NOTE PURCHASE AGREEMENT
Dated as of February 16, 1999
Among
NORTHWEST AIRLINES, INC.,
STATE STREET BANK AND TRUST COMPANY, 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......................................................2
Section 2. Financing of New Aircraft........................................2
Section 3. Conditions Precedent.............................................6
Section 4. Representations and Warranties...................................6
Section 5. Covenants........................................................9
Section 6. Notices.........................................................10
Section 7. Expenses........................................................10
Section 8. Further Assurances..............................................11
Section 9. Miscellaneous...................................................11
Section 10. Indemnity......................................................12
Section 11. Termination....................................................15
Section 12. Governing Law..................................................15
SCHEDULES
Schedule I New 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
ANNEX
Annex A Definitions
i
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
ii
NOTE PURCHASE AGREEMENT
This NOTE PURCHASE AGREEMENT, dated as of February 16, 1999, among
(i) Northwest Airlines, Inc., a Minnesota corporation (the "Company"), (ii)
State Street Bank and Trust Company, a Massachusetts trust company, 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 three 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 obtained commitments from the
Seller pursuant to the Aircraft Purchase Agreement for the delivery of the four
(4) aircraft listed in Schedule I hereto (the "New 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 of the Aircraft;
WHEREAS, the Company has entered into the Underwriting Agreement
dated as of February 4, 1999 (the "Underwriting Agreement") with the several
underwriters (the "Underwriters") named therein, which provides that the Company
will cause the Pass Through Trustee of each of the Class A Trust, the Class B
Trust and the Class C Trust to issue and sell the Class A Certificates, the
Class B 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 such New Aircraft (a
"Leased Aircraft") or to issue secured equipment notes in order to finance such
New 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 a New
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 New 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) Citibank, N.A., a national banking association (the "Liquidity
Provider"), has entered into three (3) 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 and (ii) the Pass
Through Trustee, the Liquidity Provider and the Subordination Agent have entered
into the Intercreditor Agreement, dated as of the date hereof (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 New Aircraft. (a) The Company confirms that
it has entered into the Aircraft Purchase Agreement with the Seller pursuant to
which it has agreed to purchase, and the Seller has agreed to deliver, 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 the New 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")
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(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
New Aircraft, which notice shall:
i. specify whether the Company has elected to treat such New
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 New Aircraft;
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 New Aircraft on such Scheduled
Closing Date (which shall in all respects comply with the Mandatory
Economic Terms); and
vi. if such New 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 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 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 on or before the relevant Closing Date,
it being understood that if Rating Agency Confirmation shall have been received
with respect to any Financing Agreements and such Financing
3
Agreements are utilized for subsequent New Aircraft without material
modifications, no additional 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
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 or (B) a withdrawal or
suspension of the rating of any Class of Certificates.
(d) With respect to each New 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 either Rating Agency, the Company shall deliver
or cause to be delivered to each Rating Agency a true and complete copy of each
Financing Agreement relating to the financing of each New 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 a New
Aircraft the financing thereof in the manner contemplated hereby shall not be
consummated for whatever reason, the Company shall give the parties hereto
prompt notice thereof. Concurrent with the giving of such notice of postponement
or subsequent thereto, the Company shall give the parties hereto 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 of the relevant
New 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.
(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 New Aircraft, and subsequent to its giving a Closing Notice therefor, to
postpone the Scheduled Closing Date of such New Aircraft so as to enable the
Company to change its election to treat such New 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
4
Notice complying with the provisions of Section 2(b) hereof and specifying the
new Closing Date for such postponed New 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 New Aircraft on the
re-scheduled Closing Date therefor except the re-scheduled Closing Date shall be
deemed the Closing Date of such New 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 and (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 on 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
and that the Pass Through Trusts will not be subject to federal income tax as a
result of such conversion.
(h) The Company shall have no liability for the failure of the Pass
Through Trustees to purchase Equipment Notes with respect to any New 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 a
New 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. ss.
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 New 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.
5
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:
(a) no Triggering Event shall have occurred;
(b) the Company shall have delivered a certificate to each such Pass
Through Trustee and each Liquidity 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 Certificate Holders, 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.
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. ss. 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; and
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
rights of creditors generally and by general principles of equity, whether
considered in a proceeding at law or in equity.
6
(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. ss. 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, Pass Through
Trustee 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, Pass Through Trustee 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, Pass Through Trustee 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, Pass
Through Trustee 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, Pass Through Trustee 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:
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
7
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 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
8
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 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.
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;
9
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; and
v. the Company shall not issue Series D Equipment Notes pursuant to
any Indenture, unless it shall have received Rating Agency Confirmation.
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.
(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.
ss. 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.
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 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
10
the Series A Equipment Notes, Series B 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.
(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 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, all reasonable fees and expenses (including, without
limitation, fees and disbursements of counsel) of the Escrow Agent and/or the
Paying Agent in connection therewith. For purposes of this Section 7(b), (i) the
terms "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 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,
11
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 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 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 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
12
(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 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 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
13
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 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.
14
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; provided, that, the provisions of Sections 7
and 8 hereof shall survive any termination of this Agreement.
Section 12. 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.)
15
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: /s/ Xxxxxx X. Xxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Executive Vice President and
Chief Financial Officer
Address: 000 Xxxxxxxxx Xxxxx
Xx. Xxxx, Xxxxxxxxx 00000-0000
Attention:
Facsimile:
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity, except as
otherwise provided herein, but solely as
Pass Through Trustee
By: /s/ Xxxxxx Xxxxx
---------------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
Address:
Attention:
Facsimile:
00
XXXXX XXXXXX BANK AND TRUST COMPANY,
not in its individual capacity, except as
otherwise provided herein, but solely as
Subordination Agent
By: /s/ Xxxxxx Xxxxx
---------------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
Address:
Attention:
Facsimile:
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
as Escrow Agent
By: /s/ Xxxx X. Xxxxxx
---------------------------------------
Name: Xxxx X. Hawle
Title: Vice President
Address:
Attention:
Facsimile:
STATE STREET BANK AND TRUST COMPANY, as
Paying Agent
By: /s/ Xxxxxx Xxxxx
---------------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
Address:
Attention:
Facsimile:
17
SCHEDULE I TO
NOTE PURCHASE AGREEMENT
NEW AIRCRAFT AND SCHEDULED CLOSING MONTHS
--------------------------------------------------------------------------------
Expected
Expected Manufacturer's Scheduled
New Aircraft Type Registration Number Serial Number Delivery Months
--------------------------------------------------------------------------------
Boeing 747-400 N671US 26477 March 1999
--------------------------------------------------------------------------------
Boeing 747-400 N672US 26475 July 1999
--------------------------------------------------------------------------------
Boeing 747-400 N673US 26476 August 1999
--------------------------------------------------------------------------------
Boeing 747-400 N674US 26478 October 1999
--------------------------------------------------------------------------------
SCHEDULE II TO
NOTE PURCHASE AGREEMENT
TRUST SUPPLEMENTS
Trust Supplement, dated as of the Issuance Date, among the Company,
Northwest Airlines Holdings Corporation, Northwest Airlines Corporation and the
Pass Through Trustee in respect of Northwest Airlines Pass Through Trust, Series
1999-1A.
Trust Supplement, dated as of the Issuance Date, among the Company,
Northwest Airlines Holdings Corporation, Northwest Airlines Corporation and the
Pass Through Trustee in respect of Northwest Airlines Pass Through Trust, Series
1999-1B.
Trust Supplement, dated as of the Issuance Date, among the Company,
Northwest Airlines Holdings Corporation, Northwest Airlines Corporation and the
Pass Through Trustee in respect of Northwest Airlines Pass Through Trust, Series
1999-1C.
SCHEDULE III TO
NOTE PURCHASE AGREEMENT
DEPOSIT AGREEMENTS
Deposit Agreement (Class A), dated as of the Issuance Date, between
the Depositary and the Escrow Agent.
Deposit Agreement (Class B), 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.
SCHEDULE IV TO
NOTE PURCHASE AGREEMENT
ESCROW AND PAYING AGENT AGREEMENTS
Escrow and Paying Agent Agreement (Class A), 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 B), 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.
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
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 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
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 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 Indenture Trustee
or the Certificate Holders.
SCHEDULE VI TO
NOTE PURCHASE AGREEMENT
MANDATORY ECONOMIC TERMS
EQUIPMENT NOTES
Obligor: Northwest Airlines, Inc. or an Owner Trust
Maximum Principal Amount:
The 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 Prospectus Supplement in
"Prospectus Supplement Summary--Equipment Notes and the Aircraft" under the
column "Maximum Principal Amount of Equipment Notes."
Initial Loan to Aircraft Value (with the value of any Aircraft for
these purposes equal to the value (the "Assumed Appraised Value") for such
Aircraft set forth in the Prospectus Supplement in "Prospectus Supplement
Summary--Equipment Notes and the Aircraft" under the column "Appraised Base
Value"):
Series A: not in excess of 38.3%
Series B: not in excess of 56.3%
Series C: not in excess of 70.0%
The Loan to Aircraft Value for each series of Equipment Notes issued
in respect of each Aircraft (computed as of the date of the issuance thereof on
the basis of the Assumed Appraised Value of such Aircraft and the Depreciation
Assumption (as defined in the Prospectus Supplement in "Description of the
Equipment Notes - Loan to Value Ratios of Equipment Notes")) will not exceed as
of any Regular Distribution Date thereafter (assuming no default in the payment
of the Equipment Notes) 38.0% in the case of the Series A Equipment Notes and
56.0% in the case of the Series B Equipment Notes and 68.0% in the case of the
Series C Equipment Notes. Initial Average Life (in years) of the Series A
Equipment Notes, the Series B Equipment Notes and the Series C Equipment Notes
on any Aircraft will not extend beyond 14.5 years, 14.0 years and 11.5 years,
respectively, from the Issuance Date.
AVERAGE LIFE (IN YEARS)
As of the Delivery Period Termination Date, the average life of the
Class A Certificates, the Class B Certificates and the Class C Certificates
shall not be more than 13.9 years, 13.0 years and 10.0 years, respectively, from
the Issuance Date (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).
FINAL EXPECTED DISTRIBUTION DATE
Series A Certificates: February 1, 2020
Series B Certificates: February 1, 2020
Series C Certificates: February 1, 2014
Past Due Rate: Debt Rate plus 2% per annum.
Payment Dates: February 1 and August 1, commencing with the first such date
after the applicable Equipment Notes are issued
Make-Whole Amounts: As provided in Article II of the form of Leased Aircraft
Indenture marked as Exhibit A-3 of the Note Purchase Agreement (the "Leased
Aircraft Indenture Form") or the form of Owned Aircraft Indenture marked as
Exhibit C-2 of the Note Purchase Agreement (the "Owned Aircraft Indenture Form",
together with the Leased Aircraft Indenture Form, the "Trust Indenture Form").
Redemption and Purchase: As provided in Article II of the Trust Indenture Form.
The original aggregate principal amount of all of the Equipment Notes of each
Series shall not exceed the original aggregate face amount of the Certificates
issued by the corresponding Trust.
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.
All-risk hull insurance: Not less than an amount equal to the stipulated
loss value (in the case of a Leased Aircraft) or
unpaid principal amount of the related Equipment
Notes (in the case of an Owned Aircraft).
LEASE
Term: The Basic Lease Term shall expire by its terms
on or after final maturity date of the related
Series A, Series B or Series C Equipment Notes.
Lease Period Dates: Each February 1 and August 1, commencing with
the first such date after the Lease is entered
into, to and including the last such date in the
Term.
Sch. VI-2
Minimum Rent: Basic Rent (and supplemental rent, if any) due
and payable on each Lease Period Date shall be
at least sufficient to pay in full, as of such
Lease Period Date (assuming timely payment of
the related Equipment Notes prior to such Date),
the aggregate principal amount of scheduled
installments due on the related Equipment Notes
outstanding on such Lease Period Date, together
with accrued and unpaid interest thereon.
Termination Value At all times equal to or greater than the then
and Stipulated outstanding principal amount of the related
Loss Value: Equipment Notes together with accrued interest
thereon.
Minimum Liability $400,000,000 per occurrence.
Insurance Amount:
Past Due Rate: As set forth in the Lease Form (the "Lease
Form") marked as Exhibit A-2 to the Note
Purchase Agreement.
PARTICIPATION AGREEMENT
Loan Trustee, Subordination Agent, Liquidity Provider, Pass Through
Trustees and Note Holders shall be indemnified against Expenses and Taxes in a
manner no less favorable to the Loan Trustee, the Subordination Agent, the
Liquidity Provider, the Pass Through Trustees and the Note Holders than that set
forth in Sections 7(b) and 7(c) of the form of the Participation Agreement (the
"Participation Form") marked as Exhibit A-1 to the Note Purchase Agreement for
the Leased Aircraft or as Exhibit C-1 to the Note Purchase Agreement for the
Owned Aircraft.
Sch. VI-3
SCHEDULE VII TO
NOTE PURCHASE AGREEMENT
AGGREGATE AMORTIZATION SCHEDULE
1999-1A Trust 1991-1C Trust
Equipment 1999-1B Trust Equipment
Notes Equipment Notes Notes
Scheduled Scheduled Scheduled
Payments of Payments of Payments of
Principal Principal Principal
Date Class A Class B Class C
---- ------- ------- -------
August 1, 1999 $ 0.00 $ 0.00 $ 70,000.00
February 1, 2000 3,531,150.00 3,573,121.53 4,638,132.40
August 1, 2000 3,534,000.00 1,465,247.96 0.00
February 1, 2001 7,065,150.00 1,654,930.52 557,100.00
February 1, 2002 7,065.150.00 3,346,650.00 1,423,502.46
February 1, 2003 7,065,150.00 3,346,650.00 2,005,665.14
February 1, 2004 7,065,150.00 3,346,650.00 2,234,318.65
February 1, 2005 7,065,150.00 3,458,688.01 6,503,983.77
February 1, 2006 7,065,150.00 3,234,611.99 169,409.68
February 1, 2007 7,065,150.00 3,346,650.00 12,343,977.17
February 1, 2008 7,065,150.00 3,346,650.00 5,540,634.20
February 1, 2009 7,065,150.00 3,346,650.00 1,584,866.62
February 1, 2010 7,065,150.00 3,346,650.00 4,780,180.40
February 1, 2011 7,065,150.00 4,171,446.76 4,621,865.62
February 1, 2012 7,065,150.00 5,427,375.94 0.00
August 1, 2013 7,065,150.00 441,127.29 24,957,437.71
February 1, 2014 7,065,150.00 3,346,650.00 2,708,926.18
February 1, 2015 9,420,200.00 20,288,422.66 0.00
February 1, 2016 9,420,200.00 25,186,137.50 0.00
February 1, 2017 27,687,486.92 9,449,819.78 0.00
February 1, 2018 39,771,418.36 0.00 0.00
February 1, 2019 42,481,019.21 78,113.13 0.00
February 1, 2020 747,425.51 6,352,756.93 0.00
--------------- --------------- ---------------
Total $235,505,000.00 $111,555,000.00 $ 74,140,000.00
=============== =============== ===============
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 Purchase Agreement" means the Purchase Agreement No. 1630
dated as of December 1, 1989, between the Company and the Seller (including all
exhibits thereto, together with all letter Agreements entered into that by their
terms constitute part of any such Purchase Agreement).
"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, 1996, between the Company, Northwest Airlines
Corporation and the Pass Through Trustee, as amended by the Supplemental
Agreement, dated as of November 20, 1998, among the Company, Northwest Airlines
Holdings Corporation, Northwest Airlines Corporation and the Pass Through
Trustee, as such agreement may be further supplemented, amended or modified, but
does not include any Trust Supplement.
"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, Boston, Massachusetts
or Salt Lake City, Utah.
"Certificate" has the meaning set forth in the recitals to the Note
Purchase Agreement.
Annex A-1
"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 A Certificates" means the Class A Certificates issued by the
Northwest Airlines Pass Through Trust, Series 1999-1A.
"Class A Trust" means the Northwest Airlines Pass Through Trust,
Series 1999-1A formed pursuant to the Basic Pass Through Trust Agreement and
Class A Trust Supplement.
"Class B Certificates" means the Class B Certificates issued by the
Northwest Airlines Pass Through Trust, Series 1999-1B.
"Class B Trust" means the Northwest Airlines Pass Through Trust,
Series 1999-1B formed pursuant to the Basic Pass Through Trust Agreement and
Class B Trust Supplement.
"Class C Certificates" means the Class C Certificates issued by the
Northwest Airlines Pass Through Trust, Series 1999-1C.
"Class C Purchase Agreement" has the meaning set forth in the
recitals to the Note Purchase Agreement.
"Class C Trust" means the Northwest Airlines Pass Through Trust,
Series 1999-1C 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.
"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 the earlier of (a) January
31, 2000 and (b) the date on which Equipment Notes issued with respect to all of
the New Aircraft have been purchased by the Pass Through Trustees in accordance
with the Note Purchase Agreement.
Annex A-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 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 193 basis points in the case of the Class A Certificates and
248 basis points in the case of the Class B Certificates and 325 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., Chicago Branch, a banking
institution organized under the laws of The Netherlands.
"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.
"FAA" means the Federal Aviation Administration of the United
States.
"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.
Annex A-3
"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.
"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 a New Aircraft subject to a Lease.
Annex A-4
"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.
"Manufacturer" means The Boeing Company.
"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 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, $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.
"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 a New 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.
Annex A-5
"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
"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 three 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.
"Qualified Owner Participant" means a Person which has a tangible
net worth (exclusive of goodwill) greater than $75,000,000.
"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.
Annex A-6
"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 or (ii) a withdrawal or suspension of the rating of any
Class of Certificates.
"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 February 1 and August 1 of
each year, commencing August 1, 1999.
"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 payment due on the maturity of such Equipment Note by (ii) the
number 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.
"Scheduled Closing Date" has the meaning set forth in Section 2(b)
hereof.
"Section 1110" means 11 U.S.C. ss. 1110 of the Bankruptcy Code or
any successor or analogous Section of the federal bankruptcy law in effect from
time to time.
"Seller" means The Boeing Company.
"Series A Equipment Notes" means Equipment Notes issued under an
Indenture and designated as "Series A" thereunder.
"Series B Equipment Notes" means Equipment Notes issued under an
Indenture and designated as "Series B" thereunder.
"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.
"Subordination Agent" has the meaning set forth in the first
paragraph of the Note Purchase Agreement.
Annex A-7
"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 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.
Annex A-8
