Exhibit 4(d)
INTERCREDITOR AGREEMENT
Dated as of
August 5, 2002
BY AND AMONG
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
not in its individual capacity
but as Trustee under the
Northwest Airlines Pass Through Trust 0000-0X-0,
Xxxxxxxxx Xxxxxxxx Xxxx Through Trust 0000-0X-0,
Xxxxxxxxx Xxxxxxxx Xxxx Through Trust 2002-1C-1 and
Northwest Airlines Pass Through Trust 2002-1C-2
WESTDEUTSCHE LANDESBANK GIROZENTRALE,
NEW YORK BRANCH
as Class G-1 Primary Liquidity Provider,
Class G-2 Primary Liquidity Provider,
Class C-1 Primary Liquidity Provider
and Class C-2 Primary Liquidity Provider
CREDIT SUISSE FIRST BOSTON INTERNATIONAL,
as Class G-1 Above-Cap Liquidity Provider
and Class C-1 Above-Cap Liquidity Provider
STATE STREET BANK AND TRUST COMPANY
not in its individual capacity except
as expressly set forth herein but
as Subordination Agent and trustee hereunder
AND
MBIA INSURANCE CORPORATION
as Policy Provider
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS........................................................2
Section 1.1. Definitions.......................................2
ARTICLE II TRUST ACCOUNTS; CONTROLLING PARTY................................30
Section 2.1. Agreement to Terms of Subordination;
Payments from Monies Received Only...............30
Section 2.2. Trust Accounts...................................31
Section 2.3. Deposits to the Collection Account and
Special Payments Account.........................32
Section 2.4. Distributions of Special Payments................33
Section 2.5. Designated Representatives.......................36
Section 2.6. Controlling Party................................37
ARTICLE III RECEIPT, DISTRIBUTION AND APPLICATION OF
AMOUNTS RECEIVED................................................40
Section 3.1. Written Notice of Distribution...................40
Section 3.2. Distribution of Amounts on Deposit in the
Collection Account...............................42
Section 3.3. Distribution of Amounts on Deposit
Following a Triggering Event.....................44
Section 3.4. Other Payments...................................48
Section 3.5. Payments to the Trustees, the Primary
Liquidity Providers and the Policy
Provider.........................................49
Section 3.6. Liquidity Facilities.............................49
Section 3.7. The Policies.....................................60
Section 3.8. Subrogation......................................65
ARTICLE IV EXERCISE OF REMEDIES.............................................65
Section 4.1. Directions from the Controlling Party............65
Section 4.2. Remedies Cumulative..............................66
Section 4.3. Discontinuance of Proceedings....................67
Section 4.4. Right of Certificateholders and Primary
Liquidity Providers to Receive Payments
Not to Be Impaired...............................67
Section 4.5. Undertaking for Costs............................67
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Page
ARTICLE V DUTIES OF THE SUBORDINATION AGENT; AGREEMENTS OF
TRUSTEES, ETC.....................................................68
Section 5.1. Notice of Indenture Default or Triggering
Event............................................68
Section 5.2. Indemnification..................................68
Section 5.3. No Duties Except as Specified in
Intercreditor Agreement..........................68
Section 5.4. Notice from the Liquidity Providers
and Trustees.....................................69
ARTICLE VI THE SUBORDINATION AGENT..........................................69
Section 6.1. Authorization; Acceptance of Trusts
and Duties.......................................69
Section 6.2. Absence of Duties................................70
Section 6.3. No Representations or Warranties as to
Documents........................................70
Section 6.4. No Segregation of Monies; No Interest............71
Section 6.5. Reliance; Agents; Advice of Counsel..............71
Section 6.6. Capacity in Which Acting.........................71
Section 6.7. Compensation.....................................71
Section 6.8. May Become Certificateholder.....................71
Section 6.9. Subordination Agent Required; Eligibility........71
Section 6.10. Money to Be Held in Trust........................71
ARTICLE VII INDEMNIFICATION OF SUBORDINATION AGENT..........................72
Section 7.1. Scope of Indemnification.........................72
ARTICLE VIII SUCCESSOR SUBORDINATION AGENT..................................72
Section 8.1. Replacement of Subordination Agent;
Appointment of Successor.........................72
ARTICLE IX SUPPLEMENTS AND AMENDMENTS.......................................73
Section 9.1. Amendments, Waivers, Etc.........................73
Section 9.2. Subordination Agent Protected....................77
Section 9.3. Effect of Supplemental Agreements................77
Section 9.4. Notice to Rating Agencies and the Policy
Provider.........................................77
ARTICLE X MISCELLANEOUS.....................................................77
Section 10.1. Termination of Intercreditor Agreement...........77
Section 10.2. Intercreditor Agreement for Benefit of
Trustees, Liquidity Providers, Policy
Provider and Subordination Agent.................78
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Section 10.3. Notices..........................................78
Section 10.4. Severability.....................................80
Section 10.5. No Oral Modifications or Continuing Waivers......80
Section 10.6. Successors and Assigns...........................80
Section 10.7. Headings.........................................80
Section 10.8. Counterpart Form.................................80
Section 10.9. Subordination....................................81
Section 10.10. Governing Law....................................82
Section 10.11. Submission to Jurisdiction; Waiver of Jury
Trial; Waiver of Immunity........................82
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INTERCREDITOR AGREEMENT
INTERCREDITOR AGREEMENT dated as of August 5, 2002, by and among
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, a
national banking association ("State Street of Connecticut"), not in its
individual capacity but solely as Trustee of each Trust (each as defined
below), WESTDEUTSCHE lANDESBANK girozentrale, NEW YORK BRANCH ("WestLB"), as
Class G-1 Primary Liquidity Provider, Class G-2 Primary Liquidity Provider,
Class C-1 Primary Liquidity Provider and Class C-2 Primary Liquidity Provider;
CREDIT SUISSE FIRST BOSTON INTERNATIONAL ("CSFBI"), as Class G-1 Above-Cap
Liquidity Provider and Class C-1 Above-Cap Liquidity Provider, STATE STREET
BANK AND TRUST COMPANY, a Massachusetts trust company, not in its individual
capacity except as expressly set forth herein, but solely as Subordination
Agent and trustee hereunder (in such capacity, together with any successor
appointed pursuant to Article VIII hereof, the "Subordination Agent") and MBIA
INSURANCE CORPORATION, a New York stock insurance company ("MBIA"), as the
Policy Provider.
WHEREAS, all capitalized terms used herein shall have the respective
meaning referred to in Article I hereof;
WHEREAS, pursuant to each Indenture (i) in the case of each Airbus
A319-100 Aircraft, Boeing 757-300 Aircraft or Airbus A330-300 Aircraft that is
owned by Northwest at the time such Indenture is entered into (the "Owned
Aircraft"), Northwest will issue on a recourse basis up to six series of
Equipment Notes to finance the purchase of such Aircraft and (ii) in the case
of one Boeing 757-300 Aircraft and one Airbus A330-300 Aircraft that may be
leased to Northwest pursuant to a related Lease (the "Leased Aircraft"), the
related Owner Trustee will issue on a nonrecourse basis two series of
Equipment Notes to finance the purchase of such Aircraft;
WHEREAS, pursuant to the Financing Agreements, each Trust will
acquire Equipment Notes having an interest rate equal to the interest rate
applicable to the Certificates to be issued by such Trust;
WHEREAS, pursuant to each Trust Agreement, the Trust created thereby
proposes to issue a single class of Certificates (a "Class") bearing the
interest rate and having the final distribution date described in such Trust
Agreement on the terms and subject to the conditions set forth therein;
WHEREAS, pursuant to the Underwriting Agreement (as defined below),
the Underwriters propose to purchase the Class G-1 Certificates, Class G-2
Certificates, Class C-1 Certificates and Class C-2 Certificates issued by each
of the Class G-1 Trust, Class G-2 Trust, Class C-1 Trust and Class C-2 Trust,
respectively, in the aggregate face amount set forth opposite the name of each
such Trust on Schedule I thereto on the terms and subject to the conditions
set forth therein;
WHEREAS, the Class G-1 Primary Liquidity Provider proposes to enter
into a revolving credit agreement relating to the Class G-1 Certificates, the
Class G-2 Primary
Liquidity Provider proposes to enter into a revolving credit agreement
relating to the Class G-2 Certificates, the Class C-1 Primary Liquidity
Provider proposes to enter into a revolving credit agreement relating to the
Class C-1 Certificates, the Class C-2 Primary Liquidity Provider proposes to
enter into a revolving credit agreement relating to the Class C-2
Certificates, the Class G-1 Above-Cap Liquidity Provider proposes to enter
into an irrevocable interest rate cap agreement relating to the Class G-1
Certificates and the Class C-1 Above-Cap Liquidity Provider proposes to enter
into an irrevocable interest rate cap agreement relating to the Class C-1
Certificates in each case with the Subordination Agent, as agent for the
Trustee of the applicable Trust, respectively, for the benefit of the
Certificateholders of such Trust;
WHEREAS, the Policy Provider proposes to enter into the Policy
Provider Agreement providing for the issuance by the Policy Provider of the
Policies for the benefit of the Class G-1 and Class G-2 Trusts;
WHEREAS, it is a condition precedent to the obligations of the
Underwriters under the Underwriting Agreement that the Subordination Agent,
the Trustees, the Liquidity Providers and the Policy Provider agree to the
terms of subordination set forth in this Agreement in respect of each Class of
Certificates, and the Subordination Agent, the Trustees, the Liquidity
Providers and the Policy Provider, by entering into this Agreement, hereby
acknowledge and agree to such terms of subordination and the other provisions
of this Agreement; and
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, and of other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. For all purposes of this Agreement, except
as otherwise expressly provided or unless the context otherwise requires:
(1) the terms used herein that are defined in thi s Article
have the meanings assigned to them in this Article, and include the
plural as well as the singular;
(2) all references in this Agreement to designated "Articles",
"Sections" and other subdivisions are to the designated Articles,
Sections and other subdivisions of this Agreement;
(3) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Agreement as a whole and not
to any particular Article, Section or other subdivision; and
(4) the term "including" shall mean "including without
limitation".
"Above-Cap Account" means the Class G-1 Above-Cap Account or
the Class C-1 Above Cap Account, as applicable.
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"Above-Cap Reserve Account" means the Class G-1 Above-Cap
Reserve Account or the Class C-1 Above-Cap Reserve Account, as
applicable.
"Above-Cap Liquidity Facility" means the Class G-1 Above-Cap
Liquidity Facility or the Class C-1 Above-Cap Liquidity Facility, as
applicable.
"Above-Cap Liquidity Provider" means the Class G-1 Above-Cap
Liquidity Provider or the Class C-1 Above-Cap Liquidity Provider, as
applicable.
"Above-Cap Payment" has the meaning assigned to such term in
Section 3.6(a).
"Above-Cap Withdrawal" has the meaning assigned to such term in
Section 3.6(a).
"Acceleration" means, with respect to the amounts payable in
respect of the Equipment Notes issued under any Indenture, the
declaration or deemed declaration of such amounts to be immediately
due and payable. "Accelerate" and "Accelerated" have meanings
correlative to the foregoing.
"Accrued Class G-1 Interest" means, with respect to any
Distribution Date, all amounts due and owing in respect of accrued
and unpaid interest on the Class G-1 Certificates at the Stated
Interest Rate for the Class G-1 Certificates on such Distribution
Date.
"Accrued Class G-2 Interest" means, with respect to any
Distribution Date, all amounts due and owing in respect of accrued
and unpaid interest on the Class G-2 Certificates at the Stated
Interest Rate for the Class G-2 Certificates on such Distribution
Date.
"Additional Payment" means the payment of any Break Amount,
Prepayment Premium and/or other premium in respect of the Equipment
Notes.
"Adjusted Expected Distributions" means with respect to the
Certificates of any Class on any Current Distribution Date the sum
of (x) the amount of accrued and unpaid interest on such
Certificates (excluding interest, if any, payable with respect to
the Deposits related to such Trust) plus (y) the greater of:
(A) the difference between (x) the Pool Balance of such
Certificates as of the immediately preceding Distribution Date
(or if the Current Distribution Date is the first Distribution
Date, the original aggregate face amount of the Certificates of
such Trust) and (y) the Pool Balance of such Certificates as of
the Current Distribution Date calculated on the basis that (i)
the principal of the Non-Performing Equipment Notes held in
such Trust has been paid in full and such payments have been
distributed to the holders of such Certificates, (ii) the
principal of the Performing Equipment Notes has been paid when
due (but without giving effect to any Acceleration of
Performing Equipment Notes except to the extent monies are
received as a result of such Acceleration) and has been
distributed to the holders of such Certificates and (iii) the
principal of any
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Equipment Notes formerly held in such Trust which have been
sold pursuant to the terms hereof have been paid in full and
such payments have been distributed to the holders of such
Certificates but without giving effect to any reduction in the
Pool Balance as a result of any distribution attributable to
Deposits occurring after the immediately preceding Distribution
Date (or, if the Current Distribution Date is the first
Distribution Date, occurring after the initial issuance of the
Certificates of such Trust) and
(B) the amount of the excess, if any, by which (i) the
Pool Balance of such Class of Certificates as of the
immediately preceding Distribution Date (or, if the Current
Distribution Date is the first Distribution Date, the original
aggregate face amount of the Certificates of such Trust) less
the amount of the Deposits for such Class of Certificates as of
such preceding Distribution Date (or, if the Current
Distribution Date is the first Distribution Date, the original
aggregate amount of the Deposits for such Class of
Certificates) other than any portion of such Deposits
thereafter used to acquire Equipment Notes pursuant to the Note
Purchase Agreement, over (ii) the Aggregate LTV Collateral
Amount for such Class of Certificates for the Current
Distribution Date;
provided that, (x) until the date of the initial LTV Appraisals for
all of the Aircraft, clause (B) above shall not be applicable and
(y) in the case of the Class D Certificates, clause (B) above shall
not be applicable.
For purposes of calculating Adjusted Expected Distributions,
any Additional Payment paid on the Equipment Notes held in any Trust
which has not been distributed to the Certificateholders of such
Trust (other than such Additional Payment or a portion thereof
applied to the payment of interest on the Certificates of such Trust
or the reduction of the Pool Balance of such Trust) shall be added
to the amount of such Adjusted Expected Distributions.
"Advance", with respect to any Primary Liquidity Facility,
means any Advance as defined in such Primary Liquidity Facility.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under common
control with such Person. For the purposes of this definition,
"control" means the power, directly or indirectly, to direct or
cause the direction of the management and policies of such Person
whether through the ownership of voting securities or by contract or
otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Aggregate LTV Collateral Amount" for any Class of Certificates
(other than the Class D Certificates) for any Distribution Date
means an amount, not less than zero, equal to the product of (i) the
sum of the applicable LTV Collateral Amounts for each Aircraft,
minus the Pool Balance for each Class of Certificates, if any,
senior to such Class, after giving effect to any distribution of
principal on such Distribution Date with respect to such senior
Class or Classes and (ii) (a) in the case of Class G-1 Certificates
or Class G-2 Certificates, as the case may be, a fraction the
numerator of which equals the
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Pool Balance for the Class G-1 Certificates or Class G-2
Certificates, as the case may be, and the denominator of which
equals the aggregate Pool Balances for the Class G-1 Certificates
and the Class G-2 Certificates, in each case prior to giving effect
to any distribution of principal on such Distribution Date with
respect to either such Class of Certificates and (b) in the case of
the Class C-1 Certificates or Class C-2 Certificates as the case may
be, a fraction the numerator of which equals the Pool Balance for
the Class C-1 Certificates or Class C-2 Certificates, as the case
may be, and the denominator of which equals the aggregate Pool
Balance for the Class C-1 Certificates and the Class C-2
Certificates, in each case prior to giving effect to any
distributions of principal on such Distribution Date with respect to
either such Class of Certificate.
"Aircraft" means, with respect to any Indenture, the "Aircraft"
referred to therein.
"Appraised Current Market Value" of any Aircraft means the
lower of the average and the median of the most recent three LTV
Appraisals of such Aircraft.
"Appraisers" means Aircraft Information Systems, Inc., Avitas,
Inc. and Xxxxxx Xxxxx and Xxxxx, Inc.
"Avoided Payment" has the meaning assigned to such terms in
each Policy.
"Break Amount" shall have the meaning set forth in the
Indentures.
"Business Day" means any day other than a Saturday or Sunday or
a day on which (i) for purposes of each Policy and the Policy
Provider, the fiscal agent under the Policy, at its office specified
in such Policy, the Policy Provider at its office specified in the
Policy and insurance companies in New York, New York are required or
authorized by law or executive order to close and (ii) for all such
and all other purposes hereunder, commercial banks are required or
authorized to close in Minneapolis, Minnesota, New York, New York,
or the city and state in which any Trustee, the Subordination Agent
or any Loan Trustee maintains its Corporate Trust Office or receives
and disburses funds. Solely with respect to draws under any
Liquidity Facility, Business Day shall also include a "Business Day"
as defined in such Liquidity Facility.
"Capped Interest Rate" means, with respect to the Class G-1
Certificates, 10.75% per annum, and with respect to the Class C-1
Certificates, 14.50% per annum.
"Cash Collateral Account" means the Class G-1 Primary Cash
Collateral Account, the Class G-1 Above-Cap Reserve Account, the
Class G-2 Primary Cash Collateral Account, the Class C-1 Primary
Cash Collateral Account, the Class C-1 Above-Cap Reserve Account or
the Class C-2 Primary Cash Collateral Account, as applicable.
"Capped LIBOR" means, at any time, 10.0% per annum.
"Certificate" means a Class G-1 Certificate, a Class G-2
Certificate, a Class C-1 Certificate, a Class C-2 Certificate or,
upon its issuance, a Class D Certificate, as applicable.
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"Certificateholder" means any holder of one or more
Certificates.
"Class" has the meaning assigned to such term in the
preliminary statements to this Agreement.
"Class C-1 Above-Cap Account" means an Eligible Deposit Account
in the name of the Subordination Agent maintained at an Eligible
Institution, which shall be the Subordination Agent if it shall so
qualify, into which all amounts paid under the Class C-1 Above-Cap
Liquidity Facility pursuant to Section 3.6(a) shall be deposited.
"Class C-1 Above-Cap Reserve Account" means an Eligible Deposit
Account in the name of the Subordination Agent maintained at an
Eligible Institution, which shall be the Subordination Agent if it
shall so qualify, into which all amounts paid under the Class C-1
Above-Cap Liquidity Facility pursuant to Section 3.6(f) shall be
deposited.
"Class C-1 Above-Cap Liquidity Facility" means, initially, the
ISDA Master Agreement, dated as of the date hereof, between the
Subordination Agent, as agent and trustee for the Class C-1 Trust,
and the initial Class C-1 Above-Cap Liquidity Provider, together
with the Schedule and Confirmation attached thereto, relating to the
Class C-1 Certificates, and, from and after the replacement of such
ISDA Master Agreement pursuant hereto, the Replacement Above-Cap
Liquidity Facility therefor, if any, in each case as amended,
supplemented or otherwise modified from time to time in accordance
with its terms.
"Class C-1 Above-Cap Liquidity Provider" means Credit Suisse
First Boston International, together with any Replacement Above-Cap
Liquidity Provider which has issued a Replacement Above-Cap
Liquidity Facility to replace any Class C-1 Above-Cap Liquidity
Facility pursuant to Section 3.6(c)(ii).
"Class C-1 Certificateholder" means, at any time, any holder of
one or more Class C-1 Certificates.
"Class C-1 Certificates" means the certificates issued by the
Class C-1 Trust, substantially in the form of Exhibit A to the Class
C-1 Trust Agreement, and authenticated by the Class C-1 Trustee,
representing fractional undivided interests in the Class C-1 Trust,
and any certificates issued in exchange therefor or replacement
thereof pursuant to the terms of the Class C-1 Trust Agreement.
"Class C-1 Primary Cash Collateral Account" means an Eligible
Deposit Account in the name of the Subordination Agent maintained at
an Eligible Institution, which shall be the Subordination Agent if
it shall so qualify, into which all amounts drawn under the Class
C-1 Primary Liquidity Facility pursuant to Sections 3.6(c), 3.6(d)
or 3.6(i) shall be deposited.
"Class C-1 Primary Liquidity Facility" means, initially, the
Revolving Credit Agreement dated as of the date hereof, by and
between the Subordination Agent, as agent and trustee of the Class
C-1 Trustee, and the initial Class C-1 Primary Liquidity Provider,
and, from and after the replacement of such Agreement pursuant
hereto, the Replacement
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Primary Liquidity Facility therefor, if any, in each case as
amended, supplemented or otherwise modified from time to time in
accordance with its terms.
"Class C-1 Primary Liquidity Provider" means WestLB together
with any Replacement Primary Liquidity Provider which has issued a
Replacement Primary Liquidity Facility to replace the Class C-1
Primary Liquidity Facility pursuant to Section 3.6(e).
"Class C-1 Trust" means Northwest Airlines 2002-1C-1 Pass
Through Trust created and administered pursuant to the Class C-1
Trust Agreement.
"Class C-1 Trust Agreement" means the Pass Through Trust
Agreement, as supplemented by Trust Supplement No. 2002-1C-1 thereto
dated as of the date hereof, by and among Northwest, the Guarantor
and the Trustee, governing the creation and administration of the
Class C-1 Trust and the issuance of the Class C-1 Certificates, as
the same may be amended, supplemented or otherwise modified from
time to time in accordance with its terms.
"Class C-1 Trustee" means State Street of Connecticut, not in
its individual capacity except as expressly set forth in the Class
C-1 Trust Agreement, but solely as trustee under the Class C-1 Trust
Agreement, together with any successor trustee appointed pursuant
thereto.
"Class C-2 Certificateholder" means, at any time, any holder of
one or more Class C-2 Certificates.
"Class C-2 Certificates" means the certificates issued by the
Class C-2 Trust, substantially in the form of Exhibit A to the Class
C-2 Trust Agreement, and authenticated by the Class C-2 Trustee,
representing fractional undivided interests in the Class C-2 Trust,
and any certificates issued in exchange therefor or replacement
thereof pursuant to the terms of the Class C-2 Trust Agreement.
"Class C-2 Primary Cash Collateral Account" means an Eligible
Deposit Account in the name of the Subordination Agent maintained at
an Eligible Institution, which shall be the Subordination Agent if
it shall so qualify, into which all amounts drawn under the Class
C-2 Primary Liquidity Facility pursuant to Sections 3.6(c), 3.6(d)
or 3.6(i) shall be deposited.
"Class C-2 Primary Liquidity Facility" means, initially, the
Revolving Credit Agreement dated as of the date hereof, by and
between the Subordination Agent, as agent and trustee of the Class
C-2 Trustee, and the initial Class C-2 Primary Liquidity Provider,
and, from and after the replacement of such Agreement pursuant
hereto, the Replacement Primary Liquidity Facility therefor, if any,
in each case as amended, supplemented or otherwise modified from
time to time in accordance with its terms.
"Class C-2 Primary Liquidity Provider" means WestLB, together
with any Replacement Primary Liquidity Provider which has issued a
Replacement Primary
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Liquidity Facility to replace the Class C-2 Primary Liquidity
Facility pursuant to Section 3.6(e).
"Class C-2 Trust" means Northwest Airlines 2002-1C-2 Pass
Through Trust created and administered pursuant to the Class C-2
Trust Agreement.
"Class C-2 Trust Agreement" means the Pass Through Trust
Agreement, as supplemented by Trust Supplement No. 2002-1C-2 thereto
dated as of the date hereof, by and among Northwest, the Guarantor
and the Trustee, governing the creation and administration of the
Class C-2 Trust and the issuance of the Class C-2 Certificates, as
the same may be amended, supplemented or otherwise modified from
time to time in accordance with its terms.
"Class C-2 Trustee" means State Street of Connecticut, not in
its individual capacity except as expressly set forth in the Class
C-2 Trust Agreement, but solely as trustee under the Class C-2 Trust
Agreement, together with any successor trustee appointed pursuant
thereto.
"Class D Certificateholder" means, at any time, any holder of
one or more Class D Certificates.
"Class D Certificates" means the certificates, if any, issued
by the Class D Trust, substantially in the form of Exhibit A to the
Class D Trust Agreement, and authenticated by the Class D Trustee,
representing fractional undivided interests in the Class D Trust,
and any certificates issued in exchange therefor or in replacement
thereof pursuant to the terms of the Class D Trust Agreement.
"Class D Trust" means Northwest Airlines 2002-1D Pass Through
Trust created and administered pursuant to the Class D Trust
Agreement.
"Class D Trust Agreement" means, upon execution of the Class D
Trust Supplement (as defined in the Note Purchase Agreement), the
Pass Through Trust Agreement, as supplemented by the Class D Trust
Supplement, governing the creation and administration of the Class D
Trust and the issuance of the Class D Certificates, as the same may
be amended, supplemented or otherwise modified from time to time in
accordance with its terms.
"Class D Trustee" means, upon execution of the Class D Trust
Agreement, State Street of Connecticut, not in its individual
capacity except as expressly set forth in the Class D Trust
Agreement, but solely as trustee under the Class D Trust Agreement,
together with any successor trustee appointed pursuant thereto.
"Class E Certificates" means the certificates, if any, issued
by the Class E Trust representing a fractional undivided interest in
the Class E Trust.
"Class E Trust" means Northwest Airlines 2002-1E Pass Through
Trust, if and when established.
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"Class G-1 Above-Cap Account" means an Eligible Deposit Account
in the name of the Subordination Agent maintained at an Eligible
Institution, which shall be the Subordination Agent if it shall so
qualify, into which all amounts paid under the Class G-1 Above-Cap
Liquidity Facility pursuant to Section 3.6(a) shall be deposited.
"Class G-1 Above-Cap Reserve Account" means an Eligible Deposit
Account in the name of the Subordination Agent maintained at an
Eligible Institution, which shall be the Subordination Agent if it
shall so qualify, into which all amounts paid under the Class G-1
Above-Cap Liquidity Facility pursuant to Section 3.6(f) shall be
deposited.
"Class G-1 Above-Cap Liquidity Facility" means, initially, the
ISDA Master Agreement, dated as of the date hereof, between the
Subordination Agent, as agent and trustee for the Class G-1 Trust,
and the initial Class G-1 Above-Cap Liquidity Provider, together
with the Schedule and Confirmation attached thereto, relating to the
Class G-1 Certificates, and, from and after the replacement of such
ISDA Master Agreement pursuant hereto, the Replacement Above-Cap
Liquidity Facility therefor, if any, in each case as amended,
supplemented or otherwise modified from time to time in accordance
with its terms.
"Class G-1 Above-Cap Liquidity Provider" means Credit Suisse
First Boston International, together with any Replacement Above-Cap
Liquidity Provider which has issued a Replacement Above-Cap
Liquidity Facility to replace any Class G-1 Above-Cap Liquidity
Facility pursuant to Section 3.6(c)(ii).
"Class G-1 Certificateholder" means, at any time, any holder of
one or more Class G-1 Certificates.
"Class G-1 Certificates" means the certificates issued by the
Class G-1 Trust, substantially in the form of Exhibit A to the Class
G-1 Trust Agreement, and authenticated by the Class G-1 Trustee,
representing fractional undivided interests in the Class G-1 Trust,
and any certificates issued in exchange therefor or replacement
thereof pursuant to the terms of the Class G-1 Trust Agreement.
"Class G-1 Deposits" means the Deposits with respect to the
Class G-1 Certificates.
"Class G-1 Escrow Receipts" means the Escrow Receipts issued
under the Escrow and Paying Agent Agreement relating to the Class
G-1 Trust.
"Class G-1 Paying Agent Account" means the Paying Agent Account
as defined in the Escrow and Paying Agent Agreement relating to the
Class G-1 Certificates.
"Class G-1 Policy" means the Financial Guaranty Insurance
Policy No.38687 issued as of the Closing Date, by the Policy
Provider in favor of the Subordination Agent, for the benefit of the
Class G-1 Certificateholders, as amended, supplemented or otherwise
modified from time to time in accordance with its terms.
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"Class G-1 Policy Account" means the Eligible Deposit Account
Established by the Subordination Agent pursuant to Section
2.2(a)(iii).
"Class G-1 Primary Cash Collateral Account" means an Eligible
Deposit Account in the name of the Subordination Agent maintained at
an Eligible Institution, which shall be the Subordination Agent if
it shall so qualify, into which all amounts drawn under the Class
G-1 Primary Liquidity Facility pursuant to Sections 3.6(c), 3.6(d)
or 3.6(i) shall be deposited.
"Class G-1 Primary Liquidity Facility" means, initially, the
Revolving Credit Agreement dated as of the date hereof, by and
between the Subordination Agent, as agent and trustee of the Class
G-1 Trustee, and the initial Class G-1 Primary Liquidity Provider,
and, from and after the replacement of such Agreement pursuant
hereto, the Replacement Primary Liquidity Facility therefor, if any,
in each case as amended, supplemented or otherwise modified from
time to time in accordance with its terms.
"Class G-1 Primary Liquidity Provider" means WestLB, together
with any Replacement Primary Liquidity Provider which has issued a
Replacement Primary Liquidity Facility to replace the Class G-1
Primary Liquidity Facility pursuant to Section 3.6(e).
"Class G-1 Trust" means Northwest Airlines 2002-1G-1 Pass
Through Trust created and administered pursuant to the Class G-1
Trust Agreement.
"Class G-1 Trust Agreement" means the Pass Through Trust
Agreement, as supplemented by Trust Supplement No. 2002-1G-1 thereto
dated as of the date hereof, by and among Northwest, the Guarantor
and the Trustee, governing the creation and administration of the
Class G-1 Trust and the issuance of the Class G-1 Certificates, as
the same may be amended, supplemented or otherwise modified from
time to time in accordance with its terms.
"Class G-1 Trustee" means State Street of Connecticut, not in
its individual capacity except as expressly set forth in the Class
G-1 Trust Agreement, but solely as trustee under the Class G-1 Trust
Agreement, together with any successor trustee appointed pursuant
thereto.
"Class G-2 Certificateholder" means, at any time, any holder of
one or more Class G-2 Certificates.
"Class G-2 Certificates" means the certificates issued by the
Class G-2 Trust, substantially in the form of Exhibit A to the Class
G-2 Trust Agreement, and authenticated by the Class G-2 Trustee,
representing fractional undivided interests in the Class G-2 Trust,
and any certificates issued in exchange therefor or replacement
thereof pursuant to the terms of the Class G-2 Trust Agreement.
"Class G-2 Deposits" means the Deposits with respect to the
Class G-2 Certificates.
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"Class G-2 Escrow Receipts" means the Escrow Receipts issued
under the Escrow and Paying Agent Agreement relating to the Class
G-2 Trust.
"Class G-2 Paying Agent Account" means the Paying Agent Account
as defined in the Escrow and Paying Agent Agreement relating to the
Class G-2 Certificates.
"Class G-2 Policy" means the Financial Guaranty Insurance
Policy No. 38688 issued as of the Closing Date, by the Policy
Provider in favor of the Subordination Agent, for the benefit of the
Class G-2 Certificateholders, as amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"Class G-2 Policy Account" means the Eligible Deposit Account
Established by the Subordination Agent pursuant to Section
2.2(a)(iii).
"Class G-2 Primary Cash Collateral Account" means an Eligible
Deposit Account in the name of the Subordination Agent maintained at
an Eligible Institution, which shall be the Subordination Agent if
it shall so qualify, into which all amounts drawn under the Class
G-2 Primary Liquidity Facility pursuant to Sections 3.6(c), 3.6(d)
or 3.6(i) shall be deposited.
"Class G-2 Primary Liquidity Facility" means, initially, the
Revolving Credit Agreement dated as of the date hereof, by and
between the Subordination Agent, as agent and trustee of the Class
G-2 Trustee, and the initial Class G-2 Primary Liquidity Provider,
and, from and after the replacement of such Agreement pursuant
hereto, the Replacement Primary Liquidity Facility therefor, if any,
in each case as amended, supplemented or otherwise modified from
time to time in accordance with its terms.
"Class G-2 Primary Liquidity Provider" means WestLB together
with any Replacement Primary Liquidity Provider which has issued a
Replacement Primary Liquidity Facility to replace the Class G-2
Primary Liquidity Facility pursuant to Section 3.6(e).
"Class G-2 Trust" means Northwest Airlines 2002-1G-2 Pass
Through Trust created and administered pursuant to the Class G-2
Trust Agreement.
"Class G-2 Trust Agreement" means the Pass Through Trust
Agreement, as supplemented by Trust Supplement No. 2002-1G-2 thereto
dated as of the date hereof, by and among Northwest, the Guarantor
and the Trustee, governing the creation and administration of the
Class G-2 Trust and the issuance of the Class G-2 Certificates, as
the same may be amended, supplemented or otherwise modified from
time to time in accordance with its terms.
"Class G-2 Trustee" means State Street of Connecticut, not in
its individual capacity except as expressly set forth in the Class
G-2 Trust Agreement, but solely as trustee under the Class G-2 Trust
Agreement, together with any successor trustee appointed pursuant
thereto.
"Closing Date" means August 5, 2002.
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"Code" means the Internal Revenue Code of 1986, as amended from
time to time, and Treasury Regulations promulgated thereunder.
"Collection Account" means the Eligible Deposit Account
established by the Subordination Agent pursuant to Section 2.2 which
the Subordination Agent shall make deposits in and withdrawals from
in accordance with this Agreement.
"Consent Period" has the meaning ascribed to such term in
Section 3.6(d).
"Controlling Party" means the Person entitled to act as such
pursuant to the terms of Section 2.6.
"Corporate Trust Office" means, with respect to any Trustee,
the Subordination Agent or any Loan Trustee, the office of such
Person in the city at which, at any particular time, its corporate
trust business shall be principally administered.
"Current Distribution Date" means a Distribution Date specified
as a reference date for calculating the Adjusted Expected
Distributions or Expected Distributions with respect to the
Certificates of any Trust as of such Distribution Date.
"Defaulted Series G-1 Equipment Notes" has the meaning assigned
to such term in Section 3.7(c).
"Defaulted Series G-2 Equipment Notes" has the meaning assigned
to such term in Section 3.7(c).
"Deficiency Amount" has the meaning assigned to such term in
Section 3.6(a).
"Delivery Period Expiry Date" means March 31, 2004.
"Deposit Agreement" shall mean, with respect to any Class of
Certificates (other than Class D Certificates), the Deposit
Agreement pertaining to such Class dated the date hereof between the
Escrow Agent and the Depositary, as the same may be amended,
modified or supplemented from time to time in accordance with the
terms thereof.
"Depositary" means Credit Suisse First Boston, New York Branch,
as depositary under the Deposit Agreement relating to Class G-1,
Class G-2, Class C-1 and Class C-2 Certificates.
"Deposits" with respect to any Class of Certificates (other
than Class D Certificates), shall have the meaning set forth in the
Deposit Agreement pertaining to such Class.
"Designated Representatives" means the Subordination Agent
Representatives, Trustee Representatives, the Policy Provider
Representatives and the LP Representatives identified under Section
2.5.
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"Distribution Date" means a Regular Distribution Date or a
Special Distribution Date.
"Dollars" or "$" means United States dollars.
"Downgrade Drawing" with respect to any Primary Liquidity
Facility, has the meaning assigned to such term in such Primary
Liquidity Facility.
"Downgrade Event" has the meaning assigned to such term in each
Primary Liquidity Facility.
"Downgraded Facility" has the meaning assigned to such term in
Section 3.6(c).
"Drawing" means an Interest Drawing, a Non-Extension Drawing, a
Final Drawing or a Downgrade Drawing, as the case may be.
"Election Interest Payment" has the meaning specified in
Section 3.7(d) hereof.
"Eligible Deposit Account" means either (a) a segregated
account with an Eligible Institution or (b) a segregated trust
account with the corporate trust department of a depository
institution organized under the laws of the United States of America
or any one of the states thereof or the District of Columbia (or any
U.S. branch of a foreign bank), having corporate trust powers and
acting as trustee for funds deposited in such account, so long as
any of the securities of such depository institution has a long-term
unsecured debt rating from each Rating Agency of at least A-3 or its
equivalent. An Eligible Deposit Account may be maintained with a
Primary Liquidity Provider so long as such Primary Liquidity
Provider is an Eligible Institution (as defined below); provided
that such Primary Liquidity Provider shall have waived all rights of
set-off and counterclaim with respect to such account.
"Eligible Institution" means, subject to the last sentence of
subsection 2.2(c), (a) the corporate trust department of the
Subordination Agent or any Trustee, as applicable, or (b) a
depository institution organized under the laws of the United States
of America or any one of the states thereof or the District of
Columbia (or any U.S. branch of a foreign bank), which has a
long-term unsecured debt rating from each Rating Agency of at least
A-3 or its equivalent.
"Eligible Investments" means (a) investments in obligations of,
or guaranteed by, the United States Government having maturities no
later than 90 days following the date of such investment, (b)
investments in open market commercial paper of any corporation
incorporated under the laws of the United States of America or any
state thereof with a short-term unsecured debt rating issued by
Moody's and Standard & Poor's of at least P-1 or A-1, respectively,
having maturities no later than 90 days following the date of such
investment or (c) investments in negotiable certificates of deposit,
time deposits, banker's acceptances, commercial paper or other
direct obligations of, or obligations guaranteed by, commercial
banks organized under the laws of the United States or of any
political subdivision thereof (or any U.S. branch of a foreign bank)
with issuer ratings of at least B/C by Thomson Bankwatch, having
maturities no later than 90 days following the date
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of such investment; provided, however, that (x) all Eligible
Investments that are bank obligations shall be denominated in U.S.
dollars; and (y) the aggregate amount of Eligible Investments at any
one time that are bank obligations issued by any one bank shall not
be in excess of 5% of such bank's capital surplus; provided further
that (1) any investment of the types described in clauses (a), (b)
and (c) above may be made through a repurchase agreement in
commercially reasonable form with a bank or other financial
institution qualifying as an Eligible Institution so long as such
investment is held by a third party custodian also qualifying as an
Eligible Institution, and (2) all such investments set forth in (a),
(b) and (c) above mature no later than the Business Day immediately
preceding the next Regular Distribution Date; provided further,
however, that in the case of any Eligible Investment issued by a
domestic branch of a foreign bank, the income from such investment
shall be from sources within the United States for purposes of the
Code. Notwithstanding the foregoing, no investment of the types
described in clause (b) or (c) above which is issued or guaranteed
by a Liquidity Provider or Northwest or any of their respective
Affiliates shall be an Eligible Investment.
"Eligible Provider" has the meaning assigned to such term in
Section 2.6(c).
"Equipment Notes" means, at any time, the Series G-1 Equipment
Notes, the Series G-2 Equipment Notes, the Series C-1 Equipment
Notes, the Series C-2 Equipment Notes and, upon their issuance, the
Series D Equipment Notes, collectively, and in each case, any
Equipment Notes issued in exchange therefor or replacement thereof
pursuant to the terms of the Indentures.
"Escrow Agent" means Xxxxx Fargo Bank Northwest, National
Association, as escrow agent under each Escrow and Paying Agent
Agreement, together with its successors in such capacity.
"Escrow and Paying Agent Agreement" shall mean, with respect to
any Class of Certificates (other than Class D Certificates), the
Escrow and Paying Agent Agreement pertaining to such Class, dated
the date hereof, among the Escrow Agent, the Underwriters, the
Trustee for such Class and the Paying Agent, as the same may be
amended, modified or supplemented from time to time in accordance
with the terms thereof.
"Escrow Receipts" has the meaning assigned to such term in the
Escrow and Paying Agent Agreements for the Trusts (other than the
Class D Trust).
"Excess Reimbursement Obligations" means, (a) in the event of
any Policy Provider Election, the portion of the Policy Provider
Obligations that represents interest on the Series G-1 or Series G-2
Equipment Notes in respect of which the Policy Provider Election has
been made in excess of 21 months of interest at the interest rate
applicable to such Series G-1 and G-2 Equipment Notes and (b) any
interest on the Liquidity Obligations in respect of the Class G-1
and Class G-2 Liquidity Facilities paid by the Policy Provider to
the related Liquidity Providers from and after the end of the
21-month period referred to in Section 3.7(c) hereof.
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"Expected Distributions" means, with respect to the
Certificates of any Trust on any Current Distribution Date, the sum
of (x) accrued and unpaid interest on such Certificates (excluding
interest, if any, payable with respect to the Deposits related to
such Trust) and (y) the difference between (A) the Pool Balance of
such Certificates as of the immediately preceding Distribution Date
(or if the Current Distribution Date is the first Distribution Date,
the original aggregate face amount of the Certificates of such
Trust) and (B) the Pool Balance of such Certificates as of the
Current Distribution Date, calculated on the basis that (1) the
principal of the Equipment Notes held in such Trust has been paid
when due (whether at stated maturity or upon redemption, prepayment,
purchase, Acceleration or otherwise) and such payments have been
distributed to the holders of such Certificates and (2) the
principal of any Equipment Notes formerly held in such Trust that
have been sold pursuant to this Agreement has been paid in full and
such payments have been distributed to the Certificateholders, but
without giving effect to any reduction in the Pool Balance as a
result of any distribution attributable to Deposits occurring after
the immediately preceding Distribution Date (or, if the Current
Distribution Date is the first Distribution Date, occurring after
the initial issuance of the Certificates of such Trust). For
purposes of calculating Expected Distributions with respect to the
Certificates of any Trust, any Additional Payment paid on the
Equipment Notes held in such Trust which has not been distributed to
the Certificateholders of such Trust (other than such Additional
Payment or a portion thereof applied to the payment of interest on
the Certificates of such Trust or the reduction of the Pool Balance
of such Trust) shall be added to the amount of such Expected
Distributions.
"Expiry Date" with respect to any Primary Liquidity Facility,
shall have the meaning set forth in such Primary Liquidity Facility.
"Facility Office" with respect to any Primary Liquidity
Provider, shall have the meaning set forth in the related Primary
Liquidity Facility.
"Fee Letter" with respect to any Primary Liquidity Facility,
shall have the meaning set forth in such Primary Liquidity Facility.
"Final Distributions" means, with respect to the Certificates
of any Trust on any Distribution Date, the sum of (a) the aggregate
amount of all accrued and unpaid interest on such Certificates
(excluding interest, if any, payable with respect to the Deposits
relating to such Trust) and (b) the Pool Balance of such
Certificates as of the immediately preceding Distribution Date (less
the amount of the Deposits for such Class of Certificates as of such
preceding Distribution Date other than any portion of such Deposits
thereafter used to acquire Equipment Notes pursuant to the Note
Purchase Agreement). For purposes of calculating Final Distributions
with respect to the Certificates of any Trust, any Additional
Payment paid on the Equipment Notes held in such Trust which has not
been distributed to the Certificateholders of such Trust (other than
such Additional Payment or a portion thereof applied to the payment
of interest on the Certificates of such Trust or the reduction of
the Pool Balance of such Trust) shall be added to the amount of such
Final Distributions.
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"Final Drawing" means, in respect of a Primary Liquidity
Facility, a borrowing or drawing, other than an Interest Drawing, a
Downgrade Drawing or a Non-Extension Drawing, of all available and
undrawn amounts under such Primary Liquidity Facility in accordance
with the provisions thereof.
"Final Legal Distribution Date" means, for the Class G-1
Certificates, November 20, 2015, for the Class G-2 Certificates, May
20, 2023, for the Class C-1 Certificates, November 20, 2013 and for
the Class C-2 Certificates, November 20, 2013.
"Final Order" has the meaning assigned to such term in each
Policy.
"Financing Agreement" means each of the Participation
Agreements and the Note Purchase Agreement.
"Fitch" means Fitch Ratings.
"Guarantor" means Northwest Airlines Corporation, a Delaware
corporation and its successors and assigns.
"Indenture" means each of the Trust Indentures entered into by
the Loan Trustee, and the Owner Trustee or Northwest, pursuant to
the Note Purchase Agreement, in each case as the same may be
amended, supplemented or otherwise modified from time to time in
accordance with its terms.
"Indenture Default" means, with respect to any Indenture, any
Event of Default (as such term is defined in such Indenture)
thereunder.
"Interest Drawing" has the meaning assigned to such term in
Section 3.6(a).
"Interest Payment Date" means, with respect to any Primary
Liquidity Facility, each date on which interest is due and payable
under such Primary Liquidity Facility on a Downgrade Drawing,
Non-Extension Drawing or Final Drawing thereunder.
"Interest Period" has the meaning assigned to such term in the
Indentures.
"Investment Earnings" means investment earnings on funds on
deposit in the Trust Accounts net of losses and investment expenses
of the Subordination Agent in making such investments.
"Lease" means, with respect to any Indenture relating to a
Leased Aircraft, the "Lease" referred to therein.
"Leased Aircraft" has the meaning assigned to such term in the
preliminary statements of this Agreement.
"Leased Aircraft Indenture" means, with respect to each Leased
Aircraft, the Indenture pertaining to such Aircraft.
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"LIBOR" has the meaning assigned to such term in the Reference
Agency Agreement.
"Lien" means any mortgage, pledge, lien, charge, claim,
disposition of title, encumbrance, lease, sublease, sub-sublease or
security interest of any kind, including, without limitation, any
thereof arising under any conditional sales or other title retention
agreement.
"Liquidity Event of Default" with respect to any Primary
Liquidity Facility, has the meaning assigned to such term in such
Primary Liquidity Facility.
"Liquidity Expenses" means, with respect to the Primary
Liquidity Facilities, all Liquidity Obligations other than (i) the
principal amount of any Drawings under the Primary Liquidity
Facilities and (ii) any interest accrued on any Liquidity
Obligations.
"Liquidity Facility" means, at any time, the Class G-1 Primary
Liquidity Facility, the Class G-1 Above-Cap Liquidity Facility, the
Class G-2 Primary Liquidity Facility, the Class C-1 Primary
Liquidity Facility, the Class C-1 Above-Cap Liquidity Facility or
the Class C-2 Primary Liquidity Facility, as applicable.
"Liquidity Obligations" means all principal, interest, fees and
other amounts owing to the Primary Liquidity Provider under the
Primary Liquidity Facilities, the Fee Letters and Section 7 of the
Participation Agreements.
"Liquidity Provider" means, at any time, any Primary Liquidity
Provider or any Above-Cap Liquidity Provider, as applicable.
"Loan Trustee" means, with respect to any Indenture, the
indenture trustee thereunder.
"LP Incumbency Certificate" has the meaning assigned to such
term in Section 2.5(c).
"LP Representatives" has the meaning assigned to such term in
Section 2.5(c).
"LTV Appraisal" means a current fair market appraisal (which
may be a "desktop" appraisal) performed by any Appraiser or any
other nationally recognized appraiser on the basis of an
arm's-length transaction between an informed and willing purchaser
under no compulsion to buy and an informed and willing seller under
no compulsion to sell and both having knowledge of all relevant
facts.
"LTV Collateral Amount" of any Aircraft for any Class of
Certificates (other than the Class D Certificates) on any
Distribution Date means the lesser of (i) the LTV Ratio for such
Class of Certificates multiplied by the Appraised Current Market
Value of such Aircraft (or with respect to any such Aircraft which
has suffered an Event of Loss under and as defined in the relevant
Lease (in the case of a Leased Aircraft) or Indenture (in the case
of an Owned Aircraft), the amount of the insurance proceeds paid to
the related Loan Trustee in respect thereof to the extent then held
by such Loan Trustee (and/or on
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deposit in the Special Payments Account) or payable to such Loan
Trustee in respect thereof) and (ii) the outstanding principal
amount of the Equipment Notes secured by such Aircraft after giving
effect to any principal payments of such Equipment Notes on or
before such Distribution Date.
"LTV Ratio" means, for the Class G-1 and Class G-2
Certificates, 55.2%, for the Class C-1 and Class C-2 Certificates,
64.9% and for the Class D Certificates, upon their issuance, 73.0%.
"Make-Whole Premium" has the meaning specified in the
Indentures.
"Maximum Available Commitment," with respect to any Primary
Liquidity Facility, has the meaning specified therein.
"Minimum Sale Price" means, with respect to any Aircraft or the
Equipment Notes issued in respect of such Aircraft, at any time, the
lesser of (a) 75% of the Appraised Current Market Value of such
Aircraft and (b) the aggregate outstanding principal amount of such
Equipment Notes, plus accrued and unpaid interest thereon.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Non-Controlling Party" means, at any time, any Trustee,
Liquidity Provider or Policy Provider which is not the Controlling
Party at such time.
"Non-Extended Facility" has the meaning provided in Section
3.6(d).
"Non-Extension Drawing" has the meaning provided in Section
3.6(d).
"Non-Performing Equipment Note" means an Equipment Note issued
pursuant to an Indenture that is not a Performing Equipment Note.
"Northwest" means Northwest Airlines, Inc., a Minnesota
corporation, and its successors and assigns.
"Northwest Bankruptcy Event" means the occurrence and
continuation of any of the following:
(a) the commencement of an involuntary case or other proceeding
in respect of Northwest in an involuntary case under the federal
bankruptcy laws, as now or hereafter constituted, or any other
applicable federal or state bankruptcy, insolvency or other similar
law in the United States or seeking the appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of Northwest or for all or substantially all of its
property, or seeking the winding-up or liquidation of its affairs
and the continuation of any such case or other proceeding
undismissed and unstayed for a period of ninety (90) consecutive
days or an order, judgment or decree shall be entered in any
proceeding by any court of competent jurisdiction appointing,
without the consent of Northwest, a receiver, trustee or liquidator
of Northwest, or
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of any substantial part of its property, or sequestering any
substantial part of the property of Northwest and any such order,
judgment or decree or appointment or sequestration shall be final or
shall remain in force undismissed, unstayed or unvacated for a
period of ninety (90) days after the date of entry thereof; or
(b) the commencement by Northwest of a voluntary case under the
federal bankruptcy laws, as now constituted or hereafter amended, or
any other applicable federal or state bankruptcy, insolvency or
other similar law in the United States, or the consent by Northwest
to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or other
similar official) of Northwest or for all or substantially all of
its property, or the making by Northwest of any assignment for the
benefit of creditors or the taking by Northwest of any corporate
action to authorize any of the foregoing.
"Northwest Provisions" has the meaning provided in Section
9.1(a).
"Note Purchase Agreement" means the Note Purchase Agreement
dated as of the date hereof among Northwest, each Trustee, the
Escrow Agent, the Subordination Agent and the Paying Agent.
"Notice of Avoided Payment", with respect to a Policy, has the
meaning assigned to such term in such Policy.
"Notice of Nonpayment", with respect to a Policy, has the
meaning assigned to such term in such Policy.
"NWA Corp." means Northwest Airlines Corporation (formerly
known as Newbridge Parent Corporation), a Delaware corporation, and
its successors and assigns.
"Officer's Certificate" of any Person means a certification
signed by a Responsible Officer of such Person.
"Operative Agreements" means this Agreement, the Liquidity
Facilities, the Policies, the Policy Provider Agreement, the Policy
Fee Letter, the Fee Letter, the Indentures, the Trust Agreements,
the Underwriting Agreement, the Purchase Agreement, the Financing
Agreements, the Leases, the Reference Agency Agreement, the
Equipment Notes and the Certificates, together with all exhibits and
schedules included with any of the foregoing and each of the other
documents and instruments referred to in the definitions of
"Operative Documents" contained in the Leases or any Owned Aircraft
Indenture.
"Outstanding" means, when used with respect to each Class of
Certificates, as of the date of determination, all Certificates of
such Class theretofore authenticated and delivered under the related
Trust Agreement, except:
(i) Certificates of such Class theretofore cancelled by
the Registrar (as defined in such Trust Agreement) or delivered
to the Trustee thereunder or such Registrar for cancellation;
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(ii) Certificates of such Class for which money in the
full amount required to make the final distribution with
respect to such Certificates pursuant to Section 11.01 of such
Trust Agreement has been theretofore deposited with the related
Trustee in trust for the holders of such Certificates as
provided in Section 4.01 of such Trust Agreement pending
distribution of such money to such Certificateholders pursuant
to such final distribution payment; and
(iii) Certificates of such Class in exchange for or in
lieu of which other Certificates have been authenticated and
delivered pursuant to such Trust Agreement;
provided, however, that in determining whether the holders of the
requisite Outstanding amount of such Certificates have given any
request, demand, authorization, direction, notice, consent or waiver
hereunder, any Certificates owned by Northwest or any of its
Affiliates shall be disregarded and deemed not to be Outstanding,
except that, in determining whether such Trustee shall be protected
in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Certificates that such Trustee knows
to be so owned shall be so disregarded. Certificates so owned that
have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to the satisfaction of the applicable
Trustee the pledgee's right so to act with respect to such
Certificates and that the pledgee is not Northwest or any of its
Affiliates.
"Overdue Scheduled Payment" means any Scheduled Payment which
is not in fact received by the Subordination Agent within five days
of the Scheduled Payment Date relating thereto.
"Owned Aircraft" has the meaning assigned to such term in the
preliminary statements of this Agreement.
"Owned Aircraft Indenture" means, with respect to each Owned
Aircraft, the Indenture pertaining to such Aircraft.
"Owner Participant" means, with respect to any Indenture
pertaining to a Leased Aircraft, the Owner Participant (as defined
therein) and any permitted successor or assign of such Owner
Participant.
"Owner Trustee" means, with respect to any Indenture pertaining
to a Leased Aircraft, the Owner Trustee (as defined therein) not in
its individual capacity but solely as trustee under the related
owner trust agreement, together with any successor trustee appointed
pursuant to such owner trust agreement.
"Participation Agreements" means, with respect to each
Indenture, each of the Participation Agreements referred to therein,
as the same may be amended, supplemented or otherwise modified from
time to time in accordance with its terms.
"Pass Through Trust Agreement" means the Pass Through Trust
Agreement, dated as of June 3, 1999 by and among the Guarantor,
Northwest and the State Street Bank and Trust Company of
Connecticut, National Association, not in its individual
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capacity except as expressly provided therein, but solely as trustee
(in such capacity, together with its successors in such capacity,
the "Pass Through Trustee").
"Payee" has the meaning assigned to such term in Section
2.4(e).
"Paying Agent" means State Street Bank and Trust Company, as
paying agent under each Escrow and Paying Agent Agreement, together
with its successors in such capacity.
"Paying Agent Account" has the meaning specified in each Escrow
and Paying Agent Agreement.
"Performing Equipment Note" means an Equipment Note issued
pursuant to an Indenture with respect to which no payment default
has occurred and is continuing (without giving effect to any
Acceleration); provided that if a bankruptcy proceeding is commenced
involving Northwest under Title 11 of the United State Code (the
"U.S. Bankruptcy Code"), (i) any payment default existing during the
60-day period under Section 1110(a)(2)(A) of the U.S. Bankruptcy
Code (or such longer period as may apply under Section 1110(b) of
the U.S. Bankruptcy Code) (the "Section 1110 Period") will not be
taken into consideration until the expiration of the applicable
period, (ii) any payment default occurring after the date of the
order of relief in such proceeding but during the Section 1110
Period will not be taken into consideration if such payment default
is cured under Section 1110(a)(2)(B) of the U.S. Bankruptcy Code
before the later of 30 days after the date of such default or the
expiration of the Section 1110 Period and (iii) any payment default
occurring after the Section 1110 Period will not be taken into
consideration if such payment default is cured before the end of the
grace period, if any, set forth in the related Lease (in the case of
a Leased Aircraft) or Owned Aircraft Indenture (in the case of an
Owned Aircraft).
"Performing Note Deficiency" means any time that less than 65%
of the then aggregate outstanding principal amount of all Equipment
Notes are Performing Equipment Notes.
"Person" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock
company, trust, trustee, unincorporated organization or government
or any agency or political subdivision thereof.
"Policy" means the Class G-1 Policy or the Class G-2 Policy, as
applicable.
"Policy Account" means the Class G-1 Policy Account or the
Class G-2 Policy Account, as applicable.
"Policy Drawing" means any payment of a claim under the Policy.
"Policy Expenses" means all amounts (including amounts in
respect of expenses) owing to the Policy Provider under the Policy
Provider Agreement or the Participation Agreements other than (i)
any amounts due under the Policy Fee Letter, (ii) the amount of any
Policy Drawing and any interest accrued thereon, (iii) reimbursement
of and interest
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on the Liquidity Obligations paid to the Liquidity Provider by the
Policy Provider, (iv) any indemnity payments owed to the Policy
Provider, (v) any amounts that the Policy Provider is entitled to
receive by virtue of the subrogation rights of the Policy Provider
hereunder, including, without limitation, fees and expenses incurred
in connection with the enforcement of such rights and (vi) any
Excess Reimbursement Obligations.
"Policy Fee Letter" means the fee letter, dated as of August 5,
2002 from the Policy Provider to Northwest and the Subordination
Agent setting forth the Policy Premium and certain other amounts
payable in respect of the Policies.
"Policy Premium" has the meaning specified in the Policy Fee
Letter.
"Policy Provider" means MBIA Insurance Corporation or any
successor thereto, as issuer of the Policies.
"Policy Provider Agreement" means the Insurance and Indemnity
Agreement, dated as of the date of issuance of the Certificates,
among the Subordination Agent, the Class G-1 Trustee, Class G-2
Trustee, Northwest and the Policy Provider pursuant to which, among
other things, the Subordination Agent agrees to reimburse the Policy
Provider for amounts paid pursuant to claims made under the Policy.
"Policy Provider Default" means the occurrence of any of the
following events (a) the Policy Provider fails to make a payment
required under the Policy in accordance with its terms and such
failure remains unremedied for two Business Days following the
delivery of Written Notice of such failure to the Policy Provider or
(b) the Policy Provider (i) files any petition or commences any case
or proceeding under any provisions of any federal or state law
relating to insolvency, bankruptcy, rehabilitation, liquidation or
reorganization, (ii) makes a general assignment for the benefit of
its creditors or (iii) has an order for relief entered against it
under any federal or state law relating to insolvency, bankruptcy,
rehabilitation, liquidation or reorganization that is final and
nonappealable, or (c) a court of competent jurisdiction, the New
York Insurance Department or another competent regulatory authority
enters a final and nonappealable order, judgment or decree (i)
appointing a custodian, trustee, agent or receiver for the Policy
Provider or for all or any material portion of its property or (ii)
authorizing the taking of possession by a custodian, trustee, agent
or receiver of the Policy Provider (or taking of possession of all
or any material portion of the Policy Provider's property).
"Policy Provider Election" has the meaning assigned to such
term in Section 3.7(c).
"Policy Provider Incumbency Certificate" has the meaning
assigned to such term in Section 2.5(d).
"Policy Provider Obligations" means all reimbursement and other
amounts, including fees and indemnities, due to the Policy Provider
under the Policy Provider Agreement, but shall not include (i) any
amounts due under the Policy Fee Letter or (ii) any interest on
Policy Drawings except, if the Class G-1 Liquidity Provider or the
Class G-2 Liquidity Provider has failed to honor its obligation to
make a payment on any
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Interest Drawing in respect of the Class G-1 Certificates or the
Class G-2 Certificates, as applicable, interest on the portion of
any Policy Drawing made to cover the shortfall attributable to such
failure by the Liquidity Provider in an amount equal to the amount
of interest that would have accrued on such Interest Drawing if such
Interest Drawing had been made at the interest rate applicable to
such Interest Drawing until such Policy Drawing has been repaid in
full, up to a maximum of six such Policy Drawings under the
applicable Policy. For the avoidance of doubt, and subject to the
effect of payment priorities with respect to Excess Reimbursement
Obligations, Policy Provider Obligations include reimbursement of
and interest on the Liquidity Obligations in respect of the
Liquidity Facilities paid by the Policy Provider to the Liquidity
Provider.
"Policy Provider Representative" has the meaning specified in
Section 2.5(d).
"Pool Balance" means, with respect to each Trust (other than
the Class D Trust) or the Certificates issued by any Trust (other
than the Class D Trust), as of any date, (i) the original aggregate
face amount of the Certificates of such Trust which, in the case of
the Class G-1 Trust, is $487,131,000, in the case of the Class G-2
Trust, $150,000,000, in the case of the Class C-1 Trust,
$56,000,000, and, in the case of the Class C-2 Trust, $56,000,000,
less (ii) the aggregate amount of all payments made in respect of
the Certificates of such Trust or in respect of Deposits relating to
such Trust other than payments made in respect of interest or
Additional Payments thereon or reimbursement of any costs and
expenses in connection therewith. The Pool Balance for the Class D
Trust or the Class D Certificates, means, as of any date, (x) the
original aggregate amount of all of the Series D Equipment Notes
acquired by the Class D Trustee on or prior to such date less (y)
the aggregate amount of all payments made in respect of the Class D
Certificates other than payments made in respect of interest or
premium thereon or reimbursement of any costs and expenses in
connection therewith. The Pool Balance for each Trust or the
Certificates issued by any Trust as of any Distribution Date shall
be computed after giving effect to any special distribution with
respect to unused Deposits, any payment of principal, of the
Equipment Notes or payment with respect to other Trust Property held
in such Trust and the distribution thereof to be made on such date
and, with respect to the Class G-1 and Class G-2 Trusts, payments
under the related Policy for the benefit of the Class G-1 and Class
G-2 Certificate respectively (other than in respect of the Liquidity
Facilities and interest on the Class G-1 or Class G-2 Certificates).
"Premium Percentage" has the meaning set forth in the Policy
Fee Letter.
"Prepayment Premium" has the meaning set forth in the
Indenture.
"Primary Cash Collateral Account" means the Class G-1 Primary
Cash Collateral Account, the Class G-2 Primary Cash Collateral
Account, Class C-1 Primary Cash Collateral Account or the Class C-2
Primary Cash Collateral Account, as applicable.
"Primary Liquidity Facility" means the Class G-1 Primary
Liquidity Facility, the Class G-2 Primary Liquidity Facility, the
Class C-1 Primary Liquidity Facility or the Class C-2 Primary
Liquidity Facility, as applicable.
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"Primary Liquidity Provider" means the Class G-1 Primary
Liquidity Provider, the Class G-2 Primary Liquidity Provider, the
Class C-1 Primary Liquidity Provider or the Class C-2 Primary
Liquidity Provider, as applicable.
"Proceeding" means any suit in equity, action at law or other
judicial or administrative proceeding.
"PTC Event of Default" means, with respect to each Trust
Agreement, the failure to pay within 10 Business Days of the due date
thereof: (i) the outstanding Pool Balance of the applicable Class of
Certificates on the Final Legal Distribution Date for such Class
(unless, in the case of the Class G-1 or Class G-2 Certificates, the
Subordination Agent shall have made a drawing under the related
Policy in an aggregate amount sufficient to pay such outstanding Pool
Balance and shall have distributed such amount to the Class G-1
and/or Class G-2 Trustee, as the case may be), or (ii) interest due
on such Certificates on any Distribution Date (unless the
Subordination Agent shall have made an Interest Drawing or a
withdrawal from the Primary Cash Collateral Account relating to a
Primary Liquidity Facility or, in the case of the Class G-1 or Class
C-1 Certificates a withdrawal from any related Above-Cap Account or,
in the case of the Class G-1 or Class G-2 Certificates, a drawing
under the related Policy, with respect thereto in an aggregate amount
sufficient to pay such interest and shall have distributed such
amount to the Trustee entitled thereto).
"Rating Agencies" means, collectively, at any time, each
nationally recognized rating agency which shall have been requested
to rate the Certificates (other than the Class D Certificates) and
which shall then be rating the Certificates (other than the Class D
Certificates). Initially, the Rating Agencies shall consist of
Moody's, Standard & Poor's and Fitch.
"Ratings Confirmation" means, with respect to any action
proposed to be taken, a written confirmation from each of the Rating
Agencies (without regard to the Policies in the case of the Class
G-1 and Class G-2 Certificates) that such action would not result in
(i) a reduction of the rating for any Class of Certificates below
the then current rating for such Class of Certificates or (ii) a
withdrawal or suspension of the rating of any Class of Certificates.
"Reference Agency Agreement" means the Reference Agency
Agreement, dated as of the date hereof, among Northwest, State
Street Bank and Trust Company, as the reference agent thereunder,
the Subordination Agent, the Loan Trustee and the Escrow Agent.
"Regular Distribution Dates" means each February 20, May 20,
August 20 and November 20, commencing on August 20, 2002; provided,
however, that, if any such day shall not be a Business Day, the
related distribution shall be made on the next succeeding Business
Day and interest will be added for such additional period in the
case of the Class G-1 Certificates, Class C-1 Certificate or Class D
Certificates but not in the case of the Class G-2 Certificates or
Class C-2 Certificates.
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"Replacement Above-Cap Liquidity Facility" means, for either
Above-Cap Liquidity Facility, an irrevocable interest rate cap
agreement (or agreements) for the same term as the Above-Cap
Liquidity Facility being replaced, in substantially the form of the
Above-Cap Liquidity Facility being replaced or in such other form
(which may include a letter of credit) as shall permit the Rating
Agencies to issue in writing, and the Rating Agencies shall have
issued in writing, a Ratings Confirmation (before the downgrading of
the ratings on the Certificates, if any, as a result of any
downgrading of the applicable Above-Cap Liquidity Provider), issued
by a Person (or Person(s)) having short-term unsecured debt ratings
or corporate credit ratings, as the case may be, issued by Fitch,
Moody's and Standard & Poor's that are equal to or higher than the
applicable Threshold Rating (which Person, in the case of the Class
G-1 Above-Cap Liquidity Facility, will be consented to by the Policy
Provider, which consent shall not be unreasonably withheld or
denied), provided that no prior Ratings Confirmation or consent of
the Policy Provider shall be required under the circumstances
specified in Part 5(i) of the Schedule to the ISDA Master Agreement
forming a part of each Above-Cap Liquidity Facility.
"Replacement Above-Cap Liquidity Provider" means a Person (or
Persons) who issues a Replacement Above-Cap Liquidity Facility.
"Replacement Primary Liquidity Facility" means, for any Primary
Liquidity Facility, an irrevocable revolving credit agreement for
the same term as the Primary Liquidity Facility being replaced in
substantially the form of the Primary Liquidity Facility being
replaced, including reinstatement provisions, or in such other form
(which may include a letter of credit) as shall permit the Rating
Agencies to confirm in writing pursuant to Section 3.6(e)(iv)(x)
their respective ratings (in the case of the Class G-1 and Class G-2
Certificates, without regard to the Policies) then in effect for the
related Class of Certificates (before the downgrading of such
ratings, if any, as a result of the downgrading of the applicable
Primary Liquidity Provider), and, in the case of the Class G-1
Primary Liquidity Facility or the Class G-2 Primary Liquidity
Facility, which is consented to by the Policy Provider, which
consent shall not be unreasonably withheld or delayed, in a face
amount (or in an aggregate face amount) equal to the Required Amount
for the related Class of Certificates as of the date of replacement
for such Primary Liquidity Facility and issued by a Person (or
Person(s)) having short-term unsecured debt ratings or corporate
credit ratings, as the case may be, issued by Moody's, Fitch (if
rated by Fitch) and Standard & Poor's that are equal to or higher
than the applicable Threshold Rating. Without limitation of the form
that a Replacement Primary Liquidity Facility otherwise may have
pursuant to the preceding sentence, a Replacement Primary Liquidity
Facility for any Class of Certificates may have a stated expiration
date earlier than 15 days after the Final Legal Distribution Date of
such Class of Certificates so long as such Replacement Primary
Liquidity Facility provides for a Non-Extension Drawing as
contemplated by Section 3.6(d) hereof.
"Replacement Primary Liquidity Provider" means a Person (or
Person(s)) who issues a Replacement Primary Liquidity Facility.
"Required Amount" means, with respect to each Primary Liquidity
Facility and each Primary Cash Collateral Account related thereto,
for any day, the sum of the
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aggregate amount of interest, calculated at the rate per annum equal
to the applicable Capped Interest Rate (in the case of each of the
Class G-1 and Class C-1 Primary Liquidity Facility and Primary Cash
Collateral Account) or at the applicable Stated Interest Rate (in
the case of the Class G-2 and Class C-2 Primary Liquidity Facility
and Primary Cash Collateral Account), that in each case would be
payable on the related Class of Certificates on each of the six
successive Regular Distribution Dates immediately following such day
or, if such day is a Regular Distribution Date, on such day and the
succeeding five Regular Distribution Dates, in each case calculated
on the basis of the Pool Balance of such Class of Certificates on
such date and without regard to expected future payments of
principal on such Class of Certificates. The Pool Balance for
purposes of the definition of Required Amount with respect to the
Class G-1 and Class G-2 Liquidity Facilities shall, in the event of
any Policy Provider Election, be deemed to be reduced by an amount
(if positive) by which (a) the outstanding principal balance of the
Series G-1 and Series G-2 Equipment Notes in respect of which such
Policy Provider Election has been made shall exceed (b) the amount
of any Policy Drawings previously paid by the Policy Provider in
respect of principal on such Series G-1 and Series G-2 Equipment
Notes.
"Responsible Officer" means (i) with respect to the
Subordination Agent and each of the Trustees, any officer in the
corporate trust administration department of the Subordination Agent
or such Trustee or any other officer customarily performing
functions similar to those performed by the Persons who at the time
shall be such officers, respectively, or to whom any corporate trust
matter is referred because of his knowledge of and familiarity with
a particular subject and (ii) with respect to each Liquidity
Provider, any authorized officer or agent of such Liquidity
Provider.
"Scheduled Payment" means, with respect to any Equipment Note,
(i) any payment of principal or interest on such Equipment Note
(other than an Overdue Scheduled Payment) due from the obligor
thereon, which payment represents the installment of principal at
the stated maturity of such installment of principal on such
Equipment Note, the payment of regularly scheduled interest accrued
on the unpaid principal amount of such Equipment Note, or both or
(ii) any payment of interest on the corresponding Class of
Certificates with funds drawn under the related Primary Liquidity
Facility or withdrawn from the Primary Cash Collateral Accounts for
such Class of Certificates or, in the case of the Class G-1 or Class
C-1 Certificates, from the related Above-Cap Account or, in the case
of any Series G-1 or Series G-2 Equipment Note, drawn under the
related Policy; provided that any payment of principal or Additional
Payment, if any, or interest resulting from the redemption or
purchase of any Equipment Note shall not constitute a Scheduled
Payment.
"Scheduled Payment Date" means, with respect to any Scheduled
Payment, the date on which such Scheduled Payment is scheduled to be
made.
"Section 2.4(b) Fraction" has the meaning assigned to such term
in Section 2.4(b)(i).
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"Selected Aircraft" has the meaning assigned to such term in
the Note Purchase Agreement.
"Series C-1 Equipment Notes" means the Series C-1 Equipment
Notes issued pursuant to certain Indentures by Northwest and
authenticated by the Loan Trustee thereunder, and any such Equipment
Notes issued in exchange therefor or replacement thereof pursuant to
the terms of such Indenture.
"Series C-2 Equipment Notes" means the 9.055% Series C-2
Equipment Notes issued pursuant to certain Indentures by Northwest,
as the case may be, and authenticated by the Loan Trustee
thereunder, and any such Equipment Notes issued in exchange therefor
or replacement thereof pursuant to the terms of such Indenture.
"Series D Equipment Notes" means the equipment notes, if any,
issued pursuant to certain Indentures by Northwest, as the case may
be, and authenticated by the Loan Trustee thereunder, and designated
as "Series D" thereunder, and any such equipment notes issued in
exchange therefor or replacement thereof pursuant to the terms of
such Indenture.
"Series G-1 Equipment Notes" means the Series G-1 Equipment
Notes issued pursuant to certain Indentures by Northwest and
authenticated by the Loan Trustee thereunder, and any such Equipment
Notes issued in exchange therefor or replacement thereof pursuant to
the terms of such Indenture.
"Series G-2 Equipment Notes" means the 6.264% Series G-2
Equipment Notes issued pursuant to certain Indentures by Northwest
and authenticated by the Loan Trustee thereunder, and any such
Equipment Notes issued in exchange therefor or replacement thereof
pursuant to the terms of such Indenture.
"Special Distribution Date" means, (i) with respect to any
Special Payment, the date chosen by the Subordination Agent pursuant
to Section 2.4(a) or Section 3.7(b) for the distribution of such
Special Payment in accordance with this Agreement, (ii) an Election
Distribution Date or (iii) each date designated in Section 3.7(c) or
Section 3.7(e) as a Special Distribution Date.
"Special Payment" means any payment (other than a Scheduled
Payment) in respect of, or any proceeds of, any Equipment Note,
Trust Indenture Estate (as defined in the Indenture in respect of a
Leased Aircraft) or Collateral (as defined in the Indenture in
respect to an Owned Aircraft), including Overdue Scheduled Payments,
payments in respect of the redemption or repurchase of any Equipment
Note and payments in respect of the sale of any Equipment Note to
the related Owner Trustee, Owner Participant or any other Person.
"Special Payments Account" means the Eligible Deposit Account
created pursuant to Section 2.2 as a sub-account to the Collection
Account.
"Specified Investments" has the meaning assigned to such term
in the Pass Through Trust Agreement.
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"Standard & Poor's" means Standard & Poor's Ratings Services, a
division of The XxXxxx-Xxxx Companies, Inc.
"State Street of Connecticut" has the meaning assigned to it in
the preamble to this Agreement.
"Stated Amount" with respect to any Primary Liquidity Facility
at any time, means the Maximum Commitment (as defined in such
Primary Liquidity Facility) at such time of the applicable Primary
Liquidity Provider thereunder.
"Stated Expiration Date" has the meaning specified in Section
3.6(d).
"Stated Interest Rate" means (i) with respect to the Class G-1
Certificates, for any Interest Period, LIBOR for such Interest
Period plus 0.75% per annum; (ii) with respect to the Class G-2
Certificates, 6.264% per annum; (iii) with respect to the Class C-1
Certificates, for any Interest Period, LIBOR for such Interest
Period plus 4.50% per annum; (iv) with respect to the Class C-2
Certificates, 9.055% per annum; and (v) with respect to the Class D
Certificates, the interest rate specified in the Class D Trust
Agreement.
"Subordination Agent" has the meaning assigned to it in the
preamble to this Agreement.
"Subordination Agent Incumbency Certificate" has the meaning
assigned to such term in Section 2.5(a).
"Subordination Agent Representative" has the meaning assigned
to such term in Section 2.5(a).
"Tax" and "Taxes" mean any and all taxes, fees, levies, duties,
tariffs, imposts, and other charges of any kind (together with any
and all interest, penalties, loss, damage, liability, expense,
additions to tax and additional amounts or costs incurred or imposed
with respect thereto) imposed or otherwise assessed by the United
States or by any state, local or foreign government (or any
subdivision or agency thereof) or other taxing authority, including,
without limitation: taxes or other charges on or with respect to
income, franchises, windfall or other profits, gross receipts,
property, sales, use, capital stock, payroll, employment, social
security, workers' compensation, unemployment compensation, or net
worth and similar charges; taxes or other charges in the nature of
excise, withholding, ad valorem, stamp, transfer, value added, taxes
on goods and services, gains taxes, license, registration and
documentation fees, customs duties, tariffs, and similar charges.
"Termination Amount", with respect to any Above-Cap Liquidity
Facility, has the meaning assigned to such term in such Above-Cap
Liquidity Facility.
"Termination Notice" with respect to any Primary Liquidity
Facility has the meaning assigned to such term in such Primary
Liquidity Facility.
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"Threshold Rating" means the short-term unsecured debt rating
of F-1 by Fitch (if rated by Fitch) and P-1 by Xxxxx'x and the
short-term corporate credit rating of A-1 by Standard & Poor's.
"Treasury Regulations" means regulations, including proposed or
temporary regulations, promulgated under the Code. References herein
to specific provisions of proposed or temporary regulations shall
include analogous provisions of final Treasury Regulations or other
successor Treasury Regulations.
"Triggering Event" means (x) the occurrence of an Indenture
Default under all of the Indentures resulting in a PTC Event of
Default with respect to the most senior Class of Certificates then
Outstanding, (y) the Acceleration of all of the outstanding
Equipment Notes (provided that, with respect to the period prior to
the Delivery Period Expiry Date, such Equipment Notes have an
aggregate principal balance in excess of $300,000,000) or (z) the
occurrence of a Northwest Bankruptcy Event.
"Trust" means any of the Class G-1 Trust, the Class G-2 Trust,
the Class C-1 Trust, the Class C-2 Trust or, upon its formation, the
Class D Trust.
"Trust Accounts" has the meaning assigned to such term in
Section 2.2(a).
"Trust Agreement" means any of the Class G-1 Trust Agreement,
the Class G-2 Trust Agreement, Class C-1 Trust Agreement, Class C-2
Trust Agreement or, upon the execution thereof, the Class D Trust
Agreement.
"Trust Property" with respect to any Trust, has the meaning set
forth in the Trust Agreement for such Trust.
"Trust Supplement" means an agreement supplemental to the Pass
Through Trust Agreement pursuant to which (i) a separate trust is
created for the benefit of the holders of Certificates of a series,
(ii) the issuance of the Certificates of a series representing
fractional undivided interests in such trust is authorized and (iii)
the terms of the Certificates of such series are established, as
such agreement may from time to time be supplemented, amended or
otherwise modified.
"Trustee" means any of the Class G-1 Trustee, the Class G-2
Trustee, the Class C-1 Trustee, the Class C-2 Trustee or upon the
execution of the Class D Trust Agreement, the Class D Trustee.
"Trustee Incumbency Certificate" has the meaning assigned to
such term in Section 2.5(b).
"Trustee Representatives" has the meaning assigned to such term
in Section 2.5(b).
"Underwriters" means the several Underwriters listed as such in
the Underwriting Agreement.
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"Underwriting Agreement" means the Underwriting Agreement dated
July 29, 2002, by and among the Underwriters, Northwest and the
Guarantor, relating to the purchase of the Class G-1 Certificates,
the Class G-2 Certificates, the Class C-1 Certificates and the Class
C-2 Certificates by the Underwriters, as the same may be amended,
supplemented or otherwise modified from time to time in accordance
with its terms.
"Withdrawal Notice" has the meaning specified in Section
3.6(d).
"Written Notice" means, from any Trustee, Liquidity Provider,
the Policy Provider or the Subordination Agent, a written instrument
executed by the Designated Representative of such Person. An invoice
delivered by a Primary Liquidity Provider pursuant to Section 3.1 in
accordance with its normal invoicing procedures shall constitute
Written Notice under such Section.
ARTICLE II
TRUST ACCOUNTS; CONTROLLING PARTY
Section 2.1. Agreement to Terms of Subordination; Payments from
Monies Received Only. (a) Each Trustee hereby (i) acknowledges and agrees to
the terms of subordination and distribution set forth in this Agreement in
respect of each Class of Certificates, (ii) agrees to enforce such provisions
and cause all payments in respect of the Equipment Notes, the Liquidity
Facilities and the Policies to be applied in accordance with the terms of this
Agreement and (iii) with respect to payments in respect of the Equipment Notes
received by it, agrees to allocate such payments first, to interest payable in
respect of the Certificates of the related Class, second, to Prepayment
Premium, Make-Whole Premium and Break Amount, if any, payable in respect of
the Certificates of the related Class, and third, to principal payable in
respect of the Certificates of the related Class. In addition, each Trustee
hereby agrees to cause the Equipment Notes purchased by the related Trust to
be registered in the name of the Subordination Agent, as agent and trustee for
such Trustee, to be held in trust by the Subordination Agent solely for the
purpose of facilitating the enforcement of the subordination and other
provisions of this Agreement.
(b) Except as otherwise expressly provided in the next succeeding
sentence of this Section 2.1, all payments to be made by the Subordination
Agent hereunder shall be made only from amounts received by it that constitute
Scheduled Payments, Special Payments and other payments under the Operative
Agreements including payments under Section 7(c) of the Participation
Agreement relating to the Owned Aircraft, Section 7(c) of the Participation
Agreement relating to the Leased Aircraft, payments under Section 7 of the
Note Purchase Agreement or payments under the Liquidity Facilities or amounts
credited to the Trust Accounts, and only to the extent that the Subordination
Agent shall have received sufficient income or proceeds therefrom to enable it
to make such payments in accordance with the terms hereof. Each of the
Trustees and the Subordination Agent hereby agrees and, as provided in each
Trust Agreement, each Certificateholder, by its acceptance of a Certificate,
and each Primary Liquidity Provider, by entering into the Primary Liquidity
Facility to which it is a party, and the Policy Provider, by entering into the
Policy Provider Agreement, has agreed to look solely to such
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amounts to the extent available for distribution to it as provided in this
Agreement and to the relevant Deposits and that none of the Trustees, Owner
Trustees, Loan Trustees, Owner Participants nor the Subordination Agent is
personally liable to any of them for any amounts payable or any liability
under this Agreement, any Trust Agreement, any Liquidity Facility, the Policy
Provider Agreement or such Certificate, except (in the case of the
Subordination Agent) as expressly provided herein or (in the case of the
Trustees) as expressly provided in each Trust Agreement or (in the case of the
Owner Trustees and the Loan Trustees) as expressly provided in any Operative
Agreement.
Notwithstanding anything to the contrary in this Agreement and in
the other Operative Agreements, the Certificates do not represent indebtedness
of the related Trust, and references in this Agreement and the Operative
Agreements to accrued interest or principal amounts payable on the
Certificates of any Class are included only for computational purposes. For
purposes of such computations, the Certificates of any Class shall be deemed
to be comprised of interest and principal components, with the principal
component deemed to be the Pool Balance, and the interest component deemed to
equal interest accruing at the Stated Interest Rate for such Class of
Certificates from (i) the later of (1) the date of issuance thereof and (2)
the most recent but preceding Distribution Date to which such interest was
distributed to (ii) the applicable date of determination, such interest to be
considered payable in arrears and to be calculated on the basis of a 360-day
year comprised of twelve 30-day months (in the case of the Class G-2 and Class
C-2 Certificates) or on the basis of the actual number of days elapsed over a
360-day year (in the case of the Class G-1, Class C-1 and Class D
Certificates).
Section 2.2. Trust Accounts. (a) Upon the execution of this
Agreement, the Subordination Agent shall establish and maintain in its name
(i) the Collection Account as an Eligible Deposit Account, bearing a
designation clearly indicating that the funds deposited therein are held in
trust for the benefit of the Trustees, the Certificateholders, the Primary
Liquidity Providers and the Policy Provider, (ii) as a sub-account in the
Collection Account, the Special Payments Account as an Eligible Deposit
Account, bearing a designation clearly indicating that the funds deposited
therein are held in trust for the benefit of the Trustees, the
Certificateholders, the Primary Liquidity Providers and the Policy Provider,
(iii) (x) a Class G-1 Policy Account as an Eligible Deposit Account bearing a
designation clearly indicating that the funds deposited therein are held in
trust for the benefit of the Class G-1 Certificateholders and (y) a Class G-2
Policy Account as an Eligible Deposit Account bearing a designation clearly
indicating that the funds deposited therein are held in trust for the benefit
of the Class G-2 Certificateholders and (iv) a Class G-1 Above-Cap Account and
a Class C-1 Above-Cap Account each bearing a designation clearly indicating
that the funds deposited therein are held in trust for the benefit of the
related Trustee and Certificateholders. The Subordination Agent shall
establish and maintain the Cash Collateral Accounts pursuant to and under the
circumstances set forth in Section 3.6(f) hereof. Each Cash Collateral Account
shall bear a designation clearly indicating that the funds deposited therein
are held in trust for the benefit of the related Trustee and
Certificateholders. Upon such establishment and maintenance under Section
3.6(f) hereof, the Cash Collateral Accounts shall, together with the
Collection Accounts, the Policy Accounts, and the Above-Cap Accounts
constitute the "Trust Accounts" hereunder. Without limiting the foregoing, all
monies credited to the Trust Accounts shall be, and shall remain, the property
of the relevant Trust(s).
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(b) Funds on deposit in the Trust Accounts shall be invested and
reinvested by the Subordination Agent in Eligible Investments selected by the
Subordination Agent if such investments are reasonably available and have
maturities no later than the earlier of (i) 90 days following the date of such
investment (provided that the Subordination Agent shall invest and reinvest
funds on deposit in the Above-Cap Accounts and Above-Cap Reserve Accounts in
the manner specified in Schedule 2.2(b) attached hereto) or (ii) the Business
Day immediately preceding the Regular Distribution Date or the date of the
related distribution pursuant to Section 2.4 hereof, as the case may be, next
following the date of such investment; provided further, however, that upon
the occurrence and during the continuation of a Triggering Event, the
Subordination Agent shall invest and reinvest such amounts in Eligible
Investments in accordance with the written instructions of the Controlling
Party. Unless otherwise expressly provided in this Agreement (including,
without limitation, with respect to Investment Earnings on amounts on deposit
in the Above-Cap Reserve Accounts and in the Above-Cap Accounts, in each case
pursuant to Section 3.6(f) hereof), any Investment Earnings shall be deposited
in the Collection Account when received by the Subordination Agent and shall
be applied by the Subordination Agent in the same manner as the other amounts
on deposit in the Collection Account are to be applied and any losses shall be
charged against the principal amount invested, in each case net of the
Subordination Agent's reasonable fees and expenses in making such investments.
The Subordination Agent shall not be liable for any loss resulting from any
investment, reinvestment or liquidation required to be made under this
Agreement other than by reason of its willful misconduct or gross negligence
or, with respect to the handling or transfer of funds, ordinary negligence.
Eligible Investments and any other investment required to be made hereunder
shall be held to their maturities except that any such investment may be sold
(without regard to its maturity) by the Subordination Agent without
instructions whenever such sale is necessary to make a distribution required
under this Agreement. Uninvested funds held hereunder shall not earn or accrue
interest.
(c) The Subordination Agent shall possess all right, title and
interest in all funds on deposit from time to time in the Trust Accounts and
in all proceeds thereof (including all income thereon, except as otherwise
provided herein with respect to Investment Earnings). The Trust Accounts shall
be held in trust by the Subordination Agent under the sole dominion and
control of the Subordination Agent for the benefit of the Trustees, the
Certificateholders, the Liquidity Providers and the Policy Providers, as the
case may be. If, at any time, any of the Trust Accounts ceases to be an
Eligible Deposit Account, the Subordination Agent shall within 10 Business
Days (or such longer period, not to exceed 30 calendar days, to which each
Rating Agency may consent) establish a new Collection Account, Special
Payments Account, Policy Account, Cash Collateral Account or Above-Cap
Account, as the case may be, as an Eligible Deposit Account and shall transfer
any cash and/or any investments to such new Collection Account, Special
Payments Account, Policy Account, Cash Collateral Account or Above-Cap
Account, as the case may be. So long as the Subordination Agent is an Eligible
Institution, the Trust Accounts shall be maintained with it as Eligible
Deposit Accounts.
Section 2.3. Deposits to the Collection Account and Special Payments
Account. (a) The Subordination Agent shall, upon receipt thereof, deposit in
the Collection Account all Scheduled Payments received by it (other than any
Scheduled Payment which by the express terms hereof is to be deposited to a
Policy Account or a Cash Collateral Account).
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(b) The Subordination Agent shall, on each date when one or more
Special Payments are made to the Subordination Agent as holder of the
Equipment Notes, deposit in the Special Payments Account the aggregate amount
of such Special Payments.
Section 2.4. Distributions of Special Payments. (a) Notice of
Special Payment. Except as provided in Section 2.4(e), upon receipt by the
Subordination Agent, as registered holder of the Equipment Notes, of any
notice of a Special Payment (or, in the absence of any such notice, upon
receipt by the Subordination Agent of a Special Payment), the Subordination
Agent shall promptly give notice thereof to each Trustee, the Primary
Liquidity Providers and the Policy Provider. The Subordination Agent shall
promptly calculate the amount of the redemption or purchase of Equipment Notes
or the amount of any Overdue Scheduled Payment, as the case may be, comprising
such Special Payment under the applicable Indenture or Indentures and shall
promptly send to each Trustee and the Primary Liquidity Providers a Written
Notice of such amount and the amount allocable to each Trust. Such Written
Notice shall also set the distribution date for such Special Payment (a
"Special Distribution Date"), which shall be the Business Day which
immediately follows the later to occur of (x) the 15th day after the date of
such Written Notice or (y) the date the Subordination Agent has received or
expects to receive such Special Payment. Amounts on deposit in the Special
Payments Account shall be distributed in accordance with Sections 2.4(b) and
2.4(c) hereof, as applicable.
(b) (i) Redemptions and Purchases of Equipment Notes. So long as no
Triggering Event shall have occurred (whether or not continuing), the
Subordination Agent shall make distributions pursuant to this Section 2.4(b)
of amounts on deposit in the Special Payments Account on account of the
redemption or purchase (including, without limitation, a purchase resulting
from the sale of the Equipment Notes permitted by Article IV hereof) of any of
the Equipment Notes issued pursuant to an Indenture on the Special
Distribution Date for such Special Payment in the following order of priority:
first, such amount as shall be required to pay (A) all accrued and
unpaid Liquidity Expenses and Policy Expenses then in arrears plus (B)
the product of (x) the aggregate amount of all accrued and unpaid
Liquidity Expenses and Policy Expenses not in arrears to such Special
Distribution Date multiplied by (y) a fraction, the numerator of which is
the aggregate outstanding principal amount of Equipment Notes (other than
Series D Equipment Notes) being redeemed, purchased or prepaid on such
Special Distribution Date and the denominator of which is the aggregate
outstanding principal amount of all Equipment Notes (other than Series D
Equipment Notes) (the "Section 2.4(b) Fraction") ("accrued amounts"),
shall be distributed to the applicable Primary Liquidity Providers and
Policy Provider first in satisfaction of any past due amounts then in
satisfaction of the accrued amounts, in each case, pro rata on the basis
of the amount of Liquidity Expenses and Policy Expenses, owed to each
Primary Liquidity Provider and the Policy Provider;
second, such amount as shall be required to pay (i)(A) all accrued
and unpaid interest then in arrears on all Liquidity Obligations (at the
rate provided in the applicable Primary Liquidity Facility, determined
after giving effect to payments made by the Policy Provider to each
Primary Liquidity Provider, if any, in respect of interest on drawings
under the Primary Liquidity Facilities) plus (B) the aggregate amount of
all accrued and unpaid interest on all Liquidity Obligations not in
arrears to such Special Distribution
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Date (at the rate provided in the applicable Primary Liquidity Facility
and determined after giving effect to payments made by the Policy
Provider to each Primary Liquidity Provider, if any, in respect of
interest on Drawings under the Primary Liquidity Facilities), (ii) if
either the Class G-1 or Class G-2 Primary Liquidity Provider has
defaulted in its obligation to make a payment on any Interest Drawing in
respect of the Class G-1 or Class G-2 Certificates, as the case may be,
(A) the aggregate amount of interest accrued on the portion of any Policy
Drawing made to cover the shortfall attributable to such default by the
Primary Liquidity Provider at the rate provided in the "except" clause of
clause (ii) of the definition of "Policy Provider Obligations" which are
then in arrears plus (B) the aggregate amount of all accrued and unpaid
interest on such Policy Drawings not in arrears to such Special
Distribution Date and (iii) if the Policy Provider has elected to pay to
each Primary Liquidity Provider all outstanding drawings and interest
owing to such Primary Liquidity Provider under its Primary Liquidity
Facility pursuant to subsection 2.6(c) hereof, the amount of such payment
made to the Primary Liquidity Providers attributable to such interest
accrued on such drawings, shall be distributed to the Primary Liquidity
Providers and the Policy Provider pro rata (without duplication), on the
basis of such Liquidity Obligations owed to each Primary Liquidity
Provider and the amount of such unreimbursed Policy Provider Obligations
payable to the Policy Provider under this clause "second";
third, such amount as shall be required (A) if any Primary Cash
Collateral Account had been previously funded as provided in Section
3.6(f), to fund such Cash Collateral Account up to its Required Amount
shall be deposited in such Primary Cash Collateral Account, (B) if any
Primary Liquidity Facility shall become a Downgraded Facility or a
Non-Extended Facility at a time when unreimbursed Interest Drawings under
such Primary Liquidity Facility have reduced the Maximum Available
Commitment thereunder to zero, to deposit into the related Primary Cash
Collateral Account an amount equal to such Primary Cash Collateral
Account's Required Amount shall be deposited in such Primary Cash
Collateral Account, (C) if with respect to any particular Primary
Liquidity Facility neither subclause (A) nor subclause (B) of this clause
"third" is applicable, to pay or reimburse the Primary Liquidity Provider
in respect of such Primary Liquidity Facility in an amount equal to the
amount of any unreimbursed Interest Drawings under such Primary Liquidity
Facility shall be distributed to such Primary Liquidity Provider (other
than amounts payable pursuant to clauses first or second of this Section
2.4(b) and as determined after giving effect to payments made by the
Policy Provider to such Primary Liquidity Provider in respect of
principal of drawings under its Primary Liquidity Facility), pro rata
with any amount distributable pursuant to subclause (D) of this clause
"third" on the basis of the amount of all such unreimbursed Interest
Drawings and unreimbursed Policy Provider Obligations payable to the
Policy Provider under subclause (D) of this clause "third" and (D) if the
Policy Provider has elected to pay to the Primary Liquidity Providers all
outstanding drawings and interest owing to each such Primary Liquidity
Provider under its Primary Liquidity Facility pursuant to subsection
2.6(c) hereof, to reimburse the Policy Provider for the principal amount
of such payment made to the Primary Liquidity Providers, but only after
giving effect to the application of amounts, if any, under subclause (A)
or (B) of this clause "third" and if any amount shall be distributable
under subclause (C) of this clause "third", pro rata with any amount
distributable on the basis of the amounts distributable pursuant to such
subclause
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(C) on the basis of the amounts of all such unreimbursed Interest
Drawings and the amount of such unreimbursed Policy Provider Obligations
payable to the Policy Provider under this clause "third";
fourth, if, with respect to any particular Primary Liquidity
Facility, any amounts are to be distributed pursuant to either subclause
(A) or (B) of clause "third" above, then the Primary Liquidity Provider
with respect to such Primary Liquidity Facility shall be paid the excess
of (x) the aggregate outstanding amount of unreimbursed Advances (whether
or not then due) under such Primary Liquidity Facility over (y) the
Required Amount for the relevant Class, pro rata on the basis of such
amounts in respect of each Primary Liquidity Provider;
fifth, if any Above-Cap Reserve Account had been previously funded
as provided in Section 3.6(f), such amount as shall be required to fund
such Above-Cap Reserve Account up to an amount equal to the applicable
Termination Amount (as recalculated on such Distribution Date) less any
amount then on deposit in the related Above-Cap Account shall be
deposited in such Above-Cap Reserve Account;
sixth, such amount as shall be required to pay in full Expected
Distributions to the holders of Class G-1 Certificates and Class G-2
Certificates on such Special Distribution Date shall be distributed to
the Class G-1 Trustee and Class G-2 Trustee pro rata on the basis of such
amounts in respect of each such Class of Certificates;
seventh, such amount as shall be required to pay Policy Provider
Obligations then due (other than amounts payable pursuant to the
preceding clauses of this Section 2.4(b)(i) and other than any Excess
Reimbursement Obligations) and any amounts due under the Policy Fee
Letter;
eighth, such amount as shall be required to pay in full Expected
Distributions to the holders of Class C-1 Certificates and Class C-2
Certificates on such Special Distribution Date shall be distributed to
the Class C-1 Trustee and Class C-2 Trustee, pro rata, on the basis of
such amounts in respect of each such Class of Certificates;
ninth, such amount as shall be required to pay Excess Reimbursement
Obligations to the Policy Provider;
tenth, such amount as shall be required to pay in full Expected
Distributions to the holders of Class D Certificates, if any, on such
Special Distribution Date shall be distributed to the Class D Trustee,
provided, however, that if all of the Class D Certificates are owned by
one or more Persons that are not Affiliates of Northwest and the sale or
sales of such Certificates to such Persons occurred prior to the
occurrence of an Indenture Default under any Indenture, the Expected
Distributions on the Class D Certificates shall be distributed
immediately prior to the payment in clause "ninth" above;
eleventh, such amount as shall be required, if any Above-Cap Reserve
Account had been previously funded as provided in Section 3.6(f), to fund
such Above-Cap Cash Reserve Account up to an amount equal to the
applicable Termination Amount (as
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recalculated on such Distribution Date) shall be deposited in such
Above-Cap Reserve Account; and
twelfth, the balance, if any, of such Special Payment shall be
transferred to the Collection Account for distribution in accordance with
Section 3.2 hereof.
For the purpose of this Section 2.4(b)(i), clause (x) of the definition of
"Expected Distributions" shall be deemed to read as follows: "(x) accrued, due
and unpaid interest on such Certificates excluding interest, if any, payable
with respect to the Deposits related to such Trust", together with (without
duplication) accrued and unpaid interest in respect of a portion of such
Certificates equal to the outstanding principal amount of Equipment Notes
being redeemed, purchased or prepaid (immediately prior to such redemption,
purchase or prepayment).
(ii) Upon the occurrence of a Triggering Event (whether or not
continuing), the Subordination Agent shall make distributions pursuant to
this Section 2.4(b) of amounts on deposit in the Special Payments Account
on account of the redemption or purchase of all of the Equipment Notes
issued pursuant to an Indenture on the Special Distribution Date for such
Special Payment in accordance with Section 3.3 hereof.
(c) Other Special Payments. Except as provided in clause (e) below,
any amounts on deposit in the Special Payments Account other than in respect
of amounts to be distributed pursuant to Section 2.4(b) shall be distributed
on the Special Distribution Date therefor in accordance with Article III
hereof.
(d) Investment of Amounts in Special Payments Account. Any amounts
on deposit in the Special Payments Account prior to the distribution thereof
pursuant to Section 2.4(b) or (c) shall be invested in accordance with Section
2.2(b). Investment Earnings on such investments shall be distributed in
accordance with Section 2.4(b) or (c), as the case may be.
(e) Certain Payments. Except for amounts constituting Liquidity
Obligations which shall be distributed as provided in Sections 2.4(b), 3.2 or
3.3 (as the case may be), the Subordination Agent will distribute promptly
upon receipt thereof (i) any indemnity payment received by it from the Owner
Participant, the Owner Trustee or Northwest in respect of any Trustee, any
Primary Liquidity Provider, the Policy Provider, any Paying Agent, any
Depositary or any Escrow Agent (collectively, the "Payees") and (ii) any
compensation (including, without limitation, any fees payable to any Liquidity
Provider under the Fee Letters or to the Policy Provider under the Policy
Letter) received by it from the Owner Participant, the Owner Trustee or
Northwest under any Operative Agreement in respect of any Payee, directly to
the Payee entitled thereto.
Section 2.5. Designated Representatives. (a) With the delivery of
this Agreement, the Subordination Agent shall furnish to each Liquidity
Provider, the Policy Provider and each Trustee, and from time to time
thereafter may furnish to each Liquidity Provider, the Policy Provider and
each Trustee, at the Subordination Agent's discretion, or upon any Liquidity
Provider's, the Policy Provider's or Trustee's request (which request shall
not be made more than one time in any 12-month period), a certificate (a
"Subordination Agent Incumbency Certificate") of a Responsible Officer of the
Subordination Agent certifying as to the
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incumbency and specimen signatures of the officers of the Subordination Agent
and the attorney-in-fact and agents of the Subordination Agent (the
"Subordination Agent Representatives") authorized to give Written Notices on
behalf of the Subordination Agent hereunder. Until each Liquidity Provider,
Policy Provider and Trustee receives a subsequent Subordination Agent
Incumbency Certificate, it shall be entitled to rely on the last Subordination
Agent Incumbency Certificate delivered to it hereunder.
(b) With the delivery of this Agreement, each Trustee shall furnish
to the Subordination Agent, and from time to time thereafter may furnish to
the Subordination Agent, at such Trustee's discretion, or upon the
Subordination Agent's request (which request shall not be made more than one
time in any 12-month period), a certificate (a "Trustee Incumbency
Certificate") of a Responsible Officer of such Trustee certifying as to the
incumbency and specimen signatures of the officers of such Trustee and the
attorney-in-fact and agents of such Trustee (the "Trustee Representatives")
authorized to give Written Notices on behalf of such Trustee hereunder. Until
the Subordination Agent receives a subsequent Trustee Incumbency Certificate,
it shall be entitled to rely on the last Trustee Incumbency Certificate
delivered to it hereunder.
(c) With the delivery of this Agreement, each Liquidity Provider
shall furnish to the Subordination Agent, and from time to time thereafter may
furnish to the Subordination Agent, at such Liquidity Provider's discretion,
or upon the Subordination Agent's request (which request shall not be made
more than one time in any 12-month period), a certificate (each a "LP
Incumbency Certificate") of any authorized signatory of such Liquidity
Provider certifying as to the incumbency and specimen signatures of any
officer, attorney-in-fact, agent or other designated representative of such
Liquidity Provider (in each case, the "LP Representatives" and, together with
the Trustee Representatives, the "Designated Representatives") authorized to
give Written Notices on behalf of such Liquidity Provider hereunder. Until the
Subordination Agent receives a subsequent LP Incumbency Certificate, it shall
be entitled to rely on the last LP Incumbency Certificate delivered to it
hereunder.
(d) With the delivery of this Agreement, each Policy Provider shall
furnish to the Subordination Agent, and from time to time thereafter may
furnish to the Subordination Agent, at such Policy Provider's discretion, or
upon the Subordination Agent's request (which request shall not be made more
than one time in any 12-month period), a certificate (each a "Policy Provider
Incumbency Certificate") of any authorized signatory of such the Policy
Provider certifying as to the incumbency and specimen signatures of any
officer, attorney-in-fact, agent or other designated representative of such
Policy Provider (in each case, the "Policy Provider Representatives" and
together with the Trustee Representatives, the "Designated Representatives")
authorized to give Written Notices on behalf of such Policy Provider
hereunder. Until the Subordination Agent receives a subsequent Policy Provider
Incumbency Certificate, it shall be entitled to rely on the last Policy
Provider Incumbency Certificate delivered to it hereunder.
Section 2.6. Controlling Party. (a) The Trustees, the Liquidity
Providers and the Policy Provider hereby agree that, with respect to any
Indenture at any given time, the Loan Trustee thereunder will be directed (i)
in taking, or refraining from taking, any action with respect to such
Indenture or the Equipment Notes issued thereunder, so long as no Indenture
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Default has occurred and is continuing thereunder, by the holders of at least
a majority of the outstanding principal amount of such Equipment Notes
(provided that, for so long as the Subordination Agent is the registered
holder of the Equipment Notes, the Subordination Agent shall act with respect
to this clause (i) in accordance with the directions of the Trustees of Trusts
for which the related Trust Properties include, in the aggregate, such a
majority of outstanding principal amount of Equipment Notes, except so long as
the Final Distributions on the Class G-1 and Class G-2 Certificates have not
been made or any Policy Provider Obligations remain outstanding and no Policy
Provider Default shall have occurred and be continuing, the Subordination
Agent shall request directions from the Policy Provider rather than the Class
G-1 Trustee with respect to the Series G-1 Equipment Notes or the Class G-2
Trustee with respect to the Series G-2 Equipment Notes), and (ii) after the
occurrence and during the continuance of an Indenture Default thereunder
(which, in the case of an Indenture pertaining to a Leased Aircraft, has not
been cured by the applicable Owner Trustee or the applicable Owner
Participant, if applicable, pursuant to Section 4.03 of such Indenture), in
taking, or refraining from taking, any action with respect to such Indenture
or such Equipment Notes, including exercising remedies thereunder (including
accelerating the Equipment Notes issued thereunder or foreclosing the Lien on
the Aircraft securing such Equipment Notes), by the Subordination Agent as
directed by the Controlling Party.
(b) Subject to subparagraph (c) below, the "Controlling Party" with
respect to any Indenture shall be: (x)(i) the Policy Provider until payment of
Final Distributions to the holders of Class G-1 and Class G-2 Certificates and
no obligations owing to the Policy Provider hereunder remain outstanding, or
(ii) if a Policy Provider Default has occurred and is continuing, (A) the
Class G-1 or Class G-2 Trustee, whichever represents the Class with the larger
Pool Balance of Certificates outstanding at the time that the Indenture
Default occurs, and (B) upon payment of Final Distributions to the holders of
such larger Class, the other of the Class G-1 Trustee or Class G-2 Trustee;
(y) upon payment of Final Distributions to the holders of Class G-1
Certificates and Class G-2 Certificates and, unless a Policy Provider Default
has occurred and is continuing, of any obligations owing to the Policy
Provider hereunder, the Class C-1 or Class C-2 Trustee, whichever represents
the Class with the larger Pool Balance of Certificates outstanding at the time
that the Indenture Default occurs, until payment of Final Distributions to the
holders of such larger Class, and thereafter the other of the Class C-1
Trustee or Class C-2 Trustee and (z) upon payment of Final Distributions to
the holders of the Class G-1, Class G-2, Class C-1 and Class C-2 Certificates,
and unless a Policy Provider Default has occurred and is continuing, of any
obligations owing to the Policy Provider hereunder, the Class D Trustee, if
there be one. For purposes of giving effect to the foregoing, the Trustees
(other than the Controlling Party) irrevocably agree (and the
Certificateholders (other than the Certificateholders represented by the
Controlling Party) shall be deemed to agree by virtue of their purchase of
Certificates) that the Subordination Agent, as record holder of the Equipment
Notes, shall exercise its voting rights in respect of the Equipment Notes as
directed by the Controlling Party and any vote so exercised shall be binding
upon the Trustees and all Certificateholders.
The Subordination Agent shall give Written Notice to all of the
other parties to this Agreement promptly upon a change in the identity of the
Controlling Party. Each of the parties hereto agrees that it shall not
exercise any of the rights of the Controlling Party at such time as it is not
the Controlling Party hereunder; provided, however, that nothing herein
contained shall prevent or prohibit any Non-Controlling Party from exercising
such rights as
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shall be specifically granted to such Non-Controlling Party hereunder and
under the other Operative Agreements.
(c) Notwithstanding the foregoing, at any time after 18 months from
the earliest to occur of (i) the date on which the entire Maximum Available
Commitment under any Primary Liquidity Facility shall have been drawn (for any
reason other than a Downgrade Drawing or a Non-Extension Drawing) and any
amount remains unreimbursed, (ii) the date on which the entire amount of any
Downgrade Drawing or Non-Extension Drawing has been withdrawn from a Primary
Cash Collateral Account to pay interest on the relevant Class of Certificates
or, if earlier, the date on which the entire amount of any Downgrade Drawing
or Non-Extension Drawing is converted into a Final Drawing, and which in each
case remains unreimbursed and (iii) the date on which all Equipment Notes
shall have been Accelerated (provided that with respect to the period prior to
the Delivery Period Expiry Date, such Equipment Notes have an aggregate
outstanding principal balance in excess of $300,000,000), the Primary
Liquidity Provider with the highest outstanding amount of unreimbursed
Liquidity Obligations (so long as such Primary Liquidity Provider has not
defaulted in its obligation to make any advance under its Primary Liquidity
Facility, the "Eligible Provider") shall have the right to elect, by Written
Notice to the Subordination Agent, the Policy Provider and each of the
Trustees, to become the Controlling Party hereunder with respect to any
Indenture at any time from and including the last day of such 18-month period,
provided, further, that if, within 15 Business Days after its receipt of any
such Written Notice from such Primary Liquidity Provider (which notice may be
given on or after the fifteenth Business Day prior to the end of such 18-month
period) the Policy Provider pays to each Primary Liquidity Provider all
outstanding drawings owing to each Primary Liquidity Provider in respect of
its Primary Liquidity Facility, and interest accrued thereon to such date, the
Policy Provider shall remain the Controlling Party so long as no Policy
Provider Default has occurred and is continuing and the Policy Provider
thereafter pays to the Primary Liquidity Providers with respect to the Class
G-1 and the Class G-2 Certificates all subsequent Drawings, together with
accrued interest thereon, under the related Primary Liquidity Facilities as
and when such obligations become due (which payments shall be applied by the
Primary Liquidity Provider as repayments of such Drawings and accrued interest
thereon), provided, further, however, that upon any such Policy Provider
Default the Eligible Provider, if it so elects and if Liquidity Obligations
owing to it remain outstanding, or if it does not so elect or if no Liquidity
Obligations owing to it remain outstanding, the Person determined to be the
Controlling Party in accordance with Section 2.6(b) shall become the
Controlling Party.
(d) The exercise of remedies by the Controlling Party under this
Agreement shall be expressly limited by Section 4.1(a)(ii) hereof.
(e) The Controlling Party shall not be entitled to require or
obligate any Non-Controlling Party to provide funds necessary to exercise any
right or remedy hereunder.
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ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF
AMOUNTS RECEIVED
Section 3.1. Written Notice of Distribution. (a) No later than 3:00
P.M. (New York City time) on the Business Day immediately preceding each
Regular Distribution Date (or Special Distribution Date for purposes of
Section 2.4(b) hereof, as the case may be), each of the following Persons
shall deliver to the Subordination Agent a Written Notice setting forth the
following information as at the close of business on such Business Day:
(i) With respect to the Class G-1 and Class G-2 Certificates, the
Class G-1 and Class G-2 Trustees, respectively, shall separately set
forth the amounts to be paid in accordance with clause "sixth" of Section
2.4(b) or Section 3.2, as the case may be, hereof;
(ii) With respect to the Class C-1 and Class C-2 Certificates, the
Class C-1 and Class C-2 Trustees, respectively, shall separately set
forth the amounts to be paid in accordance with clause "eighth" of
Section 2.4(b) or Section 3.2, as the case may be, hereof;
(iii) With respect to the Class D Certificates, the Class D Trustee
shall separately set forth the amounts to be paid in accordance with
clause "tenth" of Section 2.4(b) or Section 3.2, as the case may be,
hereof;
(iv) With respect to each Primary Liquidity Facility, the Primary
Liquidity Provider thereunder shall separately set forth the amounts to
be paid in accordance with clauses "first", "second", "third" and
"fourth" of Section 2.4(b) or Section 3.2, as the case may be, hereof;
(v) The Policy Provider shall set forth the amounts to be paid to it
in accordance with clauses "first", "second" and "third", of Section
2.4(b) or Section 3.2, as the case may be, hereof;
(vi) Each Trustee shall set forth the amounts to be paid in
accordance with clause "eleventh" of Section 3.2 hereof.
The notices required under this Section 3.1(a) shall be provided to the
Subordination Agent by the parties referenced therein or by any one of them
pursuant to an agreement between the parties referred to therein, and may
state that, unless there has been a prepayment of the Certificates, such
notice is to remain in effect until any substitute notice or amendment shall
be given to the Subordination Agent by the party providing such notice.
(b) Following the occurrence of a Triggering Event, the
Subordination Agent shall request the following information from the following
Persons, and each of the following Persons shall, upon the request of the
Subordination Agent, deliver a Written Notice to the Subordination Agent
setting forth for such Person the following information:
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(i) With respect to the Class G-1 and G-2 Certificates, the Class
G-1 and Class G-2 Trustees, respectively, shall separately set forth the
amounts to be paid in accordance with clauses "first" (relating to
reimbursement of payments made by such Trustee or the Class G-1 and Class
G-2 Certificateholders), and "seventh" and "eighth" of Section 3.3
hereof;
(ii) With respect to the Class C-1 and Class C-2 Certificates, the
Class C-1 and Class C-2 Trustees, respectively, shall separately set
forth the amounts to be paid in accordance with clauses "first" (relating
to reimbursement of payments made by such Trustee or the Class C-1
Certificateholders or Class C-2 Certificateholders), "seventh" and
"tenth" of Section 3.3 hereof;
(iii) With respect to the Class D Certificates, the Class D Trustee
shall separately set forth the amounts to be paid in accordance with
clauses "first" (relating to reimbursement of payments made by such
Trustee or the Class D Certificateholders), "seventh" and "twelfth" of
Section 3.3 hereof;
(iv) With respect to each Primary Liquidity Facility, the Primary
Liquidity Provider thereunder shall separately set forth the amounts to
be paid in accordance with clauses "first", "second," "third", "fourth"
and "fifth" of Section 3.3 hereof;
(v) The Policy Provider shall separately set forth amounts to be
paid to it in accordance with clauses "first", "second", "third",
"fourth", "ninth" and "eleventh" of Section 3.3 hereof; and
(vi) Each Trustee shall set forth the amounts to be paid in
accordance with clause "seventh" of Section 3.3 hereof.
(c) At such time as a Trustee, a Primary Liquidity Provider or the
Policy Provider shall have received all amounts owing to it (and, in the case
of a Trustee, the Certificateholders for which it is acting) pursuant to
Sections 2.4, 3.2 or 3.3 hereof, as applicable, and, in the case of a Primary
Liquidity Provider or the Policy Provider, its commitment under the related
Primary Liquidity Facility or the Policy shall have terminated or expired,
such Person shall, by a Written Notice, so inform the Subordination Agent and
each other party to this Agreement.
(d) As provided in Section 6.5 hereof, the Subordination Agent shall
be fully protected in relying on any of the information set forth in a Written
Notice provided by any Trustee, any Primary Liquidity Provider or the Policy
Provider pursuant to paragraphs (a) through (c) above and shall have no
independent obligation to verify, calculate or recalculate any amount set
forth in any Written Notice delivered in accordance with such paragraphs.
(e) Any Written Notice delivered by a Trustee, a Primary Liquidity
Provider or the Policy Provider, as applicable, pursuant to Sections 3.1(a),
3.1(b) or 3.1(c) hereof, if made prior to 10:00 A.M. (New York City time) on
any Business Day shall be effective on the date delivered (or, if delivered
later on a Business Day or if delivered on a day which is not a Business Day,
shall be effective as of the next Business Day). Subject to the terms of this
Agreement, the Subordination Agent shall as promptly as practicable comply
with any such instructions; provided, however, that any transfer of funds
pursuant to any instruction received
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after 10:00 A.M. (New York City time) on any Business Day may be made on the
next succeeding Business Day.
(f) In the event the Subordination Agent shall not receive from any
Person any information set forth in paragraphs (a) or (b) above which is
required to enable the Subordination Agent to make a distribution to such
Person pursuant to Sections 2.4, 3.2 or 3.3 hereof, the Subordination Agent
shall request such information in writing and, failing to receive any such
information, the Subordination Agent shall, after written notice to such
person, not make such distribution(s) to such Person. In such event, the
Subordination Agent shall make distributions pursuant to clauses "first"
through "twelfth" of Section 2.4, clauses "first" through "thirteenth" of
Section 3.2 and clauses "first" through "fifteenth" of Section 3.3 to the
extent it shall have sufficient information to enable it to make such
distributions, and shall continue to hold any funds remaining, after making
such distributions, until the Subordination Agent shall receive all necessary
information to enable it to distribute any funds so withheld.
(g) On such dates (but not more frequently than monthly) as any
Primary Liquidity Provider, the Policy Provider or any Trustee shall request,
but in any event automatically at the end of each calendar quarter, the
Subordination Agent shall send to such party a written statement reflecting
all amounts on deposit with the Subordination Agent pursuant to Section 3.1(f)
hereof.
Section 3.2. Distribution of Amounts on Deposit in the Collection
Account. Except as otherwise provided in Sections 2.4, 3.1(f), 3.3, 3.4 and
3.6(b), amounts on deposit in the Collection Account (or, in the case of any
amount described in Section 2.4(c), on deposit in the Special Payments
Account) shall be promptly distributed on each Regular Distribution Date (or,
in the case of any amount described in Section 2.4(c), on the Special
Distribution Date therefor) in the following order of priority and in
accordance with the information provided to the Subordination Agent pursuant
to Section 3.1(a) hereof:
first, such amount as shall be required to pay (i) all accrued and
unpaid Liquidity Expenses owed to each Primary Liquidity Provider and
(ii) all accrued and unpaid Policy Expenses owed to the Policy Provider
shall be distributed to the Primary Liquidity Providers and the Policy
Provider pro rata on the basis of the amount of Liquidity Expenses owed
to the Primary Liquidity Provider and Policy Expenses owed to the Policy
Provider;
second, such amount as shall be required to pay in full (i) the
aggregate amount of interest accrued on all Liquidity Obligations (at the
rate provided in the applicable Primary Liquidity Facility determined
after giving effect to payments made by the Policy Provider to each
Primary Liquidity Provider, if any, in respect of interest on drawings
under the Primary Liquidity Facilities), (ii) if either the Class G-1 or
Class G-2 Primary Liquidity Provider has defaulted in its obligation to
make a payment on any Interest Drawing in respect of the Class G-1 or
Class G-2 Certificates, as the case may be, the aggregate amount of
interest accrued on the portion of any Policy Drawing made to cover the
shortfall attributable to such default by such Primary Liquidity Provider
at the rate provided in the "except" clause (ii) of the definition of
"Policy Provider Obligations" and (iii) if the Policy Provider has
elected to pay to each Primary Liquidity Provider all
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outstanding drawings and interest owing to such Primary Liquidity
Provider under its Primary Liquidity Facility pursuant to subsection
2.6(c) hereof, the amount of such payment made to the Primary Liquidity
Providers attributable to such interest accrued on such drawings, shall
be distributed to the Primary Liquidity Providers and the Policy Provider
pro rata (without duplication) on the basis of the amounts owing to each;
third, such amount as shall be required (A) if any Primary Cash
Collateral Account relating to a Primary Liquidity Facility had been
previously funded as provided in Section 3.6(f), to fund such Primary
Cash Collateral Account up to its Required Amount shall be deposited in
such Account, (B) if any Primary Liquidity Facility shall become a
Downgraded Facility or a Non-Extended Facility at a time when
unreimbursed Interest Drawings under such Primary Liquidity Facility have
reduced the Maximum Available Commitment thereunder to zero, to deposit
into the related Primary Cash Collateral Account an amount equal to such
Primary Cash Collateral Account's Required Amount shall be deposited in
such Cash Collateral Account, (C) if, with respect to any particular
Primary Liquidity Facility, neither subclause (A) nor subclause (B) of
this clause "third" is applicable, to pay or reimburse the Primary
Liquidity Provider in respect of such Primary Liquidity Facility in an
amount equal to the amount of all Liquidity Obligations then due under
such Primary Liquidity Facility (other than amounts payable pursuant to
clause "first" or "second" of this Section 3.2 and as determined after
giving effect to payments made by the Policy Provider to such Primary
Liquidity Provider in respect of principal of drawings under its Primary
Liquidity Facility), pro rata with any amount distributable pursuant to
subclause (D) of this clause "third" on the basis of the amount of all
such unreimbursed Interest Drawing and unreimbursed Policy Provider
Obligations payable to the Policy Provider under subclause (D) of this
clause "third" and (D) if the Policy Provider has elected to pay to the
Primary Liquidity Provider all outstanding drawings and interest owing to
the Primary Liquidity Provider under the applicable Primary Liquidity
Facility pursuant to subsection 2.6(c) hereof, to reimburse the Policy
Provider for the principal amount of such payment made to the Primary
Liquidity Provider, but only after giving effect to the application of
amounts, if any, under subclause (A) or (B) of this clause "third" and if
any amount shall be distributable under subclause (C) of this clause
"third", pro rata (without duplication) with any amount distributable
pursuant to such subclause (C), on the basis of the amounts of all such
unreimbursed Interest Drawings and the amount of such unreimbursed Policy
Provider Obligations payable to the Policy Provider under this clause
"third";
fourth, if, with respect to any particular Primary Liquidity
Facility, any amounts are to be distributed pursuant to either subclause
(A) or (B) of clause "third" above, then the Primary Liquidity Provider
with respect to such Primary Liquidity Facility shall be paid the excess
of (x) the aggregate outstanding amount of unreimbursed Advances (whether
or not then due) under such Primary Liquidity Facility over (y) the
Required Amount for the relevant Class, pro rata on the basis of such
amounts in respect of each Primary Liquidity Provider;
fifth, if any Above-Cap Reserve Account had been previously funded
as provided in Section 3.6(f), such amount as shall be required to fund
such Above-Cap Reserve Account up to an amount equal to the applicable
Termination Amount (as recalculated on
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such Distribution Date) less any amount then on deposit in the related
Above-Cap Account shall be deposited in such Above-Cap Reserve Account;
sixth, such amount as shall be required to pay in full Expected
Distributions to the holders of Class G-1 and Class G-2 Certificates on
such Distribution Date shall be distributed to the Class G-1 and Class
G-2 Trustees, pro rata on the basis of such amounts in respect of each
such Class of Certificates;
seventh, such amount as shall be required to pay the Policy Provider
all Policy Provider Obligations then due (other than amounts payable
pursuant to the preceding clauses of this Section 3.2 and other than
Excess Reimbursement Obligations) and any amounts due under the Policy
Fee Letter;
eighth, such amount as shall be required to pay in full Expected
Distributions to the holders of the Class C-1 and Class C-2 Certificates
on such Distribution Date shall be distributed to the Class C-1 and Class
C-2 Trustees, pro rata on the basis of such amounts in respect of each
such Class of Certificates;
ninth, such amount as shall be required to pay in full any Excess
Reimbursement Obligations shall be distributed to the Policy Provider;
tenth, such amount as shall be required to pay in full Expected
Distributions to the holders of the Class D Certificates on such
Distribution Date shall be distributed to the Class D Trustee, provided,
however, that if all of the Class D Certificates are owned by one or more
Persons that are not Affiliates of Northwest and the sale or sales of
such Certificates to such Persons occurred prior to the occurrence of an
Indenture Default under any Indenture, the Expected Distributions on the
Class D Certificates shall be distributed immediately prior to the
payment in clause "ninth" above;
eleventh, such amount as shall be required to pay in full the
aggregate unpaid amount of fees and expenses payable as of such
Distribution Date to the Subordination Agent and each Trustee pursuant to
the terms of this Agreement and the Trust Agreements, as the case may be,
shall be distributed to the Subordination Agent and such Trustee;
twelfth, such amount as shall be required, if any Above-Cap Reserve
Account had been previously funded as provided in Section 3.6(f), to fund
such Above-Cap Reserve Account up to an amount equal to the applicable
Termination Amount (as recalculated on such Distribution Date) shall be
deposited in such Above-Cap Reserve Account; and
thirteenth, the balance, if any, of any such payment remaining
thereafter shall be held in the Collection Account for later distribution
in accordance with this Article III (including the priorities set forth
therein).
Section 3.3. Distribution of Amounts on Deposit Following a
Triggering Event. (a) Except as otherwise provided in Sections 3.1(f) and
3.6(b) hereof, upon the occurrence of a Triggering Event and at all times
thereafter, all funds in the Collection Account or the Special
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Payments Account shall be promptly distributed by the Subordination Agent in
the following order of priority:
first, such amount as shall be required to reimburse (i) the
Subordination Agent for any out-of-pocket costs and expenses actually
incurred by it (to the extent not previously reimbursed) in the
protection of, or the realization of the value of, the Equipment Notes or
any Collateral or Trust Indenture Estate (as defined in the relevant
Indenture), shall be applied by the Subordination Agent in reimbursement
of such costs and expenses, (ii) each Trustee for any amounts of the
nature described in clause (i) above actually incurred by it under the
applicable Trust Agreement (to the extent not previously reimbursed),
shall be distributed to such Trustee, (iii) the Policy Provider for any
amounts of the nature described in clause (i) above actually incurred by
it (to the extent not previously reimbursed), shall be distributed to the
Policy Provider and (iv) any Primary Liquidity Provider, Policy Provider
or Certificateholder for payments, if any, made by it to the
Subordination Agent or any Trustee in respect of amounts described in
clause (i) above, shall be distributed to such Primary Liquidity
Provider, Policy Provider or to the applicable Trustee for the account of
such Certificateholder, in each such case, pro rata on the basis of all
amounts described in clauses (i) through (iv) above;
second, (i) such amount as shall be required to pay all accrued and
unpaid Liquidity Expenses and (ii) all accrued and unpaid Policy Expenses
shall be distributed to each Primary Liquidity Provider and the Policy
Provider pro rata on the basis of the amount of Primary Liquidity
Expenses and Policy Expenses owed to each Primary Liquidity Provider and
the Policy Provider;
third, such amount as shall be required to pay (i) accrued and
unpaid interest on the Liquidity Obligations (at the rate provided in the
applicable Primary Liquidity Facility determined after giving effect to
payments made by the Policy Provider to each Primary Liquidity Provider,
if any, in respect of interest on drawings under the Primary Liquidity
Facilities) as provided in the Primary Liquidity Facilities shall be
distributed to each Primary Liquidity Provider pro rata on the basis of
the amount of such accrued and unpaid interest owed to each Primary
Liquidity Provider, (ii) if either the Class G-1 or Class G-2 Primary
Liquidity Provider has defaulted in its obligation to make a payment on
any Interest Drawing in respect of the Class G-1 or Class G-2
Certificates, as the case may be, the aggregate amount of interest
accrued on the portion of any Policy Drawing made to cover the shortfall
attributable to such default by such Primary Liquidity Provider at the
rate provided in the "except" clause (ii) of the definition of "Policy
Provider Obligations" and (iii) if the Policy Provider has elected to pay
to each Primary Liquidity Provider all outstanding drawings and interest
owing to such Primary Liquidity Provider under its Primary Liquidity
Facility pursuant to subsection 2.6(c) hereof, the amount of such payment
made to the Primary Liquidity Providers attributable to such interest
accrued on such drawings, shall be distributed to the Primary Liquidity
Providers and the Policy Provider pro rata (without duplication) on the
basis of the amounts owing to each;
fourth, such amount as shall be required (A) if any Primary Cash
Collateral Account relating to a Primary Liquidity Facility had been
previously funded as provided
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in Section 3.6(f), unless (i) a Performing Note Deficiency exists and a
Liquidity Event of Default shall have occurred and be continuing with
respect to the relevant Primary Liquidity Facility or (ii) a Final
Drawing shall have occurred with respect to such Primary Liquidity
Facility, to fund such Primary Cash Collateral Account up to its Required
Amount (less the amount of any repayments of Interest Drawings under such
Primary Liquidity Facility while subclause (A)(i) above is applicable)
shall be deposited in such Primary Cash Collateral Account, (B) if any
Primary Liquidity Facility shall become a Downgraded Facility or a
Non-Extended Facility at a time when unreimbursed Interest Drawings under
such Primary Liquidity Facility have reduced the Maximum Available
Commitment thereunder to zero, unless (i) a Performing Note Deficiency
exists and a Liquidity Event of Default shall have occurred and be
continuing with respect to the relevant Primary Liquidity Facility or
(ii) a Final Drawing shall have occurred with respect to such Primary
Liquidity Facility, to deposit into the related Primary Cash Collateral
Account an amount equal to such Primary Cash Collateral Account's
Required Amount (less the amount of any repayments of Interest Drawings
under such Primary Liquidity Facility while subclause (B)(i) above is
applicable) shall be deposited in such Cash Collateral Account, (C) if,
with respect to any particular Primary Liquidity Facility, neither
subclause (A) nor subclause (B) of this clause "fourth" are applicable,
to pay in full the outstanding amount of all Liquidity Obligations then
due under such Primary Liquidity Facility (other than amounts payable
pursuant to clause "second" or "third" of this Section 3.3 and as
determined after giving effect to payments made by the Policy Provider to
the Primary Liquidity Provider of such Primary Liquidity Facility in
respect of principal of drawings under such Primary Liquidity Facility),
pro rata with any amount distributable pursuant to subclause (D) of this
clause "fourth" on the basis of the amount of all such unreimbursed
Interest Drawing and unreimbursed Policy Provider Obligations payable to
the Policy Provider under subclause (D) of this clause "fourth" and (D)
if the Policy Provider has elected to pay to each Primary Liquidity
Provider all outstanding drawings and interest owing to such Primary
Liquidity Provider under its Primary Liquidity Facility pursuant to
subsection 2.6(c) hereof, to reimburse the Policy Provider for the
principal amount of such payment made to the Primary Liquidity Providers,
but only after giving effect to the application of amounts, if any, under
subclause (A) or (B) of this clause "fourth" and if any amount shall be
distributable under subclause (C) of this clause "fourth", pro rata with
any amount distributable pursuant to such subclause (C) on the basis of
the amounts of all such unreimbursed Liquidity Obligations and the amount
of such unreimbursed Policy Provider Obligations payable to the Policy
Provider under this clause "fourth";
fifth, if, with respect to any particular Primary Liquidity
Facility, any amounts are to be distributed pursuant to either subclause
(A) or (B) of clause "fourth" above, then the Primary Liquidity Provider
with respect to such Primary Liquidity Facility shall be paid the excess
of (x) the aggregate outstanding amount of unreimbursed Advances (whether
or not then due) under such Primary Liquidity Facility over (y) the
Required Amount for the relevant Class (less the amount of any repayments
of Interest Drawings under such Primary Liquidity Facility while
subclause (A)(i) or (B)(i), as the case may be, of clause "fourth" above
is applicable), pro rata on the basis of such amounts in respect of each
Primary Liquidity Provider;
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sixth, such amount as shall be required, if any Above-Cap Account
had been previously funded as provided in Section 3.6(f), unless (i) a
Performing Note Deficiency exists and a Liquidity Event of Default shall
have occurred and be continuing with respect to the relevant Primary
Liquidity Facility or (ii) a Final Drawing shall have occurred with
respect to such Primary Liquidity Facility, to fund such Above-Cap
Reserve Account up to an amount equal to the applicable Termination
Amount (as recalculated on such Distribution Date) less any amount then
on deposit in the related Above-Cap Account shall be deposited in such
Above-Cap Reserve Account;
seventh, such amount as shall be required to reimburse or pay (i)
the Subordination Agent for any Tax (other than Taxes imposed on
compensation paid hereunder), expense, fee, charge or other loss incurred
by or any other amount payable to the Subordination Agent in connection
with the transactions contemplated hereby (to the extent not previously
reimbursed), shall be applied by the Subordination Agent in reimbursement
of such amount, (ii) each Trustee for any Tax (other than Taxes imposed
on compensation paid under the applicable Trust Agreement), expense, fee,
charge, loss or any other amount payable to such Trustee under the
applicable Trust Agreements (to the extent not previously reimbursed),
shall be distributed to such Trustee and (iii) each Certificateholder for
payments, if any, made by it pursuant to Section 5.2 hereof in respect of
amounts described in clause (i) above, shall be distributed to the
applicable Trustee for the account of such Certificateholder, in each
such case, pro rata on the basis of all amounts described in clauses (i)
through (iii) above;
eighth, such amount as shall be required to pay in full Adjusted
Expected Distributions to the holders of Class G-1 and Class G-2
Certificates on such Distribution Date shall be distributed to the Class
G-1 and Class G-2 Trustees; provided that if available funds are
insufficient to pay an Adjusted Expected Distribution to each such Class
in full, available funds will be distributed to each of the Class G-1
Trustee and Class G-2 Trustee in the same proportion as such Trustee's
proportionate share of the aggregate amount of such Adjusted Expected
Distributions;
ninth, such amount remaining as shall be required to pay the Policy
Provider Obligations then due to the Policy Provider under the Policy
Provider Agreement (other than amounts payable pursuant to clauses
"first" through "fourth" above and other than any Excess Reimbursement
Obligations) and any amounts due under the Policy Fee Letter shall be
paid to the Policy Provider;
tenth, such amount as shall be required to pay in full Adjusted
Expected Distributions to the holders of Class C-1 and Class C-2
Certificates on such Distribution Date shall be distributed to the Class
C-1 and Class C-2 Trustees; provided that if available funds are
insufficient to pay an Adjusted Expected Distribution to each such Class
in full, available funds will be distributed to each of the Class C-1
Trustee and Class C-2 Trustee in the same proportion as such Trustee's
proportionate share of the aggregate amount of such Adjusted Expected
Distributions;
eleventh, such amount remaining as shall be required to pay any
Excess Reimbursement Obligations to the Policy Provider;
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twelfth, such amount remaining as shall be required to pay in full
Adjusted Expected Distributions on the Class D Certificates shall be
distributed to the Class D Trustee, provided, however, that if all of the
Class D Certificates are owned by one or more Persons that are not
Affiliates of Northwest and the sale or sales of such Certificates to
such Persons occurred prior to the occurrence of an Indenture Default
under any Indenture, the Expected Distributions on the Class D
Certificates shall be distributed immediately prior to the payment in
clause "eleventh" above;
thirteenth, if any Above-Cap Reserve Account had been previously
funded as provided in Section 3.6(f), unless (i) a Performing Note
Deficiency exists and a Liquidity Event of Default shall have occurred
and be continuing with respect to the relevant Primary Liquidity Facility
or (ii) a Final Drawing shall have occurred with respect to such Primary
Liquidity Facility, to fund such Above-Cap Reserve Account up to an
amount equal to the applicable Termination Amount (as recalculated on
such Distribution Date) shall be deposited in such Above-Cap Reserve
Account;
fourteenth, such amount remaining shall be retained in the
Collection Account until the immediately succeeding Distribution Date or,
if all Classes of Certificates shall have been paid in full, shall be
distributed to the Owner Trustee to the extent that the amount received
from the Loan Trustees and deposited in the Collection Account exceed the
amounts described in clauses "first" through "thirteenth" above; and
fifteenth, amount remaining shall be distributed to the
Certificateholders of the related Trust.
Section 3.4. Other Payments. (a) Any payments received by the
Subordination Agent for which no provision as to the application thereof is
made in this Agreement shall be distributed by the Subordination Agent in the
order of priority specified in Section 3.3 hereof.
(b) On any Interest Payment Date under each Primary Liquidity
Facility which is not a Distribution Date, the Subordination Agent shall pay
to the Primary Liquidity Provider under such Primary Liquidity Facility from,
and to the extent of, amounts on deposit in the Collection Account, an amount
equal to the amount of interest then due and payable to such Primary Liquidity
Provider under such Primary Liquidity Facility.
(c) Except as otherwise provided in Section 3.3 hereof, if the
Subordination Agent receives any Scheduled Payment after the Scheduled Payment
Date relating thereto, but prior to such payment becoming an Overdue Scheduled
Payment, then the Subordination Agent shall deposit such Scheduled Payment in
the Collection Account and promptly distribute such Scheduled Payment in
accordance with the priority of distributions set forth in Section 3.2 hereof;
provided that, for the purposes of this Section 3.4(c) only, each reference in
clause "eleventh" of Section 3.2 to "Distribution Date" shall be deemed to
mean the actual date of payment of such Scheduled Payment and each reference
in clause "sixth", "eighth" or "tenth" of Section 3.2 to "Distribution Date"
shall be deemed to refer to such Scheduled Payment Date.
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Section 3.5. Payments to the Trustees, the Primary Liquidity
Providers and the Policy Provider. Any amounts distributed hereunder to any
Primary Liquidity Provider or the Policy Provider shall be paid to such
Primary Liquidity Provider or the Policy Provider by wire transfer of funds to
the address such Primary Liquidity Provider or the Policy Provider shall
provide to the Subordination Agent. The Subordination Agent shall provide a
Written Notice of any such transfer to the applicable Primary Liquidity
Provider or the Policy Provider, as the case may be, at the time of such
transfer. Any amounts distributed hereunder by the Subordination Agent to any
Trustee which shall not be the same institution as the Subordination Agent
shall be paid to such Trustee by wire transfer of funds to the address such
Trustee shall provide to the Subordination Agent.
Section 3.6. Liquidity Facilities. (a) Interest Drawings and
Above-Cap Payments. If on any Distribution Date, after giving effect to the
subordination provisions of this Agreement and any Election Interest Payment
made by the Policy Provider pursuant to subclause (ii) of Section 3.7(c), the
Subordination Agent shall not have sufficient funds for the payment of any
amounts due and owing in respect of accrued interest on the Class G-1
Certificates, Class G-2 Certificates, Class C-1 Certificates or the Class C-2
Certificates (at the Stated Interest Rate for such Class of Certificates for
the applicable Interest Period), then, prior to 12:00 Noon (New York City
time) on such Distribution Date, (i) the Subordination Agent shall request a
drawing (each such drawing, an "Interest Drawing") under the Primary Liquidity
Facility with respect to such Class of Certificates (and concurrently with the
making of such request, the Subordination Agent shall give notice to the
Policy Provider of such insufficiency of funds) in an amount equal to the
lesser of (x) an amount sufficient to pay the amount of such accrued interest
(calculated at the applicable Stated Interest Rate for such Class of
Certificates for the applicable Interest Period) and (y) the Maximum Available
Commitment under such Liquidity Facility, and shall pay such amount to the
Trustee with respect to such Class of Certificates in payment of such accrued
interest; and (ii) if LIBOR for the Interest Period ending on such
Distribution Date (or, if such Distribution Date is not the last day of an
Interest Period, LIBOR for the Interest Period including such Distribution
Date) exceeds Capped LIBOR, the Subordination Agent shall (if it can make the
certification described in the last sentence of this Section 3.6(a)) request
an interest rate cap payment (each such payment, an "Above-Cap Payment") under
the Above-Cap Liquidity Facility with respect to the Class G-1 Certificates or
the Class C-1 Certificates, as the case may be, for credit to the applicable
Above-Cap Account in an amount equal to the product of (x) the difference
between LIBOR for the Interest Period ending on such Distribution Date (or, if
such Distribution Date is not the last day of an Interest Period, LIBOR for
the Interest Period including such Distribution Date) and Capped LIBOR,
multiplied by (y) the Pool Balance of such Class of Certificates as of such
Distribution Date (and before giving effect to any distribution on such date),
multiplied by (z) the actual number of days elapsed in the Interest Period
ending on such Distribution Date divided by 360, and upon the receipt thereof
the Subordination Agent shall immediately deposit such Above-Cap Payment into
the Above-Cap Account for such Class of Certificates. If the Interest Drawing
on such Distribution Date pursuant to clause (i) above, together with all
other amounts available to the Subordination Agent on such Distribution Date
(after giving effect to the subordination provisions of this Agreement and any
withdrawals from any available Cash Collateral Account related to the relevant
Primary Liquidity Facility), is insufficient to pay accrued interest (at the
Stated Interest Rate for such Class of Certificates for the applicable
Interest Period) payable on such Class of Certificates on such Distribution
Date (such deficiency, the "Deficiency Amount"), the
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Subordination Agent shall, prior to 4:00 p.m. (New York City time) on such
Distribution Date, withdraw (each, an "Above-Cap Withdrawal") from the
Above-Cap Account for such Class of Certificates an amount equal to the lesser
of (x) such Deficiency Amount and (y) the amount on deposit in such Above-Cap
Account (including any amounts deposited, or to be deposited, on such
Distribution Date pursuant to clause (ii) above), and shall pay such amount to
the Trustee with respect to such Class of Certificates in payment of such
accrued interest. In connection with a request for an Above-Cap Payment under
any Above-Cap Liquidity Facility pursuant to clause (ii) above, the
Subordination Agent shall certify to the Above-Cap Liquidity Provider that at
least one of the following statements is true as of such Distribution Date:
(i) the Maximum Available Commitment under the related Primary Liquidity
Facility (prior to giving effect to any Interest Advances to be made on such
Distribution Date) is greater than zero; (ii) the amount on deposit in the
Primary Cash Collateral Account relating to such Primary Liquidity Facility
(prior to giving effect to any withdrawal to be made from such account on such
Distribution Date) is greater than zero; or (iii) the amount on deposit in the
related Above-Cap Account (prior to giving effect to any withdrawal to be made
from such account on such Distribution Date) is greater than zero.
(b) Application of Interest Drawings and Above-Cap Withdrawals.
Notwithstanding anything to the contrary contained in this Agreement, (i) all
payments received by the Subordination Agent in respect of an Interest Drawing
under any Primary Liquidity Facility and all amounts withdrawn by the
Subordination Agent from any Primary Cash Collateral Account and payable in
each case to the related Class of Certificateholders shall be promptly
distributed to the Trustee for such Class and applied to the payment of
interest in respect of which it was drawn, except that if (x) the
Subordination Agent shall receive any amount in respect of an Interest Drawing
under the Class G-1 or Class G-2 Primary Liquidity Facility or a withdrawal
from the Class G-1 or Class G-2 Primary Cash Collateral Account to pay Accrued
Class G-1 Interest or Accrued Class G-2 Interest after such Accrued Class G-1
Interest or Accrued Class G-2 Interest has been fully paid by a Policy Drawing
under the applicable Policy pursuant to Section 3.7(a) hereof, or (y) the
Subordination Agent shall receive any amount in respect of a Policy Drawing
under the applicable Policy pursuant to Section 3.7(a) hereof to fully pay
Accrued Class G-1 Interest or Accrued Class G-2 Interest after such Accrued
Class G-1 Interest or Accrued Class G-2 Interest has been paid (in full or in
part) to the applicable Trustee by an Interest Drawing under the applicable
Primary Liquidity Facility or a withdrawal from the applicable Primary Cash
Collateral Account, the Subordination Agent, in either case, shall pay an
amount equal to the amount of such Interest Drawing directly to the Policy
Provider as reimbursement of such Policy Drawing rather than to the applicable
Certificateholders or Trustee and (ii) all payments received by the
Subordination Agent in respect of an Above-Cap Withdrawal from any Above-Cap
Account, and payable to the related Class of Certificateholders shall be
promptly distributed to the Trustee for such Class of Certificateholders and
applied to the payment of interest in respect of which it was drawn, except
that if the Subordination Agent shall receive any amount in respect of such
Above-Cap Withdrawal to pay Accrued Class G-1 Interest after such Accrued
Class G-1 Interest has been fully paid to the applicable Trustee by a Policy
Drawing under the applicable Policy pursuant to Section 3.7(a) hereof, such
amount received in respect of such Above-Cap Withdrawal shall be paid directly
to the Policy Provider as reimbursement of such Policy Drawing rather than to
the applicable Certificateholders or the applicable Trustee.
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(c) Downgrade Drawings. (i) If at any time a Downgrade Event shall
have occurred with respect to any Primary Liquidity Facility, the Primary
Liquidity Provider under such Primary Liquidity Facility may arrange, or the
Subordination Agent (in consultation with Northwest), may arrange for a
Replacement Primary Liquidity Provider to issue and deliver a Replacement
Primary Liquidity Facility to the Subordination Agent. If such Primary
Liquidity Facility is not replaced with a Replacement Primary Liquidity
Facility within ten (10) days after such Downgrade Event (but no later than
the expiration date of the Primary Liquidity Facility (the "Downgraded
Facility") in respect of which the Downgrade Event occurs), the Subordination
Agent shall, on the 10th day (or if such 10th day is not a Business Day, on
the next succeeding Business Day) (or, if earlier, the expiration date of such
Downgraded Facility), request a drawing in accordance with and to the extent
permitted by such Downgraded Facility (such drawing, a "Downgrade Drawing") of
the then Maximum Available Commitment thereunder. Amounts drawn pursuant to a
Downgrade Drawing shall be maintained and invested as provided in Section
3.6(f) hereof. The applicable Primary Liquidity Provider may also arrange for
a Replacement Primary Liquidity Provider to issue and deliver a Replacement
Primary Liquidity Facility at any time after such Downgrade Drawing so long as
such Downgrade Drawing has not been reimbursed in full to such Primary
Liquidity Provider.
(ii) If an "Illegality", "Credit Event Upon Merger" or "Credit
Downgrade" (each as defined in the Class G-1 Above-Cap Liquidity Facility or
the Class C-1 Above-Cap Liquidity Facility, as the case may be, each such
event, a "Mandatory Termination Event") shall occur under either Above-Cap
Liquidity Facility, the Above-Cap Liquidity Provider under such Above-Cap
Liquidity Facility shall provide notice of such Mandatory Termination Event in
writing to Northwest, the Subordination Agent, the Class G-1 Trustee and the
Class C-1 Trustee, and Northwest or such Above-Cap Liquidity Provider may, in
each case at its own expense, arrange for one or more Replacement Above-Cap
Liquidity Providers to issue and deliver a Replacement Above-Cap Liquidity
Facility for such Above-Cap Liquidity Facility to the Subordination Agent. In
addition, if a "Tax Event" or "Tax Event Upon Merger" (as defined in each
Above-Cap Liquidity Facility) shall occur under an Above-Cap Liquidity
Facility, the Above-Cap Liquidity Provider thereunder shall have the right
(but not the obligation) to transfer its rights and obligations under such
Above-Cap Liquidity Facility to another Office (as defined in such Above-Cap
Liquidity Facility), to deliver to the Subordination Agent a Replacement
Above-Cap Liquidity Facility or to pay the applicable Termination Amount on an
Early Termination Date (as defined in each Above-Cap Liquidity Facility)
designated by such Above-Cap Liquidity Provider, all in accordance with the
terms of such Above-Cap Liquidity Facility. In the event that an Above-Cap
Liquidity Provider or Northwest makes arrangements for a Replacement Above-Cap
Liquidity Facility or for the rights and obligations of such Above-Cap
Liquidity Provider under such Above-Cap Liquidity Facility to be transferred,
in either case, in accordance with the terms of the applicable Above-Cap
Liquidity Facility, (y) the Subordination Agent shall, if and to the extent so
requested by such Above-Cap Liquidity Provider or Northwest, execute and
deliver any certificate or other instrument required to give effect to such
replacement or transfer and (z) each of the parties hereto shall enter into
any amendments to this Agreement necessary to give effect to such replacement
or transfer. If an Above-Cap Liquidity Facility subject to a Mandatory
Termination Event has not been replaced in accordance with its terms and the
terms of this paragraph or if an Early Termination Date has been designated
under an Above-Cap Liquidity Facility after the occurrence of an Event of
Default (as defined in such Above-Cap Liquidity Facility) or "Tax Event" or
"Tax Event Upon Merger," such Above-Cap
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Liquidity Facility shall be terminated and such Above-Cap Liquidity Provider
shall, on such Early Termination Date, pay to the Subordination Agent, for the
benefit of the Trustee on behalf of the holders of the related Class of
Certificates, the applicable Termination Amount for credit to such Above-Cap
Reserve Account relating to such Above-Cap Liquidity Facility to be applied as
provided in Section 3.6(f) hereof plus the amount of all other unpaid sums due
and payable by such Above-Cap Liquidity Provider thereunder on or prior to
such date, and upon such payment, such Above-Cap Liquidity Facility shall be
terminated. Nothing contained herein shall limit the rights of any Above-Cap
Liquidity Provider to transfer its rights and obligations under the applicable
Above-Cap Liquidity Facility or otherwise arrange for a Replacement Above-Cap
Liquidity Facility, subject to and in accordance with the provisions of such
Above-Cap Liquidity Facility.
(d) Non-Extension Drawings. If any Primary Liquidity Facility with
respect to any Class of Certificates is scheduled to expire on a date (the
"Stated Expiration Date") prior to the date that is 15 days after the Final
Legal Distribution Date for such Class of Certificates, then, no earlier than
the 60th day and no later than the 40th day prior to the then Stated
Expiration Date, the Subordination Agent may request that such Primary
Liquidity Provider renew its obligations under the applicable Primary
Liquidity Facility for a period ending on a date (the "Renewal Date") that is
the earlier of (i) the date which is 15 days after such Final Legal
Distribution Date and (ii) the date that is the day immediately preceding the
364th day occurring after the last day of the applicable Consent Period
(unless the obligations of such Primary Liquidity Provider under such Primary
Liquidity Facility are earlier terminated in accordance with such Primary
Liquidity Facility). Whether or not the Primary Liquidity Provider has
received a request from the Subordination Agent, such Primary Liquidity
Provider shall, by a notice to the Subordination Agent, given during the
period commencing on the date that is 60 days prior to the Stated Expiration
Date then in effect and ending on the date that is 25 days prior to the Stated
Expiration Date then in effect for such Primary Liquidity Facility (such
period, with respect to such Primary Liquidity Facility, the "Consent
Period"), advise the Subordination Agent whether, in its sole discretion, it
consents to such renewal of its obligations under the applicable Primary
Liquidity Facility for the period ending on the Renewal Date, in which event
the Renewal Date shall become the Stated Expiration Date hereunder; provided,
however, that any such consent shall not be effective with respect to such
Primary Liquidity Provider if by a notice (a "Withdrawal Notice") to the
Subordination Agent during the applicable Consent Period such Primary
Liquidity Provider revokes its consent. If (x) on or before the date on which
such Consent Period ends, such Primary Liquidity Facility shall not have been
replaced in accordance with Section 3.6(e), and (y) the applicable Primary
Liquidity Provider shall not have advised the Subordination Agent that it
consents to such renewal of such Primary Liquidity Facility within the
applicable Consent Period or a Withdrawal Notice has been given with respect
to such Primary Liquidity Facility during the applicable Consent Period, the
Subordination Agent shall, on the date on which such Consent Period ends (or
as soon as possible thereafter), in accordance with the terms of the expiring
Primary Liquidity Facility (a "Non-Extended Facility"), request a drawing
under such expiring Primary Liquidity Facility (such drawing, a "Non-Extension
Drawing") of the Maximum Available Commitment thereunder. Amounts drawn
pursuant to a Non-Extension Drawing shall be maintained and invested in
accordance with Section 3.6(f) hereof.
(e) Issuance of Replacement Primary Liquidity Facility.
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(i) At any time, Northwest may, at its option, with cause or
without cause, arrange for a Replacement Primary Liquidity Facility
to replace any Primary Liquidity Facility for any Class of
Certificates (including any Replacement Primary Liquidity Facility
provided pursuant to Section 3.6(e)(ii) hereof); provided that
WestLB shall not be replaced by Northwest as a Primary Liquidity
Provider with respect to any Primary Liquidity Facility prior to the
fifth anniversary of the Closing Date unless (A) there shall have
become due to such Primary Liquidity Provider, or such Primary
Liquidity Provider shall have demanded, amounts pursuant to Sections
3.01, 3.02 or 3.03 of any applicable Primary Liquidity Facility and
the replacement of such Primary Liquidity Provider would reduce or
eliminate the obligation to pay such amounts or Northwest determines
in good faith that there is a substantial likelihood that such
Primary Liquidity Provider will have the right to claim any such
amounts (unless such Primary Liquidity Provider waives, in writing,
any right it may have to claim such amounts), which determination
shall be set forth in a certificate delivered by Northwest to such
Primary Liquidity Provider setting forth the basis for such
determination and accompanied by an opinion of outside counsel
selected by Northwest and reasonably acceptable to such Primary
Liquidity Provider verifying the legal conclusions, if any, of such
certificate relating to such basis, provided that, in the case of
any likely claim for such amounts based upon any proposed, or
proposed change in, law, rule, regulation, interpretation,
directive, requirement, request or administrative practice, such
opinion may assume the adoption or promulgation of such proposed
matter, (B) it shall become unlawful or impossible for such Primary
Liquidity Provider to maintain or fund its LIBOR Advances as
described in Section 3.10 of any of its Primary Liquidity
Facilities, (C) any Primary Liquidity Facility of such Primary
Liquidity Provider shall become a Downgraded Facility or a
Non-Extended Facility or a Downgrade Drawing or a Non-Extension
Drawing shall have occurred under any Primary Liquidity Facility of
such Primary Liquidity Provider or (D) such Primary Liquidity
Provider shall have breached any of its payment (including, without
limitation, funding) obligations under any Primary Liquidity
Facility in respect of which it is the Primary Liquidity Provider.
If such Replacement Primary Liquidity Facility is provided at any
time after a Downgrade Drawing or Non-Extension Drawing has been
made, all funds on deposit in the relevant Primary Cash Collateral
Account will be returned to the Primary Liquidity Provider being
replaced.
(ii) If any Primary Liquidity Provider shall determine not to
renew any of its Primary Liquidity Facilities in accordance with
Section 3.6(d), then such Primary Liquidity Provider may, at its
option, arrange for a Replacement Primary Liquidity Facility to
replace such Primary Liquidity Facility during the period no earlier
than 40 days and no later than 25 days prior to the then effective
Stated Expiration Date of such Primary Liquidity Facility or at any
time after such Stated Expiration Date. In addition, at any time
after a Non-Extension Drawing has been made under any Primary
Liquidity Facility or at any time after a Primary Liquidity Provider
has extended the Stated Expiration Date under any such Primary
Liquidity Facility to a date that is up to 15 days after the
applicable Final Legal Distribution Date in accordance with the
provisions of such Primary Liquidity Facility, the Primary Liquidity
Provider thereunder, may, at its option, arrange for a Replacement
Primary Liquidity Facility to replace such Primary Liquidity
Facility; provided, however, if a Primary Liquidity Provider has
extended the
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Stated Expiration Date as described above in this sentence, it shall
not have the right to replace such Primary Liquidity Facility prior
to the first anniversary of the Closing Date.
(iii) No Replacement Primary Liquidity Facility arranged by
Northwest or a Primary Liquidity Provider in accordance with clause
(i) or (ii) above or pursuant to Section 3.6(c), respectively, shall
become effective and no such Replacement Primary Liquidity Facility
shall be deemed a "Primary Liquidity Facility" under the Operative
Agreements, unless and until (A) each of the conditions referred to
in subclauses (iv)(x) and (z) below shall have been satisfied, (B)
if such Replacement Primary Liquidity Facility shall materially
adversely affect the rights, remedies, interests or obligations of
the Class G-1 Certificateholders, the Class G-2 Certificateholders,
the Class C-1 Certificateholders or the Class C-2 Certificateholders
under any of the Operative Agreements, the applicable Trustee shall
have consented, in writing, to the execution and issuance of such
Replacement Primary Liquidity Facility and (C) in the case of a
Replacement Primary Liquidity Facility arranged by a Primary
Liquidity Provider under Section 3.6(e)(ii) or pursuant to Section
3.6(c), such Replacement Primary Liquidity Facility has been
consented to by Northwest (which consent, in the case of a
replacement pursuant to Section 3.6(c), shall not be unreasonably
withheld).
(iv) In connection with the issuance of each Replacement
Primary Liquidity Facility, the Subordination Agent shall (x) prior
to the issuance of such Replacement Primary Liquidity Facility,
obtain written confirmation from each Rating Agency that such
Replacement Primary Liquidity Facility will not cause a reduction of
any rating then in effect for any Class of Certificates by such
Rating Agency (without regard to any downgrading of any rating of
any Primary Liquidity Provider being replaced pursuant to Section
3.6(c) hereof and without regard to any Policy) and, in the case of
the Class G-1 Primary Liquidity Facility or the Class G-2 Primary
Liquidity Facility, the written consent of the Policy Provider
(which consent shall not be unreasonably withheld or delayed), (y)
pay all Primary Liquidity Obligations then owing to the replaced
Primary Liquidity Provider (which payment shall be made first from
available funds in the applicable Primary Cash Collateral Account as
described in clause (v) of Section 3.6(f) hereof, and thereafter
from any other available source, including, without limitation, a
drawing under the Replacement Primary Liquidity Facility) and (z)
cause the issuer of the Replacement Primary Liquidity Facility to
deliver the Replacement Primary Liquidity Facility to the
Subordination Agent, together with a legal opinion opining that such
Replacement Primary Liquidity Facility is an enforceable obligation
of such Replacement Primary Liquidity Provider.
(v) Upon satisfaction of the conditions set forth in clauses
(iii) and (iv) of this Section 3.6(e) with respect to a Replacement
Primary Liquidity Facility, (w) the replaced Primary Liquidity
Facility shall terminate, (x) the Subordination Agent shall, if and
to the extent so requested by Northwest or the Primary Liquidity
Provider being replaced, execute and deliver any certificate or
other instrument required in order to terminate the replaced Primary
Liquidity Facility, shall surrender the replaced Primary Liquidity
Facility to the Primary Liquidity Provider being replaced and shall
execute and deliver the Replacement Primary Liquidity Facility and
any associated Fee Letter, (y) each of the parties hereto shall
enter into any amendments to this Agreement necessary to give effect
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to (1) the replacement of the applicable Primary Liquidity Provider
with the applicable Replacement Primary Liquidity Provider and (2)
the replacement of the applicable Primary Liquidity Facility with
the applicable Replacement Primary Liquidity Facility and (z) the
applicable Replacement Primary Liquidity Provider shall be deemed to
be a Primary Liquidity Provider, with the rights and obligations of
a Primary Liquidity Provider hereunder and under the other Operative
Agreements and such Replacement Primary Liquidity Facility shall be
deemed to be a Primary Liquidity Facility hereunder and under the
other Operative Agreements.
(f) Cash Collateral Accounts; Above-Cap Accounts; Withdrawals;
Investments. In the event the Subordination Agent shall draw all Maximum
Available Commitments under any Primary Liquidity Facility pursuant to
Sections 3.6(c), 3.6(d) or 3.6(i) hereof, or in the event amounts are to be
deposited in any Primary Cash Collateral Account related to the Primary
Liquidity Facilities pursuant to subclause (A) or (B) of clause "third" of
Section 2.4(b), subclause (A) or (B) of clause "third" of Section 3.2 or
subclause (A) or (B) of clause "fourth" of Section 3.3, amounts so drawn or to
be deposited, as the case may be, shall be deposited by the Subordination
Agent in the related Primary Cash Collateral Account. If any Above-Cap
Liquidity Provider shall at any time make a Termination Amount payment under
its Above-Cap Liquidity Facility, such Termination Amount payment shall be
deposited by the Subordination Agent in the related Above-Cap Reserve Account
to be applied as specified below in this Section 3.6(f). All amounts on
deposit in each Cash Collateral Account shall be invested and reinvested in
Eligible Investments in accordance with Section 2.2(b) hereof. On each
Interest Payment Date (or, in the case of any Special Distribution Date with
respect to a distribution pursuant to Section 2.4(b) hereof occurring prior to
the occurrence of a Triggering Event, on such Special Distribution Date),
Investment Earnings on amounts on deposit in each Primary Cash Collateral
Account (or, in the case of any Special Distribution Date with respect to a
distribution pursuant to Section 2.4(b) hereof occurring prior to the
occurrence of a Triggering Event, a fraction of such Investment Earnings equal
to the Section 2.4(b) Fraction) shall be deposited in the Collection Account
(or, in the case of any Special Distribution Date with respect to a
distribution pursuant to Section 2.4(b) hereof occurring prior to the
occurrence of a Triggering Event, the Special Payments Account) and applied on
such Interest Payment Date (or Special Distribution Date, as the case may be)
in accordance with Sections 2.4, 3.2, 3.3 or 3.4 (as applicable). Investment
Earnings on amounts on deposit in any Above-Cap Reserve Account shall be
credited to such account and applied in the same manner as the Termination
Amount payment credited thereto. Investment Earnings on amounts on deposit in
the Above-Cap Accounts shall be credited to such account and applied in the
same manner as Above-Cap Payments credited thereto. The Subordination Agent
shall deliver a written statement to Northwest and each Liquidity Provider one
day prior to each Interest Payment Date and Special Distribution Date setting
forth the amount of Investment Earnings held in each of the Cash Collateral
Accounts as of such date. The Subordination Agent shall also deliver a written
statement to Northwest and each Liquidity Provider one day after each
Distribution Date on which amounts have been deposited in any Above-Cap Account
and/or withdrawn from any Above-Cap Reserve Account setting forth the amount of
such deposit and/or withdrawal. In addition, from and after the date funds are
so deposited, the Subordination Agent shall make withdrawals from such
accounts as follows:
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(i) on each Distribution Date, the Subordination Agent shall,
to the extent it shall not have received funds to pay accrued and
unpaid interest due and owing on the Class G-1 Certificates (at the
Stated Interest Rate for the Class G-1 Certificates for the
applicable Interest Period) after giving effect to the subordination
provisions of this Agreement and any Election Interest Payment made
by the Policy Provider, (A) withdraw from the Class G-1 Primary Cash
Collateral Account, and pay to the Class G-1 Trustee an amount equal
to the lesser of (x) an amount necessary to pay accrued and unpaid
interest (at the Stated Interest Rate for the Class G-1 Certificates
for the applicable Interest Period) on such Class G-1 Certificates
and (y) the amount on deposit in the Class G-1 Primary Cash
Collateral Account (so long as the aggregate amount of unreplenished
withdrawals, including such withdrawal, does not exceed the Required
Amount for such Distribution Date); and (B) if an "Above-Cap Payment"
would have been required to be made on such Distribution Date
pursuant to the terms of the Class G-1 Above-Cap Liquidity Facility
were such Liquidity Facility still in effect, withdraw from the
Class G-1 Above-Cap Reserve Account, and deposit into the Class G-1
Above-Cap Account, an amount (if any) equal to the lesser of (x) an
amount equal to such Above-Cap Payment and (y) the amount on deposit
in the Class G-1 Above-Cap Reserve Account;
(ii) on each Distribution Date, the Subordination Agent shall,
to the extent it shall not have received funds to pay accrued and
unpaid interest due and owing on the Class G-2 Certificates (at the
Stated Interest Rate for the Class G-2 Certificates for the
applicable Interest Period) after giving effect to the subordination
provisions of this Agreement and any Election Interest Payment made
by the Policy Provider, withdraw from the Class G-2 Primary Cash
Collateral Account, and pay to the Class G-2 Trustee an amount equal
to the lesser of (x) an amount necessary to pay accrued and unpaid
interest (at the Stated Interest Rate for the Class G-2 Certificates
for the applicable Interest Period) on such Class G-2 Certificates
and (y) the amount on deposit in the Class G-2 Primary Cash
Collateral Account (so long as the aggregate amount of unreplenished
withdrawals, including such withdrawal, does not exceed the Required
Amount for such Distribution Date);
(iii) on each Distribution Date, the Subordination Agent shall,
to the extent it shall not have received funds to pay accrued and
unpaid interest due and owing on the Class C-1 Certificates (at the
Stated Interest Rate for the Class C-1 Certificates for the
applicable Interest Period) after giving effect to the subordination
provisions of this Agreement, (A) withdraw from the Class C-1 Primary
Cash Collateral Account, and pay to the Class C-1 Trustee an amount
equal to the lesser of (x) an amount necessary to pay accrued and
unpaid interest (at the Stated Interest Rate for the Class C-1
Certificates for the applicable Interest Period) on such Class C-1
Certificates and (y) the amount on deposit in the Class C-1 Primary
Cash Collateral Account (so long as the aggregate amount of
unreplenished withdrawals, including such withdrawal, does not
exceed the Required Amount for such Distribution Date); and (B) if
an "Above-Cap Payment" would have been required to be made on such
Distribution Date pursuant to the terms of the Class C-1 Above-Cap
Liquidity Facility were such Liquidity Facility still in effect,
withdraw from the Class C-1 Above-Cap Reserve Account, and deposit
into the Class C-1 Above-Cap Account, an amount (if any) equal to the
lesser of (x) an amount equal to
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such Above-Cap Payment and (y) the amount on deposit in the Class C-1
Above-Cap Reserve Account;
(iv) on each Distribution Date, the Subordination Agent shall,
to the extent it shall not have received funds to pay accrued and
unpaid interest due and owing on the Class C-2 Certificates (at the
Stated Interest Rate for the Class C-2 Certificates for the
applicable Interest Period) after giving effect to the subordination
provisions of this Agreement, withdraw from the Class C-2 Primary
Cash Collateral Account, and pay to the Class C-2 Trustee an amount
equal to the lesser of (x) an amount necessary to pay accrued and
unpaid interest (at the Stated Interest Rate for the Class C-2
Certificates for the applicable Interest Period) on such Class C-2
Certificates and (y) the amount on deposit in the Class C-2 Primary
Cash Collateral Account (so long as the aggregate amount of
unreplenished withdrawals, including such withdrawal, does not
exceed the Required Amount for such Distribution Date);
(v) on each date on which the Pool Balance of the Class G-1
Trust shall have been reduced by payments made to the Class G-1
Certificateholders pursuant to Sections 2.4, 3.2 or 3.3 hereof or
pursuant to Section 2.3 of the Escrow and Paying Agent Agreement for
such Class, the Subordination Agent shall withdraw from the Class G-1
Primary Cash Collateral Account such amount as is necessary so that,
after giving effect to the reduction of the Pool Balance on such
date (and any reduction in the amounts on deposit in the Class G-1
Primary Cash Collateral Account resulting from a prior withdrawal of
amounts on deposit in the Class G-1 Primary Cash Collateral Account
on such date) and any transfer of Investment Earnings from such Cash
Collateral Account to the Collection Account or the Special Payments
Account on such date, an amount equal to the sum of the Required
Amount plus Investment Earnings on deposit in such Cash Collateral
Account (after giving effect to any such transfer of Investment
Earnings) will be on deposit in the Class G-1 Primary Cash Collateral
Account and shall first, pay such withdrawn amount to the Class G-1
Primary Liquidity Provider until the Liquidity Obligations (with
respect to the Class G-1 Certificates) owing to such Primary
Liquidity Provider shall have been paid in full, and second, deposit
any remaining withdrawn amount in the Collection Account;
(vi) on each date on which the Pool Balance of the Class G-2
Trust shall have been reduced by payments made to the Class G-2
Certificateholders pursuant to Sections 2.4, 3.2 or 3.3 hereof or
pursuant to Section 2.3 of the Escrow and Paying Agent Agreement for
such Class, the Subordination Agent shall withdraw from the Class G-2
Primary Cash Collateral Account such amount as is necessary so that,
after giving effect to the reduction of the Pool Balance on such
date (and any reduction in the amounts on deposit in the Class G-2
Primary Cash Collateral Account resulting from a prior withdrawal of
amounts on deposit in the Class G-2 Primary Cash Collateral Account
on such date) and any transfer of Investment Earnings from such Cash
Collateral Account to the Collection Account or the Special Payments
Account on such date, an amount equal to the sum of the Required
Amount plus Investment Earnings on deposit in such Cash Collateral
Account (after giving effect to any such transfer of Investment
Earnings) will be on deposit in the Class G-2 Primary Cash Collateral
Account and shall first, pay such withdrawn amount to the Class G-2
Primary Liquidity Provider until the Liquidity
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Obligations (with respect to the Class G-2 Certificates) owing to
such Primary Liquidity Provider shall have been paid in full, and
second, deposit any remaining withdrawn amount in the Collection
Account;
(vii) on each date on which the Pool Balance of the Class C-1
Trust shall have been reduced by payments made to the Class C-1
Certificateholders pursuant to Sections 2.4, 3.2 or 3.3 hereof or
pursuant to Section 2.3 of the Escrow and Paying Agent Agreement for
such Class, the Subordination Agent shall withdraw from the Class C-1
Primary Cash Collateral Account such amount as is necessary so that,
after giving effect to the reduction of the Pool Balance on such
date (and any reduction in the amounts on deposit in the Class C-1
Primary Cash Collateral Account resulting from a prior withdrawal of
amounts on deposit in the Class C-1 Primary Cash Collateral Account
on such date) and any transfer of Investment Earnings from such Cash
Collateral Account to the Collection Account or the Special Payments
Account on such date, an amount equal to the sum of the Required
Amount plus Investment Earnings on deposit in such Cash Collateral
Account (after giving effect to any such transfer of Investment
Earnings) will be on deposit in the Class C-1 Primary Cash Collateral
Account and shall first, pay such withdrawn amount to the Class C-1
Primary Liquidity Provider until the Liquidity Obligations (with
respect to the Class C-1 Certificates) owing to such Primary
Liquidity Provider shall have been paid in full, and second, deposit
any remaining withdrawn amount in the Collection Account;
(viii) on each date on which the Pool Balance of the Class C-2
Trust shall have been reduced by payments made to the Class C-2
Certificateholders pursuant to Sections 2.4, 3.2 or 3.3 hereof or
pursuant to Section 2.3 of the Escrow and Paying Agent Agreement for
such Class, the Subordination Agent shall withdraw from the Class C-2
Primary Cash Collateral Account such amount as is necessary so that,
after giving effect to the reduction of the Pool Balance on such
date (and any reduction in the amounts on deposit in the Class C-2
Primary Cash Collateral Account resulting from a prior withdrawal of
amounts on deposit in the Class C-2 Primary Cash Collateral Account
on such date) and any transfer of Investment Earnings from such Cash
Collateral Account to the Collection Account or the Special Payments
Account on such date, an amount equal to the sum of the Required
Amount plus Investment Earnings on deposit in such Cash Collateral
Account (after giving effect to any such transfer of Investment
Earnings) will be on deposit in the Class C-2 Primary Cash Collateral
Account and shall first, pay such withdrawn amount to the Class C-2
Primary Liquidity Provider until the Liquidity Obligations (with
respect to the Class C-2 Certificates) owing to such Primary
Liquidity Provider shall have been paid in full, and second, deposit
any remaining withdrawn amount in the Collection Account;
(ix) if a Replacement Primary Liquidity Facility for any Class
of Certificates shall be delivered to the Subordination Agent
following the date on which funds have been deposited into the
Primary Cash Collateral Account related to the Primary Liquidity
Facility for such Class of Certificates, the Subordination Agent
shall withdraw all amounts on deposit in such Primary Cash
Collateral Account and shall pay such amounts to such replaced
Primary Liquidity Provider until all Liquidity Obligations owed to
such
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Person shall have been paid in full, and shall deposit any remaining
amount in the Collection Account; and;
(x) following the payment of Final Distributions with respect
to any Class of Certificates, on the date on which the Subordination
Agent shall have been notified by the Primary Liquidity Provider for
such Class of Certificates that the Liquidity Obligations owed to
such Primary Liquidity Provider have been paid in full, the
Subordination Agent shall withdraw all amounts on deposit in the
Primary Cash Collateral Account related to the Primary Liquidity
Facility in respect of such Class of Certificates and shall deposit
such amount in the Collection Account and, in the case of the Class
G-1 Certificates and the Class C-1 Certificates, (y) on the first
Business Day occurring immediately after the earlier of (1) the date
of the payment of Final Distributions with respect to such Class of
Certificates and (2) the Final Legal Distribution Date for such
Class of Certificates (after giving effect to all distributions to
be made on such date), the Subordination Agent shall pay to the
relevant Above-Cap Liquidity Provider an amount equal to the sum of
the amounts (if any) on deposit in (A) the Above-Cap Account relating
to such Class of Certificate and (B) the Above-Cap Reserve Account
relating to such Class of Certificate.
(g) Reinstatement. With respect to any Interest Drawing under the
Primary Liquidity Facility for any applicable Trust, upon the reimbursement of
the applicable Primary Liquidity Provider for all or any part of the amount of
such Interest Drawing, together with any accrued interest thereon, the Maximum
Available Commitment of such Primary Liquidity Facility shall be reinstated by
an amount equal to the amount of such Interest Drawing so reimbursed to the
applicable Primary Liquidity Provider but not to exceed the Stated Amount for
such Primary Liquidity Facility; provided, however, that such Primary
Liquidity Facility shall not be so reinstated in part or in full at any time
if (x) both a Performing Note Deficiency exists and a Liquidity Event of
Default shall have occurred and be continuing with respect to the relevant
Primary Liquidity Facility or (y) a Final Drawing shall have occurred with
respect to such Primary Liquidity Facility; provided, further, that any
payment by the Policy Provider to any Primary Liquidity Provider of any
amounts pursuant to the second proviso to Section 2.6(c) shall not reinstate
the related Primary Liquidity Facility, but such Primary Liquidity Facility
(so long as such Primary Liquidity Facility is in effect) shall be reinstated,
pro tanto, to the extent the Policy Provider receives any reimbursement in
respect of such payment under clause "third" of Section 2.4(b), clause "third"
of Section 3.2 or clause "fourth" of Section 3.3., unless (x) both a
Performing Note Deficiency exists and a Liquidity Event of Default shall have
occurred with respect to such Primary Liquidity Facility or (y) a Final
Drawing shall have occurred with respect to such Primary Liquidity Facility.
In the event that, with respect to any particular Primary Liquidity Facility,
(i) funds are withdrawn from any related Primary Cash Collateral Account
pursuant to clause (i) or (ii) of Section 3.6(f) hereof or (ii) such Primary
Liquidity Facility shall become a Downgraded Facility or a Non-Extended
Facility at a time when unreimbursed Interest Drawings under such Primary
Liquidity Facility have reduced the Maximum Available Commitment thereunder to
zero, then funds received by the Subordination Agent at any time other than
(x) any time when a Liquidity Event of Default shall have occurred and be
continuing with respect to such Primary Liquidity Facility and a Performing
Note Deficiency exists or (y) any time after a Final Drawing shall have
occurred with respect to such Primary Liquidity Facility shall be deposited in
such Primary Cash Collateral Account as and to
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the extent provided in clause "third" of Section 2.4(b), clause "third" of
Section 3.2 or clause "third" of Section 3.3, as applicable, and applied in
accordance with Section 3.6(f) hereof.
(h) Reimbursement. The amount of each drawing under the Primary
Liquidity Facilities shall be due and payable, together with interest thereon,
on the dates and at the rates, respectively, provided in the Primary Liquidity
Facilities. The Subordination Agent shall have no obligation to reimburse the
Above-Cap Liquidity Provider for any Above-Cap Payments and the Above-Cap
Liquidity Provider shall have no interest in any monies credited to any Trust
Account except as provided in Section 3.6(f)(x) hereof.
(i) Final Drawing. Upon receipt from a Primary Liquidity Provider of
a Termination Notice with respect to any Primary Liquidity Facility, the
Subordination Agent shall, not later than the date specified in such
Termination Notice, in accordance with the terms of such Primary Liquidity
Facility, request a drawing under such Primary Liquidity Facility of the
Maximum Available Commitment thereunder (a "Final Drawing"). Amounts drawn
pursuant to a Final Drawing shall be maintained and invested in accordance
with Section 3.6(f) hereof.
(j) Reduction of Stated Amount. Promptly following each date on
which the Required Amount of the Primary Liquidity Facility for a Class of
Certificates is reduced as a result of a reduction in the Pool Balance with
respect to such Certificates (including, in the case of the Class G-1 and Class
G-2 Certificates, by reason of a Policy Provider Election with respect to one
or more Series G-1 or Series G-2 Equipment Notes, as the case may be) or
otherwise, the Stated Amount shall be automatically reduced to an amount equal
to the Required Amount with respect to such Primary Liquidity Facility (as
calculated by the Subordination Agent).
(k) Relation to Subordination Provisions. Interest Drawings under
the Primary Liquidity Facilities and withdrawals from the Primary Cash
Collateral Accounts relating to such Primary Liquidity Facilities and the
Above-Cap Accounts, in each case, in respect of interest on the Certificates of
any Class, will be distributed to the Trustee for such Class of Certificates,
notwithstanding Sections 2.4, 3.2 and 3.3 hereof.
Section 3.7. The Policies. The following provisions of paragraphs
(a) through (h) of this Section 3.7 shall apply to (i) the Class G-1 Trust and
the Class G-1 Certificates and (ii) the Class G-2 Trust and the Class G-2
Certificates, as if such provisions are separately set forth in full for each
of the Class G-1 Trust (and the Class G-1 Certificates) and the Class G-2 Trust
(and the Class G-2 Certificates). For the purposes of clause (i) above, each
reference in paragraphs (a) through (i) of this Section 3.7 to "Accrued Class
G Interest", "Class G Primary Cash Collateral Account", "Class G
Certificates", "Class G Certificateholders", "Class G Deposits", "Class G
Primary Liquidity Facility", "Class G Paying Agent Account", "Class G Trust",
"Class G Trustee", "Class G Escrow Receipts", "Policy", "Policy Account" and
"Series G Equipment Note" shall mean "Accrued Class G-1 Interest", "Class G-1
Primary Cash Collateral Account", "Class G-1 Certificates", "Class G-1
Certificateholders", "Class G-1 Deposits", "Class G-1 Escrow Receipts", "Class
G-1 Primary Liquidity Facility", "Class G-1 Paying Agent Account", "Class G-1
Trust", "Class G-1 Trustee", "Class G-1 Policy", "Class G-1 Policy Account" and
"Series G-1 Equipment Note", respectively. For the purposes of clause (ii)
above, each reference in paragraphs (a) through (i) of this Section 3.7 to
"Accrued Class G Interest", "Class G Primary Cash Collateral Account", "Class
G Certificates", "Class G
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Certificateholders", "Class G Deposits", "Class G Primary Liquidity Facility",
"Class G Paying Agent Account", "Class G Trustee", "Class G Escrow Receipts",
"Policy", "Policy Account" and "Series G Equipment Note" shall mean "Accrued
Class G-2 Interest", "Class G-2 Primary Cash Collateral Account", "Class G-2
Certificates", "Class G-2 Certificateholders", "Class G-2 Deposits", "Class G-2
Escrow Receipts", "Class G-2 Primary Liquidity Facility", "Class G-2 Paying
Agent Account", "Class G-2 Trust", "Class G-2 Trustee", "Class G-2 Policy",
"Class G-2 Policy Account" and "Series G-2 Equipment Note", respectively.
(a) Interest Drawings. If on any Regular Distribution Date (other
than the Final Legal Distribution Date) after giving effect to the application
of available funds in accordance with the priorities specified in Section 2.4
and Article III, and taking into account the application of any amounts
received by the Escrow Agent in the Class G Paying Agent Account in respect of
accrued interest on the Class G Deposits, any Drawing paid under the Class G
Primary Liquidity Facility in respect of accrued interest and any withdrawal
of funds from the Class G Primary Cash Collateral Account (and, in the case of
the Class G-1 Certificates, the Class G-1 Above-Cap Account) in respect of such
interest, the Subordination Agent (or, in the case of the Escrow Receipts, the
Paying Agent) does not then have sufficient funds available for the payment of
Accrued Class G Interest, then, prior to 1:00 p.m. (New York City time) on
such Distribution Date, the Subordination Agent (i) shall deliver a Notice of
Nonpayment, as provided in the Policy to the Policy Provider or its fiscal
agent, requesting a Policy Drawing under the Policy (for payment into the
Policy Account) in an amount sufficient to enable the Subordination Agent to
pay such Accrued Class G Interest and (ii) shall pay such amount from the
related Policy Account to the Class G Trustee or the Escrow Agent for deposit
into the Class G Paying Agent Account, as the case may be) in payment of such
Accrued Class G Interest on such Distribution Date.
(b) Proceeds Deficiency Drawing. If on any Special Distribution Date
(other than a Special Distribution Date established pursuant to the second
paragraph of Section 3.7(c)) established by the Subordination Agent by reason
of its receipt of a Special Payment (a "Disposition Payment") constituting the
proceeds of any Series G Equipment Note or related Collateral or Indenture
Estate, as the case may be, there exists a shortfall in the amounts available
to the Subordination Agent (after giving effect to the application of
available funds (including, without limitation, the amount of such Disposition
Payment) in accordance with the priorities specified in Section 2.4 and
Article III, and (if the disposition of such Series G Equipment Note or
related Collateral or Indenture Estate occurs prior to a Policy Provider
Election with respect to such Series G Equipment Note) taking into account the
application of any amounts received by the Escrow Agent in the Class G Paying
Agent Account in respect of accrued interest on the Class G Deposits, any
Drawing paid under the Class G Primary Liquidity Facility in respect of such
interest, any withdrawal of funds in the Class G Primary Cash Collateral
Account in respect of such interest (and, in the case of the Class G-1
Certificates, the Class G-1 Above-Cap Account)) required to reduce the
outstanding Pool Balance of the Class G Certificates by an amount equal to the
outstanding principal amount of the applicable Series G Equipment Note
(determined immediately prior to the receipt of such Disposition Payment and
less the amount of any Policy Drawing previously paid by the Policy Provider
in respect of principal of such Series G Equipment Note) plus accrued and
unpaid interest on the amount of such reduction accrued at the Stated Interest
Rate for the Class G Certificates for the period from the immediately
preceding Regular Distribution Date to such Special Distribution Date, then,
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prior to 1:00 p.m. (New York City time) on such Special Distribution Date, the
Subordination Agent (x) shall deliver a Notice of Nonpayment, as provided in
the Policy (for payment into the Policy Account) in an amount equal to the
amount of such shortfall and (y) shall pay such amount from the Policy Account
to the Class G Trustee in payment of such reduction in the outstanding Pool
Balance of the Class G Certificates plus such accrued and unpaid interest on
such Special Distribution Date. The Subordination Agent shall promptly, but
not less than 20 days prior to the Special Distribution Date established
pursuant to this Section 3.7(b), send to Northwest, the Trustees, the Primary
Liquidity Provider for the Class G Primary Liquidity Facility and the Policy
Provider, a Written Notice of such Special Distribution Date.
(c) No Proceeds Drawing. On the first Business Day (which shall be a
Special Distribution Date) that is 21 months after the last date on which full
payment was made on any Series G Equipment Note (a "Defaulted Series G
Equipment Note") as to which there has subsequently been a failure to pay
principal or that has subsequently been Accelerated, if the Subordination
Agent has not theretofore made a drawing under the Policy pursuant to Section
3.7(b), the Subordination Agent shall deliver a Notice of Nonpayment, as
provided in the Policy, to the Policy Provider or its fiscal agent, requesting
a Policy Drawing under the Policy (for payment into the Policy Account) in an
amount equal to the then outstanding principal amount of such Defaulted Series
G Equipment Note plus accrued and unpaid interest thereon from the immediately
preceding Regular Distribution Date. The Subordination Agent shall promptly,
but not less than 25 days prior to such Business Day, send to Northwest, the
Trustees, the Primary Liquidity Provider for the Class G Primary Liquidity
Facility and the Policy Provider a Written Notice establishing such Business
Day as the date for the distribution of the proceeds of such Policy Drawing,
which date shall constitute a Special Distribution Date. No later than 1:00
p.m. (New York City time) on the specified Special Distribution Date the
Subordination Agent shall make the specified Policy Drawing and upon its
receipt of the proceeds thereof pay the amount thereof from the Policy Account
to the Class G Trustee in reduction of the outstanding Pool Balance of the
Class G Certificates together with such accrued and unpaid interest on the
amount of such reduction. For the avoidance of doubt, after the payment by the
Policy Provider in full of such amount under this Section 3.7(c), the
Subordination Agent shall have no right to make any further Policy Drawings
under Section 3.7(c) in respect of such Defaulted Series G Equipment Note
except for a drawing under Section 3.7(e).
Notwithstanding the foregoing, the Policy Provider has the right, so
long as no Policy Provider Default shall have occurred and be continuing, upon
notice to the Subordination Agent given at least five days prior to the
Special Distribution Date established by the Subordination Agent pursuant to
the first paragraph of this Section 3.7(c), to elect instead (the "Policy
Provider Election") to pay (i) on such Special Distribution Date an amount
equal to the scheduled principal and interest that came due on such Defaulted
Series G Equipment Note (without regard to the Acceleration thereof) but was
not paid during such 21-month period (after giving effect to the application of
funds received from the Class G Primary Liquidity Facility and the Class G
Primary Cash Collateral Account (and in the case of the Class G-1 Certificates,
the Class G-1 Above-Cap Account), in each case attributable to such interest)
and (ii) thereafter, on each Regular Distribution Date, an amount equal to the
scheduled principal and interest that were to become due on such Defaulted
Series G Equipment Note on the related payment date (without regard to any
acceleration thereof or to any funds available under any Liquidity Facility or
any Cash Collateral Account) until the establishment of an Election
Distribution Date or a Special
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Distribution Date established as provided in the immediately following
sentence (each such interest payment, an "Election Interest Payment").
Following a Policy Provider Election with respect to a Defaulted Series G
Equipment Note, on any Business Day (which shall be a Special Distribution
Date) elected by the Policy Provider upon 20 days' Written Notice to the
Subordination Agent and the Class G Trustee, the Policy Provider may,
notwithstanding the Policy Provider Election, request the Subordination Agent
to, and the Subordination Agent shall, make a Policy Drawing for an amount
equal to the then outstanding principal balance of such Defaulted Series G
Equipment Note (less any Policy Drawings previously paid by the Policy
Provider in respect of principal of such Defaulted Series G Equipment Note)
and accrued and unpaid interest on such amounts at the Stated Interest Rate
for the Class G Certificates from the previous Regular Distribution Date to
such Special Distribution Date.
Further, following a Policy Provider Election with respect to a
Defaulted Series G Equipment Note, upon the occurrence and continuance of a
Policy Provider Default, the Subordination Agent shall on any Business Day (an
"Election Distribution Date", which shall be a Special Distribution Date)
elected by the Subordination Agent upon 20 days' Written Notice to the Class G
Trustee and the Policy Provider, make a Policy Drawing for an amount equal to
the then outstanding principal balance of such Defaulted Series G Equipment
Note (less any Policy Drawings previously paid by the Policy Provider in
respect of principal of such Equipment Note) and accrued and unpaid interest
on such amounts at the Stated Interest Rate for the Class G Certificates from
the immediately preceding Regular Distribution Date to such Election
Distribution Date. The Subordination Agent shall make each such Policy Drawing
referred to in this subparagraph (c) under the Policy (for payment into the
Policy Account) no later than 1:00 p.m. (New York City time) on the relevant
Special Distribution Date and upon its receipt of the proceeds thereof pay the
amount thereof from the Policy Account to the Class G Trustee in reduction of
the outstanding Pool Balance of the Class G Certificates together with such
accrued and unpaid interest thereon.
In addition, regardless of whether or not the Policy Provider makes
a Policy Provider Election, the Policy Provider shall, at the end of the first
occurring 21-month period described in Section 3.7(c), endorse the Policy (if
not already endorsed to so provide) to provide for the payment to the Primary
Liquidity Provider with respect to the Class G-1 Certificates and to the
Primary Liquidity Provider with respect to the Class G-2 Certificates of
interest accruing on the outstanding drawings in respect of the related
Liquidity Facilities from and after the end of such 21-month period as and when
such interest becomes due in accordance with such Primary Liquidity
Facilities. The Policy Provider hereby agrees not to otherwise amend or modify
the Policy without the consent of the Primary Liquidity Provider if such
amendment or modification would adversely affect the rights of the Primary
Liquidity Provider.
(d) Final Policy Drawing. If on the Final Legal Distribution Date of
the Class G Certificates after giving effect to the application of available
funds in accordance with the priorities specified in Section 2.4 and Article
III, and taking into account the application of any amounts received by the
Escrow Agent in the Class G Paying Agent Account in respect of accrued
interest on the Class G Deposits, any Drawing paid under the Class G Primary
Liquidity Facility in respect of interest included in the Final Distribution
and any withdrawal of funds in the Class G Primary Cash Collateral Account
(and, in the case of the Class G-1 Certificates, the Class G-1 Above Cap
Account) in respect of interest included in the Final Distribution, the
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Subordination Agent does not then have sufficient funds available on such date
for the payment in full of the Final Distribution (calculated as at such date
but excluding any accrued and unpaid Make-Whole Premium or Break Amount) on the
Class G Certificates then, prior to 1:00 p.m. (New York City time) on such
date, the Subordination Agent shall: (i) deliver a Notice of Nonpayment, as
provided in the Policy, to the Policy Provider or its fiscal agent, requesting
a Policy Drawing under the Policy (for payment into the Policy Account) in an
amount equal to the minimum amount sufficient to enable the Subordination
Agent to pay the Final Distribution (calculated as at such date but excluding
any accrued and unpaid premium) on the Class G Certificates, and (ii) shall
pay such amount from the Policy Account to the Class G Trustee in payment of
such amount on such date.
If on the Final Withdrawal Date (as defined in the Escrow and Paying
Agent Agreement for the Class G Certificates) the full amount of the Class G
Deposits has not been used to purchase the Class G Equipment Notes and there
is a shortfall in the amount available to the Paying Agent for the payment in
full of the unpaid principal amount of the Escrow Receipts then, prior to 1:00
p.m. (New York City time) on such date, the Subordination Agent shall: (i)
deliver a Notice of Nonpayment, as provided in the Policy, to the Policy
Provider or its fiscal agent, requesting a Policy Drawing under the Policy
(for payment into the Policy Account) in an amount equal to the amount of such
shortfall and (ii) shall pay such amount from the Policy Account to the Paying
Agent for the Class G Trust in payment of such amount on such date.
(e) Avoidance Drawings. If at any time the Subordination Agent shall
have actual knowledge of the issuance of any Final Order, the Subordination
Agent shall promptly give notice thereof to Northwest, each Trustee, the
Liquidity Providers and the Policy Provider. The Subordination Agent shall
thereupon calculate the relevant Avoided Payments resulting therefrom and
shall promptly: (a) send to the Class G Trustee a Written Notice of such
amount and (b) deliver to the Policy Provider, or its fiscal agent, a Notice
of Avoided Payment, together with a copy of the documentation required by the
Policy with respect thereto, requesting a Policy Drawing (for payment to the
receiver, conservator, debtor-in-possession or trustee in bankruptcy and/or the
Subordination Agent for deposit into the Policy Account) in an amount equal to
the amount of relevant Avoided Payment. Such Written Notice shall also set the
date for the distribution of the proceeds of such Policy Drawing, which date
shall constitute a Special Distribution Date and shall be the earlier of the
third Business Day that immediately precedes the expiration of the Policy and
the Business Day that immediately follows the 25th day after the date of such
Written Notice. No later than 1:00 p.m. (New York City time) on the specified
Special Distribution Date, the Subordination Agent shall make the specified
Policy Drawing and, upon its receipt of the proceeds thereof, pay the amount
thereof from the Policy Account to the Class G Trustee in reinstatement of the
Avoided Payment.
(f) Application of Policy Drawings. Notwithstanding anything to the
contrary contained in this Agreement (including, without limitation, Sections
2.4, 3.2 and 3.3 hereof), all payments received by the Subordination Agent in
respect of a Policy Drawing shall be promptly paid from the Policy Account to
the Class G Trustee for distribution to the Class G Certificateholders or the
Escrow Agent for distribution to the holders of the Class G Escrow Receipts,
as the case may be. Each Policy Drawing shall be applied to the purpose for
which it was made, including, without limitation, the application of that
portion of a Policy Drawing relating (i) to accrued interest on a Series G
Equipment Note to the payment of interest on the
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Class G Certificates and (ii) to principal of a Series G Equipment Notes to
the reduction of the Pool Balance of the Class G Certificates.
(g) Reduction of Outstanding Pool Balance. Promptly following each
date on which the Pool Balance of the Class G Certificates is reduced as a
result of a payment under this Agreement, the Subordination Agent shall inform
the Policy Provider of such reduction. Anything contained herein to the
contrary notwithstanding, (i) no Policy Drawing for payment in respect of the
Class G Certificates under clause (a) of this Section 3.7 shall be in excess
of Accrued Class G Interest and (ii) no Policy Drawing under clauses (b)-(d) of
this Section 3.7 shall be for an amount in excess of the outstanding Pool
Balance of the Class G Certificates plus accrued and unpaid interest thereon
at the Stated Interest Rate for the Class G Certificates. Nothing contained in
this Intercreditor Agreement shall be deemed to alter or amend the
liabilities, obligations, requirements or procedures of the Policy Provider
under the Policy and the Policy Provider shall not be obligated to make
payment except at the times and in the amounts and under the circumstances
expressly set forth in the Policy.
(h) Resubmission of Notice for Payment. If the Policy Provider at
any time informs the Subordination Agent in accordance with the Policy that a
Notice of Nonpayment or Notice of Avoided Payment submitted by the
Subordination Agent does not satisfy the requirements of the Policy, the
Subordination Agent shall, as promptly as possible after being so informed,
submit to the Policy Provider an amended and revised Notice of Nonpayment or
Notice of Avoided Payment, as the case may be, and shall pay to the Class G
Trustee out of the Policy Account the amount received pursuant to such amended
or revised Notice of Nonpayment or Notice of Avoided Payment, as the case may
be, when received.
Section 3.8. Subrogation. Subject to Section 3.6(b), the Policy
Provider will be subrogated to all of the rights of the holders of the Class
G-1 Certificates and Class G-2 Certificates to payment on the Class G-1
Certificates and Class G-2 Certificates to the extent of the payments made
under the Policy as set forth herein, the exercise of such subrogation rights
to be subject to the other provisions of this Agreement.
ARTICLE IV
EXERCISE OF REMEDIES
Section 4.1. Directions from the Controlling Party. (a) (i)
Following the occurrence and during the continuation of an Indenture Default
under any Indenture, the Controlling Party shall direct the Subordination
Agent, which in turn shall direct the Loan Trustee under such Indenture in the
exercise of remedies available to the holders of the Equipment Notes issued
pursuant to such Indenture, including, without limitation, the ability to vote
all such Equipment Notes in favor of declaring all of the unpaid principal
amount of such Equipment Notes and accrued and unpaid interest thereon to be
due and payable under, and in accordance with, the provisions of such
Indenture. Subject to the Owner Trustees' and the Owner Participants' rights,
if any, set forth in the Indentures with respect to Leased Aircraft to
purchase the Equipment Notes, if the Equipment Notes issued pursuant to any
Indenture have been Accelerated following an Indenture Default with respect
thereto, the Controlling Party may sell, assign, contract to sell or otherwise
dispose of and deliver all (but not less than all) of such
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Equipment Notes to any Person at public or private sale, at any location at
the option of the Controlling Party, all upon such terms and conditions as it
may reasonably deem advisable in accordance with applicable law.
(ii) Subject to the Owner Trustees' and the Owner Participants'
rights set forth in the Indentures with respect to Leased Aircraft to purchase
the Equipment Notes, and notwithstanding the foregoing, so long as any
Certificates remain Outstanding, during the period ending on the date which is
nine months after the earlier of (x) the Acceleration of the Equipment Notes
issued pursuant to any Indenture or (y) the occurrence of a Northwest
Bankruptcy Event, without the consent of each Trustee (other than the Trustee
of any Trust all of the Certificates of which are held or beneficially owned
by Northwest and/or its Affiliates), (A) no Aircraft subject to the Lien of
such Indenture or such Equipment Notes may be sold if the net proceeds from
such sale would be less than the Minimum Sale Price for such Aircraft or such
Equipment Notes, and (B) with respect to any Leased Aircraft, the amount and
payment dates of rentals payable by Northwest under the Lease for such
Aircraft may not be adjusted, if, as a result of such adjustment, the
discounted present value of all such rentals would be less than 75% of the
discounted present value of the rentals payable by Northwest under such Lease
before giving effect to such adjustment, in each case, using the weighted
average interest rate of the Equipment Notes issued pursuant to such Indenture
as the discount rate.
(iii) At the request of the Controlling Party, the Subordination
Agent may from time to time during the continuance of an Indenture Default
(and before the occurrence of a Triggering Event) commission LTV Appraisals
with respect to the related Aircraft.
(iv) After a Triggering Event occurs and any Equipment Note becomes
a Non-Performing Equipment Note, the Subordination Agent shall obtain LTV
Appraisals for all of the Aircraft as soon as practicable and additional LTV
Appraisals on or prior to each anniversary of the date of such initial LTV
Appraisals; provided that, if the Controlling Party reasonably objects to the
appraised value of the Aircraft shown in any such LTV Appraisals, the
Controlling Party shall have the right to obtain or cause to be obtained at
its expense substitute LTV Appraisals (including any LTV Appraisals based upon
physical inspection of the Aircraft).
(b) To the extent permitted by applicable law, the Subordination
Agent, at the direction of the Controlling Party, shall take such actions as
it may reasonably deem most effectual to complete the sale or other
disposition of such Aircraft or Equipment Notes. In addition, in lieu of any
sale, assignment, contract to sell or other disposition, the Subordination
Agent, if so directed by and on behalf of the Controlling Party, may maintain
possession of such Equipment Notes and continue to apply monies received in
respect of such Equipment Notes in accordance with Article III hereof. In
addition, in lieu of such sale, assignment, contract to sell or other
disposition, or in lieu of such maintenance of possession, the Controlling
Party may instruct the Loan Trustee under such Indenture to foreclose on the
Lien on the related Aircraft or to take any other remedial action permitted
under such Indenture or applicable law.
Section 4.2. Remedies Cumulative. Each and every right, power and
remedy given to the Trustees, the Primary Liquidity Providers, the Policy
Provider, the Controlling Party or the Subordination Agent specifically or
otherwise in this Agreement shall be cumulative and shall be in addition to
every other right, power and remedy herein specifically given or now or
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hereafter existing at law, in equity or by statute, and each and every right,
power and remedy whether specifically herein given or otherwise existing may,
subject always to the terms and conditions hereof, be exercised from time to
time and as often and in such order as may be deemed expedient by any Trustee,
any Primary Liquidity Provider, the Policy Provider, the Controlling Party or
the Subordination Agent, as appropriate, and the exercise or the beginning of
the exercise of any power or remedy shall not be construed to be a waiver of
the right to exercise at the same time or thereafter any other right, power or
remedy. No delay or omission by any Trustee, any Liquidity Provider, the
Policy Provider, the Controlling Party or the Subordination Agent in the
exercise of any right, remedy or power or in the pursuit of any remedy shall
impair any such right, power or remedy or be construed to be a waiver of any
default or to be an acquiescence therein.
Section 4.3. Discontinuance of Proceedings. In case any party to
this Agreement (including the Controlling Party in such capacity) shall have
instituted any Proceeding to enforce any right, power or remedy under this
Agreement by foreclosure, entry or otherwise, and such Proceeding shall have
been discontinued or abandoned for any reason or shall have been determined
adversely to the Person instituting such Proceeding, then and in every such
case each such party shall, subject to any determination in such Proceeding,
be restored to its former position and rights hereunder, and all rights,
remedies and powers of such party shall continue as if no such Proceeding had
been instituted.
Section 4.4. Right of Certificateholders and Primary Liquidity
Providers to Receive Payments Not to Be Impaired. Anything in this Agreement
to the contrary notwithstanding but subject to each Trust Agreement, the right
of any Certificateholder, any Primary Liquidity Provider or the Policy
Provider, respectively, to receive payments hereunder (including, without
limitation, pursuant to Sections 2.4, 3.2 or 3.3 hereof) when due, or to
institute suit for the enforcement of any such payment on or after the
applicable Distribution Date, shall not be impaired or affected without the
consent of such Certificateholder, such Primary Liquidity Provider or the
Policy Provider, respectively.
Section 4.5. Undertaking for Costs. In any suit for the enforcement
of any right or remedy under this Agreement or in any suit against any
Controlling Party or the Subordination Agent for any action taken or omitted
by it as Controlling Party or Subordination Agent, as the case may be, a court
in its discretion may require the filing by any party litigant in the suit of
an undertaking to pay the costs of the suit, and the court in its discretion
may assess reasonable costs, including reasonable attorneys' fees and
expenses, against any party litigant in the suit, having due regard to the
merits and good faith of the claims or defenses made by the party litigant.
The provisions of this Section do not apply to a suit instituted by the
Subordination Agent, a Liquidity Provider, the Policy Provider or a Trustee or
a suit by Certificateholders holding more than 10% of the original principal
amount of any Class of Certificates.
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ARTICLE V
DUTIES OF THE SUBORDINATION AGENT;
AGREEMENTS OF TRUSTEES, ETC.
Section 5.1. Notice of Indenture Default or Triggering Event. (a) In
the event the Subordination Agent shall have actual knowledge of the
occurrence of an Indenture Default or a Triggering Event, as promptly as
practicable, and in any event within 10 days after obtaining knowledge
thereof, the Subordination Agent shall transmit by mail or courier to the
Rating Agencies, the Liquidity Providers, the Policy Provider and the Trustees
notice of such Indenture Default or Triggering Event, unless such Indenture
Default or Triggering Event shall have been cured or waived. For all purposes
of this Agreement, in the absence of actual knowledge on the part of a
Responsible Officer, the Subordination Agent shall not be deemed to have
knowledge of any Indenture Default or Triggering Event unless notified in
writing by Northwest, one or more Trustees, one or more Liquidity Providers,
the Policy Provider or one or more Certificateholders.
(b) Other Notices. The Subordination Agent will furnish to each
Liquidity Provider, the Policy Provider and Trustee, promptly upon receipt
thereof, duplicates or copies of all reports, notices, requests, demands,
certificates, financial statements and other instruments furnished to the
Subordination Agent as registered holder of the Equipment Notes or otherwise
in its capacity as Subordination Agent to the extent the same shall not have
been otherwise directly distributed to such Liquidity Provider, the Policy
Provider or Trustee, as applicable, pursuant to the express provision of any
other Operative Agreement.
Section 5.2. Indemnification. The Subordination Agent shall not be
required to take any action or refrain from taking any action under Section
5.1 (other than the first sentence thereof) or Article IV hereof unless the
Subordination Agent shall have been indemnified (to the extent and in the
manner reasonably satisfactory to the Subordination Agent) against any
liability, cost or expense (including counsel fees and expenses) which may be
incurred in connection therewith. The Subordination Agent shall not be under
any obligation to take any action under this Agreement and nothing contained
in this Agreement shall require the Subordination Agent to expend or risk its
own funds or otherwise incur any financial liability in the performance of any
of its duties hereunder or in the exercise of any of its rights or powers if
it shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it. The Subordination Agent shall not be required to take any action under
Section 5.1 (other than the first sentence thereof) or Article IV hereof, nor
shall any other provision of this Agreement be deemed to impose a duty on the
Subordination Agent to take any action, if the Subordination Agent shall have
been advised by counsel that such action is contrary to the terms hereof or is
otherwise contrary to law.
Section 5.3. No Duties Except as Specified in Intercreditor
Agreement. The Subordination Agent shall not have any duty or obligation to
take or refrain from taking any action under, or in connection with, this
Agreement, except as expressly provided by the terms of this Agreement; and no
implied duties or obligations shall be read into this Agreement against the
Subordination Agent. The Subordination Agent agrees that it will, in its
individual capacity
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and at its own cost and expense (but without any right of indemnity in respect
of any such cost or expense under Section 5.2 or 7.1 hereof) promptly take
such action as may be necessary to duly discharge all Liens on any of the
Trust Accounts or any monies deposited therein which result from claims
against it in its individual capacity not related to its activities hereunder
or from a breach of its obligations that constitute willful misconduct or
gross negligence hereunder or any other Operative Agreement.
Section 5.4. Notice from the Liquidity Providers and Trustees. If a
Responsible Officer of any Liquidity Provider, the Policy Provider or Trustee
has actual notice of an Indenture Default or a Triggering Event, such Person
shall promptly use its best efforts to give notice thereof to all other
Liquidity Providers and Trustees and to the Policy Provider and to the
Subordination Agent, provided, however, that no such Person shall have any
liability hereunder as a result of its failure to deliver any such notice.
Section 5.5. Agreements Relating to Above-Cap Liquidity Facilities.
Each of the Subordination Agent, the Class G-1 Trustee and the Class C-1 Trustee
agrees at the request of the Class G-1 or Class C-1 Above-Cap Liquidity Provider
(as the case may be) to use reasonable efforts (consistent with applicable
legal and regulatory restrictions) to take any action that would avoid the
need for, or reduce the amount of, any payment under Section 2(d) of the ISDA
Master Agreement forming part of either the Class G-1 Above-Cap Liquidity
Facility or the Class C-1 Above-Cap Liquidity Facility; provided that any such
action would not, in the reasonable judgment of such Person, be materially
disadvantageous to it. Notwithstanding anything to the contrary contained
herein, but without limiting, and subject to, the rights of the Subordination
Agent hereunder, the obligation of the Above-Cap Liquidity Providers to make
any Above-Cap Payment or pay any Termination Amount shall be governed
exclusively by the applicable Above-Cap Liquidity Facility.
ARTICLE VI
THE SUBORDINATION AGENT
Section 6.1. Authorization; Acceptance of Trusts and Duties. Each of
the Class G-1 Trustee, Class G-2 Trustee, Class C-1 Trustee and Class C-2
Trustee hereby designates and appoints the Subordination Agent as the agent
and trustee of such Trustee under the applicable Liquidity Facility and
authorizes the Subordination Agent to enter into the applicable Liquidity
Facility as agent and trustee for such Trustee. Each of the Liquidity
Providers, the Trustees and the Policy Provider hereby designates and appoints
the Subordination Agent as the Subordination Agent under this Agreement.
The Subordination Agent hereby accepts the duties hereby created and
applicable to it as the Subordination Agent and agrees to perform the same but
only upon the terms of this Agreement and agrees to receive and disburse all
monies received by it in accordance with the terms hereof. The Subordination
Agent shall not be answerable or accountable under any circumstances, except
(a) for its own willful misconduct or gross negligence or, with respect to the
handling or transfer of funds, ordinary negligence, (b) as provided in Section
2.2 or 5.3 hereof and (c) for liabilities that may result from the material
inaccuracy of any representation or warranty of the Subordination Agent made
in its individual capacity in any Operative
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Agreement. The Subordination Agent shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Subordination
Agent, unless it is proved that the Subordination Agent was negligent in
ascertaining the pertinent facts.
Section 6.2. Absence of Duties. The Subordination Agent shall have
no duty to see to any recording or filing of this Agreement or any other
document, or to see to the maintenance of any such recording or filing.
Section 6.3. No Representations or Warranties as to Documents. The
Subordination Agent in its individual capacity does not make nor shall be
deemed to have made any representation or warranty as to the validity,
legality or enforceability of this Agreement or any other Operative Agreement
or as to the correctness of any statement contained in any thereof, except for
the representations and warranties of the Subordination Agent, made in its
individual capacity, under any Operative Agreement to which it is a party. The
Certificateholders, the Trustees, the Policy Provider and the Liquidity
Providers make no representation or warranty hereunder whatsoever.
Section 6.4. No Segregation of Monies; No Interest. Any monies paid
to or retained by the Subordination Agent pursuant to any provision hereof and
not then required to be distributed to any Trustee, the Policy Provider or any
Primary Liquidity Provider as provided in Articles II and III hereof need not
be segregated in any manner except to the extent required by such Articles II
and III and by law, and the Subordination Agent shall not (except as otherwise
provided in Section 2.2 hereof) be liable for any interest thereon; provided,
however, that any payments received or applied hereunder by the Subordination
Agent shall be accounted for by the Subordination Agent so that any portion
thereof paid or applied pursuant hereto shall be identifiable as to the source
thereof.
Section 6.5. Reliance; Agents; Advice of Counsel. The Subordination
Agent shall not incur liability to anyone in acting upon any signature,
instrument, notice, resolution, request, consent, order, certificate, report,
opinion, bond or other document or paper believed by it to be genuine and
believed by it to be signed by the proper party or parties. As to the Pool
Balance of any Trust as of any date, the Subordination Agent may for all
purposes hereof rely on a certificate signed by any Responsible Officer of the
applicable Trustee, and such certificate shall constitute full protection to
the Subordination Agent for any action taken or omitted to be taken by it in
good faith in reliance thereon. As to any fact or matter relating to the
Liquidity Providers, the Policy Provider or the Trustees the manner of
ascertainment of which is not specifically described herein, the Subordination
Agent may for all purposes hereof rely on a certificate, signed by any
Responsible Officer of the applicable Liquidity Provider or Trustee or the
Policy Provider, as the case may be, as to such fact or matter, and such
certificate shall constitute full protection to the Subordination Agent for
any action taken or omitted to be taken by it in good faith in reliance
thereon. The Subordination Agent shall assume, and shall be fully protected in
assuming, that each of the Liquidity Providers, the Policy Provider and each
of the Trustees are authorized to enter into this Agreement and to take all
action to be taken by them pursuant to the provisions hereof, and shall not
inquire into the authorization of each of the Liquidity Providers and each of
the Trustees with respect thereto. In the administration of the trusts
hereunder, the Subordination Agent may execute any of the trusts or powers
hereof and perform its powers and duties hereunder directly or through agents
or attorneys and may consult
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with counsel, accountants and other skilled persons to be selected and
retained by it, and the Subordination Agent shall not be liable for the acts
or omissions of any agent appointed with due care or for anything done,
suffered or omitted in good faith by it in accordance with the advice or
written opinion of any such counsel, accountants or other skilled persons.
Section 6.6. Capacity in Which Acting. The Subordination Agent acts
hereunder solely as agent and trustee herein and not in its individual
capacity, except as otherwise expressly provided in the Operative Agreements.
Section 6.7. Compensation. The Subordination Agent shall be entitled
to reasonable compensation, including expenses and disbursements, for all
services rendered hereunder and shall have a priority claim to the extent set
forth in Article III hereof on all monies collected hereunder for the payment
of such compensation, to the extent that such compensation shall not be paid
by others. The Subordination Agent agrees that it shall have no right against
any Trustee or Liquidity Provider or the Policy Provider for any fee as
compensation for its services as agent under this Agreement. The provisions of
this Section 6.7 shall survive the termination of this Agreement.
Section 6.8. May Become Certificateholder. The institution acting as
Subordination Agent hereunder may become a Certificateholder and have all
rights and benefits of a Certificateholder to the same extent as if it were
not the institution acting as the Subordination Agent.
Section 6.9. Subordination Agent Required; Eligibility. There shall
at all times be a Subordination Agent hereunder which shall be a corporation
organized and doing business under the laws of the United States of America or
of any State or the District of Columbia having a combined capital and surplus
of at least $100,000,000 (or the obligations of which, whether now in
existence or hereafter incurred, are fully and unconditionally guaranteed by a
corporation organized and doing business under the laws of the United States,
any State thereof or of the District of Columbia and having a combined capital
and surplus of at least $100,000,000), if there is such an institution willing
and able to perform the duties of the Subordination Agent hereunder upon
reasonable or customary terms. Such corporation shall be a citizen of the
United States and shall be authorized under the laws of the United States or
any State thereof or of the District of Columbia to exercise corporate trust
powers and shall be subject to supervision or examination by federal, state or
District of Columbia authorities. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of any of
the aforesaid supervising or examining authorities, then, for the purposes of
this Section 6.9, 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.
In case at any time the Subordination Agent shall cease to be
eligible in accordance with the provisions of this Section, the Subordination
Agent shall resign immediately in the manner and with the effect specified in
Section 8.1.
Section 6.10. Money to Be Held in Trust. All Equipment Notes, monies
and other property deposited with or held by the Subordination Agent pursuant
to this Agreement shall be held in trust for the benefit of the parties
entitled to such Equipment Notes, monies and
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other property. All such Equipment Notes, monies or other property shall be
held in the Trust Department of the institution acting as Subordination Agent
hereunder.
ARTICLE VII
INDEMNIFICATION OF SUBORDINATION AGENT
Section 7.1. Scope of Indemnification. The Subordination Agent shall
be indemnified hereunder to the extent and in the manner described in Section
7(c) of the Participation Agreements and Section 7 of the Note Purchase
Agreement. The indemnities contained in such Sections of such agreements shall
survive the termination of this Agreement.
ARTICLE VIII
SUCCESSOR SUBORDINATION AGENT
Section 8.1. Replacement of Subordination Agent; Appointment of
Successor. The Subordination Agent may resign at any time by so notifying the
Trustees, the Policy Provider and the Liquidity Providers. The Controlling
Party may remove the Subordination Agent for cause by so notifying the
Subordination Agent and may appoint a successor Subordination Agent. The
Controlling Party shall remove the Subordination Agent if:
(1) the Subordination Agent fails to comply with Section 6.9
hereof;
(2) the Subordination Agent is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the
Subordination Agent or its property; or
(4) the Subordination Agent otherwise becomes incapable of
acting.
If the Subordination Agent resigns or is removed or if a vacancy
exists in the office of Subordination Agent for any reason (the Subordination
Agent in such event being referred to herein as the retiring Subordination
Agent), the Controlling Party in consultation with Northwest shall promptly
appoint a successor Subordination Agent.
Any corporation into which the Subordination Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Subordination Agent
shall be a party, or any corporation to which substantially all the corporate
trust business of the Subordination Agent may be transferred, shall, subject
to the terms of Section 6.9 hereof, be the Subordination Agent hereunder and
under the other Operative Agreements to which the Subordination Agent is a
party without further act, except that such Person shall give prompt
subsequent notice of such transaction to the Liquidity Provider and each
Trustee.
A successor Subordination Agent shall deliver (x) a written
acceptance of its appointment as Subordination Agent hereunder to the retiring
Subordination Agent and (y) a written assumption of its obligations hereunder
and under each Liquidity Facility, to each party
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hereto upon which the resignation or removal of the retiring Subordination
Agent shall become effective, and the successor Subordination Agent shall have
all the rights, powers and duties of the Subordination Agent under this
Agreement. The successor Subordination Agent shall send a written notice of
its succession to the Liquidity Providers, the Policy Provider and the
Trustees. The retiring Subordination Agent shall promptly transfer its rights
under each of the Liquidity Facilities and all of the property held by it as
Subordination Agent to the successor Subordination Agent.
If a successor Subordination Agent does not take office within 60
days after the retiring Subordination Agent resigns or is removed, the
retiring Subordination Agent or one or more of the Trustees may petition any
court of competent jurisdiction for the appointment of a successor
Subordination Agent.
If the Subordination Agent fails to comply with Section 6.9 hereof
(to the extent applicable), one or more of the Trustees or one or more of the
Liquidity Providers, the Policy Provider or Northwest may petition any court
of competent jurisdiction for the removal of the Subordination Agent and the
appointment of a successor Subordination Agent.
Notwithstanding the foregoing, no resignation or removal of the
Subordination Agent shall be effective unless and until a successor has been
appointed. No appointment of a successor Subordination Agent shall be
effective unless and until the Rating Agencies shall have delivered a Ratings
Confirmation.
ARTICLE IX
SUPPLEMENTS AND AMENDMENTS
Section 9.1. Amendments, Waivers, Etc. (a) This Agreement may not be
supplemented, amended or modified without the consent of each Trustee (acting,
except in the case of any amendment pursuant to Section 3.6(e)(v)(y) hereof
with respect to any Replacement Primary Liquidity Facility, any amendment
pursuant to Section 3.6(c)(ii) hereof with respect to any Replacement Above-Cap
Liquidity Facility or any amendment contemplated by the last sentence of this
Section 9.1(a), with the consent of holders of Certificates of the related
Class evidencing interests in the related Trust aggregating not less than a
majority in interest in such Trust or as otherwise authorized pursuant to the
relevant Trust Agreement), the Subordination Agent, the Policy Provider and
each Liquidity Provider; provided, however, that this Agreement may be
supplemented, amended or modified without the consent of any Trustee if such
supplement, amendment or modification (i) is in accordance with Section
9.1(d), 9.1(e) or 9.1(f) hereof or (ii) cures an ambiguity or inconsistency or
does not materially adversely affect such Trustee or the holders of the
related Class of Certificates; provided further, however, that, if such
supplement, amendment or modification (A) would (x) directly or indirectly
modify or supersede, or otherwise conflict with, Section 2.2(b), Section
3.6(e), Section 3.6(f) (other than the last sentence thereof), the last
sentence of this Section 9.1(a) or this proviso (collectively, the "Northwest
Provisions") or (y) otherwise adversely affect the interests of a potential
Replacement Primary Liquidity Provider or of Northwest with respect to its
ability to replace any Primary Liquidity Facility or with respect to its
payment obligations under any Leased Aircraft Indenture, Owned Aircraft
Indenture or Operative Agreement or, (B) is made pursuant to the last
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sentence of this Section 9.1(a), then such supplement, amendment or
modification shall not be effective without the additional written consent of
Northwest. Notwithstanding the foregoing, without the consent of each
Certificateholder, the Policy Provider and each Primary Liquidity Provider, no
supplement, amendment or modification of this Agreement may (i) reduce the
percentage of the interest in any Trust evidenced by the Certificates issued
by such Trust necessary to consent to modify or amend any provision of this
Agreement or to waive compliance therewith or (ii) except as provided in
Section 9.1(d) or 9.1(e) or the last sentence of this Section 9.1(a), modify
Sections 2.4, 3.2 or 3.3 hereof, relating to the distribution of monies
received by the Subordination Agent hereunder from the Equipment Notes or
pursuant to the Liquidity Facilities or any Policy. Notwithstanding any
provision to the contrary contained herein, any modification to (x) Section
2.4(b), 3.2 or 3.3 hereof which would change the priority of payments to the
Above-Cap Reserve Account (other than a change in priority to provide for
distributions to the holders of Class E Certificates being made prior to the
application of any amount required to fund the Above-Cap Reserve Account
pursuant to clause "eleventh" of Section 2.4(b), clause "twelfth" of Section
3.2 and clause "thirteen" of Section 3.3 in connection with Section 9.1(f)
hereof) or (y) any provision herein that would materially adversely affect the
rights or materially increase the obligations of any Above-Cap Liquidity
Provider under its Above-Cap Liquidity Facility shall also require the consent
of the Above-Cap Liquidity Providers (or the applicable Above-Cap Liquidity
Provider, in the case of clause (y) above). Nothing contained in this Section
shall require the consent of a Trustee at any time following the payment of
Final Distributions with respect to the related Class of Certificates. If any
Replacement Primary Liquidity Facility for any Primary Liquidity Facility in
accordance with Section 3.6(e) hereof is to be comprised of more than one
instrument as contemplated by the definition of the term "Replacement Primary
Liquidity Facility", then each of the parties hereto agrees to amend this
Agreement to incorporate appropriate mechanics for multiple Primary Liquidity
Facilities for a Trust.
(b) In the event that the Subordination Agent, as the registered
holder of any Equipment Notes, receives a request for its consent to any
amendment, modification, consent or waiver under such Equipment Notes, the
Indenture pursuant to which such Equipment Notes were issued, or the related
Lease, Participation Agreement or other related document, (i) if no Indenture
Default shall have occurred and be continuing with respect to such Indenture,
the Subordination Agent shall request directions with respect to each Series
of such Equipment Notes from the Trustee of the Trust which holds such
Equipment Notes and shall vote or consent in accordance with the directions of
such Trustee, except that so long as the Final Distribution on the Class G-1
and Class G-2 Certificates has not been made or any Policy Provider Obligations
remain outstanding and no Policy Provider Default shall have occurred and be
continuing, the Subordination Agent shall request directions from the Policy
Provider rather than the Class G-1 Trustee with respect to the Class G-1
Equipment Notes held in the Class G-1 Trust, or the Class G-2 Trustee with
respect to the Class G-2 Equipment Notes held in the Class G-2 Trust, and (ii)
if any Indenture Default (which, in the case of any Indenture pertaining to a
Leased Aircraft, has not been cured by the applicable Owner Trustee or the
applicable Owner Participant, if applicable, pursuant to Section 4.03 of such
Indenture) shall have occurred and be continuing with respect to such
Indenture, the Subordination Agent will exercise its voting rights as directed
by the Controlling Party, subject to Sections 4.1 and 4.4 hereof; provided
that no such amendment, modification or waiver shall, without the consent of
each Primary Liquidity Provider and the Policy Provider, (i) reduce the amount
of rent, supplemental rent, stipulated loss
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value or termination value payable by Northwest under any Lease or reduce the
amount of principal or interest payable by Northwest under any Equipment Note
issued under any Indenture in respect of an Owned Aircraft (other than in
connection with a reoptimization relating to a Sale/Leaseback transaction for
a Selected Aircraft), (ii) create any Lien with respect to any Collateral or
Indenture Estate prior to or pari passu with the Lien of the related Indenture
or deprive any holder of an Equipment Note issued under such Indenture of the
benefit of the Lien of such Indenture upon the related Collateral or Indenture
Estate or (iii) reduce the percentage in principal amount of the outstanding
Equipment Notes issued under any Indenture required to take or approve any
action under such Indenture.
(c) Notwithstanding any provision to the contrary contained herein,
so long as Northwest and/or its Affiliates holds or beneficially owns a
majority of the Class D Certificates or otherwise controls the actions of the
Class D Trustee, any consent or approval of the Class D Trustee or any Class D
Certificateholder otherwise required in accordance with the foregoing
provisions shall not be required.
(d) If any Class D Certificates are issued, such Class D
Certificates shall be subordinated to the Class G-1, Class G-2, Class C-1 and
Class C-2 Certificates in the manner set forth in this Agreement and this
Agreement shall be amended in accordance with this Agreement and Section 11 of
the Note Purchase Agreement by written agreement of the Trustees and the
Subordination Agent to give effect to the issuance of any Class D
Certificates, which amendment shall include, without limitation, provision for
the Class D Trust Trustee to be added as a party to this Agreement and for the
definition of "Stated Interest Rate" to be revised, as appropriate, to reflect
the issuance of the Class D Certificates (and the subordination thereof). No
such amendment shall materially adversely affect any Trustee or the Policy
Provider.
(e) Pursuant to the Indentures for the Owned Aircraft for Aircraft
other than Selected Aircraft, if Northwest elects to redeem only the Series D
Equipment Notes outstanding under such Indentures pursuant to the second
paragraph of Section 2.11 thereof, Northwest may be required to simultaneously
issue new Series D Equipment Notes (the "New Series D Equipment Notes")
pursuant to the terms of such second paragraph. If New Series D Equipment
Notes are issued, such Notes are required to be held by a new pass through
trust (the "New Class D Trust") subject to the same subordination provisions
as the Class D Trust. In connection with the issuance of new class D pass
through certificates by the New Class D Trust (the "New Class D
Certificates"), this Agreement shall be amended by written agreement by the
Trustees and the Subordination Agent to provide for the subordination of the
New Class D Certificates to the Class G-1, Class G-2, Class C-1 and Class C-2
Certificates in the same manner as the Class D Certificates. No such amendment
shall materially adversely affect any Trustee. The amendment to this Agreement
to give effect to the issuance of any New Class D Certificate shall include,
without limitation:
(i) the trustee of the New Class D Trust shall be added as a
party to this Agreement and assuming Final Distributions have been
paid on the Class D Certificates, the Class D Trustee shall cease to
be a party to this Agreement;
(ii) the definitions of "Cash Collateral Account,"
"Certificate," "Class," "Equipment Notes," "Final Legal Distribution
Date," "LTV Ratio," "Stated Interest Rate,"
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"Trust," "Trust Agreement," and "Controlling Party" shall be
revised, as appropriate, to reflect the issuance of the New Class D
Certificates (and the subordination thereof); and
(iii) the provisions of this Agreement governing payments with
respect to Certificates and related notices, including, without
limitation, Sections 2.4, 3.1, 3.2, 3.3 and 3.6(e), shall be revised
to provide for distributions on the New Class D Certificates after
payment of all relevant distributions on the Class C-1 and Class C-2
Certificates and in the same priority as the Class D Certificates.
(f) If any Class E Certificate are issued, this Agreement shall be
amended by written agreement by the Trustees and the Subordination Agent to
provide for the subordination of such Class E Certificate to the Class G-1,
Class G-2, Class C-1, Class C-2 and Class D Certificates (or New Class D
Certificates) substantially in the same manner as the Class C-1 and Class C-2
Certificates are subordinated hereunder to the Class G-1 and Class G-2
Certificates and the Class D Certificates (or New Class D Certificates) are
subordinated hereunder to the Class C-1 and Class C-2 Certificates . No such
amendment shall materially adversely affect any Trustee. The amendment to this
Agreement to give effect to the issuance of any Class E Certificate shall
include, without limitation:
(i) the trustee of the Class E Trust shall be added as a party
to this Agreement;
(ii) the definitions of "Cash Collateral Account,"
"Certificate," "Class," "Equipment Notes," "Final Legal Distribution
Date," "LTV Ratio," "Stated Interest Rate," "Trust," "Trust
Agreement," and "Controlling Party" shall be revised, as
appropriate, to reflect the issuance of the Class E Certificates
(and the subordination thereof); and
(iii) the provisions of this Agreement governing payments with
respect to Certificates and related notices, including, without
limitation, Sections 2.4, 3.1, 3.2, 3.3 and 3.6(e), shall be revised
to provide for distributions on the Class E Certificates after
payment of all relevant distributions on the Class C-1 and Class C-2
Certificates and Class D Certificates (or New Class D Certificates).
If, with respect to any Aircraft, Series E Equipment Notes are
issued to any Person other than the Class E Trust, this Agreement
shall be amended by written agreement of the Trustees and the
Subordination Agent to (i) provide for each holder of a Series E
Equipment Note to be bound by the provisions of Section 2.6(a) so
that the Controlling Party, among other things, shall be entitled to
direct the Loan Trustee as provided therein (and such Series E
Equipment Notes shall make effective provision therefor so as to
bind each holder thereof to such provisions of Section 2.6(a)) and
(ii) to revise the definitions of "Controlling Party" and "Equipment
Notes", as appropriate, to reflect the issuance of the Series E
Equipment Notes (and the prior rights, as against the holders of
such Series E Equipment Notes, of the Class G-1, Class G-2, Class C-1,
Class C-2 and Class D Trustee (or the trustee of the New Class D
Trust) to be such "Controlling Party"). No such amendment shall
materially adversely affect any Trustee.
Each of the Liquidity Providers and the Policy Providers hereby
agree and confirm that (i) it shall be deemed to consent to the issuance of
any Class D Certificates, New
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Class D Certificates, Class E Certificates, Series D Equipment Notes, New
Series D Equipment Notes, Series E Equipment Notes and the amendments to this
Agreement made in connection therewith in accordance with this Section 9.1 and
(ii) any such issuance and amendment shall not affect any of its respective
obligations under its Liquidity Facilities or Policies, as applicable. Each
Policy Provider agrees and confirms that (i) its consent shall not be required
in connection with a transfer of the obligations of an Above-Cap Liquidity
Provider or the replacement of an Above-Cap Liquidity Facility under the
circumstances specified in Part 5(i) of the Schedule to the ISDA Master
Agreement forming a part of each Above-Cap Liquidity Facility and (ii) any such
transfer or replacement shall not affect any of its obligations under its
Policy.
The parties hereto agree that no amendments shall be made to this
Agreement pursuant to Section 9.1(d), 9.1(e) or 9.1(f) unless each Rating
Agency shall have provided written confirmation that the issuance of the Class
D Certificates, the New Class D Certificates or the Class E Certificates, as
the case may be, will not cause the rating then in effect by such Rating
Agency for any Class of Certificates (without regard, in the case of the Class
G-1 Certificate or the Class G-2 Certificates, to the Policies) to be withdrawn,
suspended or downgraded.
Section 9.2. Subordination Agent Protected. If, in the reasonable
opinion of the institution acting as the Subordination Agent hereunder, any
document required to be executed pursuant to the terms of Section 9.1 affects
any right, duty, immunity or indemnity with respect to it under this Agreement
or any Liquidity Facility, the Subordination Agent may in its discretion
decline to execute such document.
Section 9.3. Effect of Supplemental Agreements. Upon the execution
of any amendment or supplement hereto pursuant to the provisions hereof, this
Agreement shall be and be deemed to be modified and amended in accordance
therewith and the respective rights, limitations of rights, obligations,
duties and immunities under this Agreement of the parties hereto and
beneficiaries hereof shall thereafter be determined, exercised and enforced
hereunder subject in all respects to such modifications and amendments, and
all the terms and conditions of any such supplemental agreement shall be and
be deemed to be part of the terms and conditions of this Agreement for any and
all purposes. In executing or accepting any supplemental agreement permitted
by this Article IX, the Subordination Agent shall be entitled to receive, and
shall be fully protected in relying upon, an opinion of counsel stating that
the execution of such supplemental agreement is authorized or permitted by
this Agreement.
Section 9.4. Notice to Rating Agencies and the Policy Provider.
Promptly following its receipt of each amendment, consent, modification,
supplement or waiver contemplated by this Article IX, the Subordination Agent
shall send a copy thereof to each Rating Agency and the Policy Provider.
ARTICLE X
MISCELLANEOUS
Section 10.1. Termination of Intercreditor Agreement. Following
payment of Final Distributions with respect to each Class of Certificates and
the payment in full of all
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Liquidity Obligations to the Liquidity Providers and all Policy Provider
Obligations to the Policy Provider (provided that there shall then be no other
amounts due to the Certificateholders, the Trustees, the Liquidity Providers,
the Policy Provider with respect to the Primary Liquidity Facility and the
Subordination Agent hereunder or under the Trust Agreements, and that the
commitment of (i) the Liquidity Providers under the Liquidity Facilities and
(ii) the Policy Provider under the Policies shall have expired or been
terminated), this Agreement and the trusts created hereby shall terminate and
this Agreement shall be of no further force or effect. Except as aforesaid or
otherwise provided, this Agreement and the trusts created hereby shall
continue in full force and effect in accordance with the terms hereof.
Section 10.2. Intercreditor Agreement for Benefit of Trustees,
Liquidity Providers, Policy Provider and Subordination Agent. Subject to the
second sentence of Section 10.6 and the provisions of Section 4.4, nothing in
this Agreement, whether express or implied, shall be construed to give to any
Person other than the Trustees, the Liquidity Providers, the Policy Provider
and the Subordination Agent any legal or equitable right, remedy or claim
under or in respect of this Agreement.
Section 10.3. Notices. Unless otherwise expressly specified or
permitted by the terms hereof, all notices, requests, demands, authorizations,
directions, consents, waivers or documents provided or permitted by this
Agreement to be made, given, furnished or filed shall be in writing, mailed by
certified mail, postage prepaid, or by confirmed telecopy and
(i) if to the Subordination Agent,
addressed to it at its office at:
x/x Xxxxx Xxxxxx Xxxx and Trust Company
0 Xxxxxx xx Xxxxxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Corporate Trust Department
Fax: (000) 000-0000
(ii) if to the Trustee, addressed to it at its office at:
State Street Bank and Trust Company of
Connecticut, National Association
000 Xxxxxx Xxxxxx, Xxxxxxx Square
Hartford, Connecticut 06103
Attention: Corporate/Muni Department
Fax: (000) 000-0000
(iii) If to the Policy Provider, addressed to it at its office at:
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MBIA Insurance Corporation
000 Xxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Attention: Insured Portfolio Management, Structured
Fax: (000) 000-0000
(iv) if to the initial Primary Liquidity Provider,
addressed to it at its office at:
Westdeutsche Landesbank Girozentrale, New York Branch
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Suzy Kong
Fax: (000) 000-0000
Telephone: (000) 000-0000
With a copy to:
Westdeutsche Landesbank Girozentrale, New York Branch
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx Xxxxxx
Fax: (000) 000-0000
Telephone: (000) 000-0000
(v) if to the initial Above-Cap Liquidity Provider,
addressed to it at its office at:
Credit Suisse First Boston International
One Xxxxx Xxxxxx
Xxxxxx, X00 0X0
Xxxxxxx
Attention: (a) Head of Credit Risk Management
(b) Managing Director - Operations Department
(c) Managing Director - Legal Department
Fax: (44) (00) 0000-0000
Telephone: (44) (00) 0000-0000
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(v) If to MBIA Insurance Corporation, addressed to its office at:
MBIA Insurance Corporation
000 Xxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Insured Portfolio Management, Structured Finance
Fax: (000) 000-0000
Telephone: (000) 000-0000
Whenever any notice in writing is required to be given by any Trustee or
Liquidity Provider or the Policy Provider or the Subordination Agent to any of
the other of them, such notice shall be deemed given and such requirement
satisfied when such notice is received, if such notice is mailed by certified
mail, postage prepaid or by courier service or if such notice is sent by
confirmed telecopy addressed as provided above. Any party hereto may change
the address to which notices to such party will be sent by giving notice of
such change to the other parties to this Agreement.
Section 10.4. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
Section 10.5. No Oral Modifications or Continuing Waivers. No terms
or provisions of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party or
other Person against whom enforcement of the change, waiver, discharge or
termination is sought and any other party or other Person whose consent is
required pursuant to this Agreement and any waiver of the terms hereof shall
be effective only in the specific instance and for the specific purpose given.
Section 10.6. Successors and Assigns. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, each of
the parties hereto and the successors and assigns of each, all as herein
provided. In addition, the Northwest Provision shall inure to the benefit of
Northwest and its successors and permitted assigns and Northwest has hereby
constituted and agreed to be an express third party beneficiary of the
Northwest Provision.
Section 10.7. Headings. The headings of the various Articles and
Sections herein and in the table of contents hereto are for convenience of
reference only and shall not define or limit any of the terms or provisions
hereof.
Section 10.8. Counterpart Form. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute but one and the same agreement.
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Section 10.9. Subordination. (a) As between the Liquidity Providers
and the Policy Provider, on the one hand, and the Trustees and the
Certificateholders, on the other hand, and as between and among the Trustees
and the related Certificateholders of all Classes of Certificates, this
Agreement shall be a subordination agreement for purposes of Xxxxxxx 000 xx
xxx Xxxxxx Xxxxxx Bankruptcy Code, as amended from time to time.
(b) Notwithstanding the provisions of this Agreement, if prior to
the payment in full to the Liquidity Providers of all Liquidity Obligations
then due and payable and (ii) Policy Provider of all Policy Provider
Obligations, any party hereto shall have received any payment or distribution
in respect of Equipment Notes or any other amount under the Indentures or
other Operative Agreements which, had the subordination provisions of this
Agreement been properly applied to such payment, distribution or other amount,
would not have been distributed to such Person, then such payment,
distribution or other amount shall be received and held in trust by such
Person and paid over or delivered to the Subordination Agent for application
as provided herein.
(c) If any Trustee, any Liquidity Provider, the Subordination Agent
or the Policy Provider receives any payment in respect of any obligations
owing hereunder (or, in the case of the Liquidity Providers or the Policy
Provider, in respect of the Liquidity Obligations or the Policy Provider
Obligations, as the case may be) which is subsequently invalidated, declared
preferential, set aside and/or required to be repaid to a trustee, receiver or
other party, then, to the extent of such payment, such obligations (or, in the
case of the Liquidity Providers or the Policy Provider, such Liquidity
Obligations or the Policy Provider Obligations, as the case may be) intended
to be satisfied shall be revived and continue in full force and effect as if
such payment had not been received.
(d) The Trustees (on behalf of themselves and the holders of
Certificates), the Liquidity Providers, the Subordination Agent and the Policy
Provider confirm that the payment priorities specified in Sections 2.4, 3.2
and 3.3 shall apply in all circumstances, notwithstanding the fact that the
obligations owed to the Trustees and the holders of Certificates are secured
by certain assets and the Liquidity Obligations and the Policy Provider
Obligations may not be so secured. The Trustees expressly agree (on behalf of
themselves and the holders of Certificates) not to assert priority over the
holders of Liquidity Obligations or Policy Provider Obligations due to their
status as secured creditors in any bankruptcy, insolvency or other legal
proceeding.
(e) Each of the Trustees (on behalf of themselves and the holders of
Certificates), the Primary Liquidity Providers, the Policy Provider and the
Subordination Agent may take any of the following actions without impairing
its rights under this Agreement:
(i) obtain a lien on any property to secure any amounts owing to it
hereunder, including, in the case of the Primary Liquidity Providers and
the Policy Provider, the Primary Liquidity Obligations or the Policy
Provider Obligations, as the case may be,
(ii) obtain the primary or secondary obligation of any other obligor
with respect to any amounts owing to it hereunder, including, in the case
of the Primary Liquidity Providers and the Policy Provider, any of the
Liquidity Obligations or the Policy Provider Obligations, as the case may
be,
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(iii) renew, extend, increase, alter or exchange any amounts owing
to it hereunder, including, in the case of the Primary Liquidity
Providers and the Policy Provider, any of the Primary Liquidity
Obligations or the Policy Provider Obligations, as the case may be, or
release or compromise any obligation of any obligor with respect thereto,
(iv) refrain from exercising any right or remedy, or delay in
exercising such right or remedy, which it may have, or
(v) take any other action which might discharge a subordinated party
or a surety under applicable law;
provided, however, that the taking of any such actions by any of the Trustees,
the Liquidity Providers, the Policy Provider or the Subordination Agent shall
not prejudice the rights or adversely affect the obligations of any other
party under this Agreement.
Section 10.10. Governing Law. THIS AGREEMENT SHALL IN ALL RESPECTS
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
Section 10.11. Submission to Jurisdiction; Waiver of Jury Trial;
Waiver of Immunity. (a) Each of the parties hereto hereby irrevocably and
unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Agreement or any other Operative Agreement,
or for recognition and enforcement of any judgment in respect hereof or
thereof, to the nonexclusive general jurisdiction of the courts of the
State of New York, the courts of the United States of America for the
Southern District of New York, and the 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
that the venue of any such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same;
(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 each party hereto at its address set forth in Section 10.3
hereof, or at such other address of which the other parties shall have
been notified pursuant thereto; 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 jurisdiction.
(b) EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF THIS AGREEMENT OR ANY DEALINGS
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BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT AND THE
RELATIONSHIP THAT IS BEING ESTABLISHED, INCLUDING, WITHOUT LIMITATION,
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW
AND STATUTORY CLAIMS. EACH OF THE PARTIES WARRANTS AND REPRESENTS THAT IT HAS
REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT IT KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH SUCH
LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, AND CANNOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
(c) Each Liquidity Provider hereby waives any immunity it may have
from the jurisdiction of the courts of the United States or of any state
thereof and waives any immunity any of its properties located in the United
States may have from attachment or execution upon a judgment entered by any
such court under the United States Foreign Sovereign Immunities Act of 1976 or
any similar successor legislation.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective officers thereunto duly authorized, as of the day
and year first above written, and acknowledge that this Agreement has been
made and delivered in the City of New York, and this Agreement has become
effective only upon such execution and delivery.
STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Trustee for each of the Trusts
By: /s/ Xxxxxxx X. Ring
-------------------------------------
Name: Xxxxxxx X. Ring
Title: Assistant Vice President
WESTDEUTSCHE LANDESBANK GIROZENTRALE,
NEW YORK BRANCH, as Primary Liquidity
Provider
By:---------------------------------------
Name:
Title:
By:---------------------------------------
Name:
Title:
CREDIT SUISSE FIRST BOSTON
INTERNATIONAL, as the Class G-1 Above-Cap
Liquidity Provider and the Class C-2 Above-Cap
Liquidity Provider
By:-------------------------------------
Name:
Title:
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective officers thereunto duly authorized, as of the day
and year first above written, and acknowledge that this Agreement has been
made and delivered in the City of New York, and this Agreement has become
effective only upon such execution and delivery.
STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Trustee for each of the Trusts
By:-------------------------------------
Name:
Title:
WESTDEUTSCHE LANDESBANK GIROZENTRALE,
NEW YORK BRANCH, as Primary Liquidity
Provider
By: /s/ Xxxxxxxx Xxxxxx
---------------------------------------
Name: Xxxxxxxx Xxxxxx
Title: Managing Director
By: /s/ Xxxxxx Xxxxxx
---------------------------------------
Name: Xxxxxx Xxxxxx
Title: Associate Director
CREDIT SUISSE FIRST BOSTON
INTERNATIONAL, as the Class G-1 Above-Cap
Liquidity Provider and the Class C-2 Above-Cap
Liquidity Provider
By:-------------------------------------
Name:
Title:
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective officers thereunto duly authorized, as of the day
and year first above written, and acknowledge that this Agreement has been
made and delivered in the City of New York, and this Agreement has become
effective only upon such execution and delivery.
STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Trustee for each of the Trusts
By:-------------------------------------
Name:
Title:
WESTDEUTSCHE LANDESBANK GIROZENTRALE,
NEW YORK BRANCH, as Primary Liquidity
Provider
By:---------------------------------------
Name:
Title:
By:---------------------------------------
Name:
Title:
CREDIT SUISSE FIRST BOSOTON
INTERNATIONAL, as the Class G-1 Above-Cap
Liquidity Provider and the Class C-2 Above-Cap
Liquidity Provider
By: /s/ Xxxx Xxxxx
-------------------------------------
Name: Xxxx Xxxxx
Title: Authorized Signatory
By: /s/ Xxxxx XxXxxxx
-------------------------------------
Name: Xxxxx XxXxxxx
Title: Authorized Signatory
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XXXXX XXXXXX XXXX AND TRUST COMPANY, not in its
individual capacity except as expressly set
forth herein but solely as Subordination Agent
and trustee
By: /s/ Xxxxxxx X. Ring
-------------------------------------
Name: Xxxxxxx X. Ring
Title: Assistant Vice President
MBIA INSURANCE CORPORATION, as Policy Provider
By:-------------------------------------
Name:
Title:
-00-
XXXXX XXXXXX XXXX AND TRUST COMPANY, not in its
individual capacity except as expressly set
forth herein but solely as Subordination Agent
and trustee
By:-------------------------------------
Name:
Title:
MBIA INSURANCE CORPORATION, as Policy Provider
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Managing Director
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SCHEDULE 2.2(b)
Upon the funding of any Above-Cap Account or Above-Cap Reserve
Account or the maturity or redemption of any investment of funds in any such
account (such funds, the "Funds"), Credit Suisse First Boston International
shall send a notice to the Subordination Agent containing a list of Eligible
Investments (the "Specified Investments") which shall contain at least 10
investments in open market commercial paper of corporations incorporated under
the laws of the United States of America or any state thereof.
Following receipt of such notice, the Subordination Agent shall use
its best efforts to invest or reinvest the Funds in any Specified Investment.
If no Specified Investment is then available, the Subordination Agent shall
invest or reinvest the Funds in any other Eligible Investment selected by the
Subordination Agent.
Following such investment or reinvestment of the Funds by the
Subordination Agent in any Specified Investment or other Eligible Investment,
the Subordination Agent shall deliver a written statement to Credit Suisse
First Boston International setting forth for each such Specified Investment or
Eligible Investment the CUSIP number or other similar number for such
obligation (or, if such obligation does not have such a number, (i) the name
of the issuer, (ii) its maturity date, (iii) its yield or rate of return, and
(iv) its rating, if rated by any nationally recognized rating agency).
