United Airlines (UAUA)

Holders may convert, at any time on or prior to maturity, redemption, a change in ownership or a fundamental change, any of their O’Hare Notes (or portions thereof) into shares of the Company’s common stock at a conversion price which will initially be 125% of the average of last reported sales prices of the Company’s common stock for the 60 consecutive trading days following February 1, 2006. In lieu of delivery of shares of the Company’s common stock upon conversion of all or any portion of the O’Hare Notes, the Company may elect to pay holders surrendering O’Hare Notes for conversion cash or a combination of shares of common stock and cash.

The O’Hare Indenture provides that the Company may not consolidate with or merge into any person or convey, transfer or lease all or substantially all of its assets to another person unless: (i) (A) in the case of a merger or consolidation, the Company is the surviving person, or (B) in the case of a merger or consolidation where the Company is not the surviving person and in the case of any such conveyance, transfer or lease, the resulting, surviving or transferee person is a corporation organized and existing under the laws of the United States or any state thereof and such corporation assumes all the Company’s obligations under the O’Hare Notes and the O’Hare Indenture; (ii) if, as a result of such transaction the O’Hare Notes become convertible or exchangeable into common stock or securities issued by a third party, such third party guarantees all of the Company’s obligations under the O’Hare Notes and the O’Hare Indenture; (iii) after giving effect to the transaction no event of default, and no event that, after notice or passage of time, would become an event of default, has occurred and is continuing; and (iv) other conditions described in the O’Hare Indenture are met.

The O’Hare Indenture also provides that a guarantor may not consolidate with or merge into any person or convey, transfer or lease its properties and assets substantially as an entity to another person unless (i) after giving effect to the transaction no event of default, and no event that, after notice or passage of time, would become an event of default, has occurred and is continuing; and (ii) the guarantor survives or the surviving person assumes the obligations of such guarantor.  Upon the assumption of the guarantor’s obligations by such person in such circumstances, the guarantor will not be discharged from its obligations under the O’Hare Notes and the O’Hare Indenture.

The O’Hare Indenture governing the O’Hare Notes contains customary events of default. Under the O’Hare Indenture, events of default include (i) default in payment of any interest under the O’Hare Notes, which default continues for 30 days; (ii) default in the payment of any principal amount with respect to the O’Hare Notes, when the same becomes due and payable; (iii) the Company fails to provide notice of a change in ownership or a fundamental change; (iv) default in the performance of, or breach of, any covenant or warranty with respect to the O’Hare Notes, which default continues for 60 days after receipt of notice by holders of at least 25% in aggregate principal amount of the outstanding O’Hare Notes; provided, however, that breaches of covenants with respect to notice of change in ownership, notice of default, compliance certificates and changes in organizational documents do not require notice by holders; (v) the Company defaults in its obligation to deliver shares of common stock of the Company, cash or other property upon conversion of a holder’s exercise of their right to convert its O’Hare Notes; (vi) certain events of bankruptcy, insolvency or reorganization affecting the Company or the guarantor; and (vii) any guarantee ceases to be in full force and effect or is declared null and void or any guarantor denies that it has any

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As a result of the Chapter 11 filing, UAL is no longer making interest payments on the TOPrS Debentures. As a result, the TOPrS Trust no longer has the funds available to pay distributions on the TOPrS Preferred Securities and stopped accruing and paying such dividends in October 2002.