e8vk
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 15, 2010
UAL CORPORATION
UNITED AIR LINES, INC.
(Exact name of registrant issuer as specified in its charter)
         
Delaware   001-06033   36-2675207
Delaware   001-11355   36-2675206
         
(State or other Jurisdiction of   (Commission File Number)   (IRS Employer Identification No.)
Incorporation)        
     
77 W. Wacker Drive, Chicago, IL   60601
     
(Address of Principal Executive Offices)   (Zip Code)
Registrant’s telephone number, including area code: (312) 997-8000
(Former name or former address if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 

 


 

Item 1.01. Entry into a Material Definitive Agreement.
     On January 15, 2010, United Air Lines, Inc. (“United”), a wholly owned subsidiary of UAL Corporation (the “Company”), completed its previously announced private offerings, consisting of $500,000,000 aggregate principal amount of 9.875% Senior Secured Notes due 2013 (the “Senior Secured Notes”) and $200,000,000 aggregate principal amount of 12.000% Senior Second Lien Notes due 2013 (the “Second Lien Notes” and, together with the Senior Secured Notes, the “Notes”). The Notes were sold only to qualified institutional buyers in accordance with Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”) and to non-U.S. persons in accordance with Regulation S under the Securities Act.
     The Senior Secured Notes were issued under an Indenture, dated as of January 15, 2010 (the “Senior Secured Notes Indenture”), by and among United, the guarantors named therein (the “Guarantors”), The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”) and Wilmington Trust FSB, as collateral trustee (the “Collateral Trustee”). The Senior Secured Notes will mature on August 1, 2013. The interest on the Senior Secured Notes is payable semi-annually on February 1 and August 1 of each year, beginning August 1, 2010. The Senior Secured Notes will be senior secured obligations of United, unconditionally guaranteed on a senior unsecured basis by the Guarantors. The Senior Secured Notes will be secured by United’s route authority to operate between the United States and Japan and beyond Japan to points in other countries, certain airport takeoff and landing slots and airport gate leaseholds utilized in connection with these routes (the “Collateral”). The Second Lien Notes were issued under an Indenture, dated as of January 15, 2010 (the “Second Lien Notes Indenture” and, together with the Senior Secured Notes Indenture, the “Indentures”), by and among United, the Guarantors, the Trustee and the Collateral Trustee. The Second Lien Notes will mature on November 1, 2013. The interest on the Second Lien Notes is payable semi-annually on February 1 and August 1 of each year, beginning August 1, 2010. The Second Lien Notes will be junior secured obligations of United, unconditionally guaranteed on a senior unsecured basis by the Guarantors. The Second Lien Notes will be secured by the Collateral on a junior lien basis. Under certain circumstances, United may be required to pay special interest to holders of the Notes, in an amount equal to 2% per annum of the principal amount of the respective Notes, unless cured pursuant to the terms of the applicable Indenture.
     United, at its option, may redeem some or all of the Senior Secured Notes at any time on or after February 1, 2012 at the redemption prices specified in such notes, plus accrued and unpaid interest and special interest, if any. In addition, at any time prior to February 1, 2012, United, at its option, may redeem: (1) some or all of the Senior Secured Notes at a price equal to 100% of their principal amount plus a “make-whole” premium and accrued and unpaid interest and special interest, if any, and (2) up to 35% of the aggregate principal amount of the Senior Secured Notes with the proceeds of certain equity offerings at the redemption price specified in such notes. In addition, at any time prior to February 1, 2013, United, at its option, may redeem, during any 12-month period, up to 10% of the original aggregate principal amount of the Senior Secured Notes at a redemption price of 103% of their principal amount, plus accrued and unpaid interest and special interest, if any.
     United, at its option, may redeem some or all of the Second Lien Notes at any time on or after February 1, 2012 at the redemption prices specified in such notes, plus accrued and unpaid interest and special interest, if any. In addition, at any time prior to February 1, 2012, United, at its option, may redeem: (1) some or all of the Second Lien Notes at a price equal to 100% of their principal amount plus a “make-whole” premium and accrued and unpaid interest and special interest, if any, and (2) up to 35% of the aggregate principal amount of the Second Lien Notes with the proceeds of certain equity offerings at the redemption price specified in such notes.
     The foregoing descriptions of the Indentures are qualified in their entirety by reference to those agreements and instruments.
Item 2.03. Creation of Direct Financial Obligation.
See Item 1.01.

2


 

Item 9.01. Financial Statements and Exhibits.
     
Exhibit No.   Description
4.1*
  Senior Secured Notes Indenture, dated as of January 15, 2010, among United Air Lines Inc., each of the Guarantors party thereto, The Bank of New York Mellon, N.A., as trustee, and Wilmington Trust FSB, as collateral trustee
 
   
4.2*
  Form of Note representing all 9.875% Senior Secured Notes due 2013 (included in Exhibit 4.1)
 
   
4.3*
  Form of Senior Secured Notes Guarantee (included in Exhibit 4.1)
 
   
4.4*
  Second Lien Notes Indenture, dated as of January 15, 2010, among United Air Lines Inc., each of the Guarantors party thereto, The Bank of New York Mellon, N.A., as trustee, and Wilmington Trust FSB, as collateral trustee
 
   
4.5*
  Form of Note representing all 12.000% Second Lien Notes due 2013 (included in Exhibit 4.4)
 
   
4.6*
  Form of Second Lien Notes Guarantee (included in Exhibit 4.4)
 
*   Filed herewith electronically

3


 

SIGNATURES
     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
             
    UAL CORPORATION    
    UNITED AIR LINES, INC.    
 
           
 
  By:   /s/ Kathryn A. Mikells    
 
  Name:  
 
Kathryn A. Mikells
   
 
  Title:   Executive Vice President and    
 
      Chief Financial Officer    
Date: January 15, 2010

4


 

EXHIBIT INDEX
     
Exhibit No.   Description
4.1*
  Senior Secured Notes Indenture, dated as of January 15, 2010, among United Air Lines Inc., each of the Guarantors party thereto, The Bank of New York Mellon, N.A., as trustee, and Wilmington Trust FSB, as collateral trustee
 
   
4.2*
  Form of Note representing all 9.875% Senior Secured Notes due 2013 (included in Exhibit 4.1)
 
   
4.3*
  Form of Senior Secured Notes Guarantee (included in Exhibit 4.1)
 
   
4.4*
  Second Lien Notes Indenture, dated as of January 15, 2010, among United Air Lines Inc., each of the Guarantors party thereto, The Bank of New York Mellon, N.A., as trustee, and Wilmington Trust FSB, as collateral trustee
 
   
4.5*
  Form of Note representing all 12.000% Second Lien Notes due 2013 (included in Exhibit 4.4)
 
   
4.6*
  Form of Second Lien Notes Guarantee (included in Exhibit 4.4)
 
*   Filed herewith electronically

5

exv4w1
Exhibit 4.1
Execution Version
 
UNITED AIR LINES, INC.
and
EACH OF THE GUARANTORS PARTY HERETO
9.875% SENIOR SECURED NOTES DUE 2013
 
INDENTURE
Dated as of January 15, 2010
 
The Bank of New York Mellon Trust Company, N.A.
as Trustee
and
Wilmington Trust FSB
as Collateral Trustee
 


 

TABLE OF CONTENTS
         
    Page
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
 
       
Section 1.01 Definitions
    1  
Section 1.02 Other Definitions
    36  
Section 1.03 Rules of Construction
    36  
 
       
ARTICLE 2
THE NOTES
 
       
Section 2.01 Form and Dating
    37  
Section 2.02 Execution and Authentication
    37  
Section 2.03 Registrar and Paying Agent
    38  
Section 2.04 Paying Agent to Hold Money in Trust
    38  
Section 2.05 Holder Lists
    39  
Section 2.06 Transfer and Exchange
    39  
Section 2.07 Replacement Notes
    49  
Section 2.08 Outstanding Notes
    49  
Section 2.09 Treasury Notes
    49  
Section 2.10 Temporary Notes
    49  
Section 2.11 Cancellation
    50  
Section 2.12 Defaulted Interest
    50  
Section 2.13 CUSIP Numbers
    50  
Section 2.14 Issuance of Additional Notes
    50  
 
       
ARTICLE 3
REDEMPTION AND PREPAYMENT
 
       
Section 3.01 Notices to Trustee
    51  
Section 3.02 Selection of Notes to Be Redeemed or Purchased
    51  
Section 3.03 Notice of Redemption
    51  
Section 3.04 Effect of Notice of Redemption
    52  
Section 3.05 Deposit of Redemption or Purchase Price
    52  
Section 3.06 Notes Redeemed or Purchased in Part
    53  
Section 3.07 Optional Redemption
    53  
Section 3.08 Mandatory Redemption
    54  
Section 3.09 Special Scheduled Maturity Date
    54  
Section 3.10 Offer to Purchase by Application of Excess Proceeds or Sale of Collateral Consideration
    54  
 
       
ARTICLE 4
COVENANTS
 
       
Section 4.01 Payment of Notes
    56  
Section 4.02 Maintenance of Office or Agency
    57  
Section 4.03 Reports
    57  
Section 4.04 Compliance Certificate
    58  
Section 4.05 Taxes
    59  
Section 4.06 Stay, Extension and Usury Laws
    59  


 

         
    Page
Section 4.07 Restricted Payments
    59  
Section 4.08 Dividend and Other Payment Restrictions Affecting Subsidiaries
    63  
Section 4.09 Incurrence of Indebtedness and Issuance of Preferred Stock
    65  
Section 4.10 Asset Sales
    70  
Section 4.11 Transactions with Affiliates
    75  
Section 4.12 Liens
    77  
Section 4.13 Business Activities
    77  
Section 4.14 Corporate Existence
    77  
Section 4.15 Offer to Repurchase Upon Change of Control
    77  
Section 4.16 Payments for Consent
    79  
Section 4.17 Additional Note Guarantees
    79  
Section 4.18 Designation of Restricted and Unrestricted Subsidiaries
    79  
Section 4.19 Delivery of Appraisals
    80  
Section 4.20 Priority Lien Debt Value Ratio
    80  
Section 4.21 Priority Lien Debt Value Ratio Maintenance
    81  
Section 4.22 Regulatory Cooperation
    82  
Section 4.23 Regulatory Matters; Citizenship; Utilization; Reporting
    82  
Section 4.24 Collateral Ownership
    84  
Section 4.25 Insurance
    84  
Section 4.26 Note Calculations
    84  
 
       
ARTICLE 5
SUCCESSORS
 
       
Section 5.01 Merger, Consolidation, or Sale of Assets
    84  
Section 5.02 Successor Corporation Substituted
    85  
 
       
ARTICLE 6
DEFAULTS AND REMEDIES
 
       
Section 6.01 Events of Default
    86  
Section 6.02 Acceleration
    88  
Section 6.03 Other Remedies
    88  
Section 6.04 Waiver of Past Defaults
    88  
Section 6.05 Control by Majority
    88  
Section 6.06 Limitation on Suits
    89  
Section 6.07 Rights of Holders of Notes to Receive Payment
    89  
Section 6.08 Collection Suit by Trustee
    89  
Section 6.09 Trustee May File Proofs of Claim
    90  
Section 6.10 Priorities
    90  
Section 6.11 Undertaking for Costs
    90  
 
       
ARTICLE 7
TRUSTEE
 
       
Section 7.01 Duties of Trustee
    91  
Section 7.02 Rights of Trustee
    92  
Section 7.03 Individual Rights of Trustee
    92  
Section 7.04 Trustee’s Disclaimer
    93  
Section 7.05 Notice of Defaults
    93  
Section 7.06 Compensation and Indemnity
    93  
Section 7.07 Replacement of Trustee
    94  
Section 7.08 Successor Trustee by Merger, etc
    95  
Section 7.09 Eligibility; Disqualification
    95  

ii


 

         
    Page
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
 
       
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance
    95  
Section 8.02 Legal Defeasance and Discharge
    95  
Section 8.03 Covenant Defeasance
    96  
Section 8.04 Conditions to Legal or Covenant Defeasance
    96  
Section 8.05 Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions
    97  
Section 8.06 Repayment to Company
    98  
Section 8.07 Reinstatement
    98  
 
       
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
 
       
Section 9.01 Without Consent of Holders of Notes
    98  
Section 9.02 With Consent of Holders of Notes
    99  
Section 9.03 Revocation and Effect of Consents
    101  
Section 9.04 Notation on or Exchange of Notes
    101  
Section 9.05 Trustee to Sign Amendments, etc.
    101  
 
       
ARTICLE 10
NOTE GUARANTEES
 
       
Section 10.01 Guarantee
    101  
Section 10.02 Limitation on Guarantor Liability
    102  
Section 10.03 Execution and Delivery of Note Guarantee
    103  
Section 10.04 Guarantors May Consolidate, etc., on Certain Terms
    103  
Section 10.05 Releases
    104  
 
       
ARTICLE 11
SATISFACTION AND DISCHARGE
 
       
Section 11.01 Satisfaction and Discharge
    105  
Section 11.02 Application of Trust Money
    106  
 
       
ARTICLE 12
COLLATERAL AND SECURITY
 
       
Section 12.01 Security Interest
    106  
Section 12.02 Collateral Trust Agreement
    107  
Section 12.03 Release of Liens in Respect of the Notes
    107  
Section 12.04 Collateral Trustee
    107  
 
       
ARTICLE 13
MISCELLANEOUS
 
       
Section 13.01 Notices
    108  
Section 13.02 Certificate and Opinion as to Conditions Precedent
    110  
Section 13.03 Statements Required in Certificate or Opinion
    110  
Section 13.04 Rules by Trustee and Agents
    110  
Section 13.05 No Personal Liability of Directors, Officers, Employees and Stockholders
    110  
Section 13.06 Governing Law
    111  
Section 13.07 No Adverse Interpretation of Other Agreements
    111  
Section 13.08 Successors
    111  
Section 13.09 Severability
    111  

iii


 

         
    Page
Section 13.10 Counterpart Originals
    111  
Section 13.11 Table of Contents, Headings, etc.
    111  

iv


 

EXHIBITS
     
Exhibit A
  FORM OF NOTE
Exhibit B
  FORM OF CERTIFICATE OF TRANSFER
Exhibit C
  FORM OF CERTIFICATE OF EXCHANGE
Exhibit D
  FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Exhibit E
  FORM OF NOTATION OF GUARANTEE
Exhibit F
  FORM OF SUPPLEMENTAL INDENTURE


 

     INDENTURE dated as of January 15, 2010 among United Air Lines, Inc., a Delaware corporation, the Guarantors (as defined), The Bank of New York Mellon Trust Company, N.A., as trustee and Wilmington Trust FSB, as collateral trustee.
     The Company, the Guarantors, the Trustee (as defined) and the Collateral Trustee (as defined) agree as follows for the benefit of each other and for the equal and ratable benefit of the Holders (as defined) of the 9.875% Senior Secured Notes due 2013 (the “Notes”):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions.
     “144A Global Note” means a Global Note substantially in the form of Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of, and registered in the name of, the Depositary or its nominee that will be issued in a denomination equal to the outstanding principal amount of the Notes sold in reliance on Rule 144A.
     “Acquired Debt” means, with respect to any specified Person:
     (1) Indebtedness, Disqualified Stock or preferred stock of any other Person existing at the time such other Person is merged, consolidated or amalgamated with or into such specified Person, or became a Subsidiary of such specified Person, whether or not such Indebtedness is incurred in connection with, or in contemplation of, such other Person merging, consolidating or amalgamating with or into, or becoming a Subsidiary of, such specified Person; and
     (2) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.
     “Act of Required Debtholders” means, as to any matter at any time:
     (1) prior to the Discharge of Priority Lien Obligations, a direction in writing delivered to the Collateral Trustee by or with the written consent of the holders of more than 50% of the sum of:
     (A) the aggregate outstanding principal amount of Priority Lien Debt (including the face amount of outstanding letters of credit whether or not then available or drawn); and
     (B) the aggregate unfunded commitments to extend credit which, when funded, would constitute Priority Lien Debt;
provided, however, that after (i) the termination or expiration of all commitments to extend credit that would constitute Priority Lien Debt, (ii) the payment in full in cash of the principal of and interest and premium (if any) on all Priority Lien Debt (other than any undrawn letters of credit), (iii) the discharge or cash collateralization (at the lower of (x) 105% of the aggregate undrawn amount or (y) the percentage of the aggregate undrawn amount required for release of Liens under the terms of the applicable Priority Lien Document) of all outstanding letters of credit constituting Priority Lien Debt and (iv) the payment in full in cash of all other Priority Lien Obligations other than any Priority Lien Obligations consisting of Banking Product Obligations

1


 

and Hedging Obligations, the term “Act of Required Debtholders” will mean the holders of more than 50% of the sum of the aggregate “settlement amount” (or similar term) (as defined in the applicable Hedge Agreement relating to Priority Lien Obligations consisting of a Hedging Obligation) or, with respect to any such Hedge Agreement that has been terminated in accordance with its terms, the amount then due and payable (including any termination payments then due) under such Hedge Agreement, under all Hedge Agreements relating to Priority Lien Obligations consisting of Hedging Obligations; provided that the “settlement amount” (or similar term) as of the last Business Day of the month preceding any date of determination shall be calculated by the appropriate swap counterparties and reported to the Collateral Trustee upon request; provided further, that any Hedging Obligation with a “settlement amount” (or similar term) that is a negative number shall be disregarded for purposes of all calculations required by the term “Act of Required Debtholders;” and
     (2) at any time after the Discharge of Priority Lien Obligations, a direction in writing delivered to the Collateral Trustee by or with the written consent of the holders of more than 50% of the sum of:
     (A) the aggregate outstanding principal amount of Junior Lien Debt (including the face amount of outstanding letters of credit whether or not then available or drawn); and
     (B) the aggregate unfunded commitments to extend credit which, when funded, would constitute Junior Lien Debt;
provided, however, that after (i) the termination or expiration of all commitments to extend credit that would constitute Junior Lien Debt, (ii) the payment in full in cash of the principal of and interest and premium (if any) on all Junior Lien Debt (other than any undrawn letters of credit), (iii) the discharge or cash collateralization (at the lower of (x) 105% of the aggregate undrawn amount or (y) the percentage of the aggregate undrawn amount required for release of Liens under the terms of the applicable Junior Lien Document) of all outstanding letters of credit constituting Junior Lien Debt and (iv) the payment in full in cash of all other Junior Lien Obligations other than any Junior Lien Obligations consisting of Hedging Obligations, the term “Act of Required Debtholders” will mean the holders of more than 50% of the sum of the aggregate “settlement amount” (or similar term) (as defined in the applicable Hedge Agreement relating to Junior Lien Obligations consisting of a Hedging Obligation) or, with respect to any such Hedge Agreement that has been terminated in accordance with its terms, the amount then due and payable (including any termination payments then due) under such Hedge Agreement, under all Hedge Agreements relating to Junior Lien Obligations consisting of Hedging Obligations; provided that the “settlement amount” (or similar term) as of the last Business Day of the month preceding any date of determination shall be calculated by the appropriate swap counterparties and reported to the Collateral Trustee upon request; provided further, that any Hedging Obligation with a “settlement amount” (or similar term) that is a negative number shall be disregarded for purposes of all calculations required by the term “Act of the Required Debtholders.”
     For purposes of this definition, (a) Secured Debt registered in the name of, or beneficially owned by, the Company or any Affiliate of the Company will not be deemed outstanding, and (b) votes will be determined in accordance with Section 7.2 of the Collateral Trust Agreement.
     “Additional Notes” means an unlimited aggregate principal amount of Notes (other than the Initial Notes) issued on or after the Release Date under this Indenture in accordance with Sections 2.02,

2


 

4.09 and 4.12 hereof which shall have identical terms as the Initial Notes, other than with respect to the date of issuance and issue price.
     “Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, “control,” as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise. For purposes of this definition, the terms “controlling,” “controlled by” and “under common control with” have correlative meanings. No Person (other than Parent or any Subsidiary of Parent) in whom a Receivables Subsidiary makes an Investment in connection with a Qualified Receivables Transaction will be deemed to be an Affiliate of Parent or any of its Subsidiaries solely by reason of such Investment.
     “Agent” means any Registrar, co-registrar, Paying Agent or additional paying agent.
     “Aircraft Mortgage” means an aircraft mortgage in form and substance reasonably acceptable to the Collateral Trustee and the Company.
     “Airport Authority” means any city or any public or private board or other body or organization chartered or otherwise established for the purpose of administering, operating or managing airports or related facilities.
     “Applicable Premium” means, with respect to any Note on any redemption date, the greater of:
     (1) 1.0% of the principal amount of the Note; and
     (2) the excess of: (A) the present value at such redemption date of (i) the redemption price of such Note at February 1, 2012, (such redemption price being set forth in Section 3.07(e) hereof), plus (ii) all required interest payments due on the Note through February 1, 2012, (excluding accrued and unpaid interest to the redemption date), computed using a discount rate equal to the Treasury Rate as of such redemption date plus 50 basis points; over (B) the principal amount of such Note.
     “Applicable Procedures” means, with respect to any transfer or exchange of or for beneficial interests in any Global Note, the rules and procedures of the Depositary, Euroclear and Clearstream that apply to such transfer or exchange.
     “Appraisal” means an appraisal, dated the date of delivery thereof, prepared by SH&E, Inc. or another independent appraisal firm appointed by the Company and reasonably satisfactory to the Trustee, which certifies, at the time of determination, in reasonable detail the Appraised Value of the Collateral and, except in the case of Cure Collateral or Qualified Replacement Assets not constituting Japan Routes, Japan Slots or Japan Gate Leaseholds, is consistent in all material respects with the Appraisal delivered to the Trustee on the date of the Indenture and described in the Offering Memorandum under the caption “Description of the collateral—Appraisal.”
     “Appraised Value” means, as of any date of determination, the sum of (a) the aggregate fair market value of all Collateral (other than cash and Cash Equivalents pledged as Cure Collateral or maintained in the Collateral Proceeds Account) owned by the Company as of that date, as reflected in the most recent Appraisal delivered to the Trustee as of that date plus (b) 150% of the amount of cash and Cash Equivalents pledged at such time as Cure Collateral or maintained in the Collateral Proceeds Account.

3


 

     “Asset Sale” means:
     (1) the sale, lease, conveyance, transfer or other disposition of any assets or rights (whether voluntarily, or in an involuntary transaction that generates Net Proceeds) by Parent or any of its Restricted Subsidiaries (any of the foregoing, a “disposition”); provided that the sale, lease, conveyance or other disposition of all or substantially all of the assets of Parent and its Restricted Subsidiaries taken as a whole will be governed by Sections 4.15 and/or 5.01 hereof and not by Section 4.10; and
     (2) the issuance or sale of Equity Interests (other than directors’ qualifying shares and shares issued to foreign nationals or other third parties to the extent required by applicable law) of any of Parent’s Restricted Subsidiaries, including any sale for cash.
Notwithstanding the preceding, none of the following items will be deemed to be an Asset Sale:
     (1) any single transaction or series of related transactions that involves assets having a Fair Market Value of less than $10.0 million;
     (2) dispositions between or among Parent and its Restricted Subsidiaries;
     (3) an issuance or sale of Equity Interests by a Restricted Subsidiary of Parent to Parent or to a Restricted Subsidiary of Parent;
     (4) the disposition of products, services or accounts receivable and other properties or assets that do not constitute the Japan Routes, Japan Slots, Japan Gate Leaseholds or any property or asset that constitutes Collateral in the ordinary course of business and any other disposition of damaged, worn-out, uneconomical or obsolete properties or assets that do not constitute the Japan Routes, Japan Slots, Japan Gate Leaseholds or any property or asset that constitutes Collateral in the ordinary course of business;
     (5) licenses, sublicenses, leases and subleases by Parent or any of its Restricted Subsidiaries of software or intellectual property in the ordinary course of business;
     (6) any surrender or waiver of contract rights or settlement, release, recovery on or surrender of contract, tort or other claims in the ordinary course of business;
     (7) the granting of Liens not prohibited by Section 4.12 hereof;
     (8) the sale or other disposition of cash or Cash Equivalents that do not constitute Collateral;
     (9) a Restricted Payment that does not violate Section 4.07 hereof or a Permitted Investment, in each case other than a Restricted Payment or a Permitted Investment involving the Japan Routes, Japan Slots, Japan Gate Leaseholds or any property or asset that constitutes Collateral;
     (10) the abandonment of assets no longer useful or used in the business; provided, that such abandonment is (A) in the ordinary course of business consistent with past practices and (B) with respect to assets that are not material to the business of Parent and its Restricted Subsidiaries;

4


 

     (11) the sale or discount of accounts to a collection agency in connection with collections of delinquent receivables, or in a bankruptcy or similar proceeding;
     (12) any disposition of Margin Stock for fair value as determined in good faith by Parent;
     (13) the lease or sublease of, or use or license agreements with respect to, assets and properties in the ordinary course of business and swap or similar arrangements with respect to Slots or Gate Leaseholds in the ordinary course of business (A) that do not constitute Collateral, (B) that constitute Collateral so long as the lease, sublease, use or license agreement pursuant to this clause (13)(B) has a term of one year or less, or in the case of swaps or similar arrangements relating to Slots, does not extend beyond two comparable IATA traffic seasons or (C) that constitute Collateral and the term of such lease, sublease, use or license agreement or swap or similar arrangement pursuant to this clause (13)(C) is longer than provided for in clause (13)(B); provided, however, that in the case of each transaction pursuant to this clause (C), an officer of the Company determines in good faith and certifies in an Officers’ Certificate delivered to the Trustee and the Collateral Trustee prior to entering into any such transaction that (i) immediately after giving effect to such transaction the Priority Lien Debt Value Ratio (excluding, for purposes of calculating the Priority Lien Debt Value Ratio, the proceeds of such transaction and the intended use there of) would be at least 1.5 to 1.0, (ii) the Collateral Trustee’s Liens on Collateral subject to such lease, sublease, use, license agreement or swap or similar arrangement are not materially adversely affected and (iii) no Event of Default exists at the time of such transaction;
     (14) the lease or sublease, in the ordinary course of business, of up to five pairs of Slots at Tokyo’s Narita Airport to All Nippon Airways;
     (15) sales of accounts receivables and related assets of the type specified in the definition of “Qualified Receivables Transaction” to a Receivables Subsidiary;
     (16) transfers of accounts receivables and related assets of the type specified in the definition of “Qualified Receivables Transaction” (or a fractional undivided interest therein) to a Receivables Subsidiary or to any other Person in connection with a Qualified Receivables Transaction or the creation of a Lien on any such accounts receivables or related assets in connection with a Qualified Receivables Transaction;
     (17) sales of jet fuel and related property pursuant to the Jet Fuel Supply Agreement;
     (18) sales or dispositions of aircraft, aircraft engines and spare parts that do not constitute Collateral in the ordinary course of business; and
     (19) any issuance or sale of Equity Interests in, or Indebtedness or other securities of, an Unrestricted Subsidiary, including in connection with any merger, consolidation or amalgamation.
     “Banking Product Obligations” means, as applied to any Person, any direct or indirect liability, contingent or otherwise, of such Person in respect of any treasury, depository and cash management services, netting services and automated clearing house transfers of funds services, including obligations for the payment of fees, interest, charges, expenses, attorneys’ fees and disbursements in connection therewith.

5


 

     “Bankruptcy Law” means Title 11 of the U.S. Code or any similar federal or state law for the relief of debtors.
     “Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular “person” (as that term is used in Section 13(d)(3) of the Exchange Act), such “person” will be deemed to have beneficial ownership of all securities that such “person” has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only after the passage of time. The terms “Beneficially Owns” and “Beneficially Owned” have a corresponding meaning.
     “Board of Directors” means:
     (1) with respect to a corporation, the board of directors of the corporation or any committee thereof duly authorized to act on behalf of such board;
     (2) with respect to a partnership, the Board of Directors of the general partner of the partnership;
     (3) with respect to a limited liability company, the managing member or members, manager or managers or any controlling committee of managing members thereof; and
     (4) with respect to any other Person, the board or committee of such Person serving a similar function.
     “Business Day” means any day other than a Legal Holiday.
     “Capital Lease Obligation” means, at the time any determination is to be made, the amount of the liability in respect of a capital lease that would at that time be required to be capitalized and reflected as a liability on a balance sheet prepared in accordance with GAAP, and the Stated Maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be prepaid by the lessee without payment of a penalty.
     “Capital Stock” means:
     (1) in the case of a corporation, corporate stock;
     (2) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;
     (3) in the case of a partnership or limited liability company, partnership interests (whether general or limited) or membership interests; and
     (4) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person,
     but excluding from all of the foregoing any debt securities convertible into Capital Stock, whether or not such debt securities include any right of participation with Capital Stock.
     “Cash Equivalents” means:
     (1) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States (or by any agency thereof to the extent such

6


 

obligations are backed by the full faith and credit of the United States), in each case maturing within one year from the date of acquisition thereof;
     (2) direct obligations of state and local government entities, in each case maturing within one year from the date of acquisition thereof, which have a rating of at least A- (or the equivalent thereof) from S&P or A-3 (or the equivalent thereof) from Moody’s;
     (3) obligations of domestic or foreign companies and their subsidiaries (including, without limitation, agencies, sponsored enterprises or instrumentalities chartered by an Act of Congress, which are not backed by the full faith and credit of the United States), including, without limitation, bills, notes, bonds, debentures, and mortgage-backed securities, in each case maturing within one year from the date of acquisition thereof;
     (4) Investments in commercial paper maturing within 365 days from the date of acquisition thereof and having, at such date of acquisition, a rating of at least A-2 (or the equivalent thereof) from S&P or P-2 (or the equivalent thereof) from Moody’s;
     (5) Investments in certificates of deposit, banker’s acceptances, time deposits, eurodollar time deposits or overnight bank deposits maturing within one year from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any other commercial bank of recognized standing organized under the laws of the United States or any State thereof that has a combined capital and surplus and undivided profits of not less than $250.0 million;
     (6) fully collateralized repurchase agreements with a term of not more than six months for underlying securities that would otherwise be eligible for investment;
     (7) Investments in money in an investment company organized under the Investment Company Act of 1940, as amended, or in pooled accounts or funds offered through mutual funds, investment advisors, banks and brokerage houses which invest its assets in obligations of the type described in clauses (1) through (6) above. This could include, but not be limited to, money market funds or short-term and intermediate bonds funds;
     (8) money market funds that (A) comply with the criteria set forth in SEC Rule 2a-7 under the Investment Company Act of 1940, as amended, (B) are rated AAA (or the equivalent thereof) by S&P and Aaa (or the equivalent thereof) by Moody’s and (C) have portfolio assets of at least $5.0 billion;
     (9) deposits available for withdrawal on demand with commercial banks organized in the United States having capital and surplus in excess of $100.0 million; and
     (10) securities with maturities of one year or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States, by any political subdivision or taxing authority of any such state, commonwealth or territory or by any foreign government, the securities of which state, commonwealth, territory, political subdivision, taxing authority or foreign government (as the case may be) are rated at least A by S&P or A2 by Moody’s.

7


 

     “Change of Control” means the occurrence of any of the following:
     (1) the sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of Parent and its Subsidiaries taken as a whole to any Person (including any “person” (as that term is used in Section 13(d)(3) of the Exchange Act));
     (2) the consummation of any transaction (including, without limitation, any merger or consolidation), the result of which is that any Person (including any “person” (as defined above)) becomes the Beneficial Owner, directly or indirectly, of more than 50% of the Voting Stock of Parent (measured by voting power rather than number of shares), other than (A) any such transaction where the Voting Stock of Parent (measured by voting power rather than number of shares) outstanding immediately prior to such transaction constitutes or is converted into or exchanged for a majority of the outstanding shares of the Voting Stock of such Beneficial Owner (measured by voting power rather than number of shares) or (B) any merger or consolidation of Parent with or into any Person (including any “person” (as defined above)) which owns a Permitted Business (a “Permitted Person”) or a Subsidiary of a Permitted Person, in each case, if immediately after such transaction no Person (including any “person” (as defined above)) is the Beneficial Owner, directly or indirectly, of more than 50% of the total Voting Stock of such Permitted Person (measured by voting power rather than number of shares);
     (3) the first day on which Parent ceases to own 100% of the outstanding Equity Interests of the Company; or
     (4) during any period of up to 24 consecutive months, a majority of the Board of Directors (excluding vacant seats) of Parent shall cease to consist of Continuing Directors.
     “Class” means (a) in the case of Junior Lien Debt, every Series of Junior Lien Debt, taken together and (b) in the case of Priority Lien Debt, every Series of Priority Lien Debt, taken together.
     “Clearstream” means Clearstream Banking, S.A.
     “Co-Branded Agreement” means that certain Amended and Restated Co-Branded Card Marketing Services Agreement, effective September 15, 2008, among the Company, Parent, UAL Loyalty Services, LLC and Chase Bank USA, N.A., as heretofore amended and as may be further amended, amended and restated, modified, supplemented, replaced or extended from time to time.
     “Collateral” means (a) the Japan Routes, the Japan Slots and the Japan Gate Leaseholds upon which Secured Debt Liens have been granted to the Collateral Trustee to secure the Secured Debt Obligations, (b) Qualified Replacement Assets, (c) all Cure Collateral upon which Secured Debt Liens have been granted to the Collateral Trustee to secure the Secured Debt Obligations under the circumstances contemplated by the provisions of Sections 4.20 and 4.21 hereof and (d) all proceeds of the foregoing (including, without limitation, proceeds from dispositions of the foregoing deposited into the Collateral Proceeds Account held by the Collateral Trustee). For the avoidance of doubt, the term “Collateral” does not include the Escrow Account or other Escrow Property.
     “Collateral Trust Agreement” means the Collateral Trust Agreement, dated as of the date of this Indenture, among the Company, the Trustee and the Collateral Trustee, as amended, restated, adjusted, waived, renewed, extended, supplemented or otherwise modified from time to time.
     “Collateral Trustee” means Wilmington Trust FSB, in its capacity as Collateral Trustee under the Collateral Trust Agreement, together with its successors in such capacity.

8


 

     “Company” means United Air Lines, Inc., a Delaware corporation, and any and all successors pursuant to Section 5.02 hereof.
     “Consolidated EBITDAR” means, with respect to any specified Person for any period, the Consolidated Net Income of such Person for such period plus, without duplication:
     (1) an amount equal to any extraordinary loss plus any net loss realized by such Person or any of its Restricted Subsidiaries in connection with an asset sale, to the extent such losses were deducted in computing such Consolidated Net Income; plus
     (2) provision for taxes based on income or profits of such Person and its Restricted Subsidiaries for such period, to the extent that such provision for taxes was deducted in computing such Consolidated Net Income; plus
     (3) the Fixed Charges of such Person and its Restricted Subsidiaries for such period, to the extent that such Fixed Charges were deducted in computing such Consolidated Net Income; plus
     (4) any foreign currency translation losses (including losses related to currency remeasurements of Indebtedness) of such Person and its Restricted Subsidiaries for such period, to the extent that such losses were taken into account in computing such Consolidated Net Income; plus
     (5) depreciation, amortization (including amortization of intangibles but excluding amortization of prepaid cash expenses that were paid in a prior period) and other non-cash charges and expenses (excluding any such non-cash charge or expense to the extent that it represents an accrual of or reserve for cash charges or expenses in any future period or amortization of a prepaid cash charge or expense that was paid in a prior period) of such Person and its Restricted Subsidiaries for such period to the extent that such depreciation, amortization and other non-cash charges or expenses were deducted in computing such Consolidated Net Income; plus
     (6) aircraft rent expense of such Person and its Restricted Subsidiaries for such period to the extent that such aircraft rent expense is payable in cash and was deducted in computing such Consolidated Net Income; plus
     (7) to the extent deducted in computing such Consolidated Net Income, extraordinary, nonrecurring or unusual losses for such period; plus
     (8) to the extent deducted in computing such Consolidated Net Income, the amortization of debt discount for such period; plus
     (9) an amount equal to any deduction to Consolidated Net Income as a result of any grant to any employee of Parent or its Restricted Subsidiaries of any Equity Interests during such period; plus
     (10) to the extent deducted in computing such Consolidated Net Income, any net loss incurred during such period arising from the sale, exchange or other disposition of capital assets by Parent or its Restricted Subsidiaries (including any fixed assets, whether tangible or intangible, all inventory sold in conjunction with the disposition of fixed assets and all securities); plus

9


 

     (11) to the extent deducted in computing such Consolidated Net Income, any losses arising under fuel hedging arrangements incurred prior to the date of this Indenture; plus
     (12) to the extent deducted in computing such Consolidated Net Income, cash restructuring charges in an aggregate amount not to exceed $15.0 million in any fiscal year; plus
     (13) to the extent deducted in computing such Consolidated Net Income, all cost-savings, integration costs, transactional costs, expenses and charges incurred in connection with the consummation of any transaction related to any permitted acquisition, merger, disposition, issuance of Indebtedness, issuance of Equity Interests, or any Investment, in each case, to the extent permitted under this Indenture; plus
     (14) proceeds from business interruption insurance, to the extent not already included calculating such Consolidated Net Income; plus
     (15) to the extent deducted in computing such Consolidated Net Income, any expenses and charges that are covered by indemnification or reimbursement provisions in connection with any permitted acquisition, merger, disposition, incurrence of Indebtedness, issuance of Equity Interests or any investment to the extent actually indemnified or reimbursed; plus
     (16) proceeds from sales of miles to third party business partners to the extent not already included in calculating Consolidated Net Income; plus
     (17) to the extent deducted in computing such Consolidated Net Income, costs and expenses, including fees, incurred directly in connection with the consummation of the offering of the Notes as described in the Offering Memorandum; minus
     (18) non-cash items increasing such Consolidated Net Income for such period, other than the accrual of revenue in the ordinary course of business; minus
     (19) the sum of (A) income tax credits, (B) interest income and (C) extraordinary, non-recurring or unusual gains included in calculating Consolidated Net Income for such period; minus
     (20) any amount included in the calculation of Consolidated EBITDAR in a prior period under clause (16) of this definition to the extent that such amount is recognized as revenue in such current period,
in each case, on a consolidated basis and determined in accordance with GAAP.
     “Consolidated Net Income” means, with respect to any specified Person for any period, the aggregate of the net income (loss) of such Person and its Restricted Subsidiaries for such period, on a consolidated basis (excluding the net income (loss) of any Unrestricted Subsidiary of such Person), determined in accordance with GAAP and without any reduction in respect of preferred stock dividends; provided that:
     (1) all net after tax extraordinary, non-recurring or unusual gains or losses and all gains or losses realized in connection with any Asset Sale (without giving effect to the exclusions listed in the definition of “Asset Sale”) or the disposition of securities or the early extinguishment of Indebtedness, together with any related provision for taxes on any such gain, will be excluded;

10


 

     (2) the net income (but not loss) of any Person that is not a Restricted Subsidiary or that is accounted for by the equity method of accounting will be included only to the extent of the amount of dividends or similar distributions paid in cash to the specified Person or a Restricted Subsidiary of the Person;
     (3) the net income (but not loss) of any Restricted Subsidiary will be excluded to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of that net income is not at the date of determination permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its stockholders;
     (4) the cumulative effect of a change in accounting principles will be excluded;
     (5) the effect of non-cash gains and losses resulting from Hedging Obligations, including attributable to movement in the mark-to-market valuation of Hedging Obligations pursuant to Financial Accounting Standards Board Statement No. 133, will be excluded;
     (6) any non-cash compensation expense recorded from grants of stock appreciation or similar rights, stock options or other rights to officers, directors or employees, will be excluded;
     (7) the effect of any non-cash items resulting from any amortization, write-up, write-down or write-off of assets (including intangible assets, goodwill and deferred financing costs) in connection with any acquisition, disposition, merger, consolidation or similar transaction or any other non-cash impairment charges incurred subsequent to the date of this Indenture resulting from the application at SFAS Nos. 141, 142 or 144 (excluding any such non-cash item to the extent that it represents and accrual of or reserve for cash expenditures in any future period except to the extent such item is subsequently reversed), will be excluded;
     (8) non-cash charges of the type described under the section titled “Fresh-Start Reporting” in Parent’s financial statements included in its Form 10-K for the year ended December 31, 2006, will be excluded; and
     (9) any provision for income tax reflected on such Person’s financial statements for such period will be excluded to the extent such provision exceeds the actual amount of taxes paid in cash during such period by such Person and its consolidated Subsidiaries.
     “continuing” means, with respect to any Default or Event of Default, that such Default or Event of Default has not been cured or waived.
     “Continuing Directors” means, as of any date or for any period of determination, any member of the Board of Directors of Parent who:
     (1) was a member of such Board of Directors on the first day of such period; or
     (2) was nominated for election or elected to such Board of Directors with the approval of a majority of the Continuing Directors who were members of such Board of Directors at the time of such nomination or election.

11


 

     “Corporate Trust Office of the Trustee” will be at the address of the Trustee specified in Section 13.01 hereof and for purposes of Sections 2.03 and 4.02 hereof, such office shall also mean the office or agency of the Trustee located at 101 Barclay Street, New York, NY 10286, Attention: Bond Operations-7E, or such other address as to which the Trustee may give notice to the Company.
     “Credit Agreement” means that certain Amended and Restated Revolving Credit, Term Loan and Guaranty Agreement, dated as of February 2, 2007, by and among the Company, as borrower, Parent, the subsidiaries of the Company and Parent named therein, as guarantors, the lenders party thereto, JPMorgan Chase Bank, N.A., as co-administrative agent, co-collateral agent and paying agent, Citicorp USA, Inc., as co-administrative agent and co-collateral agent, J.P. Morgan Securities Inc., as joint lead arranger and joint bookrunner, Citigroup Global Markets Inc., as joint lead arranger and joint bookrunner and Credit Suisse Securities (USA) LLC, as syndication agent, as amended, restated, modified, supplemented, renewed, refunded, replaced in any manner (whether upon or after termination or otherwise, and whether or not the amount of Indebtedness thereunder is increased) or refinanced (including by means of sales of debt securities) in whole or in part from time to time.
     “Credit Facilities” means, one or more debt facilities (including, without limitation, the Credit Agreement) or commercial paper facilities, in each case with banks or other lenders providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables) or letters of credit, in each case, as amended, restated, modified, renewed, extended, refunded, replaced in any manner (whether upon or after termination or otherwise) or refinanced (including by means of sales of debt securities) in whole or in part from time to time.
     “Cure Collateral” means (a) cash and Permitted Investments contemplated by clauses (2) and (14) of the definition thereof, pledged to the Collateral Trustee (and subject to an account control agreement in form and substance reasonably satisfactory to the Collateral Trustee) and (b) additional Routes, Slots, Gates Leaseholds, ground support equipment, airframes, engines, spare parts, Real Property Assets, flight simulators, QEC Kits or other assets of the Company designated as “Cure Collateral” in an Officers’ Certificate delivered by the Company to the Collateral Trustee and pledged on a Secured Debt Lien basis to the Collateral Trustee pursuant to arrangements reasonably satisfactory to the Collateral Trustee.
     “Custodian” means the Trustee, as custodian for the Depositary with respect to the Global Notes, or any successor entity thereto.
     “Default” means any event that, unless cured or waived, is, or with the passage of time or the giving of notice or both would be, an Event of Default.
     “Definitive Note” means a certificated Note registered in the name of the Holder thereof and issued in accordance with Section 2.06 hereof, substantially in the form of Exhibit A hereto except that such Note shall not bear the Global Note Legend and shall not have the “Schedule of Exchanges of Interests in the Global Note” attached thereto.
     “Depositary” means, with respect to the Notes issuable or issued in whole or in part in global form, the Person specified in Section 2.03 hereof as the Depositary with respect to the Notes, and any and all successors thereto appointed as depositary hereunder and having become such pursuant to the applicable provision of this Indenture.
     “Designated Noncash Consideration” means any non-cash consideration received by Parent or a Restricted Subsidiary in connection with an Asset Sale that is designated as Designated Noncash

12


 

Consideration pursuant to an Officers’ Certificate delivered to the Trustee, which Officers’ Certificate shall set forth the Fair Market Value of such Designated Noncash Consideration and the basis for determining Fair Market Value.
     “Discharge of Priority Lien Obligations” means the occurrence of all of the following:
     (1) termination or expiration of all commitments to extend credit that would constitute Priority Lien Debt;
     (2) payment in full in cash of the principal of and interest and premium (if any) on all Priority Lien Debt (other than any undrawn letters of credit);
     (3) discharge or cash collateralization (at the lower of (A) 105% of the aggregate undrawn amount and (B) the percentage of the aggregate undrawn amount required for release of liens under the terms of the applicable Priority Lien Document) of all outstanding letters of credit constituting Priority Lien Debt; and
     (4) payment in full in cash of all other Priority Lien Obligations that are outstanding and unpaid at the time the Priority Lien Debt is paid in full in cash (other than any obligations for taxes, costs, indemnifications, reimbursements, damages and other liabilities in respect of which no claim or demand for payment has been made at such time).
     “Disqualified Stock” means any Capital Stock that, by its terms (or by the terms of any security into which it is convertible, or for which it is exchangeable, in each case at the option of the holder of the Capital Stock), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise (other than as a result of a change of control or asset sale), is convertible or exchangeable for Indebtedness or Disqualified Stock, or is redeemable at the option of the holder of the Capital Stock, in whole or in part (other than as a result of a change of control or asset sale), on or prior to the date that is 91 days after the date on which the Notes mature. Notwithstanding the preceding sentence, any Capital Stock that would constitute Disqualified Stock solely because the holders of the Capital Stock have the right to require the Company to repurchase such Capital Stock upon the occurrence of a change of control or an asset sale will not constitute Disqualified Stock if the terms of such Capital Stock provide that the Company may not repurchase or redeem any such Capital Stock pursuant to such provisions unless such repurchase or redemption complies with Section 4.07 hereof. The amount of Disqualified Stock deemed to be outstanding at any time for purposes of this Indenture will be the maximum amount that Parent and its Restricted Subsidiaries may become obligated to pay upon the maturity of, or pursuant to any mandatory redemption provisions of, such Disqualified Stock, exclusive of accrued dividends.
     “DOT” means the U.S. Department of Transportation and any successor thereto.
     “Equity Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).
     “Equity Offering” means any public or private sale either: (a) of Qualifying Equity Interests by Parent (other than to a Subsidiary of Parent or pursuant to a registration statement on Form S-8 or otherwise relating to equity securities issuable under any employee benefit plan of Parent) or (b) of Equity Interests of a direct or indirect parent entity of Parent (other than to Parent or a Subsidiary of Parent) to the extent that the net proceeds therefrom are contributed to the common equity capital of Parent.

13


 

     “Escrow Account” has the meaning set forth in the Escrow and Security Agreement.
     “Escrow and Security Agreement” means the Escrow and Security Agreement, dated as of the date of this Indenture, among the Company, the Trustee and The Bank of New York Mellon Trust Company, N.A., as escrow agent, for the sole benefit of the Holders of Notes, as such agreement may be amended, amended and restated, adjusted, supplemented or otherwise modified from time to time.
     “Escrow Conditions” has the meaning set forth in the Collateral Trust Agreement.
     “Escrow Property” has the meaning set forth in the Escrow and Security Agreement.
     “Euroclear” means Euroclear Bank, S.A./N.V., as operator of the Euroclear system.
     “Exchange Act” means the Securities Exchange Act of 1934, as amended.
     “Excluded Contributions” means net cash proceeds received by Parent after the date of this Indenture from:
     (1) contributions to its common equity capital (other than from any Subsidiary); or
     (2) the sale (other than to a Subsidiary or to any management equity plan or stock option plan or any other management or employee benefit plan or agreement of Parent or any Subsidiary) of Qualifying Equity Interests,
in each case designated as Excluded Contributions pursuant to an Officers’ Certificate executed on the date such capital contributions are made or the date such Equity Interests are sold, as the case may be. Excluded Contributions will not be considered to be net proceeds of Qualifying Equity Interests for purposes of clause (a)(3)(B) of Section 4.07 hereof.
     “Existing Indebtedness” means all Indebtedness of Parent and its Subsidiaries (other than Indebtedness incurred under clauses (1) or (3) of the definition of “Permitted Debt”) in existence on the date of this Indenture (including under the Credit Agreement), until such amounts are repaid.
     “FAA” means the Federal Aviation Administration of the United States of America and any successor thereto.
     “Fair Market Value” means the value that would be paid by a willing buyer to an unaffiliated willing seller in a transaction not involving distress or necessity of either party, determined in good faith by the Board of Directors of Parent (unless otherwise provided in this Indenture); provided that the Board of Directors shall be permitted to consider the circumstances existing at such time (including, without limitation, any relevant legal compulsion, judicial proceeding or administrative order or the possibility thereof) in determining such Fair Market Value in connection with such transaction.
     “Fifth-Freedom Rights” means the operational right to enplane passenger traffic and cargo in a foreign country and deplane it in another foreign country, including any such right pursuant to a bilateral treaty between the United States and a foreign country.
     “Fixed Charge Coverage Ratio” means with respect to any specified Person for any period, the ratio of the Consolidated EBITDAR of such Person for such period to the Fixed Charges of such Person for such period. In the event that the specified Person or any of its Restricted Subsidiaries incurs, assumes, guarantees, repays, repurchases, redeems, defeases or otherwise discharges any Indebtedness

14


 

(other than ordinary working capital borrowings) or issues, repurchases or redeems Disqualified Stock or preferred stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated and on or prior to the date on which the event for which the calculation of the Fixed Charge Coverage Ratio is made (the “Calculation Date”), then the Fixed Charge Coverage Ratio will be calculated giving pro forma effect (as determined in good faith by a responsible financial or accounting officer of Parent and certified in an Officers’ Certificate delivered to the Trustee) to such incurrence, assumption, Guarantee, repayment, repurchase, redemption, defeasance or other discharge of Indebtedness, or such issuance, repurchase or redemption of Disqualified Stock or preferred stock, and the use of the proceeds therefrom, as if the same had occurred at the beginning of the applicable four-quarter reference period.
     In addition, for purposes of calculating the Fixed Charge Coverage Ratio:
     (1) acquisitions that have been made by the specified Person or any of its Restricted Subsidiaries, including through mergers or consolidations, or any Person or any of its Restricted Subsidiaries acquired by the specified Person or any of its Restricted Subsidiaries, and including all related financing transactions and including increases in ownership of Restricted Subsidiaries, during the four-quarter reference period or subsequent to such reference period and on or prior to the Calculation Date, or that are to be made on the Calculation Date, will be given pro forma effect (as determined in good faith by a responsible financial or accounting officer of Parent and certified in an Officers’ Certificate delivered to the Trustee, and including any operating expense reductions for such period resulting from such acquisition that have been realized or for which all of the material steps necessary for realization have been taken) as if they had occurred on the first day of the four-quarter reference period;
     (2) the Consolidated EBITDAR attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses (and ownership interests therein) disposed of prior to the Calculation Date, will be excluded;
     (3) the Fixed Charges attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses (and ownership interests therein) disposed of prior to the Calculation Date, will be excluded, but only to the extent that the obligations giving rise to such Fixed Charges will not be obligations of the specified Person or any of its Restricted Subsidiaries following the Calculation Date;
     (4) any Person that is a Restricted Subsidiary on the Calculation Date will be deemed to have been a Restricted Subsidiary at all times during such four-quarter period;
     (5) any Person that is not a Restricted Subsidiary on the Calculation Date will be deemed not to have been a Restricted Subsidiary at any time during such four-quarter period; and
     (6) if any Indebtedness bears a floating rate of interest, the interest expense on such Indebtedness will be calculated as if the rate in effect on the Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligation applicable to such Indebtedness if such Hedging Obligation has a remaining term as at the Calculation Date in excess of 12 months).
     “Fixed Charges” means, with respect to any specified Person for any period, the sum, without duplication, of:

15


 

     (1) the consolidated gross cash interest expense of such Person and its Restricted Subsidiaries for such period; plus
     (2) the cash interest component of leases that are capitalized in accordance with GAAP of such Person and its Restricted Subsidiaries for such period; plus
     (3) any cash interest expense actually paid on Indebtedness of another Person that is guaranteed by such Person or one of its Restricted Subsidiaries or secured by a Lien on assets of such Person or one of its Restricted Subsidiaries; plus
     (4) the product of (A) all cash dividends accrued on any series of preferred stock of such Person or any of its Restricted Subsidiaries, other than to Parent or a Restricted Subsidiary of Parent, times (B) a fraction, the numerator of which is one and the denominator of which is one minus the then current combined federal, state and local statutory tax rate of such Person, expressed as a decimal, in each case, determined on a consolidated basis in accordance with GAAP; plus
     (5) the aggregate aircraft rental expense of such Person and its Restricted Subsidiaries for such period to the extent such rental expense is payable in cash,
all as determined on a consolidated basis in accordance with GAAP.
     “Foreign Aviation Authorities” means any foreign governmental, quasi-governmental, regulatory or other agencies, public corporations or private entities that exercise jurisdiction over the issuance or authorization (a) to serve any foreign point on the Japan Routes that the Company is serving at any time (other than points in China, including Hong Kong) and/or to conduct operations related to the Japan Routes and Japan Gate Leaseholds and/or (b) to hold and operate any Japan Route Foreign Slots.
     “GAAP” means generally accepted accounting principles in the United States of America, which are in effect from time to time, including those set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants, statements and pronouncements of the Financial Accounting Standards Board, such other statements by such other entity as have been approved by a significant segment of the accounting profession; and the rules and regulations of the SEC governing the inclusion of financial statements in periodic reports required to be filed pursuant to Section 13 of the Exchange Act, including opinions and pronouncements in staff accounting bulletins and similar written statements from the accounting staff of the SEC.
     “Gate Leasehold” means, at any time, all of the right, title, privilege, interest and authority, now held or hereafter acquired by the Company in connection with the right to use, operate or occupy space in an airport terminal at an airport where the Company conducts scheduled nonstop service utilizing the Japan Routes to the extent such right, title, privilege, interest or authority is actually used in conjunction with the operation of such nonstop service.
     “Global Note Legend” means the legend set forth in Section 2.06(f)(2) hereof, which is required to be placed on all Global Notes issued under this Indenture.
     “Global Notes” means, individually and collectively, each of the Restricted Global Notes and the Unrestricted Global Notes deposited with or on behalf of and registered in the name of the Depository or its nominee, substantially in the form of Exhibit A hereto and that bears the Global Note Legend and that has the “Schedule of Exchanges of Interests in the Global Note” attached thereto, issued in accordance with Section 2.01 or 2.06(b)(3), 2.06(b)(4) or 2.06(d)(2).

16


 

     “Government Securities” means direct obligations of, or obligations guaranteed by, the United States of America (including any agency or instrumentality thereof) for the payment of which obligations or guarantees the full faith and credit of the United States of America is pledged and which are not callable or redeemable at the issuer’s option.
     “Governmental Authority” means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank organization, or other entity exercising executive, legislative, judicial, taxing or regulatory powers or functions of or pertaining to government. Governmental Authority shall not include any Person in its capacity as an Airport Authority.
     “Guarantee” means a guarantee (other than (a) by endorsement of negotiable instruments for collection or (b) customary contractual indemnities, in each case in the ordinary course of business), direct or indirect, in any manner including, without limitation, by way of a pledge of assets or through letters of credit or reimbursement agreements in respect thereof, of all or any part of any Indebtedness (whether arising by virtue of partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services, to take or pay or to maintain financial statement conditions).
     “Guarantors” means Parent and any domestic Restricted Subsidiary of Parent that guarantees the Notes in accordance with the provisions of this Indenture, and their respective successors and assigns, in each case, until the Note Guarantee of such Person has been released in accordance with the provisions of this Indenture.
     “Hedge Agreement” means any agreement evidencing Hedging Obligations.
     “Hedging Obligations” means, with respect to any specified Person, the Obligations of such Person under:
     (1) interest rate swap agreements (whether from fixed to floating or from floating to fixed), interest rate cap agreements and interest rate collar agreements;
     (2) other agreements or arrangements designed to manage interest rates or interest rate risk; and
     (3) other agreements or arrangements designed to protect such Person against fluctuations in currency exchange rates, fuel prices or other commodity prices.
     “Holder” means a Person in whose name a Note is registered.
     “IATA” means the International Air Transport Association and any successor thereto.
     “Indebtedness” means, with respect to any specified Person, any indebtedness of such Person (excluding accrued expenses and trade payables), whether or not contingent:
     (1) in respect of borrowed money;
     (2) evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof);
     (3) in respect of banker’s acceptances;

17


 

     (4) representing Capital Lease Obligations;
     (5) representing the balance deferred and unpaid of the purchase price of any property or services due more than six months after such property is acquired or such services are completed, and excluding in any event trade payables arising in the ordinary course of business; or
     (6) representing any Hedging Obligations,
if and to the extent any of the preceding items (other than letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet of the specified Person prepared in accordance with GAAP. In addition, the term “Indebtedness” includes all Indebtedness of others secured by a Lien on any asset of the specified Person (whether or not such Indebtedness is assumed by the specified Person) and, to the extent not otherwise included, the Guarantee by the specified Person of any Indebtedness of any other Person. Indebtedness shall be calculated without giving effect to the effects of Statement of Financial Accounting Standards No. 133 and related interpretations to the extent such effects would otherwise increase or decrease an amount of Indebtedness for any purpose under this Indenture as a result of accounting for any embedded derivatives created by the terms of such Indebtedness.
     For the avoidance of doubt, Banking Product Obligations do not constitute Indebtedness.
     “Indenture” means this Indenture, as amended, amended and restated, adjusted, supplemented or otherwise modified from time to time.
     “Indirect Participant” means a Person who holds a beneficial interest in a Global Note through a Participant.
     “Initial Notes” means the first $500.0 million aggregate principal amount of Notes issued under this Indenture on the date of this Indenture.
     “Initial Purchasers” means J.P. Morgan Securities Inc., Goldman, Sachs & Co., Morgan Stanley & Co. Incorporated, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC and Barclays Capital Inc.
     “insolvency or liquidation proceeding” means:
     (1) any case commenced by or against the Company under Bankruptcy Law, any other proceeding for the reorganization, recapitalization or adjustment or marshalling of the assets or liabilities of the Company, any receivership or assignment for the benefit of creditors relating to the Company or any similar case or proceeding relative to the Company or its creditors, as such, in each case whether or not voluntary;
     (2) any liquidation, dissolution, marshalling of assets or liabilities or other winding up of or relating to the Company, in each case whether or not voluntary and whether or not involving bankruptcy or insolvency; or
     (3) any other proceeding of any type or nature in which substantially all claims of creditors of the Company are determined and any payment or distribution is or may be made on account of such claims.

18


 

     “Institutional Accredited Investor” means an institution that is an “accredited investor” as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act, who are not also QIBs.
     “Investments” means, with respect to any Person, all direct or indirect investments by such Person in other Persons (including Affiliates) in the forms of loans (including Guarantees or other obligations), advances or capital contributions (excluding commission, travel and similar advances to officers, employees and consultants made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities of other Persons, together with all items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP. If Parent or any Restricted Subsidiary of Parent sells or otherwise disposes of any Equity Interests of any direct or indirect Restricted Subsidiary of Parent such that, after giving effect to any such sale or disposition, such Person is no longer a Restricted Subsidiary of Parent, Parent will be deemed to have made an Investment on the date of any such sale or disposition equal to the Fair Market Value of Parent’s Investments in such Subsidiary that were not sold or disposed of in an amount determined as provided in Section 4.07 hereof. Notwithstanding the foregoing, any Equity Interests retained by Parent or any of its Subsidiaries after a disposition or dividend of assets or Capital Stock of any Person in connection with any partial “spin-off” of a Subsidiary or similar transactions shall not be deemed to be an Investment. The acquisition by Parent or any Restricted Subsidiary of Parent of a Person that holds an Investment in a third Person will be deemed to be an Investment by Parent or such Restricted Subsidiary in such third Person in an amount equal to the Fair Market Value of the Investments held by the acquired Person in such third Person in an amount determined as provided in Section 4.07 hereof. Except as otherwise provided in this Indenture, the amount of an Investment will be determined at the time the Investment is made and without giving effect to subsequent changes in value.
     “Japan Gate Leaseholds” means the right, title, privilege, interest and authority, now held or hereafter acquired by the Company in connection with the right to use, operate or occupy space in an airport terminal at an airport where the Company conducts scheduled nonstop service utilizing the Japan Routes to the extent such right, title, privilege, interest or authority is actually used in conjunction with the operation of such nonstop service (other than (a) at airports in China, including Hong Kong or (b) at LaGuardia Airport, Reagan National Airport or London Heathrow Airport in the case of this clause (b), to the extent otherwise pledged by the Company to other Persons).
     “Japan Route FAA Slot” means, at any time, any Slot of the Company, now held or hereafter acquired, at an airport in the United States that serves as an origin or destination point for nonstop flights that the Company operates from time to time utilizing the Japan Routes to the extent such Slot is actually used in conjunction with the operation of such nonstop service (other than at LaGuardia Airport or Reagan National Airport to the extent otherwise pledged by the Company to other Persons).
     “Japan Route Foreign Slot” means, at any time, any Slot of the Company, now held or hereafter acquired, at an airport outside the United States that serves as an origin or destination point for nonstop flights that the Company operates from time to time utilizing the Japan Routes to the extent such Slot is actually used in conjunction with the operation of such nonstop service (other than (a) at airports in China, including Hong Kong or (b) London Heathrow Airport in the case of this clause (b), to the extent otherwise pledged by the Company to other Persons).
     “Japan Routes” means the authority the Company now holds, or hereafter acquires from the DOT pursuant to Title 49 or other applicable law, to operate scheduled foreign air transportation of persons, property and mail between a point or points in the United States and a point or points in Japan, and beyond between a point or points in Japan and a point or points in other countries, including applicable designations, frequencies, exemptions, certificates, Fifth-Freedom Rights and “behind and

19


 

beyond rights,” in each case whether or not utilized by the Company, except to the extent such route authority relates to all-cargo operations.
     “Japan Slots” means the Company’s Slots, now held or hereafter acquired, at airports that serve as an origin or destination point for nonstop flights the Company operates from time to time utilizing the Japan Routes to the extent such Slots are actually used in conjunction with the operation of such nonstop service (other than (a) at airports in China, including Hong Kong or (b) at LaGuardia Airport, Reagan National Airport or London Heathrow Airport in the case of this clause (b), to the extent otherwise pledged by the Company to other Persons).
     “Jet Fuel Supply Agreement” means the Jet Fuel Supply Agreement, dated as of October 21, 2003, by and among the Company, United Aviation Fuels Corporation and Morgan Stanley Capital Group Inc., as heretofore amended or modified, and as may be further amended, amended and restated, modified, supplemented, replaced or extended from time to time.
     “Junior Lien” means a Lien granted by a Security Document to the Collateral Trustee, at any time, upon any property of the Company to secure Junior Lien Obligations.
     “Junior Lien Debt” means (a) the Second Lien Notes and (b) any Indebtedness (including letters of credit and reimbursement obligations with respect thereto) of the Company that is secured by a Junior Lien and that was permitted to be incurred and so secured under each applicable Secured Debt Document (including any Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace or defease other Junior Lien Debt); provided that:
     (1) on or before the date on which any such Indebtedness contemplated by clause (b) above is incurred by the Company, such Indebtedness is designated by the Company, in an Officers’ Certificate delivered to each Junior Lien Representative, each Priority Lien Representative and the Collateral Trustee, as “Junior Lien Debt” for the purposes of this Indenture and the Collateral Trust Agreement; provided that no Series of Secured Debt may be designated as both Junior Lien Debt and Priority Lien Debt;
     (2) any such Indebtedness contemplated by clause (b) above is governed by an indenture, credit agreement or other agreement that includes a Lien Sharing and Priority Confirmation; and
     (3) all requirements set forth in the Collateral Trust Agreement as to the confirmation, grant or perfection of the Collateral Trustee’s Liens to secure any such Indebtedness contemplated by clause (b) above or Obligations in respect thereof are satisfied (and the satisfaction of such requirements and the other provisions of this clause (3) will be conclusively established if the Company delivers to the Collateral Trustee an Officers’ Certificate stating that such requirements and other provisions have been satisfied and that such Indebtedness is “Junior Lien Debt”).
     “Junior Lien Documents” means, collectively, the Second Lien Indenture and any indenture, credit agreement or other agreement governing each Series of Junior Lien Debt and the security documents related thereto.
     “Junior Lien Obligations” means Junior Lien Debt and all other Obligations in respect thereof, together with Hedging Obligations that are secured, or intended to be secured, under the Junior Lien Documents if the provider of such Hedging Obligations has agreed to be bound by the terms of the Collateral Trust Agreement as a holder of Junior Lien Obligations or such provider’s interest in the

20


 

Collateral is subject to the terms of the Collateral Trust Agreement as a holder of Junior Lien Obligations and if such Hedging Obligations are permitted to be incurred and so secured under each applicable Secured Debt Document.
     “Junior Lien Representative” means the trustee, agent or representative of the holder of any Series of Junior Lien Debt who maintains the transfer register for such Series of Junior Lien Debt and (a) is appointed as a Junior Lien Representative (for purposes related to the administration of the security documents) pursuant to the indenture, credit agreement or other agreement governing such Series of Junior Lien Debt, together with its successors in such capacity and (b) has become a party to the Collateral Trust Agreement by executing a joinder in the form required under the Collateral Trust Agreement.
     “Legal Holiday” means a Saturday, a Sunday or a day on which banking institutions in the City of New York or at a place of payment are authorized by law, regulation or executive order to remain closed. If a payment date is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue on such payment for the intervening period.
     “Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or similar encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law (but excluding any lease or sublease pursuant to clauses (13) or (14) of the definition of “Asset Sale”), including any conditional sale or other title retention agreement, any option or other agreement to sell or give a security interest in and, except in connection with any Qualified Receivables Transaction, any agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.
     “Lien Sharing and Priority Confirmation” means:
     (1) as to any future Series of Priority Lien Debt, the written agreement of the holders of such Series of Priority Lien Debt, as set forth in the indenture, credit agreement or other agreement governing such Series of Priority Lien Debt, for the benefit of all holders of Secured Debt and each future Secured Debt Representative:
     (A) that all Priority Lien Obligations will be and are secured equally and ratably by all Priority Liens at any time granted by the Company to secure any Obligations in respect of such Series of Priority Lien Debt, whether or not upon property otherwise constituting Collateral, and that all such Priority Liens will be enforceable by the Collateral Trustee for the benefit of all holders of Priority Lien Obligations;
     (B) that the holders of Obligations in respect of such Series of Priority Lien Debt are bound by the provisions of the Collateral Trust Agreement, including the provisions relating to the ranking of Priority Liens and the order of application of proceeds from enforcement of Priority Liens; and
     (C) consenting to the terms of the Collateral Trust Agreement and the Collateral Trustee’s performance of, and directing the Collateral Trustee to perform its obligations under, the Collateral Trust Agreement and the other Security Documents; and
     (2) as to any Series of Junior Lien Debt, the written agreement of the holders of such Series of Junior Lien Debt, as set forth in the indenture, credit agreement or other agreement

21


 

governing such Series of Junior Lien Debt, for the benefit of all holders of Secured Debt and each Secured Debt Representative:
     (A) that all Junior Lien Obligations will be and are secured equally and ratably by all Junior Liens at any time granted by the Company to secure any Obligations in respect of such Series of Junior Lien Debt, whether or not upon property otherwise constituting collateral for such Series of Junior Lien Debt, and that all such Junior Liens will be enforceable by the Collateral Trustee for the benefit of all holders of Junior Lien Obligations;
     (B) that the holders of Obligations in respect of such Series of Junior Lien Debt are bound by the provisions of the Collateral Trust Agreement, including the provisions relating to the ranking of Junior Liens and the order of application of proceeds from the enforcement of Junior Liens; and
     (C) consenting to the terms of the Collateral Trust Agreement and the Collateral Trustee’s performance of, and directing the Collateral Trustee to perform its obligations under, the Collateral Trust Agreement and the other Security Documents.
     “Margin Stock” means as defined within Regulation U of the Board of Governors of the Federal Reserve System of the United States.
     “Material Adverse Effect” means a material adverse effect on (a) the Collateral, taken as a whole or (b) the Japan Routes.
     “Net Proceeds” means the aggregate cash proceeds and Cash Equivalents received by Parent or any of its Restricted Subsidiaries in respect of any Asset Sale (including, without limitation, any cash or Cash Equivalents received in respect of or upon the sale or other disposition of any Designated Noncash Consideration or other non-cash consideration received in any Asset Sale), net of: (a) the direct costs and expenses relating to such Asset Sale and the sale or disposition of such Designated Noncash Consideration, including, without limitation, legal, accounting and investment banking fees, and sales commissions, and any relocation expenses incurred as a result of the Asset Sale, taxes paid or payable as a result of the Asset Sale, in each case, after taking into account any available tax credits or deductions and any tax sharing arrangements; (b) any reserve for adjustment or indemnification obligations in respect of the sale price of such asset or assets established in accordance with GAAP; (c) all payments made on any Indebtedness (other than Secured Debt) that is secured by a Permitted Lien on the assets subject to such Asset Sale, in accordance with the terms of any Lien upon such assets, or that must by its terms, or in order to obtain a necessary consent to such Asset Sale, or by applicable law be repaid out of the proceeds from such Asset Sale; (d) all distributions and other payments required to be made to minority interest holders in Subsidiaries or joint ventures as a result of such Asset Sale; and (e) any portion of the purchase price from an Asset Sale placed in escrow pursuant to the terms of such Asset Sale (either as a reserve for adjustment of the purchase price, or for satisfaction of indemnities in respect of such Asset Sale) until the termination of such escrow.
     “Non-Recourse Debt” means Indebtedness:
     (1) as to which neither Parent nor any of its Restricted Subsidiaries (A) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness) or (B) is directly or indirectly liable as a guarantor or otherwise; and

22


 

     (2) as to which the holders of such Indebtedness do not otherwise have recourse to the stock or assets of Parent or any of its Restricted Subsidiaries (other than the Equity Interests of an Unrestricted Subsidiary).
     “Non-U.S. Person” means a Person who is not a U.S. Person.
     “Note Documents” means this Indenture, the Notes, the Note Guarantees, the Security Documents and the Escrow and Security Agreement.
     “Note Guarantee” means the Guarantee by each Guarantor of the Company’s obligations under this Indenture and the Notes, executed pursuant to the provisions of this Indenture.
     “Notes” has the meaning assigned to it in the preamble to this Indenture. The Initial Notes and the Additional Notes shall be treated as a single class for all purposes under this Indenture, and unless the context otherwise requires, all references to the Notes shall include the Initial Notes and any Additional Notes.
     “Obligations” means any principal (including reimbursement obligations with respect to letters of credit whether or not drawn), interest (including all interest accrued thereon after the commencement of any insolvency or liquidation proceeding at the rate, including any applicable post-default rate, specified in the Secured Debt Documents, even if such interest is not enforceable, allowable or allowed as a claim in such proceeding), premium (if any), fees, indemnifications, reimbursements, expenses and other liabilities payable under the documentation governing any Indebtedness.
     “Offering Memorandum” means the offering memorandum, dated as of January 11, 2010, prepared in connection with the sale and distribution of the Notes.
     “Officer” means, with respect to any Person, the Chairman of the Board, the Chief Executive Officer, the President, the Chief Operating Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary or any Vice-President of such Person.
     “Officers’ Certificate” means a certificate signed on behalf of the Company or Parent by two Officers of the Company or Parent, as applicable, that meets the requirements of Section 13.03 hereof.
     “Opinion of Counsel” means a written opinion from legal counsel that meets the requirements of Section 13.03 hereof. The counsel may be an employee of or counsel to Parent, any Subsidiary of Parent or the Trustee.
     “Parent” means UAL Corporation, a Delaware corporation, and any and all successors pursuant to Section 5.02 hereof.
     “Participant” means, with respect to the Depositary, Euroclear or Clearstream, a Person who has an account with the Depositary, Euroclear or Clearstream, respectively (and, with respect to DTC, shall include Euroclear and Clearstream).
     “Permitted Business” means any business that is the same as, or reasonably related, ancillary, supportive or complementary to, the business in which the Company and the Guarantors are engaged on the date of this Indenture.

23


 

     “Permitted Investments” means:
     (1) any Investment in Parent or in a Restricted Subsidiary of Parent;
     (2) any Investment in cash, Cash Equivalents and any foreign equivalents;
     (3) any Investment by Parent or any Restricted Subsidiary of Parent in a Person, if as a result of such Investment:
     (A) such Person becomes a Restricted Subsidiary of Parent; or
     (B) such Person, in one transaction or a series of related and substantially concurrent transactions, is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, Parent or a Restricted Subsidiary of Parent;
     (4) any Investment made as a result of the receipt of non-cash consideration from an Asset Sale that was made pursuant to and in compliance with Section 4.10 hereof;
     (5) any acquisition of assets or Capital Stock in exchange for the issuance of Qualifying Equity Interests;
     (6) any Investments received in compromise or resolution of (A) obligations of trade creditors or customers that were incurred in the ordinary course of business of Parent or any of its Restricted Subsidiaries, including pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of any trade creditor or customer or (B) litigation, arbitration or other disputes;
     (7) Investments represented by Hedging Obligations;
     (8) loans or advances to officers, directors or employees made in the ordinary course of business of Parent or any Restricted Subsidiary of Parent in an aggregate principal amount not to exceed $7.0 million at any one time outstanding;
     (9) repurchases of the Notes;
     (10) any guarantee of Indebtedness permitted to be incurred pursuant to Section 4.09 hereof other than a guarantee of Indebtedness of an Affiliate of Parent that is not a Restricted Subsidiary of Parent;
     (11) any Investment existing on, or made pursuant to binding commitments existing on, the date of this Indenture and any Investment consisting of an extension, modification or renewal of any Investment existing on, or made pursuant to a binding commitment existing on, the date of this Indenture; provided that the amount of any such Investment may be increased (A) as required by the terms of such Investment as in existence on the date of this Indenture or (B) as otherwise permitted under this Indenture;
     (12) Investments acquired after the date of this Indenture as a result of the acquisition by Parent or any Restricted Subsidiary of Parent of another Person, including by way of a merger, amalgamation or consolidation with or into Parent or any of its Restricted Subsidiaries in a transaction that is not prohibited by Section 5.01 hereof after the date of this Indenture to the extent that such Investments were not made in contemplation of such acquisition, merger,

24


 

amalgamation or consolidation and were in existence on the date of such acquisition, merger, amalgamation or consolidation;
     (13) the acquisition by a Receivables Subsidiary in connection with a Qualified Receivables Transaction of Equity Interests of a trust or other Person established by such Receivables Subsidiary to effect such Qualified Receivables Transaction and any other Investment by Parent or a Subsidiary of Parent in a Receivables Subsidiary or any Investment by a Receivables Subsidiary in any other Person in connection with a Qualified Receivables Transaction;
     (14) accounts receivable arising in the ordinary course of business;
     (15) Investments in connection with outsourcing initiatives in the ordinary course of business;
     (16) Investments having an aggregate Fair Market Value (measured on the date each such Investment was made and without giving effect to subsequent changes in value other than a reduction for all returns of principal in cash and capital dividends in cash), when taken together with all Investments made pursuant to this clause (16) that are at the time outstanding, not to exceed $750.0 million at any one time outstanding in connection with (A) travel or airline related businesses made in connection with marketing and promotion agreements, alliance agreements, distribution agreements, agreements with respect to fuel consortiums, agreements relating to flight training, agreements relating to insurance arrangements, agreements relating to parts management systems and other similar agreements or (B) joint ventures in existence on the date of this Indenture or formed thereafter; and
     (17) other Investments in any Person that do not involve properties or assets that constitute Collateral, having an aggregate Fair Market Value (measured on the date each such Investment was made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (17) that are at the time outstanding, not to exceed 3.0% of the total consolidated tangible assets of Parent and its Restricted Subsidiaries at the time of such Investment.
     “Permitted Liens” means:
     (1) Priority Liens held by the Collateral Trustee securing (A) Priority Lien Debt in an aggregate principal amount (as of the date of incurrence of any Priority Lien Debt and after giving pro forma effect to the application of the net proceeds therefrom), not exceeding the Priority Lien Cap and (B) all other Priority Lien Obligations;
     (2) Junior Liens held by the Collateral Trustee securing (A)(i) Junior Lien Debt (including all Permitted Refinancing Indebtedness secured by a Junior Lien permitted by clause (A)(ii) below and together with all Third Lien Debt at the time outstanding) in an aggregate principal amount (as of the date of incurrence of any such Junior Lien Debt and after giving pro forma effect to the application of the net proceeds therefrom), not exceeding $300.0 million at any one time outstanding and (ii) Permitted Refinancing Indebtedness the proceeds of which are applied to renew, refund, extend, refinance, replace, defease or discharge any Junior Lien Debt or other Junior Lien Obligations and (B) all other Junior Lien Obligations; provided, that all such Junior Liens contemplated by this clause (2) are made junior to the Priority Lien Obligations pursuant to the Collateral Trust Agreement;

25


 

     (3) Liens on Collateral securing (A)(i) Third Lien Debt (including all Permitted Refinancing Indebtedness secured by a Lien permitted by clause (A)(ii) below and together with all Junior Lien Debt at the time outstanding) in an aggregate principal amount (as of the date of incurrence of any such Third Lien Debt and after giving pro forma effect to the application of the net proceeds therefrom), not exceeding the Subordinated Lien Cap and (ii) Permitted Refinancing Indebtedness the proceeds of which are applied to renew, refund, refinance, extend, replace, defease or discharge any Third Lien Debt or other Third Lien Obligations and (B) all other Third Lien Obligations;
     (4) Liens for taxes, assessments or governmental charges or claims that are not yet delinquent or that are being contested in good faith by appropriate proceedings promptly instituted and diligently concluded; provided that any reserve or other appropriate provision as is required in conformity with GAAP has been made therefor;
     (5) Liens imposed by law, including carrier’s, warehousemen’s, landlord’s and mechanics’ Liens, in each case, incurred in the ordinary course of business;
     (6) Liens arising by operation of law in connection with judgments, attachments or awards which do not constitute an Event of Default hereunder;
     (7) Liens created for the benefit of (or to secure) the Notes (or the Note Guarantees);
     (8) Liens on accounts receivables and related assets of the type specified in the definition of “Qualified Receivables Transaction,” incurred in connection with a Qualified Receivables Transaction;
     (9) (A) any overdrafts and related liabilities arising from treasury, netting, depository and cash management services or in connection with any automated clearing house transfers of funds, in each case as it relates to Cure Collateral, if any and (B) Liens arising by operation of law or that are contractual rights of set-off in favor of the depository bank or securities intermediary in respect of the Collateral Proceeds Account;
     (10) licenses, sublicenses, leases and subleases by the Company as they relate to Cure Collateral and to the extent (A) such licenses, sublicenses, leases or subleases do not interfere in any material respect with the business of Parent and its Restricted Subsidiaries, taken as a whole, and in each case, such license, sublicense, lease or sublease is to be subject to the Liens granted to the Collateral Trustee pursuant to the Security Documents or (B) otherwise expressly permitted by the Security Documents;
     (11) easements (including, without limitation, reciprocal easement agreements and utility agreements), rights-of-way, covenants, reservations, encroachments, land use restrictions, encumbrances or other similar matters and title defects, in each case as they relate to Real Property Assets, which (A) do not interfere materially with the ordinary conduct of the business of the Company or its utilization of such property, (B) do not materially detract from the value of the property to which they attach or materially impair the use thereof to the Company and (C) do not materially adversely affect the marketability of the applicable property;
     (12) salvage or similar rights of insurers, in each case as it relates to Cure Collateral, if any;

26


 

     (13) Liens pursuant to the Credit Agreement and the Co-Branded Agreement that are required to be released pursuant to the Escrow Conditions; provided that upon the Release Date this clause (13) will no longer be applicable to the Notes and have no force and effect; and
     (14) Liens incurred in the ordinary course of business of Parent or any Restricted Subsidiary of Parent with respect to obligations that do not exceed $7.0 million at any one time outstanding.
     “Permitted Refinancing Indebtedness” means any Indebtedness of Parent or any of its Restricted Subsidiaries issued in exchange for, or the net proceeds of which are used to renew, refund, extend, refinance, replace, defease or discharge other Indebtedness of Parent or any of its Restricted Subsidiaries (other than intercompany Indebtedness); provided that:
     (1) the principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness does not exceed the original principal amount (or accreted value, if applicable) of the Indebtedness renewed, refunded, extended, refinanced, replaced, defeased or discharged (plus all accrued interest on the Indebtedness and the amount of all fees and expenses, including premiums, incurred in connection therewith);
     (2) if such Permitted Refinancing Indebtedness has a maturity date that is after the maturity date of the Notes (with any amortization payment comprising such Permitted Refinancing Indebtedness being treated as maturing on its amortization date), such Permitted Refinancing Indebtedness has a Weighted Average Life to Maturity that is (A) equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being renewed, refunded, extended, refinanced, replaced, defeased or discharged or (B) more than 90 days after the final maturity date of the Notes;
     (3) if the Indebtedness being renewed, refunded, extended, refinanced, replaced, defeased or discharged is subordinated in right of payment to the Notes, such Permitted Refinancing Indebtedness is subordinated in right of payment to the Notes on terms at least as favorable to the Holders of Notes as those contained in the documentation governing the Indebtedness being renewed, refunded, extended, refinanced, replaced, defeased or discharged;
     (4) no Restricted Subsidiary that is not a Guarantor shall be an obligor with respect to such Permitted Refinancing Indebtedness unless such non-Guarantor Restricted Subsidiary was an obligor with respect to the Indebtedness being renewed, refunded, extended, refinanced, replaced, defeased or discharged; and
     (5) notwithstanding that the Indebtedness being renewed, refunded, refinanced, extended, replaced, defeased or discharged may have been repaid or discharged by Parent or any of its Restricted Subsidiaries prior to the date on which the new Indebtedness is incurred, Indebtedness that otherwise satisfies the requirements of this definition may be designated as Permitted Refinancing Indebtedness so long as such renewal, refunding, refinancing, extension, replacement, defeasance or discharge occurred not more than 36 months prior to the date of such incurrence of Permitted Refinancing Indebtedness.
     “Person” means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, limited liability company or government or other entity.
     “Priority Lien” means a Lien granted by a Security Document to the Collateral Trustee, at any time, upon any property of the Company to secure Priority Lien Obligations.

27


 

     “Priority Lien Cap” means $500.0 million (plus the aggregate amount of accrued interest and the amount of all fees and expenses, including premiums, paid or incurred in connection with any refunding, replacement or other refinancing of Priority Lien Debt with the proceeds of other Priority Lien Debt that was permitted to be incurred under this Indenture), minus the aggregate amount of all Net Proceeds of any Sale of Collateral applied by the Company since the date of this Indenture to repay or redeem Notes or any Priority Lien Debt under a Credit Facility that is term Indebtedness or to repay other Priority Lien Debt or to repay Priority Lien Debt under a Credit Facility that is revolving credit Indebtedness and effect a corresponding commitment reduction thereunder pursuant to Section 4.10 hereof, and minus the principal amount of any Permitted Refinancing Indebtedness not constituting Priority Lien Debt the proceeds of which are applied to refinance, refund, repay, redeem, defease or otherwise acquire or retire for value any Priority Lien Debt.
     “Priority Lien Debt” means:
     (1) the Initial Notes; and
     (2) additional notes issued under any indenture (including this Indenture) or other Indebtedness (including letters of credit and reimbursement obligations with respect thereto but excluding Hedging Obligations) of the Company that is secured equally and ratably with the Notes on a priority basis by a Priority Lien that is permitted to be incurred and so secured under each applicable Secured Debt Document; provided, in the case of any Indebtedness referred to in this clause (2), that:
     (A) on or before the date on which such future Indebtedness is incurred by the Company, such Indebtedness is designated by the Company, in an Officers’ Certificate delivered to each Priority Lien Representative and the Collateral Trustee, as “Priority Lien Debt” for purposes of the Secured Debt Documents; provided that no Series of Secured Debt may be designated as both Junior Lien Debt and Priority Lien Debt;
     (B) the Priority Lien Representative for such Indebtedness executes a joinder in the form required under the Collateral Trust Agreement and such Indebtedness is governed by a credit agreement or other agreement that includes a Lien Sharing and Priority Confirmation;
     (C) all requirements set forth in the Collateral Trust Agreement as to the confirmation, grant or perfection of the Collateral Trustee’s Priority Lien to secure such Indebtedness or Obligations in respect thereof are satisfied (and the satisfaction of such requirements and the other provisions of this clause (C) will be conclusively established if the Company delivers to the Collateral Trustee an Officers’ Certificate stating that such requirements and other provisions have been satisfied and that such Indebtedness is “Priority Lien Debt”); and
     (D) such Indebtedness (i) matures after the final maturity date of the Notes and (ii) has a Weighted Average Life to Maturity greater than the Weighted Average Life to Maturity of the Notes.
     For the avoidance of doubt, Banking Product Obligations and Hedging Obligations do not constitute Priority Lien Debt, but may constitute Priority Lien Obligations.

28


 

     “Priority Lien Debt Value Ratio” means, as of any date of determination, the ratio of (a) the Appraised Value of the Collateral as of that date to (b) the aggregate principal amount of Priority Lien Debt outstanding as of that date (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Parent and its Restricted Subsidiaries thereunder).
     “Priority Lien Documents” means this Indenture, any other Credit Facility pursuant to which any Priority Lien Debt is incurred, any Hedge Agreement pursuant to which any Hedging Obligations constituting Priority Lien Obligations are incurred, any agreement pursuant to which any Banking Product Obligations constituting Priority Lien Obligations are incurred and the Security Documents.
     “Priority Lien Obligations” means the Priority Lien Debt and all other Obligations in respect of Priority Lien Debt, together with the sum of (a) Hedging Obligations evidenced by a Hedge Agreement that includes a Lien Sharing and Priority Confirmation and meets all of the other requirements of the Collateral Trust Agreement to be Priority Lien Obligations and that have been designated as “Priority Lien Obligations” in an Officers’ Certificate delivered to the Collateral Trustee on the date on which the Hedge Agreement relating to such Hedging Obligation was entered into (1) having an aggregate “settlement amount” (or similar term) (as defined in the applicable Hedge Agreement relating to Priority Lien Obligations consisting of a Hedging Obligation) or (2), with respect to any such Hedge Agreement that has been terminated in accordance with its terms, the amount then due and payable (exclusive of expenses and similar payments but including any termination payments then due) under such Hedge Agreement, under all Hedge Agreements relating to Priority Lien Obligations consisting of Hedging Obligations, minus the aggregate amount of all Net Proceeds of any Sale of Collateral applied by the Company since the date of this Indenture to repay any Hedging Obligations pursuant to the terms of the Priority Lien Documents under which such Hedging Obligations are secured or intended to be secured; provided that the “settlement amount” (or similar term) as of the last Business Day of the month preceding any date of determination shall be calculated by the appropriate swap counterparties and reported to the Collateral Trustee upon request plus (b) Banking Product Obligations of the Company that are evidenced by an agreement that includes a Lien Sharing and Priority Confirmation and meets all of the other requirements of the Collateral Trust Agreement to be Priority Lien Obligations and that have been designated as “Priority Lien Obligations” in an Officers’ Certificate delivered to the Collateral Trustee on the date on which the agreement relating to such Banking Product Obligation was entered into, in an aggregate amount not to exceed, together with the amounts referred to in clause (a) above, $15.0 million.
     “Priority Lien Representative” means (a) in the case of the Notes, the Trustee or (b) in the case of any other Series of Priority Lien Debt, the trustee, agent or representative of the Holders of such Series of Priority Lien Debt who maintains the transfer register for such Series of Priority Lien Debt and is appointed as a representative of the Priority Lien Debt (for purposes related to the administration of the security documents) pursuant to the credit agreement or other agreement governing such Series of Priority Lien Debt.
     “Private Placement Legend” means the legend set forth in Section 2.06(f)(1) hereof to be placed on all Notes issued under this Indenture except where otherwise permitted by the provisions of this Indenture.
     “QEC Kits” means the quick engine change kits of the Company.
     “QIB” means a “qualified institutional buyer” as defined in Rule 144A.
     “Qualified Receivables Transaction” means any transaction or series of transactions entered into by Parent or any of its Subsidiaries pursuant to which Parent or any of its Subsidiaries sells, conveys or

29


 

otherwise transfers to (a) a Receivables Subsidiary or any other Person (in the case of a transfer by Parent or any of its Subsidiaries) and (b) any other Person (in the case of a transfer by a Receivables Subsidiary), or grants a security interest in, any accounts receivable (whether now existing or arising in the future) of Parent or any of its Subsidiaries, and any assets related thereto including, without limitation, all Equity Interests and other investments in the Receivables Subsidiary, all collateral securing such accounts receivable, all contracts and all guarantees or other obligations in respect of such accounts receivable, proceeds of such accounts receivable and other assets which are customarily transferred or in respect of which security interests are customarily granted in connection with asset securitization transactions involving accounts receivable, other than assets that constitute Collateral or proceeds of Collateral.
     “Qualified Replacement Assets” means any aircraft, spare engines, Asian Pacific Routes, Asian Pacific Slots or Asian Pacific Gate Leaseholds (a) which the Company owns or in which the Company has any rights or the power to transfer rights, (b) in which the Company pledges such ownership interests or rights as Collateral under the Security Documents to secure Secured Debt Obligations and (c) which are subject to a perfected Secured Debt Lien in favor of the Collateral Trustee for the benefit of the holders of the Secured Debt Obligations subject only to Permitted Liens, pursuant to arrangements reasonably satisfactory to the Collateral Trustee.
     “Qualifying Equity Interests” means Equity Interests of Parent other than Disqualified Stock.
     “Real Estate Mortgages” means, collectively, each mortgage granted pursuant to the terms of this Indenture, as the same may be amended, restated, modified, supplemented, extended or amended and restated from time to time.
     “Real Property Assets” means those certain parcels of real property owned in fee by the Company and located at (a) 1200 Algonquin Road, Elk Grove Village, Illinois 60007 and (b) the Denver Training Facility and together with, in each case, all buildings, improvements, facilities, appurtenant fixtures and equipment, easements and other property and rights incidental or appurtenant to the ownership of such parcel of real property (as each such real property is more particularly described in the applicable Real Estate Mortgage) (including, without limitation, all collateral described in the applicable Real Estate Mortgage) and, from time to time, all collateral identified in a Real Estate Mortgage granted pursuant to the terms of this Indenture and designated as Cure Collateral in accordance with Sections 4.20 and 4.21 hereof.
     “Receivables Subsidiary” means a Subsidiary of Parent which engages in no activities other than in connection with the financing of accounts receivable and which is designated by the Board of Directors of Parent (as provided below) as a Receivables Subsidiary (a) no portion of the Indebtedness or any other Obligations (contingent or otherwise) of which (1) is guaranteed by Parent or any Restricted Subsidiary of Parent (other than comprising a pledge of the Capital Stock or other interests in such Receivables Subsidiary (an “incidental pledge”), and excluding any guarantees of Obligations (other than the principal of, and interest on, Indebtedness) pursuant to representations, warranties, covenants and indemnities entered into in the ordinary course of business in connection with a Qualified Receivables Transaction), (2) is recourse to or obligates Parent or any Restricted Subsidiary of Parent in any way other than through an incidental pledge pursuant to representations, warranties, covenants and indemnities entered into in the ordinary course of business in connection with a Qualified Receivables Transaction or (3) subjects any property or asset of Parent or any Subsidiary of Parent (other than accounts receivable and related assets as provided in the definition of “Qualified Receivables Transaction”), directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to representations, warranties, covenants and indemnities entered into in the ordinary course of business in connection with a Qualified Receivables Transaction, (b) with which neither Parent nor any Subsidiary of Parent has any material contract, agreement, arrangement or understanding (other than pursuant to the Qualified Receivables Transaction)

30


 

other than on terms no less favorable to Parent or such Subsidiary than those that might be obtained at the time from Persons who are not Affiliates of Parent, other than fees payable in the ordinary course of business in connection with servicing accounts receivable and (c) with which neither Parent nor any Subsidiary of Parent has any obligation to maintain or preserve such Subsidiary’s financial condition, other than a minimum capitalization in customary amounts, or cause such Subsidiary to achieve certain levels of operating results. Any such designation by the Board of Directors of Parent will be evidenced to the Trustee by filing with the Trustee a certified copy of the resolution of the Board of Directors of Parent giving effect to such designation and an Officers’ Certificate certifying that such designation complied with the foregoing conditions.
     “Regulation S” means Regulation S promulgated under the Securities Act, as it may be amended from time to time, and any successor provision thereto.
     “Regulation S Global Note” means a Global Note substantially in the form of Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of and registered in the name of the Depositary or its nominee, issued in a denomination equal to the outstanding principal amount of the Notes sold in reliance on Rule 903 of Regulation S.
     “Release Date” has the meaning set forth in the Collateral Trust Agreement.
     “Responsible Officer” when used with respect to the Trustee, means any officer within the Corporate Trust Office of the Trustee (or any successor group of the Trustee) or any other officer of the 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 his knowledge of and familiarity with the particular subject.
     “Restricted Definitive Note” means a Definitive Note bearing the Private Placement Legend.
     “Restricted Global Note” means a Global Note bearing the Private Placement Legend.
     “Restricted Investment” means an Investment other than a Permitted Investment.
     “Restricted Period” means the 40-day distribution compliance period as defined in Regulation S.
     “Restricted Subsidiary” of a Person means any Subsidiary of the referent Person that is not an Unrestricted Subsidiary.
     “Route” means the authority the Company now holds, or hereafter acquires from the DOT pursuant to Title 49 or other applicable law, to operate scheduled foreign air transportation of persons, property and mail, including applicable designations, frequencies, certificates, Fifth-Freedom Rights and “behind and beyond rights,” in each case whether or not utilized by the Company.
     “Rule 144” means Rule 144 promulgated under the Securities Act.
     “Rule 144A” means Rule 144A promulgated under the Securities Act.
     “Rule 903” means Rule 903 promulgated under the Securities Act.
     “Rule 904” means Rule 904 promulgated under the Securities Act.
     “SEC” means the Securities and Exchange Commission.

31


 

     “Securities Act” means the Securities Act of 1933, as amended.
     “Sale of Collateral” means any Asset Sale to the extent involving a sale, lease or other disposition of Japan Slots or Japan Gate Leaseholds or any property or asset that constitutes Collateral. For the avoidance of doubt, the Company will not sell, lease, convey, transfer or otherwise dispose of the Japan Routes.
     “Second Lien Escrow and Security Agreement” means that certain escrow and security agreement, dated as of the date of the Second Lien Indenture, among the Company, The Bank of New York Mellon Trust Company, N.A., as trustee, and The Bank of New York Mellon Trust Company, N.A., as escrow agent, for the sole benefit of the holders of the Second Lien Notes, as such agreement may be amended, amended and restated, adjusted, supplemented or otherwise modified from time to time.
     “Second Lien Indenture” means the indenture, dated as of the date of this Indenture, among the Company, the Guarantors, The Bank of New York Mellon Trust Company, N.A., as trustee, and Wilmington Trust FSB, as collateral trustee, governing the Second Lien Notes, as amended, amended and restated, adjusted, supplemented or otherwise modified from time to time.
     “Second Lien Notes” means $200.0 million in aggregate principal amount of the Company’s 12.000% Senior Second Lien Notes due 2013.
     “Secured Debt” means Priority Lien Debt and Junior Lien Debt.
     “Secured Debt Documents” means the Priority Lien Documents and Junior Lien Documents.
     “Secured Debt Lien” means a Lien granted by a Security Document to the Collateral Trustee, at any time, upon any property of the Company to secure Secured Debt Obligations.
     “Secured Debt Obligations” means Priority Lien Obligations and Junior Lien Obligations.
     “Secured Debt Representative” means each Junior Lien Representative and each Priority Lien Representative.
     “Secured Parties” means the holders of Secured Debt Obligations and the Secured Debt Representatives.
     “Security Documents” means the Collateral Trust Agreement, each Lien Sharing and Priority Confirmation, and all security agreements, pledge agreements, collateral assignments, mortgages, deeds of trust, collateral agency agreements, control agreements or other grants or transfers for security executed and delivered by the Company creating (or purporting to create) a Lien upon Collateral in favor of the Collateral Trustee, for the benefit of the Secured Parties, in each case, as amended, amended and restated, modified, renewed, restated or replaced, in whole or in part, from time to time, in accordance with its terms and Section 7.1 of the Collateral Trust Agreement; provided, that the Escrow and Security Agreement shall not be deemed a “Security Document.”
     “Series of Junior Lien Debt” means, severally, the Second Lien Notes and each issue or series of Junior Lien Debt for which a single transfer register is maintained and any other Indebtedness under any other indenture or Credit Facility that constitutes Junior Lien Obligations.
     “Series of Priority Lien Debt” means, severally, the Notes, any additional notes or other indebtedness under any other indenture or Credit Facility that constitutes Priority Lien Obligations.

32


 

     “Series of Secured Debt” means, severally, each Series of Junior Lien Debt and each Series of Priority Lien Debt.
     “Significant Subsidiary” means any Restricted Subsidiary that would be a “significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation is in effect on the date of this Indenture.
     “Slot” means (a) in the case of airports outside the United States, at any time, the right and operational authority to conduct one landing or takeoff at a specific time or during a specific time period or (b) in the case of airports in the United States, at any time, the right and operational authority to conduct one Instrument Flight Rule (as defined in Title 14) scheduled landing or takeoff operation at a specific time or during a specific time period at any airport at which landings or takeoffs are restricted, including, without limitation, slots, arrival and operating authorizations, whether pursuant to FAA or DOT regulations or orders pursuant to Title 14, Title 49 or other federal statutes now or hereinafter in effect.
     “Special Interest” means additional interest on all outstanding Notes in an amount equal to 2.0% per annum of the principal amount of such Notes, payable as described (a) in clause (4)(B)(i) of Section 4.10(a) hereof and (b) in Section 4.20 hereof; provided that in no event will the aggregate amount of Special Interest payable at any one time pursuant to clauses (a) and (b) above together exceed 2.0% per annum of the principal amount of such Notes. For the avoidance of doubt, Special Interest payable pursuant to clauses (a) and (b) above are independent obligations governed by separate provisions of this Indenture and the termination of the obligation to pay Special Interest under one such provision does not automatically terminate the obligation to pay Special Interest under the other provision. Special Interest payable pursuant to clauses (a) or (b) above will be calculated and paid in the same manner as regular interest is calculated and paid under this Indenture and all references to payments of interest will be deemed to include Special Interest, if applicable.
     “Standard Securitization Undertakings” means all representations, warranties, covenants, indemnities, performance Guarantees and servicing obligations entered into by Parent or any Subsidiary (other than a Receivables Subsidiary), which are customary in connection with any Qualified Receivables Transaction.
     “Stated Maturity” means, with respect to any installment of interest or principal on any series of Indebtedness, the date on which the payment of interest or principal was scheduled to be paid in the documentation governing such Indebtedness as of the date of this Indenture, and will not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof.
     “Subordinated Lien Cap” means as of any date of determination, the aggregate amount of Junior Lien Debt and/or Third Lien Debt that may be incurred by the Company such that, after giving pro forma effect to such incurrence and the application of the net proceeds therefrom the Total Appraised Value Ratio would be no less than 1.0 to 1.0.
     “Subsidiary” means, with respect to any specified Person:
     (1) any corporation, association or other business entity (other than a partnership, joint venture or limited liability company) of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency and after giving effect to any voting agreement or stockholders’ agreement that effectively transfers voting power) to vote in the election of directors, managers or trustees of the corporation, association or

33


 

other business entity is at the time of determination owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and
     (2) any partnership, joint venture or limited liability company of which (A) more than 50% of the capital accounts, distribution rights, total equity and voting interests or general and limited partnership interests, as applicable, are owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof, whether in the form of membership, general, special or limited partnership interests or otherwise and (B) such Person or any Subsidiary of such Person is a controlling general partner or otherwise controls such entity.
     “Third Lien Debt” means Indebtedness secured by Liens on Collateral that are subordinated to Priority Lien Obligations and Junior Lien Obligations on terms that are substantially identical (as conclusively determined in good faith by an Officer of the Company and evidenced in an Officers’ Certificate delivered to the Trustee) to the subordination provisions applicable to Junior Lien Obligations set forth in the Collateral Trust Agreement as of the date of this Indenture that subordinate the Junior Lien Obligations to the Priority Lien Obligations.
     “Third Lien Obligations” means all Obligations in respect of Third Lien Debt, including Hedging Obligations that are secured, or intended by the Company to be secured, by a Lien on Collateral that is pari passu with the Lien securing Third Lien Debt, including subordination to Priority Lien Obligations and Junior Lien Obligations on terms that are substantially identical (as conclusively determined in good faith by an officer of the Company and evidenced in an Officers’ Certificate delivered to the Trustee) to the subordination provisions applicable to Junior Lien Obligations set forth in the Collateral Trust Agreement as of the date of this Indenture.
     “Title 14” means Title 14 of the U.S. Code of Federal Regulations, including Part 93, Subparts K and S thereof, as amended from time to time or any successor or recodified regulation.
     “Title 49” means Title 49 of the U.S. Code, which, among other things, recodified and replaced the U.S. Federal Aviation Act of 1958, and the rules and regulations promulgated pursuant thereto or any subsequent legislation that amends, supplements or supersedes such provisions.
     “Total Appraised Value Ratio” means, as of any date of determination, the ratio of (a) the Appraised Value of the Collateral as of that date to (b) the aggregate principal amount of Secured Debt and Third Lien Debt outstanding as of that date (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Parent and its Restricted Subsidiaries thereunder), excluding Hedging Obligations.
     “Treasury Rate” means, as of any redemption date, the yield to maturity as of such redemption date of U.S. Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two Business Days prior to the redemption date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the redemption date to February 1, 2012; provided, however, that if the period from the redemption date to February 1, 2012 is less than one year, the weekly average yield on actually traded U.S. Treasury securities adjusted to a constant maturity of one year will be used.

34


 

     “Trustee” means The Bank of New York Mellon Trust Company, N.A. until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor serving hereunder.
     “Uniform Commercial Code” means the Uniform Commercial Code as in effect from time to time in any applicable jurisdiction.
     “United States Citizen” means a Person meeting the definition set forth in Section 40102(a)(15) of Title 49, as such term has been interpreted by the DOT.
     “Unrestricted Definitive Note” means a Definitive Note that does not bear and is not required to bear the Private Placement Legend.
     “Unrestricted Global Note” means a Global Note that does not bear and is not required to bear the Private Placement Legend.
     “Unrestricted Subsidiary” means any Subsidiary of Parent (except the Company) that is designated by the Board of Directors of Parent as an Unrestricted Subsidiary in compliance with Section 4.18 hereof pursuant to a resolution of the Board of Directors, but only to the extent that such Subsidiary:
     (1) has no Indebtedness other than Non-Recourse Debt;
     (2) except as permitted by Section 4.11 hereof, is not party to any agreement, contract, arrangement or understanding with Parent or any Restricted Subsidiary of Parent unless the terms of any such agreement, contract, arrangement or understanding are no less favorable to Parent or such Restricted Subsidiary than those that might be obtained at the time from Persons who are not Affiliates of Parent;
     (3) is a Person with respect to which neither Parent nor any of its Restricted Subsidiaries has any direct or indirect obligation (A) to subscribe for additional Equity Interests or (B) to maintain or preserve such Person’s financial condition or to cause such Person to achieve any specified levels of operating results; and
     (4) has not guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of Parent or any of its Restricted Subsidiaries.
     “U.S. Person” means a U.S. Person as defined in Rule 902(k) promulgated under the Securities Act.
     “Use or Lose Rule” means, with respect to Slots, any applicable utilization requirements issued by the FAA, other Governmental Authorities, any Foreign Aviation Authorities or any Airport Authorities, including the terms of Section 93.227 of Title 14 to the extent applicable.
     “Voting Stock” of any specified Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.
     “Weighted Average Life to Maturity” means, when applied to any Indebtedness at any date, the number of years obtained by dividing:
     (1) the sum of the products obtained by multiplying (A) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal,

35


 

including payment at final maturity, in respect of the Indebtedness, by (B) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by
     (2) the then outstanding principal amount of such Indebtedness.
Section 1.02 Other Definitions.
         
    Defined in
Term   Section
“Affiliate Transaction”
    4.11  
“Asset Sale Offer”
    4.10  
“Authentication Order”
    2.02  
“Calculation Date”
    1.01  
“Change of Control Offer”
    4.15  
“Change of Control Payment”
    4.15  
“Change of Control Payment Date”
    4.15  
“Collateral Proceeds Account”
    4.10  
“Consideration Remainder”
    4.10  
“Covenant Defeasance”
    8.03  
“disposition”
    1.01  
“DTC”
    2.03  
“Event of Default”
    6.01  
“Excess Proceeds”
    4.10  
“incur”
    4.09  
“Legal Defeasance”
    8.02  
“Offer Amount”
    3.10  
“Offer Period”
    3.10  
“Other Offer Notes”
    4.10  
“Paying Agent”
    2.03  
“Permitted Debt”
    4.09  
“Permitted Person”
    1.01  
“Purchase Date”
    3.10  
“Reference Date”
    4.20  
“Registrar”
    2.03  
“Restricted Payments”
    4.07  
“Sale of Collateral Consideration”
    4.10  
“Sale of Collateral Offer”
    4.10  
“Special Scheduled Maturity Date”
    3.09  
“Special Scheduled Maturity Date Price”
    3.09  
Section 1.03 Rules of Construction.
     Unless the context otherwise requires:
     (1) a term has the meaning assigned to it;
     (2) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;
     (3) “or” is not exclusive;

36


 

     (4) words in the singular include the plural, and in the plural include the singular;
     (5) “will” shall be interpreted to express a command;
     (6) provisions apply to successive events and transactions;
     (7) “including” means including without limitation; and
     (8) references to sections of or rules under the Securities Act or the Exchange Act will be deemed to include substitute, replacement of successor sections or rules adopted by the SEC from time to time.
ARTICLE 2
THE NOTES
Section 2.01 Form and Dating.
     (a) General. The Notes and the Trustee’s certificate of authentication will be substantially in the form of Exhibit A hereto. The Notes may have notations, legends or endorsements required by law, stock exchange rule or usage. Each Note will be dated the date of its authentication. The Notes shall be in denominations of $2,000 and integral multiples of $1,000 in excess thereof.
     The terms and provisions contained in the Notes will constitute, and are hereby expressly made, a part of this Indenture and the Company, the Guarantors, the Trustee and the Collateral Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. However, to the extent any provision of any Note conflicts with the express provisions of this Indenture, the provisions of this Indenture shall govern and be controlling.
     (b) Global Notes. Global Notes will be substantially in the form of Exhibit A hereto (including the Global Note Legend set forth in Section 2.06(f) hereof and the “Schedule of Exchanges of Interests in the Global Note” attached thereto). Definitive Notes will be substantially in the form of Exhibit A hereto (but without the Global Note Legend and without the “Schedule of Exchanges of Interests in the Global Note” attached thereto). Each Global Note will represent such of the outstanding Notes as will be specified therein and each shall provide that it represents the aggregate principal amount of outstanding Notes from time to time endorsed thereon and that the aggregate principal amount of outstanding Notes represented thereby may from time to time be reduced or increased, as appropriate, to reflect exchanges and redemptions. Any endorsement of a Global Note to reflect the amount of any increase or decrease in the aggregate principal amount of outstanding Notes represented thereby will be made by the Trustee or the Custodian, at the direction of the Trustee, in accordance with instructions given by the Holder thereof as required by Section 2.06 hereof.
     (c) Euroclear and Clearstream Procedures Applicable. The provisions of the “Operating Procedures of the Euroclear System” and “Terms and Conditions Governing Use of Euroclear” and the “General Terms and Conditions of Clearstream Banking” and “Customer Handbook” of Clearstream and, in each case, any successor provisions, will be applicable to transfers of beneficial interests in the Regulation S Global Notes that are held by Participants through Euroclear or Clearstream.
Section 2.02 Execution and Authentication.
     At least one Officer must sign the Notes for the Company by manual or facsimile signature.

37


 

     If an Officer whose signature is on a Note no longer holds that office at the time a Note is authenticated, the Note will nevertheless be valid.
     A Note will not be valid until authenticated by the manual signature of the Trustee. The signature will be conclusive evidence that the Note has been authenticated under this Indenture.
     The Trustee will, upon receipt of a written order of the Company signed by an Officer (an “Authentication Order”), authenticate Notes for original issue that may be validly issued under this Indenture, including any Additional Notes issued on or after the Release Date pursuant to Section 2.14 hereof. The aggregate principal amount of Notes outstanding at any time may not exceed the aggregate principal amount of Notes authorized for issuance by the Company pursuant to one or more Authentication Orders, except as provided in Section 2.07 hereof.
     In authenticating the Notes, the Trustee shall receive, and subject to Section 7.01 hereof will be fully protected in relying upon, an Opinion of Counsel stating that this Indenture and such Notes and Note Guarantees, when authenticated and delivered by the Trustee and issued by the Company and the Guarantors in the manner and subject to any conditions specified in such Opinion of Counsel, will constitute valid and binding obligations of the Company and the Guarantors enforceable in accordance with their terms (except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium, or other laws relating to or affecting creditors’ rights and by general principles of equity, and subject to customary assumptions).
     The Trustee may appoint an authenticating agent acceptable to the Company to authenticate Notes. Unless otherwise provided in the appointment, an authenticating agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as an Agent to deal with Holders of Notes or an Affiliate of the Company.
Section 2.03 Registrar and Paying Agent.
     The Company will maintain or cause to be maintained an office or agency where Notes may be presented for registration of transfer or for exchange (“Registrar”) and an office or agency where Notes may be presented for payment (“Paying Agent”). The Registrar will keep a register of the Notes and of their transfer and exchange. The Company may appoint one or more co-registrars and one or more additional paying agents. The term “Registrar” includes any co-registrar and the term “Paying Agent” includes any additional paying agent. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company will notify the Trustee in writing of the name and address of any Agent not a party to this Indenture. If the Company fails to appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall act as such. Parent or any of its Subsidiaries may act as Paying Agent or Registrar.
     The Company initially appoints the Depository Trust Company (“DTC”) to act as Depositary with respect to the Global Notes.
     The Company initially appoints the Trustee to act as the Registrar and Paying Agent and to act as Custodian with respect to the Global Notes.
Section 2.04 Paying Agent to Hold Money in Trust.
     The Company will require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in trust for the benefit of Holders of Notes or the Trustee all money held by the

38


 

Paying Agent for the payment of principal, premium or Special Interest, if any, or interest on the Notes (whether such assets have been distributed to it by the Company or any other obligor on the Notes), and will notify the Trustee of any default by the Company in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than Parent or a Subsidiary) will have no further liability for the money. If Parent or a Subsidiary acts as Paying Agent, it will segregate and hold in a separate trust fund for the benefit of the Holders of Notes all money held by it as Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the Company, the Trustee will serve as Paying Agent for the Notes.
Section 2.05 Holder Lists.
     The Trustee will preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of all Holders of Notes. If the Trustee is not the Registrar, the Company will furnish to the Trustee at least two Business Days before each interest payment date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of the Holders of Notes.
Section 2.06 Transfer and Exchange.
     (a) Transfer and Exchange of Global Notes. A Global Note may not be transferred except as a whole by the Depositary to a nominee of the Depositary, by a nominee of the Depositary to the Depositary or to another nominee of the Depositary, or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary. All Global Notes may be exchanged by the Company for Definitive Notes if:
     (1) the Company delivers to the Trustee notice from the Depositary that it is unwilling or unable to continue to act as Depositary or that it is no longer a clearing agency registered under the Exchange Act and, in either case, a successor Depositary is not appointed by the Company within 120 days after the date of such notice from the Depositary;
     (2) the Company in its sole discretion determines that the Global Notes (in whole but not in part) should be exchanged for Definitive Notes and delivers a written notice to such effect to the Trustee; or
     (3) there has occurred and is continuing a Default or Event of Default with respect to the Notes.
     Upon the occurrence of any of the preceding events in clauses (1), (2) or (3) of this Section 2.06(a), Definitive Notes may be issued in such names as the Depositary shall instruct the Trustee. Global Notes also may be exchanged or replaced, in whole or in part, as provided in Sections 2.07 and 2.10 hereof. Every Note authenticated and delivered in exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof, shall be authenticated and delivered in the form of, and shall be, a Global Note.
     (b) Transfer and Exchange of Beneficial Interests in the Global Notes. The transfer and exchange of beneficial interests in the Global Notes will be effected through the Depositary, in accordance with the provisions of this Indenture and the Applicable Procedures. Beneficial interests in the Restricted Global Notes will be subject to restrictions on transfer comparable to those set forth herein to the extent required by the Securities Act. Transfers of beneficial interests in the Global Notes also will

39


 

require compliance with either subparagraph (1) or (2) below, as applicable, as well as one or more of the other following subparagraphs, as applicable:
     (1) Transfer of Beneficial Interests in the Same Global Note. Beneficial interests in any Restricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Restricted Global Note in accordance with the transfer restrictions set forth in the Private Placement Legend; provided, however, that prior to the expiration of the Restricted Period, transfers of beneficial interests in the Regulation S Global Note may not be made to a U.S. Person or for the account or benefit of a U.S. Person (other than an Initial Purchaser). Beneficial interests in any Unrestricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note.
     (2) All Other Transfers and Exchanges of Beneficial Interests in Global Notes. In connection with all transfers and exchanges of beneficial interests that are not subject to Section 2.06(b)(1) above, the transferor of such beneficial interest must deliver to the Registrar either:
     (A) both:
     (i) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to credit or cause to be credited a beneficial interest in another Global Note in an amount equal to the beneficial interest to be transferred or exchanged; and
     (ii) instructions given in accordance with the Applicable Procedures containing information regarding the Participant account to be credited with such increase; or
     (B) upon the occurrence of any of the events in clauses (1), (2) or (3) of Section 2.06(a) hereof, both:
     (i) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to cause to be issued a Definitive Note in an amount equal to the beneficial interest to be transferred or exchanged; and
     (ii) instructions given by the Depositary to the Registrar containing information regarding the Person in whose name such Definitive Note shall be registered to effect the transfer or exchange referred to in clause (1) above;
     Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Notes contained in this Indenture and the Notes or otherwise applicable under the Securities Act, the Trustee shall adjust the principal amount of the relevant Global Note(s) pursuant to Section 2.06(g) hereof.
     (3) Transfer of Beneficial Interests to Another Restricted Global Note. A beneficial interest in any Restricted Global Note may be transferred to a Person who takes delivery thereof in the form of a beneficial interest in another Restricted Global Note if the transfer complies with the requirements of Section 2.06(b)(2) above and the Registrar receives the following:

40


 

     (A) if the transferee will take delivery in the form of a beneficial interest in the 144A Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (1) thereof; and
     (B) if the transferee will take delivery in the form of a beneficial interest in the Regulation S Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof; and
     (4) Transfer and Exchange of Beneficial Interests in a Restricted Global Note for Beneficial Interests in an Unrestricted Global Note. A beneficial interest in any Restricted Global Note may be exchanged by any holder thereof for a beneficial interest in an Unrestricted Global Note or transferred to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note if the exchange or transfer complies with the requirements of Section 2.06(b)(2) above and:
     (A) the Registrar receives the following:
     (i) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (1)(a) thereof; or
     (ii) if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (A), if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.
     If any such transfer is effected pursuant to subparagraph (A) above at a time when an Unrestricted Global Note has not yet been issued, the Company shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the aggregate principal amount of beneficial interests transferred pursuant to subparagraph (A) above.
     Beneficial interests in an Unrestricted Global Note cannot be exchanged for, or transferred to Persons who take delivery thereof in the form of, a beneficial interest in a Restricted Global Note.
     (c) Transfer or Exchange of Beneficial Interests for Definitive Notes.
     (1) Beneficial Interests in Restricted Global Notes to Restricted Definitive Notes. Upon the occurrence of any of the events in clauses (1), (2) or (3) of Section 2.06(a) hereof, then, upon receipt by the Registrar of the following documentation:

41


 

     (A) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (2)(a) thereof;
     (B) if such beneficial interest is being transferred to a QIB in accordance with Rule 144A, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (1) thereof;
     (C) if such beneficial interest is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2) thereof;
     (D) if such beneficial interest is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(a) thereof;
     (E) if such beneficial interest is being transferred to an Institutional Accredited Investor in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (B) through (D) above, a certificate to the effect set forth in Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable; or
     (F) if such beneficial interest is being transferred to the Company or any of its Subsidiaries, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(b) thereof,
the Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(g) hereof, and the Company shall execute and the Trustee shall authenticate and deliver to the Person designated in the instructions a Definitive Note in the appropriate principal amount. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from the Depositary and the Participant or Indirect Participant. The Trustee shall deliver such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c)(1) shall bear the Private Placement Legend and shall be subject to all restrictions on transfer contained therein.
     (2) Beneficial Interests in Restricted Global Notes to Unrestricted Definitive Notes. Upon the occurrence of any of the events in clauses (1), (2) or (3) of Section 2.06(a) hereof, holder of a beneficial interest in a Restricted Global Note may exchange such beneficial interest for an Unrestricted Definitive Note or may transfer such beneficial interest to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note only if:
     (A) the Registrar receives the following:
     (i) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for an Unrestricted Definitive

42


 

Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (1)(b) thereof; or
     (ii) if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (A), if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.
     (3) Beneficial Interests in Unrestricted Global Notes to Unrestricted Definitive Notes. Upon the occurrence of any of the events in clauses (1), (2) or (3) of Section 2.06(a) hereof, if any holder of a beneficial interest in an Unrestricted Global Note proposes to exchange such beneficial interest for a Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Definitive Note, then, upon satisfaction of the conditions set forth in Section 2.06(b)(2) hereof, the Trustee will cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(g) hereof, and the Company will execute and the Trustee will authenticate and deliver to the Person designated in the instructions a Definitive Note in the appropriate principal amount. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(3) will be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest requests through instructions to the Registrar from or through the Depositary and the Participant or Indirect Participant. The Trustee will deliver such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(3) will not bear the Private Placement Legend.
     (d) Transfer and Exchange of Definitive Notes for Beneficial Interests.
     (1) Restricted Definitive Notes to Beneficial Interests in Restricted Global Notes. If any Holder of a Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note or to transfer such Restricted Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in a Restricted Global Note, then, upon receipt by the Registrar of the following documentation:
     (A) if the Holder of such Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (2)(b) thereof;
     (B) if such Restricted Definitive Note is being transferred to a QIB in accordance with Rule 144A, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (1) thereof;

43


 

     (C) if such Restricted Definitive Note is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2) thereof;
     (D) if such Restricted Definitive Note is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(a) thereof;
     (E) if such Restricted Definitive Note is being transferred to an Institutional Accredited Investor in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (B) through (D) above, a certificate to the effect set forth in Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable; or
     (F) if such Restricted Definitive Note is being transferred to the Company or any of its Subsidiaries, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(b) thereof,
the Trustee will cancel the Restricted Definitive Note, increase or cause to be increased the aggregate principal amount of, in the case of clause (A) above, the appropriate Restricted Global Note, in the case of clause (B) above, the 144A Global Note and in the case of clause (C) above, the Regulation S Global Note.
     (2) Restricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes. A Holder of a Restricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Restricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note only if:
     (A) the Registrar receives the following:
     (i) if the Holder of such Definitive Notes proposes to exchange such Notes for a beneficial interest in the Unrestricted Global Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (1)(c) thereof; or
     (ii) if the Holder of such Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of a beneficial interest in the Unrestricted Global Note, a certificate from such Holder in the form of Exhibit B hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (A), if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.
     Upon satisfaction of the conditions of any of the subparagraphs in this Section 2.06(d)(2), the Trustee will cancel the Definitive Notes and increase or cause to be increased the aggregate principal amount of the Unrestricted Global Note.

44


 

     (3) Unrestricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note at any time. Upon receipt of a request for such an exchange or transfer, the Trustee will cancel the applicable Unrestricted Definitive Note and increase or cause to be increased the aggregate principal amount of one of the Unrestricted Global Notes.
     If any such exchange or transfer from a Definitive Note to a beneficial interest is effected pursuant to subparagraphs (2)(A) or (3) above at a time when an Unrestricted Global Note has not yet been issued, the Company will issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee will authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of Definitive Notes so transferred.
     (e) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon the occurrence of any of the events in clauses (1), (2) or (3) of Section 2.06(a) hereof, then, upon request by a Holder of Definitive Notes and such Holder’s compliance with the provisions of this Section 2.06(e), the Registrar will register the transfer or exchange of Definitive Notes. Prior to such registration of transfer or exchange, the requesting Holder must present or surrender to the Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar duly executed by such Holder or by its attorney, duly authorized in writing. In addition, the requesting Holder must provide any additional certifications, documents and information, as applicable, required pursuant to the following provisions of this Section 2.06(e).
     (1) Restricted Definitive Notes to Restricted Definitive Notes. Any Restricted Definitive Note may be transferred to and registered in the name of Persons who take delivery thereof in the form of a Restricted Definitive Note if the Registrar receives the following:
     (A) if the transfer will be made pursuant to Rule 144A, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (1) thereof;
     (B) if the transfer will be made pursuant to Rule 903 or Rule 904, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof; and
     (C) if the transfer will be made pursuant to any other exemption from the registration requirements of the Securities Act, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable.
     (2) Restricted Definitive Notes to Unrestricted Definitive Notes. Any Restricted Definitive Note may be exchanged by the Holder thereof for an Unrestricted Definitive Note or transferred to a Person or Persons who take delivery thereof in the form of an Unrestricted Definitive Note if:
     (A) the Registrar receives the following:
     (i) if the Holder of such Restricted Definitive Notes proposes to exchange such Notes for an Unrestricted Definitive Note, a certificate from such

45


 

Holder in the form of Exhibit C hereto, including the certifications in item (1)(d) thereof; or
     (ii) if the Holder of such Restricted Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such Holder in the form of Exhibit B hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (A), if the Registrar so requests, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.
     (3) Unrestricted Definitive Notes to Unrestricted Definitive Notes. A Holder of Unrestricted Definitive Notes may transfer such Notes to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note. Upon receipt of a request to register such a transfer, the Registrar shall register the Unrestricted Definitive Notes pursuant to the instructions from the Holder thereof.
     (f) Legends. The following legends will appear on the face of all Global Notes and Definitive Notes issued under this Indenture unless specifically stated otherwise in the applicable provisions of this Indenture.
     (1) Private Placement Legend.
     (A) Each Global Note and each Definitive Note (and all Notes issued in exchange therefor or substitution thereof) shall bear the legend in substantially the following form:
“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) THAT IS [IN THE CASE OF RULE 144A NOTES: SIX MONTHS] [IN THE CASE OF REGULATION S NOTES: 40 DAYS] AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY(A) TO THE ISSUER, (B) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT

46


 

OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUER’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (C) OR (D) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.”
     (2) Global Note Legend. Each Global Note will bear a legend in substantially the following form:
“THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (4) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.”
     (g) Cancellation and/or Adjustment of Global Notes. At such time as all beneficial interests in a particular Global Note have been exchanged for Definitive Notes or a particular Global Note has been redeemed, repurchased or canceled in whole and not in part, each such Global Note will be returned to or retained and canceled by the Trustee in accordance with Section 2.11 hereof. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the principal amount of Notes represented by such Global Note will be reduced accordingly and an endorsement will be made on the “Schedule of Exchanges of Interests in the Global Note” attached to such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note will be increased accordingly and an endorsement will be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such increase.

47


 

     (h) General Provisions Relating to Transfers and Exchanges.
     (1) To permit registrations of transfers and exchanges, the Company will execute and the Trustee will authenticate Global Notes and Definitive Notes upon receipt of an Authentication Order in accordance with Section 2.02 hereof or at the Registrar’s request.
     (2) No service charge will be made to a Holder of a beneficial interest in a Global Note or to a Holder of a Definitive Note for any registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar governmental charge or notation payable upon exchange, transfer or notation pursuant to Sections 2.10, 3.06, 3.10, 4.10, 4.15 and 9.04 hereof).
     (3) The Registrar will not be required to register the transfer of or exchange of any Note selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part.
     (4) All Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes will be the valid obligations of the Company and the Guarantors, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange.
     (5) Neither the Registrar nor the Company will be required:
     (A) to issue, to register the transfer of or to exchange any Notes during a period beginning at the opening of business 15 days before the day of any selection of Notes for redemption under Section 3.02 hereof and ending at the close of business on the day of selection;
     (B) to register the transfer of or to exchange any Note selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part; or
     (C) to register the transfer of or to exchange a Note between a record date and the next succeeding interest payment date.
     (6) Prior to due presentment for the registration of a transfer of any Note, the Trustee, any Agent and the Company may deem and treat the Person in whose name any Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest on such Notes and for all other purposes, and none of the Trustee, any Agent or the Company shall be affected by notice to the contrary.
     (7) The Trustee will authenticate Global Notes and Definitive Notes in accordance with the provisions of Section 2.02 hereof.
     (8) All certifications, certificates and Opinions of Counsel required to be submitted to the Registrar pursuant to this Section 2.06 to effect a registration of transfer or exchange may be submitted by facsimile.

48


 

Section 2.07 Replacement Notes.
     If any mutilated Note is surrendered to the Trustee or the Company and the Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Note, the Company will issue and the Trustee, upon receipt of an Authentication Order, will authenticate a replacement Note if the Trustee’s requirements are met. If required by the Trustee or the Company, an indemnity bond must be supplied by the Holder that is sufficient in the judgment of the Trustee and the Company to protect the Company, the Trustee, any Agent and any authenticating agent from any loss that any of them may suffer if a Note is replaced. The Company may charge for its expenses in replacing a Note, including reasonable fees and expenses of the Trustee.
     Every replacement Note is an obligation of the Company and will be entitled to all of the benefits of this Indenture equally and proportionately with all other Notes duly issued hereunder.
Section 2.08 Outstanding Notes.
     The Notes outstanding at any time are all the Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those reductions in the interest in a Global Note effected by the Trustee in accordance with the provisions hereof, and those described in this Section 2.08 as not outstanding. Except as set forth in Section 2.09 hereof, a Note does not cease to be outstanding because the Company or an Affiliate of the Company holds the Note; however, Notes held by Parent or a Subsidiary of Parent shall not be deemed to be outstanding for purposes of Section 3.07(b) hereof.
     If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by a protected purchaser.
     If the principal amount of any Note is considered paid under Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.
     If the Paying Agent (other than Parent, a Subsidiary or an Affiliate of any thereof) holds, on a redemption date or maturity date, money sufficient to pay Notes payable on that date, then on and after that date such Notes will be deemed to be no longer outstanding and will cease to accrue interest.
Section 2.09 Treasury Notes.
     In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Company, any Guarantor or any Affiliate of the Company or any Guarantor will be disregarded, except that for the purposes of determining whether the Trustee will be protected in relying on any such direction, waiver or consent, only Notes that the Trustee actually knows are so owned will be so disregarded.
Section 2.10 Temporary Notes.
     Until certificates representing Notes are ready for delivery, the Company may prepare and the Trustee will authenticate temporary Notes. Temporary Notes will be substantially in the form of certificated Notes but may have variations that the Company considers appropriate for temporary Notes and as may be reasonably acceptable to the Trustee. Without unreasonable delay, the Company will prepare and the Trustee will authenticate definitive Notes in exchange for temporary Notes.
     Until such exchange, Holders of temporary Notes will be entitled to all of the rights, benefits and privileges of this Indenture.

49


 

Section 2.11 Cancellation.
     The Company at any time may deliver Notes to the Trustee for cancellation. The Registrar and Paying Agent will forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee, or at the direction of the Trustee, the Registrar or the Paying Agent, and no one else, will cancel all Notes surrendered for registration of transfer, exchange, payment, replacement or cancellation and at the written direction of the Company will dispose of canceled Notes in accordance with its then existing procedures therefor (subject to the record retention requirement of the Exchange Act). Certification of such disposal of all canceled Notes will be delivered to the Company upon request. The Company may not issue new Notes to replace Notes that it has paid or that have been delivered to the Trustee for cancellation.
Section 2.12 Defaulted Interest.
     If the Company defaults in a payment of interest on the Notes, it will pay the defaulted interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted interest, to the Persons who are Holders of Notes on a subsequent special record date, in each case at the rate provided in the Notes and in Section 4.01 hereof. The Company will notify the Trustee in writing of the amount of defaulted interest proposed to be paid on each Note and the date of the proposed payment. The Company will fix or cause to be fixed each such special record date and payment date; provided that no such special record date may be less than 10 days prior to the related payment date for such defaulted interest. At least 15 days before the special record date, the Company (or, upon the written request of the Company, the Trustee in the name and at the expense of the Company) will mail or cause to be mailed to Holders of Notes a notice that states the special record date, the related payment date and the amount of such interest to be paid.
Section 2.13 CUSIP Numbers.
     The Company in issuing the Notes may use “CUSIP” numbers (if then generally in use), and, if so, the Trustee shall use “CUSIP” numbers in notice issued under this Indenture, including but not limited to notices of redemption, as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes or as contained in any notice of redemption or other notice and that reliance may be placed only on the other elements of identification printed on the Notes, and any such redemption or effect of other such notice shall not be affected by any defect in or omission of such numbers.
Section 2.14 Issuance of Additional Notes.
     After the date of this Indenture, the Company shall be entitled to issue Additional Notes under this Indenture. All the Notes issued under this Indenture shall be treated as a single class for all purposes of this Indenture including waivers, amendments, redemptions and offers to purchase.
     With respect to any Additional Notes, the Company shall set forth in a resolution of the Board of Directors and an Officers’ Certificate, a copy of each which shall be delivered to the Trustee, the following information:
     (a) the aggregate principal amount of such Additional Notes to be authenticated and delivered pursuant to this Indenture; and
     (b) the issue price, the issue date and the CUSIP number of such Additional Notes; provided, however, that no Additional Notes may be issued at a price that would cause such Additional Notes to

50


 

have “original issue discount” within the meaning of Section 1273 of the Internal Revenue Code of 1986, as amended.
ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee.
     If the Company elects to redeem Notes pursuant to the optional redemption provisions of Section 3.07 hereof, it must furnish to the Trustee, at least 30 days but not more than 60 days before a redemption date, an Officers’ Certificate setting forth:
     (1) the clause of this Indenture pursuant to which the redemption shall occur;
     (2) the redemption date;
     (3) the principal amount of Notes to be redeemed; and
     (4) the redemption price.
     If the redemption price is not known at the time such notice is to be given, the actual redemption price, calculated as described in the terms of the Notes to be redeemed, will be set forth in an Officers’ Certificate of the Company delivered to the Trustee no later than two Business Days prior to the redemption date.
Section 3.02 Selection of Notes to Be Redeemed or Purchased.
     If less than all of the Notes are to be redeemed or purchased in an offer to purchase at any time, and the Notes are not Global Notes, the Trustee will select Notes for redemption or purchase on a pro rata basis (or, in the case of Global Notes, the Trustee will select Notes for redemption based on DTC’s method that most nearly approximates a pro rata selection), unless otherwise required by law or applicable stock exchange or depositary requirements.
     In the event of partial redemption or purchase by lot, the particular Notes to be redeemed or purchased will be selected, unless otherwise provided herein, not less than 30 nor more than 60 days prior to the redemption or purchase date by the Trustee from the outstanding Notes not previously called for redemption or purchase.
     The Trustee will promptly notify the Company in writing of the Notes selected for redemption or purchase and, in the case of any Note selected for partial redemption or purchase, the principal amount thereof to be redeemed or purchased. Notes and portions of Notes selected will be in amounts of $2,000 or integral multiples of $1,000 in excess thereof; except that if all of the Notes of a Holder are to be redeemed or purchased, the entire outstanding amount of Notes held by such Holder, even if not $2,000 or a multiple of $1,000 in excess thereof, shall be redeemed or purchased. Except as provided in the preceding sentence, provisions of this Indenture that apply to Notes called for redemption or purchase also apply to portions of Notes called for redemption or purchase.
Section 3.03 Notice of Redemption.
     Subject to the provisions of Section 3.10 hereof, at least 30 days but not more than 60 days before a redemption date, the Company will mail or cause to be mailed, by first class mail, a notice of

51


 

redemption to each Holder whose Notes are to be redeemed at its registered address, except that redemption notices may be mailed more than 60 days prior to a redemption date if the notice is issued in connection with a defeasance of the Notes or a satisfaction and discharge of this Indenture pursuant to Articles 8 or 11 hereof.
     The notice will identify the Notes to be redeemed and will state:
     (1) the redemption date;
     (2) the redemption price;
     (3) if any Note is being redeemed in part, the portion of the principal amount of such Note to be redeemed and that, after the redemption date upon surrender of such Note, a new Note or Notes in principal amount equal to the unredeemed portion will be issued upon cancellation of the original Note;
     (4) the name and address of the Paying Agent;
     (5) that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price;
     (6) that, unless the Company defaults in making such redemption payment, interest on Notes called for redemption ceases to accrue on and after the redemption date;
     (7) the paragraph of the Notes and/or Section of this Indenture pursuant to which the Notes called for redemption are being redeemed; and
     (8) that no representation is made as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or printed on the Notes.
     At the Company’s request, the Trustee will give the notice of redemption in the Company’s name and at its expense; provided, however, that the Company has delivered to the Trustee, at least 45 days prior to the redemption date, an Officers’ Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph.
Section 3.04 Effect of Notice of Redemption.
     Once notice of redemption is mailed in accordance with Section 3.03 hereof, Notes called for redemption become irrevocably due and payable on the redemption date at the redemption price. A notice of redemption may not be conditional.
Section 3.05 Deposit of Redemption or Purchase Price.
     On or prior to 11:00 a.m. Eastern Time on the redemption or purchase date, the Company will deposit with the Trustee or with the Paying Agent money sufficient to pay the redemption or purchase price of and accrued interest and Special Interest, if any, on all Notes to be redeemed or purchased on that date. The Trustee or the Paying Agent will promptly return to the Company any money deposited with the Trustee or the Paying Agent by the Company in excess of the amounts necessary to pay the redemption or purchase price of, and accrued interest and Special Interest, if any, on, all Notes to be redeemed or purchased.

52


 

     If the Company complies with the provisions of the preceding paragraph, on and after the redemption or purchase date, interest will cease to accrue on the Notes or the portions of Notes called for redemption or purchase. If a Note is redeemed or purchased on or after an interest record date but on or prior to the related interest payment date, then any accrued and unpaid interest shall be paid to the Person in whose name such Note was registered at the close of business on such record date. If any Note called for redemption or purchase is not so paid upon surrender for redemption or purchase because of the failure of the Company to comply with the preceding paragraph, interest shall be paid on the unpaid principal, from the redemption or purchase date until such principal is paid, and to the extent lawful on any interest not paid on such unpaid principal, in each case at the rate provided in the Notes and in Section 4.01 hereof.
Section 3.06 Notes Redeemed or Purchased in Part.
     Upon surrender of a Note that is redeemed or purchased in part, the Company will issue and, upon receipt of an Authentication Order, the Trustee will authenticate for the Holder at the expense of the Company a new Note equal in principal amount to the unredeemed or unpurchased portion of the Note surrendered.
Section 3.07 Optional Redemption.
     (a) Except as described in this Section 3.07, the Notes will not be redeemable at the Company’s option prior to February 1, 2012.
     (b) At any time prior to February 1, 2012, the Company may on any one or more occasions redeem up to 35% of the aggregate principal amount of Notes issued under this Indenture, subject to the provisions of Section 3.03 hereof, at a redemption price equal to 109.875% of the aggregate principal amount thereof, plus accrued and unpaid interest and Special Interest, if any, to the date of redemption (subject to the rights of the Holders of Notes on the relevant record date to receive interest on the relevant interest payment date), with the net cash proceeds of an Equity Offering by the Company; provided that:
     (1) at least 50% of the aggregate principal amount of Notes originally issued under this Indenture (excluding Notes held by Parent and its Subsidiaries) remains outstanding immediately after the occurrence of such redemption; and
     (2) the redemption occurs within 90 days of the closing of such Equity Offering.
     (c) At any time prior to February 1, 2012, the Company may on any one or more occasions redeem all or a part of the Notes, subject to the provisions of Section 3.03 hereof, at a redemption price equal to 100% of the principal amount of Notes redeemed, plus the Applicable Premium as of, and accrued and unpaid interest and Special Interest, if any, to the date of redemption, subject to the rights of Holders of Notes on the relevant record date to receive interest due on the relevant interest payment date.
     (d) At any time prior to February 1, 2013, the Company may redeem a portion of the Notes, subject to the provisions of Section 3.03 hereof, at a redemption price equal to 103% of the principal amount thereof, plus accrued and unpaid interest and Special Interest, if any, to the applicable date of redemption, subject to the rights of Holders of Notes on the relevant record date to receive interest due on the relevant interest payment date; provided that in no event may the Company redeem more than 10% of the original aggregate principal amount of the Notes during any 12-month period.
     (e) On or after February 1, 2012, the Company may on any one or more occasions redeem all or a part of the Notes, subject to the provisions of Section 3.03 hereof, at the redemption prices (expressed

53


 

as percentages of principal amount on the date of redemption), plus accrued and unpaid interest and Special Interest, if any, on the Notes redeemed to the applicable date of redemption, if redeemed during the 12-month period beginning on February 1 of the years set forth below, subject to the rights of Holders of Notes on the relevant record date to receive interest on the relevant interest payment date:
         
Period   Percentage
2012
    107.406 %
2013 and thereafter
    100.000 %
     Unless the Company defaults in the payment of the redemption price, interest will cease to accrue on the Notes or portions thereof called for redemption on the applicable redemption date.
     (f) Any redemption pursuant to this Section 3.07 shall be made pursuant to the provisions of Sections 3.01 through 3.06 hereof.
Section 3.08 Mandatory Redemption.
     Except as described in Section 3.09 hereof, the Company is not required to make mandatory redemption, sinking fund or other scheduled payments of principal with respect to the Notes. However, the Company may be required to offer to purchase the Notes as described in Sections 4.10 and 4.15 hereof. The Company or its Affiliates may at any time and from time to time purchase Notes in the open market or otherwise.
Section 3.09 Special Scheduled Maturity Date.
     (a) The Escrow Property, in an aggregate amount of $518,515,625.00, representing the net proceeds from the issuance and sale of the Notes of $486,295,000.00 together with $32,220,625.00 contributed by the Company, will be held by the Trustee, in its capacity as Escrow Agent, in the Escrow Account pursuant to the Escrow and Security Agreement. The Escrow Property will be invested as provided in the Escrow and Security Agreement.
     (b) In addition to any payments required by Sections 4.10 and 4.15 hereof, if the Escrow Conditions have not been satisfied on or prior to the 120th day following the date of this Indenture, the Company will repurchase all of the outstanding Notes on or prior to the 135th day following the date of this Indenture (the “Special Scheduled Maturity Date”), upon not less than 10 days’ notice and pursuant to the terms of the Escrow and Security Agreement, at a price equal to 100% of the aggregate principal amount of the Notes, plus accrued and unpaid interest to, but not including, the Special Scheduled Maturity Date (the “Special Scheduled Maturity Date Price”).
     (c) Immediately upon receipt by the Paying Agent of the Escrow Property, the Trustee will notify the Holders of the date fixed for the Special Scheduled Maturity Date pursuant to this Section 3.09.
     (d) Other than as specifically provided in this Section 3.09 (including, without limitation, the requirement to provide not less then 10 days’ prior notice), any Special Scheduled Maturity Date repurchase pursuant to this Section 3.09 will be made pursuant to the provisions of Section 3.01 through 3.05 hereof.
Section 3.10 Offer to Purchase by Application of Excess Proceeds or Sale of Collateral Consideration.
     In the event that, pursuant to Section 4.10 hereof, the Company is required to commence an Asset Sale Offer or a Sale of Collateral Offer, it will follow the procedures specified below.

54


 

     The Asset Sale Offer or Sale of Collateral Offer shall be made to all Holders of Notes and, in the case of an Asset Sale Offer, all holders of Other Offer Notes; provided that, in the case of an Asset Sale Offer, the percentage of such Excess Proceeds allocated and offered to the Notes in such Asset Sale Offer is at least equal to the percentage of the aggregate principal amount of all Priority Lien Debt represented at such time by the Notes.
     The Asset Sale Offer or Sale of Collateral Offer will remain open for a period of at least 20 Business Days following its commencement and not more than 30 Business Days, except to the extent that a longer period is required by applicable law (the “Offer Period”). No later than five Business Days after the termination of the Offer Period (the “Purchase Date”), the Company will apply all Excess Proceeds (in the case of an Asset Sale) or Sale of Collateral Consideration (in the case of a Sale of Collateral) (in each case, the “Offer Amount”) to the purchase of Notes and Other Offer Notes (in the case of an Asset Sale) (on a pro rata basis, if applicable) or, if less than the Offer Amount has been tendered, all Notes and other Indebtedness tendered in response to the Asset Sale Offer or all Notes tendered in response to the Sale of Collateral Offer. Payment for any Notes so purchased will be made in the same manner as interest payments are made.
     If the Purchase Date is on or after an interest record date and on or before the related interest payment date, any accrued and unpaid interest and Special Interest, if any, will be paid to the Person in whose name a Note is registered at the close of business on such record date, and no additional interest will be payable to Holders of Notes who tender Notes pursuant to the Asset Sale Offer or Sale of Collateral Offer, as applicable.
     Upon the commencement of an Asset Sale Offer or Sale of Collateral Offer, the Company will send, by first class mail, a notice to the Trustee and each of the Holders of Notes, with a copy to the Trustee. The notice will contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Asset Sale Offer or Sale of Collateral Offer, as applicable. The notice, which will govern the terms of the Asset Sale Offer or Sale of Collateral Offer, as applicable, will state:
     (1) that the Asset Sale Offer or Sale of Collateral Offer, as applicable, is being made pursuant to this Section 3.10 and Section 4.10 hereof and the length of time the Asset Sale Offer or Sale of Collateral Offer, as applicable, will remain open;
     (2) the Offer Amount, the purchase price and the Purchase Date;
     (3) that any Note not tendered or accepted for payment will continue to accrue interest and Special Interest, if any;
     (4) that, unless the Company defaults in making such payment, any Note accepted for payment pursuant to the Asset Sale Offer or Sale of Collateral Offer, as applicable, will cease to accrue interest and Special Interest, if any, after the Purchase Date;
     (5) that Holders of Notes electing to have a Note purchased pursuant to an Asset Sale Offer or Sale of Collateral Offer, as applicable, may elect to have Notes purchased in denominations of $2,000, or an integral multiple of $1,000 in excess thereof only;
     (6) that Holders of Notes electing to have Notes purchased pursuant to any Asset Sale Offer or Sale of Collateral Offer, as applicable, will be required to surrender the Note, with the form entitled “Option of Holder to Elect Purchase” attached to the Notes completed, or transfer by book-entry transfer, to the Company, a Depositary, if appointed by the Company, or a Paying Agent at the address specified in the notice at least three days before the Purchase Date;

55


 

     (7) that Holders of Notes will be entitled to withdraw their election if the Company, the Depositary or the Paying Agent, as the case may be, receives, not later than the expiration of the Offer Period, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Note purchased;
     (8) that, if the aggregate principal amount of Notes and other pari passu Indebtedness (in the case of an Asset Sale Offer) surrendered by holders thereof exceeds the Offer Amount, the Trustee will select the Notes and other pari passu Indebtedness (in the case of an Asset Sale Offer) to be purchased on a pro rata basis based on the principal amount of Notes and such other pari passu Indebtedness (in the case of an Asset Sale Offer) surrendered (with such adjustments as may be deemed appropriate by the Company so that only Notes in denominations of $2,000, or an integral multiple of $1,000 in excess thereof, will be purchased); and
     (9) that Holders of Notes whose Notes were purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered (or transferred by book-entry transfer).
     On or before the Purchase Date, the Company will, to the extent lawful, accept for payment, on a pro rata basis to the extent necessary, the Offer Amount of Notes or portions thereof tendered pursuant to the Asset Sale Offer or Sale of Collateral Offer, as applicable, or if less than the Offer Amount has been tendered, all Notes tendered, and will deliver or cause to be delivered to the Trustee the Notes properly accepted together with an Officers’ Certificate stating that such Notes or portions thereof were accepted for payment by the Company in accordance with the terms of this Section 3.10. The Company, the Depositary or the Paying Agent, as the case may be, will promptly (but in any case not later than five days after the Purchase Date) mail or deliver to each tendering Holder an amount equal to the purchase price of the Notes tendered by such Holder and accepted by the Company for purchase, and the Company will promptly issue a new Note, and the Trustee, upon written request from the Company, will authenticate and mail or deliver (or cause to be transferred by book entry) such new Note to such Holder, in a principal amount equal to any unpurchased portion of the Note surrendered. Any Note not so accepted shall be promptly mailed or delivered by the Company to the Holder thereof. The Company will publicly announce the results of the Asset Sale Offer or Sale of Collateral Offer, as applicable, on the Purchase Date.
     Other than as specifically provided in this Section 3.10, any purchase pursuant to this Section 3.10 shall be made pursuant to the provisions of Sections 3.01 through 3.06 hereof.
ARTICLE 4
COVENANTS
Section 4.01 Payment of Notes.
     The Company will pay or cause to be paid the principal of, premium, if any, and interest and Special Interest, if any, on, the Notes on the dates and in the manner provided in the Notes and in this Indenture. Principal, premium, if any, and interest and Special Interest, if any, will be considered paid on the date due if the Paying Agent, if other than Parent or a Subsidiary thereof, holds as of 11:00 a.m. Eastern Time on the due date money deposited by the Company in immediately available funds and designated for and sufficient to pay all principal, premium, if any, and interest and Special Interest, if any, then due.

56


 

     The Company will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal at the rate equal to 1% per annum in excess of the then applicable interest rate on the Notes to the extent lawful; it will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest and Special Interest, if any, (without regard to any applicable grace period) at the same rate to the extent lawful.
Section 4.02 Maintenance of Office or Agency.
     The Company will maintain in the Borough of Manhattan, the City of New York, an office or agency (which may be an office of the Trustee or an affiliate of the Trustee, Registrar or co-registrar) where Notes may be surrendered for registration of transfer or for exchange and where notices and demands to or upon the Company in respect of the Notes and this Indenture may be served. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company fails to maintain any such required office or agency or fails to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee.
     The Company may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission will in any manner relieve the Company of its obligation to maintain an office or agency in the Borough of Manhattan, the City of New York for such purposes. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.
     The Company hereby designates the Corporate Trust Office of the Trustee as one such office or agency of the Company in accordance with Section 2.03 hereof.
Section 4.03 Reports.
     (a) So long as any Notes are outstanding, Parent will furnish to the Trustee, within the time periods specified in the SEC’s rules and regulations that would apply to Parent if it were subject to those rules and regulations (whether or not Parent is actually so subject):
     (1) annual reports of Parent containing substantially all of the information that would have been required to be contained in an Annual Report on Form 10-K under the Exchange Act if Parent had been a reporting company under the Exchange Act (but only to the extent similar information is included in the Offering Memorandum), including (A) “Management’s discussion and analysis of financial condition and results of operations” and (B) audited financial statements prepared in accordance with GAAP;
     (2) quarterly reports of Parent containing substantially all of the information that would have been required to be contained in a Quarterly Report on Form 10-Q under the Exchange Act if Parent had been a reporting company under the Exchange Act (but only to the extent similar information is included in the Offering Memorandum), including (A) “Management’s discussion and analysis of financial condition and results of operations” and (B) the unaudited quarterly financial statements prepared in accordance with GAAP and reviewed pursuant to Statement on Auditing Standards No. 100 (or any successor provision); and
     (3) current reports containing substantially all of the information that would have been required to be contained in a Current Report on Form 8-K under the Exchange Act if Parent had been a reporting company under the Exchange Act; provided, however, that no such current

57


 

report will be required to be furnished if (A) Parent determines in its good faith judgment that such event is not material to Holders of Notes or the business, assets, operations, financial positions or prospects of Parent and its Restricted Subsidiaries, taken as a whole or (B) a failure to furnish such current report would not result in Parent losing its Form S-3 filing eligibility.
     Notwithstanding the foregoing, in no event will Parent be required by this Section 4.03 to (i) comply with Section 302 or Section 404 of the Sarbanes-Oxley Act of 2002, or related Items 307 and 308 of Regulation S-K promulgated by the SEC, or Item 10(e) of Regulation S-K (with respect to any non-GAAP financial measures contained therein) or Regulation G, (ii) include the separate financial information for Guarantors contemplated by Rule 3-10 of Regulation S-X promulgated by the SEC or (iii) provide any additional information in respect of Item 402 of Regulation S-K beyond information of the type included in the Offering Memorandum.
     Parent’s reporting obligations under the first paragraph of subparagraph (a) of this Section 4.03 will be satisfied if Parent timely files such reports with the SEC on EDGAR.
     (b) Within 10 Business Days after any Appraisal is required to be delivered pursuant to Section 4.19 hereof, the Company will furnish to the Trustee a summary of each such Appraisal (which summary will be made publicly available) and will post the complete Appraisal on a private, restricted website to which Holders of Notes, prospective investors, broker-dealers and securities analysts are given access, subject to such individuals agreeing to confidentiality obligations reasonably acceptable to the Company for securities law purposes.
     (c) So long as any Notes are outstanding, if at any time Parent is not required to file with the SEC the reports required by the preceding subparagraph (a) of this Section 4.03, Parent will also:
     (1) issue a press release to an internationally recognized wire service no fewer than three Business Days prior to the first public disclosure of the reports required by the preceding subparagraphs (a) and (b) of this Section 4.03 announcing the date on which such reports will become publicly available and directing Holders of Notes, prospective investors, broker-dealers and securities analysts to contact the investor relations office of Parent to obtain copies of such reports; and
     (2) maintain a website to which Holders of Notes, prospective investors, broker-dealers and securities analysts are given access and to which all of the reports and press releases required by this Section 4.03 are posted.
     (d) The Company will furnish to Holders of Notes, prospective investors, broker-dealers and securities analysts, upon their request, any information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act so long as the Notes constitute “restricted securities” under Rule 144.
     (e) Delivery of reports, information and documents to the Trustee is for informational purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including compliance by the Company or any Guarantor with any of their covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers’ Certificates).
Section 4.04 Compliance Certificate.
     (a) The Company will deliver to the Trustee, within 90 days after the end of each fiscal year, an Officers’ Certificate stating that a review of the activities of Parent and its Subsidiaries during the

58


 

preceding fiscal year has been made under the supervision of the signing Officers with a view to determining whether the Company and the Guarantors have kept, observed, performed and fulfilled their obligations under this Indenture, and further stating, as to each such Officer signing such certificate, that to his or her knowledge, the Company and the Guarantors are not in default in the performance or observance of any of the terms, provisions and conditions of this Indenture (or, if a Default or Event of Default has occurred, describing all such Defaults or Events of Default of which he or she may have knowledge and what action the Company and the Guarantors are taking or propose to take with respect thereto) and that to his or her knowledge no event has occurred and remains in existence by reason of which payments on account of the principal of, and premium, if any, or interest and Special Interest, if any, on the Notes is prohibited or if such event has occurred, a description of the event and what action the Company and the Guarantors are taking or propose to take with respect thereto.
     (b) So long as any of the Notes are outstanding, the Company will deliver to the Trustee, within 10 Business Days of any Officer becoming aware of any Default or Event of Default, an Officers’ Certificate specifying such Default or Event of Default and what action Parent and its Subsidiaries are taking or propose to take with respect thereto.
Section 4.05 Taxes.
     Parent will pay, and will cause each of its Subsidiaries to pay, prior to delinquency, all material taxes, assessments, and governmental levies before the same shall become more than 90 days delinquent, except such as are contested in good faith and by appropriate proceedings or where the failure to effect such payment would not reasonably be expected to have a material adverse effect on Parent.
Section 4.06 Stay, Extension and Usury Laws.
     The Company and each of the Guarantors covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Company and each of the Guarantors (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law has been enacted.
Section 4.07 Restricted Payments.
     (a) Parent will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly:
     (1) declare or pay any dividend or make any other payment or distribution on account of Parent’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation involving Parent or any of its Restricted Subsidiaries) or to the direct or indirect holders of Parent’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than (A) dividends, distributions or payments payable in Qualifying Equity Interests or in the case of preferred stock of Parent, an increase in the liquidation value thereof and (B) dividends, distributions or payments payable to Parent or a Restricted Subsidiary of Parent);

59


 

     (2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation involving Parent) any Equity Interests of Parent or any direct or indirect parent of Parent;
     (3) make any payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value (collectively for purposes of this clause (3), a “purchase”) any Indebtedness of the Company or any Guarantor that is contractually subordinated to the Notes or to any Note Guarantee (excluding any intercompany Indebtedness between or among Parent and any of its Restricted Subsidiaries), except any scheduled payment of interest and any purchase within one year of the Stated Maturity thereof; or
     (4) make any Restricted Investment,
(all such payments and other actions set forth in these clauses (1) through (4) above being collectively referred to as “Restricted Payments”),
unless, at the time of and after giving effect to such Restricted Payment:
     (1) no Default or Event of Default has occurred and is continuing;
     (2) Parent would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.09(a) hereof; and
     (3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by Parent and its Restricted Subsidiaries since the date of this Indenture (excluding Restricted Payments permitted by clauses (2), (3), (4), (5), (6), (7), (8), (9), (10), (11), (12), (13), (14) and (15) of Section 4.07(b) hereof), is less than the sum, without duplication, of:
     (A) 50% of the Consolidated Net Income of Parent for the period (taken as one accounting period) from the beginning of the first fiscal quarter commencing prior to the date of this Indenture to the end of Parent’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit); plus
     (B) 100% of the aggregate net cash proceeds and the Fair Market Value of non-cash consideration received by Parent since the date of this Indenture as a contribution to its common equity capital or from the issue or sale of Qualifying Equity Interests or from the issue or sale of convertible or exchangeable Disqualified Stock of Parent or convertible or exchangeable debt securities of Parent, in each case that have been converted into or exchanged for Qualifying Equity Interests (other than Qualifying Equity Interests and convertible or exchangeable Disqualified Stock or debt securities sold to a Subsidiary of Parent and excluding Excluded Contributions); plus
     (C) to the extent that any Restricted Investment that was made after the date of this Indenture is (i) sold for cash or otherwise cancelled, liquidated or repaid for cash or (ii) made in an entity that subsequently becomes a Restricted Subsidiary of Parent, the

60


 

initial amount of such Restricted Investment (or, if less, the amount of cash received upon repayment or sale); plus
     (D) to the extent that any Unrestricted Subsidiary of Parent designated as such after the date of this Indenture is redesignated as a Restricted Subsidiary after the date of the Indenture, the lesser of (i) the Fair Market Value of Parent’s Restricted Investment in such Subsidiary as of the date of such redesignation or (ii) such Fair Market Value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary after the date of this Indenture; plus
     (E) 100% of any dividends received in cash by Parent or a Restricted Subsidiary of Parent after the date of this Indenture from an Unrestricted Subsidiary of Parent, to the extent that such dividends were not otherwise included in the Consolidated Net Income of Parent for such period.
     (b) The provisions of Section 4.07(a) hereof will not prohibit:
     (1) the payment of any dividend or distribution or the consummation of any irrevocable redemption within 60 days after the date of declaration of the dividend or distribution or giving of the redemption notice, as the case may be, if at the date of declaration or notice, the dividend or redemption payment would have complied with the provisions of this Indenture;
     (2) the making of any Restricted Payment in exchange for, or out of or with the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of Parent) of, Qualifying Equity Interests or from the substantially concurrent contribution of common equity capital to Parent; provided that the amount of any such net cash proceeds that are utilized for any such Restricted Payment will not be considered to be net proceeds of Qualifying Equity Interests for purposes of clause (a)(3)(B) of Section 4.07 hereof and will not be considered to be Excluded Contributions;
     (3) the payment of any dividend (or, in the case of any partnership or limited liability company, any similar distribution), distribution or payment by a Restricted Subsidiary of Parent to the holders of its Equity Interests on a pro rata basis;
     (4) the repurchase, redemption, defeasance or other acquisition or retirement for value of Indebtedness of the Company or any Guarantor that is contractually subordinated to the Notes or to any Note Guarantee with the net cash proceeds from an incurrence of Permitted Refinancing Indebtedness;
     (5) the repurchase, redemption, acquisition or retirement for value of any Equity Interests of Parent or any Restricted Subsidiary of Parent held by any current or former officer, director, consultant or employee (or their estates or beneficiaries of their estates) of Parent or any of its Restricted Subsidiaries pursuant to any management equity plan or equity subscription agreement, stock option agreement, shareholders’ agreement or similar agreement; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $10.0 million in any 12-month period (except to the extent such repurchase, redemption, acquisition or retirement is in connection with the acquisition of a Permitted Business or merger, consolidation or amalgamation otherwise permitted by this Indenture and in such case the aggregate price paid by Parent and its Restricted Subsidiaries may not exceed $50.0 million in connection with such acquisition of a Permitted Business or merger, consolidation or amalgamation); provided further that Parent or any of its Restricted Subsidiaries may carry over

61


 

and make in subsequent 12-month periods, in addition to the amounts permitted for such 12-month period, up to $5.0 million of unutilized capacity under this clause (5) attributable to the immediately preceding twelve-month period;
     (6) the repurchase of Equity Interests or other securities deemed to occur upon (A) the exercise of stock options, warrants or other securities convertible or exchangeable into Equity Interests or any other securities, to the extent such Equity Interests or other securities represent a portion of the exercise price of those stock options, warrants or other securities convertible or exchangeable into Equity Interests or any other securities or (B) the withholding of a portion of Equity Interests issued to employees and other participants under an equity compensation program of Parent or its Subsidiaries to cover withholding tax obligations of such persons in respect of such issuance;
     (7) so long as no Default or Event of Default has occurred and is continuing, the declaration and payment of regularly scheduled or accrued dividends, distributions or payments to holders of any class or series of Disqualified Stock of Parent or any preferred stock of any Restricted Subsidiary of Parent issued on or after the date of this Indenture in accordance with Section 4.09 hereof;
     (8) payments of cash, dividends, distributions, advances, common stock or other Restricted Payments by Parent or any of its Restricted Subsidiaries to allow the payment of cash in lieu of the issuance of fractional shares upon (A) the exercise of options or warrants or (B) the conversion or exchange of Capital Stock of any such Person;
     (9) the declaration and payment of dividends to holders of any class or series of Disqualified Stock of Parent or any Disqualified Stock or preferred stock of any Restricted Subsidiary to the extent such dividends are included in the definition of “Fixed Charges” for such Person;
     (10) in the event of a Change of Control, and if no Default shall have occurred and be continuing, the payment, purchase, redemption, defeasance or other acquisition or retirement of any subordinated Obligations of the Company or Parent, in each case, at a purchase price not greater than 101% of the principal amount of such subordinated Obligations, plus any accrued and unpaid interest thereon; provided, however, that prior to such payment, purchase, redemption, defeasance or other acquisition or retirement, the Company (or a third party to the extent permitted by this Indenture) has made a Change of Control Offer with respect to the Notes as a result of such change of control and has repurchased all Notes validly tendered and not withdrawn in connection with such Change of Control Offer;
     (11) Restricted Payments made with Excluded Contributions;
     (12) the distribution, as a dividend or otherwise, of shares of Capital Stock of, or Indebtedness owed to, Parent or any of its Restricted Subsidiaries by any Unrestricted Subsidiary;
     (13) the distribution or dividend of assets or Capital Stock of any Person in connection with any full or partial “spin-off” of a Subsidiary or similar transactions; provided that Parent would, on the date of such distribution after giving pro forma effect thereto as if the same had occurred at the beginning of the applicable four-quarter period, be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.09(a) hereof; provided further that the assets distributed or dividended do not include,

62


 

directly or indirectly, any Japan Routes, Japan Slots, Japan Gate Leaseholds or any property or asset that constitutes Collateral;
     (14) the distribution or dividend of assets or Capital Stock of any Person in connection with any full or partial “spin-off” of a Subsidiary or similar transactions having an aggregate Fair Market Value not to exceed $500.0 million since the date of this Indenture; provided that the assets distributed or dividended do not include, directly or indirectly, any Japan Routes, Japan Slots, Japan Gate Leaseholds or any property or asset that constitutes Collateral; and
     (15) so long as no Default or Event of Default has occurred and is continuing, other Restricted Payments in an aggregate amount not to exceed $250.0 million since the date of this Indenture.
     The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by Parent or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The Fair Market Value of any assets or securities that are required to be valued by this Section 4.07 will be determined by the Board of Directors of Parent whose resolution with respect thereto will be delivered to the Trustee.
     For purposes of determining compliance with this Section 4.07, in the event that a proposed Restricted Payment (or portion thereof) meets the criteria of more than one of the categories of Restricted Payments described in clauses (1) through (15) of subparagraph (b) of this Section 4.07, or is entitled to be made pursuant to subparagraph (a) of this Section 4.07, Parent will be entitled to classify or later reclassify such Restricted Payment (or portion thereof) on the date of its payment in any manner that complies with this Section 4.07.
Section 4.08 Dividend and Other Payment Restrictions Affecting Subsidiaries.
     (a) Parent will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create or permit to exist or become effective any consensual encumbrance or restriction on the ability of any Restricted Subsidiary to:
     (1) pay dividends or make any other distributions on its Capital Stock to Parent or any of its Restricted Subsidiaries or with respect to any other interest or participation in, or measured by, its profits, or pay any indebtedness owed to Parent or any of its Restricted Subsidiaries;
     (2) make loans or advances to Parent or any of its Restricted Subsidiaries; or
     (3) sell, lease or transfer any of its properties or assets to Parent or any of its Restricted Subsidiaries.
     (b) The restrictions in Section 4.08(a) hereof will not apply to encumbrances or restrictions existing under or by reason of:
     (1) agreements (A) governing Existing Indebtedness, Credit Facilities, Junior Lien Obligations and any other Priority Lien Obligations, in each case as in effect on (or required by agreements in effect on) the date of this Indenture or (B) in effect on the date of this Indenture;

63


 

     (2) this Indenture, the Note Guarantees, the Security Documents, the Escrow and Security Agreement and the Second Lien Escrow and Security Agreement;
     (3) agreements governing other Indebtedness or shares of preferred stock permitted to be incurred or issued under the provisions of Section 4.09 hereof; provided that if such Restricted Subsidiary incurring or issuing such Indebtedness or shares of preferred stock is not a Guarantor, the restrictions therein are either (in each case, as determined in good faith by a senior financial officer of Parent) (A) not materially more restrictive, taken as a whole, than those contained in this Indenture, the Notes and the Note Guarantees or (B)(i) customary for instruments of such type and (ii) will not materially adversely impact the ability of the Company to make required principal and interest payments on the Notes;
     (4) applicable law, rule, regulation or order;
     (5) any instrument governing Indebtedness or Capital Stock of a Person acquired by Parent or any of its Restricted Subsidiaries (including by way of merger, consolidation or amalgamation of Parent or any of its Restricted Subsidiaries) as in effect at the time of such acquisition (except to the extent such Indebtedness or Capital Stock was incurred in connection with or in contemplation of such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired; provided that, in the case of Indebtedness, such Indebtedness was permitted by the terms of this Indenture to be incurred;
     (6) customary provisions in contracts, licenses, leases and asset sale agreements entered into in the ordinary course of business;
     (7) purchase money obligations for property acquired in the ordinary course of business and Capital Lease Obligations that impose restrictions on the property (or proceeds thereof) purchased or leased of the nature described in clause (3) of Section 4.08(a) hereof;
     (8) any contract or agreement for the sale or other disposition of a Restricted Subsidiary that restricts distributions, asset sales or loans by that Restricted Subsidiary pending its sale or other disposition;
     (9) Permitted Refinancing Indebtedness; provided that such amendment, modification, restatement, renewal, extension, increase, supplement, refunding, replacement or refinancing is, in the good faith judgment of a senior financial officer of Parent, taken together as a whole, not materially more restrictive with respect to such dividend and other payment restrictions than those contained in (A) the dividend or other payment restrictions prior to such amendment, modification, restatement, renewal, extension, increase, supplement, refunding, replacement or refinancing or (B) this Indenture;
     (10) Liens permitted to be incurred under the provisions of Section 4.12 hereof that limit the right of the debtor to dispose of the assets subject to such Liens;
     (11) provisions limiting the disposition or distribution of assets or property or loans or advances in joint venture agreements, asset sale agreements, sale-leaseback agreements, stock sale agreements and other similar agreements (including agreements entered into in connection with a Restricted Investment) entered into with the approval of Parent’s Board of Directors, which limitation is applicable only to the assets or the joint venture entity, as applicable, that are the subject of such agreements or otherwise in the ordinary course of business;

64


 

     (12) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business;
     (13) any instrument or agreement entered into in connection with any full or partial “spin-off” or similar transactions;
     (14) any encumbrance or restriction of the type referred to in clauses (1), (2) and (3) of Section 4.08(a) imposed by any amendments, modifications, restatements, renewals, extensions, increases, supplements, refundings, replacements or refinancings of the contracts, instruments or obligations referred to in clauses (1) through (13) of this Section 4.08(b); provided that such amendment, modification, restatement, renewal, extension, increase, supplement, refunding, replacement or refinancing is, in the good faith judgment of a senior financial officer of Parent, taken together as a whole, not materially more restrictive with respect to such dividend and other payment restrictions than those contained in (A) the dividend or other payment restrictions prior to such amendment, modification, restatement, renewal, extension, increase, supplement, refunding, replacement or refinancing or (B) this Indenture; and
     (15) any encumbrance or restriction existing under or by reason of Indebtedness or other contractual requirements of a Receivables Subsidiary or any Standard Securitization Undertaking, in each case, in connection with a Qualified Receivables Transaction; provided that such restrictions apply only to such Receivables Subsidiary.
Section 4.09 Incurrence of Indebtedness and Issuance of Preferred Stock.
     (a) Parent will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Parent will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that Parent’s Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue preferred stock, and Parent may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, if the Fixed Charge Coverage Ratio for Parent’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such preferred stock is issued, as the case may be, would have been at least 1.2 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
     (b) The provisions of Section 4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
     (1) the incurrence by the Company and any Guarantor of the Notes to be issued on the date of this Indenture and any other additional Indebtedness and letters of credit (and reimbursement obligations with respect thereto) that will constitute Priority Lien Debt, and any Permitted Refinancing Indebtedness that does not constitute Priority Lien Debt and that is incurred to renew, refund, refinance, replace, defease, extend or discharge any other Indebtedness incurred pursuant to this clause (1), in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and any Guarantor thereunder and including all other Priority Lien Debt that will be outstanding after such incurrence and the application of the proceeds therefrom), not to exceed the Priority Lien Cap;

65


 

     (2) the incurrence by Parent and its Restricted Subsidiaries of the Existing Indebtedness and any Indebtedness that is incurred pursuant to a commitment in existence as of date of this Indenture, including notes issuable under the indenture dated as of February 1, 2006, among Parent, the Company and The Bank of New York Trust Company, N.A., providing for the issuance of 8% Contingent Notes;
     (3) the incurrence by the Company and any Guarantor of (A) Indebtedness and letters of credit (and reimbursement obligations with respect thereto) under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (3) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Parent and its Restricted Subsidiaries thereunder) not to exceed $1.75 billion and (B) Indebtedness and letters of credit (and reimbursement obligations with respect thereto) under Credit Facilities secured on a junior priority basis by some or all of the collateral securing Indebtedness under Credit Facilities contemplated by clause (A) of this clause (3) in an aggregate principal amount at any one time outstanding under this clause (3)(B) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Parent and its Restricted Subsidiaries thereunder) not to exceed $1.5 billion; provided that no Indebtedness or letters of credit incurred pursuant to this clause (3) is secured by a Lien on the Japan Routes, Japan Slots, Japan Gate Leaseholds or any property or asset that constitutes Collateral;
     (4) the incurrence by Parent or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of Parent or any of its Restricted Subsidiaries, in an aggregate principal amount (or accreted value, as applicable), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, extend, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed $500.0 million at any time outstanding; provided that no Indebtedness incurred pursuant to this clause (4) is secured by a Lien on the Japan Routes, Japan Slots, Japan Gate Leaseholds or any property or asset that constitutes Collateral;
     (5) the incurrence by Parent or any of its Restricted Subsidiaries of (A) Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, extend, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (4), (5), (6), (13), (20), (21), (24), (25) or (26) of this Section 4.09(b) and (B) Permitted Refinancing Indebtedness secured by aircraft, engines, spare parts or other assets replacing, renewing, refunding, extending, refinancing, defeasing or discharging any other Indebtedness of Parent or any of its Restricted Subsidiaries that was secured by aircraft, engines, spare parts or other assets; provided that notwithstanding clause (1) of the definition of “Permitted Refinancing Indebtedness,” such Permitted Refinancing Indebtedness shall be permitted under clauses (A) and (B) so long as the aggregate principal amount of such Permitted Refinancing Indebtedness, as of the date of its incurrence, does not cause the loan to value ratio of such Permitted Refinancing Indebtedness to exceed 80% of the appraised value of the assets securing such Indebtedness; provided further that if more than one series of Indebtedness is being replaced at any one time, the loan to value ratio of all such replaced Indebtedness will be calculated based on the aggregate loan to value ratio of all series of Indebtedness being replaced at that time;
     (6) the incurrence by Parent or any of its Restricted Subsidiaries of Indebtedness (including Acquired Debt) (A) as part of, or to finance, the acquisition (including by way of

66


 

merger) of any Permitted Business or (B) incurred in connection with the acquisition of, or merger with or into, any Person that owns a Permitted Business;
     (7) the incurrence by Parent or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Parent and any of its Restricted Subsidiaries; provided, however, that:
     (A) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
     (B) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Parent or a Restricted Subsidiary of Parent and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either Parent or a Restricted Subsidiary of Parent,
will be deemed, in each case under this clause (B), to constitute an incurrence of such Indebtedness by Parent or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (7);
     (8) the issuance by any of Parent’s Restricted Subsidiaries to Parent or to any of its Restricted Subsidiaries of shares of preferred stock; provided, however, that:
     (A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than Parent or a Restricted Subsidiary of Parent; and
     (B) any sale or other transfer of any such preferred stock to a Person that is not either Parent or a Restricted Subsidiary of Parent,
will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (8);
     (9) the incurrence by Parent or any of its Restricted Subsidiaries of Hedging Obligations in the ordinary course of business;
     (10) the guarantee by Parent or any Restricted Subsidiary of Parent of Indebtedness of Parent or a Restricted Subsidiary of Parent to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
     (11) the incurrence by Parent or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, performance and surety bonds in the ordinary course of business;

67


 

     (12) the incurrence by Parent or any of its Restricted Subsidiaries of Indebtedness in respect of any overdrafts and related liabilities arising from treasury, depository and cash management services or in connection with any automated clearing house transfers of funds;
     (13) Indebtedness (A) constituting credit support or financing from aircraft or engine manufacturers or their affiliates or (B) incurred to finance the acquisition of aircraft, engines, spare parts or other operating assets; provided that no Indebtedness may be incurred in reliance on subsection (B) of this clause (13) more than 12 months after such acquisition; provided further that no such Indebtedness incurred in reliance on this clause (13) may be secured by a Lien on the Japan Routes, Japan Slots, Japan Gate Leaseholds or any property or assets that constitute Collateral;
     (14) Indebtedness issued to current or former directors, consultants, managers, officers and employees and their spouses or estates to purchase or redeem Capital Stock of Parent issued to such director, consultant, manager, officer or employee in an aggregate principal amount not to exceed $3.0 million in any 12-month period;
     (15) reimbursement obligations in respect of standby or documentary letters of credit or banker’s acceptances that are not secured by Liens on the Japan Routes, Japan Slots, Japan Gate Leaseholds or any property or asset that constitutes Collateral;
     (16) surety and appeal bonds that are not secured by Liens on the Japan Routes, Japan Slots, Japan Gate Leaseholds or any property or asset that constitutes Collateral and that do not secure judgments that constitute an Event of Default;
     (17) Indebtedness of Parent or any of its Restricted Subsidiaries to credit card processors in connection with credit card processing services incurred in the ordinary course of business of Parent and its Restricted Subsidiaries;
     (18) the incurrence by a Receivables Subsidiary of Indebtedness in a Qualified Receivables Transaction that is without recourse to Parent or to any other Subsidiary of Parent or their assets (other than such Receivables Subsidiary and its assets and, as to Parent or any other Subsidiary of Parent, other than Standard Securitization Undertakings) and is not guaranteed by any such Person;
     (19) the incurrence of Indebtedness of Parent or any of its Restricted Subsidiaries owed to one or more Persons in connection with the financing of insurance premiums in the ordinary course of business;
     (20) the incurrence of obligations under the Co-Branded Agreement to the extent such obligations may be deemed to constitute Indebtedness of Parent or any of its Restricted Subsidiaries;
     (21) the incurrence of obligations under the Jet Fuel Supply Agreement to the extent such obligations may be deemed to constitute Indebtedness of Parent or any of its Restricted Subsidiaries, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, extend, defease or discharge any Indebtedness incurred pursuant to this clause (21), not to exceed $50.0 million at any time outstanding;
     (22) Indebtedness arising from agreements of Parent or any of its Restricted Subsidiaries providing for indemnification, adjustment of purchase price or similar obligations, in

68


 

each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary; provided that the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds, including non-cash proceeds (the Fair Market Value of such non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by Parent or any of its Restricted Subsidiaries in connection with such disposition;
     (23) Indebtedness of the Company or Parent consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business and consistent with past practices of the Company or Parent, as applicable;
     (24) the incurrence by Parent or any of its Restricted Subsidiaries of additional Indebtedness that is either (A) unsecured and expressly contractually subordinated to the prior payment in full in cash of all Obligations with respect to the Notes and the Note Guarantees on terms not materially less favorable to Holders of Notes than those customary at the time of incurrence (determined in good faith by a senior financial officer of Parent) for senior subordinated “high yield” debt securities or (B) unsecured, pari passu with all Obligations with respect to the Notes and the Note Guarantees and convertible into common stock of Parent; provided that the aggregate principal amount of Indebtedness incurred pursuant to clauses (A) and (B) together, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, extend, defease or discharge any Indebtedness incurred pursuant to this clause (24), does not exceed $500.0 million at any time outstanding;
     (25) the incurrence by Parent or any of its Restricted Subsidiaries of additional Indebtedness that is not secured by a Lien on the Japan Routes, Japan Slots, Japan Gate Leaseholds or any property or asset that constitutes Collateral in an aggregate principal amount (or accreted value, as applicable), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, extend, defease or discharge any Indebtedness incurred pursuant to this clause (25), not to exceed $500.0 million at any time outstanding; and
     (26) the incurrence by the Company and any Guarantor of Indebtedness and letters of credit (and reimbursement obligations with respect thereto) that will constitute either Junior Lien Debt (including the Second Lien Notes) or Third Lien Debt, and any Permitted Refinancing Indebtedness that does not constitute Junior Lien Debt or Third Lien Debt and that is incurred to renew, refund, refinance, replace, defease, extend or discharge any other Indebtedness incurred pursuant to this clause (26), in an aggregate principal amount at any one time outstanding under this clause (26) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of United and any Guarantor thereunder and including all other Junior Lien Debt and Third Lien Debt that will be outstanding after such incurrence and the application of the proceeds therefrom), not to exceed $300.0 million.
     (c) The Company will not incur, and will not permit any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Company or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company or such Guarantor solely by virtue of being unsecured or by virtue of being secured on a junior priority basis.
     For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses

69


 

(1) through (26) of Section 4.09(b) hereof or is entitled to be incurred pursuant to Section 4.09(a) hereof, Parent will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09; provided that (A) all Priority Lien Debt will at all times be deemed to have been incurred in reliance on the exception provided by clause (1) of the definition of “Permitted Debt,” (B) all Junior Lien Debt will at all times be deemed to have been incurred in reliance on the exception provided by clause (26) of the definition of Permitted Debt and (C) the term “Existing Indebtedness” will not include any Indebtedness that is permitted to be incurred under clauses (1), (3) or (26) of the definition of “Permitted Debt.”
     The accrual of interest or preferred stock dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles and the payment of dividends on preferred stock or Disqualified Stock in the form of additional shares of the same class of preferred stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of preferred stock or Disqualified Stock for purposes of this Section 4.09.
     For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be utilized, calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred. Notwithstanding any other provision of this Section 4.09, the maximum amount of Indebtedness that Parent or any of its Restricted Subsidiaries may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.
     The amount of any Indebtedness outstanding as of any date will be:
     (1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
     (2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
     (3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
     (A) the Fair Market Value of such assets at the date of determination; and
     (B) the amount of the Indebtedness of the other Person.
Section 4.10 Asset Sales.
     (a) Parent will not, and will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless:
     (1) Parent (or the Restricted Subsidiary, as the case may be) receives consideration at the time of the Asset Sale at least equal to the Fair Market Value (measured as of the date of the definitive agreement with respect to such Asset Sale) of the assets or Equity Interests issued, sold or otherwise disposed of; provided that this clause (1) will not apply to (i) any involuntary disposition or (ii) any disposition of Slots or Gate Leaseholds;

70


 

     (2) at least 75% of the consideration received in the Asset Sale by Parent or such Restricted Subsidiary is in the form of cash or Cash Equivalents, Qualified Replacement Assets, or a combination thereof; provided that this clause (2) will not apply to (i) any involuntary disposition or (ii) any disposition of (x) Slots or Gate Leaseholds, (y) assets used or useful in connection with any loyalty program, maintenance, repair and overhaul business or flight center training business or (z) Capital Stock of any Person that owns assets of the kind referred to in clauses (x) or (y) of this proviso. For purposes of this clause (2), in the case of any Asset Sale that is not a Sale of Collateral, each of the following will be deemed to be cash:
     (A) any liabilities, as shown on the most recent consolidated balance sheet, of Parent or any Restricted Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated to the Notes or any Note Guarantee) that are assumed by the transferee of any such assets;
     (B) any securities, notes or other obligations received by Parent or any such Restricted Subsidiary from such transferee that are, within 90 days, converted by Parent or such Restricted Subsidiary into cash or Cash Equivalents, to the extent of the cash or Cash Equivalents received in that conversion;
     (C) any stock or assets of the kind referred to in clauses (3) or (5) of Section 4.10(b) hereof; and
     (D) any Designated Noncash Consideration received by Parent or such Restricted Subsidiary in such Asset Sale, having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this clause (D) that is at that time outstanding, not to exceed $400.0 million, with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received and without giving effect to subsequent changes in value;
     (3) in the case of an Asset Sale after the Release Date that constitutes a Sale of Collateral, the Company deposits the Net Proceeds therefrom within two Business Days, or in the case of a sale of Cure Collateral, within five Business Days, of receipt thereof as Collateral in a segregated account or accounts (each, a “Collateral Proceeds Account”) held by or under the control of (for purposes of the Uniform Commercial Code) the Collateral Trustee or its agent to secure all Secured Debt Obligations; provided, however, that the Company will not be required to cause any Net Proceeds from a Sale of Collateral to be held in the Collateral Proceeds Account except to the extent the aggregate Net Proceeds from all Sales of Collateral that are not held in the Collateral Proceeds Account would exceed $5.0 million; and
     (4) in the case of an Asset Sale after the Release Date that constitutes a Sale of Collateral, the Company delivers an Appraisal to the Trustee and the Collateral Trustee demonstrating, with reasonably detailed calculations, the Priority Lien Debt Value Ratio, after giving pro forma effect to such Sale of Collateral (excluding, for purposes of calculating the Priority Lien Debt Value Ratio, the proceeds of such Sale of Collateral and the intended use thereof); and provided that:
     (A) if the pro forma Priority Lien Debt Value Ratio (calculated as provided in clause (4) of this Section 4.10(a)) would have been at least 1.5 to 1.0, within 365 days after the receipt of any Net Proceeds from such a Sale of Collateral, the Company may apply such Net Proceeds:

71


 

     (i) to purchase Qualified Replacement Assets;
     (ii) to purchase Cure Collateral, in the case of Net Proceeds received from any sale of Cure Collateral;
     (iii) to repay Indebtedness (other than Secured Debt Obligations or Third Lien Obligations) that is secured by a Permitted Lien on any Collateral that was sold in such Sale of Collateral;
     (iv) to optionally redeem all or a part of the Notes pursuant to any of the provisions of Section 3.07 hereof; or
     (v) to make a capital expenditure to augment, increase, renovate or renew assets that constitute Collateral;
provided that the Company will be deemed to have complied with the provision described in clauses (i), (ii) and (v) of this Section 4.10(a)(4)(A) if and to the extent that, within 365 days after the Sale of Collateral that generated the Net Proceeds, the Company has entered into and not abandoned or rejected a binding agreement to acquire the assets that would constitute Collateral or make a capital expenditure in compliance with the provision described in clauses (i), (ii) and (v) of this Section 4.10(a)(4)(A), and that acquisition, purchase or capital expenditure is thereafter completed within 180 days after the end of such 365-day period;
     (B) if the pro forma Priority Lien Debt Value Ratio (calculated as provided in clause (4) of this Section 4.10(a)) would have been less than 1.5 to 1.0 and equal to or greater than 1.25 to 1.0, the Company will:
     (i) pay Special Interest commencing on the date of such Sale of Collateral. The Company may, within 45 days after such Sale of Collateral, grant a Secured Debt Lien on Qualified Replacement Assets to secure all current and future Secured Debt Obligations, in which event the pro forma Priority Lien Debt Value Ratio will be recalculated and such Qualified Replacement Assets will be included in the calculation of the pro forma Priority Lien Debt Value Ratio (calculated as provided in clause (4) of this Section 4.10(a)). If, after the pledge of Qualified Replacement Assets within the 45-day period contemplated by the preceding sentence and the recalculation of the pro forma Priority Lien Debt Value Ratio pursuant to the preceding sentence, the Company’s pro forma Priority Lien Debt Value Ratio (calculated as provided in clause (4) of this Section 4.10(a)) is at least 1.5 to 1.0, no Special Interest will accrue pursuant to this clause (i) of this Section 4.10(a)(4)(B);
     (ii) contribute to the Collateral Proceeds Account within two Business Days of the closing of such Sale of Collateral: (x) 100% of the cash and Cash Equivalents received in such Sale of Collateral and (y) cash or Cash Equivalents in an amount equal to the Fair Market Value of the non-cash consideration received in such Sale of Collateral (the aggregate amount of cash and Cash Equivalents contemplated by clauses (x) and (y) is collectively referred to as the “Sale of Collateral Consideration”);

72


 

     (iii) within five Business Days of the date on which the aggregate amount of Sale of Collateral Consideration from such Sale of Collateral and all prior Sales of Collateral contemplated by this clause (a)(4)(B) that has not previously been used to make an offer to repurchase the Notes, the Second Lien Notes or other Junior Lien Debt containing provisions similar to those in the Second Lien Notes, if any, pursuant to this clause (iii) of this Section 4.10(a)(4)(B) exceeds $10.0 million, (x) make an offer to repurchase, for cash, the Notes in an amount equal to the Sale of Collateral Consideration, whereby (I) the offer price will be equal to 103% of the principal amount, plus accrued and unpaid interest and Special Interest, if any, to the date of purchase, subject to the rights of Holders of Notes on the relevant record date to receive interest due on the relevant interest payment date and (II) if the aggregate principal amount of Notes tendered in such offer exceeds the Sale of Collateral Consideration, the Trustee will select the Notes to be purchased pro rata based on the aggregate principal amounts so tendered (with such adjustments as may be deemed appropriate by the Company so that only Notes in denominations of $2,000, or an integral multiple of $1,000 in excess thereof, will be purchased) and (y) if the Sale of Collateral Consideration exceeds the aggregate principal amount of Notes tendered in such offer described in clause (x) above (such excess amount, the “Consideration Remainder”), the Company will, within five Business Days of the consummation of such offer described in clause (x) above, make an offer to repurchase, for cash, the Second Lien Notes and other Junior Lien Debt containing provisions similar to those in the Second Lien Notes, if any, in an amount equal to the Consideration Remainder, pursuant to the terms of the Second Lien Notes Indenture and the agreements governing such other Junior Lien Debt, as applicable (the offers described in clauses (x) and (y) together, a “Sale of Collateral Offer”); and
     (iv) retain any cash or Cash Equivalents remaining after the consummation of the Sale of Collateral Offer in the Collateral Proceeds Account as Collateral, unless the Company, at its option, chooses to use such funds to (x) purchase Qualified Replacement Assets or (y) optionally redeem all or a part of the Notes pursuant to any of the provisions of Section 3.07 hereof; and
     (C) if the pro forma Priority Lien Debt Value Ratio (calculated as provided in clause (4) of this Section 4.10(a)) would have been less than 1.25 to 1.0, the Company will, prior to such Sale of Collateral, grant a Secured Debt Lien on such amount of Qualified Replacement Assets to secure all current and future Secured Debt Obligations as would be necessary to cause the calculation of the pro forma Priority Lien Debt Value Ratio as of the date of such Sale of Collateral, calculated as if such pledge of Qualified Replacement Assets had already occurred, to be at least 1.25 to 1.0. If the recalculated pro forma Priority Lien Debt Value Ratio would have been at least 1.5 to 1.0, the Company will comply with clause (4)(A) of this Section 4.10(a) in connection with such Sale of Collateral, otherwise, the Company will comply with clause (4)(B) of this Section 4.10(a).
     For the avoidance of doubt, in no event will the Company (i) consummate any Asset Sale that constitutes a Sale of Collateral if the Company’s Priority Lien Debt Value Ratio is or would be less than 1.25 to 1.0 (excluding the proceeds of such Sale of Collateral and the intended use thereof) or (ii) sell, lease, convey, transfer or otherwise dispose of the Japan Routes.

73


 

     Notwithstanding anything to the contrary herein, the Company shall not consummate any Asset Sale to the extent involving a sale, lease or other disposition of Japan Slots or Japan Gate Leaseholds until the Release Date. For the avoidance of doubt, the Company will not sell, lease, convey, transfer or otherwise dispose of the Japan Routes.
     (b) Within 365 days after the receipt of any Net Proceeds from an Asset Sale, other than a Sale of Collateral, Parent (or the applicable Restricted Subsidiary, as the case may be) may apply such Net Proceeds:
     (1) to repay the Notes and any other Indebtedness secured by a Lien;
     (2) to repay any other Indebtedness, other than Indebtedness owed to Parent or any of its Restricted Subsidiaries (subject, in the case of any Indebtedness that is subordinated to the Notes or any Note Guarantee, to Section 4.07 hereof);
     (3) to acquire all or substantially all of the assets of, or any Capital Stock of, another Permitted Business, if, after giving effect to any such acquisition of Capital Stock, the Permitted Business is or becomes a Restricted Subsidiary of Parent or is acquired by a merger, consolidation or amalgamation with Parent or a Restricted Subsidiary of Parent;
     (4) to make a capital expenditure; or
     (5) to acquire other assets that are used or useful in a Permitted Business;
provided that Parent (or the applicable Restricted Subsidiary, as the case may be) will be deemed to have complied with the provision described in clauses (3), (4) and (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Asset Sale that generated the Net Proceeds, Parent (or the applicable Restricted Subsidiary, as the case may be) has entered into and not abandoned or rejected a binding agreement to acquire a Permitted Business, make a capital expenditure or acquire other assets used or useful in a Permitted Business in compliance with the provision described in clauses (3), (4) and (5) of this Section 4.10(b), and that acquisition, purchase or capital expenditure is thereafter completed within 180 days after the end of such 365-day period.
     (c) Pending the final application of any Net Proceeds from an Asset Sale that is not a Sale of Collateral, Parent (or the applicable Restricted Subsidiary) may temporarily reduce revolving credit borrowings or otherwise invest the Net Proceeds in any manner that is not prohibited by this Indenture.
     (d) Any Net Proceeds from Asset Sales that are not applied or invested as provided in clause (a)(4)(A) or clause (b) of this Section 4.10, together with any such Net Proceeds that are earlier designated as “Excess Proceeds” by the Company, will constitute “Excess Proceeds.” Within five Business Days of the date on which the aggregate amount of Excess Proceeds (including any Excess Proceeds held in the Collateral Proceeds Account, other than any Sale of Collateral Consideration) exceeds $20.0 million (or earlier if the Company so elects), the Company will make an offer and/or repay, prepay or redeem, as applicable, to all Holders of Notes and all holders of other Priority Lien Debt containing provisions similar to those set forth in this Indenture with respect to offers to purchase (“Other Offer Notes”), and prepay any other Priority Lien Debt requiring repayment or prepayment (collectively, whether through an offer or a required prepayment, an “Asset Sale Offer”); provided that the percentage of such Excess Proceeds allocated and offered to the Notes in such Asset Sale Offer is at least equal to the percentage of the aggregate principal amount of all Priority Lien Debt represented at such time by the Notes. The offer price in any Asset Sale Offer will be equal to 100% of the principal amount, plus accrued and unpaid interest and Special Interest, if any, to the date of purchase, prepayment or

74


 

redemption, subject to the rights of Holders of Notes on the relevant record date to receive interest due on the relevant interest payment date, and will be payable in cash. If any Excess Proceeds remain after consummation of an Asset Sale Offer, the Company may use those Excess Proceeds for any purpose not otherwise prohibited by this Indenture. If the aggregate principal amount of Notes and Other Offer Notes tendered in such Asset Sale Offer exceeds the amount of Excess Proceeds (including any Excess Proceeds held in the Collateral Proceeds Account, other than any Sale of Collateral Consideration) allocated to such Notes and Other Offer Notes in such Asset Sale Offer, the Trustee will select the Notes and Other Offer Notes to be purchased pro rata based on the aggregate principal amounts so tendered (with such adjustments as may be deemed appropriate by the Company so that only Notes in denominations of $2,000, or an integral multiple of $1,000 in excess thereof, will be purchased). Upon completion of each Asset Sale Offer, the amount of Excess Proceeds will be reset at zero.
     The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with each repurchase of Notes pursuant to a Change of Control Offer, an Asset Sale Offer or a Sale of Collateral Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of Section 3.10 hereof or this Section 4.10, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under Section 3.10 hereof or this Section 4.10 by virtue of such compliance.
     For the avoidance of doubt, the Company’s failure to make an offer for the Notes would constitute a Default under clause (4) of Section 6.01 hereof and not clause (2).
Section 4.11 Transactions with Affiliates.
     (a) Parent will not, and will not permit any of its Restricted Subsidiaries to, make any payment to or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of Parent (each an “Affiliate Transaction”) involving aggregate payments or consideration in excess of $15.0 million, unless:
     (1) the Affiliate Transaction is on terms that are not materially less favorable to Parent or the relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by Parent or such Restricted Subsidiary with an unrelated Person; and
     (2) Parent delivers to the Trustee:
     (A) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $30.0 million, a resolution of the Board of Directors of Parent set forth in an Officers’ Certificate certifying that such Affiliate Transaction complies with clause (1) of this Section 4.11(a) and that such Affiliate Transaction has been approved by a majority of the disinterested members of the Board of Directors of Parent; and
     (B) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $60.0 million, an opinion as to the fairness to Parent or such Subsidiary of such Affiliate Transaction from a financial point of view issued by an accounting, appraisal or investment banking firm of national standing.

75


 

     (b) The following items will not be deemed to be Affiliate Transactions and, therefore, will not be subject to the provisions of Section 4.11(a) hereof:
     (1) any employment agreement, employee benefit plan, officer or director indemnification agreement or any similar arrangement entered into by Parent or any of its Restricted Subsidiaries in the ordinary course of business and payments pursuant thereto;
     (2) transactions between or among Parent and/or its Restricted Subsidiaries;
     (3) transactions with a Person (other than an Unrestricted Subsidiary of Parent) that is an Affiliate of Parent solely because Parent owns, directly or through a Restricted Subsidiary, an Equity Interest in, or controls, such Person;
     (4) payment of reasonable and customary fees, reimbursements of expenses (pursuant to indemnity arrangements or otherwise) and indemnities provided to or on behalf of officers, directors, employees or consultants of Parent or any of its Restricted Subsidiaries;
     (5) any issuance of Qualifying Equity Interests to Affiliates of Parent;
     (6) transactions with customers, clients, suppliers or purchasers or sellers of goods or services in the ordinary course of business or transactions with joint ventures or Unrestricted Subsidiaries entered into in the ordinary course of business and consistent with past practice and industry norms;
     (7) Permitted Investments and Restricted Payments that do not violate Section 4.07 hereof;
     (8) loans or advances to employees in the ordinary course of business not to exceed $7.0 million in the aggregate at any one time outstanding;
     (9) transactions pursuant to agreements or arrangements in effect on the date of this Indenture or any amendment, modification or supplement thereto or replacement thereof and any payments made or performance under any agreement as in effect on the date of this Indenture or any amendment, replacement, extension or renewal thereof (so long as such agreement as so amended, replaced, extended or renewed is not materially less advantageous, taken as a whole, to the Holders of Notes than the original agreement as in effect on the date of this Indenture);
     (10) transactions between or among Parent and/or its Subsidiaries or transactions between a Receivables Subsidiary and any Person in which the Receivables Subsidiary has an Investment;
     (11) transactions between or among Parent and/or its Restricted Subsidiaries in connection with any full or partial “spin-off” or similar transactions;
     (12) any transaction effected as part of a Qualified Receivables Transaction; and
     (13) any purchase by Parent’s Affiliates of Indebtedness of Parent or any of its Restricted Subsidiaries, the majority of which Indebtedness is offered to Persons who are not Affiliates of Parent.

76


 

Section 4.12 Liens.
     Parent will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly create, incur, assume or suffer to exist any Lien of any kind on (a) the Japan Routes, Japan Slots, Japan Gate Leaseholds, (b) any property or asset that constitutes Collateral now owned or hereafter acquired, except in both of the foregoing cases Permitted Liens or (c) the Escrow Account or other Escrow Property (other than pursuant to the Escrow and Security Agreement).
Section 4.13 Business Activities.
     Parent will not, and will not permit any of its Restricted Subsidiaries to, engage in any business other than Permitted Businesses, except to such extent as would not be material to Parent and its Restricted Subsidiaries taken as a whole.
Section 4.14 Corporate Existence.
     Parent shall do or cause to be done all things reasonably necessary to preserve and keep in full force and effect:
     (1) its corporate existence, and the corporate, partnership or other existence of each of its Restricted Subsidiaries, in accordance with the respective organizational documents (as the same may be amended from time to time) of Parent or any such Restricted Subsidiary; and
     (2) the rights (charter and statutory) and material franchises of Parent and its Restricted Subsidiaries; provided, however, that Parent shall not be required to preserve any such right or franchise, or the corporate, partnership or other existence of it or any of its Restricted Subsidiaries, if the Board of Directors shall determine that the preservation thereof is no longer desirable in the conduct of the business of Parent and its Subsidiaries, taken as a whole, and that the loss thereof would not, individually or in the aggregate, have a Material Adverse Effect on Parent and the Guarantors, taken as a whole.
     For the avoidance of doubt, this Section 4.14 shall not prohibit any actions permitted by Article 5 hereof.
Section 4.15 Offer to Repurchase Upon Change of Control.
     (a) Upon the occurrence of a Change of Control, each Holder of Notes will have the right to require the Company to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of that Holder’s Notes pursuant to an offer (a “Change of Control Offer”) at a purchase price in cash equal to 101% of the aggregate principal amount of Notes repurchased, plus accrued and unpaid interest and Special Interest, if any, on the Notes repurchased to the date of purchase, subject to the rights of Holders of Notes on the relevant record date to receive interest due on the relevant interest payment date (the “Change of Control Payment”). Within 30 days following any Change of Control, the Company will mail a notice to each Holder describing the transaction or transactions that constitute the Change of Control and stating:
     (1) that the Change of Control Offer is being made pursuant to this Section 4.15 and that all Notes tendered will be accepted for payment;

77


 

     (2) the purchase price and the purchase date, which shall be no earlier than 30 days and no later than 60 days from the date such notice is mailed (the “Change of Control Payment Date”);
     (3) that any Note not tendered will continue to accrue interest;
     (4) that, unless the Company defaults in the payment of the Change of Control Payment, all Notes accepted for payment pursuant to the Change of Control Offer will cease to accrue interest after the Change of Control Payment Date;
     (5) that Holders of Notes electing to have any Notes purchased pursuant to a Change of Control Offer will be required to surrender the Notes, with the form entitled “Option of Holder to Elect Purchase” attached to the Notes completed, or transfer by book-entry transfer, to the Paying Agent at the address specified in the notice prior to the close of business on the third Business Day preceding the Change of Control Payment Date;
     (6) that Holders of Notes will be entitled to withdraw their election if the Paying Agent receives, not later than the close of business on the second Business Day preceding the Change of Control Payment Date, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of Notes delivered for purchase, and a statement that such Holder is withdrawing his election to have the Notes purchased; and
     (7) that Holders of Notes whose Notes are being purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered, which unpurchased portion must be equal to $2,000 in principal amount or an integral multiple of $1,000 in excess thereof.
     The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase of the Notes as a result of a Change of Control. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Section 4.15, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under this Section 4.15 by virtue of such compliance.
     (b) On the Change of Control Payment Date, the Company will, to the extent lawful:
     (1) accept for payment all Notes or portions of Notes properly tendered pursuant to the Change of Control Offer;
     (2) deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all Notes or portions of Notes properly tendered; and
     (3) deliver or cause to be delivered to the Trustee the Notes properly accepted together with an Officers’ Certificate stating the aggregate principal amount of Notes or portions of Notes being purchased by the Company.
     The Paying Agent will promptly mail (but in any case not later than five days after the Change of Control Payment Date) to each Holder of Notes properly tendered the Change of Control Payment for such Notes, and the Trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each Holder a new Note equal in principal amount to any unpurchased portion of the Notes

78


 

surrendered, if any. The Company will publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date.
     (c) Notwithstanding anything to the contrary in this Section 4.15, the Company will not be required to make a Change of Control Offer upon a Change of Control if (1) a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Section 4.15 hereof and purchases all Notes properly tendered and not withdrawn under the Change of Control Offer or (2) notice of redemption has been given pursuant to Section 3.07 hereof, unless and until there is a default in payment of the applicable redemption price.
     Notwithstanding anything to the contrary contained herein, a Change of Control Offer may be made in advance of a Change of Control, conditioned upon the consummation of such Change of Control, if a definitive agreement is in place for the Change of Control at the time the Change of Control Offer is made.
     For the avoidance of doubt, the Company’s failure to make a Change of Control Offer would constitute a Default under clause (4) of Section 6.01 hereof and not clause (2).
Section 4.16 Payments for Consent.
     Parent will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, pay or cause to be paid any consideration to or for the benefit of any Holder of Notes for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of this Indenture or the Notes unless such consideration is offered to be paid and is paid to all Holders of Notes that consent, waive or agree to amend in the time frame set forth in the solicitation documents relating to such consent, waiver or agreement.
Section 4.17 Additional Note Guarantees.
     If any domestic Restricted Subsidiary of Parent (existing on the date of this Indenture or acquired or created thereafter) becomes a guarantor or a direct obligor with respect to Indebtedness under the Credit Agreement, then such domestic Restricted Subsidiary will become a Guarantor and execute a supplemental indenture and deliver an Opinion of Counsel satisfactory to the Trustee within 30 Business Days of the date on which it became a guarantor or a direct obligor with respect to Indebtedness under the Credit Agreement.
Section 4.18 Designation of Restricted and Unrestricted Subsidiaries.
     The Board of Directors of Parent may designate any Restricted Subsidiary to be an Unrestricted Subsidiary if that designation would not cause a Default. If a Restricted Subsidiary is designated as an Unrestricted Subsidiary, the aggregate Fair Market Value of all outstanding Investments owned by Parent and its Restricted Subsidiaries in the Subsidiary designated as an Unrestricted Subsidiary will be deemed to be an Investment made as of the time of the designation and will reduce the amount available for Restricted Payments under Section 4.07 hereof or under one or more clauses of the definition of “Permitted Investments,” as determined by Parent. That designation will only be permitted if the Investment would be permitted at that time and if the Restricted Subsidiary otherwise meets the definition of an “Unrestricted Subsidiary.” The Board of Directors of Parent may redesignate any Unrestricted Subsidiary to be a Restricted Subsidiary if that redesignation would not cause a Default.
     Any designation of a Subsidiary of Parent as an Unrestricted Subsidiary will be evidenced to the Trustee by filing with the Trustee a certified copy of a resolution of the Board of Directors giving effect to such designation and an Officers’ Certificate certifying that such designation complied with the

79


 

preceding conditions and was permitted by Section 4.07 hereof. If, at any time, any Unrestricted Subsidiary would fail to meet the preceding requirements as an Unrestricted Subsidiary, it will thereafter cease to be an Unrestricted Subsidiary for purposes of this Indenture and any Indebtedness of such Subsidiary will be deemed to be incurred by a Restricted Subsidiary of Parent as of such date and, if such Indebtedness is not permitted to be incurred as of such date under Section 4.09 hereof, Parent will be in default of such covenant. The Board of Directors of Parent may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary of Parent; provided that such designation will be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of Parent of any outstanding Indebtedness of such Unrestricted Subsidiary and such designation will only be permitted if (a) such Indebtedness is permitted under Section 4.09 hereof, calculated on a pro forma basis as if such designation had occurred at the beginning of the applicable reference period and (b) no Default or Event of Default would be in existence following such designation.
Section 4.19 Delivery of Appraisals.
     On:
     (1) the date that is no later than 30 days prior to each six-month anniversary of the date of this Indenture;
     (2) the date upon which any Qualified Replacement Assets or Cure Collateral is pledged as Collateral to the Collateral Trustee to secure Secured Debt Obligations, but only with respect to such Qualified Replacement Assets or Cure Collateral; and
     (3) promptly (but in any event within 30 days) following a request by the Trustee or the Collateral Trustee if an Event of Default has occurred and is continuing,
the Company will deliver to the Trustee and the Collateral Trustee one or more Appraisals establishing the Appraised Value of the Collateral. The Company will make copies of these Appraisals available on a private, restricted website to which the Trustee, Holders of Notes, prospective investors, broker-dealers and securities analysts are given access, subject to such individuals agreeing to confidentiality obligations reasonably acceptable to the Company for securities law purposes.
     In addition to clauses (1) through (3) above, the Company will deliver to the Trustee and the Collateral Trustee a copy of any Appraisal that is delivered to any other Secured Debt Representative or other holder of Secured Debt Obligations, but has not been or is not being delivered to the Trustee in accordance with clauses (1) through (3) above, within 10 Business Days of the date on which such Appraisal was given to such other Secured Debt Representative or holder of Secured Debt Obligations.
Section 4.20 Priority Lien Debt Value Ratio.
     Within 10 Business Days after the end of each fiscal quarter of the Company, beginning with the first fiscal quarter ending after the Release Date (the last day of each such fiscal quarter being a “Reference Date”), the Company will deliver to the Trustee and the Collateral Trustee an Officers’ Certificate demonstrating, with reasonable detail, the calculation of the Priority Lien Debt Value Ratio as of the applicable Reference Date.

80


 

     If:
     (1) the Company fails to deliver the Officers’ Certificate required by the preceding paragraph within the time period specified in such paragraph or any required Appraisal referred to in Section 4.19 hereof, or
     (2) such Appraisal or such Officers’ Certificate demonstrates that the Priority Lien Debt Value Ratio was less than 1.5 to 1.0 as of the applicable Reference Date,
then the Company will pay Special Interest commencing on the earlier of (A) the date the Company delivers an Appraisal or an Officers’ Certificate demonstrating that its Priority Lien Debt Value Ratio was less than 1.5 to 1.0, or (B) the date on which the Company was required to deliver such Appraisal or such Officers’ Certificate, and continuing until the Company delivers to the Trustee and the Collateral Trustee an Appraisal and an Officers’ Certificate demonstrating, with reasonably detailed calculations, that the Company’s Priority Lien Debt Value Ratio was at least 1.5 to 1.0 as of a date subsequent to the applicable Reference Date.
     If the Company’s Priority Lien Debt Value Ratio is less than 1.5 to 1.0 on any Reference Date, the Company may, within 45 days after such Reference Date:
     (1) grant a Secured Debt Lien on additional assets pledged as Cure Collateral under the Security Documents to secure Priority Lien Obligations and Junior Lien Obligations and such Cure Collateral will be included in the calculation of Appraised Value as of such Reference Date; and/or
     (2) redeem, repay, prepay, repurchase or otherwise retire Priority Lien Debt, including by redeeming Notes pursuant to Section 3.07 hereof and such redeemed, repaid, prepaid, repurchased or otherwise retired Priority Lien Debt will not be included in the calculation of the Priority Lien Debt Value Ratio as of such Reference Date.
     If, after the pledge of Cure Collateral and/or any redemption, repayment, prepayment, repurchase or other retirement of Priority Lien Debt contemplated by the preceding paragraph and the recalculations of the Priority Lien Debt Value Ratio pursuant to the preceding paragraph, the Company’s Priority Lien Debt Value Ratio as of the applicable Reference Date would have been at least 1.5 to 1.0, then the Company will be deemed to have a Priority Lien Debt Value Ratio of at least 1.5 to 1.0 as of such Reference Date, and no Special Interest will accrue with respect to such Reference Date.
     Notwithstanding anything herein to the contrary, the Company’s failure to maintain a Priority Lien Debt Value Ratio in excess of 1.5 to 1.0 will not be deemed to constitute an Event of Default for purposes of clause (4) under Section 6.01 hereof. For the avoidance of doubt, the Company’s failure to deliver any Appraisal required by Section 4.19 hereof will be deemed to constitute a default for purposes of clause (4) under Section 6.01 hereof. The Company may not pledge additional assets as Cure Collateral except as provided in this Section 4.20, in Section 4.21 hereof and pursuant to clause (7) under Section 4.1(a) of the Collateral Trust Agreement.
Section 4.21 Priority Lien Debt Value Ratio Maintenance.
     The Company will not permit the Priority Lien Debt Value Ratio, as calculated in the Officers’ Certificate delivered to the Trustee and the Collateral Trustee pursuant to the first paragraph of Section 4.20 hereof, to be less than 1.25 to 1.0 on any Reference Date.
     If the Company’s Priority Lien Debt Value Ratio is less than 1.25 to 1.0 on any Reference Date, the Company may, within 100 days after such Reference Date (a) grant a Secured Debt Lien on additional

81


 

assets pledged as Cure Collateral under the Security Documents to secure Priority Lien Obligations and Junior Lien Obligations and such Cure Collateral will be included in the calculation of Appraised Value as of such Reference Date and/or (b) redeem, repay, prepay, repurchase or otherwise retire Priority Lien Debt, including by redeeming Notes pursuant to Section 3.07 hereof and such redeemed, repaid, prepaid, repurchased or otherwise retired Priority Lien Debt will not be included in the calculation of the Priority Lien Debt Value Ratio as of such Reference Date.
     If, after the pledge of Cure Collateral and/or any redemption, repayment, prepayment, repurchase or other retirement of Priority Lien Debt contemplated by the preceding paragraph and the recalculations of the Priority Lien Debt Value Ratio pursuant to the preceding paragraph, the Company’s Priority Lien Debt Value Ratio as of the applicable Reference Date would have been at least 1.25 to 1.0, then the Company will be deemed to have a Priority Lien Debt Value Ratio of at least 1.25 to 1.0 as of such Reference Date.
     Notwithstanding anything herein to the contrary, the Company’s failure to maintain a Priority Lien Debt Value Ratio equal to or greater than 1.25 to 1.0 (subject to the cure provisions described above) will be deemed to constitute a default for purposes of clause (4) under Section 6.01 hereof. The Company may not pledge additional assets as Cure Collateral except as provided in this Section 4.21, in Section 4.20 hereof and pursuant to clause (7) under Section 4.1(a) of the Collateral Trust Agreement.
Section 4.22 Regulatory Cooperation.
     In connection with any foreclosure, collection, sale or other enforcement of Liens granted to the Collateral Trustee in the Security Documents, Parent will, and will cause its Restricted Subsidiaries to, reasonably cooperate in good faith with the Collateral Trustee or its designee in obtaining all regulatory licenses, consents and other governmental approvals necessary or (in the reasonable opinion of the Collateral Trustee or its designee) reasonably advisable to conduct all aviation operations with respect to the Collateral and will, at the reasonable request of the Collateral Trustee and in good faith, continue to operate and manage the Collateral and maintain all applicable regulatory licenses with respect to the Collateral until such time as the Collateral Trustee or its designee obtain such licenses, consents and approvals, and at such time Parent will, and will cause its Restricted Subsidiaries to, cooperate in good faith with the transition of the aviation operations with respect to the Collateral to any new aviation operator (including, without limitation, the Collateral Trustee or its designee).
Section 4.23 Regulatory Matters; Citizenship; Utilization; Reporting.
     (a) So long as any of the Notes remain outstanding, the Company will:
     (1) maintain at all times its status as an “air carrier” within the meaning of Section 40102(a)(2) of Title 49, and hold a certificate under Section 41102(a)(1) of Title 49;
     (2) be a United States Citizen;
     (3) maintain at all times its status at the FAA as an “air carrier” and hold an air carrier operating certificate under Section 44705 of Title 49 and operations specifications issued by the FAA pursuant to Parts 119 and 121 of Title 14 as currently in effect or as may be amended or recodified from time to time;
     (4) possess and maintain all necessary certificates, exemptions, franchises, licenses, permits, designations, rights, concessions, authorizations, frequencies and consents that are material to the operation of the Japan Routes, the Japan Route FAA Slots and Japan Route

82


 

Foreign Slots flown by it, and to the conduct of its business and operations as currently conducted, except to the extent that any failure to possess or maintain would not reasonably be expected to result in a Material Adverse Effect;
     (5) maintain Japan Gate Leaseholds sufficient to ensure its ability to retain its right in and to the Japan Routes and to preserve its right in and to the Japan Route Foreign Slots and the Japan Route FAA Slots, except to the extent that any failure to maintain would not reasonably be expected to result in a Material Adverse Effect;
     (6) utilize the Japan Route FAA Slots in a manner consistent with applicable regulations, rules, law and contracts in order to preserve its right to hold and use the Japan Route FAA Slots, taking into account any waivers or other relief granted to the Company by the FAA, or other applicable Governmental Authority or Airport Authority, except to the extent that any failure to utilize would not reasonably be expected to result in a Material Adverse Effect;
     (7) cause to be done all things reasonably necessary to preserve and keep in full force and effect its rights in and to use the Japan Route FAA Slots, including, without limitation, satisfying any applicable Use or Lose Rule, except to the extent that any failure to do so would not reasonably be expected to result in a Material Adverse Effect;
     (8) utilize the Japan Route Foreign Slots in a manner consistent with applicable regulations, rules, foreign law and contracts in order to preserve its right to hold and use the Japan Route Foreign Slots, taking into account any waivers or other relief granted to the Company by any applicable Foreign Aviation Authorities, except to the extent that any failure to utilize would not reasonably be expected to result in a Material Adverse Effect;
     (9) cause to be done all things reasonably necessary to preserve and keep in full force and effect its rights in and to use the Japan Route Foreign Slots, including, without limitation, satisfying any applicable Use or Lose Rule, except to the extent that any failure to do so would not reasonably be expected to result in a Material Adverse Effect;
     (10) utilize the Japan Routes in a manner consistent with Title 49, applicable foreign law, the applicable rules and regulations of the FAA, DOT and any applicable Foreign Aviation Authorities, and any applicable treaty in order to preserve its rights to hold and operate the Japan Routes, except to the extent that any failure to utilize would not reasonably be expected to result in a Material Adverse Effect; and
     (11) cause to be done all things reasonably necessary to preserve and keep in full force and effect its authority to serve the Japan Routes, except to the extent that any failure to do so would not reasonably be expected to result in a Material Adverse Effect.
     (b) Without in any way limiting Section 4.23(a) hereof, the Company will promptly take (1) all such steps as may be reasonably necessary to obtain renewal of its authority to serve the Japan Routes from the DOT and any applicable Foreign Aviation Authorities within a reasonable time prior to the expiration of such authority (as prescribed by law or regulation, if any), and notify the Collateral Trustee of the status of such renewal and (2) all such other steps as may be necessary to maintain, renew and obtain Japan Gate Leaseholds as needed for the continued and future operations of the Company over the Japan Routes. The Company will further take all actions reasonably necessary or, in the reasonable judgment of the Collateral Trustee, advisable in order to maintain its material rights to use the Japan Routes (including, without limitation, protecting the Japan Routes from dormancy or withdrawal by the DOT or any applicable Foreign Aviation Authorities) and to have access to the Japan Gate Leaseholds.

83


 

The Company will pay any applicable filing fees and other expenses related to the submission of applications, renewal requests, and other filings as may be reasonably necessary to maintain or obtain the Company’s rights in the Japan Routes and have access to the Japan Gate Leaseholds.
Section 4.24 Collateral Ownership.
     Subject to the provisions described under Sections 4.10 and 5.01 hereof and the definition of “Asset Sale,” the Company will continue to maintain its interest in and right to use the Japan Routes, Japan Slots, Japan Gate Leaseholds and all property and assets that constitute Collateral. Notwithstanding anything herein to the contrary, the Company will not sell, lease, convey, transfer or otherwise dispose of the Japan Routes.
Section 4.25 Insurance.
     The Company will:
     (1) keep all Collateral insured at all times, against such risks, including fire and other risks insured against by extended coverage, as is prudent and customary with U.S.-based companies of the same or similar size in the same or similar businesses;
     (2) maintain in full force and effect public liability insurance against claims for personal injury or death or property damage occurring upon, in, about or in connection with the use of the Collateral owned, occupied or controlled by the Company, in such amounts and with such deductibles as are prudent and customary with U.S.-based companies of the same or similar size in the same or similar businesses and in the same geographic area;
     (3) maintain such other insurance or self insurance as may be required by law; and
     (4) maintain business interruption insurance in amounts and on terms as are customary in the U.S. domestic airline industry for major U.S. air carriers having both substantial domestic and international operations.
Section 4.26 Note Calculations.
     The Company will be responsible for making calculations called for under the terms of the Notes. These calculations include, but are not limited to, determination of redemption price (including premiums or Applicable Premium, if any), Special Interest, and original issue discount, if any. The Company will make the calculations in good faith and, absent manifest error, its calculations will be final and binding on the Holders of Notes. The Company will provide a schedule of its calculations to the Trustee when applicable, and the Trustee is entitled to rely conclusively on the accuracy of the Company’s calculations without independent verification.
ARTICLE 5
SUCCESSORS
Section 5.01 Merger, Consolidation, or Sale of Assets.
     (a) Parent and the Company shall not, directly or indirectly: (i) consolidate or merge with or into another Person (whether or not Parent or the Company is the surviving corporation) or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of either:

84


 

(x) Parent and its Restricted Subsidiaries taken as a whole or (y) the Company and its Restricted Subsidiaries taken as a whole, in one or more related transactions, to another Person, unless:
     (1) either:
     (A) Parent or the Company is the surviving corporation; or
     (B) the Person formed by or surviving any such consolidation or merger (if other than Parent or the Company) or to which such sale, assignment, transfer, conveyance or other disposition has been made is an entity organized or existing under the laws of the United States, any state of the United States or the District of Columbia; and, if such entity is not a corporation, a co-obligor of the Notes is a corporation organized or existing under any such laws;
     (2) the Person formed by or surviving any such consolidation or merger (if other than Parent or the Company) or the Person to which such sale, assignment, transfer, conveyance or other disposition has been made assumes all the obligations of Parent and the Company under the Notes, this Indenture, the Security Documents and the Escrow and Security Agreement pursuant to agreements reasonably satisfactory to the Trustee, the Collateral Trustee and the Escrow Agent, as applicable;
     (3) immediately after such transaction, no Default or Event of Default exists; and
     (4) the Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indenture (if any) complies with this Indenture.
     In addition, each of Parent and the Company will not, directly or indirectly, lease all or substantially all of the properties and assets of (i) Parent and its Restricted Subsidiaries taken as a whole, or (ii) the Company and its Restricted Subsidiaries taken as a whole, in one or more related transactions, to any other Person.
     (b) Section 5.01(a) will not apply to any sale, assignment, transfer, conveyance, lease or other disposition of assets between or among Parent and its Restricted Subsidiaries. Clause (3) of Section 5.01(a) will not apply to any merger, consolidation or transfer of assets:
     (1) of Parent or the Company with or into one of Parent’s Restricted Subsidiaries for any purpose;
     (2) among the Guarantors or by a Restricted Subsidiary that is not a Guarantor; or
     (3) with or into an Affiliate solely for the purpose of reincorporating Parent or the Company in another jurisdiction.
Section 5.02 Successor Corporation Substituted.
     Upon any consolidation or merger, or any sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of the properties or assets of Parent or the Company in a transaction that is subject to, and that complies with the provisions of, Section 5.01 hereof, the successor Person formed by such consolidation or into or with which Parent or the Company is merged or to which such sale, assignment, transfer, lease, conveyance or other disposition is made shall succeed to, and be

85


 

substituted for (so that from and after the date of such consolidation, merger, sale, assignment, transfer, lease, conveyance or other disposition, the provisions of this Indenture referring to “Parent” or the “Company,” as applicable, shall refer instead to the successor Person and not to Parent or the Company, as applicable), and may exercise every right and power of Parent or the Company, as applicable, under this Indenture with the same effect as if such successor Person had been named as Parent or the Company, as applicable, herein; provided, however, that the predecessor Company, if applicable, shall not be relieved from the obligation to pay the principal of, and premium, if any, interest and Special Interest, if any, on the Notes except in the case of a sale of all of the Company’s assets in a transaction that is subject to, and that complies with the provisions of, Section 5.01 hereof.
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01 Events of Default.
     Each of the following is an “Event of Default:”
     (1) default for 30 days in the payment when due of interest (including Special Interest, if any) on the Notes;
     (2) default in the payment when due (at maturity, upon redemption or otherwise) of the principal of, or premium, if any, on, the Notes;
     (3) failure by Parent or any of its Restricted Subsidiaries to comply with the provisions of Section 5.01 hereof;
     (4) failure by Parent or any of its Restricted Subsidiaries for 60 consecutive days after notice to the Company by the Trustee or the Holders of at least 25% in aggregate principal amount of the Notes then outstanding voting as a single class to comply with any of the other agreements in the Note Documents or the Security Documents (including, without limitation, the provisions described in Section 4.10 hereof);
     (5) any default that results in the acceleration of any Indebtedness under the Credit Agreement prior to its stated maturity;
     (6) failure by Parent or any of its Restricted Subsidiaries to pay final judgments entered by a court or courts of competent jurisdiction aggregating in excess of $70.0 million (determined net of amounts covered by insurance policies issued by creditworthy insurance companies or by third party indemnities or a combination thereof), which judgments are not paid, discharged or stayed for a period of 60 days;
     (7) at any time prior to the Release Date, the Escrow and Security Agreement or any Lien purported to be granted thereby on the Escrow Account or the cash, Government Securities or a mutual fund investing primarily in Government Securities therein is held in any judicial proceeding to be unenforceable or invalid, in whole or in part, or ceases for any reason to be fully enforceable and perfected (other than as a result of the action or inaction of the Escrow Agent or Collateral Trustee);
     (8) at any time following the Release Date: (A) any Security Document ceases to be in full force and effect (except as permitted by the terms of this Indenture or the Security Documents or other than as a result of the action or inaction of the Collateral Trustee or the

86


 

Secured Party Representatives) for a period of 60 consecutive days after the Company receives notice thereof or (B) any of the Security Documents ceases to give the Holders of Notes a valid, perfected (subject to any Permitted Liens) security interest (except as permitted by the terms of this Indenture or the Security Documents or other than as a result of the action or inaction of the Collateral Trustee or the Secured Party Representatives) for a period of 60 consecutive days after the Company receives notice thereof, in each case with respect to Collateral having an Appraised Value in excess of $70.0 million in the aggregate at any time with respect to clauses (A) and (B) above;
     (9) failure by the Company to comply with any material term of the Escrow and Security Agreement that is not cured within 10 Business Days from the date of written notice provided by the Escrow Agent;
     (10) except as permitted by this Indenture, any Note Guarantee of Parent or a Significant Subsidiary is held in any judicial proceeding to be unenforceable or invalid or ceases for any reason to be in full force and effect, or Parent or any Significant Subsidiary that is a Guarantor denies or disaffirms in writing its obligations under its Note Guarantee;
     (11) Parent or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries of Parent that, taken together, would constitute a Significant Subsidiary pursuant to or within the meaning of Bankruptcy Law:
     (A) commences a voluntary case,
     (B) consents to the entry of an order for relief against it in an involuntary case,
     (C) consents to the appointment of a custodian of it or for all or substantially all of its property,
     (D) makes a general assignment for the benefit of its creditors, or
     (E) generally is not paying its debts as they become due; and
     (12) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:
     (A) is for relief against Parent or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries of Parent that, taken together, would constitute a Significant Subsidiary in an involuntary case;
     (B) appoints a custodian of Parent or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries of Parent that, taken together, would constitute a Significant Subsidiary or for all or substantially all of the property of Parent or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries of Parent that, taken together, would constitute a Significant Subsidiary; or
     (C) orders the liquidation of Parent or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries of Parent that, taken together, would constitute a Significant Subsidiary;

87


 

     and in each case the order or decree remains unstayed and in effect for 60 consecutive days.
Section 6.02 Acceleration.
     In the case of an Event of Default specified in clauses (11) or (12) of Section 6.01 hereof, with respect to Parent or the Company, all outstanding Notes will become due and payable immediately without further action or notice. If any other Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in aggregate principal amount of the then outstanding Notes may declare all the Notes to be due and payable immediately.
     Upon any such declaration, the Notes shall become due and payable immediately.
     Holders of a majority in aggregate principal amount of the then outstanding Notes by written notice to the Trustee may, on behalf of the Holders of all of the Notes, rescind an acceleration and its consequences hereunder, if the rescission would not conflict with any judgment or decree, except a continuing Default or Event of Default in the payment of principal of, premium on, if any, or interest (including Special Interest, if any) on, the Notes.
Section 6.03 Other Remedies.
     If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal, premium, if any, and interest (including Special Interest, if any) on the Notes or to enforce the performance of any provision of the Notes or this Indenture.
     The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law.
Section 6.04 Waiver of Past Defaults.
     Holders of not less than a majority in aggregate principal amount of the then outstanding Notes by written notice to the Trustee may, on behalf of the Holders of all of the Notes, waive an existing Default or Event of Default and its consequences hereunder, except a continuing Default or Event of Default in the payment of the principal of, premium on, if any, or interest (including Special Interest, if any) on, the Notes (including in connection with an offer to purchase); provided, however, that the Holders of a majority in aggregate principal amount of the then outstanding Notes may rescind an acceleration and its consequences, including any related payment default that resulted from such acceleration, if the rescission would not conflict with any judgment or decree. Upon any such waiver, 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 Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon.
Section 6.05 Control by Majority.
     Holders of a majority in aggregate principal amount of the then outstanding Notes may direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee. However, the Trustee may withhold from Holders of Notes notice of any continuing Default or Event of Default if it determines that withholding notice is in their interest, except a Default or Event of Default

88


 

relating to the payment of principal of, premium on, if any, and interest (including Special Interest, if any).
Section 6.06 Limitation on Suits.
     Except to enforce the right to receive payment of principal, premium, if any, or interest (including Special Interest, if any) when due, no Holder may pursue any remedy with respect to this Indenture or the Notes unless:
     (1) such Holder has previously given the Trustee written notice that an Event of Default is continuing;
     (2) Holders of at least 25% in aggregate principal amount of the then outstanding Notes make a written request to the Trustee to pursue the remedy;
     (3) such Holder or Holders of Notes offer and, if requested, provide to the Trustee security or indemnity reasonably satisfactory to the Trustee against any loss, liability or expense;
     (4) the Trustee does not comply with the request within 60 days after receipt of the request and the offer of security or indemnity; and
     (5) during such 60-day period, Holders of a majority in aggregate principal amount of the then outstanding Notes do not give the Trustee a direction inconsistent with such request.
     A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain a preference or priority over another Holder.
Section 6.07 Rights of Holders of Notes to Receive Payment.
     Notwithstanding any other provision of this Indenture, the right of any Holder to receive payment of principal, premium, if any, and interest on the Note (including Special Interest, if any), on or after the respective due dates expressed in the Note (including in connection with an offer to purchase), or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder; provided that a Holder shall not have the right to institute any such suit for the enforcement of payment if and to the extent that the institution or prosecution thereof or the entry of judgment therein would, under applicable law, result in the surrender, impairment, waiver or loss of the Lien of this Indenture upon any property subject to such Lien.
Section 6.08 Collection Suit by Trustee.
     If an Event of Default specified in Section 6.01(1) or (2) hereof occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as Trustee of an express trust against the Company for the whole amount of principal of, premium, if any, and interest (including Special Interest, if any) remaining unpaid on, the Notes and interest (including Special Interest, if any) on overdue principal and, to the extent lawful, interest and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

89


 

Section 6.09 Trustee May File Proofs of Claim.
     The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders of Notes allowed in any judicial proceedings relative to the Company (or any other obligor upon the Notes), its creditors or its property and shall be entitled and empowered to collect, receive and distribute any money or other property payable or deliverable on any such claims and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the Holders of Notes, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.06 hereof. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.06 hereof out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the Holders of Notes may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.
Section 6.10 Priorities.
     If the Trustee collects any money pursuant to this Article 6 or any other money or property distributable in respect of the obligations of the Company or any Guarantor under this Indenture, it shall pay out the money in the following order:
     First: to the Trustee, its agents and attorneys for amounts due under Section 7.06 hereof, including payment of all reasonable compensation, out-of-pocket expenses and liabilities incurred, and all advances made, by the Trustee and the costs and reasonable out-of-pocket expenses of collection;
     Second: to Holders of Notes for amounts due and unpaid on the Notes for principal, premium, if any, and interest (including Special Interest, if any), ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal, premium, if any and interest (including Special Interest, if any), respectively; and
     Third: to the Company, the Guarantors, if applicable, or to such party as a court of competent jurisdiction shall direct.
     The Trustee, upon prior notice to the Company, may fix a record date and payment date for any payment to Holders of Notes pursuant to this Section 6.10.
Section 6.11 Undertaking for Costs.
     In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in

90


 

the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in aggregate principal amount of the then outstanding Notes.
ARTICLE 7
TRUSTEE
Section 7.01 Duties of Trustee.
     (a) If an Event of Default has occurred and is continuing, the Trustee will exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in its exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.
     (b) Except during the continuance of an Event of Default:
     (1) the duties of the Trustee will be determined solely by the express provisions of this Indenture and the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and
     (2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, the Trustee will examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture.
     (c) The Trustee may not be relieved from liabilities for its own gross negligent action, its own gross negligent failure to act, or its own willful misconduct, except that:
     (1) this paragraph does not limit the effect of paragraph (b) of this Section 7.01;
     (2) the Trustee will not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was grossly negligent in ascertaining the pertinent facts; and
     (3) the Trustee will not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05 hereof or in accordance with the direction of a majority in aggregate principal amount of Notes outstanding relating to the exercise of any right or power of the Trustee under this Indenture..
     (d) Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.01.
     (e) No provision of this Indenture will require the Trustee to expend or risk its own funds or incur any liability. The Trustee will be under no obligation to exercise any of its rights and powers under this Indenture at the request or direction of any Holders of Notes, unless such Holder has offered to the Trustee security and indemnity satisfactory to it against any loss, liability or expense.

91


 

     (f) The Trustee will not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.
     (g) The Trustee is hereby authorized to execute the Collateral Trust Agreement, the Escrow and Security Agreement, and any other Security Document to which it may be a party and perform its obligations in accordance with their terms, and the rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be compensated, reimbursed and indemnified, are extended to the Trustee’s execution and performance of each such agreement.
Section 7.02 Rights of Trustee.
     Subject to Section 7.01 hereof:
     (a) The Trustee may conclusively rely upon any document believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document.
     (b) Before the Trustee acts or refrains from acting, it may require an Officers’ Certificate or an Opinion of Counsel or both. The Trustee will not be liable for any action it takes or omits to take in good faith in reliance on such Officers’ Certificate or Opinion of Counsel. The Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel will be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon.
     (c) The Trustee may act through its attorneys and agents and will not be responsible for the misconduct or negligence of any agent appointed with due care.
     (d) The Trustee will not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within the rights or powers conferred upon it by this Indenture.
     (e) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from Parent or the Company will be sufficient if signed by an Officer of Parent or the Company, as applicable.
     (f) The Trustee will be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders of Notes unless such Holders of Notes have offered to the Trustee reasonable indemnity or security against the losses, liabilities and expenses that might be incurred by it in compliance with such request or direction.
Section 7.03 Individual Rights of Trustee.
     The Trustee or any of its Affiliates, each in its individual or any other capacity may become the owner or pledgee of Notes and may become a creditor of, or otherwise deal with Parent, its Subsidiaries or any of their respective Affiliates with the same rights it would have if it were not Trustee or an Affiliate of the Trustee. However, in the event that the Trustee acquires any conflicting interest it must eliminate such conflict within 90 days, apply to the SEC for permission to continue as trustee or resign. Any Agent may do the same with like rights and duties. The Trustee is also subject to Section 7.09 hereof.

92


 

Section 7.04 Trustee’s Disclaimer.
     The Trustee will not be responsible for and makes no representation as to the validity or adequacy of this Indenture, the Notes, the Note Guarantees, the Security Documents or the Collateral, it shall not be accountable for the Company’s use of the proceeds from the Notes or any money paid to the Company or upon the Company’s direction under any provision of this Indenture, it will not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it will not be responsible for any statement or recital herein or any statement in the Offering Memorandum, the Notes or any other document in connection with the sale of the Notes or pursuant to this Indenture other than its certificate of authentication. The Trustee shall have no responsibility for any act or omission of the Collateral Trustee.
Section 7.05 Notice of Defaults.
     If a Default or Event of Default occurs and is continuing and if it is known to the Trustee, the Trustee will mail to Holders of Notes a notice of the Default or Event of Default within 90 days after it occurs. Except in the case of a Default or Event of Default in payment of principal of, premium, if any, or interest (including Special Interest, if any) on, any Note, the Trustee may withhold the notice if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of the Holders of Notes.
Section 7.06 Compensation and Indemnity.
     (a) The Company will pay to the Trustee from time to time reasonable compensation for its acceptance of this Indenture and services hereunder. The Trustee’s compensation will not be limited by any law on compensation of a trustee of an express trust. The Company will reimburse the Trustee promptly upon request for all reasonable disbursements, advances and expenses incurred or made by it in addition to the compensation for its services, except any such disbursements, expenses and advances as may be attributable to the Trustee’s gross negligence, bad faith or willful misconduct. Such expenses will include the reasonable compensation, disbursements and expenses of the Trustee’s agents and counsel.
     (b) The Company and the Guarantors will indemnify the Trustee against any and all losses, liabilities or expenses incurred by it arising out of or in connection with the acceptance or administration of its duties under this Indenture, including the costs and expenses of enforcing this Indenture against the Company and the Guarantors (including this Section 7.06) and defending itself against any claim (whether asserted by the Company, the Guarantors, any Holder or any other Person) or liability in connection with the exercise or performance of any of its powers or duties hereunder, except to the extent any such loss, liability or expense may be attributable to its gross negligence, bad faith or willful misconduct. The Trustee will notify the Company promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Company will not relieve the Company or any of the Guarantors of their obligations hereunder. The Company or such Guarantor will defend the claim and the Trustee will cooperate in the defense. The Trustee may have separate counsel and the Company will pay the reasonable fees and expenses of such counsel. Neither the Company nor any Guarantor need pay for any settlement made without its consent, which consent will not be unreasonably withheld. The Company and the Guarantors need not reimburse any expense or indemnify against any loss or liability to the extent incurred by the Trustee through the Trustee’s gross negligence, bad faith or willful misconduct.
     (c) The obligations of the Company and the Guarantors under this Section 7.06 will survive the satisfaction and discharge of this Indenture and the resignation or removal of the Trustee.

93


 

     (d) To secure the Company’s and the Guarantors’ payment obligations in this Section 7.06, the Trustee will have a Lien prior to the Notes on all money or property held or collected by the Trustee, except that held in trust to pay principal and interest on particular Notes. For the avoidance of doubt, the Trustee shall not have any individual Lien on, or claim to, the Escrow Property with respect to the payment obligations in this Section 7.06. Such Lien will survive the satisfaction and discharge of this Indenture and the resignation or removal of the Trustee.
     (e) When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(11) or (12) hereof occurs, the expenses and the compensation for the services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any Bankruptcy Law.
Section 7.07 Replacement of Trustee.
     (a) A resignation or removal of the Trustee and appointment of a successor Trustee will become effective only upon the successor Trustee’s acceptance of appointment as provided in this Section 7.07.
     (b) The Trustee may resign in writing at any time and be discharged from the trust hereby created by so notifying the Company. The Holders of a majority in aggregate principal amount of the then outstanding Notes may remove the Trustee by so notifying the Trustee and the Company in writing. The Company may remove the Trustee if:
     (1) the Trustee fails to comply with Section 7.09 hereof;
     (2) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law;
     (3) a receiver or other public officer takes charge of the Trustee or its property; or
     (4) the Trustee becomes incapable of acting.
     (c) If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Company will promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the Holders of a majority in aggregate principal amount of the then outstanding Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Company.
     (d) If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company, or the Holders of at least 10% in aggregate principal amount of the then outstanding Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee.
     (e) If the Trustee, after written request by any Holder who has been a Holder for at least six months, fails to comply with Section 7.09 hereof, such Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.
     (f) A successor Trustee will deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon, the resignation or removal of the retiring Trustee will become effective, and the successor Trustee will have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee will mail a notice of its succession to Holders of Notes. The retiring Trustee will promptly transfer all property held by it as Trustee to the successor Trustee; provided all

94


 

sums owing to the Trustee hereunder have been paid and subject to the Lien provided for in Section 7.06 hereof. Notwithstanding replacement of the Trustee pursuant to this Section 7.07, the Company’s obligations under Section 7.06 hereof will continue for the benefit of the retiring Trustee.
Section 7.08 Successor Trustee by Merger, etc.
     If the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor corporation without any further act will be the successor Trustee.
Section 7.09 Eligibility; Disqualification.
     There will at all times be a Trustee hereunder that is a corporation organized and doing business under the laws of the United States of America or of any state thereof that is authorized under such laws to exercise corporate trustee power, that is subject to supervision or examination by federal or state authorities and that has a combined capital and surplus of at least $100.0 million as set forth in its most recent published annual report of condition.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance.
     The Company may at any time, at the option of its Board of Directors evidenced by a resolution set forth in an Officers’ Certificate, elect to have either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon compliance with the conditions set forth below in this Article 8.
Section 8.02 Legal Defeasance and Discharge.
     Upon the Company’s exercise under Section 8.01 hereof of the option applicable to this Section 8.02, the Company and each of the Guarantors will, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to have been discharged from their obligations with respect to all outstanding Notes (including the Note Guarantees) on the date the conditions set forth below are satisfied (hereinafter, “Legal Defeasance”). For this purpose, Legal Defeasance means that the Company and the Guarantors will be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Notes (including the Note Guarantees), which will thereafter be deemed to be “outstanding” only for the purposes of Section 8.05 hereof and the other Sections of this Indenture referred to in clauses (1) and (2) below, and to have satisfied all their other obligations under such Notes, the Note Guarantees and this Indenture (and the Trustee, on demand of and at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following provisions which will survive until otherwise terminated or discharged hereunder:
     (1) the rights of Holders of outstanding Notes to receive payments in respect of the principal of, or interest (including Special Interest, if any) or premium, if any, on, such Notes when such payments are due from the trust referred to in Section 8.04 hereof;
     (2) the Company’s obligations with respect to such Notes under Article 2 and Section 4.02 hereof;
     (3) the rights, powers, trusts, duties and immunities of the Trustee hereunder and the Company’s and the Guarantors’ obligations in connection therewith; and
     (4) this Article 8.

95


 

     Subject to compliance with this Article 8, the Company may exercise its option under this Section 8.02 notwithstanding the prior exercise of its option under Section 8.03 hereof.
Section 8.03 Covenant Defeasance.
     Upon the Company’s exercise under Section 8.01 hereof of the option applicable to this Section 8.03, the Company and each of the Guarantors will, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be released from each of their obligations under the covenants contained in Sections 4.03, 4.04, 4.05, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.15, 4.16, 4.17, 4.18, 4.19, 4.20, 4.21, 4.22, 4.23, 4.24 and 4.25 hereof with respect to the outstanding Notes on and after the date the conditions set forth in Section 8.04 hereof are satisfied (hereinafter, “Covenant Defeasance”), and the Notes will thereafter be deemed not “outstanding” for the purposes of any direction, waiver, consent or declaration or act of Holders of Notes (and the consequences of any thereof) in connection with such covenants, but will continue to be deemed “outstanding” for all other purposes hereunder (it being understood that such Notes will not be deemed outstanding for accounting purposes). For this purpose, Covenant Defeasance means that, with respect to the outstanding Notes and Note Guarantees, the Company and the Guarantors may omit to comply with and will have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply will not constitute a Default or an Event of Default under Section 6.01 hereof, but, except as specified above, the remainder of this Indenture and such Notes and Note Guarantees will be unaffected thereby. In addition, upon the Company’s exercise under Section 8.01 hereof of the option applicable to this Section 8.03, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, Sections 6.01(3) through 6.01(10) hereof will not constitute Events of Default.
Section 8.04 Conditions to Legal or Covenant Defeasance.
     In order to exercise either Legal Defeasance or Covenant Defeasance under either Section 8.02 or 8.03 hereof:
     (1) the Company must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders of Notes, cash in U.S. dollars, non-callable Government Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized investment bank, appraisal firm, or firm of independent public accountants, to pay the principal of, premium, if any, and interest (including Special Interest, if any) on, the outstanding Notes on the stated date for payment thereof or on the applicable redemption date, as the case may be, and the Company must specify whether the Notes are being defeased to such stated date for payment or to a particular redemption date;
     (2) in the case of Legal Defeasance, the Company must deliver to the Trustee an Opinion of Counsel confirming that (A) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (B) since the date of this Indenture, there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel will confirm that, the Holders of Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;

96


 

     (3) in the case of Covenant Defeasance, the Company must deliver to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that the Holders of Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;
     (4) no Default or Event of Default has occurred and is continuing on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit (and any similar concurrent deposit relating to other Indebtedness), and the granting of Liens to secure such borrowings);
     (5) such Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than this Indenture and the agreements governing any other Indebtedness being defeased, discharged or replaced) to which the Company or any of the Guarantors is a party or by which the Company or any of the Guarantors is bound;
     (6) the Company must deliver to the Trustee an Officers’ Certificate stating that the deposit was not made by the Company with the intent of preferring the Holders of Notes over the other creditors of the Company with the intent of defeating, hindering, delaying or defrauding any creditors of the Company or others; and
     (7) the Company must deliver to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent relating to the Legal Defeasance or the Covenant Defeasance have been complied with.
     Upon a Legal Defeasance or Covenant Defeasance, the Collateral Trustee will cease to be a party to the Security Documents on behalf of the Holders of Notes and the Collateral will no longer secure the Notes. The Collateral will be released from the Liens securing the Notes as provided in the Collateral Trust Agreement.
Section 8.05 Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions.
     Subject to Section 8.06 hereof, all money and non-callable Government Securities (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 8.05, the “Trustee”) pursuant to Section 8.04 hereof in respect of the outstanding Notes will be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as Paying Agent) as the Trustee may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of principal, premium, if any, and interest (including Special Interest, if any), but such money need not be segregated from other funds except to the extent required by law.
     The Company will pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or non-callable Government Securities deposited pursuant to Section 8.04 hereof or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes.
     Notwithstanding anything in this Article 8 to the contrary, the Trustee will deliver or pay to the Company from time to time upon the request of the Company any money or non-callable Government

97


 

Securities held by it as provided in Section 8.04 hereof which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 8.04(1) hereof), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
Section 8.06 Repayment to Company.
     Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of, premium, if any, or interest on (including Special Interest, if any), any Note and remaining unclaimed for two years after such principal, premium, if any, or interest (including Special Interest, if any) has become due and payable shall be paid to the Company on its request or (if then held by the Company) will be discharged from such trust; and the Holder of such Note will thereafter be permitted to look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, will thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in the New York Times and The Wall Street Journal (national edition), notice that such money remains unclaimed and that, after a date specified therein, which will not be less than 30 days from the date of such notification or publication, any unclaimed balance of such money then remaining will be repaid to the Company.
Section 8.07 Reinstatement.
     If the Trustee or Paying Agent is unable to apply any U.S. dollars or non-callable Government Securities in accordance with Section 8.02 or 8.03 hereof, as the case may be, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Company’s and the Guarantors’ obligations under this Indenture and the Notes and the Note Guarantees will be revived and reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 8.02 or 8.03 hereof, as the case may be; provided, however, that, if the Company makes any payment of principal of, premium, if any, or interest (including Special Interest, if any) on, any Note following the reinstatement of its obligations, the Company will be subrogated to the rights of the Holders of such Notes to receive such payment from the money held by the Trustee or Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes.
     Notwithstanding Section 9.02 of this Indenture, the Company, the Guarantors and the Trustee may amend or supplement this Indenture, the Notes or the Note Guarantees without the consent of any Holder:
     (1) to cure any ambiguity, defect or inconsistency;
     (2) to provide for uncertificated Notes in addition to or in place of certificated Notes;
     (3) to provide for the assumption of the Company’s or a Guarantor’s obligations to the Holders of Notes and Note Guarantees in the case of a merger or consolidation or sale of all or substantially all of the Company’s or such Guarantor’s assets, as applicable;

98


 

     (4) to make any change that would provide any additional rights or benefits to the Holders of Notes or that does not adversely affect the legal rights hereunder of any Holder;
     (5) to conform the text of any of the Note Documents to any provision of the “Description of notes” section of the Offering Memorandum, to the extent that such provision in that “Description of notes” was intended to be a verbatim recitation of a provision of such Note Documents, as determined in good faith by an officer of Parent and set forth in an Officers’ Certificate to that effect;
     (6) to enter into additional or supplemental Security Documents or provide for additional Collateral;
     (7) to make, complete or confirm any grant of Collateral permitted or required by this Indenture or any of the Security Documents or to release Collateral in accordance with the terms of this Indenture and the Security Documents;
     (8) to provide for the issuance of Additional Notes in accordance with the limitations set forth in this Indenture as of the date of this Indenture; or
     (9) to allow any Guarantor to execute a supplemental indenture and/or a Note Guarantee with respect to the Notes.
     Upon the request of the Company accompanied by a resolution of its Board of Directors authorizing the execution of any such amended or supplemental indenture, and upon receipt by the Trustee of the documents described in Section 7.02 hereof, the Trustee and the Collateral Trustee will join with the Company and the Guarantors in the execution of any amended or supplemental indenture authorized or permitted by the terms of this Indenture and to make any further appropriate agreements and stipulations that may be therein contained, but neither the Trustee nor the Collateral Trustee will be obligated to enter into such amended or supplemental indenture that affects its own rights, duties or immunities under this Indenture or otherwise.
Section 9.02 With Consent of Holders of Notes.
     Except as provided below in this Section 9.02, the Company, the Trustee and the Collateral Trustee may amend or supplement this Indenture (including, without limitation, Sections 3.10, 4.10 and 4.15 hereof), the Notes and the Note Guarantees with the consent of the Company and the Holders of at least a majority in aggregate principal amount of the then outstanding Notes (including, without limitation, Additional Notes, if any) voting as a single class (including, without limitation, consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing Default or Event of Default (other than a Default or Event of Default in the payment of the principal of, premium, if any, or interest (including Special Interest, if any) on, the Notes, except a payment default resulting from an acceleration that has been rescinded) or compliance with any provision of this Indenture, the Notes or the Note Guarantees may be waived with the consent of the Holders of a majority in aggregate principal amount of the then outstanding Notes (including, without limitation, Additional Notes, if any) voting as a single class (including, without limitation, consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes). Section 2.08 hereof shall determine which Notes are considered to be “outstanding” for purposes of this Section 9.02.
     Upon the request of the Company accompanied by a resolution of its Board of Directors authorizing the execution of any such amended or supplemental indenture, and upon the filing with the

99


 

Trustee and the Collateral Trustee of evidence satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by the Trustee of the documents described in Section 7.02 hereof, each of the Trustee and the Collateral Trustee will join with the Company and the Guarantors in the execution of such amended or supplemental indenture unless such amended or supplemental indenture directly affects the Trustee’s and/or the Collateral Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee and/or the Collateral Trustee may in its discretion, but will not be obligated to, enter into such amended or supplemental Indenture.
     It is not necessary for the consent of the Company or the Holders of Notes under this Section 9.02 to approve the particular form of any proposed amendment, supplement or waiver, but it is sufficient if such consent approves the substance thereof.
     After an amendment, supplement or waiver under this Section 9.02 becomes effective, the Company will mail to the Holders of Notes affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Company to mail such notice, or any defect therein, will not, however, in any way impair or affect the validity of any such amended or supplemental indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a majority in aggregate principal amount of the Notes then outstanding voting as a single class may waive compliance in a particular instance by the Company with any provision of this Indenture, the Notes or the Note Guarantees. However, without the consent of each Holder affected, an amendment, supplement or waiver under this Section 9.02 may not (with respect to any Notes held by a non-consenting Holder):
     (1) reduce the principal amount of Notes whose Holders must consent to an amendment, supplement or waiver;
     (2) reduce the principal of or change the fixed maturity of any Note or alter or waive any of the provisions with respect to the redemption of the Notes (except as provided above with respect to Sections 3.10, 4.10 and 4.15 hereof), including, without limitation, the provisions relating to the Company’s Special Scheduled Maturity Date obligation described in Section 3.09 hereof;
     (3) reduce the rate of or change the time for payment of interest, including default interest, on any Note;
     (4) waive a Default or Event of Default in the payment of principal of, or premium, if any, or interest (including Special Interest, if any) on, the Notes (except a rescission of acceleration of the Notes by the Holders of at least a majority in aggregate principal amount of the then outstanding Notes and a waiver of the payment default that resulted from such acceleration);
     (5) make any Note payable in money other than that stated in the Notes;
     (6) make any change in the provisions of this Indenture relating to waivers of past Defaults or the rights of Holders of Notes to receive payments of principal of, premium on, if any, or interest (including Special Interest, if any) on, the Notes;
     (7) waive a redemption payment with respect to any Note (other than a payment required by Sections 3.10, 4.10 or 4.15 hereof);
     (8) release any Guarantor from any of its obligations under its Note Guarantee or this Indenture, except in accordance with the terms of this Indenture;

100


 

     (9) make any change to any of the Escrow Conditions; or
     (10) make any change in the preceding amendment and waiver provisions.
     Any amendment to, or waiver of, the provisions of this Indenture or any Security Document that has the effect of releasing all or substantially all of the Collateral from the Liens securing the Notes will require the consent of holders of at least 75% in aggregate principal amount of Notes then outstanding.
Section 9.03 Revocation and Effect of Consents.
     Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a Note is a continuing consent by the Holder of a Note and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holder’s Note, even if notation of the consent is not made on any Note. However, any such Holder of a Note or subsequent Holder of a Note may revoke the consent as to its Note if the Trustee receives written notice of revocation before the date the amendment, supplement or waiver becomes effective. An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Holder.
Section 9.04 Notation on or Exchange of Notes.
     The Trustee may place an appropriate notation about an amendment, supplement or waiver on any Note thereafter authenticated. The Company in exchange for all Notes may issue and the Trustee shall, upon receipt of an Authentication Order, authenticate new Notes that reflect the amendment, supplement or waiver.
     Failure to make the appropriate notation or issue a new Note will not affect the validity and effect of such amendment, supplement or waiver.
Section 9.05 Trustee to Sign Amendments, etc.
     Each of the Trustee and the Collateral Trustee will sign any amended or supplemental indenture authorized pursuant to this Article 9 if the amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee and the Collateral Trustee. The Company may not sign an amended or supplemental indenture until the Board of Directors of the Company approves it. In executing any amended or supplemental indenture, each of the Trustee and the Collateral Trustee will be entitled to receive and (subject to Section 7.01 hereof) will be fully protected in relying upon, in addition to the documents required by Section 13.02 hereof, an Officers’ Certificate and an Opinion of Counsel stating that the execution of such amended or supplemental indenture is authorized or permitted by this Indenture.
ARTICLE 10
NOTE GUARANTEES
Section 10.01 Guarantee.
     (a) Subject to the provisions of this Article 10, each of the Guarantors hereby, jointly and severally, unconditionally guarantees to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of this Indenture, the Notes or the obligations of the Company hereunder or thereunder, that:

101


 

     (1) the principal of, premium, if any, and interest on (including Special Interest, if any), the Notes will be promptly paid in full when due, whether at maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of, premium, if any, and interest (including Special Interest, if any) on the Notes, if any, if lawful, and all other obligations of the Company to the Holders of Notes or the Trustee hereunder or thereunder will be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and
     (2) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at Stated Maturity, by acceleration or otherwise.
     Failing payment when due of any amount so guaranteed or any performance so guaranteed for whatever reason, the Guarantors will be jointly and severally obligated to pay the same immediately. Each Guarantor agrees that this is a guarantee of payment and not a guarantee of collection.
     (b) The Guarantors hereby agree that their obligations hereunder are unconditional, irrespective of the validity, regularity or enforceability of the Notes or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder with respect to any provisions hereof or thereof, the recovery of any judgment against the Company, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor. Each Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest, notice and all demands whatsoever and covenant that this Note Guarantee will not be discharged except by complete performance of the obligations contained in the Notes and this Indenture.
     (c) If any Holder or the Trustee is required by any court or otherwise to return to the Company, the Guarantors or any custodian, trustee, liquidator or other similar official acting in relation to either the Company or the Guarantors, any amount paid by either to the Trustee or such Holder, this Note Guarantee, to the extent theretofore discharged, will be reinstated in full force and effect.
     (d) Each Guarantor agrees that it will not be entitled to any right of subrogation in relation to the Holders of Notes in respect of any obligations guaranteed hereby until payment in full of all obligations (other than contingent obligations) guaranteed hereby. Each Guarantor further agrees that, as between the Guarantors, on the one hand, and the Holders of Notes and the Trustee, on the other hand, (1) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article 6 hereof for the purposes of this Note Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (2) in the event of any declaration of acceleration of such obligations as provided in Article 6 hereof, such obligations (whether or not due and payable) will forthwith become due and payable by the Guarantors for the purpose of this Note Guarantee. The Guarantors will have the right to seek contribution from any non-paying Guarantor so long as the exercise of such right does not impair the rights of the Holders of Notes under the Note Guarantee.
Section 10.02 Limitation on Guarantor Liability.
     Each Guarantor, and by its acceptance of Notes, each Holder, hereby confirms that it is the intention of all such parties that the Note Guarantee of such Guarantor not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent applicable to any Note Guarantee.

102


 

To effectuate the foregoing intention, the Trustee, the Holders of Notes and the Guarantors hereby irrevocably agree that the obligations of such Guarantor will be limited to the maximum amount that will, after giving effect to such maximum amount and all other contingent and fixed liabilities of such Guarantor that are relevant under such laws, and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under this Article 10, result in the obligations of such Guarantor under its Note Guarantee not constituting a fraudulent transfer or conveyance. Each Guarantor that makes a payment for distribution under its Note Guarantee is entitled to a contribution from each other Guarantor in a pro rata amount based on the adjusted net assets of each Guarantor.
Section 10.03 Execution and Delivery of Note Guarantee.
     To evidence its Note Guarantee set forth in Section 10.01 hereof, each Guarantor hereby agrees that a notation of such Note Guarantee substantially in the form attached as Exhibit E hereto will be endorsed by an Officer of such Guarantor on each Note authenticated and delivered by the Trustee and that this Indenture will be executed on behalf of such Guarantor by one of its Officers.
     Each Guarantor hereby agrees that its Note Guarantee set forth in Section 10.01 hereof will remain in full force and effect notwithstanding any failure to endorse on each Note a notation of such Note Guarantee.
     If an Officer whose signature is on this Indenture or on the Note Guarantee no longer holds that office at the time the Trustee authenticates the Note on which a Note Guarantee is endorsed, the Note Guarantee will be valid nevertheless.
     The delivery of any Note by the Trustee, after the authentication thereof hereunder, will constitute due delivery of the Note Guarantee set forth in this Indenture on behalf of the Guarantors.
     In the event that any domestic Subsidiary of Parent (existing on the date of this Indenture or acquired or created thereafter) becomes a guarantor or a direct obligor with respect to Indebtedness under the Credit Agreement, if required by Section 4.17 hereof, Parent will cause such domestic Subsidiary to comply with the provisions of Section 4.17 hereof and this Article 10, to the extent applicable.
Section 10.04 Guarantors May Consolidate, etc., on Certain Terms.
     Except as otherwise provided in Section 10.05 hereof, no Subsidiary Guarantor may sell or otherwise dispose of all or substantially all of its assets to, or consolidate with or merge with or into (whether or not such Subsidiary Guarantor is the surviving Person) another Person, other than the Company or another Guarantor, unless either:
     (1) subject to Section 10.05 hereof, the Person acquiring the property in any such sale or disposition or the Person formed by or surviving any such consolidation or merger unconditionally assumes all the obligations of that Subsidiary Guarantor under the Note Guarantees and the Notes Documents on the terms set forth herein or therein, pursuant to a supplemental indenture in form and substance reasonably satisfactory to the Trustee and the Collateral Trustee; or
     (2) the Net Proceeds of such sale or other disposition, if any, are applied in accordance with the applicable provisions of this Indenture, including without limitation, Section 4.10 hereof.

103


 

     In case of any such consolidation, merger, sale or conveyance and upon the assumption by the successor Person, by supplemental indenture, executed and delivered to the Trustee and the Collateral Trustee and satisfactory in form to the Trustee and the Collateral Trustee, of the Note Guarantee endorsed upon the Notes and the due and punctual performance of all of the covenants and conditions of this Indenture to be performed by the Subsidiary Guarantor, such successor Person will succeed to and be substituted for the Subsidiary Guarantor with the same effect as if it had been named herein as a Guarantor. Such successor Person thereupon may cause to be signed any or all of the Note Guarantees to be endorsed upon all of the Notes issuable hereunder which theretofore shall not have been signed by the Company and delivered to the Trustee. All the Note Guarantees so issued will in all respects have the same legal rank and benefit under this Indenture as the Note Guarantees theretofore and thereafter issued in accordance with the terms of this Indenture as though all of such Note Guarantees had been issued at the date of the execution hereof.
     Except as set forth in Articles 4 and 5 hereof, and notwithstanding clauses (1) and (2) of this Section 10.04, nothing contained in this Indenture or in any of the Notes will prevent any consolidation or merger of a Subsidiary Guarantor with or into the Company or another Guarantor, or will prevent any sale or conveyance of the property of a Subsidiary Guarantor as an entirety or substantially as an entirety to the Company or another Guarantor.
Section 10.05 Releases.
     (a) In the event that any Subsidiary Guarantor ceases to provide a Guarantee or be a direct obligor of obligations outstanding under the Credit Agreement, such Subsidiary Guarantor will be automatically released and relieved of any obligations under its Note Guarantee.
     (b) In the event of any sale or other disposition of all or substantially all of the assets of any Subsidiary Guarantor, by way of merger, consolidation or otherwise, or a sale or other disposition of Capital Stock of any Subsidiary Guarantor, in each case to a Person that is not (either before or after giving effect to such transactions) Parent or a Restricted Subsidiary of Parent, then such Subsidiary Guarantor (in the event of a sale or other disposition, by way of merger, consolidation or otherwise, of all of the Capital Stock of such Subsidiary Guarantor) or the corporation acquiring the property (in the event of a sale or other disposition of all or substantially all of the assets of such Subsidiary Guarantor) will be automatically released and relieved of any obligations under its Note Guarantee; provided that the Net Proceeds of such sale or other disposition are applied in accordance with the applicable provisions of this Indenture, including without limitation Section 4.10 hereof. Upon delivery by Parent to the Trustee of an Officers’ Certificate and an Opinion of Counsel to the effect that such sale or other disposition was made by Parent in accordance with the provisions of this Indenture, including without limitation Section 4.10 hereof, the Trustee will execute any documents reasonably required in order to evidence the release of any Subsidiary Guarantor from its obligations under its Note Guarantee.
     (c) Upon designation of any Subsidiary Guarantor as an Unrestricted Subsidiary in accordance with the terms of this Indenture, such Subsidiary Guarantor will be automatically released and relieved of any obligations under its Note Guarantee.
     (d) Upon Legal Defeasance or Covenant Defeasance in accordance with Article 8 hereof or satisfaction and discharge of this Indenture in accordance with Article 11 hereof, each Guarantor will be automatically released and relieved of any obligations under its Note Guarantee.
     Any Subsidiary Guarantor not released from its obligations under its Note Guarantee as provided in this Section 10.05 will remain liable for the full amount of principal of and interest (including Special

104


 

Interest, if any) and premium, if any, on the Notes and for the other obligations of any Guarantor under this Indenture as provided in this Article 10.
ARTICLE 11
SATISFACTION AND DISCHARGE
Section 11.01 Satisfaction and Discharge.
     This Indenture will be discharged and will cease to be of further effect as to all outstanding Notes issued hereunder, when:
          (1) either:
               (A) all Notes that have been authenticated, except lost, stolen or destroyed Notes that have been replaced or paid and Notes for whose payment money has theretofore been deposited in trust and thereafter repaid to the Company, have been delivered to the Trustee for cancellation; or
               (B) all Notes that have not been delivered to the Trustee for cancellation have become due and payable by reason of the mailing of a notice of redemption or otherwise or will become due and payable within one year and the Company or any Guarantor has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust solely for the benefit of the Holders of Notes, cash in U.S. dollars, non-callable Government Securities, or a combination thereof, in such amounts as will be sufficient, without consideration of any reinvestment of interest, to pay and discharge the entire Indebtedness on the Notes not delivered to the Trustee for cancellation for principal of, premium on, if any, and interest (including Special Interest, if any) on, the Notes to the date of maturity or redemption;
     (2) in respect of clause (1)(B) of this Section 11.01, no Default or Event of Default has occurred and is continuing on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit and any similar deposit relating to other Indebtedness, in each case, the granting of Liens to secure such borrowings) and the deposit will not result in a breach or violation of, or constitute a default under, any other instrument to which the Company or any Guarantor is a party or by which the Company or any Guarantor is bound (other than with respect to the borrowing of funds to be applied concurrently to make the deposit required to effect such satisfaction and discharge and any similar concurrent deposit relating to other Indebtedness, and in each case the granting of Liens to secure such borrowings);
     (3) the Company or any Guarantor has paid or caused to be paid all sums payable by it under this Indenture; and
     (4) the Company has delivered irrevocable instructions to the Trustee under this Indenture to apply the deposited money toward the payment of the Notes at maturity or on the redemption date, as the case may be.
In addition, the Company must deliver an Officers’ Certificate and an Opinion of Counsel to the Trustee stating that all conditions precedent to satisfaction and discharge have been satisfied.

105


 

     Notwithstanding the satisfaction and discharge of this Indenture, if money has been deposited with the Trustee pursuant to clause (1)(B) of this Section 11.01, the provisions of Sections 11.02 and 8.06 hereof will survive. In addition, nothing in this Section 11.01 will be deemed to discharge those provisions of Section 7.06 hereof, that, by their terms, survive the satisfaction and discharge of this Indenture.
Section 11.02 Application of Trust Money.
     Subject to the provisions of Section 8.06 hereof, all money deposited with the Trustee pursuant to Section 11.01 hereof shall be held in trust and applied by it, in accordance with the provisions of the Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal (and premium, if any) and interest (including Special Interest, if any) for whose payment such money has been deposited with the Trustee; but such money need not be segregated from other funds except to the extent required by law.
     If the Trustee or Paying Agent is unable to apply any money or Government Securities in accordance with Section 11.01 hereof by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Company’s and any Guarantor’s obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 11.01 hereof; provided that if the Company has made any payment of principal of, premium, if any, or interest (including Special Interest, if any) on, any Notes because of the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or Government Securities held by the Trustee or Paying Agent.
ARTICLE 12
COLLATERAL AND SECURITY
Section 12.01 Security Interest.
     The due and punctual payment of the principal of, premium (if any), interest and Special Interest, if any, on, the Notes when and as the same shall be due and payable, whether on an interest payment date, at maturity, by acceleration, repurchase, redemption or otherwise, and interest on the overdue principal of, premium (if any), interest and Special Interest, if any, on the Notes and performance of all other obligations of the Company to the Holders of Notes, the Collateral Trustee or the Trustee and the Notes, according to the terms hereunder or thereunder, are secured following the Release Date as provided in the Security Documents. Prior to the release of the Escrow Property on or after the Release Date, pursuant to the Escrow and Security Agreement, the Notes will be entitled to the benefits of the Escrow Account, including a security interest in the rights, if any, of the Company therein. Each Holder, by its acceptance thereof, consents and agrees to the terms of the Security Documents (including, without limitation, the provisions providing for foreclosure and release of Collateral by the Collateral Trustee, relating to ranking of Priority Liens and order of application of proceeds from enforcement of Priority Liens) as the same may be in effect or may be amended, amended and restated, modified, renewed, restated or replaced from time to time in accordance with their terms and authorizes and appoints The Bank of New York Mellon Trust Company, N.A. as the Trustee and Wilmington Trust FSB as the Collateral Trustee, the Trustee hereby authorizes and appoints Wilmington Trust FSB as Collateral Trustee and each Holder and the Trustee direct the Collateral Trustee to enter into the Security Documents and to perform its obligations and exercise its rights thereunder in accordance therewith and to exercise such powers as are delegated to the Trustee and Collateral Trustee by the terms thereof, together with such actions and powers as are reasonably incidental thereto. Following the Release Date, the Company consents and agrees to be bound

106


 

by the terms of the Security Documents, as the same may be in effect from time to time, and agrees to perform its obligations thereunder in accordance therewith. Each Holder agrees that all Priority Lien Obligations will be and are secured equally and ratably by all Priority Liens at any time granted by the Company to secure any Obligations in respect of such Series of Priority Lien Debt, whether or not upon property otherwise constituting Collateral, and that all such Priority Liens will be enforceable by the Collateral Trustee for the benefit of all holders of Priority Lien Obligations. Following the Release Date, promptly upon the reasonable request of the Collateral Trustee or any Secured Debt Representative at any time and from time to time, the Company will execute, acknowledge and deliver such Security Documents, instruments, certificates, notices and other documents, and take such other actions as shall be reasonably required under applicable law, or that the Collateral Trustee may reasonably request, in each case, to create, perfect, protect, assure or enforce the Liens and benefits intended to be conferred, in each case as contemplated by the Priority Lien Documents for the benefit of the Holders of Notes.
Section 12.02 Collateral Trust Agreement.
     This Article 12 and the provisions of each other Security Document are subject to the terms, conditions and benefits set forth in the Collateral Trust Agreement. The Company consents to, and agrees to be bound by, the terms of the Collateral Trust Agreement, as the same may be in effect from time to time, and to perform its obligations thereunder in accordance with the terms therewith.
Section 12.03 Release of Liens in Respect of the Notes.
     The Collateral Trustee’s Liens upon the Collateral will no longer secure the Notes outstanding under this Indenture or any other Obligations under this Indenture, and the right of the Holders of Notes and such Obligations to the benefits and proceeds of the Collateral Trustee’s Liens on the Collateral will automatically terminate and be discharged:
          (1) upon satisfaction and discharge of this Indenture in accordance with Article 11 hereof;
          (2) upon a Legal Defeasance or Covenant Defeasance of the Notes in accordance with Article 8 hereof;
          (3) upon payment in full and discharge of all Notes outstanding under this Indenture and all Obligations that are outstanding, due and payable under this Indenture at the time the Notes are paid in full and discharged; or
          (4) in whole or in part, with the consent of the Holders of the requisite percentage of Notes in accordance with Article 9 hereof.
     In addition, the Collateral Trustee’s Liens on the Collateral will be released upon the terms and subject to the conditions set forth in Section 4.1 of the Collateral Trust Agreement.
Section 12.04 Collateral Trustee.
     (a) The Collateral Trustee will hold (directly or through co-trustees or agents) and is directed by each Holder to so hold, and will be entitled to enforce on behalf of the holders of Priority Lien Obligations and Junior Lien Obligations (if any), all Liens on the Collateral created by the Security Documents for their benefit, subject to the provisions of the Collateral Trust Agreement.

107


 

     (b) Neither the Company nor any of its Affiliates and no Secured Debt Representative may serve as Collateral Trustee.
     (c) Except as provided in the Collateral Trust Agreement or as directed by an Act of Required Debtholders in accordance with the Collateral Trust Agreement, the Collateral Trustee will not be obligated to:
     (1) act upon directions purported to be delivered to it by any Person;
     (2) foreclose upon or otherwise enforce any Lien; or
     (3) take any other action whatsoever with regard to any or all of the Security Documents, the Liens created thereby or the Collateral.
     (d) The Company and the Guarantors will indemnify the Collateral Trustee against any and all losses, liabilities or expenses incurred by it arising out of or in connection with this Indenture, including defending itself against any claim (whether asserted by the Company, the Guarantors, any Holder or any other Person) or liability in connection with the exercise or performance of any of its powers or duties hereunder, except to the extent any such loss, liability or expense may be attributable to (1) its gross negligence, willful misconduct or bad faith or (2) its breach of this Indenture or any Security Document. The Collateral Trustee will notify the Company promptly of any claim for which it may seek indemnity. Failure by the Collateral Trustee to so notify the Company will not relieve the Company or any of the Guarantors of their obligations hereunder. The Company or such Guarantor will defend the claim and the Collateral Trustee will cooperate in the defense. The Collateral Trustee may have separate counsel and the Company will pay the reasonable fees and out-of-pocket expenses of such counsel. Neither the Company nor any Guarantor need pay for any settlement made without its consent, which consent will not be unreasonably withheld. The obligations of the Company and the Guarantors under this Section 12.04(d) will survive the satisfaction and discharge of this Indenture.
ARTICLE 13
MISCELLANEOUS
Section 13.01 Notices.
     Any notice or communication by the Company, any Guarantor, the Collateral Trustee or the Trustee to the others is duly given if in writing and delivered in Person or by first class mail (registered or certified, return receipt requested), facsimile transmission or overnight air courier guaranteeing next day delivery, to the others’ address:
If to the Company and/or any Guarantor:
UAL Corporation
77 W. Wacker Drive
Chicago, IL 60601
Attention: Stephen R. Lieberman, Vice President and Treasurer
With a copy to:
Cravath, Swaine & Moore LLP
Worldwide Plaza
825 Eighth Avenue

108


 

New York, NY 10019-7475
Facsimile No.: (212) 765-0997
Attention: William Fogg
If to the Trustee:
The Bank of New York Mellon Trust Company, N.A.
2 North LaSalle Street, Suite 1020
Chicago, IL 60602
Facsimile No.: (312) 827-8542
Attention: Corporate Trust
With a copy to:
Drinker Biddle & Reath LLP
191 North Wacker Drive, Suite 3700
Chicago, IL 60606
Facsimile No.: (312) 569-3216
Attention: Steven M. Wagner
If to the Collateral Trustee:
Wilmington Trust FSB
50 South Sixth Street, Suite 1290
Minneapolis, MN 55402
Facsimile No.: (612) 217-5651
Attention: Corporate Client Services
With a copy to:
Morris James LLP
500 Delaware Avenue, Suite 1500
Wilmington, DE 19801-1494
Facsimile No.: (302) 888-6989
Attention: Lewis C. Ledyard, III
     The Company, any Guarantor, the Collateral Trustee or the Trustee, by notice to the others, may designate additional or different addresses for subsequent notices or communications.
     All notices and communications (other than those sent to Holders of Notes) will be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when receipt acknowledged, if transmitted by facsimile; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery.
     Any notice or communication to a Holder will be mailed by first class mail, certified or registered, return receipt requested, or by overnight air courier guaranteeing next day delivery to its address shown on the register kept by the Registrar. Failure to mail a notice or communication to a Holder or any defect in it will not affect its sufficiency with respect to other Holders of Notes.

109


 

     If a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it.
     If the Company mails a notice or communication to Holders of Notes, it will mail a copy to the Trustee and each Agent at the same time.
Section 13.02 Certificate and Opinion as to Conditions Precedent.
     Upon any request or application by the Company to the Trustee to take any action under this Indenture, the Company shall furnish to the Trustee:
     (1) an Officers’ Certificate in form and substance reasonably satisfactory to the Trustee (which must include the statements set forth in Section 13.03 hereof) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been satisfied; and
     (2) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which must include the statements set forth in Section 13.03 hereof) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been satisfied.
Section 13.03 Statements Required in Certificate or Opinion.
     Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture must include:
     (1) a statement that the Person making such certificate or opinion has read such covenant or condition;
     (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;
     (3) a statement that, in the opinion of such Person, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been complied with; and
     (4) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been complied with.
Section 13.04 Rules by Trustee and Agents.
     The Trustee may make reasonable rules for action by or at a meeting of Holders of Notes. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions.
Section 13.05 No Personal Liability of Directors, Officers, Employees and Stockholders.
     No director, officer, employee, incorporator or stockholder of the Company or any Guarantor, as such, will have any liability for any obligations of the Company or the Guarantors under the Note Documents or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. The waiver may not be effective to waive liabilities under the federal securities laws.

110


 

Section 13.06 Governing Law.
     THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE, THE NOTES AND THE NOTE GUARANTEES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
Section 13.07 No Adverse Interpretation of Other Agreements.
     This Indenture may not be used to interpret any other indenture, loan or debt agreement of Parent or its Subsidiaries or of any other Person. Any such indenture, loan or debt agreement may not be used to interpret this Indenture.
Section 13.08 Successors.
     All agreements of the Company in this Indenture and the Notes will bind its successors. All agreements of the Trustee in this Indenture will bind its successors. All agreements of each Guarantor in this Indenture will bind its successors, except as otherwise provided in Section 10.05 hereof.
Section 13.09 Severability.
     In case any provision in this Indenture or in the Notes is invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired thereby.
Section 13.10 Counterpart Originals.
     The parties may sign any number of copies of this Indenture. Each signed copy will be an original, but all of them together represent the same agreement.
Section 13.11 Table of Contents, Headings, etc.
     The Table of Contents and Headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part of this Indenture and will in no way modify or restrict any of the terms or provisions hereof.
[Signatures on following page]

111


 

SIGNATURES
Dated as of January ___, 2010
         
  UNITED AIR LINES, INC.
 
 
  By:      
    Name:      
    Title:      
Indenture Signature Page
         


 

         
  UAL CORPORATION
 
 
  By:      
    Name:      
    Title:      
 
Indenture Signature Page


 

                     
MPH I, INC.       MILEAGE PLUS, INC.    
 
                   
By:
 
 
Name:
      By:  
 
Name:
   
 
  Title:           Title:    
 
                   
MILEAGE PLUS MARKETING, INC.       MILEAGE PLUS HOLDINGS, LLC    
 
                   
By:
 
 
Name:
      By:  
 
Name:
   
 
  Title:           Title:    
 
                   
UNITED AVIATION FUELS CORPORATION                
 
                   
By:
 
 
Name:
               
 
  Title:                
             
    THE BANK OF NEW YORK MELLON TRUST    
         COMPANY, N.A.    
 
           
 
  By:        
 
     
 
Name:
   
 
      Title:    
 
           
    WILMINGTON TRUST FSB, not in its individual    
    capacity, but solely as Collateral Trustee    
 
           
 
  By:        
 
     
 
Name:
   
 
      Title:    
Indenture Signature Page


 

EXHIBIT A — FORM OF NOTE
[Face of Note]
CUSIP/ISIN                     
9.875% Senior Secured Notes due 2013
     
No. ___   $                    
UNITED AIR LINES, INC.
promises to pay to                      or registered assigns,
         
the principal sum of
 
  DOLLARS on August 1, 2013.
 
       
Interest Payment Dates: February 1 and August 1
Record Dates: January 15 and July 15
Dated:                     , 20 ___
[Signature Page Follows]

A-1


 

     IN WITNESS WHEREOF, the Company has caused this Note to be signed manually or by facsimile by its duly authorized officer as of the date first written above.
         
  UNITED AIR LINES, INC.
 
 
  By:      
    Name:      
    Title:      

A-2


 

         
This is one of the Notes referred to
in the within-mentioned Indenture:
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee
         
By:
 
 
Authorized Signatory
   

A-3


 

[Back of Note]
9.875% Senior Secured Notes due 2013
[Insert the Global Note Legend, if applicable pursuant to the provisions of the Indenture]
[Insert the Private Placement Legend, if applicable, pursuant to the provisions of the Indenture]
     Capitalized terms used herein have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.
     (1) Interest. United Air Lines, Inc., a Delaware corporation (the “Company”), promises to pay interest on the principal amount of this Note at 9.875% per annum from                     , 20 ___ until maturity and shall pay the Special Interest, if any, payable pursuant to Sections 4.10 and 4.20 of the Indenture. The Company will pay interest semi-annually in arrears on February 1 and August 1 of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each, an “Interest Payment Date”). Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of issuance; provided that if there is no existing Default in the payment of interest, and if this Note is authenticated between a record date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date; provided further that the first Interest Payment Date shall be                     , 20 ___. The Company will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, from time to time on demand at a rate that is 1% per annum in excess of the rate then in effect to the extent lawful; it will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest and Special Interest, if any, (without regard to any applicable grace periods) from time to time on demand at the same rate to the extent lawful. Interest will be computed on the basis of a 360-day year of twelve 30-day months.
     (2) Method of Payment. The Company will pay interest on the Notes (except defaulted interest) and Special Interest, if any, to the Persons who are registered Holders of Notes at the close of business on the January 15 or July 15 next preceding the Interest Payment Date, even if such Notes are canceled after such record date and on or before such Interest Payment Date, except as provided in Section 2.12 of the Indenture with respect to defaulted interest. The Notes will be payable as to principal, premium and Special Interest, if any, and interest at the office or agency of the Company maintained for such purpose within or without the City and State of New York, or, at the option of the Company, payment of interest and Special Interest, if any, may be made by check mailed to the Holders of Notes at their addresses set forth in the register of Holders of Notes; provided that payment by wire transfer of immediately available funds will be required with respect to principal of and interest, premium and Special Interest, if any, on, all Global Notes and all other Notes the Holders of which will have provided wire transfer instructions to the Company or the Paying Agent. Such payment will be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.
     (3) Paying Agent and Registrar. Initially, The Bank of New York Mellon Trust Company, N.A., the Trustee under the Indenture, will act as Paying Agent and Registrar. The Company may change any Paying Agent or Registrar without notice to any Holder. Parent or any of its Subsidiaries may act in any such capacity.

A-4


 

     (4) Indenture. The Company issued the Notes under an Indenture dated as of January 15, 2010 (as amended, amended and restated, adjusted, supplemented or otherwise modified from time to time, the “Indenture”) among the Company, the Guarantors, the Trustee and the Collateral Trustee. The Notes are subject to all such terms, and Holders of Notes are referred to the Indenture for a statement of such terms. To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling. The Notes are secured obligations of the Company. Prior to the release of the Escrow Property on or after the Release Date, pursuant to the Escrow and Security Agreement, the Notes will be entitled to the benefits of the Escrow Account, including a security interest in the rights, if any, of the Company therein and a security interest in the Company’s rights under the Escrow and Security Agreement. Following the Release Date, the Notes and all other Priority Lien Obligations will be secured, equally and ratably, by a Priority Lien on all assets of the Company that constitute Collateral, subject to Permitted Liens. Following the Release Date, the Notes are secured by a pledge of Collateral pursuant to the Security Documents referred to in the Indenture. The Indenture does not limit the aggregate principal amount of Notes that may be issued thereunder.
     (5) Optional Redemption.
     (b) Except as set forth in subparagraphs (b), (c) and (d) of this Paragraph 5, the Notes will not be redeemable at the Company’s option prior to February 1, 2012. On or after February 1, 2012, the Company may on any one or more occasions redeem all or a part of the Notes , subject to the provisions of Section 3.03 of the Indenture, at the redemption prices (expressed as percentages of principal amount on the date of redemption), plus accrued and unpaid interest and Special Interest, if any, on the Notes redeemed to the applicable date of redemption, if redeemed during the 12-month period beginning on February 1 of the years set forth below, subject to the rights of Holders of Notes on the relevant record date to receive interest on the relevant interest payment date:
         
Period   Percentage  
2012
    107.406 %
2013 and thereafter
    100.000 %
     Unless the Company defaults in the payment of the redemption price, interest will cease to accrue on the Notes or portions thereof called for redemption on the applicable redemption date.
     (c) At any time prior to February 1, 2012, the Company may on any one or more occasions redeem up to 35% of the aggregate principal amount of Notes issued under the Indenture, subject to the provisions of Section 3.03 of the Indenture, at a redemption price equal to 109.875% of the aggregate principal amount thereof, plus accrued and unpaid interest and Special Interest, if any, to the date of redemption (subject to the rights of the Holders of Notes on the relevant record date to receive interest on the relevant interest payment date), with the net cash proceeds of an Equity Offering by the Company; provided that at least 50% of the aggregate principal amount of Notes originally issued under the Indenture (excluding Notes held by Parent and its Subsidiaries) remains outstanding immediately after the occurrence of such redemption and that such redemption occurs within 90 days of the date of the closing of such Equity Offering.
     (d) At any time prior to February 1, 2012, the Company may on any one or more occasions redeem all or a part of the Notes, subject to the provisions of Section 3.03 of the Indenture, at a redemption price equal to 100% of the principal amount of Notes redeemed, plus the Applicable Premium as of, and accrued and unpaid interest and Special Interest, if any, to the date of redemption, subject to the

A-5


 

rights of Holders of Notes on the relevant record date to receive interest due on the relevant interest payment date.
     (e) At any time and from time to time prior to February 1, 2013, the Company may redeem a portion of the Notes, subject to the provisions of Section 3.03 of the Indenture, at a redemption price of 103% of the principal amount thereof, plus accrued and unpaid interest and Special Interest, if any, to the applicable date of redemption, subject to the rights of Holders of Notes on the relevant record date to receive interest due on the relevant interest payment date; provided that in no event may the Company redeem more than 10% of the original aggregate principal amount of the Initial Notes during any twelve-month period.
          (6) Special Scheduled Maturity Date.
     Except as described in the next succeeding paragraph, the Company is not required to make mandatory redemption, sinking fund or other scheduled payments of principal with respect to the Notes. However, the Company may be required to offer to purchase the notes as described in Sections 4.10 and 4.15 of the Indenture.
     If the Escrow Conditions have not been satisfied on or prior to the 120th day following the date of the Indenture, the Company will redeem all of the outstanding Notes on or prior to the 135th day following the date of the Indenture, upon not less than 10 days’ notice and pursuant to the terms of the Escrow and Security Agreement, at the Special Scheduled Maturity Date Price. Immediately upon receipt by the Paying Agent of the Escrow Property, the Trustee will notify the Holders of the date fixed for the Special Scheduled Maturity Date.
          (7) Repurchase at the Option of Holder.
          (a) Upon the occurrence of a Change of Control, each Holder of Notes will have the right to require the Company to make an offer (a “Change of Control Offer”) to each Holder to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of that Holder’s Notes at a purchase price in cash equal to 101% of the aggregate principal amount of Notes repurchased, plus accrued and unpaid interest and Special Interest, if any, on the Notes repurchased to the date of purchase, subject to the rights of Holders of Notes on the relevant record date to receive interest due on the relevant interest payment date (the “Change of Control Payment”). Within 30 days following any Change of Control, the Company will mail a notice to each Holder setting forth the procedures governing the Change of Control Offer as required by the Indenture.
          (b) In accordance with Section 4.10 of the Indenture, the Company will be required to offer to purchase the Notes upon certain Asset Sales.
     (8) Notice of Redemption. Subject to Section 6 above, notice of redemption will be mailed at least 30 days but not more than 60 days before the redemption date to each Holder whose Notes are to be redeemed at its registered address, except that redemption notices may be mailed more than 60 days prior to a redemption date if the notice is issued in connection with a defeasance of the Notes or a satisfaction or discharge of the Indenture. Notes in denominations larger than $2,000 may be redeemed in part but only in integral multiples of $1,000 in excess thereof, unless all of the Notes held by a Holder are to be redeemed.
     (9) Denominations, Transfer, Exchange. The Notes are in registered form without coupons in denominations of $2,000 and integral multiples of $1,000 in excess thereof.

A-6


 

The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Company need not exchange or register the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also, the Company need not exchange or register the transfer of any Notes for a period of 15 days before a selection of Notes to be redeemed or during the period between a record date and the corresponding Interest Payment Date.
     (10) Persons Deemed Owners. The registered Holder may be treated as its owner for all purposes.
     (11) Note Guarantees. This Note will be entitled to the benefits of certain Note Guarantees made for the benefit of the Holders. Reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and obligations thereunder of the Guarantors, the Trustee and the Holders.
     (12) Amendment, Supplement and Waiver. The provisions governing amendment, supplement and waiver of any provision of the Indenture, the Notes or the Note Guarantees are set forth in Article 9 of the Indenture.
     (13) Defaults and Remedies. The Events of Default relating to the Notes are defined in Section 6.01 of the Indenture.
     (14) Trustee Dealings with Company. The Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not the Trustee.
     (15) No Recourse Against Others. A director, officer, employee, incorporator or stockholder of the Company or any of the Guarantors, as such, will not have any liability for any obligations of the Company or the Guarantors under the Note Documents or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for the issuance of the Notes.
     (16) Authentication. This Note will not be valid until authenticated by the manual signature of the Trustee or an authenticating agent.
     (17) Abbreviations. Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
     (18) CUSIP Numbers. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Notes, and the Trustee may use CUSIP numbers in notices of redemption as a convenience to Holders of Notes. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption, and reliance may be placed only on the other identification numbers placed thereon.

A-7


 

     (19) GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE THE INDENTURE, THIS NOTE AND THE NOTE GUARANTEES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
     The Company will furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to:
UAL Corporation
77 W. Wacker Drive
Chicago, IL 60601
Attention: Stephen R. Lieberman, Vice President and Treasure

A-8


 

Assignment Form
     To assign this Note, fill in the form below:
         
(I) or (we) assign and transfer this Note to:
       
 
 
 
 
  (Insert assignee’s legal name)    
 
(Insert assignee’s soc. sec. or tax I.D. no.)
 
 
 
 
(Print or type assignee’s name, address and zip code)
     
and irrevocably appoint
to transfer this Note on the books of the Company. The agent may substitute another to act for him.
Date:                                         
         
 
  Your Signature:
                (Sign exactly as your name appears on the face of this Note)
Signature Guarantee*:                                                             
 
*   Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).

A-9


 

Option of Holder to Elect Purchase
     If you want to elect to have this Note purchased by the Company pursuant to Section 4.10 or 4.15 of the Indenture, check the appropriate box below:
     
ŇSection 4.10   ŇSection 4.15
     If you want to elect to have only part of the Note purchased by the Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the amount you elect to have purchased:
$                                        
Date:                                         
         
 
  Your Signature:
                  (Sign exactly as your name appears on the face of this Note)
 
       
 
  Tax Identification No.:
Signature Guarantee*:                                                             
 
*   Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).

A-10


 

Schedule of Exchanges of Interests in the Global Note *
     The following exchanges of a part of this Global Note for an interest in another Global Note or for a Definitive Note, or exchanges of a part of another Global Note or Definitive Note for an interest in this Global Note, have been made:
                                 
                        Principal Amount        
        Amount of decrease in     Amount of increase in     [at maturity] of this        
        Principal Amount     Principal Amount     Global Note following     Signature of authorized  
        [at maturity] of     [at maturity] of     such decrease     officer of Trustee or  
Date of Exchange     this Global Note     this Global Note     (or increase)     Custodian  
 
*   This schedule should be included only if the Note is issued in global form.

A-11


 

EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
UAL Corporation
77 W. Wacker Drive
Chicago, IL 60601
Attention: Stephen R. Lieberman, Vice President and Treasurer
The Bank of New York Mellon Trust Company, N.A.
2 North LaSalle Street, Suite 1020
Chicago, IL 60602
Facsimile No.: (312) 827-8542
Attention: Corporate Trust
     Re: 9.875% Senior Secured Notes due 2013
     Reference is hereby made to the Indenture, dated as of January 15, 2010 (the “Indenture”), among United Air Lines, Inc., as issuer (the “Company”), the Guarantors party thereto, The Bank of New York Mellon Trust Company, N.A., as trustee and Wilmington Trust FSB, as collateral trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.
                                             , (the “Transferor”) owns and proposes to transfer the Note[s] or interest in such Note[s] specified in Annex A hereto, in the principal amount of $                     in such Note[s] or interests (the “Transfer”), to                                          (the “Transferee”), as further specified in Annex A hereto. In connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
     1. o Check if Transferee will take delivery of a beneficial interest in the 144A Global Note or a Restricted Definitive Note pursuant to Rule 144A. The Transfer is being effected pursuant to and in accordance with Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and, accordingly, the Transferor hereby further certifies that the beneficial interest or Definitive Note is being transferred to a Person that the Transferor reasonably believes is purchasing the beneficial interest or Definitive Note for its own account, or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a “qualified institutional buyer” within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A, and such Transfer is in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the 144A Global Note and/or the Restricted Definitive Note and in the Indenture and the Securities Act.
     2. o Check if Transferee will take delivery of a beneficial interest in the Regulation S Global Note or a Restricted Definitive Note pursuant to Regulation S. The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and, accordingly, the Transferor hereby further certifies that (i) the Transfer is not being made to a Person in the United States and (x) at the time the buy order was originated, the Transferee was outside the United States or such Transferor and any Person acting on its behalf reasonably believed and believes that the Transferee was outside the United States or (y) the transaction was executed in, on or through the facilities of a designated offshore securities market and neither such Transferor nor any Person acting on its behalf knows that the transaction was prearranged with a buyer in the United States, (ii) no directed selling

B-1


 

efforts have been made in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S under the Securities Act, (iii) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act and (iv) if the proposed transfer is being made prior to the expiration of the Restricted Period, the transfer is not being made to a U.S. Person or for the account or benefit of a U.S. Person (other than an Initial Purchaser). Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on Transfer enumerated in the Private Placement Legend printed on the Legended Regulation S Global Note and/or the Restricted Definitive Note and in the Indenture and the Securities Act.
     3. o Check and complete if Transferee will take delivery of a beneficial interest in a Restricted Definitive Note pursuant to any provision of the Securities Act other than Rule 144A or Regulation S. The Transfer is being effected in compliance with the transfer restrictions applicable to beneficial interests in Restricted Global Notes and Restricted Definitive Notes and pursuant to and in accordance with the Securities Act and any applicable blue sky securities laws of any state of the United States, and accordingly the Transferor hereby further certifies that (check one):
     (a) o such Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act;
or
     (b) o such Transfer is being effected to the Company or a subsidiary thereof;
or
     (c) o such Transfer is being effected to an Institutional Accredited Investor and pursuant to an exemption from the registration requirements of the Securities Act other than Rule 144A, Rule 144, Rule 903 or Rule 904, and the Transferor hereby further certifies that it has not engaged in any general solicitation within the meaning of Regulation D under the Securities Act and the Transfer complies with the transfer restrictions applicable to beneficial interests in a Restricted Global Note or Restricted Definitive Notes and the requirements of the exemption claimed, which certification is supported by (1) a certificate executed by the Transferee in the form of Exhibit D to the Indenture and (2) an Opinion of Counsel provided by the Transferor or the Transferee (a copy of which the Transferor has attached to this certification), to the effect that such Transfer is in compliance with the Securities Act. Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Definitive Notes and in the Indenture and the Securities Act.
     4. o Check if Transferee will take delivery of a beneficial interest in an Unrestricted Global Note or of an Unrestricted Definitive Note.
     (a) o Check if Transfer is pursuant to Rule 144. (i) The Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Private

B-2


 

Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture.
     (b) o Check if Transfer is Pursuant to Regulation S. (i) The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture.
     (c) o Check if Transfer is Pursuant to Other Exemption. (i) The Transfer is being effected pursuant to and in compliance with an exemption from the registration requirements of the Securities Act other than Rule 144, Rule 903 or Rule 904 and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any State of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will not be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes or Restricted Definitive Notes and in the Indenture.
     This certificate and the statements contained herein are made for your benefit and the benefit of the Company.
             
         
 
      [Insert Name of Transferor]    
 
           
 
  By:        
 
     
 
Name:
   
 
      Title:    
 
           
Dated:                                         
           

B-3


 

ANNEX A TO CERTIFICATE OF TRANSFER
     1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
  (a)   o a beneficial interest in the:
  (i)   o 144A Global Note (CUSIP                     ), or
 
  (ii)   o Regulation S Global Note (CUSIP                     ), or
  (b)   o a Restricted Definitive Note.
     2. After the Transfer the Transferee will hold:
[CHECK ONE]
  (a)   o a beneficial interest in the:
  (i)   o 144A Global Note (CUSIP                     ), or
 
  (ii)   o Regulation S Global Note (CUSIP                     ), or
 
  (iii)   o Unrestricted Global Note (CUSIP                     ); or
  (b)   o a Restricted Definitive Note; or
  (c)   o an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.

B-4


 

EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
UAL Corporation
77 W. Wacker Drive
Chicago, IL 60601
Attention: Stephen R. Lieberman, Vice President and Treasurer
The Bank of New York Mellon Trust Company, N.A.
2 North LaSalle Street, Suite 1020
Chicago, IL 60602
Facsimile No.: (312) 827-8542
Attention: Corporate Trust
     Re: 9.875% Senior Secured Notes due 2013
(CUSIP                     )
     Reference is hereby made to the Indenture, dated as of January 15, 2010 (the “Indenture”), among United Air Lines, Inc., as issuer (the “Company”), the Guarantors party thereto, The Bank of New York Mellon Trust Company, N.A., as trustee and Wilmington Trust FSB, as collateral trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.
                                             , (the “Owner”) owns and proposes to exchange the Note[s] or interest in such Note[s] specified herein, in the principal amount of $                     in such Note[s] or interests (the “Exchange”). In connection with the Exchange, the Owner hereby certifies that:
     1. Exchange of Restricted Definitive Notes or Beneficial Interests in a Restricted Global Note for Unrestricted Definitive Notes or Beneficial Interests in an Unrestricted Global Note
     (a) o Check if Exchange is from beneficial interest in a Restricted Global Note to beneficial interest in an Unrestricted Global Note. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for a beneficial interest in an Unrestricted Global Note in an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Global Notes and pursuant to and in accordance with the Securities Act of 1933, as amended (the “Securities Act”), (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest in an Unrestricted Global Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.
     (b) o Check if Exchange is from beneficial interest in a Restricted Global Note to Unrestricted Definitive Note. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Definitive Note is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

C-1


 

     (c) o Check if Exchange is from Restricted Definitive Note to beneficial interest in an Unrestricted Global Note. In connection with the Owner’s Exchange of a Restricted Definitive Note for a beneficial interest in an Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.
     (d) o Check if Exchange is from Restricted Definitive Note to Unrestricted Definitive Note. In connection with the Owner’s Exchange of a Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Unrestricted Definitive Note is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Unrestricted Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.
     2. Exchange of Restricted Definitive Notes or Beneficial Interests in Restricted Global Notes for Restricted Definitive Notes or Beneficial Interests in Restricted Global Notes
     (a) o Check if Exchange is from beneficial interest in a Restricted Global Note to Restricted Definitive Note. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for a Restricted Definitive Note with an equal principal amount, the Owner hereby certifies that the Restricted Definitive Note is being acquired for the Owner’s own account without transfer. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the Restricted Definitive Note issued will continue to be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Definitive Note and in the Indenture and the Securities Act.
     (b) o Check if Exchange is from Restricted Definitive Note to beneficial interest in a Restricted Global Note. In connection with the Exchange of the Owner’s Restricted Definitive Note for a beneficial interest in the [CHECK ONE] o 144A Global Note or o Regulation S Global Note with an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer and (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, and in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the beneficial interest issued will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the relevant Restricted Global Note and in the Indenture and the Securities Act.

C-2


 

     This certificate and the statements contained herein are made for your benefit and the benefit of the Company.
             
         
 
      [Insert Name of Transferor]    
 
           
 
  By:        
 
     
 
Name:
   
 
      Title:    
 
           
Dated:                                         
           

C-3


 

EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
UAL Corporation
77 W. Wacker Drive
Chicago, IL 60601
Attention: Stephen R. Lieberman, Vice President and Treasurer
The Bank of New York Mellon Trust Company, N.A.
2 North LaSalle Street, Suite 1020
Chicago, IL 60602
Facsimile No.: (312) 827-8542
Attention: Corporate Trust
      Re:   9.875% Senior Secured Notes due 2013
     Reference is hereby made to the Indenture, dated as of January 15, 2010 (the “Indenture”), among United Air Lines, Inc., as issuer (the “Company”), the Guarantors party thereto, The Bank of New York Mellon Trust Company, N.A., as trustee and Wilmington Trust FSB, as collateral trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.
     In connection with our proposed purchase of $                     aggregate principal amount of:
     (a) o a beneficial interest in a Global Note, or
     (b) o a Definitive Note,
     we confirm that:
     1. We understand that any subsequent transfer of the Notes or any interest therein is subject to certain restrictions and conditions set forth in the Indenture and the undersigned agrees to be bound by, and not to resell, pledge or otherwise transfer the Notes or any interest therein except in compliance with, such restrictions and conditions and the Securities Act of 1933, as amended (the “Securities Act”).
     2. We understand that the offer and sale of the Notes have not been registered under the Securities Act, and that the Notes and any interest therein may not be offered or sold except as permitted in the following sentence. We agree, on our own behalf and on behalf of any accounts for which we are acting as hereinafter stated, that if we should sell the Notes or any interest therein, we will do so only (A) to the Company or any subsidiary thereof, (B) in accordance with Rule 144A under the Securities Act to a “qualified institutional buyer” (as defined therein), (C) to an institutional “accredited investor” (as defined below) that, prior to such transfer, furnishes (or has furnished on its behalf by a U.S. broker-dealer) to you and to the Company a signed letter substantially in the form of this letter and an Opinion of Counsel in form reasonably acceptable to the Company to the effect that such transfer is in compliance with the Securities Act, (D) outside the United States in accordance with Rule 904 of Regulation S under the Securities Act, (E) pursuant to the provisions of Rule 144 under the Securities Act or (F) pursuant to an effective registration statement under the Securities Act, and we further agree to provide to any Person purchasing the Definitive Note or beneficial interest in a Global Note from us in a transaction meeting the requirements of clauses (A) through (E) of this paragraph a notice advising such purchaser that resales thereof are restricted as stated herein.

D-1


 

     3. We understand that, on any proposed resale of the Notes or beneficial interest therein, we will be required to furnish to you and the Company such certifications, legal opinions and other information as you and the Company may reasonably require to confirm that the proposed sale complies with the foregoing restrictions. We further understand that the Notes purchased by us will bear a legend to the foregoing effect.
     4. We are an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Notes, and we and any accounts for which we are acting are each able to bear the economic risk of our or its investment.
     5. We are acquiring the Notes or beneficial interest therein purchased by us for our own account or for one or more accounts (each of which is an institutional “accredited investor”) as to each of which we exercise sole investment discretion.
     You and the Company are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby.
             
         
         [Insert Name of Accredited Investor]    
 
           
 
  By:        
 
     
 
Name:
   
 
      Title:    
Dated:                                                             

D-2


 

EXHIBIT E
FORM OF NOTATION OF GUARANTEE
     For value received, each of the undersigned (including any successor Person under the Indenture) hereby, jointly and severally, unconditionally guarantees, to the extent set forth in the Indenture and subject to the provisions in the Indenture dated as of January 15, 2010 (the “Indenture”) among United Air Lines, Inc., (the “Company”), the Guarantors party thereto, The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”) and Wilmington Trust FSB, as collateral trustee, (a) the due and punctual payment of the principal of, premium, if any, and interest (including Special Interest, if any) on, the Notes, whether at maturity, by acceleration, redemption or otherwise, the due and punctual payment of interest on overdue principal of and interest on the Notes, if any, if lawful, and the due and punctual performance of all other obligations of the Company to the Holders of Notes or the Trustee all in accordance with the terms of the Indenture and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. This Note Guarantee will become effective in accordance with Article 10 of the Indenture and its terms shall be evidenced therein. Each Holder of a Note, by accepting the same, (a) agrees to and shall be bound by such provisions and (b) appoints the Trustee attorney-in-fact of such Holder for such purpose.
     Capitalized terms used but not defined herein have the meanings given to them in the Indenture.
[Signature Page Follows]

E-1


 

     IN WITNESS HEREOF, each Guarantor has caused this Notation of Guarantee to be signed manually or by facsimile by its duly authorized officer.
             
    [Name of Guarantor(s)]    
 
           
 
  By:        
 
     
 
Name:
   
 
      Title:    

E-2


 

EXHIBIT F
[FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY SUBSEQUENT GUARANTORS]
     Supplemental Indenture (this “Supplemental Indenture”), dated as of                                         , 20___, among                                          (the “Guaranteeing Subsidiary”), a subsidiary of UAL Corporation (or its permitted successor), a Delaware corporation (the “Parent”), United Air Lines, Inc. (or its permitted successor), a Delaware corporation (the “Company”), the other Guarantors (as defined in the Indenture referred to herein) and The Bank of New York Mellon Trust Company, N.A., as trustee under the Indenture referred to below (the “Trustee”) and Wilmington Trust FSB, as collateral trustee under the Indenture referred to below.
W I T N E S S E T H
     WHEREAS, the Company has heretofore executed and delivered to the Trustee an indenture (the “Indenture”), dated as of January 15, 2010 providing for the issuance of 9.875% Senior Secured Notes due 2013 (the “Notes”);
     WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally guarantee all of the Company’s Obligations under the Notes and the Indenture on the terms and conditions set forth herein (the “Note Guarantee”); and
     WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture.
     NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of Notes as follows:
     1. Capitalized Terms. Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.
     2. Agreement to Guarantee. The Guaranteeing Subsidiary hereby agrees to provide an unconditional Guarantee on the terms and subject to the conditions set forth in the Note Guarantee and in the Indenture including but not limited to Article 10 thereof.
     4. No Recourse Against Others. No past, present or future director, officer, employee, incorporator, stockholder or agent of the Guaranteeing Subsidiary, as such, shall have any liability for any obligations of the Company or any Guaranteeing Subsidiary under the Notes, any Note Guarantees, the Indenture or this Supplemental Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. Such waiver may not be effective to waive liabilities under the federal securities laws and it is the view of the SEC that such a waiver is against public policy.
     5. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

F-1


 

     6. Counterparts. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.
     7. Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction hereof.
     8. The Trustee. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiary and the Company.

F-2


 

     IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed and attested, all as of the date first above written.
     Dated:                                                             , 20                     
             
    [Guaranteeing Subsidiary]    
 
           
 
  By:        
 
     
 
Name:
   
 
      Title:    
 
           
    [Company]    
 
           
 
  By:        
 
     
 
Name:
   
 
      Title:    
 
           
    [Existing Guarantors]    
 
           
 
  By:        
 
     
 
Name:
   
 
      Title:    
 
           
    [Trustee],    
         as Trustee    
 
           
 
  By:        
 
     
 
Authorized Signatory
   
 
           
    [Collateral Trustee],    
         as Collateral Trustee    
 
           
 
  By:        
 
     
 
Authorized Signatory
   

F-3

exv4w4
Exhibit 4.4
Execution Version
UNITED AIR LINES, INC.
and
EACH OF THE GUARANTORS PARTY HERETO
12.000% SENIOR SECOND LIEN NOTES DUE 2013
 
INDENTURE
Dated as of January 15, 2010
 
The Bank of New York Mellon Trust Company, N.A.
as Trustee
and
Wilmington Trust FSB
as Collateral Trustee

 


 

TABLE OF CONTENTS
         
    Page
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
 
       
Section 1.01 Definitions
    1  
Section 1.02 Other Definitions
    36  
Section 1.03 Rules of Construction
    37  
 
       
ARTICLE 2
THE NOTES
 
       
Section 2.01 Form and Dating
    37  
Section 2.02 Execution and Authentication
    38  
Section 2.03 Registrar and Paying Agent
    39  
Section 2.04 Paying Agent to Hold Money in Trust
    39  
Section 2.05 Holder Lists
    39  
Section 2.06 Transfer and Exchange
    40  
Section 2.07 Replacement Notes
    49  
Section 2.08 Outstanding Notes
    50  
Section 2.09 Treasury Notes
    50  
Section 2.10 Temporary Notes
    50  
Section 2.11 Cancellation
    50  
Section 2.12 Defaulted Interest
    51  
Section 2.13 CUSIP Numbers
    51  
Section 2.14 Issuance of Additional Notes
    51  
 
       
ARTICLE 3
REDEMPTION AND PREPAYMENT
 
       
Section 3.01 Notices to Trustee
    52  
Section 3.02 Selection of Notes to Be Redeemed or Purchased
    52  
Section 3.03 Notice of Redemption
    52  
Section 3.04 Effect of Notice of Redemption
    53  
Section 3.05 Deposit of Redemption or Purchase Price
    53  
Section 3.06 Notes Redeemed or Purchased in Part
    54  
Section 3.07 Optional Redemption
    54  
Section 3.08 Mandatory Redemption
    55  
Section 3.09 Special Scheduled Maturity Date
    55  
Section 3.10 Offer to Purchase by Application of Excess Proceeds or Sale of Collateral Consideration
    55  
 
       
ARTICLE 4
COVENANTS
 
       
Section 4.01 Payment of Notes
    57  
Section 4.02 Maintenance of Office or Agency
    58  
Section 4.03 Reports
    58  
Section 4.04 Compliance Certificate
    59  
Section 4.05 Taxes
    60  
Section 4.06 Stay, Extension and Usury Laws
    60  

 


 

         
    Page
 
Section 4.07 Restricted Payments
    60  
Section 4.08 Dividend and Other Payment Restrictions Affecting Subsidiaries
    64  
Section 4.09 Incurrence of Indebtedness and Issuance of Preferred Stock
    66  
Section 4.10 Asset Sales
    71  
Section 4.11 Transactions with Affiliates
    76  
Section 4.12 Liens
    78  
Section 4.13 Business Activities
    78  
Section 4.14 Corporate Existence
    78  
Section 4.15 Offer to Repurchase Upon Change of Control
    79  
Section 4.16 Payments for Consent
    80  
Section 4.17 Additional Note Guarantees
    80  
Section 4.18 Designation of Restricted and Unrestricted Subsidiaries
    81  
Section 4.19 Delivery of Appraisals
    81  
Section 4.20 Secured Debt Value Ratio
    82  
Section 4.21 Secured Debt Value Ratio Maintenance
    83  
Section 4.22 Regulatory Cooperation
    84  
Section 4.23 Regulatory Matters; Citizenship; Utilization; Reporting
    84  
Section 4.24 Collateral Ownership
    86  
Section 4.25 Insurance
    86  
Section 4.26 Note Calculations
    86  
 
       
ARTICLE 5
SUCCESSORS
 
       
Section 5.01 Merger, Consolidation, or Sale of Assets
    86  
Section 5.02 Successor Corporation Substituted
    87  
 
       
ARTICLE 6
DEFAULTS AND REMEDIES
 
       
Section 6.01 Events of Default
    88  
Section 6.02 Acceleration
    90  
Section 6.03 Other Remedies
    90  
Section 6.04 Waiver of Past Defaults
    90  
Section 6.05 Control by Majority
    90  
Section 6.06 Limitation on Suits
    91  
Section 6.07 Rights of Holders of Notes to Receive Payment
    91  
Section 6.08 Collection Suit by Trustee
    91  
Section 6.09 Trustee May File Proofs of Claim
    91  
Section 6.10 Priorities
    92  
Section 6.11 Undertaking for Costs
    92  
 
       
ARTICLE 7
TRUSTEE
 
       
Section 7.01 Duties of Trustee
    93  
Section 7.02 Rights of Trustee
    94  
Section 7.03 Individual Rights of Trustee
    94  
Section 7.04 Trustee’s Disclaimer
    94  
Section 7.05 Notice of Defaults
    95  
Section 7.06 Compensation and Indemnity
    95  
Section 7.07 Replacement of Trustee
    96  
Section 7.08 Successor Trustee by Merger, etc.
    97  
Section 7.09 Eligibility; Disqualification
    97  

ii 


 

         
    Page
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
 
       
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance
    97  
Section 8.02 Legal Defeasance and Discharge
    97  
Section 8.03 Covenant Defeasance
    98  
Section 8.04 Conditions to Legal or Covenant Defeasance
    98  
Section 8.05 Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions
    99  
Section 8.06 Repayment to Company
    100  
Section 8.07 Reinstatement
    100  
 
       
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
 
       
Section 9.01 Without Consent of Holders of Notes
    100  
Section 9.02 With Consent of Holders of Notes
    101  
Section 9.03 Revocation and Effect of Consents
    103  
Section 9.04 Notation on or Exchange of Notes
    103  
Section 9.05 Trustee to Sign Amendments, etc
    103  
 
       
ARTICLE 10
NOTE GUARANTEES
 
       
Section 10.01 Guarantee
    103  
Section 10.02 Limitation on Guarantor Liability
    104  
Section 10.03 Execution and Delivery of Note Guarantee
    105  
Section 10.04 Guarantors May Consolidate, etc., on Certain Terms
    105  
Section 10.05 Releases
    106  
 
       
ARTICLE 11
SATISFACTION AND DISCHARGE
 
       
Section 11.01 Satisfaction and Discharge
    107  
Section 11.02 Application of Trust Money
    108  
 
       
ARTICLE 12
COLLATERAL AND SECURITY
 
       
Section 12.01 Security Interest
    108  
Section 12.02 Collateral Trust Agreement
    109  
Section 12.03 Release of Liens in Respect of the Notes
    109  
Section 12.04 Collateral Trustee
    109  
 
       
ARTICLE 13
MISCELLANEOUS
 
       
Section 13.01 Notices
    110  
Section 13.02 Certificate and Opinion as to Conditions Precedent
    112  
Section 13.03 Statements Required in Certificate or Opinion
    112  
Section 13.04 Rules by Trustee and Agents
    112  
Section 13.05 No Personal Liability of Directors, Officers, Employees and Stockholders
    112  
Section 13.06 Governing Law
    113  
Section 13.07 No Adverse Interpretation of Other Agreements
    113  
Section 13.08 Successors
    113  
Section 13.09 Severability
    113  

iii 


 

         
    Page
 
Section 13.10 Counterpart Originals
    113  
Section 13.11 Table of Contents, Headings, etc.
    113  

iv 


 

EXHIBITS
     
Exhibit A
  FORM OF NOTE
Exhibit B
  FORM OF CERTIFICATE OF TRANSFER
Exhibit C
  FORM OF CERTIFICATE OF EXCHANGE
Exhibit D
  FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Exhibit E
  FORM OF NOTATION OF GUARANTEE
Exhibit F
  FORM OF SUPPLEMENTAL INDENTURE

 


 

     INDENTURE dated as of January 15, 2010 among United Air Lines, Inc., a Delaware corporation, the Guarantors (as defined), The Bank of New York Mellon Trust Company, N.A., as trustee and Wilmington Trust FSB, as collateral trustee.
     The Company, the Guarantors, the Trustee (as defined) and the Collateral Trustee (as defined) agree as follows for the benefit of each other and for the equal and ratable benefit of the Holders (as defined) of the 12.000% Senior Second Lien Notes due 2013 (the “Notes”):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions.
     “144A Global Note” means a Global Note substantially in the form of Exhibit A hereto bearing the Global Note Legend, the OID Legend (if required) and the Private Placement Legend and deposited with or on behalf of, and registered in the name of, the Depositary or its nominee that will be issued in a denomination equal to the outstanding principal amount of the Notes sold in reliance on Rule 144A.
     “Acquired Debt” means, with respect to any specified Person:
     (1) Indebtedness, Disqualified Stock or preferred stock of any other Person existing at the time such other Person is merged, consolidated or amalgamated with or into such specified Person, or became a Subsidiary of such specified Person, whether or not such Indebtedness is incurred in connection with, or in contemplation of, such other Person merging, consolidating or amalgamating with or into, or becoming a Subsidiary of, such specified Person; and
     (2) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.
     “Act of Required Debtholders” means, as to any matter at any time:
     (1) prior to the Discharge of Priority Lien Obligations, a direction in writing delivered to the Collateral Trustee by or with the written consent of the holders of more than 50% of the sum of:
     (A) the aggregate outstanding principal amount of Priority Lien Debt (including the face amount of outstanding letters of credit whether or not then available or drawn); and
     (B) the aggregate unfunded commitments to extend credit which, when funded, would constitute Priority Lien Debt;
provided, however, that after (i) the termination or expiration of all commitments to extend credit that would constitute Priority Lien Debt, (ii) the payment in full in cash of the principal of and interest and premium (if any) on all Priority Lien Debt (other than any undrawn letters of credit), (iii) the discharge or cash collateralization (at the lower of (x) 105% of the aggregate undrawn amount or (y) the percentage of the aggregate undrawn amount required for release of Liens under the terms of the applicable Priority Lien Document) of all outstanding letters of credit constituting Priority Lien Debt and (iv) the payment in full in cash of all other Priority Lien Obligations other than any Priority Lien Obligations consisting of Banking Product Obligations

1


 

and Hedging Obligations, the term “Act of Required Debtholders” will mean the holders of more than 50% of the sum of the aggregate “settlement amount” (or similar term) (as defined in the applicable Hedge Agreement relating to Priority Lien Obligations consisting of a Hedging Obligation) or, with respect to any such Hedge Agreement that has been terminated in accordance with its terms, the amount then due and payable (including any termination payments then due) under such Hedge Agreement, under all Hedge Agreements relating to Priority Lien Obligations consisting of Hedging Obligations; provided that the “settlement amount” (or similar term) as of the last Business Day of the month preceding any date of determination shall be calculated by the appropriate swap counterparties and reported to the Collateral Trustee upon request; provided further, that any Hedging Obligation with a “settlement amount” (or similar term) that is a negative number shall be disregarded for purposes of all calculations required by the term “Act of Required Debtholders;” and
     (2) at any time after the Discharge of Priority Lien Obligations, a direction in writing delivered to the Collateral Trustee by or with the written consent of the holders of more than 50% of the sum of:
     (A) the aggregate outstanding principal amount of Junior Lien Debt (including the face amount of outstanding letters of credit whether or not then available or drawn); and
     (B) the aggregate unfunded commitments to extend credit which, when funded, would constitute Junior Lien Debt;
provided, however, that after (i) the termination or expiration of all commitments to extend credit that would constitute Junior Lien Debt, (ii) the payment in full in cash of the principal of and interest and premium (if any) on all Junior Lien Debt (other than any undrawn letters of credit), (iii) the discharge or cash collateralization (at the lower of (x) 105% of the aggregate undrawn amount or (y) the percentage of the aggregate undrawn amount required for release of Liens under the terms of the applicable Junior Lien Document) of all outstanding letters of credit constituting Junior Lien Debt and (iv) the payment in full in cash of all other Junior Lien Obligations other than any Junior Lien Obligations consisting of Hedging Obligations, the term “Act of Required Debtholders” will mean the holders of more than 50% of the sum of the aggregate “settlement amount” (or similar term) (as defined in the applicable Hedge Agreement relating to Junior Lien Obligations consisting of a Hedging Obligation) or, with respect to any such Hedge Agreement that has been terminated in accordance with its terms, the amount then due and payable (including any termination payments then due) under such Hedge Agreement, under all Hedge Agreements relating to Junior Lien Obligations consisting of Hedging Obligations; provided that the “settlement amount” (or similar term) as of the last Business Day of the month preceding any date of determination shall be calculated by the appropriate swap counterparties and reported to the Collateral Trustee upon request; provided further, that any Hedging Obligation with a “settlement amount” (or similar term) that is a negative number shall be disregarded for purposes of all calculations required by the term “Act of the Required Debtholders.”
     For purposes of this definition, (a) Secured Debt registered in the name of, or beneficially owned by, the Company or any Affiliate of the Company will not be deemed outstanding, and (b) votes will be determined in accordance with Section 7.2 of the Collateral Trust Agreement.
     “Additional Notes” means an unlimited aggregate principal amount of Notes (other than the Initial Notes) issued on or after the Release Date under this Indenture in accordance with Sections 2.02,

2


 

4.09 and 4.12 hereof which shall have identical terms as the Initial Notes, other than with respect to the date of issuance and issue price.
     “Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, “control,” as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise. For purposes of this definition, the terms “controlling,” “controlled by” and “under common control with” have correlative meanings. No Person (other than Parent or any Subsidiary of Parent) in whom a Receivables Subsidiary makes an Investment in connection with a Qualified Receivables Transaction will be deemed to be an Affiliate of Parent or any of its Subsidiaries solely by reason of such Investment.
     “Agent” means any Registrar, co-registrar, Paying Agent or additional paying agent.
     “Aircraft Mortgage” means an aircraft mortgage in form and substance reasonably acceptable to the Collateral Trustee and the Company.
     “Airport Authority” means any city or any public or private board or other body or organization chartered or otherwise established for the purpose of administering, operating or managing airports or related facilities.
     “Applicable Premium” means, with respect to any Note on any redemption date, the greater of:
     (1) 1.0% of the principal amount of the Note; and
     (2) the excess of: (A) the present value at such redemption date of (i) the redemption price of such Note at February 1, 2012, (such redemption price being set forth in Section 3.07(d) hereof), plus (ii) all required interest payments due on the Note through February 1, 2012, (excluding accrued and unpaid interest to the redemption date), computed using a discount rate equal to the Treasury Rate as of such redemption date plus 50 basis points; over (B) the principal amount of such Note.
     “Applicable Procedures” means, with respect to any transfer or exchange of or for beneficial interests in any Global Note, the rules and procedures of the Depositary, Euroclear and Clearstream that apply to such transfer or exchange.
     “Appraisal” means an appraisal, dated the date of delivery thereof, prepared by SH&E, Inc. or another independent appraisal firm appointed by the Company and reasonably satisfactory to the Trustee, which certifies, at the time of determination, in reasonable detail the Appraised Value of the Collateral and, except in the case of Cure Collateral or Qualified Replacement Assets not constituting Japan Routes, Japan Slots or Japan Gate Leaseholds, is consistent in all material respects with the Appraisal delivered to the Trustee on the date of the Indenture and described in the Offering Memorandum under the caption “Description of the collateral—Appraisal.”
     “Appraised Value” means, as of any date of determination, the sum of (a) the aggregate fair market value of all Collateral (other than cash and Cash Equivalents pledged as Cure Collateral or maintained in the Collateral Proceeds Account) owned by the Company as of that date, as reflected in the most recent Appraisal delivered to the Trustee as of that date plus (b) 150% of the amount of cash and Cash Equivalents pledged at such time as Cure Collateral or maintained in the Collateral Proceeds Account.

3


 

     “Asset Sale” means:
     (1) the sale, lease, conveyance, transfer or other disposition of any assets or rights (whether voluntarily, or in an involuntary transaction that generates Net Proceeds) by Parent or any of its Restricted Subsidiaries (any of the foregoing, a “disposition”); provided that the sale, lease, conveyance or other disposition of all or substantially all of the assets of Parent and its Restricted Subsidiaries taken as a whole will be governed by Sections 4.15 and/or 5.01 hereof and not by Section 4.10; and
     (2) the issuance or sale of Equity Interests (other than directors’ qualifying shares and shares issued to foreign nationals or other third parties to the extent required by applicable law) of any of Parent’s Restricted Subsidiaries, including any sale for cash.
Notwithstanding the preceding, none of the following items will be deemed to be an Asset Sale:
     (1) any single transaction or series of related transactions that involves assets having a Fair Market Value of less than $10.0 million;
     (2) dispositions between or among Parent and its Restricted Subsidiaries;
     (3) an issuance or sale of Equity Interests by a Restricted Subsidiary of Parent to Parent or to a Restricted Subsidiary of Parent;
     (4) the disposition of products, services or accounts receivable and other properties or assets that do not constitute the Japan Routes, Japan Slots, Japan Gate Leaseholds or any property or asset that constitutes Collateral in the ordinary course of business and any other disposition of damaged, worn-out, uneconomical or obsolete properties or assets that do not constitute the Japan Routes, Japan Slots, Japan Gate Leaseholds or any property or asset that constitutes Collateral in the ordinary course of business;
     (5) licenses, sublicenses, leases and subleases by Parent or any of its Restricted Subsidiaries of software or intellectual property in the ordinary course of business;
     (6) any surrender or waiver of contract rights or settlement, release, recovery on or surrender of contract, tort or other claims in the ordinary course of business;
     (7) the granting of Liens not prohibited by Section 4.12 hereof;
     (8) the sale or other disposition of cash or Cash Equivalents that do not constitute Collateral;
     (9) a Restricted Payment that does not violate Section 4.07 hereof or a Permitted Investment, in each case other than a Restricted Payment or a Permitted Investment involving the Japan Routes, Japan Slots, Japan Gate Leaseholds or any property or asset that constitutes Collateral;
     (10) the abandonment of assets no longer useful or used in the business; provided, that such abandonment is (A) in the ordinary course of business consistent with past practices and (B) with respect to assets that are not material to the business of Parent and its Restricted Subsidiaries;

4


 

     (11) the sale or discount of accounts to a collection agency in connection with collections of delinquent receivables, or in a bankruptcy or similar proceeding;
     (12) any disposition of Margin Stock for fair value as determined in good faith by Parent;
     (13) the lease or sublease of, or use or license agreements with respect to, assets and properties in the ordinary course of business and swap or similar arrangements with respect to Slots or Gate Leaseholds in the ordinary course of business (A) that do not constitute Collateral, (B) that constitute Collateral so long as the lease, sublease, use or license agreement pursuant to this clause (13)(B) has a term of one year or less, or in the case of swaps or similar arrangements relating to Slots, does not extend beyond two comparable IATA traffic seasons or (C) that constitute Collateral and the term of such lease, sublease, use or license agreement or swap or similar arrangement pursuant to this clause (13)(C) is longer than provided for in clause (13)(B); provided, however, that in the case of each transaction pursuant to this clause (C), an officer of the Company determines in good faith and certifies in an Officers’ Certificate delivered to the Trustee and the Collateral Trustee prior to entering into any such transaction that (i) immediately after giving effect to such transaction the Priority Lien Debt Value Ratio (excluding, for purposes of calculating the Priority Lien Debt Value Ratio, the proceeds of such transaction and the intended use there of) would be at least 1.5 to 1.0, (ii) the Collateral Trustee’s Liens on Collateral subject to such lease, sublease, use, license agreement or swap or similar arrangement are not materially adversely affected and (iii) no Event of Default exists at the time of such transaction;
     (14) the lease or sublease, in the ordinary course of business, of up to five pairs of Slots at Tokyo’s Narita Airport to All Nippon Airways;
     (15) sales of accounts receivables and related assets of the type specified in the definition of “Qualified Receivables Transaction” to a Receivables Subsidiary;
     (16) transfers of accounts receivables and related assets of the type specified in the definition of “Qualified Receivables Transaction” (or a fractional undivided interest therein) to a Receivables Subsidiary or to any other Person in connection with a Qualified Receivables Transaction or the creation of a Lien on any such accounts receivables or related assets in connection with a Qualified Receivables Transaction;
     (17) sales of jet fuel and related property pursuant to the Jet Fuel Supply Agreement;
     (18) sales or dispositions of aircraft, aircraft engines and spare parts that do not constitute Collateral in the ordinary course of business; and
     (19) any issuance or sale of Equity Interests in, or Indebtedness or other securities of, an Unrestricted Subsidiary, including in connection with any merger, consolidation or amalgamation.
     “Banking Product Obligations” means, as applied to any Person, any direct or indirect liability, contingent or otherwise, of such Person in respect of any treasury, depository and cash management services, netting services and automated clearing house transfers of funds services, including obligations for the payment of fees, interest, charges, expenses, attorneys’ fees and disbursements in connection therewith.

5


 

     “Bankruptcy Law” means Title 11 of the U.S. Code or any similar federal or state law for the relief of debtors.
     “Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular “person” (as that term is used in Section 13(d)(3) of the Exchange Act), such “person” will be deemed to have beneficial ownership of all securities that such “person” has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only after the passage of time. The terms “Beneficially Owns” and “Beneficially Owned” have a corresponding meaning.
     “Board of Directors” means:
     (1) with respect to a corporation, the board of directors of the corporation or any committee thereof duly authorized to act on behalf of such board;
     (2) with respect to a partnership, the Board of Directors of the general partner of the partnership;
     (3) with respect to a limited liability company, the managing member or members, manager or managers or any controlling committee of managing members thereof; and
     (4) with respect to any other Person, the board or committee of such Person serving a similar function.
     “Business Day” means any day other than a Legal Holiday.
     “Capital Lease Obligation” means, at the time any determination is to be made, the amount of the liability in respect of a capital lease that would at that time be required to be capitalized and reflected as a liability on a balance sheet prepared in accordance with GAAP, and the Stated Maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be prepaid by the lessee without payment of a penalty.
     “Capital Stock” means:
     (1) in the case of a corporation, corporate stock;
     (2) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;
     (3) in the case of a partnership or limited liability company, partnership interests (whether general or limited) or membership interests; and
     (4) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person,
but excluding from all of the foregoing any debt securities convertible into Capital Stock, whether or not such debt securities include any right of participation with Capital Stock.
     “Cash Equivalents” means:
     (1) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States (or by any agency thereof to the extent such

6


 

obligations are backed by the full faith and credit of the United States), in each case maturing within one year from the date of acquisition thereof;
     (2) direct obligations of state and local government entities, in each case maturing within one year from the date of acquisition thereof, which have a rating of at least A- (or the equivalent thereof) from S&P or A-3 (or the equivalent thereof) from Moody’s;
     (3) obligations of domestic or foreign companies and their subsidiaries (including, without limitation, agencies, sponsored enterprises or instrumentalities chartered by an Act of Congress, which are not backed by the full faith and credit of the United States), including, without limitation, bills, notes, bonds, debentures, and mortgage-backed securities, in each case maturing within one year from the date of acquisition thereof;
     (4) Investments in commercial paper maturing within 365 days from the date of acquisition thereof and having, at such date of acquisition, a rating of at least A-2 (or the equivalent thereof) from S&P or P-2 (or the equivalent thereof) from Moody’s;
     (5) Investments in certificates of deposit, banker’s acceptances, time deposits, eurodollar time deposits or overnight bank deposits maturing within one year from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any other commercial bank of recognized standing organized under the laws of the United States or any State thereof that has a combined capital and surplus and undivided profits of not less than $250.0 million;
     (6) fully collateralized repurchase agreements with a term of not more than six months for underlying securities that would otherwise be eligible for investment;
     (7) Investments in money in an investment company organized under the Investment Company Act of 1940, as amended, or in pooled accounts or funds offered through mutual funds, investment advisors, banks and brokerage houses which invest its assets in obligations of the type described in clauses (1) through (6) above. This could include, but not be limited to, money market funds or short-term and intermediate bonds funds;
     (8) money market funds that (A) comply with the criteria set forth in SEC Rule 2a-7 under the Investment Company Act of 1940, as amended, (B) are rated AAA (or the equivalent thereof) by S&P and Aaa (or the equivalent thereof) by Moody’s and (C) have portfolio assets of at least $5.0 billion;
     (9) deposits available for withdrawal on demand with commercial banks organized in the United States having capital and surplus in excess of $100.0 million; and
     (10) securities with maturities of one year or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States, by any political subdivision or taxing authority of any such state, commonwealth or territory or by any foreign government, the securities of which state, commonwealth, territory, political subdivision, taxing authority or foreign government (as the case may be) are rated at least A by S&P or A2 by Moody’s.

7


 

     “Change of Control” means the occurrence of any of the following:
     (1) the sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of Parent and its Subsidiaries taken as a whole to any Person (including any “person” (as that term is used in Section 13(d)(3) of the Exchange Act));
     (2) the consummation of any transaction (including, without limitation, any merger or consolidation), the result of which is that any Person (including any “person” (as defined above)) becomes the Beneficial Owner, directly or indirectly, of more than 50% of the Voting Stock of Parent (measured by voting power rather than number of shares), other than (A) any such transaction where the Voting Stock of Parent (measured by voting power rather than number of shares) outstanding immediately prior to such transaction constitutes or is converted into or exchanged for a majority of the outstanding shares of the Voting Stock of such Beneficial Owner (measured by voting power rather than number of shares) or (B) any merger or consolidation of Parent with or into any Person (including any “person” (as defined above)) which owns a Permitted Business (a “Permitted Person”) or a Subsidiary of a Permitted Person, in each case, if immediately after such transaction no Person (including any “person” (as defined above)) is the Beneficial Owner, directly or indirectly, of more than 50% of the total Voting Stock of such Permitted Person (measured by voting power rather than number of shares);
     (3) the first day on which Parent ceases to own 100% of the outstanding Equity Interests of the Company; or
     (4) during any period of up to 24 consecutive months, a majority of the Board of Directors (excluding vacant seats) of Parent shall cease to consist of Continuing Directors.
     “Class” means (a) in the case of Junior Lien Debt, every Series of Junior Lien Debt, taken together and (b) in the case of Priority Lien Debt, every Series of Priority Lien Debt, taken together.
     “Clearstream” means Clearstream Banking, S.A.
     “Co-Branded Agreement” means that certain Amended and Restated Co-Branded Card Marketing Services Agreement, effective September 15, 2008, among the Company, Parent, UAL Loyalty Services, LLC and Chase Bank USA, N.A., as heretofore amended and as may be further amended, amended and restated, modified, supplemented, replaced or extended from time to time.
     “Collateral” means (a) the Japan Routes, the Japan Slots and the Japan Gate Leaseholds upon which Secured Debt Liens have been granted to the Collateral Trustee to secure the Secured Debt Obligations, (b) Qualified Replacement Assets, (c) all Cure Collateral upon which Secured Debt Liens have been granted to the Collateral Trustee to secure the Secured Debt Obligations under the circumstances contemplated by the provisions of Sections 4.20 and 4.21 hereof and (d) all proceeds of the foregoing (including, without limitation, proceeds from dispositions of the foregoing deposited into the Collateral Proceeds Account held by the Collateral Trustee). For the avoidance of doubt, the term “Collateral” does not include the Escrow Account or other Escrow Property.
     “Collateral Trust Agreement” means the Collateral Trust Agreement, dated as of the date of this Indenture, among the Company, the Trustee and the Collateral Trustee, as amended, restated, adjusted, waived, renewed, extended, supplemented or otherwise modified from time to time.
     “Collateral Trustee” means Wilmington Trust FSB, in its capacity as Collateral Trustee under the Collateral Trust Agreement, together with its successors in such capacity.

8


 

     “Company” means United Air Lines, Inc., a Delaware corporation, and any and all successors pursuant to Section 5.02 hereof.
     “Consolidated EBITDAR” means, with respect to any specified Person for any period, the Consolidated Net Income of such Person for such period plus, without duplication:
     (1) an amount equal to any extraordinary loss plus any net loss realized by such Person or any of its Restricted Subsidiaries in connection with an asset sale, to the extent such losses were deducted in computing such Consolidated Net Income; plus
     (2) provision for taxes based on income or profits of such Person and its Restricted Subsidiaries for such period, to the extent that such provision for taxes was deducted in computing such Consolidated Net Income; plus
     (3) the Fixed Charges of such Person and its Restricted Subsidiaries for such period, to the extent that such Fixed Charges were deducted in computing such Consolidated Net Income; plus
     (4) any foreign currency translation losses (including losses related to currency remeasurements of Indebtedness) of such Person and its Restricted Subsidiaries for such period, to the extent that such losses were taken into account in computing such Consolidated Net Income; plus
     (5) depreciation, amortization (including amortization of intangibles but excluding amortization of prepaid cash expenses that were paid in a prior period) and other non-cash charges and expenses (excluding any such non-cash charge or expense to the extent that it represents an accrual of or reserve for cash charges or expenses in any future period or amortization of a prepaid cash charge or expense that was paid in a prior period) of such Person and its Restricted Subsidiaries for such period to the extent that such depreciation, amortization and other non-cash charges or expenses were deducted in computing such Consolidated Net Income; plus
     (6) aircraft rent expense of such Person and its Restricted Subsidiaries for such period to the extent that such aircraft rent expense is payable in cash and was deducted in computing such Consolidated Net Income; plus
     (7) to the extent deducted in computing such Consolidated Net Income, extraordinary, nonrecurring or unusual losses for such period; plus
     (8) to the extent deducted in computing such Consolidated Net Income, the amortization of debt discount for such period; plus
     (9) an amount equal to any deduction to Consolidated Net Income as a result of any grant to any employee of Parent or its Restricted Subsidiaries of any Equity Interests during such period; plus
     (10) to the extent deducted in computing such Consolidated Net Income, any net loss incurred during such period arising from the sale, exchange or other disposition of capital assets by Parent or its Restricted Subsidiaries (including any fixed assets, whether tangible or intangible, all inventory sold in conjunction with the disposition of fixed assets and all securities); plus

9


 

     (11) to the extent deducted in computing such Consolidated Net Income, any losses arising under fuel hedging arrangements incurred prior to the date of this Indenture; plus
     (12) to the extent deducted in computing such Consolidated Net Income, cash restructuring charges in an aggregate amount not to exceed $15.0 million in any fiscal year; plus
     (13) to the extent deducted in computing such Consolidated Net Income, all cost-savings, integration costs, transactional costs, expenses and charges incurred in connection with the consummation of any transaction related to any permitted acquisition, merger, disposition, issuance of Indebtedness, issuance of Equity Interests, or any Investment, in each case, to the extent permitted under this Indenture; plus
     (14) proceeds from business interruption insurance, to the extent not already included calculating such Consolidated Net Income; plus
     (15) to the extent deducted in computing such Consolidated Net Income, any expenses and charges that are covered by indemnification or reimbursement provisions in connection with any permitted acquisition, merger, disposition, incurrence of Indebtedness, issuance of Equity Interests or any investment to the extent actually indemnified or reimbursed; plus
     (16) proceeds from sales of miles to third party business partners to the extent not already included in calculating Consolidated Net Income; plus
     (17) to the extent deducted in computing such Consolidated Net Income, costs and expenses, including fees, incurred directly in connection with the consummation of the offering of the Notes as described in the Offering Memorandum; minus
     (18) non-cash items increasing such Consolidated Net Income for such period, other than the accrual of revenue in the ordinary course of business; minus
     (19) the sum of (A) income tax credits, (B) interest income and (C) extraordinary, non-recurring or unusual gains included in calculating Consolidated Net Income for such period; minus
     (20) any amount included in the calculation of Consolidated EBITDAR in a prior period under clause (16) of this definition to the extent that such amount is recognized as revenue in such current period,
in each case, on a consolidated basis and determined in accordance with GAAP.
     “Consolidated Net Income” means, with respect to any specified Person for any period, the aggregate of the net income (loss) of such Person and its Restricted Subsidiaries for such period, on a consolidated basis (excluding the net income (loss) of any Unrestricted Subsidiary of such Person), determined in accordance with GAAP and without any reduction in respect of preferred stock dividends; provided that:
     (1) all net after tax extraordinary, non-recurring or unusual gains or losses and all gains or losses realized in connection with any Asset Sale (without giving effect to the exclusions listed in the definition of “Asset Sale”) or the disposition of securities or the early extinguishment of Indebtedness, together with any related provision for taxes on any such gain, will be excluded;

10


 

     (2) the net income (but not loss) of any Person that is not a Restricted Subsidiary or that is accounted for by the equity method of accounting will be included only to the extent of the amount of dividends or similar distributions paid in cash to the specified Person or a Restricted Subsidiary of the Person;
     (3) the net income (but not loss) of any Restricted Subsidiary will be excluded to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of that net income is not at the date of determination permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its stockholders;
     (4) the cumulative effect of a change in accounting principles will be excluded;
     (5) the effect of non-cash gains and losses resulting from Hedging Obligations, including attributable to movement in the mark-to-market valuation of Hedging Obligations pursuant to Financial Accounting Standards Board Statement No. 133, will be excluded;
     (6) any non-cash compensation expense recorded from grants of stock appreciation or similar rights, stock options or other rights to officers, directors or employees, will be excluded;
     (7) the effect of any non-cash items resulting from any amortization, write-up, write-down or write-off of assets (including intangible assets, goodwill and deferred financing costs) in connection with any acquisition, disposition, merger, consolidation or similar transaction or any other non-cash impairment charges incurred subsequent to the date of this Indenture resulting from the application at SFAS Nos. 141, 142 or 144 (excluding any such non-cash item to the extent that it represents and accrual of or reserve for cash expenditures in any future period except to the extent such item is subsequently reversed), will be excluded;
     (8) non-cash charges of the type described under the section titled “Fresh-Start Reporting” in Parent’s financial statements included in its Form 10-K for the year ended December 31, 2006, will be excluded; and
     (9) any provision for income tax reflected on such Person’s financial statements for such period will be excluded to the extent such provision exceeds the actual amount of taxes paid in cash during such period by such Person and its consolidated Subsidiaries.
     “continuing” means, with respect to any Default or Event of Default, that such Default or Event of Default has not been cured or waived.
     “Continuing Directors” means, as of any date or for any period of determination, any member of the Board of Directors of Parent who:
     (1) was a member of such Board of Directors on the first day of such period; or
     (2) was nominated for election or elected to such Board of Directors with the approval of a majority of the Continuing Directors who were members of such Board of Directors at the time of such nomination or election.

11


 

     “Corporate Trust Office of the Trustee” will be at the address of the Trustee specified in Section 13.01 hereof and for purposes of Sections 2.03 and 4.02 hereof, such office shall also mean the office or agency of the Trustee located at 101 Barclay Street, New York, NY 10286, Attention: Bond Operations-7E, or such other address as to which the Trustee may give notice to the Company.
     “Credit Agreement” means that certain Amended and Restated Revolving Credit, Term Loan and Guaranty Agreement, dated as of February 2, 2007, by and among the Company, as borrower, Parent, the subsidiaries of the Company and Parent named therein, as guarantors, the lenders party thereto, JPMorgan Chase Bank, N.A., as co-administrative agent, co-collateral agent and paying agent, Citicorp USA, Inc., as co-administrative agent and co-collateral agent, J.P. Morgan Securities Inc., as joint lead arranger and joint bookrunner, Citigroup Global Markets Inc., as joint lead arranger and joint bookrunner and Credit Suisse Securities (USA) LLC, as syndication agent, as amended, restated, modified, supplemented, renewed, refunded, replaced in any manner (whether upon or after termination or otherwise, and whether or not the amount of Indebtedness thereunder is increased) or refinanced (including by means of sales of debt securities) in whole or in part from time to time.
     “Credit Facilities” means, one or more debt facilities (including, without limitation, the Credit Agreement) or commercial paper facilities, in each case with banks or other lenders providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables) or letters of credit, in each case, as amended, restated, modified, renewed, extended, refunded, replaced in any manner (whether upon or after termination or otherwise) or refinanced (including by means of sales of debt securities) in whole or in part from time to time.
     “Cure Collateral” means (a) cash and Permitted Investments contemplated by clauses (2) and (14) of the definition thereof, pledged to the Collateral Trustee (and subject to an account control agreement in form and substance reasonably satisfactory to the Collateral Trustee) and (b) additional Routes, Slots, Gates Leaseholds, ground support equipment, airframes, engines, spare parts, Real Property Assets, flight simulators, QEC Kits or other assets of the Company designated as “Cure Collateral” in an Officers’ Certificate delivered by the Company to the Collateral Trustee and pledged on a Secured Debt Lien basis to the Collateral Trustee pursuant to arrangements reasonably satisfactory to the Collateral Trustee.
     “Custodian” means the Trustee, as custodian for the Depositary with respect to the Global Notes, or any successor entity thereto.
     “Default” means any event that, unless cured or waived, is, or with the passage of time or the giving of notice or both would be, an Event of Default.
     “Definitive Note” means a certificated Note registered in the name of the Holder thereof and issued in accordance with Section 2.06 hereof, substantially in the form of Exhibit A hereto except that such Note shall not bear the Global Note Legend and shall not have the “Schedule of Exchanges of Interests in the Global Note” attached thereto.
     “Depositary” means, with respect to the Notes issuable or issued in whole or in part in global form, the Person specified in Section 2.03 hereof as the Depositary with respect to the Notes, and any and all successors thereto appointed as depositary hereunder and having become such pursuant to the applicable provision of this Indenture.
     “Designated Noncash Consideration” means any non-cash consideration received by Parent or a Restricted Subsidiary in connection with an Asset Sale that is designated as Designated Noncash

12


 

Consideration pursuant to an Officers’ Certificate delivered to the Trustee, which Officers’ Certificate shall set forth the Fair Market Value of such Designated Noncash Consideration and the basis for determining Fair Market Value.
     “Discharge of Priority Lien Obligations” means the occurrence of all of the following:
     (1) termination or expiration of all commitments to extend credit that would constitute Priority Lien Debt;
     (2) payment in full in cash of the principal of and interest and premium (if any) on all Priority Lien Debt (other than any undrawn letters of credit);
     (3) discharge or cash collateralization (at the lower of (A) 105% of the aggregate undrawn amount and (B) the percentage of the aggregate undrawn amount required for release of liens under the terms of the applicable Priority Lien Document) of all outstanding letters of credit constituting Priority Lien Debt; and
     (4) payment in full in cash of all other Priority Lien Obligations that are outstanding and unpaid at the time the Priority Lien Debt is paid in full in cash (other than any obligations for taxes, costs, indemnifications, reimbursements, damages and other liabilities in respect of which no claim or demand for payment has been made at such time).
     “Disqualified Stock” means any Capital Stock that, by its terms (or by the terms of any security into which it is convertible, or for which it is exchangeable, in each case at the option of the holder of the Capital Stock), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise (other than as a result of a change of control or asset sale), is convertible or exchangeable for Indebtedness or Disqualified Stock, or is redeemable at the option of the holder of the Capital Stock, in whole or in part (other than as a result of a change of control or asset sale), on or prior to the date that is 91 days after the date on which the Notes mature. Notwithstanding the preceding sentence, any Capital Stock that would constitute Disqualified Stock solely because the holders of the Capital Stock have the right to require the Company to repurchase such Capital Stock upon the occurrence of a change of control or an asset sale will not constitute Disqualified Stock if the terms of such Capital Stock provide that the Company may not repurchase or redeem any such Capital Stock pursuant to such provisions unless such repurchase or redemption complies with Section 4.07 hereof. The amount of Disqualified Stock deemed to be outstanding at any time for purposes of this Indenture will be the maximum amount that Parent and its Restricted Subsidiaries may become obligated to pay upon the maturity of, or pursuant to any mandatory redemption provisions of, such Disqualified Stock, exclusive of accrued dividends.
     “DOT” means the U.S. Department of Transportation and any successor thereto.
     “Equity Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).
     “Equity Offering” means any public or private sale either: (a) of Qualifying Equity Interests by Parent (other than to a Subsidiary of Parent or pursuant to a registration statement on Form S-8 or otherwise relating to equity securities issuable under any employee benefit plan of Parent) or (b) of Equity Interests of a direct or indirect parent entity of Parent (other than to Parent or a Subsidiary of Parent) to the extent that the net proceeds therefrom are contributed to the common equity capital of Parent.

13


 

     “Escrow Account” has the meaning set forth in the Escrow and Security Agreement.
     “Escrow and Security Agreement” means the Escrow and Security Agreement, dated as of the date of this Indenture, among the Company, the Trustee and The Bank of New York Mellon Trust Company, N.A., as escrow agent, for the sole benefit of the Holders of Notes, as such agreement may be amended, amended and restated, adjusted, supplemented or otherwise modified from time to time.
     “Escrow Conditions” has the meaning set forth in the Collateral Trust Agreement.
     “Escrow Property” has the meaning set forth in the Escrow and Security Agreement.
     “Euroclear” means Euroclear Bank, S.A./N.V., as operator of the Euroclear system.
     “Exchange Act” means the Securities Exchange Act of 1934, as amended.
     “Excluded Contributions” means net cash proceeds received by Parent after the date of this Indenture from:
     (1) contributions to its common equity capital (other than from any Subsidiary); or
     (2) the sale (other than to a Subsidiary or to any management equity plan or stock option plan or any other management or employee benefit plan or agreement of Parent or any Subsidiary) of Qualifying Equity Interests,
in each case designated as Excluded Contributions pursuant to an Officers’ Certificate executed on the date such capital contributions are made or the date such Equity Interests are sold, as the case may be. Excluded Contributions will not be considered to be net proceeds of Qualifying Equity Interests for purposes of clause (a)(3)(B) of Section 4.07 hereof.
     “Existing Indebtedness” means all Indebtedness of Parent and its Subsidiaries (other than Indebtedness incurred under clauses (1) or (3) of the definition of “Permitted Debt”) in existence on the date of this Indenture (including under the Credit Agreement), until such amounts are repaid.
     “FAA” means the Federal Aviation Administration of the United States of America and any successor thereto.
     “Fair Market Value” means the value that would be paid by a willing buyer to an unaffiliated willing seller in a transaction not involving distress or necessity of either party, determined in good faith by the Board of Directors of Parent (unless otherwise provided in this Indenture); provided that the Board of Directors shall be permitted to consider the circumstances existing at such time (including, without limitation, any relevant legal compulsion, judicial proceeding or administrative order or the possibility thereof) in determining such Fair Market Value in connection with such transaction.
     “Fifth-Freedom Rights” means the operational right to enplane passenger traffic and cargo in a foreign country and deplane it in another foreign country, including any such right pursuant to a bilateral treaty between the United States and a foreign country.
     “Fixed Charge Coverage Ratio” means with respect to any specified Person for any period, the ratio of the Consolidated EBITDAR of such Person for such period to the Fixed Charges of such Person for such period. In the event that the specified Person or any of its Restricted Subsidiaries incurs, assumes, guarantees, repays, repurchases, redeems, defeases or otherwise discharges any Indebtedness

14


 

(other than ordinary working capital borrowings) or issues, repurchases or redeems Disqualified Stock or preferred stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated and on or prior to the date on which the event for which the calculation of the Fixed Charge Coverage Ratio is made (the “Calculation Date”), then the Fixed Charge Coverage Ratio will be calculated giving pro forma effect (as determined in good faith by a responsible financial or accounting officer of Parent and certified in an Officers’ Certificate delivered to the Trustee) to such incurrence, assumption, Guarantee, repayment, repurchase, redemption, defeasance or other discharge of Indebtedness, or such issuance, repurchase or redemption of Disqualified Stock or preferred stock, and the use of the proceeds therefrom, as if the same had occurred at the beginning of the applicable four-quarter reference period.
     In addition, for purposes of calculating the Fixed Charge Coverage Ratio:
     (1) acquisitions that have been made by the specified Person or any of its Restricted Subsidiaries, including through mergers or consolidations, or any Person or any of its Restricted Subsidiaries acquired by the specified Person or any of its Restricted Subsidiaries, and including all related financing transactions and including increases in ownership of Restricted Subsidiaries, during the four-quarter reference period or subsequent to such reference period and on or prior to the Calculation Date, or that are to be made on the Calculation Date, will be given pro forma effect (as determined in good faith by a responsible financial or accounting officer of Parent and certified in an Officers’ Certificate delivered to the Trustee, and including any operating expense reductions for such period resulting from such acquisition that have been realized or for which all of the material steps necessary for realization have been taken) as if they had occurred on the first day of the four-quarter reference period;
     (2) the Consolidated EBITDAR attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses (and ownership interests therein) disposed of prior to the Calculation Date, will be excluded;
     (3) the Fixed Charges attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses (and ownership interests therein) disposed of prior to the Calculation Date, will be excluded, but only to the extent that the obligations giving rise to such Fixed Charges will not be obligations of the specified Person or any of its Restricted Subsidiaries following the Calculation Date;
     (4) any Person that is a Restricted Subsidiary on the Calculation Date will be deemed to have been a Restricted Subsidiary at all times during such four-quarter period;
     (5) any Person that is not a Restricted Subsidiary on the Calculation Date will be deemed not to have been a Restricted Subsidiary at any time during such four-quarter period; and
     (6) if any Indebtedness bears a floating rate of interest, the interest expense on such Indebtedness will be calculated as if the rate in effect on the Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligation applicable to such Indebtedness if such Hedging Obligation has a remaining term as at the Calculation Date in excess of 12 months).

15


 

     “Fixed Charges” means, with respect to any specified Person for any period, the sum, without duplication, of:
     (1) the consolidated gross cash interest expense of such Person and its Restricted Subsidiaries for such period; plus
     (2) the cash interest component of leases that are capitalized in accordance with GAAP of such Person and its Restricted Subsidiaries for such period; plus
     (3) any cash interest expense actually paid on Indebtedness of another Person that is guaranteed by such Person or one of its Restricted Subsidiaries or secured by a Lien on assets of such Person or one of its Restricted Subsidiaries; plus
     (4) the product of (A) all cash dividends accrued on any series of preferred stock of such Person or any of its Restricted Subsidiaries, other than to Parent or a Restricted Subsidiary of Parent, times (B) a fraction, the numerator of which is one and the denominator of which is one minus the then current combined federal, state and local statutory tax rate of such Person, expressed as a decimal, in each case, determined on a consolidated basis in accordance with GAAP; plus
     (5) the aggregate aircraft rental expense of such Person and its Restricted Subsidiaries for such period to the extent such rental expense is payable in cash,
all as determined on a consolidated basis in accordance with GAAP.
     “Foreign Aviation Authorities” means any foreign governmental, quasi-governmental, regulatory or other agencies, public corporations or private entities that exercise jurisdiction over the issuance or authorization (a) to serve any foreign point on the Japan Routes that the Company is serving at any time (other than points in China, including Hong Kong) and/or to conduct operations related to the Japan Routes and Japan Gate Leaseholds and/or (b) to hold and operate any Japan Route Foreign Slots.
     “GAAP” means generally accepted accounting principles in the United States of America, which are in effect from time to time, including those set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants, statements and pronouncements of the Financial Accounting Standards Board, such other statements by such other entity as have been approved by a significant segment of the accounting profession; and the rules and regulations of the SEC governing the inclusion of financial statements in periodic reports required to be filed pursuant to Section 13 of the Exchange Act, including opinions and pronouncements in staff accounting bulletins and similar written statements from the accounting staff of the SEC.
     “Gate Leasehold” means, at any time, all of the right, title, privilege, interest and authority, now held or hereafter acquired by the Company in connection with the right to use, operate or occupy space in an airport terminal at an airport where the Company conducts scheduled nonstop service utilizing the Japan Routes to the extent such right, title, privilege, interest or authority is actually used in conjunction with the operation of such nonstop service.
     “Global Note Legend” means the legend set forth in Section 2.06(f)(2) hereof, which is required to be placed on all Global Notes issued under this Indenture.
     “Global Notes” means, individually and collectively, each of the Restricted Global Notes and the Unrestricted Global Notes deposited with or on behalf of and registered in the name of the Depository or its nominee, substantially in the form of Exhibit A hereto and that bears the Global Note Legend and that has the “Schedule of Exchanges of Interests in the Global Note” attached thereto, issued in accordance with Section 2.01 or 2.06(b)(3), 2.06(b)(4) or 2.06(d)(2).

16


 

     “Government Securities” means direct obligations of, or obligations guaranteed by, the United States of America (including any agency or instrumentality thereof) for the payment of which obligations or guarantees the full faith and credit of the United States of America is pledged and which are not callable or redeemable at the issuer’s option.
     “Governmental Authority” means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank organization, or other entity exercising executive, legislative, judicial, taxing or regulatory powers or functions of or pertaining to government. Governmental Authority shall not include any Person in its capacity as an Airport Authority.
     “Guarantee” means a guarantee (other than (a) by endorsement of negotiable instruments for collection or (b) customary contractual indemnities, in each case in the ordinary course of business), direct or indirect, in any manner including, without limitation, by way of a pledge of assets or through letters of credit or reimbursement agreements in respect thereof, of all or any part of any Indebtedness (whether arising by virtue of partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services, to take or pay or to maintain financial statement conditions).
     “Guarantors” means Parent and any domestic Restricted Subsidiary of Parent that guarantees the Notes in accordance with the provisions of this Indenture, and their respective successors and assigns, in each case, until the Note Guarantee of such Person has been released in accordance with the provisions of this Indenture.
     “Hedge Agreement” means any agreement evidencing Hedging Obligations.
     “Hedging Obligations” means, with respect to any specified Person, the Obligations of such Person under:
     (1) interest rate swap agreements (whether from fixed to floating or from floating to fixed), interest rate cap agreements and interest rate collar agreements;
     (2) other agreements or arrangements designed to manage interest rates or interest rate risk; and
     (3) other agreements or arrangements designed to protect such Person against fluctuations in currency exchange rates, fuel prices or other commodity prices.
     “Holder” means a Person in whose name a Note is registered.
     “IATA” means the International Air Transport Association and any successor thereto.
     “Indebtedness” means, with respect to any specified Person, any indebtedness of such Person (excluding accrued expenses and trade payables), whether or not contingent:
     (1) in respect of borrowed money;
     (2) evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof);
     (3) in respect of banker’s acceptances;

17


 

     (4) representing Capital Lease Obligations;
     (5) representing the balance deferred and unpaid of the purchase price of any property or services due more than six months after such property is acquired or such services are completed, and excluding in any event trade payables arising in the ordinary course of business; or
     (6) representing any Hedging Obligations,
if and to the extent any of the preceding items (other than letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet of the specified Person prepared in accordance with GAAP. In addition, the term “Indebtedness” includes all Indebtedness of others secured by a Lien on any asset of the specified Person (whether or not such Indebtedness is assumed by the specified Person) and, to the extent not otherwise included, the Guarantee by the specified Person of any Indebtedness of any other Person. Indebtedness shall be calculated without giving effect to the effects of Statement of Financial Accounting Standards No. 133 and related interpretations to the extent such effects would otherwise increase or decrease an amount of Indebtedness for any purpose under this Indenture as a result of accounting for any embedded derivatives created by the terms of such Indebtedness.
     For the avoidance of doubt, Banking Product Obligations do not constitute Indebtedness.
     “Indenture” means this Indenture, as amended, amended and restated, adjusted, supplemented or otherwise modified from time to time.
     “Indirect Participant” means a Person who holds a beneficial interest in a Global Note through a Participant.
     “Initial Notes” means the first $200.0 million aggregate principal amount of Notes issued under this Indenture on the date of this Indenture.
     “Initial Purchasers” means J.P. Morgan Securities Inc., Goldman, Sachs & Co. and Morgan Stanley & Co. Incorporated.
     “insolvency or liquidation proceeding” means:
     (1) any case commenced by or against the Company under Bankruptcy Law, any other proceeding for the reorganization, recapitalization or adjustment or marshalling of the assets or liabilities of the Company, any receivership or assignment for the benefit of creditors relating to the Company or any similar case or proceeding relative to the Company or its creditors, as such, in each case whether or not voluntary;
     (2) any liquidation, dissolution, marshalling of assets or liabilities or other winding up of or relating to the Company, in each case whether or not voluntary and whether or not involving bankruptcy or insolvency; or
     (3) any other proceeding of any type or nature in which substantially all claims of creditors of the Company are determined and any payment or distribution is or may be made on account of such claims.
     “Institutional Accredited Investor” means an institution that is an “accredited investor” as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act, who are not also QIBs.

18


 

     “Investments” means, with respect to any Person, all direct or indirect investments by such Person in other Persons (including Affiliates) in the forms of loans (including Guarantees or other obligations), advances or capital contributions (excluding commission, travel and similar advances to officers, employees and consultants made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities of other Persons, together with all items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP. If Parent or any Restricted Subsidiary of Parent sells or otherwise disposes of any Equity Interests of any direct or indirect Restricted Subsidiary of Parent such that, after giving effect to any such sale or disposition, such Person is no longer a Restricted Subsidiary of Parent, Parent will be deemed to have made an Investment on the date of any such sale or disposition equal to the Fair Market Value of Parent’s Investments in such Subsidiary that were not sold or disposed of in an amount determined as provided in Section 4.07 hereof. Notwithstanding the foregoing, any Equity Interests retained by Parent or any of its Subsidiaries after a disposition or dividend of assets or Capital Stock of any Person in connection with any partial “spin-off” of a Subsidiary or similar transactions shall not be deemed to be an Investment. The acquisition by Parent or any Restricted Subsidiary of Parent of a Person that holds an Investment in a third Person will be deemed to be an Investment by Parent or such Restricted Subsidiary in such third Person in an amount equal to the Fair Market Value of the Investments held by the acquired Person in such third Person in an amount determined as provided in Section 4.07 hereof. Except as otherwise provided in this Indenture, the amount of an Investment will be determined at the time the Investment is made and without giving effect to subsequent changes in value.
     “Japan Gate Leaseholds” means the right, title, privilege, interest and authority, now held or hereafter acquired by the Company in connection with the right to use, operate or occupy space in an airport terminal at an airport where the Company conducts scheduled nonstop service utilizing the Japan Routes to the extent such right, title, privilege, interest or authority is actually used in conjunction with the operation of such nonstop service (other than (a) at airports in China, including Hong Kong or (b) at LaGuardia Airport, Reagan National Airport or London Heathrow Airport in the case of this clause (b), to the extent otherwise pledged by the Company to other Persons).
     “Japan Route FAA Slot” means, at any time, any Slot of the Company, now held or hereafter acquired, at an airport in the United States that serves as an origin or destination point for nonstop flights that the Company operates from time to time utilizing the Japan Routes to the extent such Slot is actually used in conjunction with the operation of such nonstop service (other than at LaGuardia Airport or Reagan National Airport to the extent otherwise pledged by the Company to other Persons).
     “Japan Route Foreign Slot” means, at any time, any Slot of the Company, now held or hereafter acquired, at an airport outside the United States that serves as an origin or destination point for nonstop flights that the Company operates from time to time utilizing the Japan Routes to the extent such Slot is actually used in conjunction with the operation of such nonstop service (other than (a) at airports in China, including Hong Kong or (b) London Heathrow Airport in the case of this clause (b), to the extent otherwise pledged by the Company to other Persons).
     “Japan Routes” means the authority the Company now holds, or hereafter acquires from the DOT pursuant to Title 49 or other applicable law, to operate scheduled foreign air transportation of persons, property and mail between a point or points in the United States and a point or points in Japan, and beyond between a point or points in Japan and a point or points in other countries, including applicable designations, frequencies, exemptions, certificates, Fifth-Freedom Rights and “behind and beyond rights,” in each case whether or not utilized by the Company, except to the extent such route authority relates to all-cargo operations.

19


 

     “Japan Slots” means the Company’s Slots, now held or hereafter acquired, at airports that serve as an origin or destination point for nonstop flights the Company operates from time to time utilizing the Japan Routes to the extent such Slots are actually used in conjunction with the operation of such nonstop service (other than (a) at airports in China, including Hong Kong or (b) at LaGuardia Airport, Reagan National Airport or London Heathrow Airport in the case of this clause (b), to the extent otherwise pledged by the Company to other Persons).
     “Jet Fuel Supply Agreement” means the Jet Fuel Supply Agreement, dated as of October 21, 2003, by and among the Company, United Aviation Fuels Corporation and Morgan Stanley Capital Group Inc., as heretofore amended or modified, and as may be further amended, amended and restated, modified, supplemented, replaced or extended from time to time.
     “Junior Lien” means a Lien granted by a Security Document to the Collateral Trustee, at any time, upon any property of the Company to secure Junior Lien Obligations.
     “Junior Lien Cap” means $300.0 million (plus the aggregate amount of accrued interest and the amount of all fees and expenses, including premiums, paid or incurred in connection with any refunding, replacement or other refinancing of Junior Lien Debt with the proceeds of other Junior Lien Debt that was permitted to be incurred under this Indenture), minus the aggregate amount of all Net Proceeds of any Sale of Collateral applied by United since the date of this Indenture to repay or redeem the Notes or any Junior Lien Debt under a Credit Facility that is term Indebtedness or to repay other Junior Lien Debt or to repay Junior Lien Debt under a Credit Facility that is revolving credit Indebtedness and effect a corresponding commitment reduction thereunder pursuant to Section 4.10 hereof, and minus the principal amount of any Permitted Refinancing Indebtedness not constituting Junior Lien Debt the proceeds of which are applied to refinance, refund, repay, redeem, defease or otherwise acquire or retire for value any Junior Lien Debt.
     “Junior Lien Debt” means (a) the Initial Notes and (b) any Indebtedness (including letters of credit and reimbursement obligations with respect thereto) of the Company that is secured by a Junior Lien and that was permitted to be incurred and so secured under each applicable Secured Debt Document (including any Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace or defease other Junior Lien Debt); provided that:
     (1) on or before the date on which any such Indebtedness contemplated by clause (b) above is incurred by the Company, such Indebtedness is designated by the Company, in an Officers’ Certificate delivered to each Junior Lien Representative, each Priority Lien Representative and the Collateral Trustee, as “Junior Lien Debt” for the purposes of this Indenture and the Collateral Trust Agreement; provided that no Series of Secured Debt may be designated as both Junior Lien Debt and Priority Lien Debt;
     (2) any such Indebtedness contemplated by clause (b) above is governed by an indenture, credit agreement or other agreement that includes a Lien Sharing and Priority Confirmation; and
     (3) all requirements set forth in the Collateral Trust Agreement as to the confirmation, grant or perfection of the Collateral Trustee’s Liens to secure any such Indebtedness contemplated by clause (b) above or Obligations in respect thereof are satisfied (and the satisfaction of such requirements and the other provisions of this clause (3) will be conclusively established if the Company delivers to the Collateral Trustee an Officers’ Certificate stating that such requirements and other provisions have been satisfied and that such Indebtedness is “Junior Lien Debt”).

20


 

     “Junior Lien Documents” means, collectively, this Indenture and any indenture, credit agreement or other agreement governing each Series of Junior Lien Debt and the security documents related thereto.
     “Junior Lien Obligations” means Junior Lien Debt and all other Obligations in respect thereof, together with Hedging Obligations that are secured, or intended to be secured, under the Junior Lien Documents if the provider of such Hedging Obligations has agreed to be bound by the terms of the Collateral Trust Agreement as a holder of Junior Lien Obligations or such provider’s interest in the Collateral is subject to the terms of the Collateral Trust Agreement as a holder of Junior Lien Obligations and if such Hedging Obligations are permitted to be incurred and so secured under each applicable Secured Debt Document.
     “Junior Lien Representative” means the trustee, agent or representative of the holder of any Series of Junior Lien Debt who maintains the transfer register for such Series of Junior Lien Debt and (a) is appointed as a Junior Lien Representative (for purposes related to the administration of the security documents) pursuant to the indenture, credit agreement or other agreement governing such Series of Junior Lien Debt, together with its successors in such capacity and (b) has become a party to the Collateral Trust Agreement by executing a joinder in the form required under the Collateral Trust Agreement.
     “Legal Holiday” means a Saturday, a Sunday or a day on which banking institutions in the City of New York or at a place of payment are authorized by law, regulation or executive order to remain closed. If a payment date is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue on such payment for the intervening period.
     “Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or similar encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law (but excluding any lease or sublease pursuant to clauses (13) or (14) of the definition of “Asset Sale”), including any conditional sale or other title retention agreement, any option or other agreement to sell or give a security interest in and, except in connection with any Qualified Receivables Transaction, any agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.
     “Lien Sharing and Priority Confirmation” means:
     (1) as to any future Series of Priority Lien Debt, the written agreement of the holders of such Series of Priority Lien Debt, as set forth in the indenture, credit agreement or other agreement governing such Series of Priority Lien Debt, for the benefit of all holders of Secured Debt and each future Secured Debt Representative:
     (A) that all Priority Lien Obligations will be and are secured equally and ratably by all Priority Liens at any time granted by the Company to secure any Obligations in respect of such Series of Priority Lien Debt, whether or not upon property otherwise constituting Collateral, and that all such Priority Liens will be enforceable by the Collateral Trustee for the benefit of all holders of Priority Lien Obligations;
     (B) that the holders of Obligations in respect of such Series of Priority Lien Debt are bound by the provisions of the Collateral Trust Agreement, including the provisions relating to the ranking of Priority Liens and the order of application of proceeds from enforcement of Priority Liens; and

21


 

     (C) consenting to the terms of the Collateral Trust Agreement and the Collateral Trustee’s performance of, and directing the Collateral Trustee to perform its obligations under, the Collateral Trust Agreement and the other Security Documents; and
     (2) as to any Series of Junior Lien Debt, the written agreement of the holders of such Series of Junior Lien Debt, as set forth in the indenture, credit agreement or other agreement governing such Series of Junior Lien Debt, for the benefit of all holders of Secured Debt and each Secured Debt Representative:
     (A) that all Junior Lien Obligations will be and are secured equally and ratably by all Junior Liens at any time granted by the Company to secure any Obligations in respect of such Series of Junior Lien Debt, whether or not upon property otherwise constituting collateral for such Series of Junior Lien Debt, and that all such Junior Liens will be enforceable by the Collateral Trustee for the benefit of all holders of Junior Lien Obligations;
     (B) that the holders of Obligations in respect of such Series of Junior Lien Debt are bound by the provisions of the Collateral Trust Agreement, including the provisions relating to the ranking of Junior Liens and the order of application of proceeds from the enforcement of Junior Liens; and
     (C) consenting to the terms of the Collateral Trust Agreement and the Collateral Trustee’s performance of, and directing the Collateral Trustee to perform its obligations under, the Collateral Trust Agreement and the other Security Documents.
     “Margin Stock” means as defined within Regulation U of the Board of Governors of the Federal Reserve System of the United States.
     “Material Adverse Effect” means a material adverse effect on (a) the Collateral, taken as a whole or (b) the Japan Routes.
     “Net Proceeds” means the aggregate cash proceeds and Cash Equivalents received by Parent or any of its Restricted Subsidiaries in respect of any Asset Sale (including, without limitation, any cash or Cash Equivalents received in respect of or upon the sale or other disposition of any Designated Noncash Consideration or other non-cash consideration received in any Asset Sale), net of: (a) the direct costs and expenses relating to such Asset Sale and the sale or disposition of such Designated Noncash Consideration, including, without limitation, legal, accounting and investment banking fees, and sales commissions, and any relocation expenses incurred as a result of the Asset Sale, taxes paid or payable as a result of the Asset Sale, in each case, after taking into account any available tax credits or deductions and any tax sharing arrangements; (b) any reserve for adjustment or indemnification obligations in respect of the sale price of such asset or assets established in accordance with GAAP; (c) all payments made on any Indebtedness (other than Secured Debt) that is secured by a Permitted Lien on the assets subject to such Asset Sale, in accordance with the terms of any Lien upon such assets, or that must by its terms, or in order to obtain a necessary consent to such Asset Sale, or by applicable law be repaid out of the proceeds from such Asset Sale; (d) all distributions and other payments required to be made to minority interest holders in Subsidiaries or joint ventures as a result of such Asset Sale; and (e) any portion of the purchase price from an Asset Sale placed in escrow pursuant to the terms of such Asset Sale (either as a reserve for adjustment of the purchase price, or for satisfaction of indemnities in respect of such Asset Sale) until the termination of such escrow.

22


 

     “Non-Recourse Debt” means Indebtedness:
     (1) as to which neither Parent nor any of its Restricted Subsidiaries (A) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness) or (B) is directly or indirectly liable as a guarantor or otherwise; and
     (2) as to which the holders of such Indebtedness do not otherwise have recourse to the stock or assets of Parent or any of its Restricted Subsidiaries (other than the Equity Interests of an Unrestricted Subsidiary).
     “Non-U.S. Person” means a Person who is not a U.S. Person.
     “Note Documents” means this Indenture, the Notes, the Note Guarantees, the Security Documents and the Escrow and Security Agreement.
     “Note Guarantee” means the Guarantee by each Guarantor of the Company’s obligations under this Indenture and the Notes, executed pursuant to the provisions of this Indenture.
     “Notes” has the meaning assigned to it in the preamble to this Indenture. The Initial Notes and the Additional Notes shall be treated as a single class for all purposes under this Indenture, and unless the context otherwise requires, all references to the Notes shall include the Initial Notes and any Additional Notes.
     “Obligations” means any principal (including reimbursement obligations with respect to letters of credit whether or not drawn), interest (including all interest accrued thereon after the commencement of any insolvency or liquidation proceeding at the rate, including any applicable post-default rate, specified in the Secured Debt Documents, even if such interest is not enforceable, allowable or allowed as a claim in such proceeding), premium (if any), fees, indemnifications, reimbursements, expenses and other liabilities payable under the documentation governing any Indebtedness.
     “Offering Memorandum” means the offering memorandum, dated as of January 11, 2010, prepared in connection with the sale and distribution of the Notes.
     “Officer” means, with respect to any Person, the Chairman of the Board, the Chief Executive Officer, the President, the Chief Operating Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary or any Vice-President of such Person.
     “Officers’ Certificate” means a certificate signed on behalf of the Company or Parent by two Officers of the Company or Parent, as applicable, that meets the requirements of Section 13.03 hereof.
     “OID Legend” means the legend set forth in Section 2.06(f)(3) hereof.
     “Opinion of Counsel” means a written opinion from legal counsel that meets the requirements of Section 13.03 hereof. The counsel may be an employee of or counsel to Parent, any Subsidiary of Parent or the Trustee.
     “Parent” means UAL Corporation, a Delaware corporation, and any and all successors pursuant to Section 5.02 hereof.
     “Participant” means, with respect to the Depositary, Euroclear or Clearstream, a Person who has an account with the Depositary, Euroclear or Clearstream, respectively (and, with respect to DTC, shall include Euroclear and Clearstream).

23


 

     “Permitted Business” means any business that is the same as, or reasonably related, ancillary, supportive or complementary to, the business in which the Company and the Guarantors are engaged on the date of this Indenture.
     “Permitted Investments” means:
     (1) any Investment in Parent or in a Restricted Subsidiary of Parent;
     (2) any Investment in cash, Cash Equivalents and any foreign equivalents;
     (3) any Investment by Parent or any Restricted Subsidiary of Parent in a Person, if as a result of such Investment:
     (A) such Person becomes a Restricted Subsidiary of Parent; or
     (B) such Person, in one transaction or a series of related and substantially concurrent transactions, is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, Parent or a Restricted Subsidiary of Parent;
     (4) any Investment made as a result of the receipt of non-cash consideration from an Asset Sale that was made pursuant to and in compliance with Section 4.10 hereof;
     (5) any acquisition of assets or Capital Stock in exchange for the issuance of Qualifying Equity Interests;
     (6) any Investments received in compromise or resolution of (A) obligations of trade creditors or customers that were incurred in the ordinary course of business of Parent or any of its Restricted Subsidiaries, including pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of any trade creditor or customer or (B) litigation, arbitration or other disputes;
     (7) Investments represented by Hedging Obligations;
     (8) loans or advances to officers, directors or employees made in the ordinary course of business of Parent or any Restricted Subsidiary of Parent in an aggregate principal amount not to exceed $7.0 million at any one time outstanding;
     (9) repurchases of the Notes;
     (10) any guarantee of Indebtedness permitted to be incurred pursuant to Section 4.09 hereof other than a guarantee of Indebtedness of an Affiliate of Parent that is not a Restricted Subsidiary of Parent;
     (11) any Investment existing on, or made pursuant to binding commitments existing on, the date of this Indenture and any Investment consisting of an extension, modification or renewal of any Investment existing on, or made pursuant to a binding commitment existing on, the date of this Indenture; provided that the amount of any such Investment may be increased (A) as required by the terms of such Investment as in existence on the date of this Indenture or (B) as otherwise permitted under this Indenture;

24


 

     (12) Investments acquired after the date of this Indenture as a result of the acquisition by Parent or any Restricted Subsidiary of Parent of another Person, including by way of a merger, amalgamation or consolidation with or into Parent or any of its Restricted Subsidiaries in a transaction that is not prohibited by Section 5.01 hereof after the date of this Indenture to the extent that such Investments were not made in contemplation of such acquisition, merger, amalgamation or consolidation and were in existence on the date of such acquisition, merger, amalgamation or consolidation;
     (13) the acquisition by a Receivables Subsidiary in connection with a Qualified Receivables Transaction of Equity Interests of a trust or other Person established by such Receivables Subsidiary to effect such Qualified Receivables Transaction and any other Investment by Parent or a Subsidiary of Parent in a Receivables Subsidiary or any Investment by a Receivables Subsidiary in any other Person in connection with a Qualified Receivables Transaction;
     (14) accounts receivable arising in the ordinary course of business;
     (15) Investments in connection with outsourcing initiatives in the ordinary course of business;
     (16) Investments having an aggregate Fair Market Value (measured on the date each such Investment was made and without giving effect to subsequent changes in value other than a reduction for all returns of principal in cash and capital dividends in cash), when taken together with all Investments made pursuant to this clause (16) that are at the time outstanding, not to exceed $750.0 million at any one time outstanding in connection with (A) travel or airline related businesses made in connection with marketing and promotion agreements, alliance agreements, distribution agreements, agreements with respect to fuel consortiums, agreements relating to flight training, agreements relating to insurance arrangements, agreements relating to parts management systems and other similar agreements or (B) joint ventures in existence on the date of this Indenture or formed thereafter; and
     (17) other Investments in any Person that do not involve properties or assets that constitute Collateral, having an aggregate Fair Market Value (measured on the date each such Investment was made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (17) that are at the time outstanding, not to exceed 3.0% of the total consolidated tangible assets of Parent and its Restricted Subsidiaries at the time of such Investment.
     “Permitted Liens” means:
     (1) Priority Liens held by the Collateral Trustee securing (A) Priority Lien Debt in an aggregate principal amount (as of the date of incurrence of any Priority Lien Debt and after giving pro forma effect to the application of the net proceeds therefrom), not exceeding the Priority Lien Cap and (B) all other Priority Lien Obligations;
     (2) Junior Liens held by the Collateral Trustee securing (A)(i) Junior Lien Debt (including all Permitted Refinancing Indebtedness secured by a Junior Lien permitted by clause (A)(ii) below and together with all Third Lien Debt at the time outstanding) in an aggregate principal amount (as of the date of incurrence of any such Junior Lien Debt and after giving pro forma effect to the application of the net proceeds therefrom), not exceeding $300.0 million at any one time outstanding; provided that in no event may the aggregate principal amount of Junior

25


 

Lien Debt secured by Junior Liens at any one time outstanding exceed the Junior Lien Cap; and (ii) Permitted Refinancing Indebtedness the proceeds of which are applied to renew, refund, extend, refinance, replace, defease or discharge any Junior Lien Debt or other Junior Lien Obligations and (B) all other Junior Lien Obligations; provided, that all such Junior Liens contemplated by this clause (2) are made junior to the Priority Lien Obligations pursuant to the Collateral Trust Agreement;
     (3) Liens on Collateral securing (A)(i) Third Lien Debt (including all Permitted Refinancing Indebtedness secured by a Lien permitted by clause (A)(ii) below and together with all Junior Lien Debt at the time outstanding) in an aggregate principal amount (as of the date of incurrence of any such Third Lien Debt and after giving pro forma effect to the application of the net proceeds therefrom), not exceeding the Subordinated Lien Cap and (ii) Permitted Refinancing Indebtedness the proceeds of which are applied to renew, refund, refinance, extend, replace, defease or discharge any Third Lien Debt or other Third Lien Obligations and (B) all other Third Lien Obligations;
     (4) Liens for taxes, assessments or governmental charges or claims that are not yet delinquent or that are being contested in good faith by appropriate proceedings promptly instituted and diligently concluded; provided that any reserve or other appropriate provision as is required in conformity with GAAP has been made therefor;
     (5) Liens imposed by law, including carrier’s, warehousemen’s, landlord’s and mechanics’ Liens, in each case, incurred in the ordinary course of business;
     (6) Liens arising by operation of law in connection with judgments, attachments or awards which do not constitute an Event of Default hereunder;
     (7) Liens created for the benefit of (or to secure) the Notes (or the Note Guarantees);
     (8) Liens on accounts receivables and related assets of the type specified in the definition of “Qualified Receivables Transaction,” incurred in connection with a Qualified Receivables Transaction;
     (9) (A) any overdrafts and related liabilities arising from treasury, netting, depository and cash management services or in connection with any automated clearing house transfers of funds, in each case as it relates to Cure Collateral, if any and (B) Liens arising by operation of law or that are contractual rights of set-off in favor of the depository bank or securities intermediary in respect of the Collateral Proceeds Account;
     (10) licenses, sublicenses, leases and subleases by the Company as they relate to Cure Collateral and to the extent (A) such licenses, sublicenses, leases or subleases do not interfere in any material respect with the business of Parent and its Restricted Subsidiaries, taken as a whole, and in each case, such license, sublicense, lease or sublease is to be subject to the Liens granted to the Collateral Trustee pursuant to the Security Documents or (B) otherwise expressly permitted by the Security Documents;
     (11) easements (including, without limitation, reciprocal easement agreements and utility agreements), rights-of-way, covenants, reservations, encroachments, land use restrictions, encumbrances or other similar matters and title defects, in each case as they relate to Real Property Assets, which (A) do not interfere materially with the ordinary conduct of the business of the Company or its utilization of such property, (B) do not materially detract from the value of

26


 

the property to which they attach or materially impair the use thereof to the Company and (C) do not materially adversely affect the marketability of the applicable property;
     (12) salvage or similar rights of insurers, in each case as it relates to Cure Collateral, if any;
     (13) Liens pursuant to the Credit Agreement and the Co-Branded Agreement that are required to be released pursuant to the Escrow Conditions; provided that upon the Release Date this clause (13) will no longer be applicable to the Notes and have no force and effect; and
     (14) Liens incurred in the ordinary course of business of Parent or any Restricted Subsidiary of Parent with respect to obligations that do not exceed $7.0 million at any one time outstanding.
     “Permitted Refinancing Indebtedness” means any Indebtedness of Parent or any of its Restricted Subsidiaries issued in exchange for, or the net proceeds of which are used to renew, refund, extend, refinance, replace, defease or discharge other Indebtedness of Parent or any of its Restricted Subsidiaries (other than intercompany Indebtedness); provided that:
     (1) the principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness does not exceed the original principal amount (or accreted value, if applicable) of the Indebtedness renewed, refunded, extended, refinanced, replaced, defeased or discharged (plus all accrued interest on the Indebtedness and the amount of all fees and expenses, including premiums, incurred in connection therewith);
     (2) if such Permitted Refinancing Indebtedness has a maturity date that is after the maturity date of the Notes (with any amortization payment comprising such Permitted Refinancing Indebtedness being treated as maturing on its amortization date), such Permitted Refinancing Indebtedness has a Weighted Average Life to Maturity that is (A) equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being renewed, refunded, extended, refinanced, replaced, defeased or discharged or (B) more than 90 days after the final maturity date of the Notes;
     (3) if the Indebtedness being renewed, refunded, extended, refinanced, replaced, defeased or discharged is subordinated in right of payment to the Notes, such Permitted Refinancing Indebtedness is subordinated in right of payment to the Notes on terms at least as favorable to the Holders of Notes as those contained in the documentation governing the Indebtedness being renewed, refunded, extended, refinanced, replaced, defeased or discharged;
     (4) no Restricted Subsidiary that is not a Guarantor shall be an obligor with respect to such Permitted Refinancing Indebtedness unless such non-Guarantor Restricted Subsidiary was an obligor with respect to the Indebtedness being renewed, refunded, extended, refinanced, replaced, defeased or discharged; and
     (5) notwithstanding that the Indebtedness being renewed, refunded, refinanced, extended, replaced, defeased or discharged may have been repaid or discharged by Parent or any of its Restricted Subsidiaries prior to the date on which the new Indebtedness is incurred, Indebtedness that otherwise satisfies the requirements of this definition may be designated as Permitted Refinancing Indebtedness so long as such renewal, refunding, refinancing, extension, replacement, defeasance or discharge occurred not more than 36 months prior to the date of such incurrence of Permitted Refinancing Indebtedness.

27


 

     “Person” means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, limited liability company or government or other entity.
     “Priority Lien” means a Lien granted by a Security Document to the Collateral Trustee, at any time, upon any property of the Company to secure Priority Lien Obligations.
     “Priority Lien Cap” means $500.0 million (plus the aggregate amount of accrued interest and the amount of all fees and expenses, including premiums, paid or incurred in connection with any refunding, replacement or other refinancing of Priority Lien Debt with the proceeds of other Priority Lien Debt that was permitted to be incurred under the Senior Secured Indenture), minus the aggregate amount of all Net Proceeds of any Sale of Collateral applied by the Company since the date of the Senior Secured Indenture to repay or redeem the Senior Secured Notes due 2013 or any Priority Lien Debt under a Credit Facility that is term Indebtedness or to repay other Priority Lien Debt or to repay Priority Lien Debt under a Credit Facility that is revolving credit Indebtedness and effect a corresponding commitment reduction thereunder pursuant to Section 4.10 hereof, and minus the principal amount of any Permitted Refinancing Indebtedness not constituting Priority Lien Debt the proceeds of which are applied to refinance, refund, repay, redeem, defease or otherwise acquire or retire for value any Priority Lien Debt.
     “Priority Lien Debt” means:
     (1) the Senior Secured Notes due 2013; and
     (2) additional notes issued under any indenture (including the Senior Secured Indenture) or other Indebtedness (including letters of credit and reimbursement obligations with respect thereto but excluding Hedging Obligations) of the Company that is secured equally and ratably with the Senior Secured Notes due 2013 on a priority basis by a Priority Lien that is permitted to be incurred and so secured under each applicable Secured Debt Document; provided, in the case of any Indebtedness referred to in this clause (2), that:
     (A) on or before the date on which such future Indebtedness is incurred by the Company, such Indebtedness is designated by the Company, in an Officers’ Certificate delivered to each Priority Lien Representative and the Collateral Trustee, as “Priority Lien Debt” for purposes of the Secured Debt Documents; provided that no Series of Secured Debt may be designated as both Junior Lien Debt and Priority Lien Debt;
     (B) the Priority Lien Representative for such Indebtedness executes a joinder in the form required under the Collateral Trust Agreement and such Indebtedness is governed by a credit agreement or other agreement that includes a Lien Sharing and Priority Confirmation;
     (C) all requirements set forth in the Collateral Trust Agreement as to the confirmation, grant or perfection of the Collateral Trustee’s Priority Lien to secure such Indebtedness or Obligations in respect thereof are satisfied (and the satisfaction of such requirements and the other provisions of this clause (C) will be conclusively established if the Company delivers to the Collateral Trustee an Officers’ Certificate stating that such requirements and other provisions have been satisfied and that such Indebtedness is “Priority Lien Debt”); and

28


 

     (D) such Indebtedness (i) matures after the final maturity date of the Senior Secured Notes due 2013 and (ii) has a Weighted Average Life to Maturity greater than the Weighted Average Life to Maturity of the Senior Secured Notes due 2013.
     For the avoidance of doubt, Banking Product Obligations and Hedging Obligations do not constitute Priority Lien Debt, but may constitute Priority Lien Obligations.
     “Priority Lien Debt Value Ratio” means, as of any date of determination, the ratio of (a) the Appraised Value of the Collateral as of that date to (b) the aggregate principal amount of Priority Lien Debt outstanding as of that date (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Parent and its Restricted Subsidiaries thereunder). In the case of an Asset Sale after the Release Date that constitutes a Sale of Collateral (as described in Section 4.10 hereof), the pro forma Priority Lien Debt Value Ratio, as calculated under Section 4.10 hereof will be deemed solely for purposes of the provisions described in Section 4.10 hereof) to be greater than 1.5 to 1.0 in the event that there is no Priority Lien Debt outstanding at the time of such Asset Sale.
     “Priority Lien Documents” means the Senior Secured Indenture, any other Credit Facility pursuant to which any Priority Lien Debt is incurred, any Hedge Agreement pursuant to which any Hedging Obligations constituting Priority Lien Obligations are incurred, any agreement pursuant to which any Banking Product Obligations constituting Priority Lien Obligations are incurred and the Security Documents.
     “Priority Lien Obligations” means the Priority Lien Debt and all other Obligations in respect of Priority Lien Debt, together with the sum of (a) Hedging Obligations evidenced by a Hedge Agreement that includes a Lien Sharing and Priority Confirmation and meets all of the other requirements of the Collateral Trust Agreement to be Priority Lien Obligations and that have been designated as “Priority Lien Obligations” in an Officers’ Certificate delivered to the Collateral Trustee on the date on which the Hedge Agreement relating to such Hedging Obligation was entered into (1) having an aggregate “settlement amount” (or similar term) (as defined in the applicable Hedge Agreement relating to Priority Lien Obligations consisting of a Hedging Obligation) or (2), with respect to any such Hedge Agreement that has been terminated in accordance with its terms, the amount then due and payable (exclusive of expenses and similar payments but including any termination payments then due) under such Hedge Agreement, under all Hedge Agreements relating to Priority Lien Obligations consisting of Hedging Obligations, minus the aggregate amount of all Net Proceeds of any Sale of Collateral applied by the Company since the date of the Senior Secured Indenture to repay any Hedging Obligations pursuant to the terms of the Priority Lien Documents under which such Hedging Obligations are secured or intended to be secured; provided that the “settlement amount” (or similar term) as of the last Business Day of the month preceding any date of determination shall be calculated by the appropriate swap counterparties and reported to the Collateral Trustee upon request plus (b) Banking Product Obligations of the Company that are evidenced by an agreement that includes a Lien Sharing and Priority Confirmation and meets all of the other requirements of the Collateral Trust Agreement to be Priority Lien Obligations and that have been designated as “Priority Lien Obligations” in an Officers’ Certificate delivered to the Collateral Trustee on the date on which the agreement relating to such Banking Product Obligation was entered into, in an aggregate amount not to exceed, together with the amounts referred to in clause (a) above, $15.0 million.
     “Priority Lien Representative” means (a) in the case of the Senior Secured Notes due 2013, the trustee under the Senior Secured Indenture or (b) in the case of any other Series of Priority Lien Debt, the trustee, agent or representative of the Holders of such Series of Priority Lien Debt who maintains the transfer register for such Series of Priority Lien Debt and is appointed as a representative of the Priority

29


 

Lien Debt (for purposes related to the administration of the security documents) pursuant to the credit agreement or other agreement governing such Series of Priority Lien Debt.
     “Private Placement Legend” means the legend set forth in Section 2.06(f)(1) hereof to be placed on all Notes issued under this Indenture except where otherwise permitted by the provisions of this Indenture.
     “QEC Kits” means the quick engine change kits of the Company.
     “QIB” means a “qualified institutional buyer” as defined in Rule 144A.
     “Qualified Receivables Transaction” means any transaction or series of transactions entered into by Parent or any of its Subsidiaries pursuant to which Parent or any of its Subsidiaries sells, conveys or otherwise transfers to (a) a Receivables Subsidiary or any other Person (in the case of a transfer by Parent or any of its Subsidiaries) and (b) any other Person (in the case of a transfer by a Receivables Subsidiary), or grants a security interest in, any accounts receivable (whether now existing or arising in the future) of Parent or any of its Subsidiaries, and any assets related thereto including, without limitation, all Equity Interests and other investments in the Receivables Subsidiary, all collateral securing such accounts receivable, all contracts and all guarantees or other obligations in respect of such accounts receivable, proceeds of such accounts receivable and other assets which are customarily transferred or in respect of which security interests are customarily granted in connection with asset securitization transactions involving accounts receivable, other than assets that constitute Collateral or proceeds of Collateral.
     “Qualified Replacement Assets” means any aircraft, spare engines, Asian Pacific Routes, Asian Pacific Slots or Asian Pacific Gate Leaseholds (a) which the Company owns or in which the Company has any rights or the power to transfer rights, (b) in which the Company pledges such ownership interests or rights as Collateral under the Security Documents to secure Secured Debt Obligations and (c) which are subject to a perfected Secured Debt Lien in favor of the Collateral Trustee for the benefit of the holders of the Secured Debt Obligations subject only to Permitted Liens, pursuant to arrangements reasonably satisfactory to the Collateral Trustee.
     “Qualifying Equity Interests” means Equity Interests of Parent other than Disqualified Stock.
     “Real Estate Mortgages” means, collectively, each mortgage granted pursuant to the terms of this Indenture, as the same may be amended, restated, modified, supplemented, extended or amended and restated from time to time.
     “Real Property Assets” means those certain parcels of real property owned in fee by the Company and located at (a) 1200 Algonquin Road, Elk Grove Village, Illinois 60007 and (b) the Denver Training Facility and together with, in each case, all buildings, improvements, facilities, appurtenant fixtures and equipment, easements and other property and rights incidental or appurtenant to the ownership of such parcel of real property (as each such real property is more particularly described in the applicable Real Estate Mortgage) (including, without limitation, all collateral described in the applicable Real Estate Mortgage) and, from time to time, all collateral identified in a Real Estate Mortgage granted pursuant to the terms of this Indenture and designated as Cure Collateral in accordance with Sections 4.20 and 4.21 hereof.
     “Receivables Subsidiary” means a Subsidiary of Parent which engages in no activities other than in connection with the financing of accounts receivable and which is designated by the Board of Directors of Parent (as provided below) as a Receivables Subsidiary (a) no portion of the Indebtedness or any other Obligations (contingent or otherwise) of which (1) is guaranteed by Parent or any Restricted Subsidiary of

30


 

Parent (other than comprising a pledge of the Capital Stock or other interests in such Receivables Subsidiary (an “incidental pledge”), and excluding any guarantees of Obligations (other than the principal of, and interest on, Indebtedness) pursuant to representations, warranties, covenants and indemnities entered into in the ordinary course of business in connection with a Qualified Receivables Transaction), (2) is recourse to or obligates Parent or any Restricted Subsidiary of Parent in any way other than through an incidental pledge pursuant to representations, warranties, covenants and indemnities entered into in the ordinary course of business in connection with a Qualified Receivables Transaction or (3) subjects any property or asset of Parent or any Subsidiary of Parent (other than accounts receivable and related assets as provided in the definition of “Qualified Receivables Transaction”), directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to representations, warranties, covenants and indemnities entered into in the ordinary course of business in connection with a Qualified Receivables Transaction, (b) with which neither Parent nor any Subsidiary of Parent has any material contract, agreement, arrangement or understanding (other than pursuant to the Qualified Receivables Transaction) other than on terms no less favorable to Parent or such Subsidiary than those that might be obtained at the time from Persons who are not Affiliates of Parent, other than fees payable in the ordinary course of business in connection with servicing accounts receivable and (c) with which neither Parent nor any Subsidiary of Parent has any obligation to maintain or preserve such Subsidiary’s financial condition, other than a minimum capitalization in customary amounts, or cause such Subsidiary to achieve certain levels of operating results. Any such designation by the Board of Directors of Parent will be evidenced to the Trustee by filing with the Trustee a certified copy of the resolution of the Board of Directors of Parent giving effect to such designation and an Officers’ Certificate certifying that such designation complied with the foregoing conditions.
     “Regulation S” means Regulation S promulgated under the Securities Act, as it may be amended from time to time, and any successor provision thereto.
     “Regulation S Global Note” means a Global Note substantially in the form of Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of and registered in the name of the Depositary or its nominee, issued in a denomination equal to the outstanding principal amount of the Notes sold in reliance on Rule 903 of Regulation S.
     “Release Date” has the meaning set forth in the Collateral Trust Agreement.
     “Responsible Officer” when used with respect to the Trustee, means any officer within the Corporate Trust Office of the Trustee (or any successor group of the Trustee) or any other officer of the 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 his knowledge of and familiarity with the particular subject.
     “Restricted Definitive Note” means a Definitive Note bearing the Private Placement Legend.
     “Restricted Global Note” means a Global Note bearing the Private Placement Legend.
     “Restricted Investment” means an Investment other than a Permitted Investment.
     “Restricted Period” means the 40-day distribution compliance period as defined in Regulation S.
     “Restricted Subsidiary” of a Person means any Subsidiary of the referent Person that is not an Unrestricted Subsidiary.

31


 

     “Route” means the authority the Company now holds, or hereafter acquires from the DOT pursuant to Title 49 or other applicable law, to operate scheduled foreign air transportation of persons, property and mail, including applicable designations, frequencies, certificates, Fifth-Freedom Rights and “behind and beyond rights,” in each case whether or not utilized by the Company.
     “Rule 144” means Rule 144 promulgated under the Securities Act.
     “Rule 144A” means Rule 144A promulgated under the Securities Act.
     “Rule 903” means Rule 903 promulgated under the Securities Act.
     “Rule 904” means Rule 904 promulgated under the Securities Act.
     “SEC” means the Securities and Exchange Commission.
     “Securities Act” means the Securities Act of 1933, as amended.
     “Sale of Collateral” means any Asset Sale to the extent involving a sale, lease or other disposition of Japan Slots or Japan Gate Leaseholds or any property or asset that constitutes Collateral. For the avoidance of doubt, the Company will not sell, lease, convey, transfer or otherwise dispose of the Japan Routes.
     “Secured Debt” means Priority Lien Debt and Junior Lien Debt.
     “Secured Debt Documents” means the Priority Lien Documents and Junior Lien Documents.
     “Secured Debt Lien” means a Lien granted by a Security Document to the Collateral Trustee, at any time, upon any property of the Company to secure Secured Debt Obligations.
     “Secured Debt Obligations” means Priority Lien Obligations and Junior Lien Obligations.
     “Secured Debt Representative” means each Junior Lien Representative and each Priority Lien Representative.
     “Secured Debt Value Ratio” means, as of any date of determination, the ratio of (1) the Appraised Value of the Collateral as of that date to (2) the aggregate principal amount of Secured Debt outstanding as of that date (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Parent and its Restricted Subsidiaries thereunder).
     “Secured Parties” means the holders of Secured Debt Obligations and the Secured Debt Representatives.
     “Security Documents” means the Collateral Trust Agreement, each Lien Sharing and Priority Confirmation, and all security agreements, pledge agreements, collateral assignments, mortgages, deeds of trust, collateral agency agreements, control agreements or other grants or transfers for security executed and delivered by the Company creating (or purporting to create) a Lien upon Collateral in favor of the Collateral Trustee, for the benefit of the Secured Parties, in each case, as amended, amended and restated, modified, renewed, restated or replaced, in whole or in part, from time to time, in accordance with its terms and Section 7.1 of the Collateral Trust Agreement; provided, that the Escrow and Security Agreement shall not be deemed a “Security Document.”

32


 

     “Senior Secured Indenture” means the indenture, dated as of the date of this Indenture, among United, the Guarantors, The Bank of New York Mellon Trust Company, N.A., as trustee, and Wilmington Trust FSB, as collateral trustee, governing the Senior Secured Notes due 2013, as amended, amended and restated, modified, renewed, restated or replaced, in whole or in part.
     “Senior Secured Notes due 2013” means $500.0 million in aggregate principal amount of United’s 9.875% Senior Secured Notes due 2013.
     “Senior Secured Notes Escrow and Security Agreement” means that certain escrow and security agreement, dated as of the date of the Senior Secured Indenture, among United, The Bank of New York Mellon Trust Company, N.A., as trustee, and The Bank of New York Mellon Trust Company, N.A., as escrow agent, for the sole benefit of the holders of the Senior Secured Notes due 2013, as such agreement may be amended, amended and restated, adjusted, supplemented or otherwise modified from time to time.
     “Series of Junior Lien Debt” means, severally, the Notes and each issue or series of Junior Lien Debt for which a single transfer register is maintained and any other Indebtedness under any other indenture or Credit Facility that constitutes Junior Lien Obligations.
     “Series of Priority Lien Debt” means, severally, the Senior Secured Notes due 2013, any additional notes or other indebtedness under any other indenture or Credit Facility that constitutes Priority Lien Obligations.
     “Series of Secured Debt” means, severally, each Series of Junior Lien Debt and each Series of Priority Lien Debt.
     “Significant Subsidiary” means any Restricted Subsidiary that would be a “significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation is in effect on the date of this Indenture.
     “Slot” means (a) in the case of airports outside the United States, at any time, the right and operational authority to conduct one landing or takeoff at a specific time or during a specific time period or (b) in the case of airports in the United States, at any time, the right and operational authority to conduct one Instrument Flight Rule (as defined in Title 14) scheduled landing or takeoff operation at a specific time or during a specific time period at any airport at which landings or takeoffs are restricted, including, without limitation, slots, arrival and operating authorizations, whether pursuant to FAA or DOT regulations or orders pursuant to Title 14, Title 49 or other federal statutes now or hereinafter in effect.
     “Special Interest” means additional interest on all outstanding Notes in an amount equal to 2.0% per annum of the principal amount of such Notes, payable as described (a) in clause (4)(B)(i) of Section 4.10(a) hereof and (b) in Section 4.20 hereof; provided that in no event will the aggregate amount of Special Interest payable at any one time pursuant to clauses (a) and (b) above together exceed 2.0% per annum of the principal amount of such Notes. For the avoidance of doubt, Special Interest payable pursuant to clauses (a) and (b) above are independent obligations governed by separate provisions of this Indenture and the termination of the obligation to pay Special Interest under one such provision does not automatically terminate the obligation to pay Special Interest under the other provision. Special Interest payable pursuant to clauses (a) or (b) above will be calculated and paid in the same manner as regular interest is calculated and paid under this Indenture and all references to payments of interest will be deemed to include Special Interest, if applicable.

33


 

     “Standard Securitization Undertakings” means all representations, warranties, covenants, indemnities, performance Guarantees and servicing obligations entered into by Parent or any Subsidiary (other than a Receivables Subsidiary), which are customary in connection with any Qualified Receivables Transaction.
     “Stated Maturity” means, with respect to any installment of interest or principal on any series of Indebtedness, the date on which the payment of interest or principal was scheduled to be paid in the documentation governing such Indebtedness as of the date of this Indenture, and will not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof.
     “Subordinated Lien Cap” means as of any date of determination, the aggregate amount of Junior Lien Debt and/or Third Lien Debt that may be incurred by the Company such that, after giving pro forma effect to such incurrence and the application of the net proceeds therefrom the Total Appraised Value Ratio would be no less than 1.0 to 1.0.
     “Subsidiary” means, with respect to any specified Person:
     (1) any corporation, association or other business entity (other than a partnership, joint venture or limited liability company) of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency and after giving effect to any voting agreement or stockholders’ agreement that effectively transfers voting power) to vote in the election of directors, managers or trustees of the corporation, association or other business entity is at the time of determination owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and
     (2) any partnership, joint venture or limited liability company of which (A) more than 50% of the capital accounts, distribution rights, total equity and voting interests or general and limited partnership interests, as applicable, are owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof, whether in the form of membership, general, special or limited partnership interests or otherwise and (B) such Person or any Subsidiary of such Person is a controlling general partner or otherwise controls such entity.
     “Third Lien Debt” means Indebtedness secured by Liens on Collateral that are subordinated to Priority Lien Obligations and Junior Lien Obligations on terms that are substantially identical (as conclusively determined in good faith by an Officer of the Company and evidenced in an Officers’ Certificate delivered to the Trustee) to the subordination provisions applicable to Junior Lien Obligations set forth in the Collateral Trust Agreement as of the date of this Indenture that subordinate the Junior Lien Obligations to the Priority Lien Obligations.
     “Third Lien Obligations” means all Obligations in respect of Third Lien Debt, including Hedging Obligations that are secured, or intended by the Company to be secured, by a Lien on Collateral that is pari passu with the Lien securing Third Lien Debt, including subordination to Priority Lien Obligations and Junior Lien Obligations on terms that are substantially identical (as conclusively determined in good faith by an officer of the Company and evidenced in an Officers’ Certificate delivered to the Trustee) to the subordination provisions applicable to Junior Lien Obligations set forth in the Collateral Trust Agreement as of the date of this Indenture.

34


 

     “Title 14” means Title 14 of the U.S. Code of Federal Regulations, including Part 93, Subparts K and S thereof, as amended from time to time or any successor or recodified regulation.
     “Title 49” means Title 49 of the U.S. Code, which, among other things, recodified and replaced the U.S. Federal Aviation Act of 1958, and the rules and regulations promulgated pursuant thereto or any subsequent legislation that amends, supplements or supersedes such provisions.
     “Total Appraised Value Ratio” means, as of any date of determination, the ratio of (a) the Appraised Value of the Collateral as of that date to (b) the aggregate principal amount of Secured Debt and Third Lien Debt outstanding as of that date (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Parent and its Restricted Subsidiaries thereunder), excluding Hedging Obligations.
     “Treasury Rate” means, as of any redemption date, the yield to maturity as of such redemption date of U.S. Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two Business Days prior to the redemption date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the redemption date to February 1, 2012; provided, however, that if the period from the redemption date to February 1, 2012 is less than one year, the weekly average yield on actually traded U.S. Treasury securities adjusted to a constant maturity of one year will be used.
     “Trustee” means The Bank of New York Mellon Trust Company, N.A. until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor serving hereunder.
     “Uniform Commercial Code” means the Uniform Commercial Code as in effect from time to time in any applicable jurisdiction.
     “United States Citizen” means a Person meeting the definition set forth in Section 40102(a)(15) of Title 49, as such term has been interpreted by the DOT.
     “Unrestricted Definitive Note” means a Definitive Note that does not bear and is not required to bear the Private Placement Legend.
     “Unrestricted Global Note” means a Global Note that does not bear and is not required to bear the Private Placement Legend.
     “Unrestricted Subsidiary” means any Subsidiary of Parent (except the Company) that is designated by the Board of Directors of Parent as an Unrestricted Subsidiary in compliance with Section 4.18 hereof pursuant to a resolution of the Board of Directors, but only to the extent that such Subsidiary:
     (1) has no Indebtedness other than Non-Recourse Debt;
     (2) except as permitted by Section 4.11 hereof, is not party to any agreement, contract, arrangement or understanding with Parent or any Restricted Subsidiary of Parent unless the terms of any such agreement, contract, arrangement or understanding are no less favorable to Parent or such Restricted Subsidiary than those that might be obtained at the time from Persons who are not Affiliates of Parent;

35


 

     (3) is a Person with respect to which neither Parent nor any of its Restricted Subsidiaries has any direct or indirect obligation (A) to subscribe for additional Equity Interests or (B) to maintain or preserve such Person’s financial condition or to cause such Person to achieve any specified levels of operating results; and
     (4) has not guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of Parent or any of its Restricted Subsidiaries.
     “U.S. Person” means a U.S. Person as defined in Rule 902(k) promulgated under the Securities Act.
     “Use or Lose Rule” means, with respect to Slots, any applicable utilization requirements issued by the FAA, other Governmental Authorities, any Foreign Aviation Authorities or any Airport Authorities, including the terms of Section 93.227 of Title 14 to the extent applicable.
     “Voting Stock” of any specified Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.
     “Weighted Average Life to Maturity” means, when applied to any Indebtedness at any date, the number of years obtained by dividing:
     (1) the sum of the products obtained by multiplying (A) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect of the Indebtedness, by (B) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by
     (2) the then outstanding principal amount of such Indebtedness.
Section 1.02 Other Definitions.
         
    Defined in
Term   Section
“Affiliate Transaction”
    4.11  
“Asset Sale Offer”
    4.10  
“Authentication Order”
    2.02  
“Calculation Date”
    1.01  
“Change of Control Offer”
    4.15  
“Change of Control Payment”
    4.15  
“Change of Control Payment Date”
    4.15  
“Collateral Proceeds Account”
    4.10  
“Consideration Remainder”
    4.10  
“Covenant Defeasance”
    8.03  
“disposition”
    1.01  
“DTC”
    2.03  
“Event of Default”
    6.01  
“Excess Proceeds”
    4.10  
“incur”
    4.09  
“Legal Defeasance”
    8.02  
“Offer Amount”
    3.10  
“Offer Period”
    3.10  

36


 

         
    Defined in
Term   Section
“Other Offer Notes”
    4.10  
“Paying Agent”
    2.03  
“Permitted Debt”
    4.09  
“Permitted Person”
    1.01  
“Priority Lien Debt Officers’ Certificate”
    4.20  
“Purchase Date”
    3.10  
“Reference Date”
    4.20  
“Registrar”
    2.03  
“Restricted Payments”
    4.07  
“Sale of Collateral Consideration”
    4.10  
“Sale of Collateral Offer”
    4.10  
“Secured Debt Officers’ Certificate”
    4.20  
“Special Scheduled Maturity Date”
    3.09  
“Special Scheduled Maturity Date Price”
    3.09  
Section 1.03 Rules of Construction.
     Unless the context otherwise requires:
     (1) a term has the meaning assigned to it;
     (2) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;
     (3) “or” is not exclusive;
     (4) words in the singular include the plural, and in the plural include the singular;
     (5) “will” shall be interpreted to express a command;
     (6) provisions apply to successive events and transactions;
     (7) “including” means including without limitation; and
     (8) references to sections of or rules under the Securities Act or the Exchange Act will be deemed to include substitute, replacement of successor sections or rules adopted by the SEC from time to time.
ARTICLE 2
THE NOTES
Section 2.01 Form and Dating.
     (a) General. The Notes and the Trustee’s certificate of authentication will be substantially in the form of Exhibit A hereto. The Notes may have notations, legends or endorsements required by law, stock exchange rule or usage. Each Note will be dated the date of its authentication. The Notes shall be in denominations of $2,000 and integral multiples of $1,000 in excess thereof.

37


 

     The terms and provisions contained in the Notes will constitute, and are hereby expressly made, a part of this Indenture and the Company, the Guarantors, the Trustee and the Collateral Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. However, to the extent any provision of any Note conflicts with the express provisions of this Indenture, the provisions of this Indenture shall govern and be controlling.
     (b) Global Notes. Global Notes will be substantially in the form of Exhibit A hereto (including the Global Note Legend set forth in Section 2.06(f) hereof and the “Schedule of Exchanges of Interests in the Global Note” attached thereto). Definitive Notes will be substantially in the form of Exhibit A hereto (but without the Global Note Legend and without the “Schedule of Exchanges of Interests in the Global Note” attached thereto). Each Global Note will represent such of the outstanding Notes as will be specified therein and each shall provide that it represents the aggregate principal amount of outstanding Notes from time to time endorsed thereon and that the aggregate principal amount of outstanding Notes represented thereby may from time to time be reduced or increased, as appropriate, to reflect exchanges and redemptions. Any endorsement of a Global Note to reflect the amount of any increase or decrease in the aggregate principal amount of outstanding Notes represented thereby will be made by the Trustee or the Custodian, at the direction of the Trustee, in accordance with instructions given by the Holder thereof as required by Section 2.06 hereof.
     (c) Euroclear and Clearstream Procedures Applicable. The provisions of the “Operating Procedures of the Euroclear System” and “Terms and Conditions Governing Use of Euroclear” and the “General Terms and Conditions of Clearstream Banking” and “Customer Handbook” of Clearstream and, in each case, any successor provisions, will be applicable to transfers of beneficial interests in the Regulation S Global Notes that are held by Participants through Euroclear or Clearstream.
Section 2.02 Execution and Authentication.
     At least one Officer must sign the Notes for the Company by manual or facsimile signature.
     If an Officer whose signature is on a Note no longer holds that office at the time a Note is authenticated, the Note will nevertheless be valid.
     A Note will not be valid until authenticated by the manual signature of the Trustee. The signature will be conclusive evidence that the Note has been authenticated under this Indenture.
     The Trustee will, upon receipt of a written order of the Company signed by an Officer (an “Authentication Order”), authenticate Notes for original issue that may be validly issued under this Indenture, including any Additional Notes issued on or after the Release Date pursuant to Section 2.14 hereof. The aggregate principal amount of Notes outstanding at any time may not exceed the aggregate principal amount of Notes authorized for issuance by the Company pursuant to one or more Authentication Orders, except as provided in Section 2.07 hereof.
     In authenticating the Notes, the Trustee shall receive, and subject to Section 7.01 hereof will be fully protected in relying upon, an Opinion of Counsel stating that this Indenture and such Notes and Note Guarantees, when authenticated and delivered by the Trustee and issued by the Company and the Guarantors in the manner and subject to any conditions specified in such Opinion of Counsel, will constitute valid and binding obligations of the Company and the Guarantors enforceable in accordance with their terms (except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium, or other laws relating to or affecting creditors’ rights and by general principles of equity, and subject to customary assumptions).

38


 

     The Trustee may appoint an authenticating agent acceptable to the Company to authenticate Notes. Unless otherwise provided in the appointment, an authenticating agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as an Agent to deal with Holders of Notes or an Affiliate of the Company.
Section 2.03 Registrar and Paying Agent.
     The Company will maintain or cause to be maintained an office or agency where Notes may be presented for registration of transfer or for exchange (“Registrar”) and an office or agency where Notes may be presented for payment (“Paying Agent”). The Registrar will keep a register of the Notes and of their transfer and exchange. The Company may appoint one or more co-registrars and one or more additional paying agents. The term “Registrar” includes any co-registrar and the term “Paying Agent” includes any additional paying agent. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company will notify the Trustee in writing of the name and address of any Agent not a party to this Indenture. If the Company fails to appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall act as such. Parent or any of its Subsidiaries may act as Paying Agent or Registrar.
     The Company initially appoints the Depository Trust Company (“DTC”) to act as Depositary with respect to the Global Notes.
     The Company initially appoints the Trustee to act as the Registrar and Paying Agent and to act as Custodian with respect to the Global Notes.
Section 2.04 Paying Agent to Hold Money in Trust.
     The Company will require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in trust for the benefit of Holders of Notes or the Trustee all money held by the Paying Agent for the payment of principal, premium or Special Interest, if any, or interest on the Notes (whether such assets have been distributed to it by the Company or any other obligor on the Notes), and will notify the Trustee of any default by the Company in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than Parent or a Subsidiary) will have no further liability for the money. If Parent or a Subsidiary acts as Paying Agent, it will segregate and hold in a separate trust fund for the benefit of the Holders of Notes all money held by it as Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the Company, the Trustee will serve as Paying Agent for the Notes.
Section 2.05 Holder Lists.
     The Trustee will preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of all Holders of Notes. If the Trustee is not the Registrar, the Company will furnish to the Trustee at least two Business Days before each interest payment date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of the Holders of Notes.

39


 

Section 2.06 Transfer and Exchange.
     (a) Transfer and Exchange of Global Notes. A Global Note may not be transferred except as a whole by the Depositary to a nominee of the Depositary, by a nominee of the Depositary to the Depositary or to another nominee of the Depositary, or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary. All Global Notes may be exchanged by the Company for Definitive Notes if:
     (1) the Company delivers to the Trustee notice from the Depositary that it is unwilling or unable to continue to act as Depositary or that it is no longer a clearing agency registered under the Exchange Act and, in either case, a successor Depositary is not appointed by the Company within 120 days after the date of such notice from the Depositary;
     (2) the Company in its sole discretion determines that the Global Notes (in whole but not in part) should be exchanged for Definitive Notes and delivers a written notice to such effect to the Trustee; or
     (3) there has occurred and is continuing a Default or Event of Default with respect to the Notes.
     Upon the occurrence of any of the preceding events in clauses (1), (2) or (3) of this Section 2.06(a), Definitive Notes may be issued in such names as the Depositary shall instruct the Trustee. Global Notes also may be exchanged or replaced, in whole or in part, as provided in Sections 2.07 and 2.10 hereof. Every Note authenticated and delivered in exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof, shall be authenticated and delivered in the form of, and shall be, a Global Note.
     (b) Transfer and Exchange of Beneficial Interests in the Global Notes. The transfer and exchange of beneficial interests in the Global Notes will be effected through the Depositary, in accordance with the provisions of this Indenture and the Applicable Procedures. Beneficial interests in the Restricted Global Notes will be subject to restrictions on transfer comparable to those set forth herein to the extent required by the Securities Act. Transfers of beneficial interests in the Global Notes also will require compliance with either subparagraph (1) or (2) below, as applicable, as well as one or more of the other following subparagraphs, as applicable:
     (1) Transfer of Beneficial Interests in the Same Global Note. Beneficial interests in any Restricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Restricted Global Note in accordance with the transfer restrictions set forth in the Private Placement Legend; provided, however, that prior to the expiration of the Restricted Period, transfers of beneficial interests in the Regulation S Global Note may not be made to a U.S. Person or for the account or benefit of a U.S. Person (other than an Initial Purchaser). Beneficial interests in any Unrestricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note.
     (2) All Other Transfers and Exchanges of Beneficial Interests in Global Notes. In connection with all transfers and exchanges of beneficial interests that are not subject to Section 2.06(b)(1) above, the transferor of such beneficial interest must deliver to the Registrar either:

40


 

     (A) both:
     (i) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to credit or cause to be credited a beneficial interest in another Global Note in an amount equal to the beneficial interest to be transferred or exchanged; and
     (ii) instructions given in accordance with the Applicable Procedures containing information regarding the Participant account to be credited with such increase; or
     (B) upon the occurrence of any of the events in clauses (1), (2) or (3) of Section 2.06(a) hereof, both:
     (i) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to cause to be issued a Definitive Note in an amount equal to the beneficial interest to be transferred or exchanged; and
     (ii) instructions given by the Depositary to the Registrar containing information regarding the Person in whose name such Definitive Note shall be registered to effect the transfer or exchange referred to in clause (1) above;
     Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Notes contained in this Indenture and the Notes or otherwise applicable under the Securities Act, the Trustee shall adjust the principal amount of the relevant Global Note(s) pursuant to Section 2.06(g) hereof.
     (3) Transfer of Beneficial Interests to Another Restricted Global Note. A beneficial interest in any Restricted Global Note may be transferred to a Person who takes delivery thereof in the form of a beneficial interest in another Restricted Global Note if the transfer complies with the requirements of Section 2.06(b)(2) above and the Registrar receives the following:
     (A) if the transferee will take delivery in the form of a beneficial interest in the 144A Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (1) thereof; and
     (B) if the transferee will take delivery in the form of a beneficial interest in the Regulation S Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof; and
     (4) Transfer and Exchange of Beneficial Interests in a Restricted Global Note for Beneficial Interests in an Unrestricted Global Note. A beneficial interest in any Restricted Global Note may be exchanged by any holder thereof for a beneficial interest in an Unrestricted Global Note or transferred to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note if the exchange or transfer complies with the requirements of Section 2.06(b)(2) above and:
     (A) the Registrar receives the following:
     (i) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a beneficial interest in an

41


 

Unrestricted Global Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (1)(a) thereof; or
     (ii) if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (A), if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.
     If any such transfer is effected pursuant to subparagraph (A) above at a time when an Unrestricted Global Note has not yet been issued, the Company shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the aggregate principal amount of beneficial interests transferred pursuant to subparagraph (A) above.
     Beneficial interests in an Unrestricted Global Note cannot be exchanged for, or transferred to Persons who take delivery thereof in the form of, a beneficial interest in a Restricted Global Note.
     (c) Transfer or Exchange of Beneficial Interests for Definitive Notes.
     (1) Beneficial Interests in Restricted Global Notes to Restricted Definitive Notes. Upon the occurrence of any of the events in clauses (1), (2) or (3) of Section 2.06(a) hereof, then, upon receipt by the Registrar of the following documentation:
     (A) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (2)(a) thereof;
     (B) if such beneficial interest is being transferred to a QIB in accordance with Rule 144A, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (1) thereof;
     (C) if such beneficial interest is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2) thereof;
     (D) if such beneficial interest is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(a) thereof;
     (E) if such beneficial interest is being transferred to an Institutional Accredited Investor in reliance on an exemption from the registration requirements of the

42


 

Securities Act other than those listed in subparagraphs (B) through (D) above, a certificate to the effect set forth in Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable; or
     (F) if such beneficial interest is being transferred to the Company or any of its Subsidiaries, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(b) thereof,
the Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(g) hereof, and the Company shall execute and the Trustee shall authenticate and deliver to the Person designated in the instructions a Definitive Note in the appropriate principal amount. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from the Depositary and the Participant or Indirect Participant. The Trustee shall deliver such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c)(1) shall bear the Private Placement Legend and shall be subject to all restrictions on transfer contained therein.
     (2) Beneficial Interests in Restricted Global Notes to Unrestricted Definitive Notes. Upon the occurrence of any of the events in clauses (1), (2) or (3) of Section 2.06(a) hereof, a holder of a beneficial interest in a Restricted Global Note may exchange such beneficial interest for an Unrestricted Definitive Note or may transfer such beneficial interest to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note only if:
     (A) the Registrar receives the following:
     (i) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for an Unrestricted Definitive Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (1)(b) thereof; or
     (ii) if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (A), if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.
     (3) Beneficial Interests in Unrestricted Global Notes to Unrestricted Definitive Notes. Upon the occurrence of any of the events in clauses (1), (2) or (3) of Section 2.06(a) hereof, if any holder of a beneficial interest in an Unrestricted Global Note proposes to exchange such beneficial interest for a Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Definitive Note, then, upon satisfaction of the

43


 

conditions set forth in Section 2.06(b)(2) hereof, the Trustee will cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(g) hereof, and the Company will execute and the Trustee will authenticate and deliver to the Person designated in the instructions a Definitive Note in the appropriate principal amount. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(3) will be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest requests through instructions to the Registrar from or through the Depositary and the Participant or Indirect Participant. The Trustee will deliver such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(3) will not bear the Private Placement Legend.
     (d) Transfer and Exchange of Definitive Notes for Beneficial Interests.
     (1) Restricted Definitive Notes to Beneficial Interests in Restricted Global Notes. If any Holder of a Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note or to transfer such Restricted Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in a Restricted Global Note, then, upon receipt by the Registrar of the following documentation:
     (A) if the Holder of such Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (2)(b) thereof;
     (B) if such Restricted Definitive Note is being transferred to a QIB in accordance with Rule 144A, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (1) thereof;
     (C) if such Restricted Definitive Note is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2) thereof;
     (D) if such Restricted Definitive Note is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item
(3)(a) thereof;
     (E) if such Restricted Definitive Note is being transferred to an Institutional Accredited Investor in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (B) through (D) above, a certificate to the effect set forth in Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable; or
     (F) if such Restricted Definitive Note is being transferred to the Company or any of its Subsidiaries, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(b) thereof,
the Trustee will cancel the Restricted Definitive Note, increase or cause to be increased the aggregate principal amount of, in the case of clause (A) above, the appropriate Restricted Global Note, in the case of clause (B) above, the 144A Global Note and in the case of clause (C) above, the Regulation S Global Note.

44


 

     (2) Restricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes. A Holder of a Restricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Restricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note only if:
     (A) the Registrar receives the following:
     (i) if the Holder of such Definitive Notes proposes to exchange such Notes for a beneficial interest in the Unrestricted Global Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (1)(c) thereof; or
     (ii) if the Holder of such Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of a beneficial interest in the Unrestricted Global Note, a certificate from such Holder in the form of Exhibit B hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (A), if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.
     Upon satisfaction of the conditions of any of the subparagraphs in this Section 2.06(d)(2), the Trustee will cancel the Definitive Notes and increase or cause to be increased the aggregate principal amount of the Unrestricted Global Note.
     (3) Unrestricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note at any time. Upon receipt of a request for such an exchange or transfer, the Trustee will cancel the applicable Unrestricted Definitive Note and increase or cause to be increased the aggregate principal amount of one of the Unrestricted Global Notes.
     If any such exchange or transfer from a Definitive Note to a beneficial interest is effected pursuant to subparagraphs (2)(A) or (3) above at a time when an Unrestricted Global Note has not yet been issued, the Company will issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee will authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of Definitive Notes so transferred.
     (e) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon the occurrence of any of the events in clauses (1), (2) or (3) of Section 2.06(a) hereof, then, upon request by a Holder of Definitive Notes and such Holder’s compliance with the provisions of this Section 2.06(e), the Registrar will register the transfer or exchange of Definitive Notes. Prior to such registration of transfer or exchange, the requesting Holder must present or surrender to the Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar duly executed by such Holder or by its attorney, duly authorized in writing. In addition, the requesting Holder

45


 

must provide any additional certifications, documents and information, as applicable, required pursuant to the following provisions of this Section 2.06(e).
     (1) Restricted Definitive Notes to Restricted Definitive Notes. Any Restricted Definitive Note may be transferred to and registered in the name of Persons who take delivery thereof in the form of a Restricted Definitive Note if the Registrar receives the following:
     (A) if the transfer will be made pursuant to Rule 144A, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (1) thereof;
     (B) if the transfer will be made pursuant to Rule 903 or Rule 904, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof; and
     (C) if the transfer will be made pursuant to any other exemption from the registration requirements of the Securities Act, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable.
     (2) Restricted Definitive Notes to Unrestricted Definitive Notes. Any Restricted Definitive Note may be exchanged by the Holder thereof for an Unrestricted Definitive Note or transferred to a Person or Persons who take delivery thereof in the form of an Unrestricted Definitive Note if:
     (A) the Registrar receives the following:
     (i) if the Holder of such Restricted Definitive Notes proposes to exchange such Notes for an Unrestricted Definitive Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (1)(d) thereof; or
     (ii) if the Holder of such Restricted Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such Holder in the form of Exhibit B hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (A), if the Registrar so requests, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.
     (3) Unrestricted Definitive Notes to Unrestricted Definitive Notes. A Holder of Unrestricted Definitive Notes may transfer such Notes to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note. Upon receipt of a request to register such a transfer, the Registrar shall register the Unrestricted Definitive Notes pursuant to the instructions from the Holder thereof.

46


 

     (f) Legends. The following legends will appear on the face of all Global Notes and Definitive Notes issued under this Indenture unless specifically stated otherwise in the applicable provisions of this Indenture.
     (1) Private Placement Legend.
     (A) Each Global Note and each Definitive Note (and all Notes issued in exchange therefor or substitution thereof) shall bear the legend in substantially the following form:
“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) THAT IS [IN THE CASE OF RULE 144A NOTES: SIX MONTHS] [IN THE CASE OF REGULATION S NOTES: 40 DAYS] AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY(A) TO THE ISSUER, (B) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUER’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (C) OR (D) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.”
     (2) Global Note Legend. Each Global Note will bear a legend in substantially the following form:
“THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (4)

47


 

THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.”
     (3) Original Issue Discount Legend. Each Note will bear a legend in substantially the following form:
“THIS SECURITY HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR UNITED STATES FEDERAL INCOME TAX PURPOSES (“OID”). THE ISSUE PRICE, THE AMOUNT OF OID, THE ISSUE DATE AND THE YIELD TO MATURITY MAY BE OBTAINED BY CONTACTING THE VICE PRESIDENT AND TREASURER, UNITED AIR LINES, INC., 77 WEST WACKER DRIVE, CHICAGO, ILLINOIS 60601, TELEPHONE (312) 997-8000.”
     (g) Cancellation and/or Adjustment of Global Notes. At such time as all beneficial interests in a particular Global Note have been exchanged for Definitive Notes or a particular Global Note has been redeemed, repurchased or canceled in whole and not in part, each such Global Note will be returned to or retained and canceled by the Trustee in accordance with Section 2.11 hereof. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the principal amount of Notes represented by such Global Note will be reduced accordingly and an endorsement will be made on the “Schedule of Exchanges of Interests in the Global Note” attached to such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note will be increased accordingly and an endorsement will be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such increase.
     (h) General Provisions Relating to Transfers and Exchanges.
     (1) To permit registrations of transfers and exchanges, the Company will execute and the Trustee will authenticate Global Notes and Definitive Notes upon receipt of an Authentication Order in accordance with Section 2.02 hereof or at the Registrar’s request.
     (2) No service charge will be made to a Holder of a beneficial interest in a Global Note or to a Holder of a Definitive Note for any registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any transfer tax or similar

48


 

governmental charge payable in connection therewith (other than any such transfer taxes or similar governmental charge or notation payable upon exchange, transfer or notation pursuant to Sections 2.10, 3.06, 3.10, 4.10, 4.15 and 9.04 hereof).
     (3) The Registrar will not be required to register the transfer of or exchange of any Note selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part.
     (4) All Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes will be the valid obligations of the Company and the Guarantors, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange.
     (5) Neither the Registrar nor the Company will be required:
     (A) to issue, to register the transfer of or to exchange any Notes during a period beginning at the opening of business 15 days before the day of any selection of Notes for redemption under Section 3.02 hereof and ending at the close of business on the day of selection;
     (B) to register the transfer of or to exchange any Note selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part; or
     (C) to register the transfer of or to exchange a Note between a record date and the next succeeding interest payment date.
     (6) Prior to due presentment for the registration of a transfer of any Note, the Trustee, any Agent and the Company may deem and treat the Person in whose name any Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest on such Notes and for all other purposes, and none of the Trustee, any Agent or the Company shall be affected by notice to the contrary.
     (7) The Trustee will authenticate Global Notes and Definitive Notes in accordance with the provisions of Section 2.02 hereof.
     (8) All certifications, certificates and Opinions of Counsel required to be submitted to the Registrar pursuant to this Section 2.06 to effect a registration of transfer or exchange may be submitted by facsimile.
Section 2.07 Replacement Notes.
     If any mutilated Note is surrendered to the Trustee or the Company and the Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Note, the Company will issue and the Trustee, upon receipt of an Authentication Order, will authenticate a replacement Note if the Trustee’s requirements are met. If required by the Trustee or the Company, an indemnity bond must be supplied by the Holder that is sufficient in the judgment of the Trustee and the Company to protect the Company, the Trustee, any Agent and any authenticating agent from any loss that any of them may suffer if a Note is replaced. The Company may charge for its expenses in replacing a Note, including reasonable fees and expenses of the Trustee.

49


 

     Every replacement Note is an obligation of the Company and will be entitled to all of the benefits of this Indenture equally and proportionately with all other Notes duly issued hereunder.
Section 2.08 Outstanding Notes.
     The Notes outstanding at any time are all the Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those reductions in the interest in a Global Note effected by the Trustee in accordance with the provisions hereof, and those described in this Section 2.08 as not outstanding. Except as set forth in Section 2.09 hereof, a Note does not cease to be outstanding because the Company or an Affiliate of the Company holds the Note; however, Notes held by Parent or a Subsidiary of Parent shall not be deemed to be outstanding for purposes of Section 3.07(b) hereof.
     If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by a protected purchaser.
     If the principal amount of any Note is considered paid under Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.
     If the Paying Agent (other than Parent, a Subsidiary or an Affiliate of any thereof) holds, on a redemption date or maturity date, money sufficient to pay Notes payable on that date, then on and after that date such Notes will be deemed to be no longer outstanding and will cease to accrue interest.
Section 2.09 Treasury Notes.
     In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Company, any Guarantor or any Affiliate of the Company or any Guarantor will be disregarded, except that for the purposes of determining whether the Trustee will be protected in relying on any such direction, waiver or consent, only Notes that the Trustee actually knows are so owned will be so disregarded.
Section 2.10 Temporary Notes.
     Until certificates representing Notes are ready for delivery, the Company may prepare and the Trustee will authenticate temporary Notes. Temporary Notes will be substantially in the form of certificated Notes but may have variations that the Company considers appropriate for temporary Notes and as may be reasonably acceptable to the Trustee. Without unreasonable delay, the Company will prepare and the Trustee will authenticate definitive Notes in exchange for temporary Notes.
     Until such exchange, Holders of temporary Notes will be entitled to all of the rights, benefits and privileges of this Indenture.
Section 2.11 Cancellation.
     The Company at any time may deliver Notes to the Trustee for cancellation. The Registrar and Paying Agent will forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee, or at the direction of the Trustee, the Registrar or the Paying Agent, and no one else, will cancel all Notes surrendered for registration of transfer, exchange, payment, replacement or cancellation and at the written direction of the Company will dispose of canceled Notes in accordance with its then existing procedures therefor (subject to the record retention requirement of the Exchange Act). Certification of such disposal of all canceled Notes will be delivered to the Company

50


 

upon request. The Company may not issue new Notes to replace Notes that it has paid or that have been delivered to the Trustee for cancellation.
Section 2.12 Defaulted Interest.
     If the Company defaults in a payment of interest on the Notes, it will pay the defaulted interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted interest, to the Persons who are Holders of Notes on a subsequent special record date, in each case at the rate provided in the Notes and in Section 4.01 hereof. The Company will notify the Trustee in writing of the amount of defaulted interest proposed to be paid on each Note and the date of the proposed payment. The Company will fix or cause to be fixed each such special record date and payment date; provided that no such special record date may be less than 10 days prior to the related payment date for such defaulted interest. At least 15 days before the special record date, the Company (or, upon the written request of the Company, the Trustee in the name and at the expense of the Company) will mail or cause to be mailed to Holders of Notes a notice that states the special record date, the related payment date and the amount of such interest to be paid.
Section 2.13 CUSIP Numbers.
     The Company in issuing the Notes may use “CUSIP” numbers (if then generally in use), and, if so, the Trustee shall use “CUSIP” numbers in notice issued under this Indenture, including but not limited to notices of redemption, as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes or as contained in any notice of redemption or other notice and that reliance may be placed only on the other elements of identification printed on the Notes, and any such redemption or effect of other such notice shall not be affected by any defect in or omission of such numbers.
Section 2.14 Issuance of Additional Notes.
     After the date of this Indenture, the Company shall be entitled to issue Additional Notes under this Indenture. All the Notes issued under this Indenture shall be treated as a single class for all purposes of this Indenture including waivers, amendments, redemptions and offers to purchase.
     With respect to any Additional Notes, the Company shall set forth in a resolution of the Board of Directors and an Officers’ Certificate, a copy of each which shall be delivered to the Trustee, the following information:
     (a) the aggregate principal amount of such Additional Notes to be authenticated and delivered pursuant to this Indenture; and
     (b) the issue price, the issue date and the CUSIP number of such Additional Notes; provided, however, that no Additional Notes may be issued at a price that would cause such Additional Notes to have “original issue discount” within the meaning of Section 1273 of the Internal Revenue Code of 1986, as amended.

51


 

ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee.
     If the Company elects to redeem Notes pursuant to the optional redemption provisions of Section 3.07 hereof, it must furnish to the Trustee, at least 30 days but not more than 60 days before a redemption date, an Officers’ Certificate setting forth:
     (1) the clause of this Indenture pursuant to which the redemption shall occur;
     (2) the redemption date;
     (3) the principal amount of Notes to be redeemed; and
     (4) the redemption price.
     If the redemption price is not known at the time such notice is to be given, the actual redemption price, calculated as described in the terms of the Notes to be redeemed, will be set forth in an Officers’ Certificate of the Company delivered to the Trustee no later than two Business Days prior to the redemption date.
Section 3.02 Selection of Notes to Be Redeemed or Purchased.
     If less than all of the Notes are to be redeemed or purchased in an offer to purchase at any time, and the Notes are not Global Notes, the Trustee will select Notes for redemption or purchase on a pro rata basis (or, in the case of Global Notes, the Trustee will select Notes for redemption based on DTC’s method that most nearly approximates a pro rata selection), unless otherwise required by law or applicable stock exchange or depositary requirements.
     In the event of partial redemption or purchase by lot, the particular Notes to be redeemed or purchased will be selected, unless otherwise provided herein, not less than 30 nor more than 60 days prior to the redemption or purchase date by the Trustee from the outstanding Notes not previously called for redemption or purchase.
     The Trustee will promptly notify the Company in writing of the Notes selected for redemption or purchase and, in the case of any Note selected for partial redemption or purchase, the principal amount thereof to be redeemed or purchased. Notes and portions of Notes selected will be in amounts of $2,000 or integral multiples of $1,000 in excess thereof; except that if all of the Notes of a Holder are to be redeemed or purchased, the entire outstanding amount of Notes held by such Holder, even if not $2,000 or a multiple of $1,000 in excess thereof, shall be redeemed or purchased. Except as provided in the preceding sentence, provisions of this Indenture that apply to Notes called for redemption or purchase also apply to portions of Notes called for redemption or purchase.
Section 3.03 Notice of Redemption.
     Subject to the provisions of Section 3.10 hereof, at least 30 days but not more than 60 days before a redemption date, the Company will mail or cause to be mailed, by first class mail, a notice of redemption to each Holder whose Notes are to be redeemed at its registered address, except that redemption notices may be mailed more than 60 days prior to a redemption date if the notice is issued in

52


 

connection with a defeasance of the Notes or a satisfaction and discharge of this Indenture pursuant to Articles 8 or 11 hereof.
     The notice will identify the Notes to be redeemed and will state:
     (1) the redemption date;
     (2) the redemption price;
     (3) if any Note is being redeemed in part, the portion of the principal amount of such Note to be redeemed and that, after the redemption date upon surrender of such Note, a new Note or Notes in principal amount equal to the unredeemed portion will be issued upon cancellation of the original Note;
     (4) the name and address of the Paying Agent;
     (5) that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price;
     (6) that, unless the Company defaults in making such redemption payment, interest on Notes called for redemption ceases to accrue on and after the redemption date;
     (7) the paragraph of the Notes and/or Section of this Indenture pursuant to which the Notes called for redemption are being redeemed; and
     (8) that no representation is made as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or printed on the Notes.
     At the Company’s request, the Trustee will give the notice of redemption in the Company’s name and at its expense; provided, however, that the Company has delivered to the Trustee, at least 45 days prior to the redemption date, an Officers’ Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph.
Section 3.04 Effect of Notice of Redemption.
     Once notice of redemption is mailed in accordance with Section 3.03 hereof, Notes called for redemption become irrevocably due and payable on the redemption date at the redemption price. A notice of redemption may not be conditional.
Section 3.05 Deposit of Redemption or Purchase Price.
     On or prior to 11:00 a.m. Eastern Time on the redemption or purchase date, the Company will deposit with the Trustee or with the Paying Agent money sufficient to pay the redemption or purchase price of and accrued interest and Special Interest, if any, on all Notes to be redeemed or purchased on that date. The Trustee or the Paying Agent will promptly return to the Company any money deposited with the Trustee or the Paying Agent by the Company in excess of the amounts necessary to pay the redemption or purchase price of, and accrued interest and Special Interest, if any, on, all Notes to be redeemed or purchased.
     If the Company complies with the provisions of the preceding paragraph, on and after the redemption or purchase date, interest will cease to accrue on the Notes or the portions of Notes called for

53


 

redemption or purchase. If a Note is redeemed or purchased on or after an interest record date but on or prior to the related interest payment date, then any accrued and unpaid interest shall be paid to the Person in whose name such Note was registered at the close of business on such record date. If any Note called for redemption or purchase is not so paid upon surrender for redemption or purchase because of the failure of the Company to comply with the preceding paragraph, interest shall be paid on the unpaid principal, from the redemption or purchase date until such principal is paid, and to the extent lawful on any interest not paid on such unpaid principal, in each case at the rate provided in the Notes and in Section 4.01 hereof.
Section 3.06 Notes Redeemed or Purchased in Part.
     Upon surrender of a Note that is redeemed or purchased in part, the Company will issue and, upon receipt of an Authentication Order, the Trustee will authenticate for the Holder at the expense of the Company a new Note equal in principal amount to the unredeemed or unpurchased portion of the Note surrendered.
Section 3.07 Optional Redemption.
     (a) Except as described in this Section 3.07, the Notes will not be redeemable at the Company’s option prior to February 1, 2012.
     (b) At any time prior to February 1, 2012, the Company may on any one or more occasions redeem up to 35% of the aggregate principal amount of Notes issued under this Indenture, subject to the provisions of Section 3.03 hereof, at a redemption price equal to 112.000% of the aggregate principal amount thereof, plus accrued and unpaid interest and Special Interest, if any, to the date of redemption (subject to the rights of the Holders of Notes on the relevant record date to receive interest on the relevant interest payment date), with the net cash proceeds of an Equity Offering by the Company; provided that:
     (1) at least 50% of the aggregate principal amount of Notes originally issued under this Indenture (excluding Notes held by Parent and its Subsidiaries) remains outstanding immediately after the occurrence of such redemption; and
     (2) the redemption occurs within 90 days of the closing of such Equity Offering.
     (c) At any time prior to February 1, 2012, the Company may on any one or more occasions redeem all or a part of the Notes, subject to the provisions of Section 3.03 hereof, at a redemption price equal to 100% of the principal amount of Notes redeemed, plus the Applicable Premium as of, and accrued and unpaid interest and Special Interest, if any, to the date of redemption, subject to the rights of Holders of Notes on the relevant record date to receive interest due on the relevant interest payment date.
     (d) On or after February 1, 2012, the Company may on any one or more occasions redeem all or a part of the Notes, subject to the provisions of Section 3.03 hereof, at the redemption prices (expressed as percentages of principal amount on the date of redemption), plus accrued and unpaid interest and Special Interest, if any, on the Notes redeemed to the applicable date of redemption, if redeemed during the 12-month period beginning on February 1 of the years set forth below, subject to the rights of Holders of Notes on the relevant record date to receive interest on the relevan