EX-4(I)
EXHIBIT (4)(I)
CONFORMED COPY
NOTE PURCHASE AGREEMENT
Dated as of June 28, 2000
Among
NORTHWEST AIRLINES, INC.,
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
as Pass Through Trustee under each of the Pass Through Trust Agreements
STATE STREET BANK AND TRUST COMPANY,
as Subordination Agent
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
as Escrow Agent
and
STATE STREET BANK AND TRUST COMPANY,
as Paying Agent
INDEX TO NOTE PURCHASE AGREEMENT
Page
Section 1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . -3-
Section 2. Financing of Aircraft . . . . . . . . . . . . . . . . . . . -3-
Section 3. Conditions Precedent . . . . . . . . . . . . . . . . . . . . -7-
Section 4. Representations and Warranties . . . . . . . . . . . . . . . -8-
Section 5. Covenants . . . . . . . . . . . . . . . . . . . . . . . . . -13-
Section 6. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . -15-
Section 7. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . -15-
Section 8. Further Assurances . . . . . . . . . . . . . . . . . . . . . -16-
Section 9. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . -16-
Section 10. Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . -17-
Section 11. Termination . . . . . . . . . . . . . . . . . . . . . . . . -21-
Section 12. Third Party Beneficiary . . . . . . . . . . . . . . . . . . -21-
Section 13. Governing Law . . . . . . . . . . . . . . . . . . . . . . . -21-
SCHEDULES
Schedule I Aircraft and Scheduled Closing Months
Schedule II Trust Supplements
Schedule III Deposit Agreements
Schedule IV Escrow and Paying Agent Agreements
Schedule V Mandatory Document Terms
Schedule VI Mandatory Economic Terms
Schedule VII Aggregate Amortization Schedule
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ANNEX
Annex A Definitions
EXHIBITS
Exhibit A-1 Form of Leased Aircraft Participation Agreement
Exhibit A-2 Form of Lease
Exhibit A-3 Form of Leased Aircraft Indenture
Exhibit A-4 Form of Aircraft Purchase Agreement Assignment
Exhibit A-5 Form of Leased Aircraft Trust Agreement
Exhibit A-6 Form of Leased Aircraft Guarantee
Exhibit B Form of Closing Notice
Exhibit C-1 Form of Owned Aircraft Participation Agreement
Exhibit C-2 Form of Owned Aircraft Indenture
Exhibit C-3 Form of Owned Aircraft Guarantee
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NOTE PURCHASE AGREEMENT
This NOTE PURCHASE AGREEMENT, dated as of June 28, 2000, among
(i) Northwest Airlines, Inc., a Minnesota corporation (the "Company"), (ii)
State Street Bank and Trust Company of Connecticut, National Association, a
national banking association, not in its individual capacity except as
otherwise expressly provided herein, but solely as trustee (in such capacity
together with its successors in such capacity, the "Pass Through Trustee")
under each of the two separate Pass Through Trust Agreements (as defined
below), (iii) State Street Bank and Trust Company, a Massachusetts trust
company, as subordination agent and trustee (in such capacity together with
its successors in such capacity, the "Subordination Agent") under the
Intercreditor Agreement (as defined below), (iv) First Security Bank,
National Association, a national banking association, as Escrow Agent (in
such capacity together with its successors in such capacity, the "Escrow
Agent"), under each of the Escrow and Paying Agent Agreements (as defined
below) and (v) State Street Bank and Trust Company, a Massachusetts trust
company, as Paying Agent (in such capacity together with its successors in
such capacity, the "Paying Agent") under each of the Escrow and Paying Agent
Agreements.
W I T N E S S E T H:
WHEREAS, Northwest Airlines, Inc. has purchased six (6) Boeing 757-
200 aircraft listed on Schedule I hereto (the "Existing Aircraft") and has
received delivery of, or has commitments from the Seller pursuant to the
Aircraft Purchase Agreement for the delivery of, the thirteen (13) Airbus
A319-100 aircraft listed in Schedule I hereto (together with any aircraft
substituted therefor in accordance with the Aircraft Purchase Agreement prior
to the delivery thereof, the "New Aircraft"; together with the Existing
Aircraft, the "Aircraft");
WHEREAS, pursuant to the Basic Pass Through Trust Agreement and
each of the Trust Supplements set forth in Schedule II hereto, and
concurrently with the execution and delivery of this Agreement, separate
grantor trusts (collectively, the "Pass Through Trusts" and, individually, a
"Pass Through Trust") have been created to facilitate certain of the
transactions contemplated hereby, including, without limitation, the issuance
and sale of pass through certificates pursuant thereto (collectively, the
"Certificates") to provide for a portion of the financing or refinancing of
the Aircraft;
WHEREAS, the Company has entered into the Underwriting Agreement
dated as of June 21, 2000 (the "Underwriting Agreement") with the several
underwriters (the "Underwriters") named therein, which provides that the
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Company will cause the Pass Through Trustee of each of the Class G Trust and
the Class C Trust to issue and sell the Class G Certificates and the Class C
Certificates to the Underwriters;
WHEREAS, concurrently with the execution and delivery of this
Agreement, (i) the Escrow Agents and the Depositaries entered into the
Deposit Agreements set forth in Schedule III hereto (the "Deposit
Agreements") whereby the applicable Escrow Agent agreed to direct the
Underwriters to make certain deposits referred to therein on the Issuance
Date (the "Initial Deposits") and to permit the applicable Pass Through
Trustee to make additional deposits from time to time thereafter (the Initial
Deposits together with such additional deposits are collectively referred to
as the "Deposits") and (ii) the Pass Through Trustees, the Underwriters, the
Paying Agents and the Escrow Agents entered into the Escrow and Paying Agent
Agreements set forth in Schedule IV hereto (the "Escrow and Paying Agent
Agreements") whereby, among other things, (a) the applicable Escrow Agents
have directed the Underwriters, and the Underwriters agreed to deliver an
amount equal to the amount of the Initial Deposits to the applicable
Depositary on behalf of the applicable Escrow Agent and (b) the applicable
Escrow Agent, upon the applicable Depositary receiving such amount, has
agreed to deliver escrow receipts to be affixed to each Certificate;
WHEREAS, the Company will determine whether to enter into a
leveraged lease transaction as lessee with respect to an Aircraft (a "Leased
Aircraft") or to issue secured equipment notes in order to finance or
refinance an Aircraft (an "Owned Aircraft") and will give to the Pass Through
Trustee a Closing Notice (as defined below) specifying its election;
WHEREAS, upon receipt of a Closing Notice with respect to an
Aircraft, subject to the terms and conditions of this Agreement, the
applicable Pass Through Trustees will enter into the applicable Financing
Agreements relating to such Aircraft;
WHEREAS, on the Closing Date under the applicable Financing
Agreements, each Pass Through Trustee will fund its purchase of Equipment
Notes with the proceeds of one or more Deposits withdrawn by the applicable
Escrow Agent under the related Deposit Agreement bearing the same interest
rate as the Certificates issued by such Pass Through Trust; and
WHEREAS, concurrently with the execution and delivery of this
Agreement, (i) Credit Suisse First Boston, a banking institution organized
under the laws of Switzerland, acting through its New York branch (the
"Liquidity Provider"), has entered into two (2) revolving credit agreements
(each, a "Liquidity Facility"), one each for the benefit of the Certificate
Holders of each Pass Through Trust, with the Subordination Agent, as agent
for the Pass Through Trustee on behalf of each such Pass Through Trust, (ii)
the Pass Through Trustee, the Liquidity Provider, the Policy Provider (as
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defined below) and the Subordination Agent have entered into the
Intercreditor Agreement, dated as of the date hereof (the "Intercreditor
Agreement") and (iii) MBIA Insurance Corporation (the "Policy Provider"), the
Pass Through Trustee, the Company and the Subordination Agent have entered
into an Insurance and Indemnity Agreement (the "Policy Provider Agreement")
providing for the issuance by the Policy Provider of the Policy (as defined
in the Intercreditor Agreement).
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual agreements herein contained and other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the parties hereto
agree as follows:
Section 1. Definitions. Capitalized terms used but not defined
herein shall have the respective meanings set forth or incorporated by
reference in Annex A.
Section 2. Financing of Aircraft. (a) The Company confirms (i)
that it has purchased the Existing Aircraft and (ii) entered into the
Aircraft Purchase Agreement with the Seller pursuant to which it has agreed
to purchase or has purchased, and the Seller has agreed to deliver or has
delivered, the New Aircraft in the months specified in Schedule I hereto, all
on and subject to terms and conditions specified in the Aircraft Purchase
Agreement. The Company agrees to finance or refinance the Aircraft in the
manner provided herein, all on and subject to the terms and conditions hereof
and of the relevant Financing Agreements.
(b) In furtherance of the foregoing, the Company agrees to give
the parties hereto, each Depositary and each of the Rating Agencies not less
than two (2) Business Days' prior notice (a "Closing Notice") of the
scheduled closing date (the "Scheduled Closing Date") (or, in the case of a
Substitute Closing Notice under Section 2(f) or (g) hereof, one (1) Business
Day's prior notice) of a financing in respect of each Aircraft, which notice
shall:
(i) specify whether the Company has elected to treat such Aircraft
as a Leased Aircraft or an Owned Aircraft;
(ii) specify the Scheduled Closing Date on which the financing
therefor in the manner provided herein shall be consummated;
(iii) instruct the Pass Through Trustees to instruct each Escrow
Agent to provide a Notice of Purchase Withdrawal to the Depositary with
respect to the Equipment Notes to be issued in connection with the
financing of such Aircraft;
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(iv) instruct the Pass Through Trustees to enter into the
Participation Agreement with respect to such Aircraft in such form and
at such a time on or before the Scheduled Closing Date specified in such
Closing Notice and to perform its obligations thereunder;
(v) specify the aggregate principal amount of each series of
Equipment Notes to be issued, and purchased by the Pass Through
Trustees, in connection with the financing of such Aircraft on such
Scheduled Closing Date (which shall in all respects comply with the
Mandatory Economic Terms); and
(vi) if such Aircraft is to be a Leased Aircraft, certify that the
related Owner Participant (A) is not an Affiliate of the Company and (B)
based on the representations of such Owner Participant, is either (1) a
Qualified Owner Participant or (2) any other person the obligations of
which under the Owner Participant Documents (as defined in the
applicable Participation Agreement) are guaranteed by a Qualified Owner
Participant.
Notwithstanding the foregoing, in the event the Scheduled Closing
Date for any Aircraft to be financed or refinanced pursuant to the terms
hereof is on or within 3 Business Days following the date of issuance of the
Certificates, the Closing Notice therefor may be delivered to the parties
hereto on such Scheduled Closing Date.
(c) Upon receipt of a Closing Notice, the Pass Through Trustees
shall, and shall cause the Subordination Agent to, enter into and perform
their obligations under the Participation Agreement specified in such Closing
Notice, provided, however, that such Participation Agreement and the other
Financing Agreements to be entered into pursuant to such Participation
Agreement shall be in the forms thereof annexed hereto in all material
respects with such changes therein as shall have been requested by the
related Owner Participant (in the case of Lease Financing Agreements), agreed
to by the Company and, if modified in any material respect, as to which prior
written consent of the Policy Provider shall have been obtained and as to
which Rating Agency Confirmation shall have been obtained from each Rating
Agency by the Company (to be delivered by the Company to the applicable Pass
Through Trustee and the Policy Provider on or before the relevant Closing
Date, it being understood that if Policy Provider consent and Rating Agency
Confirmation shall have been received with respect to any Financing
Agreements and such Financing Agreements are utilized for subsequent Aircraft
(or Substitute Aircraft) without material modifications, no additional Policy
Provider consent or Rating Agency Confirmation shall be required); provided,
however, that the relevant Financing Agreements as executed and delivered
shall not vary the Mandatory Economic Terms and shall contain the Mandatory
Document Terms (as such Mandatory Document Terms may be modified in
accordance with Schedule V hereto). Notwithstanding the foregoing, if any
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Financing Agreement annexed hereto shall not have been reviewed by either
Rating Agency prior to the Issuance Date, then, prior to the use thereof in
connection with the financing of any Aircraft hereunder, the Company shall
obtain from each Rating Agency a confirmation that the use of such Financing
Agreement would not result in (A) a reduction of the rating for any Class of
Certificates below the then current rating for such Class of Certificates
(without regard to the Policy) or (B) a withdrawal or suspension of the
rating of any Class of Certificates, in each case, without reference to the
Policy.
(d) With respect to each Aircraft, the Company shall cause (i)
State Street Bank and Trust Company (or such other person that meets the
eligibility requirements to act as loan trustee under the Leased Aircraft
Indenture or Owned Aircraft Indenture) to execute as Loan Trustee the
Financing Agreements relating to such Aircraft to which such Loan Trustee is
intended to be a party and (ii) Northwest Airlines Corporation to execute a
Guarantee, and shall concurrently therewith execute such Financing Agreements
to which the Company is intended to be a party and perform its respective
obligations thereunder. Upon the request of the Policy Provider or either
Rating Agency, the Company shall deliver or cause to be delivered to the
Policy Provider or each Rating Agency, as the case may be, a true and
complete copy of each Financing Agreement relating to the financing of each
Aircraft together with a true and complete set of the closing documentation
(including legal opinions) delivered to the related Loan Trustee,
Subordination Agent and Pass Through Trustee under the related Participation
Agreement.
(e) If after giving any Closing Notice, there shall be a delay in
the delivery of a New Aircraft, or if on the Scheduled Closing Date of any
Aircraft the financing thereof in the manner contemplated hereby shall not be
consummated for whatever reason, the Company shall give the parties hereto
and the Policy Provider prompt notice thereof. Concurrent with the giving of
such notice of postponement or subsequent thereto, the Company shall give the
parties hereto and the Policy Provider a substitute Closing Notice specifying
the date (the "Substitute Closing Date") to which the applicable financing
shall have been rescheduled, which shall be a Business Day before the Cut-Off
Date on which the Escrow Agents shall be entitled to withdraw one or more
Deposits under each of the applicable Deposit Agreements to enable each
applicable Pass Through Trustee to fund its purchase of the related Equipment
Notes. Upon receipt of any such notice of postponement, each applicable Pass
Through Trustee shall comply with its obligations under Article IV of each of
the Trust Supplements and thereafter the financing or refinancing of the
relevant Aircraft shall take place on the Substitute Closing Date therefor
(all on and subject to the terms and conditions of the relevant Financing
Agreements) unless further postponed as provided herein.
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(f) Anything in this Section 2 to the contrary notwithstanding,
the Company shall have the right at any time on or before the Scheduled
Closing Date of any Aircraft, and subsequent to its giving a Closing Notice
therefor, to postpone the Scheduled Closing Date of such Aircraft so as to
enable the Company to change its election to treat such Aircraft as a Leased
Aircraft or an Owned Aircraft by written notice of such postponement to the
other parties hereto. The Company shall subsequently give the parties hereto
a substitute Closing Notice complying with the provisions of Section 2(b)
hereof and specifying the new Closing Date for such postponed Aircraft (which
shall be a Business Day occurring before the Cut-Off Date and on which the
Escrow Agents shall be entitled to withdraw Deposits under each of the
applicable Deposit Agreements sufficient to enable each applicable Pass
Through Trustee to fund its purchase of the related Equipment Notes). In
addition the Company shall have the further right, anything in this Section 2
to the contrary notwithstanding, to accept delivery of a New Aircraft under
the Aircraft Purchase Agreement on the Closing Date thereof by utilization of
bridge financing of such New Aircraft and thereafter give the parties hereto
a Closing Notice specifying a Closing Date no later than the Cut-Off Date and
otherwise complying with the provisions of Section 2(b) hereof. All other
terms and conditions of this Note Purchase Agreement shall apply to the
financing of any such Aircraft on the re-scheduled Closing Date therefor
except the re-scheduled Closing Date shall be deemed the Closing Date of such
Aircraft for all purposes of this Section 2.
(g) Anything in this Section 2 to the contrary notwithstanding,
the Company shall have the right at any time to convert an Owned Aircraft to
a Leased Aircraft by entering into a sale/leaseback transaction; provided,
that, prior to, or concurrent with, such conversion, the Company must (i)
comply with the conditions set forth in the Leased Aircraft Participation
Agreement with respect to such aircraft, (ii) deliver an opinion of counsel
that holders of Certificates related to such Aircraft will not recognize
income, gain or loss for federal income tax purposes as a result of such
conversion and will be subject to federal income tax in the same amount and
in the same manner and at the same time as would have been the case if such
conversion had not occurred (other than such change in amount, manner and
timing of interest that results from any reoptimization of the Equipment
Notes permitted pursuant to Section 16 of the applicable Owned Aircraft
Participation Agreement in connection with such conversion) and that the Pass
Through Trusts will not be subject to federal income tax as a result of such
conversion and (iii) obtain Rating Agency Confirmation. If the delivery date
for any New Aircraft under the Aircraft Purchase Agreement is delayed for
more than 30 days beyond the month scheduled for delivery or beyond the
Cut-Off Date, the Company may identify for delivery a substitute aircraft
therefor meeting the following conditions (together with the substitute
aircraft referred to in the next sentence, a "Substitute Aircraft"): (i) a
Substitute Aircraft must be an Airbus Model A319-100 aircraft delivered by
the Seller to the Company after the date of this Agreement, (ii) the
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Substitute Aircraft must have been manufactured after the Issuance Date and
(iii) the Company shall be obligated to obtain prior written consent of the
Policy Provider and Rating Agency Confirmation in respect of the replacement
of any New Aircraft by Substitute Aircraft. Upon the satisfaction of the
conditions set forth above with respect to a Substitute Aircraft, the New
Aircraft to be replaced shall cease to be subject to this Agreement and all
rights and obligations of the parties hereto concerning such New Aircraft
shall cease, and such Substitute Aircraft shall become and thereafter be
subject to the terms and conditions of this Agreement to the same extent as
such New Aircraft.
(h) The Company shall have no liability for the failure of the
Pass Through Trustees to purchase Equipment Notes with respect to any
Aircraft or Substitute Aircraft, other than the Company's obligation, if any,
to pay the Deposit Make-Whole Amount pursuant to Section 5(a)(i) of this
Agreement.
(i) The parties agree that if, in connection with the delivery of
an Aircraft or a Substitute Aircraft or the conversion of an Owned Aircraft
to a Leased Aircraft, any Owner Participant who is to be a party to any Lease
Financing Agreements shall not be a "citizen of the United States" within the
meaning of 49 U.S.C. Section 40102 (a)(15), then the applicable Lease
Financing Agreements shall be modified, consistent with the Mandatory
Document Terms (as such Mandatory Document Terms may be modified in
accordance with Schedule V hereto), to require such Owner Participant to
enter into a voting trust, voting powers or similar arrangement satisfactory
to the Company that (A) enables such Aircraft or Substitute Aircraft to be
registered in the United States and (B) complies with the FAA regulations
issued under the Act applicable thereto.
(j) Anything herein to the contrary notwithstanding, the Company
shall not have the right, and shall not be entitled, at any time to request
the issuance of Equipment Notes of any series to any Pass Through Trustee in
an aggregate principal amount in excess of the amount of the Deposits then
available for withdrawal by the Escrow Agent under and in accordance with the
provisions of the related Deposit Agreement.
(k) The Company shall notify the Rating Agencies and the Policy
Provider in writing of any lease of an Owned Aircraft pursuant to the terms
of an Owned Aircraft Indenture promptly after entering into such lease.
Section 3. Conditions Precedent. The obligation of the Pass
Through Trustees to enter into, and to cause the Subordination Agent to enter
into, any Participation Agreement as directed pursuant to a Closing Notice
and to perform its obligations under such Participation Agreement is subject
to satisfaction of the following conditions:
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(a) no Triggering Event shall have occurred;
(b) the Company shall have delivered a certificate to each such
Pass Through Trustee, each Liquidity Provider and the Policy Provider
stating that (i) such Participation Agreement and the other Financing
Agreements to be entered into pursuant to such Participation Agreement do not
vary the Mandatory Economic Terms and contain the Mandatory Document Terms
(as such Mandatory Document Terms may be modified in accordance with Schedule
V hereto) and (ii) any substantive modification of such Financing Agreements
from the forms thereof attached to this Agreement do not materially and
adversely affect the Liquidity Provider or the Certificate Holders or the
Policy Provider, and such certification shall be true and correct; and
(c) if required by Section 2(c) and in place of the statement in
clause (ii) of Section 3(b) above, Rating Agency Confirmation from each
Rating Agency and Policy Provider consent.
Anything herein to the contrary notwithstanding, the obligation of
each Pass Through Trustee to purchase Equipment Notes shall terminate on the
Cut-Off Date.
Section 4. Representations and Warranties.
(a) The Company represents and warrants on the date hereof and on
each Closing Date that:
(i) the Company is duly incorporated, validly existing and in good
standing under the laws of the State of Minnesota and is a "citizen of
the United States" as defined in 49 U.S.C. Section 40102(a)(15), and
has the full corporate power, authority and legal right under the laws
of the State of Minnesota to execute and deliver this Agreement and each
Financing Agreement to which it will be a party and to carry out the
obligations of the Company under this Agreement and each Financing
Agreement to which it will be a party;
(ii) the execution and delivery by the Company of this Agreement
and the performance by the Company of its obligations under this
Agreement have been duly authorized by the Company and will not violate
its Certificate of Incorporation or by-laws or the provisions of any
material indenture, mortgage, contract or other agreement to which it is
a party or by which it is bound;
(iii) this Agreement constitutes the legal, valid and binding
obligation of the Company, enforceable against it in accordance with its
terms, except as the same may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
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rights of creditors generally and by general principles of equity,
whether considered in a proceeding at law or in equity; and
(iv) the statements contained in any certificate delivered
pursuant to Section 3(b) are true and correct.
(b) State Street Bank and Trust Company represents and warrants on
the date hereof and on each Closing Date that:
(i) State Street Bank and Trust Company is duly incorporated,
validly existing and in good standing under the laws of the Commonwealth
of Massachusetts and is a "citizen of the United States" as defined in
49 U.S.C. Section 40102 (a)(15), and has the full corporate power,
authority and legal right under the laws of the Commonwealth of
Massachusetts and the United States pertaining to its banking, trust and
fiduciary powers to execute and deliver this Agreement and each
Financing Agreement to which it will be a party and to carry out the
obligations of State Street Bank and Trust Company, in its capacity as
Subordination Agent or Paying Agent, as the case may be, under this
Agreement and each Financing Agreement to which it will be a party;
(ii) the execution and delivery by State Street Bank and Trust
Company, in its capacity as Subordination Agent or Paying Agent, as the
case may be, of this Agreement and the performance by State Street Bank
and Trust Company, in its capacity as Subordination Agent or Paying
Agent, as the case may be, of its obligations under this Agreement have
been duly authorized by State Street Bank and Trust Company, in its
capacity as Subordination Agent or Paying Agent, as the case may be, and
will not violate its articles of association or by-laws or the
provisions of any indenture, mortgage, contract or other agreement to
which it is a party or by which it is bound; and
(iii) this Agreement constitutes the legal, valid and binding
obligation of State Street Bank and Trust Company in its capacity as
Subordination Agent or Paying Agent, as the case may be, enforceable
against it in accordance with its terms, except as the same may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the rights of creditors generally and by
general principles of equity, whether considered in a proceeding at law
or in equity.
(c) The Pass Through Trustee hereby confirms to each of the other
parties hereto that its representations and warranties set forth in Section
7.14 of the Basic Pass Through Trust Agreement are true and correct as of the
date hereof.
(d) The Subordination Agent represents and warrants that:
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(i) the Subordination Agent is duly incorporated, validly existing
and in good standing under the laws of the Commonwealth of
Massachusetts, and has the full corporate power, authority and legal
right under the laws of the Commonwealth of Massachusetts and the United
States pertaining to its banking, trust and fiduciary powers to execute
and deliver this Agreement and each Financing Agreement to which it is
or will be a party and to perform its obligations under this Agreement
and each Financing Agreement to which it is or will be a party;
(ii) this Agreement has been duly authorized, executed and
delivered by the Subordination Agent; this Agreement constitutes the
legal, valid and binding obligations of the Subordination Agent
enforceable against it in accordance with its terms, except as the same
may be limited by applicable bankruptcy, insolvency reorganization,
moratorium or similar laws affecting the rights of creditors generally
and by general principles of equity, whether considered in a proceeding
at law or in equity;
(iii) none of the execution, delivery and performance by the
Subordination Agent of this Agreement contravenes any law, rule or
regulation of the Commonwealth of Massachusetts or any United States
governmental authority or agency regulating the Subordination Agent's
banking, trust or fiduciary powers or any judgment or order applicable
to or binding on the Subordination Agent and do not contravene the
Subordination Agent's articles of association or by-laws or result in
any breach of, or constitute a default under, any Agreement or
instrument to which the Subordination Agent is a party or by which it or
any of its properties may be bound;
(iv) neither the execution and delivery by the Subordination Agent
of this Agreement nor the consummation by the Subordination Agent of any
of the transactions contemplated hereby requires the consent or approval
of, the giving of notice to, the registration with, or the taking of any
other action with respect to, any Massachusetts governmental authority
or agency or any federal Governmental authority or agency regulating the
Subordination Agent's banking, trust or fiduciary powers;
(v) there are no Taxes payable by the Subordination Agent imposed
by the Commonwealth of Massachusetts or any political subdivision or
taxing authority thereof in connection with the execution, delivery and
performance by the Subordination Agent of this Agreement (other than
franchise or other taxes based on or measured by any fees or
compensation received by the Subordination Agent for services rendered
in connection with the transactions contemplated by the Intercreditor
Agreement or any of the Liquidity Facilities), and there are no Taxes
payable by the Subordination Agent imposed by the Commonwealth of
Massachusetts or any political subdivision thereof in connection with
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the acquisition, possession or ownership by the Subordination Agent of
any of the Equipment Notes (other than franchise or other taxes based on
or measured by any fees or compensation received by the Subordination
Agent for services rendered in connection with the transactions
contemplated by the Intercreditor Agreement or any of the Liquidity
Facilities); and
(vi) there are no pending or threatened actions or proceedings
against the Subordination Agent before any court or administrative
agency which individually or in the aggregate, if determined adversely
to it, would materially adversely affect the ability of the
Subordination Agent to perform its obligations under this Agreement.
(e) The Escrow Agent represents and warrants that:
(i) the Escrow Agent is a national banking association duly
organized, validly existing and in good standing under the laws of the
United States and has the full corporate power, authority and legal
right under the laws of the United States pertaining to its banking,
trust and fiduciary powers to execute and deliver this Agreement, each
Deposit Agreement and each Escrow and Paying Agent Agreement
(collectively, the "Escrow Agent Agreements") and to carry out the
obligations of the Escrow Agent under each of the Escrow Agent
Agreements;
(ii) the execution and delivery by the Escrow Agent of each of the
Escrow Agent Agreements and the performance by the Escrow Agent of its
obligations hereunder and thereunder have been duly authorized by the
Escrow Agent and will not violate its articles of association or by-laws
or the provisions of any indenture, mortgage, contract or other
agreement to which it is a party or by which it is bound; and
(iii) each of the Escrow Agent Agreements constitutes the legal,
valid and binding obligations of the Escrow Agent enforceable against it
in accordance with its terms, except as the same may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the rights of creditors generally and by general
principles of equity, whether considered in a proceeding at law or in
equity.
(f) The Paying Agent represents and warrants that:
(i) the Paying Agent is duly incorporated, validly existing and in
good standing under the laws of the Commonwealth of Massachusetts and
has the full corporate power, authority and legal right under the laws
of the United States pertaining to its banking, trust and fiduciary
powers to execute and deliver this Agreement and each Escrow and Paying
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Agent Agreement (collectively, the "Paying Agent Agreements") and to
carry out the obligations of the Paying Agent under each of the Paying
Agent Agreements;
(ii) the execution and delivery by the Paying Agent of each of the
Paying Agent Agreements and the performance by the Paying Agent of its
obligations hereunder and thereunder have been duly authorized by the
Paying Agent and will not violate its articles of association or by-laws
or the provisions of any indenture, mortgage, contract or other
agreement to which it is a party or by which it is bound; and
(iii) each of the Paying Agent Agreements constitutes the legal,
valid and binding obligations of the Paying Agent enforceable against it
in accordance with its terms, except as the same may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the rights of creditors generally and by general
principles of equity, whether considered in a proceeding at law or in
equity.
(g) State Street Bank and Trust Company of Connecticut, National
Association represents and warrants on the date hereof and on each Closing
Date that:
(i) State Street Bank and Trust Company of Connecticut, National
Association is a national association validly existing and in good
standing with the Comptroller of the Currency under the laws of the
United States and is a "citizen of the United States" as defined in 49
U.S.C. Section 40102 (a)(15), and has the full power, authority and
legal right under the laws of the United States pertaining to its
banking, trust and fiduciary powers to execute and deliver this
Agreement and each Financing Agreement to which it will be a party and
to carry out the obligations of State Street Bank and Trust Company of
Connecticut, National Association, in its capacity as Pass Through
Trustee under this Agreement and each Financing Agreement to which it
will be a party;
(ii) the execution and delivery by State Street Bank and Trust
Company of Connecticut, National Association, in its capacity as Pass
Through Trustee under this Agreement and the performance by State Street
Bank and Trust Company of Connecticut, National Association, in its
capacity as Pass Through Trustee, of its obligations under this
Agreement have been duly authorized by State Street Bank and Trust
Company of Connecticut, National Association, in its capacity as Pass
Through Trustee and will not violate its articles of association or by-
laws or the provisions of any indenture, mortgage, contract or other
agreement to which it is a party or by which it is bound; and
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(iii) this Agreement constitutes the legal, valid and binding
obligation of State Street Bank and Trust Company of Connecticut,
National Association in its capacity as Pass Through Trustee enforceable
against it in accordance with its terms, except as the same may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the rights of creditors generally and by
general principles of equity, whether considered in a proceeding at law
or in equity.
Section 5. Covenants. (a) The Company covenants with each of the
other parties hereto that:
(i) on the date that the Depositary is obligated to pay the amount
of the Final Withdrawal to the Paying Agent pursuant to a Deposit
Agreement relating to any Trust, the Company shall pay to the Pass
Through Trustee of such Trust no later than 1:00 p.m. (New York time) an
amount equal to the Deposit Make-Whole Amount, if any, required to be
paid in respect of such Final Withdrawal amount;
(ii) subject to Section 5(a)(iv) of this Agreement, the Company
shall at all times maintain its corporate existence and shall not wind
up, liquidate or dissolve or take any action, or fail to take any
action, that would have the effect of any of the foregoing;
(iii) the Company shall at all times remain a U.S. Air Carrier (as
defined in the Financing Agreements) and shall at all times be otherwise
certificated and registered to the extent necessary to entitle (i) in
the case of Leased Aircraft, the Owner Trustee (and the Indenture
Trustee as assignee of the Owner Trustee's rights under each Lease) to
the rights afforded to lessors of aircraft equipment under Section 1110
and (ii) in the case of Owned Aircraft, the Indenture Trustee to the
rights afforded to secured parties of aircraft equipment under Section
1110;
(iv) Section 8(y) of each Participation Agreement is hereby
incorporated by reference herein;
(v) the Company shall not issue Series D Equipment Notes pursuant
to any Indenture, unless it shall have received Rating Agency
Confirmation, without regard to the Policy. If Series D Equipment Notes
are initially issued to other than the pass through trustee for the
Class D Certificates, the Company will cause such Series D Equipment
notes to be subject to the provisions of the Intercreditor Agreement
that allow the "Controlling Party" (as defined in the Intercreditor
Agreement), during the continuance of an "Indenture Default" (as defined
in the Intercreditor Agreement), to direct the Loan Trustee in taking
action under the applicable Indenture; and
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(vi) If the Depositary's short-term rating shall at any time fall
below the Depositary Threshold Rating from either Moody's or Standard &
Poor's, the Company shall, within 60 days of such event occurring, cause
the Depositary to be replaced with a depositary bank (a "Replacement
Depositary") on the following terms and conditions:
(1) the Replacement Depositary must be one that either (x)
meets the Depositary Threshold Rating or (y) with respect to which
the Company shall have obtained written confirmation from each
Rating Agency that such Replacement Depositary 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 the Depositary being replaced and
without regard to the Policy) and, in either case, the Company
shall have obtained written confirmation from each Rating Agency
that such replacement will not cause a reduction or withdrawal of
any rating then in effect for either Class of Certificates by such
Rating Agency (without regard to any downgrades of any rating of
the Depositary being replaced and without regard to the Policy);
(2) the Company shall cause the Escrow Agent and the
Replacement Depositary to enter into a Replacement Deposit
Agreement for each Class of Certificates and shall cause the
Replacement Depositary to deliver to the Company, the Policy
Provider (in the case of the Replacement Deposit Agreement for the
Class G Certificates) and each Rating Agency legal opinions and
other closing documentation substantially similar to those
delivered by the Depositary being replaced in connection with the
execution and delivery of the Deposit Agreements being replaced.
Subject to the foregoing, the Company shall instruct the Pass Through
Trustee, and the Pass Through Trustee agrees, to execute and deliver to
the Escrow Agent a duly completed Withdrawal Certificate (as defined in
the Escrow and Paying Agent Agreement with respect to the Class G
Certificates (the "Class G Escrow Agreement")) together with a Notice of
Replacement Withdrawal (as defined in the Class G Escrow Agreement).
Each of the parties hereto agrees, at the Company's request, to enter
into any amendments to this Agreement, the Class G Escrow Agreement and
any other Operative Documents as may be necessary or desirable to give
effect to the replacement of the Depositary and the Replacement Deposit
Agreements. Upon execution and delivery of the Replacement Deposit
Agreements, the Replacement Depositary shall be deemed to be the
Depositary with all of the rights and obligations of the Depositary
hereunder and under the other Operative Documents and the Replacement
Deposit Agreement shall be deemed to be the Deposit Agreement hereunder
and under the other Operative Documents, except that the obligations of
the replaced Depositary under the last sentence of Section 2.2 of the
-14-
Deposit Agreement shall remain in full force and effect notwithstanding
the execution and delivery of the Replacement Deposit Agreement.
(b) State Street Bank and Trust Company, in its individual
capacity, covenants with each of the other parties to this Agreement that it
will, immediately upon obtaining knowledge of any facts that would cast doubt
upon its continuing status as a "citizen of the United States" as defined in
49 U.S.C. Section 40102(a)(15) and promptly upon public disclosure of
negotiations in respect of any transaction which would or might adversely
affect such status, notify in writing all parties hereto of all relevant
matters in connection therewith. Upon State Street Bank and Trust Company
giving any such notice, State Street Bank and Trust Company shall, subject to
Section 9.01 of any Indenture then entered into, resign as Trustee in respect
of such Indenture.
Section 6. Notices. Unless otherwise specifically provided herein,
all notices required or permitted by the terms of this Agreement shall be in
English and in writing, and any such notice shall become effective upon being
delivered personally or, if promptly confirmed by mail, when dispatched by
facsimile or other written telecommunication, addressed to such party hereto
at its address or facsimile number set forth below the signature of such
party at the foot of this Agreement. Notice shall be given to the Policy
Provider at the address specified in the Policy Provider Agreement.
Section 7. Expenses. (a) The Company agrees to pay to the
Subordination Agent when due an amount or amounts equal to the fees payable
to the Liquidity Provider under Section 2.03 of each Liquidity Facility and
the related Fee Letter multiplied by a fraction the numerator of which shall
be the then outstanding aggregate amount of the Deposits under the Deposit
Agreements and the denominator of which shall be the sum of (x) the then
outstanding aggregate principal amount of the Series G Equipment Notes and
Series C Equipment Notes issued under all of the Indentures and (y) the then
outstanding aggregate amount of the Deposits under the Deposit Agreements.
The Company agrees to pay the Subordination Agent when due for application in
accordance with the Intercreditor Agreement an amount or amounts equal to the
fees payable to the Policy Provider under Section 3.02 of the Policy Provider
Agreement and the Policy Fee Letter multiplied by a fraction the numerator of
which shall be the then outstanding aggregate amount of the Deposits under
the Deposit Agreement pertaining to the Class G Trust and the denominator of
which shall be the sum of (x) the then outstanding aggregate principal amount
of the Series G Equipment Notes issued under all of the Indentures and (y)
the then outstanding aggregate amount of the Deposits under the Deposit
Agreement pertaining to the Class G Trust.
(b) So long as no Equipment Notes have been issued in respect of
any Aircraft, the Company agrees to pay (i) to the Subordination Agent when
due (A) the amount equal to interest on any Downgrade Advance (other than an
-15-
Applied Downgrade Advance) payable under Section 3.07 of each Liquidity
Facility minus Investment Earnings while such Downgrade Advance shall be
outstanding, (B) the amount equal to interest on any Non-Extension Advance
(other than an Applied Non-Extension Advance) payable under Section 3.07 of
each Liquidity Facility minus Investment Earnings while such Non-Extension
Advance shall be outstanding, (C) any other amounts owed to the Liquidity
Provider by the Subordination Agent as borrower under each Liquidity Facility
(other than amounts due as repayment of advances thereunder or as interest on
such advances, except to the extent payable pursuant to clause (A) or (B)),
(ii) all compensation and reimbursement of expenses, disbursements and
advances payable by the Company under the Pass Through Trust Agreements,
(iii) all compensation and reimbursement of expenses and disbursements
payable to the Subordination Agent under the Intercreditor Agreement except
with respect to any income or franchise taxes incurred by the Subordination
Agent in connection with the transactions contemplated by the Intercreditor
Agreement and (iv) in the event the Company requests any amendment to any
Operative Document or to this Note Purchase Agreement, all reasonable fees
and expenses (including, without limitation, fees and disbursements of
counsel) of the Policy Provider, the Escrow Agent and/or the Paying Agent in
connection therewith. For purposes of this Section 7(b), (i) the terms
"Applied Downgrade Advance," "Applied Non-Extension Advance," "Downgrade
Advance" and "Non-Extension Advance" shall have the meanings specified in
each Liquidity Facility and (ii) the term "Investment Earnings" shall have
the meaning specified in the Intercreditor Agreement.
Section 8. Further Assurances. Each party hereto shall duly
execute, acknowledge and deliver, or shall cause to be executed, acknowledged
and delivered, all such further agreements, instruments, certificates or
documents, and shall do and cause to be done such further acts and things, in
any case, as any other party hereto shall reasonably request in connection
with its administration of, or to carry out more effectually the purposes of,
or to better assure and confirm unto it the rights and benefits to be
provided under, this Agreement.
Section 9. Miscellaneous. (a) Provided that the transactions
contemplated hereby have been consummated, and except as otherwise provided
for herein, the representations, warranties and agreements herein of the
Company, the Subordination Agent, the Escrow Agent, the Paying Agent and the
Pass Through Trustee, and the Company's, the Subordination Agent's, the
Escrow Agent's, the Paying Agent's and the Pass Through Trustee's obligations
under any and all thereof, shall survive the expiration or other termination
of this Agreement and the other agreements referred to herein.
(b) This Agreement may be executed in any number of counterparts
(and each of the parties hereto shall not be required to execute the same
counterpart). Each counterpart of this Agreement, including a signature page
executed by each of the parties hereto, shall be an original counterpart of
-16-
this Agreement, but all of such counterparts together shall constitute one
instrument. Neither this Agreement nor any of the terms hereof may be
terminated, amended, supplemented, waived or modified orally, but only by an
instrument in writing signed by the party against which the enforcement of
the termination, amendment, supplement, waiver or modification is sought. The
index preceding this Agreement and the headings of the various Sections of
this Agreement are for convenience of reference only and shall not modify,
define, expand or limit any of the terms or provisions hereof. The terms of
this Agreement shall be binding upon, and shall inure to the benefit of, the
Company and its successors and permitted assigns, the Pass Through Trustee
and its successors as Pass Through Trustee (and any additional trustee
appointed) under any of the Pass Through Trust Agreements, the Escrow Agent
and its successors as Escrow Agent under the Escrow and Paying Agent
Agreements, the Paying Agent and its successors as Paying Agent under the
Escrow and Paying Agent Agreement and the Subordination Agent and its
successors as Subordination Agent under the Intercreditor Agreement.
(c) This Agreement is not intended to, and shall not provide any
person not a party hereto (other than the Underwriters, the Policy Provider
as beneficiary of Section 5(a)(vi) and the second paragraph of Section 10
hereof, and each of the beneficiaries of Section 7 hereof) with any rights of
any nature whatsoever against any of the parties hereto, and no person not a
party hereto (other than the Underwriters, the Policy Provider and each of
the beneficiaries of Section 7 hereof) shall have any right, power or
privilege in respect of, or have any benefit or interest arising out of, this
Agreement.
Section 10. Indemnity. The Company hereby agrees to indemnify
each Indemnitee against, and agrees to protect, defend, save and keep
harmless each thereof from any and all liabilities, obligations, losses,
damages, penalties, claims, actions, suits, out-of-pocket costs, expenses,
and disbursements, of whatsoever kind and nature (collectively called
"Expenses") imposed on, incurred by or asserted against any Indemnitee, in
any way relating to or arising out of (A) any of the Financing Agreements or
any lease or sublease of any Aircraft or the enforcement of any of the terms
thereof or any amendment, modification or waiver in respect thereof, (B) the
manufacture, purchase, acceptance or rejection of the Airframe (as defined in
the Participation Agreement) or any Engine (as defined in the Participation
Agreement), (C) the Aircraft (or any portion thereof or any Engine or engine
affixed to the Airframe) whether or not arising out of the finance,
refinance, ownership, delivery, nondelivery, storage, lease, sublease, sub-
sublease, possession, use, non-use, operation, maintenance, registration,
reregistration, condition, modification, alteration, replacement, repair,
substitution, sale, return or other disposition of the Aircraft (or any
portion thereof or any Engine or engine affixed to the Airframe) including,
without limitation, latent or other defects, whether or not discoverable,
strict tort liability and any claim for patent, trademark or copyright
-17-
infringement, or (D) the offer, sale or delivery of the Equipment Notes (the
indemnity in this clause (D) to extend also to any person who controls an
Indemnitee within the meaning of Section 15 of the Securities Act of 1933, as
amended); provided that the foregoing indemnity as to any Indemnitee shall
not extend to any Expense resulting from or arising out of or which would not
have occurred but for one or more of the following: (A) any representation or
warranty by such Indemnitee (or any of its affiliates) in the Financing
Agreements or in connection therewith being incorrect in any material
respect, or (B) the failure by such Indemnitee (or any of its affiliates) to
perform or observe any agreement, covenant or condition in any of the
Financing Agreements applicable to it (except to the extent such failure was
caused directly by the failure of the Company to perform any obligation under
a Financing Agreement), or (C) the willful misconduct or the gross negligence
of such Indemnitee (or any of its affiliates) other than gross negligence
imputed to such Indemnitee (or any of its affiliates) solely by reason of its
interest in the Aircraft), or (D) any Tax, or (E) the authorization or giving
or withholding of any future amendments, supplements, waivers or consents
with respect to any of the Financing Agreements other than such as have been
consented to, approved, authorized or requested by the Company, or (F)
subject to the next succeeding paragraph, any loss of tax benefits or
increase in tax liability under any tax law whether or not the Company is
required to indemnify therefor pursuant to this Agreement, or (G) any Expense
which is specified to be for the account of an Indemnitee pursuant to any
Financing Agreement without express right of reimbursement under any
Financing Agreement. The foregoing indemnity shall not extend to any Expense
to the extent that such Expense is not caused by, or does not arise out of,
an act, omission or event which occurs prior to the payment of all payments
required to be paid by the Company under the Financing Agreements.
The Company further agrees to indemnify the Policy Provider from
and against, and agrees to protect, save and keep harmless the Policy
Provider from any and all Expenses imposed on, incurred by or asserted
against any of them in any way relating to, based on or arising from the
enforcement by the Policy Provider of its rights as a subrogee under the
Class G Escrow and Agreement; provided, that the foregoing indemnity shall
not extend to the Policy Provider with respect to any loss, claim or expense
to the extent such loss, claim or expense is attributable to the Policy
Provider's gross negligence or willful misconduct and provided, further, that
the Policy Provider shall have no claim against any "Collateral" or "Trust
Indenture Estate" (as such terms are defined in the Financing Agreements) for
any payments under this Section 10.
The Company further agrees that any payment or indemnity pursuant
to this Section 10 in respect of any Expenses shall be in an amount which,
after deduction of all Taxes required to be paid by such recipient with
respect to such payment or indemnity under the laws of any Federal, state or
local government or taxing authority in the United States, or under the laws
-18-
of any taxing authority or governmental subdivision of a foreign country, or
any territory or possession of the United States or any international
authority, shall be equal to the excess, if any, of (A) the amount of such
Expense over (B) the net reduction in Taxes required to be paid by such
recipient resulting from the accrual or payment of such Expense.
If, by reason of any Expense payment made to or for the account of
an Indemnitee by the Company pursuant to this Section 10, such Indemnitee
subsequently realizes a tax deduction or credit (including foreign tax credit
and any reduction in Taxes) not previously taken into account in computing
such payment, such Indemnitee shall promptly pay to the Company, but only if
the Company shall have made all payments then due and owing to such
Indemnitee under the Financing Agreements, an amount equal to the sum of (I)
the actual reduction in Taxes realized by such Indemnitee which is
attributable to such deduction or credit, and (II) the actual reduction in
Taxes realized by such Indemnitee as a result of any payment made by such
Indemnitee pursuant to this sentence.
If a claim is made against an Indemnitee involving one or more
Expenses and such Indemnitee has notice thereof, such Indemnitee shall
promptly, upon receiving such notice, give notice of such claim to the
Company; provided that the failure to provide such notice shall not release
the Company from any of its obligations to indemnify hereunder, and no
payment by the Company to an Indemnitee pursuant to this Section 10 shall be
deemed to constitute a waiver or release of any right or remedy which the
Company may have against such Indemnitee for any actual damages as a result
of the failure by such Indemnitee to give the Company such notice. The
Company shall be entitled, at its sole cost and expense, acting through
counsel acceptable to the respective Indemnitee, (A) so long as the Company
has agreed in a writing acceptable to such Indemnitee that the Company is
liable to such Indemnitee for such Expense hereunder (unless such Expense is
covered by the proviso to the first paragraph of this Section 10), in any
judicial or administrative proceeding that involves solely a claim for one or
more Expenses, to assume responsibility for and control thereof, (B) so long
as the Company has agreed in a writing acceptable to such Indemnitee that the
Company is liable to such Indemnitee for such Expense hereunder (unless such
Expense is covered by the proviso to the first paragraph of this Section 10),
in any judicial or administrative proceeding involving a claim for one or
more Expenses and other claims related or unrelated to the transactions
contemplated by the Financing Agreements, to assume responsibility for and
control of such claim for Expenses to the extent that the same may be and is
severed from such other claims (and such Indemnitee shall use its best
efforts to obtain such severance), and (C) in any other case, to be consulted
by such Indemnitee with respect to judicial proceedings subject to the
control of such Indemnitee. Notwithstanding any of the foregoing to the
contrary, the Company shall not be entitled to assume responsibility for and
control of any such judicial or administrative proceedings (M) while an event
-19-
of default shall have occurred and be continuing under any of the Financing
Agreements or (N) if such proceeding could be in the good faith opinion of
such Indemnitee entail any material risk of criminal liability or present a
conflict of interest making separate representation necessary. The affected
Indemnitee may participate at its own expense and with its own counsel in any
judicial proceeding controlled by the Company pursuant to the preceding
provisions.
The affected Indemnitee shall supply the Company with such
information reasonably requested by the Company as is necessary or advisable
for the Company to control or participate in any proceeding to the extent
permitted by this Section 10. Such Indemnitee shall not enter into a
settlement or other compromise with respect to any Expense without the prior
written consent of the Company, which consent shall not be unreasonably
withheld or delayed, unless such Indemnitee waives its right to be
indemnified with respect to such Expense under this Section 10.
The Company shall supply the affected Indemnitee with such
information reasonably requested by such Indemnitee as is necessary or
advisable for such Indemnitee to control or participate in any proceeding to
the extent permitted by this Section 10.
When the Company or the insurers under a policy of insurance
maintained by the Company undertakes the defense of an Indemnitee with
respect to an Expense, no additional legal fees or expenses of such
Indemnitee in connection with the defense of such Indemnitee shall be
indemnified hereunder unless such fees or expenses were incurred at the
written request of the Company or such insurers, provided that no such
defense shall be compromised or settled on a basis that admits any gross
negligence or willful misconduct on the part of such Indemnitee without such
Indemnitee's prior consent.
In the event that the Company shall have paid an amount to an
Indemnitee pursuant to this Section 10, and such Indemnitee subsequently
shall be reimbursed in respect of such indemnified amount from any other
Person, such Indemnitee shall promptly pay to the Company an amount equal to
the amount of such reimbursement (but in no event more than such payment from
the Company) plus any net tax benefit (or minus any net tax detriment)
realized by such Indemnitee as a result of any reimbursement received and
payment made by such Indemnitee pursuant to this sentence, provided that (i)
no event of default has occurred and is continuing under any of the Financing
Agreements and (ii) such Indemnitee shall have no obligation to reimburse the
Company if the Company has not paid such Indemnitee all amounts required
pursuant to this Section 10 and any other amounts then due to such Indemnitee
from the Company under any of the Financing Agreements.
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The Company's obligations under the indemnities provided for in
this Agreement shall be those of a primary obligor, whether or not the Person
indemnified shall also be indemnified with respect to the same matter under
the terms of any other document or instrument, and the Person seeking
indemnification from the Company pursuant to this Section 10 may proceed
directly against the Company without first seeking to enforce any other right
of indemnification.
Section 11. Termination. This Agreement shall terminate on the
Delivery Period Termination Date or, if earlier, the date on which Equipment
Notes issued with respect to all of the Aircraft have been purchased by the
Pass Through Trustees in accordance with this Agreement; provided, that, the
provisions of Sections 7, 8, 9 and the second paragraph of Section 10 hereof
shall survive any termination of this Agreement.
Section 12. Third Party Beneficiary. The Policy Provider shall be
an express third party beneficiary with respect to enforcement of Section
5(a)(vi) and the second paragraph of Section 10 hereof.
Section 13. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
(This space intentionally left blank.)
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IN WITNESS WHEREOF, the parties hereto have caused this Note
Purchase Agreement to be duly executed by their respective officers thereunto
duly authorized as of the day and year first above written.
NORTHWEST AIRLINES, INC.
By:______________________________________
Name:
Title:
Address:
Attention:
Facsimile:
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION, not in
its individual capacity, except as
otherwise provided herein, but solely as
Pass Through Trustee
By:______________________________________
Name:
Title:
Address:
Attention:
Facsimile:
-00-
XXXXX XXXXXX XXXX AND TRUST COMPANY, not
in its individual capacity, except as
otherwise provided herein, but solely as
Subordination Agent
By:______________________________________
Name:
Title:
Address:
Attention:
Facsimile:
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
as Escrow Agent
By:______________________________________
Name:
Title:
Address:
Attention:
Facsimile:
STATE STREET BANK AND TRUST COMPANY, as
Paying Agent
By:______________________________________
Name:
Title:
Address:
Attention:
Facsimile:
-23-
SCHEDULE I TO
NOTE PURCHASE AGREEMENT
AIRCRAFT AND ACTUAL OR EXPECTED DELIVERY MONTHS
EXISTING AIRCRAFT
-----------------
Existing Registration Manufacturer's
Aircraft Type Number Serial Number Delivery Months
---------------- ------------ -------------- ---------------
Boeing 757-200 N544US 26491 May 1996
Boeing 757-200 N545US 26492 June 1996
Boeing 757-200 N546US 26493 July 1996
Boeing 757-200 N547US 26494 August 1996
Boeing 757-200 N548US 26495 August 1996
Boeing 757-200 N549US 26496 September 1996
NEW AIRCRAFT
------------
Expected Expected Actual or
New Registration Manufacturer's Scheduled
Aircraft Type Number Serial Number Delivery Months
-------------- ------------ -------------- ---------------
Airbus X000-000 X000XX 1230 May 2000
Airbus A319-100 N316NB 1249 June 2000
Airbus A319-100 N317NB 1324 September 2000
Airbus A319-100 N318NB 1325 September 2000
Airbus A319-100 N319NB 1346 October 2000
Airbus A319-100 N320NB December 2000
Airbus A319-100 N321NB January 2001
Airbus A319-100 N322NB February 2001
Airbus A319-100 N323NB March 2001
Airbus A319-100 N324NB March 2001
Airbus A319-100 N325NB May 2001
Airbus A319-100 N326NB May 2001
Airbus A319-100 N327NB June 2001
-24-
SCHEDULE II TO
NOTE PURCHASE AGREEMENT
TRUST SUPPLEMENTS
Trust Supplement, dated as of the Issuance Date, among the Company,
NWA Corp. and the Pass Through Trustee in respect of Northwest Airlines Pass
Through Trust, Series 2000-1G.
Trust Supplement, dated as of the Issuance Date, among the Company,
NWA Corp. and the Pass Through Trustee in respect of Northwest Airlines Pass
Through Trust, Series 2000-1C.
-25-
SCHEDULE III TO
NOTE PURCHASE AGREEMENT
DEPOSIT AGREEMENTS
Deposit Agreement (Class G), dated as of the Issuance Date, between
the Depositary and the Escrow Agent.
Deposit Agreement (Class C), dated as of the Issuance Date, between
the Depositary and the Escrow Agent.
-1-
SCHEDULE IV TO
NOTE PURCHASE AGREEMENT
ESCROW AND PAYING AGENT AGREEMENTS
Escrow and Paying Agent Agreement (Class G), dated as of the
Issuance Date, among the Escrow Agent, the Underwriters, the Pass Through
Trustee and the Paying Agent.
Escrow and Paying Agent Agreement (Class C), dated as of the
Issuance Date, among the Escrow Agent, the Underwriters, the Pass Through
Trustee and the Paying Agent.
-1-
SCHEDULE V TO
NOTE PURCHASE AGREEMENT
MANDATORY DOCUMENT TERMS
The terms "Trust Indenture Form," "Lease Form" and "Participation
Agreement Form" shall have the respective meanings specified in Schedule VI
to the Note Purchase Agreement.
1. May not modify in any material adverse respect as regards the
interests of the Note Holders, the Subordination Agent, the Liquidity
Provider, the Policy Provider or the Indenture Trustee, the Granting Clause
of the Trust Indenture Form so as to deprive the Note Holders of a first
priority security interest in and mortgage lien on the Aircraft and, in the
case of a Leased Aircraft Indenture, the Lease or to eliminate any of the
obligations intended to be secured thereby or otherwise modify in any
material adverse respect as regards the interests of the Note Holders, the
Subordination Agent, the Liquidity Provider, the Policy Provider or the
Indenture Trustee the provisions of Article II or III or Sections 4.02, 4.03,
4.04, 5.02, 5.06, 9.01 or the first sentence of Section 10.11 of the Leased
Aircraft Indenture Form for the Leased Aircraft or Article II or III or
Sections 4.01, 4.02, 5.02, 7.06(a), 7.06(b), 10.01, or the first sentence of
Section 11.11 of the Owned Aircraft Indenture Form for the Owned Aircraft.
2. May not modify in any material adverse respect as regards the
interests of the Note Holders, the Subordination Agent, the Liquidity
Provider, the Policy Provider or the Indenture Trustee the provisions of
Section 3(d)(v), Section 3(f), Section 7(a)(I)(i), clause (6) of the final
paragraph of Section 10(a), Section 16, Section 18, the first and third
sentences of Section 20 or the penultimate sentence of Section 24 of the
Lease Form or otherwise modify the terms of the Lease Form so as to deprive
the Indenture Trustee of rights expressly granted to the "Indenture Trustee"
therein.
3. May not modify in any material adverse respect as regards the
interests of the Note Holders, the Subordination Agent, the Liquidity
Provider or the Indenture Trustee the provisions of Section 4(a)(ix)(1),
4(a)(ix)(2), 4(a)(ix)(3), 4(a)(xxiii) to the extent such section requires
special counsel for the Lessee to deliver an opinion relating to Section 1110
of the Bankruptcy Code, Sections 8(q), 8(cc), 11(b), 12 or the penultimate
sentence of Section 15(c), 15(e) or the provisions of Sections 4(a)(xi),
4(a)(xii), 4(a)(xiii), 4(a)(xiv), 4(a)(xv) and 4(a)(xvi) of the Participation
Agreement Form so as to eliminate the requirement to deliver to the Loan
Participant or the Indenture Trustee, as the case may be, the legal opinions
to be provided to such Persons thereunder (recognizing that the lawyers
rendering such opinions may be changed) or the provisions of Section
8(f)(ii)(C) or otherwise modify the terms of the Participation Agreement Form
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to deprive the Subordination Agent, the Liquidity Provider or the Indenture
Trustee of any indemnity or right of reimbursement in its favor for Expenses
or Taxes.
4. May not modify, in any material adverse respect as regards the
interests of the Note Holders, the Subordination Agent, the Liquidity
Provider or the Indenture Trustee, the definition of "Make-Whole Amount" in
the Leased Aircraft Indenture Form (with respect to Equipment Notes relating
to Leased Aircraft) or in Annex A to the Owned Aircraft Indenture Form (with
respect to Equipment Notes relating to Owned Aircraft).
Notwithstanding the foregoing, any such Mandatory Document Term may
be modified to correct or supplement any such provision which may be
defective or to cure any ambiguity or correct any mistake, provided, however,
that any such action shall not materially adversely affect the interests of
the Note Holders, the Subordination Agent, the Liquidity Provider, the Policy
Provider, the Indenture Trustee or the Certificate Holders.
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SCHEDULE VI TO
NOTE PURCHASE AGREEMENT
MANDATORY ECONOMIC TERMS
EQUIPMENT NOTES
Obligor: Northwest Airlines, Inc. or an Owner Trust
- The maximum principal amount of all the Equipment Notes issued with
respect to an Aircraft shall not exceed the maximum principal amount of
Equipment Notes indicated for each such Aircraft as set forth in the
following table:
Actual/ Maximum
Expected Principal
Registration Amount of
Aircraft Type Number Equipment Notes
------------- ------------ ---------------
Airbus A319-100 . . . . . . . . . . N315NB $27,643,000
Airbus A319-100 . . . . . . . . . . N316NB 27,643,000
Airbus A319-100 . . . . . . . . . . N317NB 27,643,000
Airbus A319-100 . . . . . . . . . . N318NB 27,643,000
Airbus A319-100 . . . . . . . . . . N319NB 27,643,000
Airbus A319-100 . . . . . . . . . . N320NB 27,643,000
Airbus A319-100 . . . . . . . . . . N321NB 27,643,000
Airbus A319-100 . . . . . . . . . . N322NB 27,643,000
Airbus A319-100 . . . . . . . . . . N323NB 27,643,000
Airbus A319-100 . . . . . . . . . . N324NB 27,643,000
Airbus A319-100 . . . . . . . . . . N325NB 27,643,000
Airbus A319-100 . . . . . . . . . . N326NB 27,643,000
Airbus A319-100 . . . . . . . . . . N327NB 27,643,000
Boeing 757-200 . . . . . . . . . . N544US 33,624,000
Boeing 757-200 . . . . . . . . . . N545US 33,672,000
Boeing 757-200 . . . . . . . . . . N546US 33,717,600
Boeing 757-200 . . . . . . . . . . N547US 33,763,200
Boeing 757-200 . . . . . . . . . . N548US 33,763,200
Boeing 757-200 . . . . . . . . . . N549US 33,811,200
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- The loan to aircraft value ratio with respect to each Aircraft
(computed on the basis of the Appraised Base Value of such Aircraft
and the Depreciation Assumption) at the time of issuance of the
related Equipment Notes and on any Regular Distribution Date
thereafter shall not exceed the amounts set forth in the following
table:
Actual/
Expected Series G Series C
Registration Equipment Equipment
Aircraft Type Number Notes Notes
------------- ------------ --------- ----------
Airbus A319-100 . . . . . . . . . N315NB 62.0% 70.2%
Airbus A319-100 . . . . . . . . . N316NB 62.0% 70.1%
Airbus A319-100 . . . . . . . . . N317NB 62.0% 69.7%
Airbus A319-100 . . . . . . . . . N318NB 62.0% 69.7%
Airbus A319-100 . . . . . . . . . N319NB 62.0% 69.4%
Airbus A319-100 . . . . . . . . . N320NB 62.0% 69.2%
Airbus A319-100 . . . . . . . . . N321NB 61.8% 69.0%
Airbus A319-100 . . . . . . . . . N322NB 61.7% 68.9%
Airbus A319-100 . . . . . . . . . N323NB 61.7% 68.8%
Airbus A319-100 . . . . . . . . . N324NB 61.7% 68.8%
Airbus A319-100 . . . . . . . . . N325NB 61.4% 68.5%
Airbus A319-100 . . . . . . . . . N326NB 61.4% 68.5%
Airbus A319-100 . . . . . . . . . N327NB 61.3% 68.4%
Boeing 757-200 . . . . . . . . . N544US 62.0% 72.0%
Boeing 757-200 . . . . . . . . . N545US 62.0% 72.0%
Boeing 757-200 . . . . . . . . . N546US 62.0% 72.0%
Boeing 757-200 . . . . . . . . . N547US 62.0% 72.0%
Boeing 757-200 . . . . . . . . . N548US 62.0% 72.0%
Boeing 757-200 . . . . . . . . . N549US 62.0% 72.0%
- As of each Regular Distribution Date after the Delivery Period
Termination Date, the LTV for each Class of Certificates (computed as
of any such date on the basis of the Appraised Base Value of the
Aircraft that have been delivered and the Depreciation Assumption)
will not exceed 60% for the Class G Certificates and 68% for the
Class C Certificates.
- The initial average life of the Series G Equipment Notes and the
Series C Equipment Notes on any Aircraft will not be more than
14.5 years and 8.0 years, respectively, in each case from the
Issuance Date.
- As of the first Regular Distribution Date following the Delivery
Period Termination Date the average life of each Class of
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Certificates (computed without regard to the acceleration of any
Equipment Notes and after giving effect to any special distribution
on the Certificates thereafter required in respect of unused
Deposits) shall be not less than the minimum nor more than the
maximum years from the Issuance Date set forth in the following
table:
Class G Class C
Certificates Certificates
------------ ------------
Minimum . . . . . . . . . . . . 10.0 years 5.0 years
Maximum . . . . . . . . . . . . 12.5 years 7.0 years
- The final maturity date of the Series G Equipment Notes and the
Series C Equipment Notes will not extend beyond October 1, 2019 and
April 1, 2010, respectively.
- At the earlier of the date on which all Aircraft have been delivered
and all Equipment Notes issued and the Delivery Period Termination
Date, the aggregate principal amount of each Series of Equipment
Notes shall equal the original aggregate face amount of the related
Class of Certificates without giving effect to any principal payments
on such Equipment Notes but after giving effect to any reductions to
the Pool Balance for such Class of Certificates from Deposits not
used to purchase Equipment Notes on or before such date.
- The interest rate applicable to each Series of Equipment Notes must
be equal to the rate applicable to the Certificates issued by the
corresponding Trust.
- The payment dates for the Equipment Notes and basic rent under the
Leases must be April 1 and October 1, provided that at Northwest's
election, basic rent may also be paid at the commencement of a Lease.
- Basic rent (and supplemental rent), stipulated loss values and
termination values under the Leases must be sufficient to pay amounts
due with respect to the related Equipment Notes.
- The amounts payable under the all-risk aircraft hull insurance
maintained with respect to each Aircraft must be sufficient to pay
the applicable stipulated loss value or, in the case of Owned
Aircraft, unpaid principal amount of the related Equipment Notes,
subject to certain rights of self-insurance.
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- (a) The past due rate in the Indentures and the Leases, (b) the Make-
Whole Premium payable under the Indentures, (c) the provisions
relating to the redemption and purchase of Equipment Notes in the
Indentures, (d) the minimum liability insurance amount on Aircraft in
the Leases and (e) the indemnification of the Loan Trustees,
Subordination Agent, Liquidity Provider, Policy Provider, Trustees,
Escrow Agents and registered holders of the Equipment Notes (in such
capacity, the "Note Holders") with respect to certain taxes and
expenses, in each case must be no less favorable to the Loan
Trustees, Subordination Agent, the Liquidity Provider, the Policy
Provider, the Trustees, the Escrow Agents and the Note Holders than
as set forth in the form of Participation Agreements, Lease and
Indentures.
Past Due Rate: Debt Rate plus 2% per annum.
Payment Dates: April 1 and October 1, commencing with the first such date
after the applicable Equipment Notes are issued.
Lease Term: The Basic Lease Term shall expire by its terms on or after final
maturity date of the related Series G or Series C Equipment Notes.
-4-
SCHEDULE VII TO
NOTE PURCHASE AGREEMENT
AGGREGATE AMORTIZATION SCHEDULE
2000-1C Trust
2000-1G Trust Equipment Notes
Equipment Notes Scheduled
Scheduled Payments Payments of
of Principal Principal
Date Class G Class C
---- ------------------ ---------------
October 1, 2000 . . . . . . . . . . . $ - -
April 1, 2001 . . . . . . . . . . . . 2,366,115.75 3,109,213.28
October 1, 2001 . . . . . . . . . . . 5,807,893.68 3,331,240.42
April 1, 2002 . . . . . . . . . . . . 11,953,639.00 469,166.05
October 1, 2002 . . . . . . . . . . . 9,799,039.58 382,363.68
April 1, 2003 . . . . . . . . . . . . 6,862,150.32 -
October 1, 2003 . . . . . . . . . . . 6,446,615.20 1,402.71
April 1, 2004 . . . . . . . . . . . . 7,879,025.66 853,525.65
October 1, 2004 . . . . . . . . . . . 6,953,436.99 719,140.76
April 1, 2005 . . . . . . . . . . . . 7,064,272.76 1,190,014.19
October 1, 2005 . . . . . . . . . . . 6,955,275.80 498,184.13
April 1, 2006 . . . . . . . . . . . . 6,692,311.65 1,317,585.26
October 1, 2006 . . . . . . . . . . . 7,377,003.85 2,522,611.52
April 1, 2007 . . . . . . . . . . . . 6,424,806.37 2,012,863.66
October 1, 2007 . . . . . . . . . . . 7,956,006.30 2,187,628.54
April 1, 2008 . . . . . . . . . . . . 8,393,226.86 6,192,547.63
October 1, 2008 . . . . . . . . . . . 7,553,419.00 395,696.49
April 1, 2009 . . . . . . . . . . . . 5,429,320.17 643,664.91
October 1, 2009 . . . . . . . . . . . 10,554,114.99 19,202,093.61
April 1, 2010 . . . . . . . . . . . . 3,330,812.86 853,057.51
October 1, 2010 . . . . . . . . . . . 10,995,098.61 -
April 1, 2011 . . . . . . . . . . . . 3,627,988.35 -
October 1, 2011 . . . . . . . . . . . 17,042,520.16 -
April 1, 2012 . . . . . . . . . . . . 3,968,084.39 -
October 1, 2012 . . . . . . . . . . . 24,733,545.25 -
April 1, 2013 . . . . . . . . . . . . 2,549,086.75 -
October 1, 2013 . . . . . . . . . . . 32,288,682.06 -
April 1, 2014 . . . . . . . . . . . . 2,549,086.75 -
October 1, 2014 . . . . . . . . . . . 29,370,881.21 -
April 1, 2015 . . . . . . . . . . . . 2,894,275.45 -
October 1, 2015 46,921,981.86 -
April 1, 2016 . . . . . . . . . . . . 12,706,718.20 -
-1-
October 1, 2016 . . . . . . . . . . . 19,199,088.78 -
April 1, 2017 . . . . . . . . . . . . 7,038,886.69 -
October 1, 2017 . . . . . . . . . . . 50,227,958.85 -
April 1, 2018 . . . . . . . . . . . . 13,708,945.25 -
October 1, 2018 26,751,677.53 -
April 1, 2019 19,322,570.02 -
October 1, 2019 14,623,437.05 -
Total 476,319,000.00 45,882,000.00
-2-
ANNEX A TO
NOTE PURCHASE AGREEMENT
DEFINITIONS
"Act" means 49 U.S.C. xx.xx. 40101-46507.
"Affiliate" means, with respect to any person, any other
person directly or indirectly controlling, controlled by or under common
control with such person. For 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 "controlling," "controlled
by" and "under common control with" have correlative meanings.
"Aircraft" means six Boeing 757-200 aircraft delivered new
to the Company in 1996 and thirteen new Airbus A319-100 aircraft which were
sold or are expected to be sold to the Company or the Owner Trustee during
the period from May 2000 through June 2001.
"Aircraft Purchase Agreements" means (a) the A319 Purchase
Agreement dated as of September 19, 1997 between the Company and AVSA,
S.A.R.L. and (b) Purchase Agreement No. 1631 between The Boeing Company and
the Company, dated December 1, 1989, as subsequently amended (including, in
each case, all exhibits thereto, together with all letter Agreements entered
into that by their terms constitute part of any such Purchase Agreements).
"Aircraft Purchase Agreement Assignment" means a Purchase
Agreement Assignment substantially in the form of Exhibit A-4 to the Note
Purchase Agreement.
"Assumed Amortization Schedule" means Schedule VII to the
Note Purchase Agreement.
"Average Life Date" means, for any Equipment Note, the date
which follows the time of determination by a period equal to the Remaining
Weighted Average Life of such Equipment Note.
"Bankruptcy Code" means the United States Bankruptcy Code,
11 U.S.C. xx.xx. 101 et seq.
"Basic Pass Through Trust Agreement" means the Pass Through
Trust Agreement, dated as of June 3, 1999, among the Company, Northwest
Airlines Corporation and the Pass Through Trustee, as amended, supplemented,
amended or modified, but does not include any Trust Supplement.
-1-
"Business Day" means any day, other than a Saturday, Sunday
or other day on which commercial banks are authorized or required by law to
close in New York, New York, Minneapolis, Minnesota, Chicago, Illinois,
Hartford, Connecticut, Boston, Massachusetts or Salt Lake City, Utah.
"Certificate" has the meaning set forth in the recitals to
the Note Purchase Agreement.
"Certificate Holder" means the Person in whose name a
Certificate is registered in the Register.
"Class" means the class of Certificates issued by each Pass
Through Trust.
"Class C Certificates" means the Class C Certificates issued
by the Northwest Airlines Pass Through Trust, Series 2000-1C.
"Class C Trust" means the Northwest Airlines Pass Through
Trust, Series 2000-1C formed pursuant to the Basic Pass Through Trust
Agreement and Class C Trust Supplement.
"Class D Certificates" means the certificates, if any,
issued by Northwest Airlines, Inc. and designated Class D certificates, in
connection with a secured financing or leveraged lease transaction relating
to an aircraft which will be used in its operations.
"Class G Certificates" means the Class G Certificates issued
by the Northwest Airlines Pass Through Trust, Series 2000-1G.
"Class G Trust" means the Northwest Airlines Pass Through
Trust, Series 2000-1G formed pursuant to the Basic Pass Through Trust
Agreement and Class G Trust Supplement.
"Closing Date" means the Business Day on which a closing
occurs under the Financing Agreements.
"Closing Notice" has the meaning set forth in Section 2(b)
hereof.
"Company" means Northwest Airlines, Inc., a Minnesota
corporation.
"Cut-Off Date" means the earlier of (a) the day after the
Delivery Period Termination Date and (b) the date on which a Triggering Event
occurs.
"Delivery Period Termination Date" means September 30, 2001.
-2-
"Deposit" has the meaning set forth in the recitals to the
Note Purchase Agreement.
"Deposit Agreement" has the meaning set forth in the
recitals to the Note Purchase Agreement.
"Deposit Make-Whole Amount" means, with respect to the
distribution of unused Deposits to holders of any Class of Certificates, as
of any date of determination, an amount equal to the excess, if any, of (a)
the present value of the excess of (i) the scheduled payment of principal and
interest to maturity of the related Series of Equipment Notes, assuming the
maximum principal amount thereof (the "Maximum Amount") minus the Non-Premium
Amount were issued, on each remaining Regular Distribution Date for such
Class under the Assumed Amortization Schedule over (ii) the scheduled payment
of principal and interest to maturity of the Equipment Notes actually
acquired by the Trustee for such Class on each such Regular Distribution
Date, such present value computed by discounting such excess on a semiannual
basis on each Regular Distribution Date (assuming a 360-day year of twelve
30-day months) using a discount rate equal to the Treasury Yield plus 197
basis points in the case of the Class G Certificates and 285 basis points in
the case of Class C Certificates over (b) the amount of such unused Deposits
to be distributed to the holders of such Certificates, minus the Non-Premium
Amount plus accrued and unpaid interest on such net amount to but excluding
the date of determination from and including the preceding Regular
Distribution Date (or if such date of determination precedes the first
Regular Distribution Date, the Issuance Date).
"Depositary" means ABN AMRO Bank N.V., doing business
through a United States branch, a banking institution organized under the
laws of The Netherlands.
"Depositary Threshold Rating" means, with respect to the
Depositary or any Replacement Depositary, short-term unsecured rating of A-1+
from Standard & Poor's and P-1 from Xxxxx'x.
"Equipment Notes" means and includes any secured
certificates issued under any Indenture in the form specified in Section 2.01
thereof (as such form may be varied pursuant to the terms of such Indenture)
and any Equipment Note issued under any Indenture in exchange for or
replacement of any other Equipment Note.
"Escrow Agent" has the meaning set forth in the first
paragraph of the Note Purchase Agreement.
"Escrow and Paying Agent Agreement" has the meaning set
forth in the recitals to the Note Purchase Agreement.
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"Existing Aircraft" has the meaning set forth in the
recitals to the Note Purchase Agreement.
"FAA" means the Federal Aviation Administration of the
United States.
"Fee Letter" means the Fee Letter dated as of the date
hereof among the Liquidity Provider, the Subordination Agent and Northwest
with respect to the Liquidity Facilities."
"Final Withdrawal" with respect to each Escrow and Paying
Agent Agreement, has the meaning set forth in Section 1.2 thereof.
"Financing Agreements" means, collectively, the Lease
Financing Agreements and the Owner Financing Agreements.
"Government Entity" means (a) any federal, state, provincial
or similar government, and any body, board, department, commission, court,
tribunal, authority, agency or other instrumentality of any such government
or otherwise exercising any executive, legislative, judicial, administrative
or regulatory functions of such government or (b) any other government entity
having jurisdiction over any matter contemplated by the Operative Documents
or relating to the observance or performance of the obligations of any of the
parties to the Operative Documents.
"Guarantee" means a Guarantee whereby Northwest Airlines
Corporation guarantees (i) the Company's obligations under a Lease (in the
case of a Leased Aircraft) or (ii) the Company's obligations under an Owned
Aircraft Indenture (in the case of an Owned Aircraft).
"H.15(519)" means the weekly statistical release designated
as such, or any successor publication, published by the Board of Governors of
the Federal Reserve System.
"Indemnitee" means the Escrow Agent and the Paying Agent.
"Indentures" means, collectively, the Leased Aircraft
Indentures and the Owned Aircraft Indentures.
"Initial Deposits" has the meaning set forth in the recitals
to the Note Purchase Agreement.
"Intercreditor Agreement" has the meaning set forth in the
recitals to the Note Purchase Agreement.
"Issuance Date" means the date of the original issuance of
the Certificates.
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"Law" means (a) any constitution, treaty, statute, law,
decree, regulation, order, rule or directive of any Government Entity, and
(b) any judicial or administrative interpretation or application of, or
decision under, any of the foregoing.
"Lease" means a Lease Agreement substantially in the form of
Exhibit A-2 to the Note Purchase Agreement.
"Lease Financing Agreements" means, collectively, the
Aircraft Purchase Agreement Assignment, the Leased Aircraft Participation
Agreement, the Lease, the Leased Aircraft Indenture, the Equipment Notes
issued under the Leased Aircraft Indenture, the Guarantee and the Trust
Agreement relating to the financing of a Leased Aircraft.
"Lease Period" has the meaning set forth in the
Participation Agreement.
"Leased Aircraft" means an Aircraft subject to a Lease.
"Leased Aircraft Indenture" means a Trust Indenture and
Security Agreement substantially in the form of Exhibit A-3 to the Note
Purchase Agreement.
"Leased Aircraft Participation Agreement" means a
Participation Agreement substantially in the form of Exhibit A-1 to the Note
Purchase Agreement.
"Liquidity Facility" has the meaning set forth in the
recitals to the Note Purchase Agreement.
"Liquidity Provider" has the meaning set forth in the
recitals to the Note Purchase Agreement.
"Loan Trustee" means the "Indenture Trustee" as defined in
the Financing Agreements.
"Mandatory Document Terms" means the terms set forth on
Schedule V to the Note Purchase Agreement.
"Mandatory Economic Terms" means the terms set forth on
Schedule VI to the Note Purchase Agreement.
"New Aircraft" has the meaning set forth in the recitals to
the Note Purchase Agreement.
"Non-Premium Amount" means the amount equal to the sum of
unused Deposits to be distributed (i) due to the failure of an Aircraft to be
-5-
delivered prior to the Delivery Period Termination Date due to any reason not
occasioned by the Company's fault or negligence and (ii) in the case of Class
C Certificates, $7.5 million.
"Note Purchase Agreement" means the Note Purchase Agreement
to which this Annex A is attached.
"Notice of Purchase Withdrawal" with respect to each Deposit
Agreement, has the meaning set forth in Section 2.3 thereof.
"NWA Corp." means Northwest Airlines Corporation, a Delaware
corporation.
"Operative Documents" means, collectively, the Pass Through
Trust Agreements, the Escrow and Paying Agent Agreements, the Deposit
Agreements, the Liquidity Facilities, the Intercreditor Agreement, the
Certificates and the Financing Agreements.
"Owned Aircraft" means an Aircraft subject to an Owned
Aircraft Indenture.
"Owned Aircraft Indenture" means a Trust Indenture and
Security Agreement substantially in the form of Exhibit C-2 to the Note
Purchase Agreement.
"Owned Aircraft Participation Agreement" means a
Participation Agreement substantially in the form of Exhibit C-1 to the Note
Purchase Agreement.
"Owner Financing Agreements" means, collectively, the Owned
Aircraft Participation Agreement, the Guarantee, the Owned Aircraft Indenture
and the Equipment Notes issued thereunder.
"Owner Participant" means, with respect to any Leased
Aircraft, the Person named as the Owner Participant in the Participation
Agreement with respect to such Leased Aircraft.
"Owner Trust" means with respect to any Leased Aircraft, the
trust created by the "Trust Agreement" referred to in the Leased Aircraft
Indenture related thereto.
"Owner Trustee" means with respect to any Leased Aircraft,
the "Owner Trustee" party to the "Trust Agreement" referred to in the Leased
Aircraft Indenture related thereto.
-6-
"Participation Agreements" means, collectively, the Leased
Aircraft Participation Agreements and the Owned Aircraft Participation
Agreements.
"Pass Through Trust" has the meaning set forth in the
recitals to the Note Purchase Agreement.
"Pass Through Trust Agreement" means each of the two
separate Trust Supplements, together in each case with the Basic Pass Through
Trust Agreement, each dated as of the Issuance Date, by and between the
Lessee and Pass Through Trustee.
"Pass Through Trustee" has the meaning set forth in the
first paragraph of the Note Purchase Agreement.
"Paying Agent" has the meaning set forth in the first
paragraph of the Note Purchase Agreement.
"Person" means any individual, firm, partnership, joint
venture, trust, trustee, Government Entity, organization, association,
corporation, government agency, committee, department, authority and other
body, corporate or incorporate, whether having distinct legal status or not,
or any member of any of the same.
"Policy" means the Financial Guaranty Insurance Policy No.
32575 issued as of the Closing Date, by the Policy Provider in favor of the
Subordination Agent, for the benefit of the Class G Certificateholders, as
amended, supplemented or otherwise modified from time to time in accordance
with its terms.
"Policy Fee Letter" means the fee letter agreement, dated as
of June 28, 2000, by and among the Company, the Policy Provider and the
Subordination Agent.
"Policy Provider" means MBIA Insurance Corporation, or any
successor thereto, as issuer of the Policy.
"Qualified Owner Participant" means a Person which has a
tangible net worth (exclusive of goodwill) greater than $50,000,000.
"Rating Agencies" means, collectively, at any time, each
nationally recognized rating agency which shall have been requested to rate
the Certificates and which shall then be rating the Certificates. The initial
Rating Agencies will be Xxxxx'x Investors Service, Inc. and Standard & Poor's
Ratings Services, a division of XxXxxx-Xxxx Inc.
-7-
"Rating Agency Confirmation" means, with respect to any
Financing Agreement that has been modified in any material respect from the
forms thereof attached to the Note Purchase Agreement or with respect to the
issuance of Class D Certificates or Series D Equipment Notes, a written
confirmation from each of the Rating Agencies that the use of such Financing
Agreement with such modifications or the issuance of such Class D
Certificates or Series D Equipment Notes, as the case may be, whichever of
the foregoing shall in a particular case require Rating Agency Confirmation,
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
(without regard to the Policy) or (ii) a withdrawal or suspension of the
rating of any Class of Certificates, in each case, without reference to the
Policy.
"Register" means the register maintained pursuant to
Sections 3.04 and 7.11 of the Basic Pass Through Trust Agreement with respect
to each Pass Through Trust.
"Regular Distribution Dates" shall mean April 1 and October
1 of each year, commencing October 1, 2000.
"Remaining Weighted Average Life" means, on a given date
with respect to any Equipment Note, the number of days equal to the quotient
obtained by dividing (a) the sum of each of the products obtained by
multiplying (i) the amount of each then remaining scheduled payment of
principal of such Equipment Note, including the payment due on the maturity
of such Equipment Note by (ii) the number of days from and including such
determination date to but excluding the date on which such payment of
principal is scheduled to be made, by (b) the then outstanding principal
amount of such Equipment Note.
"Replacement Depositary" has the meaning set forth in
Section 5(a)(vi) of the Note Purchase Agreement.
"Replacement Depositary Agreement" means, for any Class of
Certificates, a deposit agreement substantially in the form of the replaced
Deposit Agreement for such Class of Certificates as shall permit the Rating
Agencies to confirm in writing their respective ratings then in effect for
such Class of Certificates (before the downgrading of such ratings, if any,
as a result of the downgrading of the Depositary and, in the case of the
Class G Certificates, without regard to the Policy).
"Scheduled Closing Date" has the meaning set forth in
Section 2(b) hereof.
-8-
"Section 1110" means 11 U.S.C. Section 1110 of the
Bankruptcy Code or any successor or analogous Section of the federal
bankruptcy law in effect from time to time.
"Seller" means AVSA, S.A.R.L.
"Series C Equipment Notes" means Equipment Notes issued
under an Indenture and designated as "Series C" thereunder.
"Series D Equipment Notes" means Equipment Notes issued
under an Indenture and designated as "Series D" thereunder.
"Series G Equipment Notes" means Equipment Notes issued
under an Indenture and designated as "Series G" thereunder.
"Subordination Agent" has the meaning set forth in the first
paragraph of the Note Purchase Agreement.
"Substitute Aircraft" has the meaning set forth in Section
2(g) of the Note Purchase Agreement.
"Substitute Closing Date" has the meaning set forth in
Section 2(e) of the Note Purchase Agreement.
"Taxes" means all license, recording, documentary,
registration and other similar fees and all taxes, levies, imposts, duties,
charges, assessments or withholdings of any nature whatsoever imposed by any
Taxing Authority, together with any penalties, additions to tax, fines or
interest thereon or additions thereto.
"Taxing Authority" means any federal, state or local
government or other taxing authority in the United States, any foreign
government or any political subdivision or taxing authority thereof, any
international taxing authority or any territory or possession of the United
States or any taxing authority thereof.
"Treasury Yield" means, as of any date of determination,
with respect to any Equipment Note (utilizing the Assumed Amortization
Schedule applicable thereto), the interest rate (expressed as a decimal and,
in the case of United States Treasury bills, converted to a bond equivalent
yield) determined to be the per annum rate equal to the semi-annual yield to
maturity for United States Treasury securities maturing on the Average Life
Date of such Equipment Note and trading in the public securities markets
either as determined by interpolation between the most recent weekly average
yield to maturity for two series of United States Treasury securities,
trading in the public securities markets, (A) one maturing as close as
possible to, but earlier than, the Average Life Date of such Equipment Note
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and (B) the other maturing as close as possible to, but later than, the
Average Life Date of such Equipment Note, in each case as published in the
most recent H.15(519) or, if a weekly average yield to maturity for United
States Treasury securities maturing on the Average Life Date of such
Equipment Note is reported on the most recent H.15(519), such weekly average
yield to maturity as published in such H.15(519).
"Triggering Event" has the meaning assigned to such term in
the Intercreditor Agreement.
"Trust Agreement" means a Trust Agreement substantially in
the form of Exhibit A-5 to the Note Purchase Agreement.
"Trust Supplement" means an agreement supplemental to the
Basic Pass Through Trust Agreement pursuant to which (i) a separate trust is
created for the benefit of the holders of the Certificates of a class, (ii)
the issuance of the Certificates of such class representing fractional
undivided interests in such trust is authorized and (iii) the terms of the
Certificates of such class are established.
"Underwriters" has the meaning set forth in the recitals to
the Note Purchase Agreement.
"Underwriting Agreement" has the meaning set forth in the
recitals to the Note Purchase Agreement.
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