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DEPOSIT AGREEMENT
(Class A)
Dated as of February 16, 1999
between
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
as Escrow Agent,
and
ABN AMRO BANK N.V., CHICAGO BRANCH,
as Depositary
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TABLE OF CONTENTS
Page
----
ARTICLE I
FORMATION OF DEPOSITS........................................................2
Section 1.1 Acceptance of Depositary.............................2
Section 1.2 Establishment of Accounts............................2
ARTICLE II
MAINTENANCE OF DEPOSITS......................................................3
Section 2.1 Deposits.............................................3
Section 2.2 Interest.............................................3
Section 2.3 Withdrawals..........................................3
Section 2.4 Other Accounts.......................................4
ARTICLE III
TERMINATION..................................................................4
ARTICLE IV
PAYMENTS.....................................................................4
ARTICLE V
REPRESENTATIONS AND WARRANTIES...............................................5
ARTICLE VI
TRANSFER.....................................................................6
ARTICLE VII
AMENDMENT....................................................................7
ARTICLE VIII
NOTICES......................................................................7
ARTICLE IX
OBLIGATIONS UNCONDITIONAL....................................................7
Page
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ARTICLE X
ENTIRE AGREEMENT ............................................................8
ARTICLE XI
GOVERNING LAW................................................................8
ARTICLE XII
WAIVER OF JURY TRIAL RIGHT...................................................8
ARTICLE XIII
COUNTERPARTS.................................................................8
Schedule I Schedule of Deposits
Exhibit A Notice of Purchase Withdrawal
Exhibit B Notice of Final Withdrawal
ii
This DEPOSIT AGREEMENT (Class A) dated as of February 16, 1999 (as
amended, modified or supplemented from time to time, this "Agreement") between
First Security Bank, National Association, as Escrow Agent under the Escrow and
Paying Agent Agreement referred to below (in such capacity, together with its
successors in such capacity, the "Escrow Agent"), and ABN AMRO BANK N.V.,
Chicago Branch, as depositary bank (the "Depositary").
W I T N E S S E T H
WHEREAS, Northwest Airlines Corporation, a Delaware corporation (the
"Guarantor"), Northwest Airlines Holdings Corporation, a Delaware corporation
(formerly known as Northwest Airlines Corporation, "Holdings"), Northwest
Airlines, Inc., a Minnesota corporation ("Northwest") and State Street Bank and
Trust Company, not in its individual capacity except as otherwise expressly
provided therein, but solely as trustee (in such capacity, together with its
successors in such capacity, the "Pass Through Trustee") have entered into a
Trust Supplement, dated February 16, 1999, to the Pass Through Trust Agreement
dated as of June 3, 1996, by and among Holdings, Northwest and the Pass Through
Trustee, as amended by the Supplemental Agreement, dated as of November 20,
1998, among the Guarantor, Holdings, Northwest and the Pass Through Trustee (the
"Basic Agreement") relating to Northwest Airlines Pass Through Trust 1999-1A
pursuant to which the Northwest Airlines Pass Through Trust, Series 1999-1A
Certificates referred to therein (the "Certificates") are being issued;
WHEREAS, Northwest and Xxxxxx Xxxxxxx & Co. Incorporated, Credit Suisse
First Boston Corporation, ABN AMRO Incorporated, Chase Securities Inc. and
Xxxxxxx Xxxxx Xxxxxx Inc. (collectively, the "Underwriters" and, together with
their respective transferees and assigns as registered owners of the
Certificates, the "Investors") have entered into an Underwriting Agreement dated
as of February 4, 1999 pursuant to which the Pass Through Trustee will issue and
sell the Certificates to the Underwriters;
WHEREAS, Northwest, the Pass Through Trustee, certain other pass through
trustees and certain other persons concurrently herewith are entering into the
Note Purchase Agreement, dated as of the date hereof (the "Note Purchase
Agreement"), pursuant to which the Pass Through Trustee has agreed to acquire
from time to time on or prior to the Delivery Period Termination Date (as
defined in the Note Purchase Agreement) equipment notes (the "Equipment Notes")
issued to finance the acquisition of aircraft by Northwest, as lessee or as
owner, utilizing a portion of the proceeds from the sale of the Certificates
(the "Net Proceeds");
WHEREAS, the Escrow Agent, the Underwriters, the Pass Through Trustee and
State Street Bank and Trust Company, as paying agent for the Escrow Agent (in
such capacity, together with its successors in such capacity, the "Paying
Agent") concurrently herewith are entering into an Escrow and Paying Agent
Agreement, dated as of the date hereof (as amended, modified or supplemented
from time to time in accordance with the terms thereof, the "Escrow and Paying
Agent Agreement"); and
[Deposit Agreement (Class A)]
WHEREAS, the Underwriters and the Pass Through Trustee intend that the Net
Proceeds be held in escrow by the Escrow Agent pursuant to the Escrow and Paying
Agent Agreement, subject to withdrawal upon request of and proper certification
by the Pass Through Trustee for the purpose of purchasing Equipment Notes, and
that pending such withdrawal the Net Proceeds be deposited by the Escrow Agent
with the Depositary pursuant to this Agreement, which provides for the
Depositary to pay interest for distribution to the Investors and to establish
accounts from which the Escrow Agent shall make withdrawals upon request of and
proper certification by the Pass Through Trustee.
NOW, THEREFORE, in consideration of the obligations contained herein, and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE 1
FORMATION OF DEPOSITS
Section 1.1 Acceptance of Depositary. The Depositary hereby agrees to act
as depositary bank as provided herein and in connection therewith to accept all
amounts to be delivered to or held by the Depositary pursuant to the terms of
this Agreement. The Depositary further agrees to hold, maintain and safeguard
the Deposits and the Accounts (as defined below) during the term of this
Agreement in accordance with the provisions of this Agreement. The Escrow Agent
shall not have any right to withdraw, assign or otherwise transfer moneys held
in the Accounts except as permitted by this Agreement.
Section 1.2 Establishment of Accounts. The Escrow Agent hereby instructs
the Depositary, and the Depositary agrees, to establish the separate deposit
accounts listed on Schedule I hereto and to establish such additional separate
deposit accounts as may be required in connection with the deposits contemplated
by Section 2.4 hereof (each, an "Account" and collectively, the "Accounts"),
each in the name of the Escrow Agent and all on the terms and conditions set
forth in this Agreement.
2
[Deposit Agreement (Class A)]
ARTICLE 2
MAINTENANCE OF DEPOSITS
Section 2.1 Deposits. The Escrow Agent shall direct the Underwriters to
deposit with the Depositary on the date of this Agreement (the "Deposit Date")
in Federal (same day) funds by wire transfer to: Federal Reserve Bank, New York,
ABN NY ABA #00000000, Account: Chicago Treasury, Reference: Northwest Airlines
1999-1 EETC, and the Depositary shall accept from the Underwriters, on behalf of
the Escrow Agent, the sum of US$235,505,000. Upon acceptance of such sum, the
Depositary shall (i) establish each of the deposits specified in Schedule I
hereto maturing on the respective dates (each such date, as it may be extended
from time to time in accordance with the Indemnity Agreement through the
Delivery Period Termination Date, a "Maturity Date") set forth therein
(including any deposit made pursuant to Section 2.4 hereof, individually, a
"Deposit" and, collectively, the "Deposits") and (ii) credit each Deposit to the
related Account as set forth therein. No amount shall be deposited in any
Account other than the related Deposit.
Section 2.2 Interest. Each Deposit shall bear interest from and including
the date of deposit to but excluding the earlier of (x) date of withdrawal and
(y) such Deposit's Maturity Date at the rate of 6.81% per annum (computed on the
basis of a year of twelve 30-day months) payable to the Paying Agent on behalf
of the Escrow Agent semiannually in arrears on each February 1 and August 1,
commencing on August 1, 1999 (each, an "Interest Payment Date"), and on the date
of the Final Withdrawal (as defined below), all in accordance with the terms of
this Agreement (whether or not any such Deposit is withdrawn on an Interest
Payment Date). Interest accrued on any Deposit that is withdrawn pursuant to a
Notice of Purchase Withdrawal (as defined below) shall be paid on the next
Interest Payment Date, notwithstanding any intervening Final Withdrawal (such
remaining interest being hereinafter referred to as a "Carryover Deposit").
Section 2.3 Withdrawals. On and after the date seven (7) days after the
establishment of any Deposit, the Escrow Agent may, by providing at least one
(1) Business Day's prior notice of withdrawal to the Depositary in the form of
Exhibit A hereto (a "Notice of Purchase Withdrawal"), withdraw not less than the
entire balance of such Deposit, except that at any time prior to the actual
withdrawal of such Deposit, the Escrow Agent or the Pass Through Trustee may, by
notice to the Depositary, cancel such withdrawal (including on the scheduled
date therefor), and thereafter such Deposit shall continue to be maintained by
the Depositary in accordance with the original terms thereof. Following such
withdrawal the balance in the related Account shall be zero and the Depositary
shall close such Account. As used herein, "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, Boston,
Massachusetts, Salt Lake City, Utah or Chicago, Illinois.
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[Deposit Agreement (Class A)]
(a) The Escrow Agent may, by providing at least fifteen (15) days'
prior notice of withdrawal to the Depositary in the form of Exhibit B hereto (a
"Notice of Final Withdrawal"), withdraw the entire amount of all of the
remaining Deposits together with the payment by the Depositary of all accrued
and unpaid interest on such Deposits to but excluding the specified date of
withdrawal (a "Final Withdrawal"), on such date as shall be specified in such
Notice of Final Withdrawal. If a Notice of Final Withdrawal has not been given
to the Depositary on or before February 1, 2000 and there are unwithdrawn
Deposits on such date, the Depositary shall pay the amount of the Final
Withdrawal to the Paying Agent on February 16, 2000.
(b) If the Depositary receives a duly completed Notice of Purchase
Withdrawal or Notice of Final Withdrawal complying with the provisions of this
Agreement, it shall make the payments specified therein in accordance with the
provisions of this Agreement.
Section 2.4 Other Accounts. On the date of withdrawal of any Deposit, the
Escrow Agent, or the Pass Through Trustee on behalf of the Escrow Agent, shall
be entitled to re-deposit with the Depositary any portion thereof and the
Depositary shall accept the same for deposit hereunder. Any sums so received for
deposit shall be established as a new Deposit and credited to a new Account, all
as more fully provided in Section 2.1 hereof, and thereafter the provisions of
this Agreement shall apply thereto as fully and with the same force and effect
as if such Deposit had been established on the Deposit Date except that (i) such
Deposit may not be withdrawn prior to the date seven days after the
establishment thereof and (ii) such Deposit shall mature on February 1, 2000 and
bear interest as provided in Section 2.2. The Depositary shall promptly give
notice to the Escrow Agent of receipt of each such re-deposit and the account
number assigned thereto.
ARTICLE 3
TERMINATION
This Agreement shall terminate on the fifth (5th) Business Day after the
later of the date on which (i) all of the Deposits shall have been withdrawn and
paid as provided herein without any re-deposit and (ii) all accrued and unpaid
interest on the Deposits shall have been paid as provided herein, but in no
event prior to the date on which the Depositary shall have performed in full its
obligations hereunder.
ARTICLE 4
PAYMENTS
All payments (including, without limitation, those Payments made in
respect of Taxes (as defined and provided for below)) made by the Depositary
hereunder shall be paid in United
4
[Deposit Agreement (Class A)]
States Dollars and immediately available funds by wire transfer (i) in the case
of accrued interest on the Deposits payable under Section 2.2 hereof or any
Final Withdrawal, directly to the Paying Agent on behalf of the Escrow Agent at
State Street Bank and Trust Company, Xxx Xxxxxxxxxxxxx Xxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, Attention: Corporate Trust Department, Reference: Northwest
Airlines 1999-1 EETC, or to such other account as the Paying Agent may direct
from time to time in writing to the Depositary and the Escrow Agent and (ii) in
the case of any withdrawal of one or more Deposits pursuant to a Notice of
Purchase Withdrawal, directly to or as directed by the Pass Through Trustee as
specified and in the manner provided in such Notice of Purchase Withdrawal. The
Depositary hereby waives any and all rights of set-off, combination of accounts,
right of retention or similar right (whether arising under applicable law,
contract or otherwise) it may have against the Deposits howsoever arising.
Except as provided below, all payments on or in respect of each Deposit shall be
made free and clear of and without reduction for or on account of any and all
taxes, levies or other impositions or charges (collectively, "Taxes"). However,
if the Depositary or the Paying Agent (pursuant to Section 2.4 of the Escrow and
Paying Agent Agreement) shall be required by law to deduct or withhold any Taxes
from or in respect of any sum payable hereunder, the Depositary shall: (i) make
such deductions or withholding; (ii) pay the full amount deducted or withheld
(including in respect of such additional amounts) to the competent taxation
authority; and (iii) if the Taxes required to be deducted or withheld are
imposed by the Netherlands or any political subdivision thereof, pay such
additional amounts as may be necessary in order that the actual amount received
by the designated recipient of such sum under this Agreement or the Escrow and
Paying Agent Agreement after such deduction or withholding equals the sum it
would have received had no such deduction or withholding been required. If the
date on which any payment due on any Deposit would otherwise fall on a day which
is not a Business Day, such payment shall be made on the next succeeding
Business Day with the same force and effect as if made on such scheduled date,
and no additional interest shall accrue in respect of such extension.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
The Depositary hereby represents and warrants to Northwest, the Guarantor,
the Escrow Agent, the Pass Through Trustee and the Paying Agent that:
(a) it is a bank duly organized and validly existing in good
standing under the laws of its jurisdiction of organization and is duly
qualified to conduct banking business in the State of Illinois through its
Chicago branch;
(b) it has full power, authority and legal right to conduct its
business and operations as currently conducted and to enter into and perform its
obligations under this Agreement;
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[Deposit Agreement (Class A)]
(c) the execution, delivery and performance of this Agreement have
been duly authorized by all necessary corporate action on the part of it and do
not require any stockholder approval, or approval or consent of any trustee or
holder of any indebtedness or obligations of it, and such document has been duly
executed and delivered by it and constitutes its legal, valid and binding
obligations enforceable against it in accordance with the terms hereof;
(d) no authorization, consent or approval of, or other action by,
and no notice to or filing with, any United States federal or state governmental
authority or regulatory body is required for the execution, delivery or
performance by it of this Agreement;
(e) neither the execution, delivery or performance by it of this
Agreement, nor compliance with the terms and provisions hereof, conflicts or
will conflict with or results or will result in, a breach or violation of any of
the terms, conditions or provisions of, or will require any consent or approval
under, any law, governmental rule or regulation or the charter documents, as
amended, or bylaws, as amended, of it or any similar instrument binding on it or
any order, writ, injunction or decree of any court or governmental authority
against it or by which it or any of its properties is bound or any indenture,
mortgage or contract or other agreement or instrument to which it is a party or
by which it or any of its properties is bound, or constitutes or will constitute
a default thereunder or results or will result in the imposition of any lien
upon any of its properties; and
(f) there are no pending or, to its knowledge, threatened actions,
suits, investigations or proceedings (whether or not purportedly on behalf of
it) against or affecting it or any of its property before or by any court or
administrative agency which, if adversely determined, (i) would adversely affect
the ability of it to perform its obligations under this Agreement or (ii) would
call into question or challenge the validity of this Agreement or the
enforceability hereof in accordance with the terms hereof, nor is the Depositary
in default with respect to any order of any court, governmental authority,
arbitration board or administrative agency so as to adversely affect its ability
to perform its obligations under this Agreement.
ARTICLE 6
TRANSFER
Neither party hereto shall be entitled to assign or otherwise transfer
this Agreement (or any interest herein) other than (in the case of the Escrow
Agent) to a successor escrow agent under Section 1.7 of the Escrow and Paying
Agent Agreement, and any purported assignment in violation thereof shall be
void. This Agreement shall be binding upon the parties hereto and their
respective successors and (in the case of the Escrow Agent) permitted assigns.
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[Deposit Agreement (Class A)]
ARTICLE 7
AMENDMENT
This Agreement may not be amended, waived or otherwise modified except by
an instrument in writing signed by the party against whom the amendment, waiver
or other modification is sought to be enforced and by the Pass Through Trustee.
ARTICLE 8
NOTICES
Unless otherwise expressly provided herein, any notice or other
communication under this Agreement shall be in writing (including by facsimile)
and shall be deemed to be given and effective upon receipt thereof. All notices
shall be sent to (x) in the case of the Depositary, ABN AMRO BANK N.V., Chicago
Branch, 000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, XX 00000-0000, Attention:
Xxxxxxx Xxxxxxxx (Telecopier: 312-606-8428) and ABN AMRO BANK N.V., Chicago
Branch, 000 X. Xxxxxxx Xxxxxx, Xxxxxxx, XX 00000, Attention: Money Markets Desk
(Telecopier: 312-904-9106) or (y) in the case of the Escrow Agent, First
Security Bank, National Association 00 Xxxxx Xxxx Xxxxxx, Xxxx Xxxx Xxxx, Xxxx
00000, Attention: Corporate-Trust Services (Telecopier: (000) 000-0000), in each
case, with a copy to the Pass Through Trustee, State Street Bank and Trust
Company, 0 Xxxxxxxxxxxxx Xxxxx, 0xx Xxxxx, Xxxxxx, XX 00000 (Telecopier: (617)
664-5151) and to Northwest, Xxxxxxxxx Xxxxxxxx, Xxx., Xxxxxxxxxx X0000, 0000
Xxxxxxxxx Xxxxx, Xx. Xxxx, XX 00000-0000, Attention: Treasurer (Telecopier:
(000) 000-0000) (or at such other address as any such party may specify from
time to time in a written notice to the parties hereto). On or prior to the
execution of this Agreement, the Escrow Agent has delivered to the Depositary a
certificate containing specimen signatures of the representatives of the Escrow
Agent who are authorized to give notices and instructions with respect to this
Agreement. The Depositary may conclusively rely on such certificate until the
Depositary receives written notice from the Escrow Agent to the contrary.
ARTICLE 9
OBLIGATIONS UNCONDITIONAL
The Depositary hereby acknowledges and agrees that its obligation to repay
each Deposit together with interest thereon as provided herein is absolute,
irrevocable and unconditional and constitutes a full recourse obligation of the
Depositary enforceable against it to the full extent of all of its assets and
properties.
7
[Deposit Agreement (Class A)]
ARTICLE 10
ENTIRE AGREEMENT
This Agreement (including all attachments hereto) sets forth all of the
promises, covenants, agreements, conditions and understandings between the
Depositary and the Escrow Agent with respect to the subject matter hereof and
supersedes all prior and contemporaneous agreements and undertakings,
inducements or conditions, express or implied, oral or written.
ARTICLE 11
GOVERNING LAW
THIS AGREEMENT, AND THE RIGHTS AND OBLIGATIONS OF THE DEPOSITARY AND THE
ESCROW AGENT WITH RESPECT TO THE DEPOSITS, SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK AND SUBJECT TO THE
PROVISIONS OF REGULATION D OF THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE
SYSTEM (OR ANY SUCCESSOR), AS THE SAME MAY BE MODIFIED AND SUPPLEMENTED AND IN
EFFECT FROM TIME TO TIME.
ARTICLE 12
WAIVER OF JURY TRIAL RIGHT
EACH OF THE DEPOSITARY AND THE ESCROW AGENT ACKNOWLEDGES AND ACCEPTS THAT
IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT
SUCH PARTY IRREVOCABLY WAIVES ITS RIGHT TO A TRIAL BY JURY.
ARTICLE 13
COUNTERPARTS
This Agreement may be executed in one or more counterparts, all of which
taken together shall constitute one instrument.
* * *
8
[Deposit Agreement (Class A)]
IN WITNESS WHEREOF, the Escrow Agent and the Depositary have caused this
Deposit Agreement to be duly executed as of the day and year first above
written.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION,
as Escrow Agent
By: /s/ Xxxx X. Xxxxxx
-------------------------------
Name: Xxxx X. Xxxxxx, Esq.
Title: Vice President
ABN AMRO BANK N.V., CHICAGO BRANCH,
as Depositary
By: /s/ Xxxxxxx Xxxxxxxx
-------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Vice President
By: /s/ Xxxxx Xxxxxxxx
-------------------------------
Name: Xxxxx Xxxxxxxx
Title: Assistant Vice President
9
Schedule I
SCHEDULE OF DEPOSITS
(Class A)
DATE TAIL NO. DEPOSIT AMOUNT ACCOUNT NO. MATURITY DATE
---- -------- -------------- ----------- -------------
2/16/99 671US $58,805,000 178307 3/15/99
2/16/99 672US $58,900,000 178329 7/15/99
2/16/99 673US $58,900,000 178360 8/15/99
2/16/99 674US $58,900,000 178432 10/15/99
[Deposit Agreement (Class A)]
EXHIBIT A
NOTICE OF PURCHASE WITHDRAWAL
ABN AMRO BANK N.V., Chicago Branch
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000-0000
Attention: Xxxxxxx Xxxxxxxx
Telecopier: 000-000-0000
ABN AMRO BANK N.V., Chicago Branch
000 X. Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Money Markets Desk
Telecopier: 000-000-0000
Ladies and Gentlemen:
Reference is made to the Deposit Agreement (Class A) dated as of February
16, 1999 (the "Deposit Agreement") between First Security Bank, National
Association, as Escrow Agent, and ABN AMRO BANK N.V., Chicago Branch, as
Depositary (the "Depositary").
In accordance with Section 2.3(a) of the Deposit Agreement, the
undersigned hereby requests the withdrawal of the entire amount of the Deposit,
$_________, Account No. ________.
The undersigned hereby directs the Depositary to pay the proceeds of the
Deposit to _________________, Account No. __________, Reference: ___________ on
__________,____, upon the telephonic request of a representative of the Pass
Through Trustee.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION,
as Escrow Agent
By:
-------------------------
Name:
-------------------
Title:
------------------
Dated:____________, ____
[Deposit Agreement (Class A)]
EXHIBIT B
NOTICE OF FINAL WITHDRAWAL
ABN AMRO BANK N.V., Chicago Branch
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000-0000
Attention: Xxxxxxx Xxxxxxxx
Telecopier: 000-000-0000
ABN AMRO BANK N.V., Chicago Branch
000 X. Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Money Markets Desk
Telecopier: 000-000-0000
Ladies and Gentlemen:
Reference is made to the Deposit Agreement (Class A) dated as of February
16, 1999 (the "Deposit Agreement") between First Security Bank, National
Association, as Escrow Agent, and ABM AMRO BANK, N.V., Chicago Branch (the
"Depositary").
In accordance with Section 2.3(b) of the Deposit Agreement, the
undersigned hereby requests the withdrawal of the entire amount of all Deposits.
The undersigned hereby directs the Depositary to pay the proceeds of the
Deposits and accrued interest thereon to the Paying Agent at [NAME], ABA
#___________, Account #_________, Attention: ___________________, Reference:
[Northwest Airlines 1999-1 EETC].
FIRST SECURITY BANK, NATIONAL
ASSOCIATION,
as Escrow Agent
By:
-------------------------
Name:
-------------------
Title:
------------------
Dated:____________, ____
