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Exhibit 4.5

GUARANTEE AGREEMENT

           
This GUARANTEE AGREEMENT, dated as of December 30, 1996, is executed and
delivered by UAL Corporation, a Delaware corporation (the "Guarantor"),
and The First National Bank of Chicago as the initial Guarantee Trustee
(as defined herein) for the benefit of the Holders (as defined herein)
from time to time of the Preferred Securities (as defined herein) of UAL
Corporation Capital Trust I, a Delaware statutory business trust (the "Issuer").

           
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of December 30, 1996 among the trustees of the
Issuer named therein, UAL Corporation, as Sponsor, and the Holders from
time to time of undivided beneficial interests in the assets of the Issuer,
the Issuer is issuing as of the date hereof in accordance with the Offer
(as defined herein) $74,982,600 aggregate liquidation amount of its 13-1/4%
Trust Originated Preferred Securities (the "Preferred Securities") representing
undivided beneficial interests in the assets of the Issuer and having the
terms set forth in Exhibit B to the Declaration;

           
WHEREAS, the Preferred Securities will be issued by the Issuer upon deposit
of the Guarantor's Debentures (as defined herein) with the Issuer as trust
assets; and

           
WHEREAS, as incentive for the Holders to exchange Depositary Shares ("Depositary
Shares") representing 1/1,000 of a share of the 12-1/4% Series B Preferred
Stock of the Guarantor for Preferred Securities pursuant to the Offer,
the Guarantor desires to irrevocably and unconditionally agree, to the
extent set forth herein, to pay to the Holders of the Preferred Securities
the Guarantee Payments (as defined herein) and to make certain other payments
on the terms and conditions set forth herein.

           
WHEREAS, the Guarantor is also executing and delivering a guarantee agreement
(the "Common Securities Guarantee Agreement") in substantially identical
terms to this Guarantee Agreement for the benefit of the holders of the
Common Securities (as defined herein), except that if an event of default
under the Indenture has occurred and is continuing, the rights of holders
of the Common Securities to receive Guarantee Payments under the Common
Securities Guarantee Agreement are subordinated to the rights of Holders
to receive Guarantee Payments under this Guarantee Agreement.

           
NOW, THEREFORE, in consideration of the exchange of Depositary Shares for
Preferred Securities, which exchange the Guarantor hereby agrees shall
benefit the Guarantor, the Guarantor executes and delivers this Guarantee
Agreement for the benefit of the Holders from time to time of the Preferred
Securities.

ARTICLE I

           
SECTION 1.1 Definitions. (a) Capitalized terms used in this Guarantee Agreement
but not defined in the preamble above have the respective meanings assigned
to them in this Section

1.1;

           
(b) a term defined anywhere in this Guarantee Agreement has the same meaning
throughout;

           
(c) all references to "the Guarantee Agreement" or "this Guarantee Agreement"
are to this Guarantee Agreement as modified, supplemented or amended from
time to time;

           
(d) all references in this Guarantee Agreement to Articles and Sections
are to Articles and Sections of this Guarantee Agreement unless otherwise
specified;

           
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Guarantee Agreement unless otherwise defined in this Guarantee
Agreement or unless the context otherwise requires; and

           
(f) a reference to the singular includes the plural and vice versa.

           
"Affiliate" has the same meaning as given to that term in Rule 405 of the
Securities Act of 1933, as amended, or any successor rule thereunder.

           
"Commission" means the United States Securities and Exchange Commission.

           
"Common Securities" means the securities representing undivided beneficial
interests in the assets of the Issuer, having the terms set forth in Exhibit
C to the Declaration.

           
"Covered Person" means any Holder of Preferred Securities.

           
"Debentures" means the series of Junior Subordinated Debentures issued
by the Guarantor under the Indenture and entitled the "13-1/4% Junior Subordinated
Debentures due 2026".

           
"Distributions" means the periodic distributions and other payments payable
to Holders of Preferred Securities in accordance with the terms of the
Preferred Securities set forth in Exhibit B to the Declaration.

           
"Event of Default" means a default by the Guarantor on any of its payment
or other obligations under this Guarantee Agreement.

           
"Guarantee Payments" means the following payments or distributions, without
duplication, with respect to the Preferred Securities, to the extent not
paid or made by the Issuer: (i) any accrued and unpaid Distributions and
the redemption price, including all accrued and unpaid Distributions to
the date of redemption (the "Redemption Price"), with respect to the Preferred
Securities called for redemption by the Issuer but if and only to the extent
that in each case the Guarantor has made a payment to the Trust of interest
or principal on the Debentures and (ii) upon a voluntary or involuntary
dissolution, winding-up or termination of the Issuer (other than in connection
with the distribution of Debentures to Holders or the redemption of all
the Preferred Securities upon the maturity or redemption of the Debentures
as provided in the Declaration), the lesser of (a) the aggregate of the
liquidation amount and all accrued and unpaid Distributions on the Preferred
Securities to the date of payment, to the extent the Issuer has funds available
therefor, and (b) the amount of assets of the Issuer remaining available
for distribution to Holders in liquidation of the Issuer (in either case,
the "Liquidation Distribution"). If an event of default under the Indenture
has occurred and is continuing the rights of holders of the Common Securities
to receive payments under the Common Securities Guarantee Agreement are
subordinated to the rights of Holders to receive Guarantee Payments.

           
"Guarantee Trustee" means The First National Bank of Chicago until a Successor
Guarantee Trustee has been appointed and accepted such appointment pursuant
to the terms of this Guarantee Agreement, and thereafter means each such
Successor Guarantee Trustee.

           
"Holder" shall mean any holder, as registered on the books and records
of the Issuer, of any Preferred Securities; provided, however, that in
determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder,
"Holder" shall not include the Guarantor or any entity directly or indirectly
controlling or controlled by or under direct or indirect common control
with the Guarantor.

           
"Indemnified Person" means the Guarantee Trustee, any Affiliate of the
Guarantee Trustee, and any officers, directors, shareholders, members,
partners, employees, representatives or agents of the Guarantee Trustee.

           
"Indenture" means the Indenture dated as of December 20, 1996 between the
Guarantor and The First National Bank of Chicago, as trustee, as supplemented
by the board resolution or supplemental indenture pursuant to which the
Debentures are to be issued.

           
"Majority in liquidation amount of the Preferred Securities" means, except
as otherwise required by the Trust Indenture Act, Holder(s) of outstanding
Preferred Securities voting together as a single class, who are the record
owners of Preferred Securities whose liquidation amount (including the
stated amount that would be paid on redemption, liquidation or otherwise,
plus accrued and unpaid Distributions to the date upon which the voting
percentages are determined) represents more than 50% of the liquidation
amount of all outstanding Preferred Securities.

           
"Offer" means the offer by the Issuer to exchange Preferred Securities
for outstanding Depositary Shares in consideration for the deposit by the
Guarantor of Debentures as trust assets of the Issuer, all as described
in a Prospectus dated November 21, 1996.

           
"Person" means a legal person, including any individual, corporation, estate,
partnership, joint venture, association, joint stock company, limited liability
company, trust, unincorporated association, or government or any agency
or political subdivision thereof, or any other entity of whatever nature.

           
"Preferred Securities" has the meaning set forth in the first recital clause
above.

           
"Redemption Price" means the amount payable on redemption of the Preferred
Securities in accordance with the terms of the Preferred Securities.

           
"Responsible Officer" means, with respect to the Guarantee Trustee, the
chairman of the board of directors, the president, any vice-president,
any assistant vice-president, the secretary, any assistant secretary, the
treasurer, any assistant treasurer, any trust officer or assistant trust
officer or any other officer of the Guarantee Trustee customarily performing
functions similar to those performed by any of the above designated officers
and also means, with respect to a particular corporate trust matter, any
other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.

           
"Successor Guarantee Trustee" means a successor Guarantee Trustee possessing
the qualifications to act as a Guarantee Trustee under Section 4.1.

           
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.

ARTICLE II

TRUST INDENTURE ACT

           
SECTION 2.1 Trust Indenture Act; Application. (a) This Guarantee Agreement
is subject to the provisions of the Trust Indenture Act that are required
to be part of this Guarantee Agreement and shall, to the extent applicable,
be governed by such provisions.

           
(b) If and to the extent that any provision of this Guarantee Agreement
limits, qualifies or conflicts with the duties imposed by Sections 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.

           
(c) The application of the Trust Indenture Act to this Guarantee Agreement
shall not affect the nature of the Preferred Securities as equity securities
representing undivided beneficial interests in the assets of the Issuer.

           
SECTION 2.2 Lists of Holders of Preferred Securities. (a) The Guarantor
shall provide the Guarantee Trustee with such information as is required
under Section 312(a) of the Trust Indenture Act at the times and in the
manner provided in Section 312(a).

           
(b) the Guarantee Trustee shall comply with its obligations under Sections
310(b), 311 and 312(b) of the Trust Indenture Act.

           
SECTION 2.3 Reports by the Guarantee Trustee. Within 60 days after May
15 of each year, the Guarantee Trustee shall provide to the Holders of
the Preferred Securities such reports as are required by Section 313 of
the Trust Indenture Act, if any, in the form, in the manner and at the
times provided by Section 313 of the Trust Indenture Act. The Guarantee
Trustee shall also comply with the requirements of Section 313(d) of the
Trust Indenture Act.

           
SECTION 2.4 Periodic Reports to Guarantee Trustee. The Guarantor shall
provide to the Guarantee Trustee, the Commission and the Holders of the
Preferred Securities, as applicable, such documents, reports and information,
if any, as required by Section 314(a)(1)-(3) of the Trust Indenture Act
and the compliance certificates required by Section 314(a)(4) and (c) of
the Trust Indenture Act, any such certificates to be provided in the form,
in the manner and at the times required by Section 314(a)(4) and (c) of
the Trust Indenture Act (provided that any certificate to be provided pursuant
to Section 314(a)(4) of the Trust Indenture Act shall be provided within
120 days of the end of each fiscal year of the Issuer).

           
SECTION 2.5 Evidence of Compliance with Conditions Precedent. The Guarantor
shall provide to the Guarantee Trustee such evidence of compliance with
any conditions precedent, if any, provided for in this Guarantee Agreement
which relate to any of the matters set forth in Section 314(c) of the Trust
Indenture Act. Any certificate or opinion required to be given pursuant
to Section 314(c) shall comply with Section 314(e) of the Trust Indenture
Act.

           
SECTION 2.6 Events of Default; Waiver. (a) Subject to Section 2.6(b), Holders
of Preferred Securities may by vote of at least a Majority in liquidation
amount of the Preferred Securities, (A) direct the time, method and place
of conducting any proceeding for any remedy available to the Guarantee
Trustee, or exercising any trust or power conferred upon the Guarantee
Trustee or (B) on behalf of the Holders of all Preferred Securities waive
any past Event of Default and its consequences. Upon such waiver, any such
default shall cease to exist, and any Event of Default arising therefrom
shall be deemed to have been cured, for every purpose of this Guarantee
Agreement, but no such waiver shall extend to any subsequent or other default
or Event of Default or impair any right consequent thereon.

           
(b) The right of any Holder of Preferred Securities to receive payment
of the Guarantee Payments in accordance with this Guarantee Agreement,
or to institute suit for the enforcement of any such payment, shall not
be impaired without the consent of each such Holder.

           
SECTION 2.7 Disclosure of Information. The disclosure of information as
to the names and addresses of the Holders of the Preferred Securities in
accordance with Section 312 of the Trust Indenture Act, regardless of the
source from which such information was derived, shall not be deemed to
be a violation of any existing law, or any law hereafter enacted which
does not specifically refer to Section 312 of the Trust Indenture Act,
nor shall the Guarantee Trustee be held accountable by reason of mailing
any material pursuant to a request made under Section 312(b) of the Trust
Indenture Act.

           
SECTION 2.8 Conflicting Interest. The Declaration shall be deemed to be
specifically described in this Guarantee Agreement for the purposes of
clause (i) of the first provision contained in Section 310(b) of the Trust
Indenture Act.

ARTICLE III

POWERS, DUTIES AND RIGHTS OF GUARANTEE
TRUSTEE

           
SECTION 3.1 Powers and Duties of the Guarantee Trustee. (a) This Guarantee
Agreement shall be held by the Guarantee Trustee in trust for the benefit
of the Holders of the Preferred Securities. The Guarantee Trustee shall
not transfer its right, title and interest in the Guarantee Agreement to
any Person except a Successor Guarantee Trustee on acceptance by such Successor
Guarantee Trustee of its appointment to act as Guarantee Trustee or to
a Holder of Preferred Securities exercising his or her rights pursuant
to Section 5.4. The right, title and interest of the Guarantee Trustee
to the Guarantee Agreement shall vest automatically in each Person who
may hereafter be appointed as Guarantee Trustee in accordance with Article
IV. Such vesting and cessation of title shall be effective whether or not
conveyancing documents have been executed and delivered.

           
(b) If an Event of Default occurs and is continuing, the Guarantee Trustee
shall enforce this Guarantee Agreement for the benefit of the Holders of
the Preferred Securities.

           
(c) This Guarantee Agreement and all moneys received by the Trust hereunder
in respect of the Guarantee Payments will not be subject to any right,
charge, security interest, lien or claim of any kind in favor of, or for
the benefit of, the Guarantee Trustee or its agents or their creditors.

           
(d) The Guarantee Trustee shall transmit, after the occurrence of an Event
of Default, by first class mail, postage prepaid, to the holders of the
Preferred Securities, as their names and addresses appear upon the register,
notice of all Events of Default known to the Guarantee Trustee, unless
such defaults shall have been cured before the giving of such notice; provided
that the Guarantee Trustee shall be protected in withholding such notice
if and so long as the board of directors, the executive committee, or a
trust committee of directors and/or Responsible Officers of the Guarantee
Trustee in good faith determine that the withholding of such notice is
in the interests of the Holders of the Preferred Securities. The Guarantee
Trustee shall not be deemed to have knowledge of any default except any
default as to which the Guarantee Trustee shall have received written notice
or a Responsible Officer charged with the administration of this Guarantee
Agreement shall have obtained written notice.

           
(e) The Guarantee Trustee shall not resign as a Trustee unless a Successor
Guarantee Trustee has been appointed and accepted that appointment in accordance
with Article IV.

           
SECTION 3.2 Certain Rights and Duties of the Guarantee Trustee. (a) The
Guarantee Trustee, before the occurrence of an Event of Default and after
the curing of all Events of Default that may have occurred, shall undertake
to perform only such duties as are specifically set forth in this Guarantee
Agreement, and no implied covenants shall be read into this Guarantee Agreement
against the Guarantee Trustee. In case an Event of Default has occurred
(that has not been cured or waived pursuant to Section 2.6(a)), the Guarantee
Trustee shall exercise such of the rights and powers vested in it by this
Guarantee Agreement, and use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the circumstances
in the conduct of his or her own affairs.

           
(b) No provision of this Guarantee Agreement shall be construed to relieve
the Guarantee Trustee from liability for its own negligent action, its
own negligent failure to act or its own willful misconduct, except that:

               
(i) prior to the occurrence of an Event of Default and after the curing
or waiving of all such Events of Default that may have occurred:

                   
(A) the duties and obligations of the Guarantee Trustee shall be determined
solely by the express provisions of this Guarantee Agreement, and the Guarantee
Trustee shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Guarantee Agreement,
and no implied covenants or obligations shall be read into this Guarantee
Agreement against the Guarantee Trustee; and

                   
(B) in the absence of bad faith on the part of the Guarantee Trustee, the
Guarantee Trustee may conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon any certificates
or opinions furnished to the Guarantee Trustee and conforming to the requirements
of this Guarantee Agreement; but in the case of any such certificates or
opinions that are specifically required to be furnished to the Guarantee
Trustee by any provision hereof, the Guarantee Trustee shall be under a
duty to examine the same to determine whether or not they conform to the
requirements of this Guarantee Agreement;

               
(ii) The Guarantee Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer of the Guarantee Trustee, unless
it shall have proved that the Guarantee Trustee was negligent in ascertaining
the pertinent facts;

               
(iii) the Guarantee Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of Preferred Securities as provided herein relating
to the time, method and place of conducting any proceeding for any remedy
available to the Guarantee Trustee, or exercising any trust or power conferred
upon the Guarantee Trustee under this Guarantee Agreement; and

               
(iv) no provision of this Guarantee Agreement shall require the Guarantee
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of
any of its rights or powers if it shall have reasonable ground for believing
that the repayment of such funds or liability is not reasonably assured
to it under the terms of this Guarantee Agreement or adequate indemnity
against such risk or liability is not reasonably assured to it.

           
(c) Subject to the provisions of Section 3.2(a) and (b):

               
(i) Whenever, in the administration of this Guarantee Agreement, the Guarantee
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the Guarantee
Trustee (unless other evidence is herein specifically prescribed) may,
in the absence of bad faith on its part, request and rely upon a certificate,
which shall comply with the provisions of Section 314(e) of the Trust Indenture
Act, signed by any authorized officer of the Guarantor;

               
(ii) the Guarantee Trustee (A) may consult with counsel (which may be counsel
to the Guarantor or any of its Affiliates and may include any of its employees)
selected by it in good faith and with due care and the written advice or
opinion of such counsel with respect to legal matters shall be full and
complete authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in reliance thereon and in
accordance with such advice and opinion and (B) shall have the right at
any time to seek instructions concerning the administration of this Guarantee
Agreement from any court of competent jurisdiction;

               
(iii) The Guarantee Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents
or attorneys and the Guarantee Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney appointed
by it in good faith and with due care;

               
(iv) The Guarantee Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Guarantee Agreement at the
request or direction of any Holders of Preferred Securities, unless such
Holders shall have offered to the Guarantee Trustee reasonable security
and indemnity against the costs, expenses (including attorneys' fees and
expenses) and liabilities that might be incurred by it in complying with
such request or direction; provided that nothing contained in this clause
(iv) shall relieve the Guarantee Trustee of the obligation, upon the occurrence
of an Event of Default (which has not been cured or waived), to exercise
such of the rights and powers vested in it by this Guarantee Agreement,
and to use the same degree of care and skill in this exercise, as a prudent
person would exercise or use under the circumstances in the conduct of
his or her own affairs; and

               
(v) Any action taken by the Guarantee Trustee or its agents hereunder shall
bind the Holders of the Preferred Securities and the signature of the Guarantee
Trustee or its agents alone shall be sufficient and effective to perform
any such action; and no third party shall be required to inquire as to
the authority of the Guarantee Trustee to so act, or as to its compliance
with any of the terms and provisions of this Guarantee Agreement, both
of which shall be conclusively evidenced by the Guarantee Trustee's or
its agent's taking such action.

           
SECTION 3.3 Not Responsible for Recitals or Issuance of Guarantee. The
recitals contained in this Guarantee shall be taken as the statements of
the Guarantor and the Guarantee Trustee does not assume any responsibility
for their correctness. The Guarantee Trustee makes no representations as
to the validity or sufficiency of this Guarantee Agreement.

ARTICLE IV

GUARANTEE TRUSTEE

           
SECTION 4.1 Qualifications. (a) There shall at all times be a Guarantee
Trustee which shall:

               
(i) not be an Affiliate of the Guarantor; and

               
(ii) be a corporation organized and doing business under the laws of the
United States of America or any State or Territory thereof or of the District
of Columbia, or a corporation or Person permitted by the Commission to
act as an institutional trustee under the Trust Indenture Act, authorized
under such laws to exercise corporate trust powers, having a combined capital
and surplus of at least $50,000,000, and subject to supervision or examination
by federal, state, territorial or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant
to law or to the requirements of the supervising or examining authority
referred to above, then for the purposes of this Section 4.1(a)(ii), the
combined capital and surplus of such corporation shall be deemed to be
its combined capital and surplus as set forth in its most recent report
of condition so published.

           
If at any time the Guarantee Trustee shall cease to satisfy the requirements
of clauses (i)-(ii) above, the Guarantee Trustee shall immediately resign
in the manner and with the effect set out in Section 4.2. If the Guarantee
Trustee has or shall acquire any "conflicting interest" within the meaning
of Section 310(b) of the Trust Indenture Act, the Guarantee Trustee and
the Guarantor shall in all respects comply with the provisions of Section
310(b) of the Trust Indenture Act.

           
SECTION 4.2 Appointment, Removal and Resignation of Guarantee Trustee.
(a) Subject to Section 4.2(b), the Guarantee Trustee may be appointed or
removed without cause at any time by the Guarantor.

           
(b) The Guarantee Trustee shall not be removed in accordance with Section
4.2(a) until a Successor Guarantee Trustee possessing the qualifications
to act as Guarantee Trustee under Section 4.1(a) has been appointed and
has accepted such appointment by written instrument executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the Guarantee Trustee
being removed.

           
(c) The Guarantee Trustee appointed to office shall hold office until his
or her successor shall have been appointed or until its removal or resignation.

           
(d) The Guarantee Trustee may resign from office (without need for prior
or subsequent accounting) by an instrument (a "Resignation Request") in
writing signed by the Guarantee Trustee and delivered to the Guarantor,
which resignation shall take effect upon such delivery or upon such later
date as is specified therein; provided, however, that no such resignation
of the Guarantee Trustee shall be effective until a Successor Guarantee
Trustee possessing the qualifications to act as Guarantee Trustee under
Section 4.1(a) has been appointed and has accepted such appointment by
instrument executed by such Successor Guarantee Trustee and delivered to
Guarantor and the resigning Guarantee Trustee.

           
(e) If no Successor Guarantee Trustee shall have been appointed and accepted
appointment as provided in this Section 4.2 within 60 days after delivery
to the Guarantor of a Resignation Request, the resigning Guarantee Trustee
may petition any court of competent jurisdiction for appointment of a Successor
Guarantee Trustee. Such court may thereupon, after such notice, if any,
as it may deem proper and prescribe, appoint a Successor Guarantee Trustee.

ARTICLE V

GUARANTEE

           
SECTION 5.1 Guarantee. The Guarantor irrevocably and unconditionally agrees
to pay in full to the Holders the Guarantee Payments (without duplication
of amounts theretofore paid by the Issuer) regardless of any defense, right
of set-off or counterclaim which the Issuer may have or assert. The Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct payment
of the required amounts by the Guarantor to the Holders or by causing the
Issuer to pay such amounts to the Holders.

           
SECTION 5.2 Waiver of Notice. The Guarantor hereby waives notice of acceptance
of this Guarantee Agreement and of any liability to which it applies or
may apply, presentment, demand for payment, any right to require a proceeding
first against the Issuer or any other Person before proceeding against
the Guarantor, protest, notice of nonpayment, notice of dishonor, notice
of redemption and all other notices and demands.

           
SECTION 5.3 Obligations Not Affected. The obligations, covenants, agreements
and duties of the Guarantor under this Guarantee Agreement shall in no
way be affected or impaired by reason of the happening from time to time
of any of the following:

               
(a) the release or waiver, by operation of law or otherwise, of the performance
or observance by the Issuer of any express or implied agreement, covenant,
term or condition relating to the Preferred Securities to be performed
or observed by the Issuer;

               
(b) the extension of time for the payment by the Issuer of all or any portion
of the Distributions (other than an extension of time for payment of Distributions
that results from the extension of any interest payment period on the Debentures),
Redemption Price, Liquidation Distribution or any other sums payable under
the terms of the Preferred Securities or the extension of time for the
performance of any other obligation under, arising out of, or in connection
with, the Preferred Securities;

               
(c) any failure, omission, delay or lack of diligence on the part of the
Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Preferred Securities,
or any action on the part of the Issuer granting indulgence or extension
of any kind;

               
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit
of creditors, reorganization, arrangement, composition or readjustment
of debt of, or other similar proceedings affecting, the Issuer or any of
the assets of the Issuer;

               
(e) any invalidity of, or defect or deficiency in, the Preferred Securities;

               
(f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or

               
(g) any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a guarantor, it being the intent
of this Section 5.3 that the obligations of the Guarantor hereunder shall
be absolute and unconditional under any and all circumstances. There shall
be no obligation of the Holders to give notice to, or obtain consent of,
the Guarantor with respect to the happening of any of the foregoing.

           
SECTION 5.4 Enforcement of Guarantee. The Guarantor and the Guarantee Trustee
expressly acknowledge that (i) this Guarantee Agreement will be deposited
with the Guarantee Trustee to be held for the benefit of the Holders; (ii)
the Guarantee Trustee has the right to enforce this Guarantee Agreement
on behalf of the Holders; (iii) Holders representing not less than a Majority
in liquidation amount of the Preferred Securities have the right to direct
the time, method and place of conducting any proceeding for any remedy
available in respect of this Guarantee Agreement, including the giving
of directions to the Guarantee Trustee, or exercising any trust or other
power conferred upon the Guarantee Trustee under this Guarantee Agreement,
and (iv) any Holder may institute a legal proceeding directly against the
Guarantor to enforce such Holder's rights under this Guarantee Agreement,
without first instituting a legal proceeding against the Issuer, the Guarantee
Trustee, or any other Person and without prior notice to the Guarantee
Trustee.

           
SECTION 5.5 Guarantee of Payment. This Guarantee Agreement creates a guarantee
of payment and not merely of collection.

           
This Guarantee Agreement will not be discharged except by payment of the
Guarantee Payments in full (without duplication of amounts theretofore
paid by the Issuer).

           
SECTION 5.6 Subrogation. The Guarantor shall be subrogated to all rights
of the Holders against the Issuer in respect of any amounts paid to the
Holders by the Guarantor under this Guarantee Agreement; provided, however,
that the Guarantor shall not (except to the extent required by mandatory
provisions of law) be entitled to enforce or exercise any rights which
it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this Guarantee
Agreement, if, at the time of any such payment, any amounts are due and
unpaid under this Guarantee Agreement. If any amount shall be paid to the
Guarantor in violation of the preceding sentence, the Guarantor agrees
to hold such amount in trust for the Holders and to pay over such amount
to the Holders.

           
SECTION 5.7 Independent Obligations. The Guarantor acknowledges that its
obligations hereunder are independent of the obligations of the Issuer
with respect to the Preferred Securities and that the Guarantor shall be
liable as principal and as debtor hereunder to make Guarantee Payments
pursuant to the terms of this Guarantee Agreement notwithstanding the occurrence
of any event referred to in subsections (a) through (g), inclusive, of
Section 5.3 hereof.

ARTICLE VI

LIMITATION OF TRANSACTIONS; SUBORDINATION

           
SECTION 6.1 Limitation of Transactions. So long as any Preferred Securities
remain outstanding, the Guarantor will not declare or pay any dividend
on, or redeem, purchase, acquire or make a distribution or liquidation
payment with respect to, any of its common stock or preferred stock or
any other securities similar to the Preferred Securities or the Debentures,
or make any guarantee payments with respect thereto, if at such time (i)
the Guarantor shall be in default with respect to its Guarantee Payments
or other payment obligations hereunder, (ii) there shall have occurred
and be continuing any event of default under the Indenture or (iii) the
Guarantor shall have given notice of its selection of an Extension Period
(as defined in the Indenture) and such period, or any extension thereof,
is continuing; provided that the Guarantor will be permitted to pay dividends
(and cash in lieu of fractional shares) upon the mandatory conversion of
any of its preferred stock in accordance with the terms of such stock.
In addition, so long as any Preferred Securities remain outstanding, the
Guarantor (i) will remain the sole direct or indirect owner of all of the
outstanding Common Securities and shall not cause or permit the Common
Securities to be transferred except to the extent such transfer is permitted
under Section 9.1(c) of the Declaration; provided that any permitted successor
of the Guarantor under the Indenture may succeed to the Guarantor's ownership
of the Common Securities and (ii) will not take any action which would
cause the Issuer to cease to be treated as a grantor trust for United States
federal income tax purposes except in connection with a distribution of
Debentures as provided in the Declaration.

           
SECTION 6.2 Subordination. This Guarantee Agreement will constitute an
unsecured obligation of the Guarantor and will rank (i) subordinate and
junior in right of payment to all other liabilities of the Guarantor, except
those made pari passu or subordinate by their terms, and (ii) senior to
all capital stock now or hereafter issued by the Guarantor and to any guarantee
now or hereafter entered into by the Guarantor in respect of any of its
capital stock.

ARTICLE VII

TERMINATION

           
SECTION 7.1 Termination. This Guarantee Agreement shall terminate and be
of no further force and effect upon full payment of the Redemption Price
of all Preferred Securities, upon the distribution of Debentures to Holders
of Preferred Securities and Common Securities in exchange for all of the
Preferred Securities and Common Securities or upon full payment of the
amounts payable in accordance with the Declaration upon liquidation of
the Issuer. Notwithstanding the foregoing, this Guarantee Agreement will
continue to be effective or will be reinstated, as the case may be, if
at any time any Holder must restore payment of any sums paid with respect
to the Preferred Securities or this Guarantee Agreement.

ARTICLE VIII

LIMITATION OF LIABILITY; INDEMNIFICATION

           
SECTION 8.1 Exculpation. (a) No Indemnified Person shall be liable, responsible
or accountable in damages or otherwise to the Guarantor or any Covered
Person for any loss, damage or claim incurred by reason of any act or omission
performed or omitted by such Indemnified Person in good faith and in a
manner such Indemnified Person reasonably believed to be within the scope
of the authority conferred on such Indemnified Person by this Guarantee
Agreement or by law, except that an Indemnified Person shall be liable
for any such loss, damage or claim incurred by reason of such Indemnified
Person's negligence or willful misconduct with respect to such acts or
omissions.

               
(b) An Indemnified Person shall be fully protected in relying in good faith
upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matters
the Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable
care by or on behalf of the Guarantor, including information, opinions,
reports or statements as to the value and amount of the assets, liabilities,
profits, losses, or any other facts pertinent to the existence and amount
of assets from which Distributions to Holders of Preferred Securities might
properly be paid.

           
SECTION 8.2 Indemnification. (a) To the fullest extent permitted by applicable
law, the Guarantor shall indemnify and hold harmless each Indemnified Person
from and against any loss, damage or claim incurred by such Indemnified
Person by reason of any act or omission performed or omitted by such Indemnified
Person in good faith and in a manner such Indemnified Person reasonably
believed to be within the scope of authority conferred on such Indemnified
Person by this Guarantee Agreement, except that no Indemnified Person shall
be entitled to be indemnified in respect of any loss, damage or claim incurred
by such Indemnified Person by reason of negligence or willful misconduct
with respect to such acts or omissions.

               
(b) To the fullest extent permitted by applicable law, expenses (including
legal fees) incurred by an Indemnified Person in defending any claim, demand,
action, suit or proceeding shall, from time to time, be advanced by the
Guarantor prior to the final disposition of such claim, demand, action,
suit or proceeding upon receipt by the Guarantor of an undertaking by or
on behalf of the Indemnified Person to repay such amount if it shall be
determined that the Indemnified Person is not entitled to be indemnified
as authorized in Section 8.2(a).

ARTICLE IX

MISCELLANEOUS

           
SECTION 9.1 Successors and Assigns. All guarantees and agreements contained
in this Guarantee Agreement shall bind the successors, assigns, receivers,
trustees and representatives of the Guarantor and shall inure to the benefit
of the Holders of the Preferred Securities then outstanding. Except in
connection with a consolidation, merger or sale involving the Guarantor
that is permitted under Article Eight of the Indenture, the Guarantor shall
not assign its obligations hereunder.

           
SECTION 9.2 Amendments. Except with respect to any changes which do not
adversely affect the rights of Holders (in which case no consent of Holders
will be required), this Guarantee Agreement may only be amended with the
prior approval of the Holders of not less than a Majority in liquidation
amount of the Preferred Securities. The provisions of Section 12.2 of the
Declaration concerning meetings of Holders shall apply to the giving of
such approval.

           
SECTION 9.3 Notices. Any notice, request or other communication required
or permitted to be given hereunder shall be in writing, duly signed by
the party giving such notice, and delivered, telecopied or mailed by first
class mail as follows:

               
(a) if given to the Guarantor, to the address set forth below or such other
address as the Guarantor may give notice of to the Holders:

UAL Corporation

1200 East Algonquin Road

Elk Grove Township, Illinois 60007

Facsimile No.: (847) 700-4000

Attention: Corporate Secretary

               
(b) if given to the Guarantee Trustee, to the address set forth below or
such other address as the Guarantee Trustee may give notice of to the Holders:

The First National Bank of Chicago

One First National Plaza, Suite
0126

Chicago, Illinois 60670-0126

Attention: Corporate Trust Administration

               
(c) if given to any Holder of Preferred Securities, at the address set
forth on the books and records of the Issuer.

           
All notices hereunder shall be deemed to have been given when received
in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no
notice was given, such notice or other document shall be deemed to have
been delivered on the date of such refusal or inability to deliver.

           
SECTION 9.4 Genders. The masculine, feminine and neuter genders used herein
shall include the masculine, feminine and neuter genders.

           
SECTION 9.5 Benefit. This Guarantee Agreement is solely for the benefit
of the Holders and subject to Section 3.1(a) is not separately transferable
from the Preferred Securities.

           
SECTION 9.6 Governing Law. THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK.

           
SECTION 9.7 Counterparts. This Guarantee Agreement may be executed in counterparts,
each of which shall be an original; but such counterparts shall together
constitute one and the same instrument.

           
THIS GUARANTEE AGREEMENT is executed as of the day and year first above
written.

 

 

	UAL CORPORATION
	
	By: /s/ Douglas A. Hacker
	Name: Douglas A. Hacker
	Title: Senior Vice President
	and Chief Financial Officer
	
	THE FIRST NATIONAL BANK OF CHICAGO,
	as Guarantee Trustee
	
	By: /s/ Richard D. Manella
	Name: Richard D. Manella
	Title: Vice President<DOCUMENT>

 
Exhibit 4.6

AMENDED AND RESTATED

DECLARATION OF TRUST
of

UAL Corporation Capital Trust I

December 30, 1996

              
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and effective
as of December 30, 1996 by the undersigned trustees (together with all
other Persons from time to time duly appointed and serving as trustees
in accordance with the provisions of this Declaration, the "Trustees"),
UAL Corporation, a Delaware corporation, as trust sponsor ("UAL" or the
"Sponsor") and the holders from time to time of undivided interests in
the assets of the Trust (as hereinafter defined).

              
WHEREAS, the Sponsor and certain of the Trustees entered into a Declaration
of Trust dated as of October 15, 1996 (the "Original Declaration") in order
to establish a statutory business trust (the "Trust") under the Business
Trust Act (as hereinafter defined);

              
WHEREAS, the Certificate of Trust (the "Certificate of Trust") of the Trust
was filed with the office of the Secretary of State of the State of Delaware
on October 15, 1996;

              
WHEREAS, the Trustees and the Sponsor desire to continue the Trust pursuant
to the Business Trust Act for the purpose of, as described more fully in
Section 3.3 hereof, (i) issuing Preferred Securities (as hereinafter defined)
representing undivided beneficial interests in the assets of the Trust
in exchange for Depositary Shares ("Depositary Shares") each representing
1/1,000 of a share of 12-1/4% Series B Preferred Stock (as hereinafter
defined) of UAL pursuant to the Offer (as hereinafter defined) and delivering
such Depositary Shares to UAL in consideration for the deposit by UAL as
trust assets of Debentures (as hereinafter defined) of UAL issued under
the Indenture (as hereinafter defined) and (ii) issuing and selling Common
Securities (as hereinafter defined) representing undivided beneficial interests
in the assets of the Trust to UAL in exchange for cash and investing the
proceeds thereof in additional Debentures (as hereinafter defined) of UAL
issued under the Indenture to be held as assets of the Trust; and

              
NOW, THEREFORE, it being the intention of the parties hereto that the Trust
constitute a business trust under the Business Trust Act, that the Original
Declaration be amended and restated in its entirety as provided herein
and that this Declaration constitute the governing instrument of such business
trust, the Trustees declare that all assets referred to in clauses (i)
and (ii) of the previous recital clause contributed to or purchased by
the Trust will be held in trust for the benefit of the Holders (as hereinafter
defined) from time to time of the Certificates (as hereinafter defined)
representing undivided beneficial interests in the assets of the Trust
issued hereunder, subject to the provisions of this Declaration.

 

 

ARTICLE I

DEFINITIONS

              
SECTION 1.1 Definitions.

              
(a) Capitalized terms used in this Declaration but not defined in the preamble
above have the respective meanings assigned to them in this Section 1.1;

              
(b) a term defined anywhere in this Declaration has the same meaning throughout;

              
(c) all references to "the Declaration" or "this Declaration" are to this
Amended and Restated Declaration of Trust (including Exhibits A, B and
C hereto (the "Exhibits")) as modified, supplemented or amended from time
to time;

              
(d) all references in this Declaration to Articles and Sections and Exhibits
are to Articles and Sections of and Exhibits to this Declaration unless
otherwise specified;

              
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Declaration unless otherwise defined in this Declaration or
unless the context otherwise requires; and

              
(f) a reference to the singular includes the plural and vice versa.

              
"Affiliate" has the same meaning as given to that term in Rule 405 under
the Securities Act or any successor rule thereunder.

              
"Book Entry Interest" means a beneficial interest in a Certificate registered
in the name of a Clearing Agency or a nominee thereof, ownership and transfers
of which shall be maintained and made through book entries by such Clearing
Agency as described in Section 9.4.

              
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions are authorized or obligated
by law or executive order to close in the Place of Payment (as such term
is defined in the Indenture).

              
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code,
12 Del. C. Sec. 3801 et seq., as it may be amended from time to time.

              
"Certificate" means a Common Security Certificate or a Preferred Security
Certificate.

              
"Certificate of Trust" has the meaning set forth in the second Whereas
clause above.

              
"Clearing Agency" means an organization registered as a "Clearing Agency"
pursuant to Section 17A of the Exchange Act that is acting as a depository
for the Preferred Securities and in whose name or in the name of a nominee
of that organization shall be registered a Certificate and which shall
undertake to effect book entry transfers and pledges of the Preferred Securities.

              
"Clearing Agency Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time the Clearing Agency
effects book entry transfers and pledges of securities deposited with the
Clearing Agency.

              
"Code" means the Internal Revenue Code of 1986, as amended from time to
time or any successor legislation. A reference to a specific section of
the Code refers not only to such specific section but also to any corresponding
provision of any federal tax statute enacted after the date of this Declaration,
as such specific section or corresponding provision is in effect on the
date of application of the provisions of this Declaration containing such
reference.

              
"Commission" means the U.S. Securities and Exchange Commission.

              
"Common Guarantee" means the Common Securities Guarantee Agreement dated
as of December 30, 1996 of UAL in respect of the Common Securities.

              
"Common Security" has the meaning specified in Section 7.1(b).

              
"Common Security Certificate" means a definitive certificate in fully registered
form representing a Common Security substantially in the form of Annex
I to Exhibit C.

              
"Covered Person" means (i) any officer, director, shareholder, partner,
member, representative, employee or agent of the Trust or its Affiliates,
(ii) any officer, director, shareholder, employee, representative or agent
of UAL or its Affiliates and (iii) the Holders from time to time of the
Securities.

              
"Dealer Manager Agreement" means the dealer manager agreement entered into
among UAL, the Trust and Merrill Lynch, Pierce, Fenner & Smith Incorporated
and Smith Barney Inc. with respect to, among other things, the Offer and
the Preferred Securities.

              
"Debenture Trustee" means The First National Bank of Chicago as trustee
under the Indenture until a successor is appointed thereunder and thereafter
means any such successor trustee.

              
"Debentures" means the series of Junior Subordinated Debentures issued
by UAL under the Indenture to the Trust and entitled the "13 1/4% Junior
Subordinated Debentures due 2026".

              
"Delaware Trustee" has the meaning set forth in Section 5.1(a)(3).

              
"Distribution" means a distribution payable to Holders of Securities in
accordance with Section 6.1.

              
"DTC" means The Depository Trust Company, the initial Clearing Agency.

              
"Event of Default" in respect of the Securities means an Indenture Event
of Default has occurred and is continuing in respect of the Debentures.

              
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, or any successor legislation.

              
"Expiration Date" has the meaning set forth in the Prospectus.

              
"Fiscal Year" has the meaning specified in Section 11.1.

              
"Holder" means a Person in whose name a Certificate representing a Security
is registered, such Person being a beneficial owner within the meaning
of the Business Trust Act.

              
"Indemnified Person" means any Trustee, any Affiliate of any Trustee, any
officers, directors, shareholders, members, partners, employees, representatives
or agents of any Trustee, or any employee or agent of the Trust or its
Affiliates.

              
"Indenture" means the Indenture dated as of December 20, 1996 between UAL
and the Debenture Trustee as supplemented by the board resolution, supplemental
indenture or officers' certificate pursuant to which the Debentures are
to be issued.

              
"Indenture Event of Default" means any event or condition defined as an
"Event of Default" with respect to the Debentures under Section 5.1 of
the Indenture that has occurred and is continuing.

              
"Institutional Trustee" means the Trustee meeting the eligibility requirements
set forth in Section 5.1(c) and having the duties set forth for the Institutional
Trustee herein.

              
"Investment Company" means an investment company as defined in the Investment
Company Act.

              
"Investment Company Act" means the Investment Company Act of 1940, as amended
from time to time, or any successor legislation.

              
"Legal Action" has the meaning specified in Section 3.6(g).

              
"Liquidation Distribution" has the meaning set forth in Exhibits B and
C hereto establishing the terms of the Securities.

              
"Majority in liquidation amount of the Securities" means, except as otherwise
required by the Trust Indenture Act and except as provided in the penultimate
paragraph of paragraph 5 of Exhibit B hereto, Holder(s) of outstanding
Securities voting together as a single class or, as the context may require,
Holder(s) of outstanding Preferred Securities or Common Securities each
voting separately as a class, who are the record owners of a relevant class
of Securities whose liquidation amount (including the stated amount that
would be paid on redemption, liquidation or otherwise, plus accrued and
unpaid Distributions to the date upon which the voting percentages are
determined) represents more than 50% of the liquidation amount of all outstanding
Securities of such class.

              
"Ministerial Action" has the meaning set forth in the terms of the Securities
as set forth in Exhibits B and C hereto.

              
"Offer" means the offer by the Trust to exchange Preferred Securities of
the Trust for outstanding Depositary Shares of UAL in consideration for
the deposit to the Trust by UAL, as trust assets, of Debentures issued
under the Indenture, all as described in the Prospectus.

              
"Original Declaration" has the meaning set forth in the first recital clause
above.

              
"Paying Agent" has the meaning specified in Section 3.8(g).

              
"Person" means a legal person, including any individual, corporation, estate,
partnership, joint venture, association, joint stock company, limited liability
company, trust, unincorporated association, or government or any agency
or political subdivision thereof, or any other entity of whatever nature.

              
"Preferred Guarantee" means the Guarantee Agreement dated as of December
30, 1996 of UAL in respect of the Preferred Securities.

              
"Preferred Security" has the meaning specified in Section 7.1(b).

              
"Preferred Security Beneficial Owner" means, with respect to a Book Entry
Interest, a Person who is the beneficial owner of such Book Entry Interest,
as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency (directly as a
Clearing Agency Participant or as an indirect participant, in each case
in accordance with the rules of such Clearing Agency).

              
"Preferred Security Certificate" means a definitive certificate in fully
registered form representing a Preferred Security substantially in the
form of Annex I to Exhibit B.

              
"Prospectus" means the Prospectus dated November 21, 1996 relating to the
Offer.

              
"Quorum" means a majority of the Regular Trustees or, if there are only
two Regular Trustees, both such Regular Trustees.

              
"Regular Trustee" means any Trustee other than the Institutional Trustee
and the Delaware Trustee.

              
"Related Party" means any direct or indirect wholly owned subsidiary of
UAL or any Person which owns, directly or indirectly, 100% of the outstanding
voting securities of UAL.

              
"Resignation Request" has the meaning specified in Section 5.2(d).

              
"Responsible Officer" means, with respect to the Institutional Trustee,
the chairman of the board of directors, the president, any vice-president,
any assistant vice-president, the secretary, any assistant secretary, the
treasurer, any assistant treasurer, any trust officer or assistant trust
officer or any other officer of the Institutional Trustee customarily performing
functions similar to those performed by any of the above designated officers
and also means, with respect to a particular corporate trust matter, any
other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.

              
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act or any successor
rule thereunder.

              
"Securities" means the Common Securities and the Preferred Securities.

              
"Securities Act" means the Securities Act of 1933, as amended from time
to time, or any successor legislation.

              
"Series B Preferred Stock" means the 12-1/4% Series B Preferred Stock of
UAL.

              
"Special Event" has the meaning set forth in the terms of the Securities
as set forth in Exhibits B and C hereto.

              
"Sponsor" or "UAL" means UAL Corporation, a Delaware corporation, or any
successor entity in a merger or consolidation, in its capacity as sponsor
of the Trust.

              
"Successor Delaware Trustee" has the meaning specified in Section 5.2(b)(ii).

              
"Successor Institutional Trustee" means a successor Trustee possessing
the qualifications to act as Institutional Trustee under Section 5.1(c).

              
"10% in liquidation amount of the Securities" means, except as otherwise
required by the Trust Indenture Act and except as provided in the penultimate
paragraph of paragraph 5 of Exhibit B hereto, Holder(s) of outstanding
Securities voting together as a single class or, as the context may require,
Holder(s) of outstanding Preferred Securities or Common Securities, voting
separately as a class, who are the record owners of a relevant class of
Securities whose liquidation amount (including the stated amount that would
be paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined)
represents 10% or more of the liquidation amount of all outstanding Securities
of such class.

              
"Treasury Regulations" means the income tax regulations, including temporary
and proposed regulations, promulgated under the Code by the United States
Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).

              
"Trustee" or "Trustees" means each Person who has signed this Declaration
as a trustee, so long as such Person shall continue in office in accordance
with the terms hereof, and all other Persons who may from time to time
be duly appointed, qualified and serving as trustees in accordance with
the provisions hereof, and references herein to a Trustee or the Trustees
shall refer to such Person or Persons solely in their capacity as trustees
hereunder.

              
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
from time to time, or any successor legislation.

              
"UAL Corporation Capital Trust" shall mean any statutory business trust
created under the laws of the State of Delaware specified in the applicable
board resolution, supplemental indenture or officers' certificate establishing
a particular series of debt securities pursuant to Section 3.1 of the Indenture.

 

 

ARTICLE II

TRUST INDENTURE ACT

              
SECTION 2.1 Trust Indenture Act; Application.

              
(a) This Declaration is subject to the provisions of the Trust Indenture
Act that are required to be part of this Declaration and shall, to the
extent applicable, be governed by such provisions;

              
(b) if and to the extent that any provision of this Declaration limits,
qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control;

              
(c) the Institutional Trustee, to the extent permitted by applicable law
and/or the rules and regulations of the Commission, shall be the only Trustee
which is a trustee for the purposes of the Trust Indenture Act; and

              
(d) the application of the Trust Indenture Act to this Declaration shall
not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.

              
SECTION 2.2 Lists of Holders of Preferred Securities.

              
(a) Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide the Institutional Trustee with such information as is required
under Section 312(a) of the Trust Indenture Act at the times and in the
manner provided in Section 312(a); and

              
(b) the Institutional Trustee shall comply with its obligations under Sections
310(b), 311 and 312(b) of the Trust Indenture Act.

              
SECTION 2.3 Reports by the Institutional Trustee.

              
Within 60 days after May 15 of each year, the Institutional Trustee shall
provide to the Holders of the Securities such reports, if any, as are required
by Section 313 of the Trust Indenture Act in the form, in the manner and
at the times provided by Section 313 of the Trust Indenture Act. The Institutional
Trustee shall also comply with the requirements of Section 313(d) of the
Trust Indenture Act.

              
SECTION 2.4 Periodic Reports to Institutional Trustee.

              
Each of the Sponsor and the Regular Trustees on behalf of the Trust shall
provide to the Institutional Trustee, the Commission and the Holders of
the Securities, as applicable, such documents, reports and information,
if any, as required by Section 314(a)(1)-(3) of the Trust Indenture Act
and the compliance certificates required by Section 314(a)(4) and (c) of
the Trust Indenture Act, any such certificates to be provided in the form,
in the manner and at the times required by Section 314(a)(4) and (c) of
the Trust Indenture Act (provided that any certificate to be provided pursuant
to Section 314(a)(4) of the Trust Indenture Act shall be provided within
120 days of the end of each Fiscal Year).

              
SECTION 2.5 Evidence of Compliance with Conditions Precedent.

              
Each of the Sponsor and the Regular Trustees on behalf of the Trust shall
provide to the Institutional Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration which relate
to any of the matters set forth in Section 314(c) of the Trust Indenture
Act. Any certificate or opinion required to be given pursuant to Section
314(c) shall comply with Section 314(e) of the Trust Indenture Act.

              
SECTION 2.6 Events of Default; Waiver.

              
(a) Subject to Section 2.6(c), Holders of Preferred Securities may by vote
of at least a Majority in liquidation amount of the Preferred Securities,
voting separately as a class, (A) in accordance with the terms of the Preferred
Securities, direct the time, method and place of conducting any proceeding
for any remedy available to the Institutional Trustee, or exercising any
trust or power conferred upon the Institutional Trustee, or (B) on behalf
of all Holders of Preferred Securities waive any past Event of Default
in respect of the Preferred Securities and its consequences, provided that
if the Event of Default arises out of an Indenture Event of Default:

                             
(i) which is not waivable under the Indenture, the Event of Default under
this Declaration shall also not be waivable; or

                             
(ii) which requires the consent or vote of (1) holders of Debentures representing
a specified percentage greater than a majority in principal amount of the
Debentures, or (2) each holder of Debentures, the Event of Default under
this Declaration may only be waived by, in the case of clause (1) above,
the vote of Holders of Preferred Securities representing such specified
percentage of the aggregate liquidation amount of the Preferred Securities,
or, in the case of clause (2) above, each Holder of Preferred Securities.

Upon such waiver, any such default
shall cease to exist, and any Event of Default with respect to the Preferred
Securities arising therefrom shall be deemed to have been cured, for every
purpose of this Declaration, but no such waiver shall extend to any subsequent
or other default or Event of Default with respect to the Preferred Securities
or impair any right consequent thereon.

              
(b) Subject to Section 2.6(c), Holders of Common Securities may by vote
of at least a Majority in liquidation amount of the Common Securities,
voting separately as a class, (A) in accordance with the terms of the Common
Securities, direct the time, method and place of conducting any proceeding
for any remedy available to the Institutional Trustee, or exercising any
trust or power conferred upon the Institutional Trustee, or (B) on behalf
of all Holders of Common Securities, waive any past Event of Default with
respect to the Common Securities and its consequences, provided that, if
the Event of Default arises out of an Indenture Event of Default:

                             
(i) which is not waivable under the Indenture, except where the Holders
of the Common Securities are deemed to have waived such Event of Default
under the Declaration as provided below, the Event of Default under this
Declaration shall also not be waivable; or

                             
(ii) which requires the consent or vote of (1) holders of Debentures representing
a specified percentage greater than a majority in principal amount of the
Debentures or (2) each holder of Debentures, except where the holders of
the Common Securities are deemed to have waived such Event of Default under
this Declaration as provided below, the Event of Default under this Declaration
may only be waived by, in the case of clause (1) above, the vote of Holders
of Common Securities representing such specified percentage of the aggregate
liquidation amount of the Common Securities, or, in the case of clause
(2) above, each Holder of Common Securities; and provided further that
each Holder of Common Securities will be deemed to have waived any Event
of Default with respect to the Common Securities and its consequences until
all Events of Default with respect to the Preferred Securities have been
cured, waived by the Holders of Preferred Securities as provided in this
Declaration or otherwise eliminated and, until all Events of Default with
respect to the Preferred Securities have been so cured, waived or otherwise
eliminated, the Institutional Trustee will be deemed to be acting solely
on behalf of the Holders of the Preferred Securities and only the Holders
of the Preferred Securities will have the right to direct the Institutional
Trustee in accordance with the terms of this Declaration or the Securities.
If any Event of Default with respect to the Preferred Securities is waived
by the Holders of Preferred Securities as provided in this Declaration,
the Holders of Common Securities agree that such waiver shall also constitute
the waiver of such Event of Default with respect to the Common Securities
for all purposes under this Declaration without any further act, vote or
consent of the Holders of the Common Securities. Subject to the foregoing
provisions of this Section 2.6(b), upon such waiver, any such default shall
cease to exist and any Event of Default with respect to the Common Securities
arising therefrom shall be deemed to have been cured, for every purpose
of this Declaration, but no such waiver shall extend to any subsequent
or other default or Event of Default with respect to the Common Securities
or impair any right consequent thereon.

              
(c) The right of any Holder of Securities to receive payment of Distributions
on the Securities in accordance with this Declaration and the terms of
the Securities set forth in Exhibits B and C on or after the respective
payment dates therefor, or to institute suit for the enforcement of any
such payment on or after such payment dates, shall not be impaired without
the consent of each such Holder.

              
(d) As provided in the terms of the Securities set forth in Exhibits B
and C hereto, a waiver of an Indenture Event of Default by the Institutional
Trustee at the written direction of the Holders of the Preferred Securities
constitutes a waiver of the corresponding Event of Default under this Declaration
in respect of the Securities.

              
SECTION 2.7 Disclosure of Information.

              
The disclosure of information as to the names and addresses of the Holders
of the Securities in accordance with Section 312 of the Trust Indenture
Act, regardless of the source from which such information was derived,
shall not be deemed to be a violation of any existing law, or any law hereafter
enacted which does not specifically refer to Section 312 of the Trust Indenture
Act, nor shall the Institutional Trustee be held accountable by reason
of mailing any material pursuant to a request made under Section 312(b)
of the Trust Indenture Act.

 

 

ARTICLE III

ORGANIZATION

              
SECTION 3.1 Name.

              
The Trust continued by this Declaration is named "UAL Corporation Capital
Trust I" as such name may be modified from time to time by the Regular
Trustees following written notice to the Holders of Securities. The Trust's
activities may be conducted under the name of the Trust or any other name
deemed advisable by the Regular Trustees.

              
SECTION 3.2 Office.

              
The address of the principal office of the Trust is c/o UAL Corporation,
1200 East Algonquin Road, Elk Grove Township, Illinois 60007, telephone
number (847) 700-4000. Upon ten days' written notice to the Holders, the
Regular Trustees may change the location of the Trust's principal office.

              
SECTION 3.3 Purpose.

              
The exclusive purposes and functions of the Trust are: (a)(i) to issue
Preferred Securities in exchange for Depositary Shares pursuant to the
Offer and to deliver such Depositary Shares to UAL in consideration for
the deposit to the Trust by UAL, as trust assets, of Debentures issued
under the Indenture having an aggregate principal amount equal to the aggregate
liquidation amount of the Depositary Shares so delivered; (ii) to enter
into such agreements and arrangements as may be necessary in connection
with the Offer and to take all action, and exercise such discretion, as
may be necessary or desirable in connection with the Offer and to file
such registration statements or make such other filings under the Securities
Act, the Exchange Act or state securities or "Blue Sky" laws as may be
necessary or desirable in connection with the Offer and the issuance of
the Preferred Securities; and (iii) to issue and sell Common Securities
to UAL for cash and use the proceeds of such sale to purchase as trust
assets an equal aggregate principal amount of Debentures issued under the
Indenture; and (b) except as otherwise limited herein, to engage in only
those other activities necessary or incidental thereto. The Trust shall
not borrow money, issue debt or reinvest proceeds derived from investments,
pledge any of its assets or, at any time while the Securities are outstanding,
otherwise undertake (or permit to be undertaken) any activity that would
result in or cause the Trust to be treated as anything other than a grantor
trust for United States federal income tax purposes.

              
SECTION 3.4 Authority.

              
Subject to the limitations provided in this Declaration and to the specific
duties of the Institutional Trustee, the Regular Trustees shall have exclusive
and complete authority to carry out the purposes of the Trust. An action
taken by the Regular Trustees in accordance with their powers shall constitute
the act of and serve to bind the Trust and an action taken by the Institutional
Trustee in accordance with its powers shall constitute the act of and serve
to bind the Trust. In dealing with the Trustees acting on behalf of the
Trust, no Person shall be required to inquire into the authority of the
Trustees to bind the Trust. Persons dealing with the Trust are entitled
to rely conclusively on the power and authority of the Trustees as set
forth in this Declaration.

              
SECTION 3.5 Title to Property of the Trust.

              
Unless otherwise provided in this Declaration, legal title to all assets
of the Trust shall be vested in the Trust. The Holders of Certificates
shall not have legal title to any part of the assets of the Trust, but
shall have an individual undivided beneficial interest in the assets of
the Trust.

              
SECTION 3.6 Powers and Duties of the Regular Trustees.

              
The Regular Trustees shall have the exclusive power, authority and duty
to cause the Trust, and shall cause the Trust, to engage in the following
activities:

              
(a) to issue Preferred Securities and Common Securities, in each case in
accordance with this Declaration; provided, however, that the Trust may
issue no more than one series of Preferred Securities and no more than
one series of Common Securities, and, provided further, there shall be
no interests in the Trust other than the Securities and the issuance of
Securities shall be limited to a one-time, simultaneous issuance of both
Preferred Securities and Common Securities;

              
(b) in connection with the Offer and the issuance of the Preferred Securities,
at the direction of the Sponsor, to effect or cause to be effected the
filings, and to execute or cause to be executed the documents, set forth
in Section 3.11;

              
(c) to acquire as trust assets Debentures upon consummation of the Offer
in connection with the exchange of Preferred Securities for Depositary
Shares pursuant to the Offer and to acquire as trust assets additional
Debentures with the proceeds of the sale of the Common Securities;

              
(d) to cause the Trust to enter into the Dealer Manager Agreement and such
other agreements and arrangements as may be necessary or desirable in connection
with the Offer and the consummation thereof, and to take all action, and
exercise all discretion, as may be necessary or desirable in connection
with the Offer or the consummation thereof;

              
(e) to give the Sponsor and the Institutional Trustee prompt written notice
of the occurrence of a Special Event, provided that the Regular Trustees
shall consult with the Sponsor and the Institutional Trustee before taking
or refraining from taking any Ministerial Action in relation to a Special
Event;

              
(f) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including for the
purposes of Section 316(c) of the Trust Indenture Act and with respect
to Distributions, voting rights, redemptions, and exchanges, and to issue
relevant notices to Holders of the Preferred Securities and Common Securities
as to such actions and applicable record dates;

              
(g) to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action, or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless, pursuant to Section 3.8(c), the Institutional
Trustee has the exclusive power to bring such Legal Action;

              
(h) to employ or otherwise engage employees and agents (who may be designated
as officers with titles) and managers, contractors, advisors, and consultants
and pay reasonable compensation for such services;

              
(i) to cause the Trust to comply with the Trust's obligations under the
Trust Indenture Act;

              
(j) to give the certificate to the Institutional Trustee required by Section
314(a)(4) of the Trust Indenture Act, which certificate may be executed
by any Regular Trustee;

              
(k) to incur expenses which are necessary or incidental to carry out any
of the purposes of the Trust;

              
(l) to act as, or appoint another Person to act as, registrar and transfer
agent for the Securities, the Regular Trustees hereby initially appointing
The First National Bank of Chicago for such purposes;

              
(m) to take all actions and perform such duties as may be required of the
Regular Trustee pursuant to the terms of the Securities set forth in Exhibits
B and C hereto;

              
(n) to execute all documents or instruments, perform all duties and powers,
and do all things for and on behalf of the Trust in all matters necessary
or incidental to the foregoing;

              
(o) to take all action which may be necessary or appropriate for the preservation
and the continuation of the Trust's valid existence, rights, franchises
and privileges as a statutory business trust under the laws of the State
of Delaware and of each other jurisdiction in which such existence is necessary
to protect the limited liability of the Holders of the Securities or to
enable the Trust to effect the purposes for which the Trust has been created;

              
(p) to take all action, not inconsistent with this Declaration or with
applicable law, which the Regular Trustees determine in their discretion
to be reasonable and necessary or desirable in carrying out the activities
of the Trust as set out in this Section 3.6, in order that:

                             
(i) the Trust will not be deemed to be an Investment Company required to
be registered under the Investment Company Act;

                             
(ii) the Trust will not be classified for United States federal income
tax purposes as an association taxable as a corporation or a partnership
and will be treated as a grantor trust for United States federal income
tax purposes; and

                             
(iii) the Trust will comply with any requirements imposed by any taxing
authority on holders of instruments treated as indebtedness for United
States federal income tax purposes; provided that such action does not
adversely affect the interests of Holders;

              
(q) to take all action necessary to cause all applicable tax returns and
tax information reports that are required to be filed with respect to the
Trust to be duly prepared and filed by the Regular Trustees, on behalf
of the Trust; and

              
(r) subject to the requirements of Rule 3a-5 and Section 317(b) of the
Trust Indenture Act, to appoint one or more Paying Agents in addition to
the Institutional Trustee.

              
The Regular Trustees must exercise the powers set forth in this Section
3.6 in a manner which is consistent with the purposes and functions of
the Trust set out in Section 3.3 and the Regular Trustees shall not take
any action which is inconsistent with the purposes and functions of the
Trust set forth in Section 3.3.

              
Subject to this Section 3.6, the Regular Trustees shall have none of the
powers nor any of the authority of the Institutional Trustee set forth
in Section 3.8.

              
SECTION 3.7 Prohibition of Actions by Trust and Trustees.

              
The Trust shall not, and the Trustees (including the Institutional Trustee)
shall cause the Trust not to, engage in any activity other than as required
or authorized by this Declaration. In particular, the Trust shall not and
the Trustees (including the Institutional Trustee) shall cause the Trust
not to:

              
(a) invest any proceeds received by the Trust from holding the Debentures
but shall promptly distribute all such proceeds to Holders of Securities
pursuant to the terms of this Declaration and of the Securities;

              
(b) acquire any assets other than as expressly provided herein;

              
(c) possess Trust property for other than a Trust purpose;

              
(d) make any investments, other than investments represented by the Debentures;

              
(e) possess any power or otherwise act in such a way as to vary the Trust
assets or the terms of the Securities in any way whatsoever;

              
(f) issue any securities or other evidences of beneficial ownership of,
or beneficial interests in, the Trust other than the Securities;

              
(g) incur any indebtedness for borrowed money; or

              
(h) (i) direct the time, method and place of exercising any trust or power
conferred upon the Debenture Trustee with respect to the Debentures, (ii)
waive any past default that is waivable under Section 5.7 of the Indenture,
(iii) exercise any right to rescind or annul any declaration that the principal
of all of the Debentures shall be due and payable or (iv) consent to any
amendment, modification or termination of the Indenture or the Debentures,
in each case where such consent shall be required, unless in the case of
this clause (h) the Institutional Trustee shall have received an unqualified
opinion of nationally recognized independent tax counsel recognized as
expert in such matters to the effect that such action will not cause the
Trust to be classified for United States federal income tax purposes as
an association taxable as a corporation or partnership and that the Trust
will continue to be classified as a grantor trust for United States federal
income tax purposes.

              
SECTION 3.8 Powers and Duties of the Institutional Trustee.

              
(a) The Institutional Trustee shall:

                             
(i) on the receipt of payments of funds made in respect of the Debentures
held by the Trust, without any further acts of the Institutional Trustee
or the Regular Trustees, promptly make payments to the Holders of the Preferred
Securities and Common Securities in accordance with Section 6.1. Funds
held in the Trust may be held uninvested, and without liability for interest
thereon, until disbursed in accordance with this Declaration;

                             
(ii) engage in such ministerial activities as shall be necessary or appropriate
to effect promptly the redemption of the Preferred Securities and the Common
Securities to the extent the Debentures are redeemed or mature;

                             
(iii) upon notice of distribution issued by the Regular Trustees in accordance
with the terms of the Preferred Securities and the Common Securities, engage
in such ministerial activities as shall be necessary or appropriate to
effect promptly the distribution pursuant to terms of the Securities of
Debentures to Holders of Securities upon the occurrence of a Special Event;
and

                             
(iv) have the legal power to exercise all of the rights, powers and privileges
of a holder of the Debentures under the Indenture and, if an Event of Default
occurs and is continuing, the Institutional Trustee, subject to Section
2.6(b), shall, for the benefit of the Holders of the Securities, enforce
its rights as holder of the Debentures under the Indenture, subject to
the rights of the Holders of the Preferred Securities pursuant to the terms
of this Declaration and the Trust Indenture Act.

              
(b) The Institutional Trustee shall take all actions and perform such duties
as may be specifically required of the Institutional Trustee pursuant to
the terms of the Securities set forth in Exhibits B and C hereto.

              
(c) The Institutional Trustee shall take any Legal Action which arises
out of or in connection with an Event of Default or the Institutional Trustee's
duties and obligations under this Declaration or the Trust Indenture Act.

              
(d) All moneys and all Debentures held by the Trust will not be subject
to any right, charge, security interest, lien or claim of any kind in favor
of, or for the benefit of, the Institutional Trustee or its agents or their
creditors.

              
(e) The Institutional Trustee shall, within 90 days after the occurrence
of a default with respect to the Securities, transmit by mail, first class
postage prepaid, to the Holders of the Securities, as their names and addresses
appear upon the register, notice of all defaults with respect to the Securities
known to the Institutional Trustee, unless such defaults shall have been
cured before the giving of such notice (the term "defaults" for the purposes
of this Section 3.8(e) being hereby defined to be an Indenture Event of
Default, not including any periods of grace provided for in the Indenture
and irrespective of the giving of any notice provided therein); provided
that, except in the case of default in the payment of the principal of
or interest on any of the Debentures, the Institutional Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee, or a trust committee of directors and/or Responsible
Officers, of the Institutional Trustee in good faith determines that the
withholding of such notice is in the interests of the Holders of the Securities.
The Institutional Trustee shall not be deemed to have knowledge of any
default, except (i) a default in the payment of principal, premium or interest
on the Debentures or (ii) any default as to which the Institutional Trustee
shall have received written notice or a Responsible Officer charged with
the administration of this Declaration shall have obtained written notice.

              
(f) The Institutional Trustee shall continue to serve as a Trustee until:

                             
(i) the Trust has been completely liquidated and the proceeds thereof distributed
to the Holders of Securities pursuant to the terms of the Securities; or

                             
(ii) a Successor Institutional Trustee has been appointed and has accepted
that appointment in accordance with Article V.

              
(g) The Institutional Trustee shall act or appoint another Person to act
as paying agent in respect of the Securities and, subject to Section 3.6(r),
may authorize one or more Persons (each, a "Paying Agent") to pay Distributions,
redemption payments or liquidation payments on behalf of the Trust with
respect to the Preferred Securities. Any such Paying Agent shall comply
with Section 317(b) of the Trust Indenture Act. Any Paying Agent may be
removed by the Institutional Trustee, after consultation with the Regular
Trustees, at any time and a successor Paying Agent or additional Paying
Agents may be appointed at any time by the Institutional Trustee, subject
to Section 3.6(r). The Institutional Trustee hereby initially appoints
The First National Bank of Chicago as the Paying Agent.

              
(h) The Institutional Trustee shall give prompt written notice to the Holders
of the Securities of any notice received by it from UAL of its election
to defer payments of interest on the Debentures by extending the interest
payment period with respect thereto.

              
(i) Subject to this Section 3.8, the Institutional Trustee shall have none
of the powers or the authority of the Regular Trustees set forth in Section
3.6.

              
(j) The Institutional Trustee shall exercise the powers, duties and rights
set forth in this Section 3.8 and Section 3.10 in a manner which is consistent
with the purposes and functions of the Trust set out in Section 3.3 and
the Institutional Trustee shall not take any action which is inconsistent
with the purposes and functions of the Trust set forth in Section 3.3.

SECTION 3.9 Delaware Trustee.

              
Notwithstanding any other provision of this Declaration other than Section
5.1(a)(3), the Delaware Trustee shall not be entitled to exercise any powers,
nor shall the Delaware Trustee have any of the duties and responsibilities,
of the Regular Trustees and the Institutional Trustee described in this
Declaration or any of the duties or responsibilities of Trustees generally.
Except as set forth in Section 5.1(a)(3), the Delaware Trustee shall be
a Trustee for the sole and limited purpose of fulfilling the requirements
of Section 3807 of the Business Trust Act. No implied covenants or obligations
shall be read into this Declaration against the Delaware Trustee.

SECTION 3.10 Certain Rights and
Duties of the Institutional Trustee.

              
(a) The Institutional Trustee, before the occurrence of an Event of Default
and after the curing of all Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in
this Declaration, and no implied covenants shall be read into this Declaration
against the Institutional Trustee. In case an Event of Default has occurred
(that has not been cured or waived pursuant to Section 2.6), the Institutional
Trustee shall exercise such of the rights and powers vested in it by this
Declaration, and use the same degree of care and skill in their exercise,
as a prudent person would exercise or use under the circumstances in the
conduct of his or her own affairs.

              
(b) No provision of this Declaration shall be construed to relieve the
Institutional Trustee from liability for its own negligent action, its
own negligent failure to act or its own willful misconduct, except that:

                             
(i) prior to the occurrence of an Event of Default and after the curing
or waiving of all such Events of Default that may have occurred:

                                            
(A) the duties and obligations of the Institutional Trustee shall be determined
solely by the express provisions of this Declaration, and the Institutional
Trustee shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Declaration, and no implied
covenants or obligations shall be read into this Declaration against the
Institutional Trustee; and

                                            
(B) in the absence of bad faith on the part of the Institutional Trustee,
the Institutional Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
any certificates or opinions furnished to the Institutional Trustee and
conforming to the requirements of this Declaration; but, in the case of
any such certificates or opinions that by any provision hereof are specifically
required to be furnished to the Institutional Trustee, the Institutional
Trustee shall be under a duty to examine the same to determine whether
or not they conform to the requirements of this Declaration;

                             
(ii) the Institutional Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer of the Institutional Trustee,
unless it shall be proved that the Institutional Trustee was negligent
in ascertaining the pertinent facts;

                             
(iii) the Institutional Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders as provided herein relating to the time, method
and place of conducting any proceeding for any remedy available to the
Institutional Trustee hereunder or under the Indenture, or exercising any
trust or power conferred upon the Institutional Trustee under this Declaration;
and

                             
(iv) no provision of this Declaration shall require the Institutional Trustee
to expend or risk its own funds or otherwise incur personal financial liability
in the performance of any of its duties or in the exercise of any of its
rights or powers, if it shall have reasonable ground for believing that
the repayment of such funds or liability is not reasonably assured to it
under the terms of this Declaration or adequate indemnity against such
risk or liability is not reasonably assured to it.

              
(c) Subject to the provisions of Section 3.10(a) and (b):

                             
(i) whenever, in the administration of this Declaration, the Institutional
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the Institutional
Trustee (unless other evidence is herein specifically prescribed) may,
in the absence of bad faith on its part and, if the Trust is excluded from
the definition of Investment Company solely by means of Rule 3a-5, subject
to the requirements of Rule 3a-5, request and rely upon a certificate,
which shall comply with the provisions of Section 314(e) of the Trust Indenture
Act, signed by any two of the Regular Trustees or by an authorized officer
of the Sponsor, as the case may be;

                             
(ii) The Institutional Trustee (A) may consult with counsel of its choice
(which may be counsel to the Sponsor or any of its Affiliates and may include
any of its employees) selected by it in good faith and with due care and
the written advice or opinion of such counsel with respect to legal matters
shall be full and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon and in accordance with such advice and opinion and (B)
shall have the right at any time to seek instructions concerning the administration
of this Declaration from any court of competent jurisdiction;

                             
(iii) The Institutional Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Institutional Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney appointed
by it in good faith and with due care;

                             
(iv) The Institutional Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Declaration at the request
or direction of any Holders, unless such Holders shall have offered to
the Institutional Trustee reasonable security and indemnity against the
costs, expenses (including attorneys' fees and expenses) and liabilities
that might be incurred by it in complying with such request or direction;
provided that nothing contained in this clause (iv) shall relieve the Institutional
Trustee of the obligation, upon the occurrence of an Event of Default (which
has not been cured or waived) to exercise such of the rights and powers
vested in it by this Declaration, and to use the same degree of care and
skill in this exercise, as a prudent person would exercise or use under
the circumstances in the conduct of his or her own affairs; and

                             
(v) Any action taken by the Institutional Trustee or its agents hereunder
shall bind the Holders of the Securities and the signature of the Institutional
Trustee or its agents alone shall be sufficient and effective to perform
any such action; and no third party shall be required to inquire as to
the authority of the Institutional Trustee to so act, or as to its compliance
with any of the terms and provisions of this Declaration, both of which
shall be conclusively evidenced by the Institutional Trustee's or its agent's
taking such action.

              
SECTION 3.11 Registration Statement and Related Matters.

              
In accordance with the Original Declaration, UAL and the Trustees have
authorized and directed, and hereby confirm the authorization of, UAL,
as the sponsor of the Trust, (i) to file with the Commission and execute,
in each case on behalf of the Trust, (a) the Registration Statement on
Form S-4 (File No. 333-14245) (the "1933 Act Registration Statement") and
any preeffective or post-effective amendments to such Registration Statement,
relating to the registration under the Securities Act of the Preferred
Securities of the Trust, (b) a Registration Statement on Form 8-A or other
appropriate form (the "1934 Act Registration Statement") (including all
pre-effective and post-effective amendments thereto) relating to the registration
of the Preferred Securities of the Trust under Section 12(b) of the Exchange
Act and (c) an Issuer Tender Offer Statement on Schedule 13E-4 and any
other tender offer statement required to be filed by the Trust with the
Commission (including, if necessary, Schedule 14D-1) relating to the Offer
(collectively, the "Tender Offer Schedules") and any amendment or supplement
thereto; (ii) to file with the New York Stock Exchange ("NYSE") and execute
on behalf of the Trust a listing application and all other applications,
statements, certificates, agreements and other instruments as shall be
necessary or desirable to cause the Preferred Securities to be listed on
the NYSE; (iii) to file and execute on behalf of the Trust such applications,
reports, surety bonds, irrevocable consents, appointments of attorney for
service of process and other papers and documents as shall be necessary
or desirable to register the Preferred Securities under the securities
or "Blue Sky" laws of such jurisdictions as UAL, on behalf of the Trust,
may deem necessary or desirable and (iv) to execute on behalf of the Trust
the Dealer Manager Agreement, relating to the Offer, substantially in the
form included as Exhibit 1 to the 1933 Act Registration Statement. In the
event that any filing referred to in clauses (i)-(iii) above is required
by the rules and regulations of the Commission, the NYSE or state securities
or "Blue Sky" laws, to be executed on behalf of the Trust by the Trustees,
the Regular Trustees, in their capacities as Trustees of the Trust, are
hereby authorized and directed to join in any such filing and to execute
on behalf of the Trust any and all of the foregoing, it being understood
that the Institutional Trustee and the Delaware Trustee, in their capacities
as Trustees of the Trust, shall not be required to join in any such filing
or execute on behalf of the Trust any such document unless required by
the rules and regulations of the Commission, the NYSE or state securities
or "Blue Sky" laws. In connection with all of the foregoing, each Trustee,
solely in its capacity as Trustee of the Trust, has constituted and appointed,
and hereby confirms the appointment of, UAL Corporation as his, her or
its true and lawful attorney-in-fact and agent, with full power of substitution
and resubstitution, for such Trustee or in such Trustee's name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to the 1933 Act Registration Statement, the
1934 Act Registration Statement and the Tender Offer Schedules and to file
the same, with all exhibits thereto, and other documents in connection
therewith, with the Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and
thing requisite and necessary to be done in connection therewith, as fully
to all intents and purposes as such Trustee might or could do in person,
hereby ratifying and confirming all that said attorney-in-fact and agent,
or its substitute, shall do or cause to be done by virtue hereof.

              
SECTION 3.12 Filing of Amendments to Certificate of Trust.

              
The Certificate of Trust as filed with the Secretary of State of the State
of Delaware on October 15, 1996 is attached hereto as Exhibit A. On or
after the date of execution of this Declaration, the Trustees shall cause
the filing with the Secretary of State of the State of Delaware of such
amendments to the Certificate of Trust as the Trustees shall deem necessary
or desirable.

              
SECTION 3.13 Execution of Documents by Regular Trustees.

              
Unless otherwise determined by the Regular Trustees and except as otherwise
required by the Business Trust Act with respect to the Certificate of Trust
or otherwise, a majority of, or, if there are only two, both of, the Regular
Trustees are authorized to execute and deliver on behalf of the Trust any
documents which the Regular Trustees have the power and authority to execute
or deliver pursuant to this Declaration.

              
SECTION 3.14 Trustees Not Responsible for Recitals or Issuance of Securities.

              
The recitals contained in this Declaration and the Securities shall be
taken as the statements of the Sponsor, and the Trustees do not assume
any responsibility for their correctness. The Trustees make no representations
as to the value or condition of the property of the Trust or any part thereof.
The Trustees make no representations as to the validity or sufficiency
of this Declaration or the Securities.

              
SECTION 3.15 Duration of Trust.

              
The Trust, absent termination pursuant to the provisions of Article VIII
hereof, shall have existence until December 15, 2026.

 

 

ARTICLE IV

SPONSOR

              
SECTION 4.1 Purchase of Common Securities by Sponsor.

              
The Sponsor will purchase Common Securities issued by the Trust at the
same time as the Preferred Securities are issued in exchange for Depositary
Shares pursuant to the Offer, such purchase to be in an amount equal to
3% of the sum of (i) the aggregate stated liquidation amount of the Preferred
Securities issued in exchange for Depositary Shares pursuant to the Offer
and (ii) the proceeds derived from the sale of the Common Securities.

              
SECTION 4.2 Expenses.

              
(a) The Sponsor shall be responsible for and shall pay for all debts and
obligations (other than with respect to the Securities) and all costs and
expenses of the Trust (including, but not limited to, costs and expenses
relating to the organization of the Trust, the issuance of the Preferred
Securities pursuant to the Offer, the fees and expenses (including reasonable
counsel fees and expenses) of the Trustees (including any amounts payable
under Article X), the costs and expenses relating to the operation of the
Trust, including, without limitation, costs and expenses of accountants,
attorneys, statistical or bookkeeping services, expenses for printing and
engraving and computing or accounting equipment, paying agent(s), registrar(s),
transfer agent(s), duplicating, travel and telephone and other telecommunications
expenses and costs and expenses incurred in connection with the disposition
of Trust assets).

              
(b) The Sponsor will pay any and all taxes (other than United States withholding
taxes attributable to the Trust or its assets) and all liabilities, costs
and expenses with respect to such taxes of the Trust.

              
(c) The Sponsor's obligations under this Section 4.2 shall be for the benefit
of, and shall be enforceable by, any Person to whom any such debts, obligations,
costs, expenses and taxes are owed (a "Creditor") whether or not such Creditor
has received notice hereof. Any such Creditor may enforce the Sponsor's
obligations under this Section 4.2 directly against the Sponsor and the
Sponsor irrevocably waives any right or remedy to require that any such
Creditor take any action against the Trust or any other Person before proceeding
against the Sponsor. The Sponsor agrees to execute such additional agreements
as may be necessary or desirable in order to give full effect to the provisions
of this Section 4.2.

 

 

ARTICLE V

TRUSTEES

              
SECTION 5.1 Number of Trustees; Qualifications.

              
(a) The number of Trustees initially shall be five (5). At any time (i)
before the issuance of the Securities, the Sponsor may, by written instrument,
increase or decrease the number of, and appoint, remove and replace the,
Trustees, and (ii) after the issuance of the Securities, the number of
Trustees may be increased or decreased solely by, and Trustees may be appointed,
removed or replaced solely by, vote of Holders of Common Securities representing
a Majority in liquidation amount of the Common Securities voting as a class;
provided that in any case:

                             
(1) the number of Trustees shall be at least five (5) unless the Trustee
that acts as the Institutional Trustee also acts as the Delaware Trustee,
in which case the number of Trustees shall be at least three (3);

                             
(2) at least a majority of the Trustees shall at all times be officers,
directors or employees of UAL;

                             
(3) if required by the Business Trust Act, one Trustee (the "Delaware Trustee")
shall be either a natural person who is a resident of the State of Delaware
or, if not a natural person, an entity which has its principal place of
business in the State of Delaware and otherwise is permitted to act as
a Trustee hereunder under the laws of the State of Delaware, except that
if the Institutional Trustee has its principal place of business in the
State of Delaware and otherwise is permitted to act as a Trustee hereunder
under the laws of the State of Delaware, then the Institutional Trustee
shall also be the Delaware Trustee and Section 3.9 shall have no application;
and

                             
(4) there shall at all times be an Institutional Trustee hereunder which
shall satisfy the requirements of Section 5.1(c).  Each Trustee shall
be either a natural person at least 21 years of age or a legal entity which
shall act through one or more duly appointed representatives.

              
(b) The initial Regular Trustees shall be:

              
Douglas A. Hacker

              
Francesca M. Maher

              
Thomas A. Mutryn

              
c/o UAL Corporation

              
1200 East Algonquin Road

              
Elk Grove Township, Illinois 60007

              
(c) There shall at all times be one Trustee which shall act as Institutional
Trustee. In order to act as Institutional Trustee hereunder, such Trustee
shall:

                             
(i) not be an Affiliate of the Sponsor; and

                             
(ii) be a corporation organized and doing business under the laws of the
United States of America or any State or Territory thereof or of the District
of Columbia, or a Person permitted by the Commission to act as an institutional
trustee under the Trust Indenture Act, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
$50,000,000, and subject to supervision or examination by Federal, State,
Territorial or District of Columbia authority. If such Person publishes
reports of condition at least annually, pursuant to law or to the requirements
of the supervising or examining authority referred to above, then, for
the purposes of this Section 5.1(c)(ii), the combined capital and surplus
of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published.

              
If at any time the Institutional Trustee shall cease to satisfy the requirements
of clauses (i)-(ii) above, the Institutional Trustee shall immediately
resign in the manner and with the effect set out in Section 5.2(d). If
the Institutional Trustee has or shall acquire any "conflicting interest"
within the meaning of Section 310(b) of the Trust Indenture Act, the Institutional
Trustee and the Holders of the Common Securities (as if such Holders were
the obligor referred to in Section 310(b) of the Trust Indenture Act) shall
in all respects comply with the provisions of Section 310(b) of the Trust
Indenture Act. The Preferred Guarantee shall be deemed to be specifically
described in this Declaration for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.

              
The initial Trustee which shall serve as the Institutional Trustee is The
First National Bank of Chicago, whose address is as set forth in Section
14.1(b).

              
(d) The initial Trustee which shall serve as the Delaware Trustee is First
Chicago Delaware Inc., whose address is as set forth in Section 14.1(c).

              
(e) Any action taken by Holders of Common Securities pursuant to this Article
V shall be taken at a meeting of Holders of Common Securities convened
for such purpose or by written consent as provided in Section 12.2.

              
(f) No amendment may be made to this Section 5.1 which would change any
rights with respect to the number, existence or appointment and removal
of Trustees, except with the consent of each Holder of Common Securities.

              
SECTION 5.2 Appointment, Removal and Resignation of  Trustees.

              
(a) Subject to Section 5.2(b), Trustees may be appointed or removed without
cause at any time:

                             
(i) until the issuance of the Securities, by written instrument executed
by the Sponsor; and

                             
(ii) after the issuance of the Securities, by vote of the Holders of a
Majority in liquidation amount of the Common Securities voting as a class.

              
(b) (i) The Trustee that acts as Institutional Trustee shall not be removed
in accordance with Section 5.2(a) until a Successor Institutional Trustee
possessing the qualifications to act as Institutional Trustee under Section
5.1(c) has been appointed and has accepted such appointment by written
instrument executed by such Successor Institutional Trustee and delivered
to the Regular Trustees, the Sponsor and the Institutional Trustee being
removed; and

                             
(ii) the Trustee that acts as Delaware Trustee shall not be removed in
accordance with Section 5.2(a) until a successor Trustee possessing the
qualifications to act as Delaware Trustee under Section 5.1(a)(3) (a "Successor
Delaware Trustee") has been appointed and has accepted such appointment
by written instrument executed by such Successor Delaware Trustee and delivered
to the Regular Trustees, the Sponsor and the Delaware Trustee being removed.

              
(c) A Trustee appointed to office shall hold office until such Trustee's
successor shall have been appointed or until death, removal or resignation.

              
(d) Any Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument (a "Resignation Request") in writing signed
by the Trustee and delivered to the Sponsor and the Trust, which resignation
shall take effect upon such delivery or upon such later date as is specified
therein; provided however, that:

                             
(i) no such resignation of the Trustee that acts as the Institutional Trustee
shall be effective until a Successor Institutional Trustee possessing the
qualifications to act as Institutional Trustee under Section 5.1(c) has
been appointed and has accepted such appointment by instrument executed
by such Successor Institutional Trustee and delivered to the Trust, the
Sponsor and the resigning Institutional Trustee; and

                             
(ii) no such resignation of the Trustee that acts as the Delaware Trustee
shall be effective until a Successor Delaware Trustee has been appointed
and has accepted such appointment by instrument executed by such Successor
Delaware Trustee and delivered to the Trust, the Sponsor and the resigning
Delaware Trustee.

              
(e) If no Successor Institutional Trustee or Successor Delaware Trustee
shall have been appointed and accepted appointment as provided in this
Section 5.2 within 60 days after delivery to the Sponsor and the Trust
of a Resignation Request, the resigning Institutional Trustee or Delaware
Trustee may petition any court of competent jurisdiction for appointment
of a Successor Institutional Trustee or Successor Delaware Trustee. Such
court may thereupon after such notice, if any, as it may deem proper and
prescribe, appoint a Successor Institutional Trustee or Successor Delaware
Trustee, as the case may be.

              
SECTION 5.3 Vacancies Among Trustees.

              
If a Trustee ceases to hold office for any reason and the number of Trustees
is not reduced pursuant to Section 5.1 or if the number of Trustees is
increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by a majority of the Regular Trustees
shall be conclusive evidence of the existence of such vacancy. The vacancy
shall be filled with a Trustee appointed in accordance with the requirements
of this Article V.

              
SECTION 5.4 Effect of Vacancies.

              
The death, resignation, retirement, removal, bankruptcy, dissolution, liquidation,
incompetence or incapacity to perform the duties of a Trustee, or any one
of them, shall not operate to annul the Trust. Whenever a vacancy in the
number of Regular Trustees shall occur, until such vacancy is filled as
provided in this Article V, the Regular Trustees in office, regardless
of their number, shall have all the powers granted to the Regular Trustees
and shall discharge all the duties imposed upon the Regular Trustees by
this Declaration.

              
SECTION 5.5 Meetings.

              
Meetings of the Regular Trustees shall be held from time to time upon the
call of any Trustee. Regular meetings of the Regular Trustees may be held
at a time and place fixed by resolution of the Regular Trustees. Notice
of any in-person meetings of the Regular Trustees shall be hand delivered
or otherwise delivered in writing (including by facsimile, with a hard
copy by overnight courier) not less than 48 hours before such meeting.
Notice of any telephonic meetings of the Regular Trustees or any committee
thereof shall be hand delivered or otherwise delivered in writing (including
by facsimile, with a hard copy by overnight courier) not less than 24 hours
before a meeting. Notices shall contain a brief statement of the time,
place and anticipated purposes of the meeting. The presence (whether in
person or by telephone) of a Regular Trustee at a meeting shall constitute
a waiver of notice of such meeting except where a Regular Trustee attends
a meeting for the express purpose of objecting to the transaction of any
activity on the ground that the meeting has not been lawfully called or
convened. Unless provided otherwise in this Declaration, any action of
the Regular Trustees may be taken at a meeting by vote of a majority of
the Regular Trustees present (whether in person or by telephone) and eligible
to vote with respect to such matter, provided that a Quorum is present,
or without a meeting by the unanimous written consent of the Regular Trustees.

SECTION 5.6 Delegation of Power.

              
(a) Any Regular Trustee may, by power of attorney consistent with applicable
law, delegate to any other natural person over the age of 21 his or her
power for the purpose of executing any registration statement or amendment
thereto or other document or schedule filed with the Commission or making
any other governmental filing (including, without limitation filings referred
to in Section 3.11).

              
(b) The Regular Trustees shall have power to delegate from time to time
to such of their number the doing of such things and the execution of such
instruments either in the name of the Trust or the names of the Regular
Trustees or otherwise as the Regular Trustees may deem expedient, to the
extent such delegation is not prohibited by applicable law or contrary
to the provisions of the Trust, as set forth herein.

 

 

ARTICLE VI

DISTRIBUTIONS

              
SECTION 6.1 Distributions.

              
Holders shall receive periodic distributions, redemption payments and liquidation
distributions in accordance with the applicable terms of the relevant Holder's
Securities ("Distributions"). Distributions shall be made to the Holders
of Preferred Securities and Common Securities in accordance with the terms
of the Securities as set forth in Exhibits B and C hereto. If and to the
extent that UAL makes a payment of interest and principal on the Debentures
held by the Institutional Trustee (the amount of any such payment being
a "Payment Amount"), the Institutional Trustee shall and is directed to
promptly make a Distribution of the Payment Amount to Holders in accordance
with the terms of the Securities as set forth in Exhibits B and C hereto.

 

 

ARTICLE VII

ISSUANCE OF SECURITIES

              
SECTION 7.1 General Provisions Regarding Securities.

              
(a) The Regular Trustees shall issue on behalf of the Trust securities
in fully registered form representing undivided beneficial interests in
the assets of the Trust in accordance with Section 7.1(b) and for the consideration
specified in Section 3.3.

              
(b) The Regular Trustees shall issue on behalf of the Trust one class of
preferred securities representing undivided beneficial interests in the
assets of the Trust having such terms as are set forth in Exhibit B (the
"Preferred Securities") which terms are incorporated by reference in, and
made a part of, this Declaration as if specifically set forth herein, and
one class of common securities representing undivided beneficial interests
in the assets of the Trust having such terms as are set forth in Exhibit
C (the "Common Securities") which terms are incorporated by reference in,
and made a part of, this Declaration as if specifically set forth herein.
The Trust shall have no securities or other interests in the assets of
the Trust other than the Preferred Securities and the Common Securities.

              
(c) The Certificates shall be signed on behalf of the Trust by the Regular
Trustees (or if there are more than two Regular Trustees by any two of
the Regular Trustees). Such signatures may be the manual or facsimile signatures
of the present or any future Regular Trustee. Typographical and other minor
errors or defects in any such reproduction of any such signature shall
not affect the validity of any Security. In case any Regular Trustee of
the Trust who shall have signed any of the Certificates shall cease to
be such Regular Trustee before the Certificate so signed shall be delivered
by the Trust, such Certificate nevertheless may be delivered as though
the person who signed such Certificate had not ceased to be such Regular
Trustee; and any Certificate may be signed on behalf of the Trust by such
persons as, at the actual date of the execution of such Security, shall
be the Regular Trustees of the Trust, although at the date of the execution
and delivery of the Declaration any such person was not such a Regular
Trustee. Certificates shall be printed, lithographed or engraved or may
be produced in any other manner as is reasonably acceptable to the Regular
Trustees, as evidenced by their execution thereof, and may have such letters,
numbers or other marks of identification or designation and such legends
or endorsements as the Regular Trustees may deem appropriate, or as may
be required to comply with any law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock exchange on
which Securities may be listed, or to conform to usage. Pending the preparation
of definitive Certificates, the Regular Trustees on behalf of the Trust
may execute temporary Certificates (printed, lithographed or typewritten),
substantially in the form of the definitive Certificates in lieu of which
they are issued, but with such omissions, insertions and variations as
may be appropriate for temporary Certificates, all as may be determined
by the Regular Trustees. Each temporary Certificate shall be executed by
the Regular Trustees on behalf of the Trust upon the same conditions and
in substantially the same manner, and with like effect, as definitive Certificates.
Without unnecessary delay, the Regular Trustees on behalf of the Trust
will execute and furnish definitive Certificates and thereupon any or all
temporary Certificates may be surrendered to the transfer agent and registrar
in exchange therefor (without charge to the Holders). Each Certificate
whether in temporary or definitive form shall be countersigned by the manual
signature of an authorized signatory of the Person acting as registrar
and transfer agent for the Securities, which shall initially be The First
National Bank of Chicago.

              
(d) The consideration received by the Trust for the issuance of the Securities
shall constitute a contribution to the capital of the Trust and shall not
constitute a loan to the Trust.

              
(e) Upon issuance of the Securities as provided in this Declaration, the
Securities so issued shall be deemed to be validly issued, fully paid and
non-assessable.

              
(f) Every Person, by virtue of having become a Holder or a Preferred Security
Beneficial Owner in accordance with the terms of this Declaration, shall
be deemed to have expressly assented and agreed to the terms of, and shall
be bound by, this Declaration.

              
(g) Upon issuance of the Securities as provided in this Declaration, the
Regular Trustees on behalf of the Trust shall return to UAL the $10 constituting
initial trust assets as set forth in the Original Declaration.

 

 

ARTICLE VIII

TERMINATION OF TRUST

              
SECTION 8.1 Termination of Trust.

              
The Trust shall terminate:

                             
(i) when all of the Securities shall have been called for redemption and
the amounts necessary for redemption thereof shall have been paid to the
Holders of Securities in accordance with the terms of the Securities; or

                             
(ii) when all of the Debentures shall have been distributed to the Holders
of Securities in exchange for all of the Securities in accordance with
the terms of the Securities; or

                             
(iii) upon the expiration of the term of the Trust as set forth in Section
3.15, and a certificate of cancellation is filed by the Trustees with the
Secretary of State of the State of Delaware; or

                             
(iv) upon the bankruptcy of UAL or the Trust; or

                             
(v) upon the filing of a certificate of dissolution or the equivalent with
respect to UAL, the filing of a certificate of cancellation with respect
to the Trust after having obtained the consent of at least a majority in
liquidation amount of the Securities, voting together as a single class,
to file such certificate of cancellation, or the revocation of the charter
of UAL and the expiration of 90 days after the date of revocation without
a reinstatement thereof; or

                             
(vi) upon the entry of a decree of judicial dissolution of UAL or the Trust.

              
The Trustees shall file a certificate of cancellation with the Secretary
of State of the State of Delaware after (i) termination of the Trust in
accordance with this Section 8.1, (ii) satisfaction of creditors of the
Trust and (iii) distribution of the Trust's assets in accordance with this
Declaration. The provisions of Sections 3.10 and 4.2 and Article X shall
survive the termination of the Trust.

 

 

ARTICLE IX

TRANSFER OF INTERESTS

              
SECTION 9.1 Transfer of Securities.

              
(a) Securities may only be transferred, in whole or in part, in accordance
with the terms and conditions set forth in this Declaration. Any transfer
or purported transfer of any Security not made in accordance with this
Declaration shall be null and void.

              
(b) Subject to this Article IX, Preferred Securities shall be freely transferable.

              
(c) Subject to this Article IX, UAL and any Related Party may only transfer
Common Securities to UAL or a Related Party, provided that any such transfer
shall be subject to the condition that the transferor shall have obtained
(1) either a ruling from the Internal Revenue Service or an unqualified
written opinion addressed to the Trust and delivered to the Trustees of
nationally recognized independent tax counsel experienced in such matters
to the effect that such transfer will not (i) cause the Trust to be treated
as issuing a class of interests in the Trust differing from the class of
interests represented by the Common Securities originally issued to UAL,
(ii) result in the Trust acquiring or disposing of, or being deemed to
have acquired or disposed of, an asset, or (iii) result in or cause the
Trust to be treated as anything other than a grantor trust for United States
federal income tax purposes and (2) an unqualified written opinion addressed
to the Trust and delivered to the Trustees of a nationally recognized independent
counsel experienced in such matters that such transfer will not cause the
Trust to be an Investment Company or controlled by an Investment Company.

              
SECTION 9.2 Transfer of Certificates.

              
The Regular Trustees shall provide for the registration of Certificates
and of transfers of Certificates, which will be effected without charge
but only upon payment (with such indemnity as the Regular Trustees may
require) in respect of any tax or other government charges which may be
imposed in relation to it. Upon surrender for registration of transfer
of any Certificate, the Regular Trustees shall cause one or more new Certificates
to be issued in the name of the designated transferee or transferees. Every
Certificate surrendered for registration of transfer shall be accompanied
by a written instrument of transfer in form satisfactory to the Regular
Trustees duly executed by the Holder or such Holder's attorney duly authorized
in writing. Each Certificate surrendered for registration of transfer shall
be canceled by the Regular Trustees. A transferee of a Certificate shall
be entitled to the rights and subject to the obligations of a Holder hereunder
upon the receipt by such transferee of a Certificate. By acceptance of
a Certificate, each transferee shall be deemed to have agreed to be bound
by this Declaration. The Trust shall not be required (i) to issue, or register
the transfer of or exchange of, any Securities during the period beginning
at the opening of 15 business days before the mailing of a notice of redemption
of Securities according to the terms of the Securities and ending at the
close of business on the day of the mailing of the relevant notice of redemption
or (ii) to register the transfer of or exchange of any Security so selected
for redemption, in whole or in part, except the unredeemed portion of any
Security being redeemed in part.

              
SECTION 9.3 Deemed Security Holders.

              
The Trustees may treat the Person in whose name any Certificate shall be
registered on the books and records of the Trust as the sole holder of
such Certificate and of the Securities represented by such Certificate
for purposes of receiving Distributions and for all other purposes whatsoever
and, accordingly, shall not be bound to recognize any equitable or other
claim to or interest in such Certificate or in the Securities represented
by such Certificate on the part of any Person, whether or not the Trustees
shall have actual or other notice thereof.

              
SECTION 9.4 Book Entry Interests.

              
The Preferred Securities Certificates, on original issuance, will be issued
in fully registered form. With respect to any Certificates registered on
the books and records of the Trust in the name of a Clearing Agency or
the nominee of a Clearing Agency:

                             
(i) the Trust and the Trustees shall be entitled to deal with the Clearing
Agency for all purposes of this Declaration (including paying Distributions
on such Certificates and receiving approvals, votes or consents hereunder)
as the Preferred Security Holder and the sole holder of such Certificates
and, except as set forth herein, shall have no obligation to the Preferred
Security Beneficial Owners;

                             
(ii) to the extent that the provisions of this Section 9.4 conflict with
any other provisions of this Declaration, the provisions of this Section
9.4 shall control; and

                             
(iii) the rights of the Preferred Security Beneficial Owners shall be exercised
only through the Clearing Agency and shall be limited to those established
by law and agreements between such Preferred Security Beneficial Owners
and the Clearing Agency and/or the Clearing Agency Participants. The Clearing
Agency will make book entry transfers among Clearing Agency Participants
and receive and transmit payments of Distributions on such Certificates
to such Clearing Agency Participants; provided, that solely for the purposes
of determining whether the Holders of the requisite amount of Preferred
Securities have voted on any matter provided for in this Declaration, so
long as definitive Preferred Security Certificates have not been issued
(pursuant to Section 9.7 hereof), the Trustees may conclusively rely on,
and shall be protected in relying on, any written instrument (including
a proxy) delivered to the Trustees by the Clearing Agency setting forth
the Preferred Security Beneficial Owners' votes or assigning the right
to vote on any matter to any other Persons either in whole or in part.

              
SECTION 9.5 Notices to Holders of Certificates.

              
Whenever a notice or other communication to the Holders is required to
be given under this Declaration, the relevant Trustees shall give such
notices and communications to the Holders and, with respect to any Preferred
Security Certificate registered in the name of a Clearing Agency or the
nominee of a Clearing Agency, the Trustees shall, except as set forth herein,
have no obligations to the Preferred Security Beneficial Owners.

              
SECTION 9.6 Appointment of Successor Clearing Agency.

              
If any Clearing Agency elects to discontinue its services as securities
depository with respect to the Preferred Securities, the Regular Trustees
may, in their sole discretion, appoint a successor Clearing Agency with
respect to the Preferred Securities.

              
SECTION 9.7 Definitive Preferred Securities Certificates.

              
If (i) a Clearing Agency elects to discontinue its services as securities
depository with respect to the Preferred Securities and a successor Clearing
Agency is not appointed within 90 days after such discontinuance pursuant
to Section 9.6 or (ii) the Regular Trustees elect after consultation with
the Sponsor to terminate the book entry system through the Clearing Agency
with respect to the Preferred Securities, then, upon surrender of the Certificates
representing the Book Entry Interests with respect to the Preferred Securities
by the Clearing Agency, accompanied by registration instructions, the Regular
Trustees shall cause definitive Preferred Security Certificates to be delivered
to Preferred Security Beneficial Owners in accordance with the instructions
of the Clearing Agency. Neither the Trustees nor the Trust shall be liable
for any delay in delivery of such instructions and each of them may conclusively
rely on, and shall be protected in relying on, such instructions.

              
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Certificates.

              
If (a) any mutilated Certificates should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their satisfaction
of the destruction, loss or theft of any Certificate; and (b) there shall
be delivered to the Regular Trustees such security or indemnity as may
be required by them to keep each of them harmless, then in the absence
of notice that such Certificate shall have been acquired by a bona fide
purchaser, any two Regular Trustees on behalf of the Trust shall execute
and deliver, in exchange for or in lieu of any such mutilated, destroyed,
lost or stolen Certificate, a new Certificate of like denomination. In
connection with the issuance of any new Certificate under this Section
9.8, the Regular Trustees may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
therewith. Any duplicate Certificate issued pursuant to this Section shall
constitute conclusive evidence of an ownership interest in the relevant
Securities, as if originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time.

 

 

ARTICLE X

LIMITATION OF LIABILITY; INDEMNIFICATION

              
SECTION 10.1 Exculpation.

              
(a) No Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to the Trust or any Covered Person for any loss, damage
or claim incurred by reason of any act or omission performed or omitted
by such Indemnified Person in good faith on behalf of the Trust and in
a manner such Indemnified Person reasonably believed to be within the scope
of the authority conferred on such Indemnified Person by this Declaration
or by law, except that an Indemnified Person shall be liable for any such
loss, damage or claim incurred by reason of such Indemnified Person's gross
negligence (or, in the case of the Institutional Trustee or the Delaware
Trustee, negligence) or willful misconduct with respect to such acts or
omissions.

              
(b) An Indemnified Person shall be fully protected in relying in good faith
upon the records of the Trust and upon such information, opinions, reports
or statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's professional
or expert competence and who has been selected with reasonable care by
or on behalf of the Trust, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets
from which Distributions to Holders of Securities might properly be paid.

              
(c) Pursuant to Section 3803 (a) of the Business Trust Act, the Holders
of Securities, in their capacities as Holders, shall be entitled to the
same limitation of liability extended to stockholders of private corporations
for profit organized under the General Corporation Law of the State of
Delaware.

              
SECTION 10.2 Indemnification.

              
(a) To the fullest extent permitted by applicable law, the Sponsor shall
indemnify and hold harmless each Indemnified Person from and against any
loss, damage or claim incurred by such Indemnified Person by reason of
any act or omission performed or omitted by such Indemnified Person in
good faith on behalf of the Trust and in a manner such Indemnified Person
reasonably believed to be within the scope of authority conferred on such
Indemnified Person by this Declaration, except that no Indemnified Person
shall be entitled to be indemnified in respect of any loss, damage or claim
incurred by such Indemnified Person by reason of gross negligence (or,
in the case of the Institutional Trustee or the Delaware Trustee, negligence)
or willful misconduct with respect to such acts or omissions.

              
(b) To the fullest extent permitted by applicable law, expenses (including
legal fees) incurred by an Indemnified Person in defending any claim, demand,
action, suit or proceeding shall, from time to time, be advanced by the
Sponsor prior to the final disposition of such claim, demand, action, suit
or proceeding upon receipt by the Sponsor of an undertaking by or on behalf
of the Indemnified Person to repay such amount if it shall be determined
that the Indemnified Person is not entitled to be indemnified as authorized
in Section 10.2(a).

              
(c) The provisions of this Section 10.2 shall survive the termination of
this Declaration.

              
SECTION 10.3 Outside Business.

              
The Sponsor and any Trustee may engage in or possess an interest in other
business ventures of any nature or description, independently or with others,
similar or dissimilar to the business of the Trust, and the Trust and the
Holders of Securities shall have no rights by virtue of this Declaration
in and to such independent ventures or the income or profits derived therefrom,
and the pursuit of any such venture, even if competitive with the business
of the Trust, shall not be deemed wrongful or improper. Neither the Sponsor
nor any Trustee shall be obligated to present any particular investment
or other opportunity to the Trust even if such opportunity is of a character
that, if presented to the Trust, could be taken by the Trust, and the Sponsor
or any Trustee shall have the right to take for its own account (individually
or as a partner or fiduciary) or to recommend to others any such particular
investment or other opportunity. Any Trustee may engage or be interested
in any financial or other transaction with the Sponsor or any Affiliate
of the Sponsor or may act as depository, trustee or agent for, or act on
any committee or body of holders of, securities or other obligations of
the Sponsor or its Affiliates.

 

 

ARTICLE XI

ACCOUNTING

              
SECTION 11.1 Fiscal Year.

              
The fiscal year ("Fiscal Year") of the Trust shall be the calendar year,
or such other year as is required by the Code.

              
SECTION 11.2 Certain Accounting Matters.

              
(a) At all times during the existence of the Trust, the Regular Trustees
shall keep, or cause to be kept, full books of account, records and supporting
documents, which shall reflect in reasonable detail each transaction of
the Trust. The books of account shall be maintained on the accrual method
of accounting, in accordance with generally accepted accounting principles,
consistently applied. The Trust shall use the accrual method of accounting
for United States federal income tax purposes. The books and records of
the Trust, together with a copy of this Declaration and a certified copy
of the Certificate of Trust, and any amendment thereto, shall at all times
be maintained at the principal office of the Trust and shall be open for
inspection for any examination by any Holder or its duly authorized representative
for any purpose reasonably related to its interest in the Trust during
normal business hours.

              
(b) If required by applicable law, the Regular Trustees shall, as soon
as available after the end of each Fiscal Year of the Trust, cause to be
prepared and mailed to each Holder of Securities unaudited financial statements
of the Trust for such Fiscal Year, prepared in accordance with generally
accepted accounting principles, provided that if the Trust is required
to comply with the periodic reporting requirements of Sections 13(a) or
15(d) of the Exchange Act, such financial statements for such Fiscal Year
shall be examined and reported on by a firm of independent certified public
accountants selected by the Regular Trustees (which firm may be the firm
used by the Sponsor).

              
(c) The Regular Trustees shall cause to be prepared and mailed to each
Holder of Securities an annual United States federal income tax information
statement, on such form as is required by the Code, containing such information
with regard to the Securities held by each Holder as is required by the
Code and the Treasury Regulations. Notwithstanding any right under the
Code to deliver any such statement at a later date, the Regular Trustees
shall endeavor to deliver all such statements within 30 days after the
end of each Fiscal Year of the Trust.

              
(d) The Regular Trustees shall cause to be prepared and filed with the
appropriate taxing authority an annual United States federal income tax
return, on such form as is required by the Code, and any other annual income
tax returns required to be filed by the Regular Trustees on behalf of the
Trust with any state or local taxing authority, such returns to be filed
as soon as practicable after the end of each Fiscal Year of the Trust.

              
SECTION 11.3 Banking.

              
The Trust shall maintain one or more bank accounts in the name and for
the sole benefit of the Trust. The sole signatories for such accounts shall
be designated by the Regular Trustees.

              
SECTION 11.4 Withholding.

              
The Trust and the Trustees shall comply with all withholding requirements
under United States federal, state and local law. The Trust shall request,
and the Holders shall provide to the Trust, such forms or certificates
as are necessary to establish an exemption from withholding with respect
to each Holder, and any representations and forms as shall reasonably be
requested by the Trust to assist it in determining the extent of, and in
fulfilling, its withholding obligations. The Trust shall file required
forms with applicable jurisdictions and, unless an exemption from withholding
is properly established by a Holder, shall remit amounts withheld with
respect to the Holder to applicable jurisdictions. To the extent that the
Trust is required to withhold and pay over any amounts to any authority
with respect to distributions or allocations to any Holder, the amount
withheld shall be deemed to be a distribution in the amount of the withholding
to the Holder. In the event of any claimed overwithholding, Holders shall
be limited to an action against the applicable jurisdiction. If the amount
to be withheld was not withheld from a Distribution, the Trust may reduce
subsequent Distributions by the amount of such withholding.

 

 

ARTICLE XII

AMENDMENTS AND MEETINGS

              
SECTION 12.1 Amendments.

              
(a) Except as otherwise provided in this Declaration or by any applicable
terms of the Securities, this Declaration may be amended by, and only by,
a written instrument executed by a majority of the Regular Trustees; provided,
however, that (i) no amendment to this Declaration shall be made if such
amendment or modification would cause the Trust to be classified for United
States federal income tax purposes as other than a grantor trust or would
cause the Trust to be deemed an "investment company" which is required
to be registered under the 1940 Act, (ii) at such time after the Trust
has issued any Securities which remain outstanding, any amendment which
would adversely affect the rights, privileges or preferences of any Holder
of Securities may be effected only with such additional requirements as
may be set forth in the terms of such Securities, (iii) Section 4.2, Section
9.1(c) and this Section 12.1 shall not be amended without the consent of
all of the Holders of the Securities, (iv) no amendment which adversely
affects the rights, powers and privileges of the Institutional Trustee
shall be made without the consent of the Institutional Trustee, (v) Article
IV shall not be amended without the consent of the Sponsor and (vi) the
rights of Holders of Common Securities under Article V to increase or decrease
the number of, and to appoint, replace or remove, Trustees shall not be
amended without the consent of each Holder of Common Securities.

              
(b) Notwithstanding Section 12.1(a)(ii), this Declaration may be amended
without the consent of the Holders of the Securities to (i) cure any ambiguity,
(ii) correct or supplement any provision in this Declaration that may be
defective or inconsistent with any other provision of this Declaration,
(iii) add to the covenants, restrictions or obligations of the Sponsor,
(iv) preserve the status of the Trust as a grantor trust for federal income
tax purposes, and (v) conform to any changes in Rule 3a-5 or any change
in interpretation or application of Rule 3a-5 by the Commission, which
amendment does not adversely affect the rights, preferences or privileges
of the Holders.

              
SECTION 12.2 Meetings of the Holders of Securities; Action by Written Consent.

              
(a) Meetings of the Holders of Preferred Securities and/or Common Securities
may be called at any time by the Regular Trustees (or as provided in the
terms of the Securities) to consider and act on any matter on which Holders
of such class of Securities are entitled to act under the terms of this
Declaration, the terms of the Securities or the rules of any stock exchange
on which the Preferred Securities are listed or admitted for trading. The
Regular Trustees shall call a meeting of Holders of Preferred Securities
or Common Securities, if directed to do so by Holders of at least 10% in
liquidation amount of such class of Securities. Such direction shall be
given by delivering to the Regular Trustees one or more calls in a writing
stating that the signing Holders of Securities wish to call a meeting and
indicating the general or specific purpose for which the meeting is to
be called. Any Holders of Securities calling a meeting shall specify in
writing the Certificates held by the Holders of Securities exercising the
right to call a meeting and only those specified Certificates shall be
counted for purposes of determining whether the required percentage set
forth in the second sentence of this paragraph has been met.

              
(b) Except to the extent otherwise provided in the terms of the Securities,
the following provision shall apply to meetings of Holders of Securities:

                             
(i) Notice of any such meeting shall be given by mail to all the Holders
of Securities having a right to vote thereat not less than 7 days nor more
than 60 days prior to the date of such meeting. Whenever a vote, consent
or approval of the Holders of Securities is permitted or required under
this Declaration or the rules of any stock exchange on which the Preferred
Securities are listed or admitted for trading, such vote, consent or approval
may be given at a meeting of the Holders of Securities. Any action that
may be taken at a meeting of the Holders of Securities may be taken without
a meeting if a consent in writing setting forth the action so taken is
signed by Holders of Securities owning not less than the minimum aggregate
liquidation amount of Securities that would be necessary to authorize or
take such action at a meeting at which all Holders of Securities having
a right to vote thereon were present and voting. Prompt notice of the taking
of action without a meeting shall be given to the Holders of Securities
entitled to vote who have not consented in writing. The Regular Trustees
may specify that any written ballot submitted to the Holders of Securities
for the purpose of taking any action without a meeting shall be returned
to the Trust within the time specified by the Regular Trustees.

                             
(ii) Each Holder of a Security may authorize any Person to act for it by
proxy on all matters in which a Holder of a Security is entitled to participate,
including waiving notice of any meeting, or voting or participating at
a meeting. No proxy shall be valid after the expiration of 11 months from
the date thereof unless otherwise provided in the proxy. Every proxy shall
be revocable at the pleasure of the Holder of the Security executing it.
Except as otherwise provided herein or in the terms of the Securities,
all matters relating to the giving, voting or validity of proxies shall
be governed by the General Corporation Law of the State of Delaware relating
to proxies, and judicial interpretations thereunder, as if the Trust were
a Delaware corporation and the Holders of the Securities were stockholders
of a Delaware corporation.

                             
(iii) Each meeting of the Holders of the Securities shall be conducted
by the Regular Trustees or by such other Person that the Regular Trustees
may designate.

                             
(iv) Unless otherwise provided in the Business Trust Act, this Declaration
or the rules of any stock exchange on which the Preferred Securities are
then listed or admitted for trading, the Regular Trustees, in their sole
discretion, shall establish all other provisions relating to meetings of
Holders of Securities, including notice of the time, place or purpose of
any meeting at which any matter is to be voted on by any Holders of Securities,
waiver of any such notice, action by consent without a meeting, the establishment
of a record date, quorum requirements, voting in person or by proxy or
any other matter with respect to the exercise of any such right to vote.

 

 

ARTICLE XIII

REPRESENTATIONS OF INSTITUTIONAL
TRUSTEE AND DELAWARE TRUSTEE

              
SECTION 13.1 Representations and Warranties of Institutional Trustee.

              
(a) The Trustee which acts as initial Institutional Trustee represents
and warrants to the Trust and to the Sponsor at the date of this Declaration,
and each Successor Institutional Trustee represents and warrants to the
Trust and the Sponsor at the time of the Successor Institutional Trustee's
acceptance of its appointment as Institutional Trustee, that:

                             
(i) The Institutional Trustee is a national banking association with trust
powers, duly organized, validly existing and in good standing under the
laws of the United States, with trust power and authority to execute and
deliver, and to carry out and perform its obligations under the terms of,
this Declaration.

                             
(ii) The execution, delivery and performance by the Institutional Trustee
of this Declaration has been duly authorized by all necessary corporate
action on the part of the Institutional Trustee. The Declaration has been
duly executed and delivered by the Institutional Trustee, and constitutes
a legal, valid and binding obligation of the Institutional Trustee, enforceable
against it in accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws affecting
creditors' rights generally and to general principles of equity and the
discretion of the court (regardless of whether the enforcement of such
remedies is considered in a proceeding in equity or at law).

                             
(iii) The execution, delivery and performance of this Declaration by the
Institutional Trustee do not conflict with or constitute a breach of the
Charter or By-laws of the Institutional Trustee.

                             
(iv) No consent, approval or authorization of, or registration with or
notice to, any banking authority which supervises or regulates the Institutional
Trustee is required for the execution, delivery or performance by the Institutional
Trustee of this Declaration.

                             
(v) The Institutional Trustee satisfies the qualifications set forth in
Section 5.1(c).

              
(b) The Trustee which acts as initial Delaware Trustee represents and warrants
to the Trust and the Sponsor at the date of this Declaration, and each
Successor Delaware Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Delaware Trustee's acceptance of its
appointment as Delaware Trustee, that it satisfies the qualifications set
forth in Section 5.1(a)(3).

 

 

ARTICLE XIV

MISCELLANEOUS

              
SECTION 14.1 Notices.

 

              
All notices provided for in this Declaration shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied
or mailed by first class mail, as follows:

              
(a) if given to the Trust, in care of the Regular Trustees at the Trust's
mailing address set forth below (or such other address as the Regular Trustees
on behalf of the Trust may give notice of to the Holders of the Securities):

UAL Corporation Capital Trust I

c/o UAL Corporation

1200 East Algonquin Road

Elk Grove Township, Illinois 60007

Attention: Trustees

Facsimile No: (847) 700-4683

              
(b) if given to the Institutional Trustee, at the mailing address of the
Institutional Trustee set forth below (or such other address as the Institutional
Trustee may give notice of to the Holders of the Securities):

The First National Bank of Chicago

One First National Plaza, Suite
0216

Chicago, Illinois 60670-0126

Attention: Corporate Trust Department

Facsimile No: (312) 407-1708

              
(c) if given to the Delaware Trustee, at the mailing address of the Delaware
Trustee set forth below (or such other address as the Delaware Trustee
may give notice of to the Holders of the Securities):

First Chicago Delaware Inc.

300 King Street

Wilmington, Delaware 19801

Facsimile No: (312) 407-1708

              
(d) if given to the Holder of the Common Securities, at the mailing address
of the Sponsor set forth below (or such other address as the Holder of
the Common Securities may give notice to the Trust):

UAL Corporation

1200 East Algonquin Road

Elk Grove Township, Illinois 60007

Attention: Corporate Secretary

Facsimile No: (847) 700-4683

              
(e) if given to any other Holder, at the address set forth on the books
and records of the Trust.

A copy of any notice to the Institutional
Trustee or the Delaware Trustee shall also be sent to the Trust. All notices
shall be deemed to have been given, when received in person, telecopied
with receipt confirmed, or mailed by first class mail, postage prepaid,
except that if a notice or other document is refused delivery or cannot
be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.

              
SECTION 14.2 Undertaking for Costs.

              
All parties to this Declaration agree, and each Holder of any Securities
by such Holder's acceptance thereof shall be deemed to have agreed, that
any court may in its discretion require, in any suit for the enforcement
of any right or remedy under this Declaration, or in any suit against the
Institutional Trustee for any action taken or omitted by it as Institutional
Trustee, the filing by any party litigant in such suit of an undertaking
to pay the costs of such suit, and that such court may in its discretion
assess reasonable costs, including reasonable attorneys' fees, against
any party litigant in such suit, having due regard to the merits and good
faith of the claims or defenses made by such party litigant; but the provisions
of this Section 14.2 shall not apply to any suit instituted by the Institutional
Trustee, to any suit instituted by any Holder of Preferred Securities,
or group of Holders of Preferred Securities, holding more than 10% in aggregate
liquidation amount of the outstanding Preferred Securities, or to any suit
instituted by any Holder of Preferred Securities for the enforcement of
the payment of the principal of or interest on the Debentures, on or after
the respective due dates expressed in such Debentures.

              
SECTION 14.3 Governing Law.

              
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF DELAWARE; PROVIDED HOWEVER, THAT THERE SHALL
NOT BE APPLICABLE TO THE TRUST, THE TRUSTEES OR THIS DECLARATION ANY PROVISIONS
OF THE LAWS (STATUTORY OR COMMON) OF THE STATE OF DELAWARE PERTAINING TO
TRUSTS, OTHER THAN THE BUSINESS TRUST ACT, THAT RELATE TO OR REGULATE,
IN A MANNER INCONSISTENT WITH THE TERMS HEREOF, (I) THE FILING WITH ANY
COURT OR GOVERNMENTAL BODY OR AGENCY OF TRUSTEE ACCOUNTS OR SCHEDULES OF
TRUSTEE FEES AND CHARGES, (II) AFFIRMATIVE REQUIREMENTS TO POST BONDS FOR
TRUSTEES, OFFICERS, AGENTS OR EMPLOYEES OF A TRUST, (III) THE NECESSITY
FOR OBTAINING COURT OR OTHER GOVERNMENTAL APPROVAL CONCERNING THE ACQUISITION,
HOLDING OR DISPOSITION OF REAL OR PERSONAL PROPERTY, (IV) FEES OR OTHER
SUMS PAYABLE TO TRUSTEES, OFFICERS, AGENTS OR EMPLOYEES OF A TRUST, (V)
THE ALLOCATION OF RECEIPTS AND EXPENDITURES TO INCOME OR PRINCIPAL, (VI)
RESTRICTIONS OR LIMITATIONS ON THE PERMISSIBLE NATURE, AMOUNT OR CONCENTRATION
OF TRUST INVESTMENTS OR REQUIREMENTS RELATING TO THE TITLING, STORAGE OR
OTHER MANNER OF HOLDING OR INVESTING TRUST ASSETS, OR (VII) THE ESTABLISHMENT
OF FIDUCIARY OR OTHER STANDARDS OR RESPONSIBILITIES OR LIMITATIONS ON THE
ACTS OR POWERS OF TRUSTEES, THAT ARE INCONSISTENT WITH THE LIMITATIONS
OR LIABILITIES OR AUTHORITIES AND POWERS OF TRUSTEES AS SET FORTH OR REFERENCED
IN THIS AGREEMENT. SECTION 3540 OF TITLE 12 OF THE DELAWARE CODE SHALL
NOT APPLY TO THE TRUST.

              
SECTION 14.4 Headings.

              
Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration
or any provision hereof.

              
SECTION 14.5 Partial Enforceability.

              
If any provision of this Declaration, or the application of such provision
to any Person or circumstance, shall be held invalid, the remainder of
this Declaration, or the application of such provision to Persons or circumstances
other than those to which it is held invalid, shall not be affected thereby.

              
SECTION 14.6 Counterparts.

              
This Declaration may contain more than one counterpart of the signature
pages and this Declaration may be executed by the affixing of the signature
of the Sponsor and each of the Trustees to one of such counterpart signature
pages. All of such counterpart signature pages shall be read as though
one, and they shall have the same force and effect as though all of the
signers had signed a single signature page.

              
SECTION 14.7 Intention of the Parties.

              
It is the intention of the parties hereto that the Trust not be classified
for United States federal income tax purposes an association taxable as
a corporation or partnership but that the Trust be treated as a grantor
trust for United States federal income tax purposes. The provisions of
this Declaration shall be interpreted to further this intention of the
parties.

              
SECTION 14.8 Successors and Assigns.

              
Whenever in this Declaration any of the parties hereto is named or referred
to, the successors and assigns of such party shall be deemed to be included,
and all covenants and agreements in this Declaration by the Sponsor and
the Trustees shall bind and inure to the benefit of their respective successors
and assigns, whether or not so expressed.

              
IN WITNESS WHEREOF, the undersigned have caused these presents to be executed
as of the day and year first above written.

UAL CORPORATION,

as Sponsor

By: /s/ Douglas A. Hacker

Name: Douglas A. Hacker

Title: Senior Vice President and
Chief Financial Officer

/s/ Douglas A. Hacker

Douglas A. Hacker,

as Trustee

/s/ Francesca M. Maher

Francesca M. Maher,

as Trustee

/s/ Thomas A. Mutryn

Thomas A. Mutryn,

as Trustee

THE FIRST NATIONAL BANK OF CHICAGO,

as Trustee

By: /s/ Richard D. Manella

Name: Richard D. Manella

Title: Vice President

FIRST CHICAGO DELAWARE INC.,

as Trustee

By: /s/ Richard D. Manella

Name: Richard D. Manella

Title: Vice President

              
There personally appeared before me Douglas A. Hacker (on behalf of UAL
Corporation, as Sponsor, and as a Trustee) and Francesca M. Maher and Thomas
A. Mutryn (as Trustees) who acknowledged the foregoing instrument to be
his, her or its free act and deed and the free act and deed of UAL Corporation
and the Trustees of UAL Corporation Capital Trust I.

Before me,

/s/ Jeanne M. Rajala

Notary Public

My Commission Expires: 6-26-99

 

              
There personally appeared before me Richard D. Manella (on behalf of The
First National Bank of Chicago, as Trustee) who acknowledged the foregoing
instrument to be his, her or its free act and deed and the free act and
deed of The First National Bank of Chicago, as Trustee.

Before me,

/s/ Ann Longino

Notary Public

My Commission Expires: 5-17-98

 

 

 

              
There personally appeared before me Richard D. Manella (on behalf of First
Chicago Delaware Inc., as Trustee) who acknowledged the foregoing instrument
to be his, her or its free act and deed and the free act and deed of First
Chicago Delaware Inc., as Trustee.

Before me,

/s/ Ann Longino

Notary Public

My Commission Expires: 5-17-98

 

 

 

 

EXHIBIT A

 

 

CERTIFICATE OF TRUST

OF

UAL CORPORATION CAPITAL TRUST I

              
This Certificate of Trust of UAL Corporation Capital Trust I (the "Trust"),
dated October 15, 1996, is being duly executed and filed by the undersigned,
as trustees, to form a business trust under the Delaware Business Trust
Act (12 Del.C. Sec. 3801 et seq.).

              
1. Name. The name of the business trust formed hereby is UAL Corporation
Capital Trust I.

              
2. Delaware Trustee. The name and business address of the trustee of the
Trust with a principal place of business in the State of Delaware are First
Chicago Delaware Inc., a Delaware corporation, 300 King Street, Wilmington,
Delaware 19801.

              
3. Effective Date. This Certificate of Trust shall be effective as of its
filing.

              
IN WITNESS WHEREOF, the undersigned, being the trustees of the Trust at
the time of filing this Certificate of Trust, have executed this Certificate
of Trust as of the date first above written.

 

  

	The First National Bank of Chicago,
as trustee
	By: /s/ Richard D. Manella
	Name: Richard D. Manella
	Title: Vice President
	
	First Chicago Delaware Inc., as
trustee
	By: /s/ Steven M. Wagner
	Name: Steven M. Wagner
	Title: Vice President

 

EXHIBIT B

TERMS OF

PREFERRED SECURITIES

              
Pursuant to Section 7.1 of the Amended and Restated Declaration of Trust
of UAL Corporation Capital Trust I dated as of December 30, 1996 (as amended
from time to time, the "Declaration"), the designations, rights, privileges,
restrictions, preferences and other terms and provisions of the Preferred
Securities are set forth below (each capitalized term used but not defined
herein having the meaning set forth in the Declaration):

              
1. Designation and Number. Preferred Securities of the Trust with an aggregate
liquidation amount in the assets of the Trust of ___________________________
(____) and a liquidation amount in the assets of the Trust of $25 per Preferred
Security, are hereby designated as "13 1/4% Trust Originated Preferred
Securities." The Preferred Security Certificates evidencing the Preferred
Securities shall be substantially in the form attached hereto as Annex
I, with such changes and additions thereto or deletions therefrom as may
be required by ordinary usage, custom or practice or to conform to the
rules of any stock exchange on which the Preferred Securities are listed.
The Preferred Securities shall be issued to former holders of Depositary
Shares ("Depositary Shares"),each representing 1/1,000 of a share of 121/4%
Series B Preferred Stock (the "Series B Preferred"), of UAL Corporation
("UAL") in exchange for such Depositary Shares pursuant to the Offer. In
connection with such Offer and the purchase by UAL of the Common Securities,
UAL will deposit in the Trust, and the Trust will purchase, respectively,
as trust assets Debentures of UAL having an aggregate principal amount
equal to $[__________], and bearing interest at an annual rate equal to
the annual Distribution rate on the Preferred Securities and Common Securities
and having payment and redemption provisions which correspond to the payment
and redemption provisions of the Preferred Securities and Common Securities.

              
2. Distributions. (a) Periodic distributions payable on each Preferred
Security will be fixed at a rate per annum of 13 1/4% (the "Coupon Rate")
of the stated liquidation amount of $25 per Preferred Security. Distributions
in arrears will bear interest at the rate per annum of 13 1/4% thereof,
compounded quarterly, to the extent permitted by law. The term "Distributions"
as used in these terms means such periodic cash distributions and any such
interest payable unless otherwise stated. A Distribution will be made by
the Institutional Trustee only to the extent that interest payments are
made in respect of the Debentures held by the Trust. The amount of Distributions
payable for any period will be computed for any full quarterly Distribution
period on the basis of a 360-day year of twelve 30day months, and for any
period shorter than a full quarterly Distribution period for which Distributions
are computed, Distributions will be computed on the basis of the actual
number of days elapsed in such a 30-day month.

              
(b) Distributions on the Preferred Securities will be cumulative, will
accrue from December 21, 1996 and will be payable quarterly in arrears,
on March 31, June 30, September 30 and December 31 of each year, commencing
on December 31, 1996, and at final maturity of the Debentures, except as
otherwise described below, but only if and to the extent that interest
payments are made in respect of the Debentures held by the Trust. In addition,
Holders of Preferred Securities will be entitled to a cash distribution
at the rate of 12-1/4% per annum of the liquidation amount thereof from
November 1, 1996 through December 20, 1996, payable on December 31, 1996
("Pre-Issuance Interest"). With the exception of Pre-Issuance Interest,
so long as UAL shall not be in default in the payment of interest on the
Debentures, UAL has the right under the Indenture for the Debentures to
defer payments of interest by extending the interest payment period from
time to time on the Debentures for a period not exceeding 20 consecutive
quarterly interest periods (each, an "Extension Period") and, as a consequence,
quarterly Distributions will continue to accrue with interest thereon (to
the extent permitted by applicable law) at the rate of 13 1/4% per annum,
compounded quarterly to the extent permitted by law during any such Extension
Period. Prior to the termination of any such Extension Period, UAL may
further extend such Extension Period; provided that such Extension Period
together with all such previous and further extensions thereof may not
exceed 20 consecutive quarterly interest periods and provided further that
no Extension Period may extend beyond the maturity of the Debentures. Upon
the termination of any Extension Period and the payment on the next distribution
payment date following such extension period of all amounts then due, UAL
may commence a new Extension Period, subject to the above requirements.
Any interest paid on the Debentures during an Extension Period on an Interest
Payment Date shall be paid pro rata to the Holders of Preferred Securities
on the corresponding distribution payment date. Payments of accrued Distributions
will be payable to Holders of Preferred Securities as they appear on the
books and records of the Trust on the record date for the first payment
occurring on or after the end of the Extension Period.

              
(c) Distributions on the Preferred Securities will be payable promptly
by the Institutional Trustee (or other Paying Agent) upon receipt of immediately
available funds to the Holders thereof as they appear on the books and
records of the Trust on the relevant record dates, which will be 15 calendar
days prior to the relevant Distribution dates, except that the record date
for the payment to be made on December 31, 1996 shall be the date of exchange
of the Preferred Securities for the Depository Shares, which record and
payment dates correspond to the record and interest payment dates on the
Debentures. Distributions payable on any Preferred Securities that are
not punctually paid on any Distribution payment date as a result of UAL
having failed to make the corresponding interest payment on the Debentures
will forthwith cease to be payable to the Person in whose name such Preferred
Security is registered on the relevant record date, and such defaulted
Distribution will instead be payable to the Person in whose name such Preferred
Security is registered on the special record date established by the Regular
Trustees, which record date shall correspond to the special record date
or other specified date determined in accordance with the Indenture; provided,
however, that Distributions shall not be considered payable on any Distribution
payment date falling within an Extension Period unless UAL has elected
to make a full or partial payment of interest accrued on the Debentures
on such Distribution payment date. Subject to any applicable laws and regulations
and the provisions of the Declaration, each payment in respect of the Preferred
Securities will be made as described in paragraph 9 hereof. If any date
on which Distributions are payable on the Preferred Securities is not a
Business Day, then payment of the Distribution payable on such date will
be made on the next succeeding day that is a Business Day (and without
any interest or other payment in respect of any such delay), except that,
if such Business Day is in the next succeeding calendar year, such payment
shall be made on the immediately preceding Business Day, in each case with
the same force and effect as if made on such date.

              
(d) All Distributions paid with respect to the Preferred Securities and
the Common Securities will be paid Pro Rata (as defined herein) to the
Holders thereof entitled thereto. If an Event of Default has occurred and
is continuing, the Preferred Securities shall have a priority over the
Common Securities with respect to Distributions.

              
(e) In the event that there is any money or other property held by or for
the Trust that is not accounted for under the Declaration, such money or
property shall be distributed Pro Rata among the Holders of the Preferred
Securities and Common Securities.

              
3. Liquidation Distribution Upon Dissolution. In the event of any voluntary
or involuntary dissolution, winding-up or termination of the Trust, the
Holders of the Preferred Securities and Common Securities at the date of
the dissolution, winding-up or termination, as the case may be, will be
entitled to receive Pro Rata, solely out of the assets of the Trust available
for distribution to Holders of Preferred Securities and Common Securities
after satisfaction of liabilities to creditors, an amount equal to the
aggregate of the stated liquidation amount of $25 per Preferred Security
and Common Security plus accrued and unpaid Distributions thereon to the
date of payment (such amount being the "Liquidation Distribution"), unless,
in connection with such dissolution, winding-up or termination, and after
satisfaction of liabilities to creditors, Debentures in an aggregate principal
amount equal to the aggregate stated liquidation amount of such Preferred
Securities and Common Securities and bearing accrued and unpaid interest
in an amount equal to the accrued and unpaid Distributions on such Preferred
Securities and Common Securities shall be distributed Pro Rata to the Holders
of the Preferred Securities and Common Securities in exchange for such
Securities.

              
If, upon any such dissolution, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets available to pay
in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Preferred Securities and Common Securities
shall be paid on a Pro Rata basis, except that, if an Event of Default
has occurred and is continuing, the Preferred Securities shall have a priority
over the Common Securities with respect to such Liquidation Distribution.

              
4. Redemption and Distribution of Debentures. The Preferred Securities
and Common Securities may only be redeemed if Debentures having an aggregate
principal amount equal to the aggregate liquidation amount of the Preferred
Securities and Common Securities are repaid, redeemed or distributed as
set forth below:

              
(a) Upon the repayment of the Debentures, in whole or in part, whether
at maturity, or upon redemption at any time or from time to time on or
after July 12, 2004, the proceeds of such repayment will be promptly applied
to redeem Pro Rata Preferred Securities and Common Securities having an
aggregate liquidation amount equal to the aggregate principal amount of
the Debentures so repaid or redeemed, upon not less than 10 nor more than
60 days' notice, at a redemption price of $25 per Preferred and Common
Security plus an amount equal to accrued and unpaid Distributions thereon
to the date of redemption, payable in cash (the "Redemption Price"). The
date of any such repayment or redemption of Preferred Securities and Common
Securities shall be established to coincide with the repayment or redemption
date of the Debentures.

              
(b) The Common Securities will be entitled to be redeemed on a Pro Rata
basis with the Preferred Securities, except that if an Event of Default
has occurred and is continuing, the Preferred Securities shall have a priority
over the Common Securities with respect to the payment of the Redemption
Price. If fewer than all the outstanding Preferred Securities and Common
Securities are to be so redeemed, the Preferred Securities and the Common
Securities will be redeemed Pro Rata and the Preferred Securities to be
redeemed will be redeemed as described in paragraph 4(f)(ii) below. If
a partial redemption would result in the delisting of the Preferred Securities
by any national securities exchange or other organization on which the
Preferred Securities are then listed, UAL pursuant to the Indenture will
only redeem Debentures in whole and, as a result, the Trust may only redeem
the Preferred Securities in whole.

              
(c) If, at any time, a Tax Event or an Investment Company Event (each as
hereinafter defined, and each a "Special Event") shall occur and be continuing,
the Regular Trustees shall, unless the Debentures are redeemed in the limited
circumstances described below, dissolve the Trust and, after satisfaction
of creditors, cause Debentures held by the Institutional Trustee having
an aggregate principal amount equal to the aggregate stated liquidation
amount of and accrued and unpaid interest equal to accrued and unpaid Distributions
on, and having the same record date for payment as, the Preferred Securities
and Common Securities, to be distributed to the Holders of the Preferred
Securities and Common Securities on a Pro Rata basis in liquidation of
such Holders' interests in the Trust, within 90 days following the occurrence
of such Special Event (the "90 Day Period"), provided, however, that in
the case of the occurrence of a Tax Event, as a condition of such dissolution
and distribution, the Regular Trustees shall have received an opinion (a
"No Recognition Opinion") of a nationally recognized independent tax counsel
experienced in such matters , which opinion may rely on any then applicable
published revenue ruling of the Internal Revenue Service, to the effect
that the Holders of the Preferred Securities will not recognize any gain
or loss for United States federal income tax purposes as a result of the
dissolution of the Trust and distribution of Debentures; and provided,
further, that, if and as long as at the time there is available to the
Trust the opportunity to eliminate, within the 90 Day Period, the Special
Event by taking some ministerial action, such as filing a form or making
an election, or pursuing some other similar reasonable measure that has
no adverse effect on the Trust, UAL, or the Holders of the Preferred Securities
("Ministerial Action"), the Trust will pursue such measure in lieu of dissolution.

              
If, in the case of the occurrence of a Tax Event, (i) the Regular Trustees
have received an opinion (a "Redemption Tax Opinion") of nationally recognized
independent tax counsel experienced in such matters that, as a result of
a Tax Event, there is more than an insubstantial risk that UAL would be
precluded from deducting the interest on the Debentures for United States
federal income tax purposes even if the Debentures were distributed to
the Holders of Preferred Securities and Common Securities in liquidation
of such Holder's interest in the Trust as described in this paragraph 4(c)
or (ii) the Regular Trustees shall have been informed by such tax counsel
that a No Recognition Opinion cannot be delivered to the Trust, UAL shall
have the right at any time, upon not less than 10 nor more than 60 days
notice, to redeem the Debentures in whole or in part for cash at the Redemption
Price within 90 days following the occurrence of such Tax Event, and promptly
following such redemption Preferred Securities and Common Securities with
an aggregate liquidation amount equal to the aggregate principal amount
of the Debentures so redeemed will be redeemed by the Trust at the Redemption
Price on a Pro Rata basis; provided, however, that, if at the time there
is available to UAL or the Regular Trustees on behalf of the Trust the
opportunity to eliminate, within such 90 day period, the Tax Event by taking
some Ministerial Action, UAL or the Regular Trustees on behalf of the Trust
will pursue such measure in lieu of redemption, and provided further that
UAL shall have no right to redeem the Debentures while the Regular Trustees
on behalf of the Trust are pursuing such Ministerial Action. The Common
Securities will be redeemed Pro Rata with the Preferred Securities, except
that, if an Event of Default under the Indenture has occurred and is continuing,
the Preferred Securities will have a priority over the Common Securities
with respect to payment of the Redemption Price.

              
"Tax Event" means that the Regular Trustees shall have obtained an opinion
(a "Dissolution Tax Opinion") of nationally recognized independent tax
counsel experienced in such matters to the effect that on or after the
Expiration Date as a result of (a) any amendment to, or change (including
any announced prospective change) in, the laws (or any regulations thereunder)
of the United States or any political subdivision or taxing authority thereof
or therein, (b) any amendment to, or change in, an interpretation or application
of any such laws or regulations by any legislative body, court, governmental
agency or regulatory authority (including the enactment of any legislation
and the publication of any judicial decision or regulatory determination),
(c) any interpretation or pronouncement that provides for a position with
respect to such laws or regulations that differs from the theretofore generally
accepted position or (d) any action taken by any governmental agency or
regulatory authority, which amendment or change is enacted, promulgated,
issued or announced or which interpretation or pronouncement is issued
or announced or which action is taken, in each case on or after the Expiration
Date, there is more than an insubstantial risk that (i) the Trust is, or
will be within 90 days of the date thereof, subject to United States federal
income tax with respect to income accrued or received on the Debentures,
(ii) the Trust is, or will be within 90 days of the date thereof, subject
to more than a de minimis amount of taxes, duties or other governmental
charges or (iii) interest payable by UAL to the Trust on the Debentures
is not, or within 90 days of the date thereof will not be, deductible by
UAL for United States federal income tax purposes.

              
"Investment Company Event" means that the Regular Trustees shall have received
an opinion of nationally recognized independent counsel experienced in
practice under the Investment Company Act that, as a result of the occurrence
of a change in law or regulation or a change in interpretation or application
of law or regulation by any legislative body, court, governmental agency
or regulatory authority or of the staff of such governmental agency or
regulatory authority (a "Change in 1940 Act Law"), there is more than an
insubstantial risk that the Trust is or will be considered an Investment
Company which is required to be registered under the Investment Company
Act, which Change in 1940 Act Law becomes effective on or after the Expiration
Date.

              
On the date fixed for any distribution of Debentures, upon dissolution
of the Trust, (i) the Preferred Securities will no longer be deemed to
be outstanding and (ii) certificates representing Preferred Securities
will be deemed to represent beneficial interests in the Debentures having
an aggregate principal amount equal to the stated liquidation amount of,
and bearing accrued and unpaid interest equal to accrued and unpaid Distributions
on, such Preferred Securities until such certificates are presented to
UAL or its agent for transfer or reissuance.

              
(d) The Trust may not redeem fewer than all the outstanding Preferred Securities
unless all accrued and unpaid Distributions have been paid on all Preferred
Securities for all quarterly Distribution periods terminating on or prior
to the date of redemption.

              
(e) If Debentures are distributed to Holders of the Preferred Securities,
UAL, pursuant to the terms of the Indenture, will use its best efforts
to have the Debentures listed on the New York Stock Exchange or on such
other exchange as the Preferred Securities were listed immediately prior
to the distribution of the Debentures.

              
(f) (i) Notice of any redemption of, or notice of distribution of Debentures
in exchange for, the Preferred Securities and Common Securities (a "Redemption/Distribution
Notice") will be given by the Regular Trustees on behalf of the Trust by
mail to each Holder of Preferred Securities and Common Securities to be
redeemed or exchanged not less than 10 nor more than 60 days prior to the
date fixed for redemption or exchange thereof. For purposes of the calculation
of the date of redemption or exchange and the dates on which notices are
given pursuant to this paragraph (f)(i), a Redemption/Distribution Notice
shall be deemed to be given on the day such notice is first mailed by first
class mail, postage prepaid, to Holders of Preferred Securities and Common
Securities. Each Redemption/ Distribution Notice shall be addressed to
the Holders of Preferred Securities and Common Securities at the address
of each such Holder appearing in the books and records of the Trust. No
defect in the Redemption/Distribution Notice or in the mailing of either
thereof with respect to any Holder shall affect the validity of the redemption
or exchange proceedings with respect to any other Holder.

                             
(ii) In the event that fewer than all the outstanding Preferred Securities
are to be redeemed (subject to adjustment to eliminate fractional Preferred
Securities), the Preferred Securities to be redeemed will be redeemed Pro
Rata from each Holder of Preferred Securities, it being understood that,
in respect of Preferred Securities registered in the name of and held of
record by DTC (or successor Clearing Agency) or any other nominee, the
distribution of the proceeds of such redemption will be made to each Clearing
Agency Participant (or Person on whose behalf such nominee holds such securities)
in accordance with the procedures applied by such agency or nominee.

                             
(iii) If the Trust gives a Redemption/Distribution Notice in respect of
a redemption of Preferred Securities as provided in this paragraph 4 (which
notice will be irrevocable) then, immediately prior to the close of business
on the redemption date, provided that UAL has paid to the Trust in immediately
available funds a sufficient amount of cash in connection with the related
redemption or maturity of the Debentures, Distributions will cease to accrue
on the Preferred Securities called for redemption, such Preferred Securities
will no longer be deemed to be outstanding and all rights of Holders of
such Preferred Securities so called for redemption will cease, except the
right of the Holders of such Preferred Securities to receive the Redemption
Price, but without interest on such Redemption Price. Neither the Trustees
nor the Trust shall be required to register or cause to be registered the
transfer of any Preferred Securities which have been so called for redemption.
If any date fixed for redemption of Preferred Securities is not a Business
Day, then payment of the Redemption Price payable on such date will be
made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) except that, if
such Business Day falls in the next calendar year, such payment will be
made on the immediately preceding Business Day, in each case with the same
force and effect as if made on such date fixed for redemption. If payment
of the Redemption Price in respect of Preferred Securities is improperly
withheld or refused and not paid either by the Trust or by UAL pursuant
to the Preferred Guarantee, Distributions on such Preferred Securities
will continue to accrue, from the original redemption date to the date
of payment, in which case the actual payment date will be considered the
date fixed for redemption for purposes of calculating the Redemption Price.

                             
(iv) Redemption/Distribution Notices shall be sent by the Regular Trustees
on behalf of the Trust to the Holders of the Preferred Securities.

                             
(v) Upon the date of dissolution of the Trust and distribution of Debentures
as a result of the occurrence of a Special Event, Preferred Security Certificates
shall be deemed to represent beneficial interests in the Debentures so
distributed, and the Preferred Securities will no longer be deemed outstanding
and may be canceled by the Regular Trustees. The Debentures so distributed
shall have an aggregate principal amount equal to the aggregate liquidation
amount of the Preferred Securities so distributed.

                             
(vi) Subject to the foregoing and applicable law (including, without limitation,
United States federal securities laws), UAL or any of its subsidiaries
may at any time and from time to time purchase outstanding Preferred Securities
by tender, in the open market or by private agreement.

              
5. Voting Rights. (a) Except as provided under paragraph 5(b) below and
as otherwise required by law and the Declaration, the Holders of the Preferred
Securities will have no voting rights.

              
(b) If any proposed amendment to the Declaration provides for, or the Regular
Trustees otherwise propose to effect, (i) any action that would adversely
affect the powers, preferences or special rights of the Securities, whether
by way of amendment to the Declaration or otherwise, or (ii) the dissolution,
winding-up or termination of the Trust, other than in accordance with the
terms of the Declaration, then the Holders of outstanding Securities will
be entitled to vote on such amendment or proposal as a class and such amendment
or proposal shall not be effective except with the approval of the Holders
of Securities representing a Majority in liquidation amount of such Securities;
provided, however, (A) if any amendment or proposal referred to in clause
(i) above would adversely affect only the Preferred Securities or the Common
Securities, then only the affected class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of a Majority in liquidation amount of such class
of Securities and (B) amendments to the Declaration shall be subject to
such further requirements as are set forth in Sections 12.1 and 12.2 of
the Declaration.

              
In the event the consent of the Institutional Trustee, as the holder of
the Debentures, is required under the Indenture with respect to any amendment,
modification or termination of the Indenture or the Debentures, the Institutional
Trustee shall request the written direction of the Holders of the Securities
with respect to such amendment, modification or termination. The Institutional
Trustee shall vote with respect to such amendment, modification or termination
as directed by a Majority in liquidation amount of the Securities voting
together as a single class (and, in the case of any other UAL Corporation
Capital Trust holding debt securities issued under the Indenture, voting
with the holders of securities of such other UAL Corporation Capital Trust);
provided that where such amendment, modification or termination of the
Indenture requires the consent or vote of (1) holders of Debentures representing
a specified percentage greater than a majority in principal amount of the
Debentures or (2) each holder of Debentures, the Institutional Trustee
may only vote with respect to that amendment, modification or termination
as directed by, in the case of clause (1) above, the vote of Holders of
Securities representing such specified percentage of the aggregate liquidation
amount of the Securities, or, in the case of clause (2) above, each Holder
of Securities; and provided, further, that the Institutional Trustee shall
be under no obligation to take any action in accordance with the directions
of the Holders of Securities unless the Institutional Trustee shall have
received, at the expense of the Sponsor, an opinion of nationally recognized
independent tax counsel recognized as expert in such matters to the effect
that the Trust will not be classified for United States federal income
tax purposes as an association taxable as a corporation or a partnership
on account of such action and will be treated as a grantor trust for United
States federal income tax purposes following such action.

              
Subject to Section 2.6 of the Declaration, and the provisions of this and
the next two succeeding paragraphs, the Holders of a Majority in liquidation
amount of the Preferred Securities, voting separately as a class, shall
have the right to (A) on behalf of all Holders of Preferred Securities,
waive any past default, and its consequences, that is waivable under the
Declaration (subject to, and in accordance with, the Declaration) and (B)
direct the time, method, and place of conducting any proceeding for any
remedy available to the Institutional Trustee, or exercising any trust
or power conferred upon the Institutional Trustee under the Declaration,
including the right to direct the Institutional Trustee, as the holder
of the Debentures (and, in the case of any other UAL Corporation Capital
Trust holding debt securities issued under the Indenture, voting with the
holders of preferred securities of such other UAL Corporation Capital Trust),
to (i) direct the time, method and place of conducting any proceeding for
any remedy available to the Debenture Trustee, or exercising any trust
or power conferred on the Debenture Trustee with respect to the Debentures,
(ii) waive any past default and its consequences that is waivable under
Section 5.7 of the Indenture, or (iii) exercise any right to rescind or
annul a declaration that the principal of all the Debentures shall be due
and payable; provided that where the taking of any action under the Indenture
requires the consent or vote of (1) holders of Debentures representing
a specified percentage greater than a majority in principal amount of the
Debentures or (2) each holder of Debentures, the Institutional Trustee
may only take such action if directed by, in the case of clause (1) above,
the vote of Holders of Preferred Securities representing such specified
percentage of the aggregate liquidation amount of the Preferred Securities,
or, in the case of clause (2) above, each Holder of Preferred Securities.
The Institutional Trustee shall not revoke, or take any action inconsistent
with, any action previously authorized or approved by a vote of the Holders
of the Preferred Securities.

              
Other than with respect to directing the time, method and place of conducting
any proceeding for any remedy available to the Institutional Trustee or
the Debenture Trustee as set forth above, the Institutional Trustee shall
be under no obligation to take any of the foregoing actions at the direction
of the Holders of Preferred Securities unless the Institutional Trustee
shall have received, at the expense of the Sponsor, an opinion of nationally
recognized independent tax counsel recognized as expert in such matters
to the effect that the Trust will not be classified for United States federal
income tax purposes as an association taxable as a corporation or a partnership
on account of such action and will be treated as a grantor trust for United
States federal income tax purposes following such action. If the Institutional
Trustee fails to enforce its rights under the Declaration (including, without
limitation, its rights, powers and privileges as a holder of the Debentures
under the Indenture) to the fullest extent permitted by law, any Holder
of Preferred Securities may, upon such Holder's written request to the
Institutional Trustee to enforce such rights, institute a legal proceeding
directly against UAL to enforce the Institutional Trustee's rights under
the Declaration, without first instituting a legal proceeding against the
Institutional Trustee or any other Person; provided that if an Event of
Default is attributable to the failure of UAL to pay interest or principal
on the Debentures on the date such interest or principal is otherwise payable
(or in the case of redemption, the redemption date), then a Holder of Preferred
Securities may directly institute a proceeding for enforcement of payment
to such Holder of the principal of or interest on the Debentures having
a principal amount equal to the aggregate liquidation amount of the Preferred
Securities of such Holder without first (i) directing the Institutional
Trustee to enforce the terms of the Debentures or (ii) instituting a legal
proceeding against UAL to enforce the Institutional Trustee's rights under
the Debentures.

              
A waiver of an Indenture Event of Default by the Institutional Trustee
at the direction of the Holders of the Preferred Securities will constitute
a waiver of the corresponding Event of Default under the Declaration in
respect of the Securities.

              
Any required approval or direction of Holders of Preferred Securities may
be given at a separate meeting of Holders of Preferred Securities convened
for such purpose, at a meeting of all of the Holders of Securities of the
Trust or pursuant to written consent. The Regular Trustees will cause a
notice of any meeting at which Holders of Preferred Securities are entitled
to vote, or of any matter upon which action by written consent of such
Holders is to be taken, to be mailed to each Holder of record of Preferred
Securities. Each such notice will include a statement setting forth (i)
the date of such meeting or the date by which such action is to be taken,
(ii) a description of any resolution proposed for adoption at such meeting
on which such Holders are entitled to vote or of such matter upon which
written consent is sought and (iii) instructions for the delivery of proxies
or consents.

No vote or consent of the Holders
of Preferred Securities will be required for the Trust to redeem and cancel
Preferred Securities or distribute Debentures in accordance with the Declaration.

              
Notwithstanding that Holders of Preferred Securities are entitled to vote
or consent under any of the circumstances described above, any of the Preferred
Securities at such time that are owned by UAL or by any Person directly
or indirectly controlling or controlled by or under direct or indirect
common control with UAL shall not be entitled to vote or consent and shall,
for purposes of such vote or consent, be treated as if they were not outstanding.

              
Holders of the Preferred Securities will have no rights to increase or
decrease the number of Trustees or to appoint, remove or replace a Trustee,
which voting rights are vested solely in the Holders of the Common Securities.

              
6. Pro Rata Treatment. A reference in these terms of the Preferred Securities
to any payment, distribution or treatment as being "Pro Rata" shall mean
pro rata to each Holder of Securities according to the aggregate liquidation
amount of the Securities held by the relevant Holder in relation to the
aggregate liquidation amount of all Securities outstanding unless, in relation
to a payment, an Event of Default has occurred and is continuing, in which
case any funds available to make such payment shall be paid first to each
Holder of the Preferred Securities pro rata according to the aggregate
liquidation amount of Preferred Securities held by the relevant Holder
relative to the aggregate liquidation amount of all Preferred Securities
outstanding, and only after satisfaction of all amounts owed to the Holders
of the Preferred Securities, to each Holder of Common Securities pro rata
according to the aggregate liquidation amount of Common Securities held
by the relevant Holder relative to the aggregate liquidation amount of
all Common Securities outstanding.

              
7. Ranking. The Preferred Securities rank pari passu and payment thereon
will be made Pro Rata with the Common Securities except that, where an
Event of Default occurs and is continuing, the rights of Holders of Preferred
Securities to payment in respect of Distributions and payments upon liquidation,
redemption or otherwise rank in priority to the rights of Holders of the
Common Securities.

              
8. Mergers, Consolidations or Amalgamations.

              
(a) The Trust may not consolidate, amalgamate or merge with or into, or
be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to, any Person, except as described in Sections
3 and 8(b) and (c).

              
(b) The Trust may, with the consent of the Regular Trustees or, if there
are more than two, a majority of the Regular Trustees and without the consent
of the Holders of the Securities, the Delaware Trustee or the Institutional
Trustee, consolidate, amalgamate or merge with or into, or be replaced
by, a trust organized as such under the laws of any State; provided that:

(i) such successor entity (the
"Successor Entity") either:
(A) expressly assumes all of the
obligations of the Trust under the Preferred Securities; or
(B) substitutes for the Preferred
Securities other securities having substantially the same terms as the
Preferred Securities (the "Successor Securities") so long as the Successor
Securities rank the same as the Preferred Securities rank with respect
to Distributions and payments upon liquidation, redemption and otherwise;

(ii) the Sponsor expressly appoints
a trustee of the Successor Entity that possesses the same powers and duties
as the Institutional Trustee as the holder of the Debentures;

(iii) the Preferred Securities or
any Successor Securities are listed, or any Successor Securities will be
listed upon notification of issuance, on any national securities exchange
or with another organization on which the Preferred Securities are then
listed or quoted;

(iv) such merger, consolidation,
amalgamation or replacement does not cause the Preferred Securities (including
any Successor Securities) to be downgraded by any nationally recognized
statistical rating organization;

(v) such merger, consolidation, amalgamation
or replacement does not adversely affect the rights, preferences and privileges
of the Holders of the Preferred Securities (including any Successor Securities)
in any material respect (other than with respect to any dilution of such
Holders' interests in the Preferred Securities as a result of such merger,
consolidation, amalgamation or replacement);

(vi) such Successor Entity has a
purpose substantially identical to that of the Trust;

(vii) such merger, consolidation,
amalgamation or replacement does not vary the investment of the Holders
of the Preferred Securities within the meaning of Treasury Regulation Section
301.7701-4(c)(1), e.g., does not substitute other assets for assets of
the Trust to which the Preferred Securities relate or add assets to the
Trust to which the Preferred Securities relate;

(viii) prior to such merger, consolidation,
amalgamation or replacement, the Sponsor has received an opinion of a nationally
recognized independent counsel to the Trust experienced in such matters
to the effect that:

 

(A) such merger, consolidation,
amalgamation or replacement does not adversely affect the rights, preferences
and privileges of the Holders of the Preferred Securities (including any
Successor Securities) in any material respect (other than with respect
to any dilution of the Holders' interest in the new entity);
(B) following such merger, consolidation,
amalgamation or replacement, neither the Trust nor the Successor Entity
will be required to register as an Investment Company; and

(C) following such merger, consolidation,
amalgamation or replacement, the Trust (or the Successor Entity) will continue
to be classified as a grantor trust for United States federal income tax
purposes; and

 

(ix) the Sponsor guarantees the obligations
of such Successor Entity under the Successor Securities at least to the
extent provided by the Preferred Guarantee.

              
9. Transfer, Exchange, Method of Payments. Payment of Distributions and
payments on redemption of the Preferred Securities will be payable, the
transfer of the Preferred Securities will be registrable, and Preferred
Securities will be exchangeable for Preferred Securities of other denominations
of a like aggregate liquidation amount, at the principal corporate trust
office of the Institutional Trustee in the City of New York; provided that
payment of Distributions may be made at the option of the Regular Trustees
on behalf of the Trust by check mailed to the address of the Persons entitled
thereto and that the payment on redemption of any Preferred Security will
be made only upon surrender of such Preferred Security to the Institutional
Trustee.

              
10. Acceptance of Indenture and Preferred Guarantee. Each Holder of Preferred
Securities, by the acceptance thereof, agrees to the provisions of (i)
the Preferred Guarantee, including the subordination provisions therein,
and (ii) the Indenture and the Debentures, including the subordination
provisions of the Indenture.

              
11. No Preemptive Rights. The Holders of Preferred Securities shall have
no preemptive or similar rights to subscribe to any additional Preferred
Securities or Common Securities.

              
12. Miscellaneous. These terms shall constitute a part of the Declaration.
The Trust will provide a copy of the Declaration and the Indenture to a
Holder without charge on written request to the Trust at its principal
place of business.

              
Annex I

Certificate Number                              
Number of Preferred Securities

B-__ _____________________

CUSIP NO. 90254Y 20 8

 

 

Certificate Evidencing Preferred
Securities

of

UAL Corporation Capital Trust I

13 1/4% Trust Originated Preferred
Securities

(liquidation amount $25 per Preferred
Security)

              
UAL Corporation Capital Trust I, a statutory business trust created under
the laws of the State of Delaware (the "Trust"), hereby certifies that
_________ (the "Holder") is the registered owner of _____ (______) preferred
securities of the Trust representing undivided beneficial interests in
the assets of the Trust designated the 13 1/4% Trust Originated Preferred
Securities (liquidation amount $25 per Preferred Security) (the "Preferred
Securities"). The Preferred Securities are transferable on the books and
records of the Trust, in person or by a duly authorized attorney, upon
surrender of this certificate duly endorsed and in proper form for transfer.
The designations, rights, privileges, restrictions, preferences and other
terms and provisions of the Preferred Securities are set forth in, and
this certificate and the Preferred Securities represented hereby are issued
and shall in all respects be subject to the terms and provisions of, the
Amended and Restated Declaration of Trust of the Trust dated as of December
30, 1996, as the same may be amended from time to time (the "Declaration")
including the designation of the terms of Preferred Securities as set forth
in Exhibit B thereto. The Preferred Securities and the Common Securities
issued by the Trust pursuant to the Declaration represent undivided beneficial
interests in the assets of the Trust, including the Debentures (as defined
in the Declaration) issued by UAL Corporation, a Delaware corporation ("UAL"),
to the Trust pursuant to the Indenture referred to in the Declaration.
The Holder is entitled to the benefits of the Guarantee Agreement of UAL
dated as of December 30, 1996, as the same may be amended from time to
time (the "Guarantee"), to the extent provided therein. The Trust will
furnish a copy of the Declaration, the Guarantee and the Indenture to the
Holder without charge upon written request to the Trust at its principal
place of business or registered office.

              
The Holder of this Certificate, by accepting this Certificate, is deemed
to have (i) agreed to the terms of the Indenture and the Debentures, including
that the Debentures are subordinate and junior in right of payment to all
Senior Indebtedness (as defined in the Indenture) as and to the extent
provided in the Indenture and (ii) agreed to the terms of the Guarantee,
including that the Guarantee is subordinate and junior in right of payment
to all other liabilities of UAL, including the Debentures, except those
made pari passu or subordinate by their terms, and senior to all capital
stock now or hereafter issued by UAL and to any guarantee now or hereafter
entered into by UAL in respect of any of its capital stock.

              
Upon receipt of this certificate, the Holder is bound by the Declaration
and is entitled to the benefits thereunder.

              
IN WITNESS WHEREOF, Trustees of the Trust have executed this Certificate
as of                 
.

UAL CORPORATION CAPITAL TRUST I

By:_________________________

Name: Douglas A. Hacker

Title: Trustee

By:_________________________

Name: Francesca M. Maher

Title: Trustee

Countersigned and Registered:

THE FIRST NATIONAL BANK OF CHICAGO,
as

Transfer Agent and Registrar

By:___________________________

Authorized Signature

              
The Trust will furnish without charge to any registered owner of Preferred
Securities who so requests, copies of the Declaration, the Guarantee and
the Indenture. Any such request should be addressed to UAL Corporation
Capital Trust I, c/o Secretary, UAL Corporation, 1200 East Algonquin Road,
Elk Grove Township, Illinois 60007 or to the Registrar named on the face
of this Certificate.

              
The following abbreviations, when used in the inscription on the face of
this Certificate, shall be construed as though they were written out in
full according to applicable laws or regulations:

TEN COM -- as tenants in common

UNIF GIFT MIN ACT -- under Uniform
Gifts to Minors Act and not as tenants TENENT -- as tenants by the entireties

JT TEN -- as joint tenants with right
of survival

Additional abbreviations may also
be used though not in the above list.

 

 

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned
hereby sells, assigns and transfers unto:

_________________________________________________________________
_________________________________________________________________ _________________________________________________________________

(Please insert social security or
other identifying number of assignee)

_________________________________________________________________
_________________________________________________________________ _________________________________________________________________

(Insert address and zip code of assignee)

the within Certificate and all rights
and interests represented by the Preferred Securities evidenced thereby,
and hereby

irrevocably constitutes and appoints______________________________________
_________________________________________________________________ 
attorney to transfer the said Preferred Securities on the books of the
within-named Trust with full power of substitution in the premises.

Dated: _________________________

Signature: _____________________

Note: The signature(s) to this assignment
must correspond with the name(s) as written upon the face of this certificate
in every particular, without alteration or enlargement, or any change whatever.

NOTICE: Signature(s) must be guaranteed
by an "eligible guarantor institution" that is a member or participant
in a "signature guarantee program" (i.e., the Securities Transfer Agents
Medallion Program, the Stock Exchange Medallion Program or the New York
Stock Exchange, Inc. Medallion Signature Program).

 

 

 

EXHIBIT C

TERMS OF COMMON SECURITIES

              
Pursuant to Section 7.1 of the Amended and Restated Declaration of Trust
of UAL Corporation Capital Trust I dated as of December 30, 1996 (as amended
from time to time, the "Declaration"), the designations, rights, privileges,
restrictions, preferences and other terms and provisions of the Common
Securities are set forth below (each capitalized term used but not defined
herein having the meaning set forth in the Declaration):

              
1. Designation and Number. Common Securities of the Trust with an aggregate
liquidation amount in the assets of the Trust of _____________________________
(_________) and a liquidation amount in the assets of the Trust of $25
per Common Security, are hereby designated as "13 1/4% Trust Originated
Common Securities." The Common Security Certificates evidencing the Common
Securities shall be substantially in the form attached hereto as Annex
I, with such changes and additions thereto or deletions therefrom as may
be required by ordinary usage, custom or practice. The Common Securities
are to be issued and sold to UAL Corporation ("UAL") in consideration of
$[_________] in cash. In connection with the Offer and the purchase by
UAL of the Common Securities, UAL will deposit in the Trust, and the Trust
will purchase, respectively, as trust assets Debentures of UAL having an
aggregate principal amount equal to $[__________], and bearing interest
at an annual rate equal to the annual Distribution rate on the Preferred
Securities and Common Securities and having payment and redemption provisions
which correspond to the payment and redemption provisions of the Preferred
Securities and Common Securities.

              
2. Distributions. (a) Periodic distributions payable on each Common Security
will be fixed at a rate per annum of 13 1/4% (the "Coupon Rate") of the
stated liquidation amount of $25 per Common Security. Distributions in
arrears for more than one quarter will bear interest at the rate per annum
of 13 1/4% thereof (to the extent permitted by applicable law), compounded
quarterly, to the extent permitted by law. The term "Distributions" as
used in these terms means such periodic cash distributions and any such
interest payable unless otherwise stated. A Distribution will be made by
the Institutional Trustee only to the extent that interest payments are
made in respect of the Debentures held by the Trust. The amount of Distributions
payable for any period will be computed for any full quarterly Distribution
period on the basis of a 360-day year of twelve 30day months, and for any
period shorter than a full quarterly Distribution period for which Distributions
are computed, Distributions will be computed on the basis of the actual
number of days elapsed in such a 30-day month.

              
(b) Distributions on the Common Securities will be cumulative, will accrue
from December 21, 1996 and will be payable quarterly in arrears, on March
31, June 30, September 30 and December 31 of each year, commencing on December
31, 1996, and at final maturity of the Debentures, except as otherwise
described below, but only if and to the extent that interest payments are
made in respect of the Debentures held by the Trust. In addition, Holders
of Common Securities will be entitled to a cash distribution at the rate
of 12-1/4% per annum of the liquidation amount thereof from November 1,
1996 through December 20, 1996, payable on December 31, 1996 ("Pre-Issuance
Interest"). With the exception of Pre-Issuance Interest, so long as UAL
shall not be in default in the payment of interest on the Debentures, UAL
has the right under the Indenture for the Debentures to defer payments
of interest by extending the interest payment period from time to time
on the Debentures for a period not exceeding 20 consecutive quarterly interest
periods (each, an "Extension Period") and, as a consequence, quarterly
Distributions will continue to accrue with interest thereon (to the extent
permitted by applicable law) at the rate of 13 1/4% per annum, compounded
quarterly to the extent permitted by law during any such Extension Period.
Prior to the termination of any such Extension Period, UAL may further
extend such Extension Period; provided that such Extension Period together
with all such previous and further extensions thereof may not exceed 20
consecutive quarterly interest periods and provided further that no Extension
Period may extend beyond the maturity of the Debentures. Upon the termination
of any Extension Period and the payment on the next distribution payment
date following such Extension Period of all amounts then due, UAL may commence
a new Extension Period, subject to the above requirements. Any interest
paid on the Debentures during an Extension Period on an Interest Payment
Date shall be paid pro rata to the Holders of Preferred Securities on the
corresponding distribution payment date. Payments of accrued Distributions
will be payable to Holders of Common Securities as they appear on the books
and records of the Trust on the record date for the first payment occurring
on or after the end of the Extension Period.

              
(c) Distributions on the Common Securities will be payable promptly by
the Institutional Trustee (or other Paying Agent) upon receipt of immediately
available funds to the Holders thereof as they appear on the books and
records of the Trust on the relevant record dates, which will be 15 calendar
days prior to the relevant Distribution dates except that the record date
for the payment to be made on December 31, 1996 shall be the date of exchange
of the Common Securities for the Depository Shares, which record and payment
dates correspond to the record and interest payment dates on the Debentures.
Distributions payable on any Common Securities that are not punctually
paid on any Distribution payment date as a result of UAL having failed
to make the corresponding interest payment on the Debentures will forthwith
cease to be payable to the Person in whose name such Common Security is
registered on the relevant record date, and such defaulted Distribution
will instead be payable to the Person in whose name such Common Security
is registered on the special record date established by the Regular Trustees,
which record date shall correspond to the special record date or other
specified date determined in accordance with the Indenture; provided, however,
that Distributions shall not be considered payable on any Distribution
payment date falling within an Extension Period unless UAL has elected
to make a full or partial payment of interest accrued on the Debentures
on such Distribution payment date. Subject to any applicable laws and regulations
and the provisions of the Declaration, each payment in respect of the Common
Securities will be made as described in paragraph 9 hereof. If any date
on which Distributions are payable on the Common Securities is not a Business
Day, then payment of the Distribution payable on such date will be made
on the next succeeding day that is a Business Day (and without any interest
or other payment in respect of any such delay), except that, if such Business
Day is in the next succeeding calendar year, such payment shall be made
on the immediately preceding Business Day, in each case with the same force
and effect as if made on such date.

              
(d) All Distributions paid with respect to the Common Securities and the
Preferred Securities will be paid Pro Rata (as defined herein) to the Holders
thereof entitled thereto. If an Event of Default has occurred and is continuing,
the Preferred Securities shall have a priority over the Common Securities
with respect to Distributions

              
(e) In the event that there is any money or other property held by or for
the Trust that is not accounted for under the Declaration, such money or
property shall be distributed Pro Rata among the Holders of the Preferred
Securities and Common Securities.

              
3. Liquidation Distribution Upon Dissolution. In the event of any voluntary
or involuntary dissolution, winding-up or termination of the Trust, the
Holders of the Preferred Securities and Common Securities at the date of
the dissolution, winding-up or termination, as the case may be, will be
entitled to receive Pro Rata, solely out of the assets of the Trust available
for distribution to Holders of Preferred Securities and Common Securities,
after satisfaction of liabilities to creditors, an amount equal to the
aggregate of the stated liquidation amount of $25 per Preferred Security
and Common Security plus accrued and unpaid Distributions thereon to the
date of payment (such amount being the "Liquidation Distribution"), unless,
in connection with such dissolution, winding-up or termination, and after
satisfaction of liabilities to creditors, Debentures in an aggregate principal
amount equal to the aggregate stated liquidation amount of such Preferred
Securities and Common Securities bearing accrued and unpaid interest in
an amount equal to the accrued and unpaid Distributions on such Preferred
Securities and Common Securities shall be distributed Pro Rata to the Holders
of the Preferred Securities and Common Securities in exchange for such
Securities.

              
If, upon any such dissolution, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets available to pay
in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Preferred Securities and Common Securities
shall be paid on a Pro Rata basis, except that, if an Event of Default
has occurred and is continuing, the Preferred Securities shall have a priority
over the Common Securities with respect to such Liquidation Distribution.

              
4. Redemption and Distribution of Debentures. The Preferred Securities
and Common Securities may only be redeemed if Debentures having an aggregate
principal amount equal to the aggregate liquidation amount of the Preferred
Securities and Common Securities are repaid, redeemed or distributed as
set forth below:

              
(a) Upon the repayment of the Debentures, in whole or in part, whether
at maturity, or upon redemption at any time or from time to time on or
after July 12, 2004, the proceeds of such repayment will be promptly applied
to redeem Pro Rata Preferred Securities and Common Securities having an
aggregate liquidation amount equal to the aggregate principal amount of
the Debentures so repaid or redeemed, upon not less than 10 nor more than
60 days' notice, at a redemption price of $25 per Preferred and Common
Security plus an amount equal to accrued and unpaid Distributions thereon
to the date of redemption, payable in cash (the "Redemption Price"). The
date of any such repayment or redemption of Preferred Securities and Common
Securities shall be established to coincide with the repayment or redemption
date of the Debentures.

              
(b) The Common Securities will be entitled to be redeemed on a Pro Rata
basis with the Preferred Securities, except that, if an Event of Default
has occurred and is continuing, the Preferred Securities shall have a priority
over the Common Securities with respect to the payment of the Redemption
Price. If fewer than all the outstanding Preferred Securities and Common
Securities are to be so redeemed, the Preferred Securities and the Common
Securities will be redeemed Pro Rata and the Common Securities to be redeemed
will be redeemed as described in paragraph 4(e)(ii) below. If a partial
redemption would result in the delisting of the Preferred Securities by
any national securities exchange or other organization on which the Preferred
Securities are then listed, UAL pursuant to the Indenture will only redeem
Debentures in whole and, as a result, the Trust may only redeem the Common
Securities in whole.

              
(c) If, at any time, a Tax Event or an Investment Company Event (each as
hereinafter defined, and each a "Special Event") shall occur and be continuing,
the Regular Trustees shall, unless the Debentures are redeemed in the limited
circumstances described below, dissolve the Trust and, after satisfaction
of creditors, cause Debentures held by the Institutional Trustee having
an aggregate principal amount equal to the aggregate stated liquidation
amount of and accrued and unpaid interest equal to accrued and unpaid Distributions
on, and having the same record date for payment as, the Preferred Securities
and Common Securities, to be distributed to the Holders of the Preferred
Securities and Common Securities on a Pro Rata basis in liquidation of
such Holders' interests in the Trust, within 90 days following the occurrence
of such Special Event (the "90 Day Period"), provided, however, that in
the case of the occurrence of a Tax Event, as a condition of such dissolution
and distribution, the Regular Trustees shall have received an opinion (a
"No Recognition Opinion") of a nationally recognized independent tax counsel
experienced in such matters, which opinion may rely on any then applicable
published revenue rulings of the Internal Revenue Service, to the effect
that the Holders of the Preferred Securities will not recognize any gain
or loss for United States federal income tax purposes as a result of the
dissolution of the Trust and distribution of Debentures; and provided,
further, that, if and as long as at the time there is available to the
Trust the opportunity to eliminate, within the 90 Day Period, the Special
Event by taking some ministerial action, such as filing a form or making
an election, or pursuing some other similar reasonable measure that has
no adverse effect on the Trust, UAL, or the Holders of the Preferred Securities
("Ministerial Action"), the Trust will pursue such measure in lieu of dissolution.

              
If, in the case of the occurrence of a Tax Event, (i) the Regular Trustees
have received an opinion (a "Redemption Tax Opinion") of nationally recognized
independent tax counsel experienced in such matters that, as a result of
a Tax Event, there is more than an insubstantial risk that UAL would be
precluded from deducting the interest on the Debentures for United States
federal income tax purposes even if the Debentures were distributed to
the Holders of Preferred Securities and Common Securities in liquidation
of such Holder's interest in the Trust as described in this paragraph 4(c)
or (ii) the Regular Trustees shall have been informed by such tax counsel
that a No Recognition Opinion cannot be delivered to the Trust, UAL shall
have the right at any time, upon not less than 10 nor more than 60 days
notice, to redeem the Debentures in whole or in part for cash at the Redemption
Price within 90 days following the occurrence of such Tax Event, and promptly
following such redemption Preferred Securities and Common Securities with
an aggregate liquidation amount equal to the aggregate principal amount
of the Debentures so redeemed will be redeemed by the Trust at the Redemption
Price on a Pro Rata basis; provided, however, that, if at the time there
is available to UAL or the Regular Trustees on behalf of the Trust the
opportunity to eliminate, within such 90 day period, the Tax Event by taking
some Ministerial Action, UAL or the Regular Trustees on behalf of the Trust
will pursue such measure in lieu of redemption, and provided further that
UAL shall have no right to redeem the Debentures while the Regular Trustees
on behalf of the Trust are pursuing such Ministerial Action. The Common
Securities will be redeemed Pro Rata with the Preferred Securities, except
that if an Event of Default under the Indenture has occurred and is continuing,
the Preferred Securities will have a priority over the Common Securities
with respect to payment of the Redemption Price.

              
"Tax Event" means that the Regular Trustees shall have obtained an opinion
(a "Dissolution Tax Opinion") of nationally recognized independent tax
counsel experienced in such matters to the effect that on or after the
Expiration Date as a result of (a) any amendment to, or change (including
any announced prospective change) in, the laws (or any regulations thereunder)
of the United States or any political subdivision or taxing authority thereof
or therein, (b) any amendment to, or change in, an interpretation or application
of any such laws or regulations by any legislative body, court, governmental
agency or regulatory authority (including the enactment of any legislation
and the publication of any judicial decision or regulatory determination),
(c) any interpretation or pronouncement that provides for a position with
respect to such laws or regulations that differs from the theretofore generally
accepted position or (d) any action taken by any governmental agency or
regulatory authority, which amendment or change is enacted, promulgated,
issued or announced or which interpretation or pronouncement is issued
or announced or which action is taken, in each case on or after the Expiration
Date, there is more than an insubstantial risk that (i) the Trust is, or
will be within 90 days of the date thereof, subject to United States federal
income tax with respect to income accrued or received on the Debentures,
(ii) the Trust is, or will be within 90 days of the date thereof, subject
to more than a de minimis amount of taxes, duties or other governmental
charges or (iii) interest payable by UAL to the Trust on the Debentures
is not, or within 90 days of the date thereof will not be, deductible by
UAL for United States federal income tax purposes.

              
"Investment Company Event" means that the Regular Trustees shall have received
an opinion of nationally recognized independent counsel experienced in
practice under the Investment Company Act that, as a result of the occurrence
of a change in law or regulation or a change in interpretation or application
of law or regulation by any legislative body, court, governmental agency
or regulatory authority or the staff of such governmental agency or regulatory
authority (a "Change in 1940 Act Law"), there is more than an insubstantial
risk that the Trust is or will be considered an Investment Company which
is required to be registered under the Investment Company Act, which Change
in 1940 Act Law becomes effective on or after the Expiration Date.

              
On the date fixed for any distribution of Debentures, upon dissolution
of the Trust, (i) the Common Securities will no longer be deemed to be
outstanding and (ii) any certificates representing Common Securities will
be deemed to represent beneficial interests in the Debentures having an
aggregate principal amount equal to the stated liquidation amount of, and
bearing accrued and unpaid interest equal to accrued and unpaid Distributions
on, such Common Securities until such certificates are presented to UAL
or its agent for transfer or reissuance.

              
(d) The Trust may not redeem fewer than all the outstanding Common Securities
unless all accrued and unpaid Distributions have been paid on all Common
Securities for all quarterly Distribution periods terminating on or prior
to the date of redemption.

              
(e)(i) Notice of any redemption of, or notice of distribution of Debentures
in exchange for, the Preferred Securities and Common Securities (a "Redemption/Distribution
Notice") will be given by the Regular Trustees on behalf of the Trust by
mail to each Holder of Preferred Securities and Common Securities to be
redeemed or exchanged not less than 10 nor more than 60 days prior to the
date fixed for redemption or exchange thereof. For purposes of the calculation
of the date of redemption or exchange and the dates on which notices are
given pursuant to this paragraph (e)(i), a Redemption/Distribution Notice
shall be deemed to be given on the day such notice is first mailed by first
class mail, postage prepaid, to Holders of Preferred Securities and Common
Securities. Each Redemption/Distribution Notice shall be addressed to the
Holders of Preferred Securities and Common Securities at the address of
each such Holder appearing in the books and records of the Trust. No defect
in the Redemption/Distribution Notice or in the mailing of either thereof
with respect to any Holder shall affect the validity of the redemption
or exchange proceedings with respect to any other Holder.

                             
(ii) In the event that fewer than all the outstanding Common Securities
are to be redeemed, the Common Securities to be redeemed will be redeemed
Pro Rata from each Holder of Common Securities (subject to adjustment to
eliminate fractional Common Securities).

                             
(iii) If the Trust gives a Redemption/Distribution Notice in respect of
a redemption of Common Securities as provided in this paragraph 4 (which
notice will be irrevocable), then, immediately prior to the close of business
on the redemption date, provided that UAL has paid to the Trust in immediately
available funds a sufficient amount of cash in connection with the related
redemption or maturity of the Debentures, Distributions will cease to accrue
on the Common Securities called for redemption, such Common Securities
will no longer be deemed to be outstanding and all rights of Holders of
such Common Securities so called for redemption will cease, except the
right of the Holders of such Common Securities to receive the Redemption
Price, but without interest on such Redemption Price. Neither the Trustees
nor the Trust shall be required to register or cause to be registered the
transfer of any Common Securities which have been so called for redemption.
If any date fixed for redemption of Common Securities is not a Business
Day, then payment of the Redemption Price payable on such date will be
made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) except that, if
such Business Day falls in the next calendar year, such payment will be
made on the immediately preceding Business Day, in each case with the same
force and effect as if made on such date fixed for redemption. If payment
of the Redemption Price in respect of Common Securities is improperly withheld
or refused and not paid by the Trust, Distributions on such Common Securities
will continue to accrue, from the original redemption date to the date
of payment, in which case the actual payment date will be considered the
date fixed for redemption for purposes of calculating the Redemption Price.

                             
(iv) Redemption/Distribution Notices shall be sent by the Regular Trustees
on behalf of the Trust to the Holders of the Common Securities.

                             
(v) Upon the date of dissolution of the Trust and distribution of Debentures
as a result of the occurrence of a Special Event, Common Security Certificates
shall be deemed to represent beneficial interests in the Debentures so
distributed, and the Common Securities will no longer be deemed outstanding
and may be canceled by the Regular Trustees. The Debentures so distributed
shall have an aggregate principal amount equal to the aggregate liquidation
amount of the Common Securities so distributed.

              
5. Voting Rights. (a) Except as provided under paragraph 5(b) below and
as otherwise required by law and the Declaration, the Holders of the Common
Securities will have no voting rights.

              
(b) Holders of Common Securities have the sole right under the Declaration
to increase or decrease the number of Trustees, and to appoint, remove
or replace a Trustee, any such increase, decrease, appointment, removal
or replacement to be approved by Holders of Common Securities representing
a Majority in liquidation amount of the Common Securities.

              
If any proposed amendment to the Declaration provides for, or the Regular
Trustees otherwise propose to effect, (i) any action that would adversely
affect the powers, preferences or special rights of the Securities, whether
by way of amendment to the Declaration or otherwise, or (ii) the dissolution,
winding-up or termination of the Trust, other than in accordance with the
terms of the Declaration, then the Holders of outstanding Securities will
be entitled to vote on such amendment or proposal as a class and such amendment
or proposal shall not be effective except with the approval of the Holders
of Securities representing a Majority in liquidation amount of such Securities;
provided, however, (A) if any amendment or proposal referred to in clause
(i) above would adversely affect only the Preferred Securities or the Common
Securities, then only the affected class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of a Majority in liquidation amount of such class
of Securities, (B) the rights of Holders of Common Securities under Article
V of the Declaration to increase or decrease the number of, and to appoint,
replace or remove, Trustees shall not be amended without the consent of
each Holder of Common Securities, and (C) amendments to the Declaration
shall be subject to such further requirements as are set forth in Sections
12.1 and 12.2 of the Declaration.

              
In the event the consent of the Institutional Trustee, as the holder of
the Debentures, is required under the Indenture with respect to any amendment,
modification or termination of the Indenture or the Debentures, the Institutional
Trustee shall request the written direction of the Holders of the Securities
with respect to such amendment, modification or termination. The Institutional
Trustee shall vote with respect to such amendment, modification or termination
as directed by a Majority in liquidation amount of the Securities voting
together as a single class (and, in the case of any other UAL Corporation
Capital Trust holding debt securities issued under the Indenture, voting
with the holders of securities of such other UAL Corporation Capital Trust);
provided that where such amendment, modification or termination of the
Indenture requires the consent or vote of (1) holders of Debentures representing
a specified percentage greater than a majority in principal amount of the
Debentures or (2) each holder of Debentures, the Institutional Trustee
may only vote with respect to that amendment, modification or termination
as directed by, in the case of clause (1) above, the vote of Holders of
Securities representing such specified percentage of the aggregate liquidation
amount of the Securities, or, in the case of clause (2) above, each Holder
of Securities; and provided, further, that the Institutional Trustee shall
be under no obligation to take any action in accordance with the directions
of the Holders of the Securities unless the Institutional Trustee shall
have received, at the expense of the Sponsor, an opinion of nationally
recognized independent tax counsel recognized as an expert in such matters
to the effect that the Trust will not be classified for United States federal
income tax purposes as an association taxable as a corporation or a partnership
on account of such action and will be treated as a grantor trust for United
States federal income tax purposes following such action.

              
Subject to Section 2.6 of the Declaration, and the provisions of this and
the next two succeeding paragraphs, the Holders of a Majority in liquidation
amount of the Common Securities, voting separately as a class, shall have
the right to (A) on behalf of all Holders of Common Securities, waive any
past default, and its consequences, that is waivable under the Declaration
(subject to, and in accordance with, the Declaration) and (B) direct the
time, method, and place of conducting any proceeding for any remedy available
to the Institutional Trustee, or exercising any trust or power conferred
upon the Institutional Trustee under the Declaration, including the right
to direct the Institutional Trustee, as holder of the Debentures (and,
in the case of any other UAL Corporation Capital Trust holding debt securities
issued under the Indenture, voting with the holders of common securities
of such other UAL Corporation Capital Trust), to (i) direct the time, method
and place of conducting any proceeding for any remedy available to the
Debenture Trustee, or exercising any trust or power conferred on the Debenture
Trustee with respect to the Debentures, (ii) waive any past default and
its consequences that is waivable under Section 5.7 of the Indenture, or
(iii) exercise any right to rescind or annul a declaration that the principal
of all the Debentures shall be due and payable; provided that where the
taking of any action under the Indenture requires the consent or vote of
(1) holders of Debentures representing a specified percentage greater than
a majority in principal amount of the Debentures or (2) each holder of
Debentures, the Institutional Trustee may only take such action if directed
by, in the case of clause (1) above, the vote of Holders of Common Securities
representing such specified percentage of the aggregate liquidation amount
of the Common Securities, or, in the case of clause (2) above, each Holder
of Common Securities. The Institutional Trustee shall not revoke, or take
any action inconsistent with, any action previously authorized or approved
by a vote of the Holders of the Preferred Securities, and shall not take
any action in accordance with the direction of the Holders of the Common
Securities under this paragraph if the action is prejudicial to the Holders
of Preferred Securities.

              
Other than with respect to directing the time, method and place of conducting
any proceeding for any remedy available to the Institutional Trustee or
the Debenture Trustee as set forth above, the Institutional Trustee shall
be under no obligation to take any of the foregoing actions at the direction
of the Holders of Common Securities unless the Institutional Trustee shall
have received, at the expense of the Sponsor, an opinion of nationally
recognized independent tax counsel recognized as expert in such matters
to the effect that the Trust will not be classified for United States federal
income tax purposes as an association taxable as a corporation or a partnership
on account of such action and will be treated as a grantor trust for United
States income tax purposes following such action.

              
Notwithstanding any other provision of these terms, each Holder of Common
Securities will be deemed to have waived any Event of Default with respect
to the Common Securities and its consequences until all Events of Default
with respect to the Preferred Securities have been cured, waived by the
Holders of Preferred Securities as provided in the Declaration or otherwise
eliminated, and until all Events of Default with respect to the Preferred
Securities have been so cured, waived by the Holders of Preferred Securities
or otherwise eliminated, the Institutional Trustee will be deemed to be
acting solely on behalf of the Holders of Preferred Securities and only
the Holders of the Preferred Securities will have the right to direct the
Institutional Trustee in accordance with the terms of the Declaration or
of the Securities. In the event that any Event of Default with respect
to the Preferred Securities is waived by the Holders of Preferred Securities
as provided in the Declaration, the Holders of Common Securities agree
that such waiver shall also constitute the waiver of such Event of Default
with respect to the Common Securities for all purposes under the Declaration
without any further act, vote or consent of the Holders of the Common Securities.

              
A waiver of an Indenture Event of Default by the Institutional Trustee
at the direction of the Holders of the Preferred Securities will constitute
a waiver of the corresponding Event of Default under the Declaration in
respect of the Securities.

              
Any required approval or direction of Holders of Common Securities may
be given at a separate meeting of Holders of Common Securities convened
for such purpose, at a meeting of all of the Holders of Securities of the
Trust or pursuant to written consent. The Regular Trustees will cause a
notice of any meeting at which Holders of Common Securities are entitled
to vote, or of any matter upon which action by written consent of such
Holders is to be taken, to be mailed to each Holder of record of Common
Securities. Each such notice will include a statement setting forth (i)
the date of such meeting or the date by which such action is to be taken,
(ii) a description of any resolution proposed for adoption at such meeting
on which such Holders are entitled to vote or of such matter upon which
written consent is sought and (iii) instructions for the delivery of proxies
or consents.

              
No vote or consent of the Holders of Common Securities will be required
for the Trust to redeem and cancel Common Securities or distribute Debentures
in accordance with the Declaration.

              
6. Pro Rata Treatment. A reference in these terms of the Common Securities
to any payment, distribution or treatment as being "Pro Rata" shall mean
pro rata to each Holder of Securities according to the aggregate liquidation
amount of the Securities held by the relevant Holder in relation to the
aggregate liquidation amount of all Securities outstanding unless, in relation
to a payment, an Event of Default has occurred and is continuing, in which
case any funds available to make such payment shall be paid first to each
Holder of the Preferred Securities pro rata according to the aggregate
liquidation amount of Preferred Securities held by the relevant Holder
relative to the aggregate liquidation amount of all Preferred Securities
outstanding, and only after satisfaction of all amounts owed to the Holders
of the Preferred Securities, to each Holder of Common Securities pro rata
according to the aggregate liquidation amount of Common Securities held
by the relevant Holder relative to the aggregate liquidation amount of
all Common Securities outstanding.

              
7. Ranking. The Common Securities rank pari passu and payment thereon will
be made Pro Rata with the Preferred Securities except that, where an Event
of Default occurs and is continuing, the rights of Holders of Common Securities
to payment in respect of Distributions and payments upon liquidation, redemption
or otherwise are subordinate to the rights of Holders of the Preferred
Securities.

              
8. Mergers, Consolidations or Amalgamations.

                             
(a) The Trust may not consolidate, amalgamate or merge with or into, or
be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to, any Person, except as described in Sections
3 and 8(b) and (c).

                             
(b) The Trust may, with the consent of the Regular Trustees or, if there
are more than two, a majority of the Regular Trustees and without the consent
of the Holders of the Securities, the Delaware Trustee or the Institutional
Trustee, consolidate, amalgamate or merge with or into, or be replaced
by, a trust organized as such under the laws of any State; provided that:

                                            
(i) such successor entity (the "Successor Entity") either:

                                                           
(A) expressly assumes all of the obligations of the Trust under the Preferred
Securities; or

                                                           
(B) substitutes for the Preferred Securities other securities having substantially
the same terms as the Preferred Securities (the "Successor Securities")
so long as the Successor Securities rank the same as the Preferred Securities
rank with respect to Distributions and payments upon liquidation, redemption
and otherwise;

                                            
(ii) the Sponsor expressly appoints a trustee of the Successor Entity that
possesses the same powers and duties as the Institutional Trustee as the
holder of the Debentures;

                                            
(iii) the Preferred Securities or any Successor Securities are listed,
or any Successor Securities will be listed upon notification of issuance,
on any national securities exchange or with another organization on which
the Preferred Securities are then listed or quoted;

                                            
(iv) such merger, consolidation, amalgamation or replacement does not cause
the Preferred Securities (including any Successor Securities) to be downgraded
by any nationally recognized statistical rating organization;

                                            
(v) such merger, consolidation, amalgamation or replacement does not adversely
affect the rights, preferences and privileges of the Holders of the Preferred
Securities (including any Successor Securities) in any material respect
(other than with respect to any dilution of such Holders' interests in
the Preferred Securities as a result of such merger, consolidation, amalgamation
or replacement);

                                            
(vi) such Successor Entity has a purpose substantially identical to that
of the Trust;

                                            
(vii) such merger, consolidation, amalgamation or replacement does not
vary the investment of the Holders of the Preferred Securities within the
meaning of Treasury Regulation Section 301.7701-4(c)(1), e.g., does not
substitute other assets for assets of the Trust to which the Preferred
Securities relate or add assets to the Trust to which the Preferred Securities
relate;

                                            
(viii) prior to such merger, consolidation, amalgamation or replacement,
the Sponsor has received an opinion of a nationally recognized independent
counsel to the Trust experienced in such matters to the effect that:

              
(A) such merger, consolidation, amalgamation or replacement does not adversely
affect the rights, preferences and privileges of the Holders of the Preferred
Securities (including any Successor Securities) in any material respect
(other than with respect to any dilution of the Holders' interest in the
new entity);
              
(B) following such merger, consolidation, amalgamation or replacement,
neither the Trust nor the Successor Entity will be required to register
as an Investment Company; and

              
(C) following such merger, consolidation, amalgamation or replacement,
the Trust (or the Successor Entity) will continue to be classified as a
grantor trust for United States federal income tax purposes; and

                                            
(ix) the Sponsor guarantees the obligations of such Successor Entity under
the Successor Securities at least to the extent provided by the Preferred
Guarantee.

              
9. Transfer, Exchange, Method of Payments. Payment of Distributions and
payments on redemption of the Common Securities will be payable, the transfer
of the Common Securities will be registrable, and Common Securities will
be exchangeable for Common Securities of other denominations of a like
aggregate liquidation amount, at the principal corporate trust office of
the Institutional Trustee in the City of New York; provided that payment
of Distributions may be made at the option of the Regular Trustees on behalf
of the Trust by check mailed to the address of the Persons entitled thereto
and that the payment on redemption of any Common Security will be made
only upon surrender of such Common Security to the Institutional Trustee.
Notwithstanding the foregoing, transfers of Common Securities are subject
to conditions set forth in Section 9.1(c) of the Declaration.

              
10. Acceptance of Indenture. Each Holder of Common Securities, by the acceptance
thereof, agrees to the provisions of (i) the Common Guarantee, including
the Subordination provisions thereof, and (ii) the Indenture and the Debentures,
including the subordination provisions thereof.

No Preemptive Rights. The Holders
of Common Securities shall have no preemptive or similar rights to subscribe
to any additional Common Securities or Preferred Securities.

              
12. Miscellaneous. These terms shall constitute a part of the Declaration.
The Trust will provide a copy of the Declaration and the Indenture to a
Holder without charge on written request to the Trust at its principal
place of business.

 

Annex I

TRANSFER OF THIS CERTIFICATE

IS SUBJECT TO THE CONDITIONS

SET FORTH IN THE DECLARATION

REFERRED TO BELOW
Certificate Number                                                                                                                                          
Number of Common Securities

______

C-1

Certificate Evidencing Common Securities

of

UAL Corporation Capital Trust I

13 1/4% Trust Originated Common Securities

(liquidation amount $25 per Common
Security)

              
UAL Corporation Capital Trust I, a statutory business trust created under
the laws of the State of Delaware (the "Trust"), hereby certifies that
UAL Corporation (the "Holder") is the registered owner of _____________________________
(______) common securities of the Trust representing undivided beneficial
interests in the assets of the Trust designated the 13 1/4% Trust Originated
Common Securities (liquidation amount $25 per Common Security) (the "Common
Securities"). The Common Securities are transferable on the books and records
of the Trust, in person or by a duly authorized attorney, upon surrender
of this certificate duly endorsed and in proper form for transfer and satisfaction
of the other conditions set forth in the Declaration (as defined below)
including, without limitation, Section 9.1(c) thereof.

The designations, rights, privileges,
restrictions, preferences and other terms and provisions of the Common
Securities are set forth in, and this certificate and the Common Securities
represented hereby are issued and shall in all respects be subject to the
terms and provisions of, the Amended and Restated Declaration of Trust
of the Trust dated as of December 30, 1996, as the same may be amended
from time to time (the "Declaration") including the designation of the
terms of Common Securities as set forth in Exhibit C thereto. The Common
Securities and the Preferred Securities issued by the Trust pursuant to
the Declaration represent undivided beneficial interests in the assets
of the Trust, including the Debentures (as defined in the Declaration)
issued by UAL Corporation, a Delaware corporation ("UAL"), to the Trust
pursuant to the Indenture referred to in the Declaration. The Holder is
entitled to the benefits of the Common Securities Guarantee Agreement dated
as of December 30, 1996, as the same may be amended from time to time (the
"Common Guarantee"). The Trust will furnish a copy of the Declaration,
the Guarantee and the Indenture to the Holder without charge upon written
request to the Trust at its principal place of business or registered office.

              
The Holder of this Certificate, by accepting this Certificate, is deemed
to have (i) agreed to the terms of the Indenture and the Debentures, including
that the Debentures are subordinate and junior in right of payment to all
Senior Indebtedness (as defined in the Indenture) as and to the extent
provided in the Indenture, and (ii) agreed to the terms of the Common Guarantee,
including that the Common Guarantee is subordinate and junior in right
of payment to all other liabilities of UAL including the Preferred Guarantee
(as defined in the Declaration), to the extent stated therein, and the
Debentures, except those made pari passu or subordinate by their terms,
and senior to all capital stock now or hereafter issued by UAL and to any
guarantee now or hereafter entered into by UAL in respect of any of its
capital stock.

              
Upon receipt of this certificate, the Holder is bound by the Declaration
and is entitled to the benefits thereunder.

              
IN WITNESS WHEREOF, Trustees of the Trust have executed this certificate
as of                    
.

 

 

UAL CORPORATION CAPITAL TRUST I

By: _________________________

Name: Douglas A. Hacker

Title: Trustee

By: _________________________

Name: Francesca M. Maher

Title: Trustee

Countersigned and Registered:

THE FIRST NATIONAL BANK OF CHICAGO,
as

Transfer Agent and Registrar

By:___________________________

Authorized Signature

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned
assigns and transfer this Common Security Certificate to: _________________________________________________________________
_________________________________________________________________ _________________________________________________________________

(Insert assignee's social security
or tax identification number)

_________________________________________________________________
_________________________________________________________________ _________________________________________________________________

(Insert address and zip code of
assignee)

and irrevocably constitutes and appoints
_________________________________  ________________________________________________________________

________________________________________________________________

attorney to transfer this Common
Security Certificate on the books of the within-named Trust with full power
of substitution in the premises.

 

Dated: ____________________________

Signature: ________________________

Note: The signature(s) to this assignment
must correspond with the name(s) as written upon the face of this certificate
in every particular, without alteration or enlargement, or any change whatever.

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