish to or at the direction of
Lessee one or more bills of sale in form and substance
reasonably satisfactory to Lessee evidencing such transfer."
(c) Section 8(y) is hereby amended by deleting the phrase
"that at least one" which appears therein and inserting in lieu thereof the
following phrase:
"both that the acquisition and holding of the Certificates
will not constitute a "prohibited transaction" within the
meaning of Section 406(b) of ERISA or Code Section
4975(c)(1)(E) or (F), and that at least one"
(d) Section 8(y)(ii) is hereby amended to be and to read
in its entirety as follows:
"(ii) such Person is an insurance company and (A)
such funds constitute assets allocated to a separate account
maintained by it which is a "pooled separate account" (within
the meaning of Section 3(17) of ERISA and Prohibited
Transaction Class Exemption 90-1 issued by the Department of
Labor ("PTE 90-1")) in which an ERISA Plan has an interest and
the acquisition and holding of Certificates is entitled to a
prohibited transaction exemption granted by PTE 90-1 or (B)
such funds are assets of an insurance company general account,
as such term is used in Prohibited Transaction Class Exemption
95-60 issued by the Department of Labor ("PTE 95-60"), that
are deemed to be assets of an ERISA Plan, and the acquisition
and holding of the Certificates is entitled to a prohibited
transaction exemption granted by PTE 95-60; or"
SECTION 3. Amendment to Section 15 of the Participation
Agreement. The second sentence of Section 15(c) of the Participation Agreement
is hereby amended by inserting the phrase ", the Owner Participant" immediately
following the words "the Indenture Trustee" therein.
SECTION 4. Amendment to Section 16 of the Participation
Agreement. Section 16 of the Participation
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[First Amendment to
Participation Agreement (1994 737 B)]
Agreement is hereby amended by deleting the words "0.5% of Lessor's Cost" which
appear therein and inserting the words "1.3433597% of Lessor's Cost" in lieu
thereof.
SECTION 5. Amendments to Section 18 of the Participation
Agreement. Section 18 of the Participation Agreement is hereby amended as
follows:
(a) Section 18(a) is hereby amended by deleting the words
"0.5% of Lessor's Cost" which appear therein and inserting the words
"1.3433597% of Lessor's Cost" in lieu thereof.
(b) Section 18(b) is hereby amended to be and read in its
entirety as follows:
"(b) In connection with optimization adjustments of
Basic Rent, Interim Rent, Excess Amount, Stipulated Loss Value
percentages, Termination Value percentages and EBO percentage
pursuant to this Section 18 and Section 3(c) of the Lease, (M)
the Holders will agree to changes in the amortization schedule
of the Certificates, and (N) each Holder will exchange the
Certificates held by it immediately prior to such optimization
for new Certificates containing optimized amortization
schedules; provided, that such changes do not (W) increase or
decrease the principal amount of the Certificates outstanding
as of the time of such exchange, (X) change the final maturity
date of any Certificate, or (Y) increase or decrease by more
than six months the original weighted average life to maturity
(determined as of the 1996 Refinancing Date) of the
Certificates."
SECTION 6. Amendments to Section 20 of the Participation
Agreement. The first sentence of Section 20(a) of the Participation Agreement
is hereby amended to be and read in its entirety as follows:
"The parties hereto acknowledge and agree that the
Certificates issued to the Existing Original Loan Participants
(as defined in the First Amendment to Participation Agreement)
have been refinanced by Certificates issued to the Original
Loan Participants (as defined in the First Amendment to
Participation Agreement) pursuant to the terms of this Section
20 on the 1996 Refinancing Date."
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[First Amendment to
Participation Agreement (1994 737 B)]
SECTION 7. Ratification; References to Participation Agreement.
Except as amended hereby, the Participation Agreement continues and shall
remain in full force and effect in all respects. From and after the date of
this Amendment, each and every reference in the Participation Agreement, as
amended hereby, to "this Agreement", "herein", "hereof" or similar words and
phrases referring to the Participation Agreement or any word or phrase
referring to a section or provision of the Participation Agreement is deemed
for all purposes to be a reference to the Participation Agreement or such
section or provision as amended pursuant to this Amendment.
SECTION 8. Miscellaneous. This Amendment may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument. Neither this Amendment nor any of
the terms hereof may be terminated, amended, supplemented, waived or modified,
except by an instrument in writing signed by the party against which the
enforcement of the termination, amendment, supplement, waiver or modification
is sought; and no such termination, amendment, supplement, waiver or
modification shall be effective unless a signed copy thereof shall have been
delivered to the Lessee, the Indenture Trustee, the Owner Participant and the
Owner Trustee. The terms of this Amendment shall be binding upon, and inure to
the benefit of and shall be enforceable by the parties hereto and their
respective permitted assignees, successors and transferees. THIS AMENDMENT
SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF ILLINOIS, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE. THIS AMENDMENT IS BEING DELIVERED IN THE STATE OF
ILLINOIS.
SECTION 9. Authorization to Execute Amendments. By execution of this
Amendment, the Owner Participant hereby authorizes, directs and instructs the
Owner Trustee to execute and deliver this Amendment, the First Amendment to
Lease Agreement, the Second Amendment to Lease Agreement, the Third Amendment
to Trust Indenture and any and all other amendments, agreements and
certificates as may be necessary or appropriate in connection with the
refinancing consummated concurrently herewith. By execution and delivery of
this Amendment, the Original Loan Participants hereby authorize, direct and
instruct the Indenture Trustee to execute and deliver this Amendment, the Third
Amendment to Trust Indenture and any and all other amendments, agreements and
certificates as may be necessary or appropriate in connection with the
refinancing consummated concurrently herewith. By execution and delivery of
this Amendment, (i) the Lessee hereby consents to the Third Amendment to Trust
Indenture and (ii) Indenture Trustee hereby consents to the First Amendment to
Lease Agreement and the Second Amendment to Lease Agreement.
SECTION 10. Representations. Each Original Loan Participant, by
execution and delivery of this Amendment and acceptance of its Certificate,
hereby makes as of the date hereof the representations and warranties of the
"Original Loan Participant" set forth in Sections 8(d), 8(i), 8(o), 8(x), 8(y)
and 8(z) of the Participation Agreement (after giving effect to the amendments
contained herein) and agrees to be bound by all the terms and conditions of the
Operative Documents applicable to the Original Loan Participant or a Holder of
the Certificate.
* * *
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10
[First Amendment to
Participation Agreement (1994 737 B)]
IN WITNESS WHEREOF, the parties hereto have caused this First
Amendment to Participation Agreement to be duly executed by their respective
officers thereunto duly authorized on the day and year first above written.
UNITED AIR LINES, INC.,
as Lessee
By:
--------------------------------
Vice President and Treasurer
MS FINANCING INC.,
Owner Participant
By:
--------------------------------
THE MITSUBISHI TRUST AND BANKING
CORPORATION, acting through its New
York Branch, an Original Loan
Participant
By:
--------------------------------
NATIONAL WESTMINSTER BANK PLC,
acting through its New York or
Nassau Branch, an Original Loan
Participant
By:
--------------------------------
FIRST SECURITY BANK OF UTAH, NATIONAL
ASSOCIATION, not in its individual
capacity, except as expressly
provided herein, but solely as Owner
Trustee, Owner Trustee
By:
--------------------------------
STATE STREET BANK AND TRUST COMPANY,
Indenture Trustee
By:
--------------------------------
