UNITED AIRLINES HOLDINGS, INC. : Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant, Unregistered Sale of Equity Securities, Other Events, Financial Statements and Exhibits (form 8-K)

Item 1.01 Entry into a Material Definitive Agreement

Loan and Guarantee Agreement

On September 28, 2020, United Airlines Holdings, Inc. ("UAL") and United Airlines, Inc. ("United" and, together with UAL, the "Company") entered into a Loan and Guarantee Agreement (the "Credit Agreement"), among United, as borrower, UAL, as parent and guarantor, the subsidiaries of UAL other than United party thereto from time to time, as guarantors, The United States Department of the Treasury ("Treasury"), as lender, and The Bank of New York Mellon, as administrative agent and collateral agent. The Credit Agreement provides for a term loan facility of up to $5.17 billion (the "Term Loan Facility") pursuant to the loan program established under Section 4003(b)(1) of the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"). The loans (the "Term Loans") under the Term Loan Facility may be disbursed in up to three disbursements on or before March 26, 2021.

Treasury has advised United that it intends to allocate additional loan commitments under the CARES Act in October 2020, and that it expects that such additional allocations will increase the amount available under the Term Loan Facility to up to $7.5 billion in the aggregate (including any funded Term Loans). Such increase, and the amount thereof, are subject to final approval by Treasury and would require an amendment to the Credit Agreement.

On September 28, 2020, United borrowed the initial Term Loan under the Term Loan Facility in an amount equal to $520 million, the proceeds of which were used to pay certain transaction fees and expenses, and for working capital and other general corporate purposes of the Company. The principal amount of Term Loans borrowed by United must be repaid in a single installment on the maturity date on September 28, 2025. United may prepay all or a portion of any Term Loan from time to time, at par plus accrued and unpaid interest.

Borrowings under the Credit Agreement bear interest at a variable rate equal to the London interbank offering rate, known as LIBOR (but not less than 0%), plus a margin of 3.00% per annum.

The obligations of United under the Credit Agreement are secured by liens on certain route authorities of United and certain related slots and gate leaseholds and other related assets. The Credit Agreement includes covenants that restrict the Company and its subsidiaries' ability to, among other things, make investments and to pay dividends on, or to repurchase, UAL common stock. In addition, the Credit Agreement requires the Company to maintain unrestricted cash and cash equivalents and unused commitments available under all revolving credit facilities and under the Term Loan Facility aggregating not less than $2.0 billion and to maintain a minimum ratio of appraised value of collateral to outstanding obligations under the Credit Agreement of 1.60 to 1. If the Company does not meet the minimum collateral coverage ratio when required, it must either provide additional collateral to secure its obligations under the Credit Agreement or repay the Term Loans (or both) to the extent necessary to maintain compliance with the collateral coverage ratio.

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The Credit Agreement contains customary events of default, including a cross payment default and cross acceleration provision to certain other material indebtedness of the Company. Upon the occurrence of an event of default, the outstanding obligations under the Credit Agreement may be accelerated and become due and payable immediately. In addition, if certain change of control events occur, the Company is required to prepay any Term Loans then outstanding.

Pursuant to the Credit Agreement, United and its affiliates will be required to comply with certain provisions of the CARES Act (as expanded and modified by the Credit Agreement), including, among others, requirements to maintain certain employment levels through September 30, 2020; provisions prohibiting the payment of dividends and the repurchase of certain equity until September 30, 2026 (or such earlier date that is one year after repayment in full of the Term Loans) (the "Outside Date"); audit and reporting requirements; provisions to comply with certain continuation of service requirements until March 1, 2022; and provisions restricting the payment of certain executive compensation until the Outside Date.

Warrant Agreement (Credit Agreement)

In connection with the Credit Agreement, UAL entered into a warrant agreement (the "Credit Agreement Warrant Agreement") with Treasury on September 28, 2020, pursuant to which UAL will issue to Treasury warrants (the "Credit Agreement Warrants") to purchase up to approximately 16.41 million shares of UAL common stock, assuming United borrows the initial commitments under the Term Loan Facility in full. The Credit Agreement Warrants will be issued on the date of disbursement of each Term Loan in an amount corresponding to 10% of the principal amount of each such disbursement. In connection with United's borrowing of the initial Term Loan, on September 28, 2020, UAL issued Credit Agreement Warrants to purchase up to approximately 1.65 million shares of UAL common stock.

The Credit Agreement Warrants will have a strike price of $31.50 per share (which was the closing price of UAL's common stock on The Nasdaq Stock Market on April 9, 2020). The Credit Agreement Warrants will expire five years after issuance, and are exercisable either through net share settlement in cash or in shares of UAL common stock, at UAL's option. If Treasury increases its loan commitments under the Term Loan Facility, then the maximum amount of common stock for which Credit Agreement Warrants could be issued would increase . . .

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

The information described under Item 1.01 above is incorporated herein by reference to the extent responsive to Item 2.03.

Item 3.02 Unregistered Sales of Equity Securities.

The information described under Item 1.01 above and under Item 8.01 below is incorporated herein by reference to the extent responsive to Item 3.02. Each of the Credit Agreement Warrants and the New PSP Warrants were or will be issued pursuant to an exemption from registration provided for under Section 4(a)(2) of the Securities Act of 1933, as amended.

Item 8.01 Other Events.



Promissory Note

As previously reported, on April 20, 2020, pursuant to the Payroll Support Program established under the CARES Act, the Company entered into a Payroll Support Program Agreement with Treasury whereby Treasury provided the Company with total funding of approximately $5.0 billion (the "Original Funding").

On September 30, 2020, Treasury disbursed an additional approximately $144.0 million in funding (the "Additional Funding") to the Company pursuant to the Payroll Support Program.

In connection with the Additional Funding, UAL's previously issued promissory note to Treasury (the "PSP Note") was increased by approximately $43.0 million, for an aggregate total of approximately $1.5 billion. No other terms of the PSP Note were changed.

Warrants (Promissory Note)

As previously reported, UAL also entered into a warrant agreement (the "PSP Warrant Agreement") with Treasury on April 20, 2020, pursuant to which UAL has issued to Treasury warrants to purchase up to approximately 4.6 million shares of common stock (the "Original PSP Warrants") in connection with the Original Funding. In connection with the Additional Funding, UAL has issued to Treasury additional warrants to purchase up to 136,700 shares of common stock (the "New PSP Warrants").

The New PSP Warrants were issued pursuant to the PSP Warrant Agreement and have the same terms and strike price as the Original PSP Warrants.

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Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.



 Exhibit
   No.                                   Description

  4.1         Warrant Agreement, dated as of September 28, 2020, between UAL and
            The United States Department of the Treasury.

  4.2         Form of Warrant (included in Exhibit 4.1 as Annex B thereto).

  10.1*       Loan and Guarantee Agreement, among United, as borrower, UAL, as
            parent and guarantor, the subsidiaries of UAL other than United party
            thereto from time to time, as guarantors, The United States Department
            of the Treasury, as lender, and The Bank of New York Mellon, as
            administrative agent and collateral agent.

104         Cover Page Interactive Data File (embedded within the Inline XBRL
            document).

* Pursuant to Item 601(a)(5) of Regulation S-K, schedules have been omitted and will be furnished on a supplemental basis to the Securities and Exchange Commission upon request.

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