Exhibit 10.9
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of November 20, 1998 (this
"AGREEMENT"), among NORTHWEST AIRLINES CORPORATION, a Delaware corporation
("NORTHWEST"), the persons identified on the signature pages hereof (the
"HOLDERS") and 1992 Air, Inc., a Texas corporation, as representative of the
Holders (the "HOLDERS' REPRESENTATIVE").
W I T N E S S E T H :
WHEREAS, pursuant to an Investment Agreement, dated as of January 25,
1998, as amended by Amendment No. 1, dated as of February 27, 1998, and
Amendment No. 2, dated as of November 20, 1998 (the "INVESTMENT AGREEMENT";
capitalized terms used but not defined herein have the meanings assigned to such
terms in the Investment Agreement), among Northwest, Northwest Airlines Holdings
Corporation, a Delaware corporation ("HOLDINGS"), the Partnership, the Cash
Electing Partners (as defined therein), the Share Electing Partners (as defined
therein), CAIPar (as defined therein) and the Transferors (as defined therein),
Northwest and Holdings are acquiring from (i) the Cash Electing Partners and the
Share Electing Partners their interests in the Partnership and (ii) the
Transferors the shares of Company Class A Common Stock owned by the Transferors
concurrently with the execution of this Agreement; and
WHEREAS, Northwest, the Holders and the Holders' Representative are
entering into this Agreement to establish certain arrangements with respect to
the shares of Northwest Common Stock issued by Northwest to the Holders pursuant
to the Investment Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
1. DEFINITIONS. Unless otherwise defined herein:
"ASSOCIATE" shall have the meaning ascribed to such term in Rule 12b-2
under the Exchange Act.
"HOLDER" shall mean any party hereto (other than Northwest), and their
permitted successors and assigns, and any Person who becomes a party hereto.
"NORTHWEST COMMON STOCK" shall mean the Common Stock, par value $.01
per share, of Northwest.
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"REGISTRABLE SECURITIES" shall mean (i) any Northwest Common Stock
issued to the Holders pursuant to the Investment Agreement or (ii) any
securities which have been or may be issued or distributed in respect of any
shares covered by clause (i) by way of stock dividend or stock split or other
distribution, recapitalization or reclassification. As to any particular
Registrable Securities, once issued such Securities shall cease to be
Registrable Securities when (v) based on an opinion of counsel or a no-action
letter of the SEC, in either case reasonably acceptable to Northwest and the
Holders' Representative, all such Securities are immediately eligible for sale
pursuant to Rule 144 (or any successor provision) under the Securities Act, (w)
such Securities shall have been sold pursuant to Rule 144 (or any successor
provision) under the Securities Act, (x) a registration statement with respect
to the sale of such Securities shall have become effective under the Securities
Act and such Securities shall have been disposed of in accordance with such
registration statement, (y) such Securities shall have been otherwise
transferred, new certificates for them not bearing a legend restricting further
transfer shall have been delivered by Northwest, and subsequent disposition of
them shall not require registration or qualification of them under the
Securities Act or any state securities or blue sky law then in force or (z) such
Securities shall have ceased to be outstanding.
"REGISTRATION EXPENSES" shall mean any and all expenses incident to
performance of or compliance with this Agreement, including, without limitation,
(i) all SEC and securities exchange or National Association of Securities
Dealers, Inc. registration and filing fees, (ii) all fees and expenses of
complying with securities or blue sky laws (including fees and disbursements of
counsel for the underwriters in connection with blue sky qualifications of the
Registrable Securities), (iii) all printing, messenger and delivery expenses,
(iv) all fees and expenses incurred in connection with the listing of the
Registrable Securities on any securities exchange pursuant to Section 4(h), (v)
the fees and disbursements of counsel for Northwest and of its independent
public accountants, including the expenses of any special audits and/or "cold
comfort" letters required by or incident to such performance and compliance,
(vi) the reasonable fees and disbursements of one counsel, other than
Northwest's counsel, selected by the Holders of a majority of the Registrable
Securities being registered to represent all Holders of the Registrable
Securities being registered in connection with each such registration (it being
understood that any Holder may, at its own expense, retain separate counsel to
represent it in connection with such registration), and (vii) any fees and
disbursements of underwriters customarily paid by the issuers or sellers of
securities, and the reasonable fees and expenses of any special experts retained
in connection with the requested registration; PROVIDED, that Registration
Expenses shall exclude all underwriting discounts and commissions, selling or
placement agent or broker fees and commissions, transfer taxes, if any, and the
fees and disbursements of counsel for the Holders other than the one firm
referred to in clause (vi) above.
"SEC" shall mean the Securities and Exchange Commission, or any
successor governmental body or agency.
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2. INCIDENTAL REGISTRATIONS.
(a) RIGHT TO INCLUDE REGISTRABLE SECURITIES. Each time Northwest
proposes to register the Northwest Common Stock under the Securities Act (other
than a registration on Form S-4 or S-8, or any successor or other forms
promulgated for similar purposes), whether or not for sale for its own account,
pursuant to a registration statement on which it is permissible to register
Registrable Securities for sale to the public under the Securities Act, it will
give prompt written notice to the Holders' Representative of its intention to do
so and of the Holders' rights under this Section 2. Upon the written request of
the Holders' Representative made in good faith on behalf of any Holders and made
within 15 days after the receipt of any such notice (which request shall specify
the number of Registrable Securities intended to be disposed of by each Holder),
Northwest will use its best efforts to effect the registration under the
Securities Act of all Registrable Securities which Northwest has been so
requested to register by the Holders' Representative; PROVIDED, that (i) if, at
any time after giving written notice of its intention to register any securities
and prior to the effective date of the registration statement filed in
connection with such registration, Northwest shall determine for any reason not
to proceed with the proposed registration, Northwest may, at its election, give
written notice of such determination to the Holders' Representative and
thereupon shall be relieved of its obligation to register any Registrable
Securities in connection with such registration (but not from its obligation to
pay the Registration Expenses in connection therewith), and (ii) if such
registration involves an underwritten offering by Northwest (underwritten, at
least in part, by Persons who are not affiliates or associates of Northwest or
any Holder), all Holders requesting to the Holders' Representative to have
Registrable Securities included in Northwest's registration must sell their
Registrable Securities to such underwriters who shall have been selected by
Northwest on the same terms and conditions as apply to Northwest, with such
differences, including any with respect to indemnification and contribution, as
may be customary or appropriate in combined primary and secondary offerings. If
a proposed registration pursuant to this Section 2(a) involves such an
underwritten public offering, any Holder making a request to the Holders'
Representative under this Section 2(a) in connection with such registration may
elect in writing, prior to the effective date of the registration statement
filed in connection with such registration, to withdraw such request from the
Holders' Representative and not to have such securities registered in connection
with such registration.
(b) EXPENSES. Northwest will pay all Registration Expenses in
connection with each registration of Registrable Securities requested pursuant
to this Section 2, regardless of whether such registration statement becomes
effective, and the Holders' on whose behalf Registrable Securities are being
sold shall pay all underwriting discounts and commissions, selling or placement
agent or broker fees and commissions, and transfer taxes, if any, relating to
the sale or disposition of such Holders' Registrable Securities pursuant to a
registration statement effected pursuant to this Section 2.
(c) PRIORITY IN INCIDENTAL REGISTRATIONS. If a registration pursuant
to this Section 2 involves an underwritten offering by Northwest (as described
in Section 2(a)(ii)) and the managing underwriter with respect to such offering
advises Northwest in writing that, in its
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opinion, the number of securities (including all Registrable Securities)
which Northwest, the Holders and any other Persons intend to include in such
registration exceeds the largest number of securities which can be sold in
such offering without having an adverse effect on the offering of securities
as contemplated by Northwest (including the price at which Northwest proposes
to sell such securities), then Northwest will include in such registration
(i) first, all the securities proposed to be sold by any Person exercising a
"demand" registration right pursuant to a registration rights agreement with
Northwest, (ii) second, all the securities Northwest proposes to sell for its
own account, and (iii) third, the number of Registrable Securities which the
Holders' Representative has requested to be included in such registration and
which, in the opinion of such managing underwriter, can be sold without
having the adverse effect referred to above, such reduced number of
Registrable Securities to be allocated pro rata among Holders that have made
a request to the Holders' Representative on the basis of the relative number
of shares of Registrable Securities then held by each such Holder (provided
that any shares thereby allocated to any such Holder that exceed such
Holder's request will be reallocated among the remaining requesting Holders
in like manner).
(d) CUSTODY AGREEMENT AND POWER OF ATTORNEY. Upon Northwest's
request, the Holders' Representative, on behalf of the Holders, will execute and
deliver a custody agreement and power of attorney in form and substance
reasonably satisfactory to Northwest with respect to the Registrable Securities
to be registered pursuant to this Section 2 (a "CUSTODY AGREEMENT AND POWER OF
ATTORNEY"). The Custody Agreement and Power of Attorney will provide, among
other things, that the Holders will deliver to and deposit in custody with the
custodian and attorney-in-fact named therein a certificate or certificates
representing such shares of Registrable Securities (duly endorsed in blank by
the registered owner or owners thereof or accompanied by duly executed stock
powers in blank) and irrevocably appoint said custodian and attorney-in-fact as
the Holder's agent and attorney-in-fact with full power and authority to act
under the Custody Agreement and Power of Attorney on behalf of the Holders with
respect to the matters specified therein.
(e) OTHER AGREEMENTS. Each Holder and the Holders' Representative
agree that they will execute such other agreements as Northwest may reasonably
request to further accomplish the purposes of this Section 2.
3. SHELF REGISTRATIONS.
(a) REQUIRED SHELF REGISTRATIONS. Northwest shall file with the SEC
and use its reasonable best efforts to have declared effective as promptly as
practicable after the Closing a shelf registration statement (the "SHELF
REGISTRATION STATEMENT") on an appropriate form that shall include all
Registrable Securities, and may include securities of Northwest for sale for
Northwest's own account (the "REQUIRED SHELF REGISTRATION"). Notwithstanding
anything else contained in this Agreement, Northwest shall be obligated to keep
such Shelf Registration Statement effective until the earliest of (i) such time
as (x) no Holder is an "affiliate" of Northwest for purposes of Rule 144 under
the Securities Act or (y) if earlier, such time as each Holder that could be
considered an affiliate of Northwest owns a number of Registrable Securities
that could at that time be sold in a single transaction under Rule 144(e)
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under the Securities Act (provided, that a written opinion of counsel for
Northwest to the effect set forth in clause (x) or (y) shall constitute
conclusive evidence of the satisfaction of such conditions), (ii) such time
as all Registrable Securities have been sold or disposed of thereunder or
sold, transferred or otherwise disposed of to a Person that is not a Holder
and (iii) such time as all securities that were Registrable Securities on the
date hereof have ceased to be Registrable Securities (the earliest of (i),
(ii) and (iii) being the "SHELF TERMINATION DATE"); PROVIDED, HOWEVER, that
the Shelf Termination Date shall be delayed to the extent required to permit
dealers to comply with the applicable prospectus delivery requirements of
Section 4(3) of the Securities Act and Rule 174 thereunder. After the date
that is 90 days following the execution of this Agreement, on two occasions,
but only once within any 12 month period, if requested by a Holder or Holders
holding 25% or more of the Registrable Securities, the Holders'
Representative shall have the right pursuant to this Section 3(a) to request
that Northwest assist it in conducting an underwritten public offering of the
Registrable Securities (each an "UNDERWRITTEN OFFERING"); PROVIDED, that such
Holder or Holders shall not have such right if the aggregate number of shares
of Registrable Securities the subject of such request is less than 1,000,000
shares (as appropriately adjusted in respect of any stock splits,
subdivisions, combinations and similar transactions). Any Holder making a
request to the Holders' Representative in connection with an Underwritten
Offering may elect in writing, prior to the date of the prospectus relating
to any such Underwritten Offering, to withdraw such Holder's Registrable
Securities from such Underwritten Offering and not to have such securities
registered in connection with such registration (it being understood that any
such withdrawal shall not reinstate or give rise to any additional rights to
an Underwritten Offering). In connection with each Underwritten Offering,
Northwest shall use its reasonable best efforts to assist the Holders'
Representative in the marketing of the Registrable Securities (including,
without limitation, to the extent reasonably consistent with work
commitments, and upon reasonable notice, using reasonable efforts to have
officers of Northwest attend meetings with analysts or investors on no more
than two days scheduled in connection with such Underwritten Offering, and so
long as such meetings are held in Minnesota, Chicago, Boston or New York),
with all out-of-pocket costs and expenses incurred by Northwest or such
officers in connection with such attendance or assistance to be paid by the
Holders.
(b) EXPENSES. (i) Northwest will pay all Registration Expenses in
connection with the registrations of Registrable Securities pursuant to this
Section 3 upon the written request of the Holders' Representative, and (ii) the
Holders on whose behalf Registrable Securities are being sold shall pay all
underwriting discounts and commissions, and transfer taxes, if any, relating to
the sale or disposition of such Holder's Registrable Securities pursuant to the
Shelf Registration Statement; PROVIDED that the amount paid by the requesting
Holders pursuant to clause (ii) above shall be paid pro rata among all
requesting Holders on the basis of the relative number of shares of Registrable
Securities then held by each such Holder.
(c) EFFECTIVE REGISTRATION STATEMENT. A registration requested
pursuant to this Section 3 will not be deemed to have been effected unless it
has become effective; PROVIDED, that if, within 60 days after it has become
effective, the offering of Registrable Securities pursuant to such registration
is interfered with by any stop order, injunction or other
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order or requirement of the SEC or other governmental agency or court, such
registration will be deemed not to have been effected.
(d) SELECTION OF UNDERWRITERS. Holder's Representative has the right
to select the investment banker or bankers and managers to administer an
Underwritten Offering which shall be a "bulge bracket" New York based investment
banker or bankers and managers; PROVIDED, HOWEVER, that such investment banker
or bankers and managers shall be reasonably satisfactory to Northwest.
(e) PRIORITY IN UNDERWRITTEN OFFERINGS. If the managing underwriter
advises Northwest in writing that, in its opinion, the number of securities
requested to be included in an Underwritten Offering (including securities of
Northwest which are not Registrable Securities) exceeds the largest number of
securities which can be sold in such Underwritten Offering, Northwest will
include in such Underwritten Offering only the Registrable Securities requested
to be included in such registration. In the event that the number of
Registrable Securities requested to be included in an Underwritten Offering
exceeds the number which, in the opinion of such managing underwriter, can be
sold, the number of such Registrable Securities to be included in such
Underwritten Offering shall be allocated pro rata among all requesting Holders
on the basis of the relative number of shares of Registrable Securities then
held by each such Holder (provided that any shares thereby allocated to any such
Holder that exceed such Holder's request shall be reallocated among the
remaining requesting Holders in like manner). In the event that the number of
Registrable Securities requested to be included in such Underwritten Offering is
less than the number which, in the opinion of the managing underwriter, can be
sold, Northwest may include in such registration the securities Northwest
proposes to sell up to the number of securities that, in the opinion of the
managing underwriter, can be sold.
(f) CERTAIN DELAY RIGHTS. Notwithstanding any other provision of
this Agreement to the contrary, if at any time while the Shelf Registration
Statement is effective Northwest provides a certificate of the chief financial
officer or chief executive officer of Northwest to the Holders' Representative
to the effect that in Northwest's good faith and reasonable judgment the sale of
Registrable Securities covered by the Shelf Registration Statement or the
disclosure of information therein or in any related prospectus or prospectus
supplement would materially interfere with any acquisition, financing or other
material event or transaction in connection with which a registration of
securities under the Securities Act for the account of Northwest is then
intended or the public disclosure of which at the time would be materially
prejudicial to Northwest (a "DISADVANTAGEOUS CONDITION") for sales of
Registrable Securities thereunder to then be permitted, and setting forth the
general reasons for such determination, Northwest may refrain from maintaining
current the prospectus contained in the Shelf Registration Statement until such
Disadvantageous Condition no longer exists (notice of which Northwest shall
promptly deliver to the Holders' Representative). With respect to each Holder,
upon the receipt by the Holders' Representative of any such notice of a
Disadvantageous Condition such Holder shall (i) forthwith discontinue use of the
prospectus and any prospectus supplement under such Shelf Registration Statement
and shall suspend sales of Registrable Securities until such Disadvantageous
Condition no longer exists and (ii) as
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applicable, if so directed by Northwest by notice to the Holders'
Representative as aforesaid, such Holder will deliver to Northwest all
copies, other than permanent file copies then in such Holder's possession, of
the prospectus and prospectus supplements then covering such Registrable
Securities at the time of receipt of such notice.
4. REGISTRATION PROCEDURES. If and whenever Northwest is required
to use its best efforts to effect or cause the registration of any Registrable
Securities under the Securities Act as provided in this Agreement, Northwest
will, as expeditiously as possible:
(a) prepare and file with the SEC a registration statement with
respect to such Registrable Securities on any form for which Northwest then
qualifies or which counsel for Northwest shall deem appropriate, and which
form shall be available for the sale of the Registrable Securities in
accordance with the intended methods of distribution thereof, and use its
best efforts to cause such registration statement to become and remain
effective; PROVIDED, that such registration statement shall include a "Plan
of Distribution" section including sales of Registrable Securities in
ordinary market transactions and underwritten offerings, as well as typical
hedging transactions; and PROVIDED FURTHER that Northwest may discontinue
any registration of its securities which is being effected pursuant to
Section 2 at any time prior to the effective date of the registration
statement relating thereto;
(b) prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection therewith
as may be necessary to keep such registration statement effective for a
period of (i) in the case of registrations pursuant to Section 2(a), 180
days or such lesser period of time as Northwest or any Holder may be
required under the Securities Act to deliver a prospectus in connection
with any sale of Registrable Securities and (ii) in the case of
registrations pursuant to Section 3(a), until the Shelf Termination Date,
and to comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such registration statement during
such period in accordance with the intended methods of disposition by the
Holders set forth in such registration statement; PROVIDED, that before
filing a registration statement pursuant to Section 3 or any prospectus
naming the Holders, or any amendments or supplements thereto, Northwest
will furnish to the Holders' Representative and its counsel copies of all
documents proposed to be filed and will provide the Holders' Representative
and its counsel the opportunity to comment thereon (it being understood
that no information with respect to a Holder will be included in such
registration statement or prospectus if the Holders' Representative or its
counsel reasonably objects on such Holder's behalf);
(c) furnish to the Holders' Representative such number of copies of
such registration statement and of each amendment and supplement thereto
(in each case including all exhibits), such number of copies of the
prospectus included in such registration statement (including each
preliminary prospectus and summary prospectus and prospectus supplement, as
applicable), in conformity with the requirements of the Securities Act, and
such other documents as the Holders' Representative may
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reasonably request in order to facilitate the disposition of the
Registrable Securities by the Holders;
(d) use its best efforts to register or qualify such Registrable
Securities covered by such registration statement under such other
securities or blue sky laws of such jurisdictions as the Holders'
Representative shall reasonably request, and do any and all other acts and
things which may be reasonably necessary or advisable to enable the Holders
to consummate the disposition in such jurisdictions of the Registrable
Securities owned by the Holders, except that Northwest shall not for any
such purpose be required to qualify generally to do business as a foreign
corporation in any jurisdiction where, but for the requirements of this
Section 4(d), it would not be obligated to be so qualified, to subject
itself to taxation in any such jurisdiction, or to consent to general
service of process in any such jurisdiction;
(e) use its best efforts to cause such Registrable Securities covered
by such registration statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary to enable
the Holders to consummate the disposition of such Registrable Securities;
(f) notify the Holders' Representative, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act
within the appropriate period mentioned in Section 4(b), of Northwest's
becoming aware that the prospectus included in such registration statement,
as then in effect, includes an untrue statement of a material fact or omits
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading in the light of the circumstances
then existing, and at the request of the Holders' Representative prepare
and furnish to the Holders' Representative a reasonable number of copies of
an amended or supplemental prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such Registrable Securities, such
prospectus shall not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading in light of the circumstances then
existing;
(g) otherwise use its best efforts to comply with all applicable
rules and regulations of the SEC, and make available to its security
holders, as soon as reasonably practicable (but not more than 18 months)
after the effective date of the registration statement, an earnings
statement which shall satisfy the provisions of Section 11(a) of the
Securities Act and the rules and regulations promulgated thereunder;
(h) (i) use its best efforts to cause all such Registrable Securities
to be listed on any securities exchange on which the Northwest Common Stock
is then listed, if such Registrable Securities are not already so listed
and if such listing is then permitted under the rules of such exchange, and
(ii) provide a transfer agent and registrar for
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such Registrable Securities covered by such registration statement no later
than the effective date of such registration statement;
(i) in the case of an Underwritten Offering, enter into such
customary agreements (including an underwriting agreement in customary
form) and take such other actions as (x) the Holders' Representative or (y)
the underwriters, if any, reasonably request in order to expedite or
facilitate the disposition of such Registrable Securities;
(j) in the case of an Underwritten Offering, obtain a "cold comfort"
letter or letters from Northwest's independent public accountants in
customary form and covering matters of the type customarily covered by
"cold comfort" letters as the Holders' Representative shall reasonably
request; and
(k) in the case of an Underwritten Offering, make available for
inspection by representatives of the Holders of the Registrable Securities
to be sold in such Underwritten Offering, by any underwriter participating
in any disposition to be effected pursuant to such registration statement
and by any attorney, accountant or other agent retained by such Holders or
any such underwriter, such financial and other records, corporate documents
and properties of Northwest as are customarily made available in connection
with a "due diligence" investigation for an underwritten secondary
offering, and cause all of Northwest's (and its subsidiaries) officers and
accountants to supply all information reasonably requested by any such
seller, underwriter, attorney, accountant or agent in connection with such
registration statement as is customarily made available in connection with
a "due diligence" investigation for an underwritten secondary offering;
PROVIDED, HOWEVER, that the foregoing shall not require Northwest to
provide access to (or copies of) any competitively sensitive information
relating to Northwest or its subsidiaries or their respective businesses;
PROVIDED FURTHER, however that (i) each Holder and the underwriters and
their respective counsel, accountants and other agents shall have entered
into a confidentiality agreement reasonably acceptable to Northwest and
(ii) the Holders and the underwriters and their respective counsel,
accountants and other agents shall use their reasonable best efforts to
minimize the disruption to Northwest's business and coordinate any such
investigation of the books, records and properties of Northwest and any
such discussions with Northwest's officers and accountants so that all such
investigations occur at the same time and all such discussions occur at the
same time.
Northwest may require each Holder of Registrable Securities as to
which any registration is being effected and the Holders' Representative to
furnish Northwest with such information regarding such Holder and the Holders'
Representative, respectively, and pertinent to the disclosure requirements
relating to the registration and the distribution of such securities as
Northwest may from time to time reasonably request in writing.
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Each Holder of Registrable Securities agrees that, upon receipt of any
notice from Northwest or the Holders' Representative of the happening of any
event of the kind described in Section 4(f), such Holder will forthwith
discontinue disposition of Registrable Securities pursuant to the registration
statement covering such Registrable Securities until such Holder's receipt of
the copies of the supplemented or amended prospectus contemplated by Section
4(f), and, if so directed by Northwest, such Holder will deliver to Northwest
(at Northwest's expense) all copies, other than permanent file copies then in
such Holder's possession, of the prospectus covering such Registrable Securities
current at the time of receipt of such notice. In the event Northwest or the
Holders' Representative shall give any such notice, the period mentioned in
Section 4(b)(i) shall be extended by the number of days during the period from
the date of the giving of such notice pursuant to Section 4(f) and through the
date when each seller of Registrable Securities covered by such registration
statement shall have received the copies of the supplemented or amended
prospectus contemplated by Section 4(f).
5. INDEMNIFICATION.
(a) INDEMNIFICATION BY NORTHWEST. In the event of any registration
of any securities of Northwest under the Securities Act pursuant to Section 2 or
3, Northwest hereby indemnifies and agrees to hold harmless, to the extent
permitted by law, the Holders' Representative, each Holder of Registrable
Securities covered by such registration statement, each affiliate of such Holder
and their respective directors and officers or general and limited partners (and
the directors, officers, affiliates and controlling Persons thereof), each other
Person who participates as an underwriter in the offering or sale of such
securities and each other Person, if any, who controls such Holder or any such
underwriter within the meaning of the Securities Act (collectively, the
"INDEMNIFIED PARTIES"), against any and all losses, claims, damages or
liabilities, joint or several, and expenses to which such Indemnified Party may
become subject under the Securities Act, common law or otherwise, insofar as
such losses, claims, damages or liabilities (or actions or proceedings in
respect thereof, whether or not such Indemnified Party is a party thereto) arise
out of or are based upon (i) any untrue statement or alleged untrue statement of
any material fact contained in any registration statement under which such
securities were registered under the Securities Act, any preliminary, final or
summary prospectus contained therein, or any amendment or supplement thereto, or
(ii) any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading
in the light of the circumstances then existing, and Northwest will reimburse
such Indemnified Party for any legal or other expenses reasonably incurred by it
in connection with investigating or defending any such loss, claim, liability,
action or proceeding; PROVIDED, that Northwest shall not be liable to any
Indemnified Party in any such case to the extent that any such loss, claim,
damage, liability (or action or proceeding in respect thereof) or expense arises
out of or is based upon any untrue statement or alleged untrue statement or
omission or alleged omission made in such registration statement, in any such
preliminary, final or summary prospectus, or any amendment or supplement thereto
(i) following notice by Northwest to such Indemnified Party of any
Disadvantageous Condition or otherwise pursuant to Section 4(f) if such
Indemnified Party uses the prospectus in effect at the time of such notice,
unless Northwest has delivered a notice
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that such Disadvantageous Condition or other circumstance no longer exists or
(ii) in reliance upon and in conformity with written information with respect
to such Indemnified Party furnished to Northwest by such Indemnified Party
for use in the preparation thereof; and PROVIDED, FURTHER, that Northwest
will not be liable to any Person who participates as an underwriter in the
offering or sale of Registrable Securities or any other Person, if any, who
controls such underwriter within the meaning of the Securities Act, under the
indemnity agreement in this Section 5(a) with respect to any preliminary
prospectus or the final prospectus or the final prospectus as amended or
supplemented, as the case may be, to the extent that any such loss, claim,
damage or liability of such underwriter or controlling Person results from
the fact that such underwriter sold Registrable Securities to a person to
whom there was not sent or given, at or prior to the written confirmation of
such sale, a copy of the final prospectus (including any documents
incorporated by reference therein) or of the final prospectus as then amended
or supplemented (including any documents incorporated by reference therein),
whichever is most recent, if Northwest has previously furnished copies
thereof to such underwriter. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of such Holder or
any Indemnified Party and shall survive the transfer of such securities by
such Holder.
(b) INDEMNIFICATION BY THE HOLDERS AND UNDERWRITERS. Northwest may
require, as a condition to including any Registrable Securities in any
registration statement filed in accordance with Section 2 or 3 herein, or in
connection with any Underwritten Offering, that Northwest shall have received an
undertaking reasonably satisfactory to it from the Holder of such Registrable
Securities or any underwriter to indemnify and hold harmless (in the same manner
and to the same extent as set forth in Section 5(a)) Northwest, all other
prospective Holders or any underwriter, as the case may be, and any of their
respective affiliates, directors, officers and controlling Persons, with respect
to any statement or alleged statement in or omission or alleged omission from
such registration statement, any preliminary, final or summary prospectus
contained therein, or any amendment or supplement, if such statement or alleged
statement or omission or alleged omission was made in reliance upon and in
conformity with written information with respect to such Holder or the Holders'
Representative or underwriter furnished to Northwest by such Holder or
underwriter expressly for use in the preparation of such registration statement,
preliminary, final or summary prospectus or amendment or supplement, or a
document incorporated by reference into any of the foregoing. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of Northwest or any of the Holders, or any of their respective
affiliates, directors, officers or controlling Persons and shall survive the
transfer of such securities by such Holder.
(c) NOTICES OF CLAIMS, ETC. Promptly after receipt by an indemnified
party hereunder of written notice of the commencement of any action or
proceeding with respect to which a claim for indemnification may be made
pursuant to this Section 5, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party, give written notice to the
latter of the commencement of such action; PROVIDED, that the failure of the
indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under Section 5(a) or 5(b), except to the
extent that the indemnifying party is
12
actually prejudiced by such failure to give notice. In case any such action
is brought against an indemnified party, unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim, the indemnifying
party will be entitled to participate in and to assume the defense thereof,
jointly with any other indemnifying party similarly notified to the extent
that it may wish, with counsel reasonably satisfactory to such indemnified
party, and after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party will
not be liable to such indemnified party for any legal or other expenses
subsequently incurred by the latter in connection with the defense thereof
other than reasonable costs of investigation. If, in such indemnified
party's reasonable judgment, having common counsel would result in a conflict
of interest between the interests of such indemnified and indemnifying
parties, then such indemnified party may employ separate counsel reasonably
acceptable to the indemnifying party to represent or defend such indemnified
party in such action, it being understood, however, that the indemnifying
party shall not be liable for the reasonable fees and expenses of more than
one separate firm of attorneys at any time for all such indemnified parties
(and not more than one separate firm of local counsel at any time for all
such indemnified parties) in such action. No indemnifying party will consent
to entry of any judgment or enter into any settlement which does not include
as an unconditional term thereof the giving by the claimant or plaintiff to
such indemnified party of a release from all liability in respect of such
claim or litigation.
(d) CONTRIBUTION. If recovery is not available under the foregoing
indemnification provisions of this Section 5 for any reason other than as
expressly specified therein, the parties entitled to indemnification by the
terms thereof shall be entitled to contribution to liabilities and expenses
except to the extent that contribution is not permitted under Section 11(f) of
the Securities Act. In determining the amount of contribution to which the
respective parties are entitled, there shall be considered the relative benefits
received by each party from the offering of the Registrable Securities (taking
into account the portion of the proceeds received by each), the parties'
relative knowledge and access to information concerning the matter with respect
to which the claim was asserted, the opportunity to correct and prevent any
misstatement or omission and any other equitable considerations appropriate
under the circumstances. The amount paid or payable by a party under this
Section 5(d) as a result of the losses, claims, damages, liabilities and
expenses referred to above shall be deemed to include any legal or other fees or
expenses reasonably incurred by such party in connection with any investigation
or proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5 were determined by PRO RATA allocation
or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding anything in this Section 5 to the contrary, no indemnifying
party (other than Northwest) shall be required pursuant to this Section 5 to
contribute any amount in excess of the gross proceeds received by such
indemnifying party from the sale of Registrable Securities in the offering to
which the losses, claims, damages or liabilities of the indemnified parties
relate. No Person guilty of fraudulent misrepresentation
13
(within the meaning of Section 11(f) of the Securities Act) shall be entitled
to contribution from any Person who was not guilty of such fraudulent
misrepresentation.
(e) NON-EXCLUSIVITY. The obligations of the parties under this
Section 5 shall be in addition to any liability which any party may otherwise
have to any other party.
(f) RULE 144. Northwest covenants that it will file the reports
required to be filed by it under the Securities Act and the Exchange Act and the
rules and regulations adopted by the SEC thereunder (or, if Northwest is not
required to file such reports, it will, upon the request of the Holders'
Representative or any Holder of Registrable Securities, make publicly available
such information), all to the extent required from time to time to enable such
Holder to sell Registrable Securities without registration under the Securities
Act within the limitation of the exemptions provided by (i) Rule 144 under the
Securities Act, as such Rule may be amended from time to time, or (ii) any
similar rule or regulation hereafter adopted by the SEC.
6. MISCELLANEOUS.
(a) HOLDBACK AGREEMENT. If any registration of Registrable
Securities shall be in connection with an underwritten public offering, each
Holder of Registrable Securities agrees not to effect any public sale or
distribution (except in connection with such underwritten public offering),
including any sale pursuant to Rule 144 under the Securities Act, of any equity
securities of Northwest, or of any security convertible into or exchangeable or
exercisable for any equity security of Northwest (in each case, other than as
part of such underwritten public offering), during the seven days prior to, and
during the 90-day period (or such lesser period as the managing underwriters may
permit) beginning on, the effective date of such registration, and Northwest
hereby also so agrees.
(b) AMENDMENTS AND WAIVERS. This Agreement may be amended and
Northwest may take any action herein prohibited, or omit to perform any act
herein required to be performed by it, only if Northwest shall have obtained the
written consent to such amendment, action or omission to act, of the Holders'
Representative. Each Holder of any shares of Registrable Securities agrees to
be bound by any consent given by the Holders' Representative in this Section
6(b).
(c) SUCCESSORS, ASSIGNS AND TRANSFEREES. Neither this Agreement nor
any of the rights, interests or obligations under this Agreement shall be
assigned, in whole or in part, by operation of law or otherwise by any of the
parties without the prior written consent of the other parties; PROVIDED that
each Holder may assign any of its rights and obligations hereunder to any of its
respective affiliates that is directly or indirectly controlled by it. This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and assigns. In addition, and whether or
not any express assignment shall have been made, the provisions of this
Agreement which are for the benefit of the parties hereto other than Northwest
and the Holders' Representative shall also be for the benefit of and
14
enforceable by any subsequent Holder of any shares of Registrable Securities,
subject to the provisions contained herein.
(d) NOTICES. All notices, requests, demands or other communications
provided herein shall be made in writing and shall be deemed to have been duly
given if delivered as follows:
If to Northwest:
0000 Xxxx Xxx Xxxxxxx
Xxxxx, XX 00000
Attention: Executive Vice President,
General Counsel and Secretary
Fax: (000) 000-0000
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Fax: (000) 000-0000
If to the Holders or the Holders' Representative:
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxx Xxxxx, Xxxxx 00000
Attention: Xxxxx X. X'Xxxxx
Fax: (000) 000-0000
with a copy to:
Xxxxx, Xxxx & Xxxxxxx
000 Xxxx Xxxxxx
Xxxx Xxxxx, XX 00000
Attention: Xxxxx X. Xxxx, Esq.
F. Xxxxxxx Xxxxxxxx, Esq.
Fax: (000) 000-0000
or to such other address as either party shall have specified by notice in
writing to the other party. All such notices, requests, demands and
communications shall be deemed to have been received on (i) the date of delivery
if sent by messenger, (ii) on the Business Day following the Business Day on
which delivered to a recognized courier service if sent by overnight courier or
(iii) on the date received, if sent by fax.
15
(e) INTERPRETATION. When a reference is made in this Agreement to a
Section, such reference shall be to a Section to this Agreement unless otherwise
indicated. The headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include," "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation."
(f) SEVERABILITY. If any provision of this Agreement shall be
declared by any court of competent jurisdiction to be illegal, void or
unenforceable, all other provisions of this Agreement shall not be affected and
shall remain in full force and effect.
(g) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become a binding agreement when one or more counterparts have been signed
by each party and delivered to the other parties.
(h) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AS APPLIED TO CONTRACTS
ENTERED INTO AND TO BE PERFORMED IN NEW YORK.
(i) REMEDIES. Each of the parties hereto acknowledges and agrees
that (i) the provisions of this Agreement are reasonable and necessary to
protect the proper and legitimate interests of the parties hereto, and (ii) the
other parties hereto would be irreparably damaged in the event any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties hereto shall be entitled to preliminary and permanent injunctive relief
to prevent breaches of the provisions of this Agreement by the other parties
hereto without the necessity of proving actual damages or of posting any bond,
and to enforce specifically the terms and provisions hereof and thereof, which
rights shall be cumulative and in addition to any other remedy to which the
parties hereto may be entitled hereunder or at law or equity.
(j) SUBMISSION TO JURISDICTION. Each of the parties hereto hereby
irrevocably and unconditionally:
(i) submits for itself and its property in any legal action
or proceeding relating to or arising from this Agreement, or for
recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the courts of the United States of
America sitting in the Southern District of New York or, in the absence of
federal jurisdiction, the Commercial Part of the Supreme Court of the State
of New York for New York County and appellate courts from any thereof;
(ii) consents that any such action or proceeding may be
brought in such courts and waives any objection that it may now or
hereafter have to the venue of any such action or proceeding in any such
court or that such action or proceeding was brought in an inconvenient
court and agrees not to plead or claim the same;
16
(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to its address set forth in Section 6(d); and
(iv) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to xxx in any other appropriate jurisdiction.
(k) FURTHER ASSURANCES. From time to time, at the reasonable request
of any other party hereto and without further consideration, each party hereto
shall execute and deliver such additional documents and take all such further
action as may be necessary or desirable to consummate and make effective, in the
most expeditious manner practicable, the transactions contemplated by this
Agreement.
(l) NO THIRD-PARTY RIGHTS. Nothing in this Agreement, expressed or
implied, shall or is intended to confer upon any Person other than the parties
hereto or their respective successors or assigns, any rights or remedies of any
nature or kind whatsoever under or by reason of this Agreement.
(m) ENTIRE AGREEMENT; NO ORAL WAIVER; CONSTRUCTION. This Agreement
and the other agreements and documents contemplated hereby and thereby
constitute the entire agreement among the parties pertaining to the subject
matter hereof and supersede all prior and contemporaneous agreements,
understandings and representations, whether oral or written, of the parties in
connection therewith. No covenant or condition or representation not expressed
in this Agreement shall affect or be effective to interpret, change or restrict
this Agreement. No prior drafts of this Agreement and no words or phrases from
any such prior drafts shall be admissible into evidence in any action, suit or
other proceeding involving this Agreement or the transactions contemplated
hereby. This Agreement may not be changed or terminated orally, nor shall any
change, termination or attempted waiver of any of the provisions of this
Agreement be binding on any party unless in writing signed by the parties
hereto. No modification, waiver, termination, rescission, discharge or
cancellation of this Agreement and no waiver of any provision of or default
under this Agreement shall affect the right of any party thereafter to enforce
any other provision or to exercise any right or remedy in the event of any other
default, whether or not similar. This Agreement has been negotiated by the
parties hereto and their respective legal counsel, and legal or equitable
principles that might require the construction of this Agreement against the
party drafting this Agreement will not apply in any construction or
interpretation of this Agreement.
(n) NONCONTRAVENTION OF OTHER AGREEMENTS. Notwithstanding any other
provision of this Agreement to the contrary, no Holder shall have any right to
sell, transfer or otherwise dispose of any Registrable Securities in
contravention of the Investment Agreement, the Standstill Agreement, the Voting
Trust Agreement and the transactions contemplated thereby.
17
(o) HOLDER'S AGENT. Each Holder hereby appoints the Holders'
Representative as its agent and attorney-in-fact for purposes of the delivery
and receipt of all notices and requests pursuant to this Agreement.
Northwest may give notice to any Holder hereunder by giving such notice
directly to such Holder. Alternatively, Northwest may request that the
Holders' Representative deliver to each Holder any notice given by Northwest
hereunder, in which event the Holders' Representative will promptly so give
such notice to each Holder. Prompt delivery by the Holders' Representative to
the Holders will be deemed satisfied if delivery is made to the Holders, in
accordance with Section 6(d), not later than the third Business Day after
actual receipt of the applicable notice or document by the Holders'
Representative from Northwest. Notwithstanding anything else contained
herein, the Holders' Representative will not be liable or responsible to any
Person should any Holder fail to act in accordance with any notice so given
to such Holder hereunder.
[Rest of page intentionally left blank.]
IN WITNESS WHEREOF, each of the undersigned has executed this
Agreement or caused this Agreement to be executed on its behalf as of the
date first written above.
NORTHWEST AIRLINES CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Executive Vice President,
General Counsel and Secretary
THE HOLDERS:
XXXXX XXXXXXXXX
BONDERMAN FAMILY LIMITED
PARTNERSHIP
LECTAIR PARTNERS
XXX XXXXX
XXXXXX XXXXX
1992 AIR GP
1992 AIR, INC.
AIR II GENERAL, INC.
By: 1992 AIR GP, as attorney-in-fact for the
foregoing
By: 1992 Air, Inc., a Texas corporation,
managing partner
By: /s/ Xxxxx X. X'Xxxxx
---------------------------------
Name: Xxxxx X. X'Xxxxx
Title: Vice President
