Exhibit 4(g)
EXECUTION COPY
NOTE PURCHASE AGREEMENT
Dated as of August 5, 2002
Among
NORTHWEST AIRLINES, INC.,
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
as Pass Through Trustee under each of the Pass Through Trust Agreements
STATE STREET BANK AND TRUST COMPANY,
as Subordination Agent
XXXXX FARGO BANK NORTHWEST, NATIONAL ASSOCIATION,
as Escrow Agent
and
STATE STREET BANK AND TRUST COMPANY,
as Paying Agent
INDEX TO NOTE PURCHASE AGREEMENT
Page
Table of Contents
Section 1. Definitions..............................................3
Section 2. Financing of Aircraft....................................3
Section 3. Conditions Precedent.....................................8
Section 4. Representations and Warranties...........................8
Section 5. Covenants...............................................12
Section 6. Notices.................................................14
Section 7. Expenses................................................14
Section 8. Further Assurances......................................15
Section 9. Miscellaneous...........................................15
Section 10. Indemnity..............................................16
Section 11. Series D Equipment Notes...............................19
Section 12. Third Party Beneficiary................................20
Section 13. Termination............................................20
Section 14. Governing Law..........................................20
SCHEDULES
Schedule I Aircraft and Scheduled Closing Months
Schedule II Trust Supplements
Schedule III Deposit Agreements
Schedule IV Escrow and Paying Agent Agreements
Schedule V Mandatory Document Terms
Schedule VI Mandatory Economic Terms
Schedule VII Aggregate Amortization Schedule
ANNEX
Annex A Definitions
EXHIBITS
Exhibit A-1 Form of Leased Aircraft Participation Agreement
Exhibit A-2 Form of Lease
Exhibit A-3 Form of Leased Aircraft Indenture
Exhibit A-4(a) Form of Aircraft Purchase Agreement Assignment
Exhibit A-4(b) Form of Aircraft Purchase Agreement Assignment
Exhibit A-5 Form of Leased Aircraft Trust Agreement
Exhibit A-6 Form of Leased Aircraft Guarantee
Exhibit C-1(a) Form of Owned Aircraft Participation Agreement
Exhibit C-1(b) Form of Owned Aircraft Participation Agreement - Selected
Aircraft
Exhibit C-2(a) Form of Owned Aircraft Indenture
Exhibit C-2(b) Form of Owned Aircraft Indenture - Selected Aircraft
Exhibit C-3 Form of Owned Aircraft Guarantee
Exhibit D Form of Closing Notice
Exhibit E Form of Delaware Trust Agreement
Exhibit F-1 Form of Opinion of Xxxxxxxx, Xxxxxx & Finger
Exhibit F-2 Form of Opinion of Xxxxxxx Xxxxxxx & Xxxxxxxx
Exhibit F-3 Form of Opinion of in-house counsel to the Company and
Guarantor
Exhibit F-4 Form of Opinion of Xxxxxxx Xxxx LLP
Exhibit G Form of Class D Trust Supplement
NOTE PURCHASE AGREEMENT
This NOTE PURCHASE AGREEMENT, dated as of August 5, 2002, among (i)
Northwest Airlines, Inc., a Minnesota corporation (the "Company"), (ii) State
Street Bank and Trust Company of Connecticut, National Association, a national
banking association, not in its individual capacity except as otherwise
expressly provided herein, but solely as trustee (in such capacity together
with its successors in such capacity, the "Pass Through Trustee") under each
of the 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) Xxxxx Fargo Bank Northwest, 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, the Company has commitments from AVSA, S.A.R.L. ("Airbus")
and The Boeing Company ("Boeing") pursuant to the respective Aircraft Purchase
Agreements for the delivery of the fifteen Airbus A319-100 aircraft, eleven
Boeing 757-300 aircraft and six Airbus A330-300 aircraft listed in Schedule I
hereto (together with any aircraft substituted therefor in accordance with an
Aircraft Purchase Agreement prior to the delivery thereof, the "Eligible
Aircraft"), and the Company wishes to finance or refinance pursuant to this
Agreement a portion of the purchase price of (i) eleven Airbus A319-100
aircraft, six Boeing 757-300 aircraft and three Airbus A330-300 aircraft
included in the Eligible Aircraft (such aircraft to be financed hereunder, the
"Aircraft");
WHEREAS, pursuant to the Basic Pass Through Trust Agreement and each
of the Trust Supplements set forth in Schedule II hereto, and concurrently
with the execution and delivery of this Agreement, separate grantor trusts
(collectively, the "Pass Through Trusts" and, individually, a "Pass Through
Trust") have been created to facilitate certain of the transactions
contemplated hereby, including, without limitation, the issuance and sale of
pass through certificates pursuant thereto (collectively, the "Certificates")
to provide for a portion of the financing of the Aircraft;
WHEREAS, the Company has entered into the Underwriting Agreement
dated July 29, 2002 (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 Offered Trusts to
issue and sell the Offered Certificates to the Underwriters;
WHEREAS, concurrently with the execution and delivery of this
Agreement, the Company, the Subordination Agent, the Escrow Agent and State
Street Bank and Trust Company, as Reference Agent (the "Reference Agent"),
entered into the Reference Agency Agreement, dated the Issuance Date (the
"Reference Agency Agreement"), whereby the
Reference Agent will determine LIBOR and calculate the interest rates payable
on the Series G-1 and Series C-1 Equipment Notes and under the Deposit
Agreements relating to the Class G-1 and Class C-1 Trust for each Interest
Period (as defined in the Reference Agency Agreement) commencing after the
Issuance Date;
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, with respect to each Selected Aircraft, the Company will
determine whether to enter into a leveraged lease transaction as lessee with
respect to such Selected Aircraft or to issue secured equipment notes in order
to finance or refinance such Selected Aircraft, and with respect to an
Aircraft which is not a Selected Aircraft, the Company shall issue secured
equipment notes in order to finance or refinance such Aircraft (each Selected
Aircraft for which the Company elects to enter into a leveraged lease, a
"Leased Aircraft", and each Selected Aircraft for which the Company elects to
issue secured equipment notes and each Aircraft which is not a Selected
Aircraft, an "Owned Aircraft"), and will give to the Pass Through Trustee a
Closing Notice (as defined below) specifying its election;
WHEREAS, upon receipt of a Closing Notice with respect to an
Aircraft, subject to the terms and conditions of this Agreement, the
applicable Pass Through Trustees will enter into the applicable Financing
Agreements relating to such Aircraft;
WHEREAS, on the Closing Date under the applicable Financing
Agreements, the applicable 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;
WHEREAS, concurrently with the execution and delivery of this
Agreement, (i) Citibank, N.A.(the "Primary Liquidity Provider"), has entered
into four (4) revolving credit agreements (each, a "Primary Liquidity
Facility"), one each for the benefit of the Certificate Holders of each of the
Offered Trusts with the Subordination Agent, as agent for the Pass Through
Trustee on behalf of each such Pass Through Trust, (ii) Credit Suisse First
Boston International ( the "Above-Cap Liquidity Provider") has entered into
the ISDA Master Agreement, the Schedules to such ISDA Master Agreement and the
Class G-1 and Class C-1 Above-Cap Liquidity Agreement Trust Confirmations that
supplement such ISDA Master
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Agreement, each with the Subordination Agent, on behalf of the Class G-1 and
the Class C-1 Trustee, respectively (each an "Above-Cap Liquidity Agreement",
and collectively, the "Above-Cap Liquidity Agreements") and (iii) each Pass
Through Trustee, the Primary Liquidity Provider, the Above-Cap Liquidity
Provider, the Policy Provider and the Subordination Agent have entered into
the Intercreditor Agreement, dated as of the date hereof (the "Intercreditor
Agreement");
WHEREAS, MBIA Insurance Corporation, (the "Policy Provider"), the
Pass Through Trustees for the Class G-1 and Class G-2 Trusts, the Company and
the Subordination Agent have entered into an Insurance and Indemnity Agreement
dated as of August 5, 2002 (the "Policy Provider Agreement") providing for the
issuance by the Policy Provider of the Policies for the benefit of the Class
G-1 and Class G-2 Certificateholders;
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual agreements herein contained and other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the parties hereto
agree as follows:
Section 1. Definitions. Capitalized terms used but not defined
herein shall have the respective meanings set forth or
incorporated by reference in Annex A.
Section 2. Financing of Aircraft. (a) The Company confirms that it
entered into the applicable Aircraft Purchase Agreements with Airbus and
Boeing, as the case may be, pursuant to which it has agreed to purchase, and
Airbus and Boeing have agreed to deliver, the Eligible Aircraft in the months
specified in Schedule I hereto, all on and subject to terms and conditions
specified in the applicable Aircraft Purchase Agreements. The Company agrees
to finance or refinance the Aircraft in the manner provided herein, all on and
subject to the terms and conditions hereof and of the relevant Financing
Agreements.
(b) In furtherance of the foregoing, the Company agrees to give the
parties hereto, each applicable Depositary and each of the Rating Agencies not
less than two (2) Business Days' prior notice (a "Closing Notice") of the
scheduled closing date (the "Scheduled Closing Date") (or, in the case of a
Substitute Closing Notice under Section 2(f) or (g) hereof, one (1) Business
Day's prior notice) of a financing in respect of each Aircraft, which notice
shall:
i. specify whether or not the Aircraft is a Selected Aircraft,
and if the Aircraft is a Selected Aircraft, whether the Company has
elected to treat such Selected Aircraft as a Leased Aircraft or an
Owned Aircraft, and if the Aircraft is not a Selected Aircraft, that
such non-Selected Aircraft shall be treated as 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 applicable Pass Through Trustees to instruct
the relevant Escrow Agents to provide Notices of Purchase Withdrawal
to the relevant Depositary with respect to the Equipment Notes to be
issued in connection with the financing of such Aircraft;
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iv. instruct the applicable 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 the series of
Equipment Notes to be issued, and purchased by the applicable Pass
Through Trustees, in connection with the financing of such Aircraft
on such Scheduled Closing Date (which shall in all respects comply
with the Mandatory Economic Terms);
vi. in the case of any Selected Aircraft, if such Aircraft is
to be a Leased Aircraft, certify that the related Owner Participant
(A) is not an Affiliate of the Company and (B) based on the
representations of such Owner Participant, is either (1) a Qualified
Owner Participant or (2) any other person the obligations of which
under the Owner Participant Documents (as defined in the applicable
Participation Agreement) are guaranteed by a Qualified Owner
Participant; and
vii. if applicable, include the information and Rating Agency
Notices referred to in Section 11(c).
Notwithstanding the foregoing, in the event the Scheduled Closing
Date for any Aircraft to be financed or refinanced pursuant to the terms
hereof is on or within 3 Business Days following the date of issuance of the
Certificates, the Closing Notice therefor may be delivered to the parties
hereto on such Scheduled Closing Date.
Notwithstanding the foregoing, if the Company elects, with respect
to any Aircraft other than a Selected Aircraft, to (i) not issue any Series D
Equipment Notes in respect of such Aircraft or (ii) issue Series D Equipment
Notes in an amount such that after the issuance of such Series D Equipment
Notes, the loan to value ratio for such Series D Equipment Notes shall be less
than the amount specified for such Aircraft in the Mandatory Economic Terms
(provided that in no event will the aggregate amount of Series D Equipment
Notes issued in respect of all Aircraft be required to exceed $75,000,000),
the Company agrees that it shall (x) at least 15 days prior to the Closing
Date for such Aircraft, provide notice of such election (a "Class D Notice")
to each party hereto, each Depositary and each Rating Agency and in such
notice (I) shall direct each Pass Through Trustee (other than the Class D Pass
Through Trustee) to instruct the applicable Escrow Agent to deliver notice of
a Series D Non-Issuance Withdrawal to the Depositary for each Offered Trust,
specifying each Deposit Account from which such a withdrawal is to be made,
the amount to be withdrawn from each Deposit Account (together with accrued
interest thereon) and applied by the Paying Agent for distribution to the
Receiptholders of the related Class pursuant to the Escrow Agreement for such
Class, and the date for payment by the Depositary of each such withdrawal
amount, which shall also be the date of distribution by the Paying Agent to
the Receiptholders pursuant to the Escrow Agreement (which date shall be the
Closing Date for such Aircraft) and (II) shall state that the Company shall
deliver on such Closing Date the written notices required by clause (y) of
this sentence and (y) on the Closing Date, deliver to each Pass Through
Trustee and the Subordination Agent copies of written confirmation from each
Rating Agency that such issuance of any Series D Equipment Notes with respect
to such Aircraft and/or distribution to the Certifcateholders of the Offered
Certificates
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from the related Deposit Accounts of the amounts specified in the preceding
clause (x) will not result in a Ratings Event. Each Pass Through Trustee
agrees that upon receipt of the notices specified in the preceding sentence,
it will promptly instruct the applicable Escrow Agent to deliver notice of a
Series D Non-Issuance Withdrawal to the Depositary for each applicable Trust
(other than the Class D Trust).
(c) Upon receipt of a Closing Notice, the applicable Pass Through
Trustees shall, and shall cause the Subordination Agent to, enter into and
perform their obligations under the Participation Agreement specified in such
Closing Notice, provided, however, that such Participation Agreement and the
other Financing Agreements to be entered into pursuant to such Participation
Agreement shall be in the forms thereof annexed hereto in all material
respects with such changes therein as shall have been requested by the related
Owner Participant (in the case of Lease Financing Agreements), agreed to by
the Company and, if modified in any material respect, as to which prior
written consent of the Policy Provider shall have been obtained and as to
which Rating Agency Confirmation shall have been obtained from each Rating
Agency by the Company (to be delivered by the Company to the applicable Pass
Through Trustee and the Policy Provider on or before the relevant Closing
Date, it being understood that if Policy Provider consent and Rating Agency
Confirmation shall have been received with respect to any Financing Agreements
and such Financing Agreements are utilized for subsequent Aircraft (or
Substitute Aircraft) without material modifications, no additional Policy
Provider consent or Rating Agency Confirmation shall be required); provided,
however, that the relevant Financing Agreements as executed and delivered
shall not vary the Mandatory Economic Terms and shall contain the Mandatory
Document Terms (as such Mandatory Document Terms may be modified in accordance
with Schedule V hereto). Notwithstanding the foregoing, if any Financing
Agreement annexed hereto shall not have been reviewed by any 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 written
confirmation from each Rating Agency that the use of such Financing Agreement
would not result in a Ratings Event.
(d) With respect to each Aircraft, the Company shall cause (i) State
Street Bank and Trust Company (or such other person that meets the eligibility
requirements to act as loan trustee under the Leased Aircraft Indenture or
Owned Aircraft Indenture) to execute as Loan Trustee the Financing Agreements
relating to such Aircraft to which such Loan Trustee is intended to be a party
and (ii) Northwest Airlines Corporation to execute a Guarantee, and shall
concurrently therewith execute such Financing Agreements to which the Company
is intended to be a party and perform its respective obligations thereunder.
Upon the request of the Policy Provider or any Rating Agency, the Company
shall deliver or cause to be delivered to the Policy Provider or each Rating
Agency, as the case may be, a true and complete copy of each Financing
Agreement relating to the financing of each Aircraft together with a true and
complete set of the closing documentation (including legal opinions) delivered
to the related Loan Trustee, Subordination Agent and Pass Through Trustee
under the related Participation Agreement.
(e) If after giving any Closing Notice or Class D Notice, there
shall be a delay in the delivery of the Aircraft referred to therein, or if on
the Scheduled Closing Date of any Aircraft the financing thereof in the manner
contemplated hereby shall not be consummated for whatever reason, the Company
shall give the parties hereto and the Policy Provider prompt notice thereof.
Concurrent with the giving of such notice of postponement or subsequent
thereto,
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the Company shall give the parties hereto and the Policy Provider a substitute
Closing Notice and Class D Notice specifying the date (the "Substitute Closing
Date") to which the applicable financing of such Aircraft or of another
Eligible Aircraft of the same type in lieu thereof shall have been rescheduled
which shall be a Business Day before the Cut-Off Date on which the Escrow
Agents shall be entitled to withdraw one or more Deposits under each of the
applicable Deposit Agreements to enable each applicable Pass Through Trustee
to fund its purchase of the related Equipment Notes. Upon receipt of any such
notice of postponement, each applicable Pass Through Trustee shall comply with
its obligations under Article IV of each of the Trust Supplements and
thereafter the financing or refinancing of such 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 Selected Aircraft, and subsequent to its giving a Closing Notice
therefor, to postpone the Scheduled Closing Date of such Selected Aircraft so
as to enable the Company to change its election to treat such Selected
Aircraft as a Leased Aircraft or an Owned Aircraft by written notice of such
postponement to the other parties hereto. The Company shall subsequently give
the parties hereto a substitute Closing Notice and Class D Notice complying
with the provisions of Section 2(b) hereof and specifying the new Closing Date
for such postponed Selected 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 any event, an Aircraft which is not a Selected
Aircraft shall be treated as an Owned Aircraft. In addition the Company shall
have the further right, anything in this Section 2 to the contrary
notwithstanding, to accept delivery of an Aircraft under the applicable
Aircraft Purchase Agreement on the delivery date thereof by utilization of
bridge financing of such Aircraft and thereafter give the parties hereto a
Closing Notice specifying a Closing Date no later than the Cut-Off Date and
otherwise complying with the provisions of Section 2(b) hereof. All other
terms and conditions of this Note Purchase Agreement shall apply to the
financing of any such Aircraft on the re-scheduled Closing Date therefor
except the re-scheduled Closing Date shall be deemed the Closing Date of such
Aircraft for all purposes of this Section 2.
(g) In the case of any Selected Aircraft, 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 Selected
Aircraft, (ii) deliver an opinion of counsel that holders of Certificates
related to such Selected 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
(other than such change in amount, manner and timing of interest that results
from any reoptimization of the Equipment Notes permitted pursuant to Section
16 of the applicable Owned Aircraft Participation Agreement in connection with
such conversion) and that the Pass Through Trusts will not be subject to
federal income tax as a result of such conversion and (iii) obtain written
confirmation from each Rating Agency that such conversion will not result in a
Ratings Event.
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(h) If the delivery date for an Eligible Aircraft under the Aircraft
Purchase Agreements is delayed for more than 30 days beyond the month
scheduled for delivery or beyond the Cut-Off Date, the Company may identify
another Eligible Aircraft of the same model as the Eligible Aircraft for
delivery as a replacement aircraft therefor. In addition, the Company may also
identify a substitute aircraft (together with the substitute aircraft referred
to in the next sentence, a "Substitute Aircraft") (for the avoidance of doubt,
an Eligible Aircraft that replaces an Aircraft is not considered a Substitute
Aircraft) meeting the following conditions: (i) a Substitute Aircraft must be
the same model as the Eligible Aircraft for which delivery by Airbus or
Boeing, as the case may be, was delayed and must be delivered by Airbus or
Boeing, as the case may be, to the Company after the date of this Agreement,
(ii) the Substitute Aircraft must have been manufactured after the Issuance
Date and (iii) the Company shall be obligated to obtain prior written consent
of the Policy Provider and written confirmations from each Rating Agency that
the replacement of such Eligible Aircraft by such Substitute Aircraft would
not result in a Ratings Event. Upon the satisfaction of the conditions set
forth above with respect to a Substitute Aircraft or the substitution of an
Eligible Aircraft for another Eligible Aircraft as provided above, the
Eligible Aircraft to be replaced shall cease to be subject to this Agreement
and all rights and obligations of the parties hereto concerning such Eligible
Aircraft shall cease, and such Substitute Aircraft or substituted Eligible
Aircraft shall become and thereafter be subject to the terms and conditions of
this Agreement to the same extent as such replaced Eligible Aircraft. If an
Eligible Aircraft which is a Selected Aircraft is replaced pursuant to this
Section 2(h), such Substitute Aircraft or replacement Eligible Aircraft shall
be deemed a Selected Aircraft for all purposes hereof.
(i) The Company shall have no liability for the failure of the Pass
Through Trustees to purchase Equipment Notes with respect to any Aircraft or
Substitute Aircraft, other than the Company's obligation, if any, to pay the
Deposit Make-Whole Amount or Deposit Break Amount, pursuant to Section 5(a)(i)
of this Agreement, and the Company's obligation to make capital contributions
as required by Section 11(b).
(j) The parties agree that if, in connection with the delivery of a
Selected Aircraft (or a Substitute Aircraft or a replacement Eligible Aircraft
for such Selected Aircraft pursuant to Section 2(h)) or the conversion of an
Owned Aircraft which is a Selected 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 Selected Aircraft (or
Substitute Aircraft or replacement Eligible Aircraft) to be registered in the
United States and (B) complies with the FAA regulations issued under the Act
applicable thereto.
(k) 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 (other than the Series D
Equipment Notes) 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.
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(l) The Company shall notify the Rating Agencies in writing of any
lease of an Owned Aircraft pursuant to the terms of an Owned Aircraft
Indenture promptly after entering into such lease.
Section 3. Conditions Precedent. The obligation of the applicable
Pass Through Trustee that receives a Closing Notice to enter into, and to
cause the Subordination Agent to enter into, any Participation Agreement as
directed pursuant to the 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, the applicable Liquidity Providers and the Policy Provider
stating that (i) such Participation Agreement and the other Financing
Agreements to be entered into pursuant to such Participation Agreement do not
vary the Mandatory Economic Terms and contain the Mandatory Document Terms (as
such Mandatory Document Terms may be modified in accordance with Schedule V
hereto) and (ii) any substantive modification of such Financing Agreements
from the forms thereof attached to this Agreement do not materially and
adversely affect the applicable Liquidity Providers, the Policy Provider or
the Certificate Holders, and such certification shall be true and correct;
(c) if required by Section 2(c) and in place of the statement in
clause (ii) of Section 3(b) above, Rating Agency Confirmation from each Rating
Agency; and
(d) if the Aircraft relating to such Participation Agreement is not
a Selected Aircraft, the Company shall have either performed its obligations
under Section 11(a) and (b) or Section 11(c) with respect to such Aircraft.
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-
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laws or the provisions of any material indenture, mortgage, contract
or other agreement to which it is a party or by which it is bound;
iii. this Agreement constitutes the legal, valid and binding
obligation of the Company, enforceable against it in accordance with
its terms, except as the same may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the rights of creditors generally and by general
principles of equity, whether considered in a proceeding at law or
in equity; and
iv. the statements contained in any certificate delivered
pursuant to Section 3(b) are true and correct.
(b) State Street Bank and Trust Company represents and warrants on
the date hereof and on each Closing Date that:
i. State Street Bank and Trust Company is duly incorporated,
validly existing and in good standing under the laws of the
Commonwealth of Massachusetts and is a "citizen of the United
States" as defined in 49 X.X.X.xx. 40102 (a)(15), and has the full
corporate power, authority and legal right under the laws of the
Commonwealth of Massachusetts and the United States pertaining to
its banking, trust and fiduciary powers to execute and deliver this
Agreement and each Financing Agreement to which it will be a party
and to carry out the obligations of State Street Bank and Trust
Company, in its capacity as Subordination Agent or Paying Agent, as
the case may be, under this Agreement and each Financing Agreement
to which it will be a party;
ii. the execution and delivery by State Street Bank and Trust
Company, in its capacity as Subordination Agent or Paying Agent, as
the case may be, of this Agreement and the performance by State
Street Bank and Trust Company, in its capacity as Subordination
Agent or Paying Agent, as the case may be, of its obligations under
this Agreement have been duly authorized by State Street Bank and
Trust Company, in its capacity as Subordination Agent or Paying
Agent, as the case may be, and will not violate its articles of
association or by-laws or the provisions of any indenture, mortgage,
contract or other agreement to which it is a party or by which it is
bound; and
iii. this Agreement constitutes the legal, valid and binding
obligation of State Street Bank and Trust Company in its capacity as
Subordination Agent or Paying Agent, as the case may be, enforceable
against it in accordance with its terms, except as the same may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the rights of creditors
generally and by general principles of equity, whether considered in
a proceeding at law or in equity.
(c) The Pass Through Trustee hereby confirms to each of the other
parties hereto that its representations and warranties set forth in Section
7.14 of the Basic Pass Through Trust Agreement are true and correct as of the
date hereof.
(d) The Subordination Agent represents and warrants that:
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i. the Subordination Agent is duly incorporated, validly
existing and in good standing under the laws of the Commonwealth of
Massachusetts, and has the full corporate power, authority and legal
right under the laws of the Commonwealth of Massachusetts and the
United States pertaining to its banking, trust and fiduciary powers
to execute and deliver this Agreement and each Financing Agreement
to which it is or will be a party and to perform its obligations
under this Agreement and each Financing Agreement to which it is or
will be a party;
ii. this Agreement has been duly authorized, executed and
delivered by the Subordination Agent; this Agreement constitutes the
legal, valid and binding obligations of the Subordination Agent
enforceable against it in accordance with its terms, except as the
same may be limited by applicable bankruptcy, insolvency
reorganization, moratorium or similar laws affecting the rights of
creditors generally and by general principles of equity, whether
considered in a proceeding at law or in equity;
iii. none of the execution, delivery and performance by the
Subordination Agent of this Agreement contravenes any law, rule or
regulation of the Commonwealth of Massachusetts or any United States
governmental authority or agency regulating the Subordination
Agent's banking, trust or fiduciary powers or any judgment or order
applicable to or binding on the Subordination Agent and do not
contravene the Subordination Agent's articles of association or
by-laws or result in any breach of, or constitute a default under,
any Agreement or instrument to which the Subordination Agent is a
party or by which it or any of its properties may be bound;
iv. neither the execution and delivery by the Subordination
Agent of this Agreement nor the consummation by the Subordination
Agent of any of the transactions contemplated hereby requires the
consent or approval of, the giving of notice to, the registration
with, or the taking of any other action with respect to, any
Massachusetts governmental authority or agency or any federal
Governmental authority or agency regulating the Subordination
Agent's banking, trust or fiduciary powers;
v. there are no Taxes payable by the Subordination Agent
imposed by the Commonwealth of Massachusetts or any political
subdivision or taxing authority thereof in connection with the
execution, delivery and performance by the Subordination Agent of
this Agreement (other than franchise or other taxes based on or
measured by any fees or compensation received by the Subordination
Agent for services rendered in connection with the transactions
contemplated by the Intercreditor Agreement or any of the Liquidity
Facilities), and there are no Taxes payable by the Subordination
Agent imposed by the Commonwealth of Massachusetts or any political
subdivision thereof in connection with 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
10
the aggregate, if determined adversely to it, would materially
adversely affect the ability of the Subordination Agent to perform
its obligations under this Agreement.
(e) The Escrow Agent represents and warrants that:
i. the Escrow Agent is a national banking association duly
organized, validly existing and in good standing under the laws of
the United States and has the full corporate power, authority and
legal right under the laws of the United States pertaining to its
banking, trust and fiduciary powers to execute and deliver this
Agreement, each Deposit Agreement and each Escrow and Paying Agent
Agreement (collectively, the "Escrow Agent Agreements") and to carry
out the obligations of the Escrow Agent under each of the Escrow
Agent Agreements;
ii. the execution and delivery by the Escrow Agent of each of
the Escrow Agent Agreements and the performance by the Escrow Agent
of its obligations hereunder and thereunder have been duly
authorized by the Escrow Agent and will not violate its articles of
association or by-laws or the provisions of any indenture, mortgage,
contract or other agreement to which it is a party or by which it is
bound; and
iii. each of the Escrow Agent Agreements constitutes the legal,
valid and binding obligations of the Escrow Agent enforceable
against it in accordance with its terms, except as the same may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the rights of creditors
generally and by general principles of equity, whether considered in
a proceeding at law or in equity.
(f) The Paying Agent represents and warrants that:
i. the Paying Agent is duly incorporated, validly existing and
in good standing under the laws of the Commonwealth of Massachusetts
and has the full corporate power, authority and legal right under
the laws of the United States pertaining to its banking, trust and
fiduciary powers to execute and deliver this Agreement and each
Escrow and Paying 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.
11
(g) State Street Bank and Trust Company of Connecticut, National
Association represents and warrants on the date hereof and on each Closing
Date that:
i. State Street Bank and Trust Company of Connecticut, National
Association is a national association validly existing and in good
standing with the Comptroller of the Currency under the laws of the
United States and is a "citizen of the United States" as defined in
49 X.X.X.xx. 40102 (a)(15), and has the full power, authority and
legal right under the laws of the United States pertaining to its
banking, trust and fiduciary powers to execute and deliver this
Agreement and each Financing Agreement to which it will be a party
and to carry out the obligations of State Street Bank and Trust
Company of Connecticut, National Association, in its capacity as
Pass Through Trustee under this Agreement and each Financing
Agreement to which it will be a party;
ii. the execution and delivery by State Street Bank and Trust
Company of Connecticut, National Association, in its capacity as
Pass Through Trustee under this Agreement and the performance by
State Street Bank and Trust Company of Connecticut, National
Association, in its capacity as Pass Through Trustee, of its
obligations under this Agreement have been duly authorized by State
Street Bank and Trust Company of Connecticut, National Association,
in its capacity as Pass Through Trustee and will not violate its
articles of association or by-laws or the provisions of any
indenture, mortgage, contract or other agreement to which it is a
party or by which it is bound; and
iii. this Agreement constitutes the legal, valid and binding
obligation of State Street Bank and Trust Company of Connecticut,
National Association in its capacity as Pass Through Trustee
enforceable against it in accordance with its terms, except as the
same may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of
creditors generally and by general principles of equity, whether
considered in a proceeding at law or in equity.
Section 5. Covenants. (a) The Company covenants with each of the
other parties hereto as follows:
i. On the date that the Depositary is obligated to pay the amount of the
Final Withdrawal and on each date that the Depositary is obligated to
pay the amount of a Series D Non-Issuance Withdrawal, in each case 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 Break Amount (in the case of the Class G-1 and Class C-1
Trusts) or the Deposit Make-Whole Amount (in the case of the Class
G-2 and Class C-2 Trusts), if any, required to be paid in respect of
such Final Withdrawal amount or Series D Non-Issuance Withdrawal
amount, as the case may be.
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.
12
iii. The Company shall at all times remain a U.S. Air Carrier
(as defined in the Financing Agreements) and shall at all times be
otherwise certificated and registered to the extent necessary to
entitle (i) in the case of Leased Aircraft, the Owner Trustee (and
the Indenture Trustee as assignee of the Owner Trustee's rights
under each Lease) to the rights afforded to lessors of aircraft
equipment under Section 1110 and (ii) in the case of Owned Aircraft,
the Indenture Trustee to the rights afforded to secured parties of
aircraft equipment under Section 1110.
iv. Section 8(y) of each Participation Agreement is hereby
incorporated by reference herein.
v. The Company shall not issue any Series E Equipment Notes
pursuant to any Indenture unless it shall have received written
confirmation from each Rating Agency that such issuance will not
result in a Ratings Event. Any issuance of Series E Equipment Notes
shall be subject to the terms of Section 9.1(f) of the Intercreditor
Agreement.
vi. If the Depositary's short-term rating shall at any time
fall below the Depositary Threshold Rating from any Rating Agency,
the Company shall, within 45 days of such event occurring, cause the
Depositary to be replaced with a depositary bank (a "Replacement
Depositary") on the following terms and conditions:
(1) the Replacement Depositary must be one that either (x)
meets the Depositary Threshold Rating or (y) with respect to
which the Company shall have obtained written confirmation from
each Rating Agency that such Replacement Depositary will not
result in a Ratings Event and, in either case, the Company
shall have obtained written confirmation from each Rating
Agency that such replacement will not result in a Ratings Event
and the prior written consent of the Policy Provider (which
consent shall not be unreasonably withheld or delayed);
(2) the Company shall cause the Escrow Agent and the
Replacement Depositary to enter into a Replacement Deposit
Agreement for each Class of Offered Certificates and shall
cause the Replacement Depositary to deliver to the Company, the
Policy Provider (in the case of the Replacement Deposit
Agreement for the Class G-1 and Class G-2 Certificates) and
each Rating Agency legal opinions and other closing
documentation substantially similar to those delivered by the
Depositary being replaced in connection with the execution and
delivery of the Deposit Agreements being replaced; and
(3) the Company shall pay all fees, expenses and other
amounts then owing to the replaced Depositary.
Subject to satisfaction of the foregoing conditions, the Company
shall instruct each Pass Through Trustee, and each Pass Through
Trustee agrees, to execute and deliver to the Escrow Agent a duly
completed Withdrawal Certificate (as defined in the Escrow and Paying
Agent Agreement with respect to each Class of Offered Certificates)
together with a Notice of Replacement Withdrawal (as defined in the
applicable Paying Agent and
13
Escrow Agreement). Each of the parties hereto agrees, at the
Company's request, to enter into any amendments to this Agreement,
any Escrow and Paying Agent Agreement and any other Operative
Documents as may be necessary or desirable to give effect to the
replacement of the Depositary and the Replacement Deposit
Agreements. Upon execution and delivery of the Replacement Deposit
Agreements, the Replacement Depositary shall be deemed to be the
Depositary with all of the rights and obligations of the Depositary
hereunder and under the other Operative Documents and the
Replacement Deposit Agreements shall be deemed to be the Deposit
Agreements hereunder and under the other Operative Documents.
vii. The Company shall not assume the obligations of the issuer
under any Indenture for a Leased Aircraft unless the Company shall
have delivered to the Loan Trustee under such Indenture a written
confirmation from each of the Rating Agencies that such assumption
will not result in a Ratings Event.
(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. Notice shall be given to the Policy Provider at
the address specified in the Policy Provider Agreement.
Section 7. Expenses. (a) The Company agrees to pay to the
Subordination Agent when due an amount or amounts equal to the fees payable to
the Primary Liquidity Provider under Section 2.03 of each Primary 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 the Series G-1, Series G-2, Series C-1 and
Series C-2 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 an
Applied Downgrade Advance) payable under Section 3.07 of each Primary
Liquidity Facility minus Investment Earnings while such Downgrade Advance
shall be outstanding, (B) the amount equal to interest on any Non-
14
Extension Advance (other than an Applied Non-Extension Advance) payable under
Section 3.07 of each Primary Liquidity Facility minus Investment Earnings
while such Non-Extension Advance shall be outstanding, (C) any other amounts
owed to the Primary Liquidity Provider by the Subordination Agent as borrower
under each Primary 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, (iv) in the event
the Company requests any amendment to any Operative Document or to this Note
Purchase Agreement, all reasonable fees and expenses (including, without
limitation, fees and disbursements of counsel) of the Escrow Agent and/or the
Paying Agent in connection therewith and (v) all compensation and
reimbursement of expenses and disbursements payable to the Policy Provider
under the Policy Provider Agreement (except for fees payable under Section
7(c) below). For purposes of this Section 7(b), (i) the terms "Applied
Downgrade Advance," "Applied Non-Extension Advance," "Downgrade Advance" and
"Non-Extension Advance" shall have the meanings specified in each Primary
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, 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
15
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 Policy Provider as beneficiary of
Section 5(a)(vi) and the second paragraph of Section 10 hereof, 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, the Policy Provider
and each of the beneficiaries of Section 7 hereof) shall have any right, power
or privilege in respect of, or have any benefit or interest arising out of,
this Agreement.
Section 10. Indemnity. The Company hereby agrees to indemnify each
Indemnitee against, and agrees to protect, defend, save and keep harmless each
thereof from any and all liabilities, obligations, losses, damages, penalties,
claims, actions, suits, out-of-pocket costs, expenses, and disbursements, of
whatsoever kind and nature (collectively called "Expenses") imposed on,
incurred by or asserted against any Indemnitee, in any way relating to or
arising out of (A) any of the Financing Agreements or any lease or sublease of
any Aircraft or the enforcement of any of the terms thereof or any amendment,
modification or waiver in respect thereof, (B) the manufacture, purchase,
acceptance or rejection of the Airframe (as defined in the Participation
Agreement) or any Engine (as defined in the Participation Agreement), (C) the
Aircraft (or any portion thereof or any Engine or engine affixed to the
Airframe) whether or not arising out of the finance, refinance, ownership,
delivery, nondelivery, storage, lease, sublease, sub-sublease, possession,
use, non-use, operation, maintenance, registration, reregistration, condition,
modification, alteration, replacement, repair, substitution, sale, return or
other disposition of the Aircraft (or any portion thereof or any Engine or
engine affixed to the Airframe) including, without limitation, latent or other
defects, whether or not discoverable, strict tort liability and any claim for
patent, trademark or copyright infringement, or (D) the offer, sale or
delivery of the Equipment Notes (the indemnity in this clause (D) to extend
also to any person who controls an Indemnitee within the meaning of Section 15
of the Securities Act of 1933, as amended); provided that the foregoing
indemnity as to any Indemnitee shall not extend to any Expense resulting from
or arising out of or which would not have occurred but for one or more of the
following: (A) any representation or warranty by such Indemnitee (or any of
its affiliates) in the Financing Agreements or in connection therewith being
incorrect in any material respect, or (B) the failure by such Indemnitee (or
any of its affiliates) to perform or observe any agreement, covenant or
condition in any of the Financing Agreements applicable to it (except to the
extent such failure was caused directly by the failure of the Company to
perform any obligation under a Financing Agreement), or (C) the willful
misconduct or the gross negligence of such Indemnitee (or any of its
affiliates) other than gross negligence imputed to such Indemnitee (or any of
its affiliates) solely by reason of its interest in the Aircraft), or (D) any
Tax, or (E) the authorization or giving or withholding of any future
amendments, supplements, waivers or consents with respect to any of the
Financing Agreements other than such as have been consented to, approved,
authorized or requested by the Company, or (F) subject to the next succeeding
paragraph, any loss of tax benefits or increase in tax liability under any tax
law
16
whether or not the Company is required to indemnify therefor pursuant to
this Agreement, or (G) any Expense which is specified to be for the account of
an Indemnitee pursuant to any Financing Agreement without express right of
reimbursement under any Financing Agreement. The foregoing indemnity shall not
extend to any Expense to the extent that such Expense is not caused by, or
does not arise out of, an act, omission or event which occurs prior to the
payment of all payments required to be paid by the Company under the Financing
Agreements.
The Company further agrees to indemnify the Policy Provider from and
against and agrees to protect, save and keep harmless the Policy Provider from
any and all Expenses imposed on, incurred by or asserted against any of them
in any way related to, based on or arising from the enforcement by the Policy
Provider of its rights as a subrogee under the Class G-1 Escrow and Paying
Agent Agreement and the Class G-2 Escrow and Paying Agent Agreement; provided,
that the foregoing indemnity shall not extend to the Policy Provider with
respect to any loss, claim or expense to the extent such loss, claim or
expensed is attributable to the Policy Provider's gross negligence or willful
misconduct and provided, further, that the Policy Provider shall have no claim
against any "Collateral" or "Trust Indenture Estate" (as such terms are
defined in the Financing Agreements) for any payments under this Section 10.
The Company further agrees that any payment or indemnity pursuant to
this Section 10 in respect of any Expenses shall be in an amount which, after
deduction of all Taxes required to be paid by such recipient with respect to
such payment or indemnity under the laws of any Federal, state or local
government or taxing authority in the United States, or under the laws 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
17
such Expense is covered by the proviso to the first paragraph of this Section
10), in any judicial or administrative proceeding that involves solely a claim
for one or more Expenses, to assume responsibility for and control thereof,
(B) so long as the Company has agreed in a writing acceptable to such
Indemnitee that the Company is liable to such Indemnitee for such Expense
hereunder (unless such Expense is covered by the proviso to the first
paragraph of this Section 10), in any judicial or administrative proceeding
involving a claim for one or more Expenses and other claims related or
unrelated to the transactions contemplated by the Financing Agreements, to
assume responsibility for and control of such claim for Expenses to the extent
that the same may be and is severed from such other claims (and such
Indemnitee shall use its best efforts to obtain such severance), and (C) in
any other case, to be consulted by such Indemnitee with respect to judicial
proceedings subject to the control of such Indemnitee. Notwithstanding any of
the foregoing to the contrary, the Company shall not be entitled to assume
responsibility for and control of any such judicial or administrative
proceedings (A) while an event of default shall have occurred and be
continuing under any of the Financing Agreements or (B) 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
18
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.
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. Series D Equipment Notes. (a) On or prior to the first
Closing Date for an Aircraft which is not a Selected Aircraft, the Company
shall:
i. form a Delaware business trust by entering into a trust agreement
substantially in the form attached hereto as Exhibit E (the "Delaware
Trust Agreement", the trust formed by such agreement being the "Delaware
Trust");
ii. form the Class D Trust by entering into the Class D Trust
Supplement;
iii. cause the Class D Pass Through Trustee to issue and sell the
Class D Certificates to the Delaware Trust in a face amount of up to
$75,000,000 and with an interest rate to be determined prior to such
issuance;
iv. deliver to the Pass Through Trustees and the Underwriters
opinions from each of the following parties (each such opinion to be in
form and substance satisfactory to the Class D Pass Through Trustee and
addressed to the Underwriters, the Class D Pass Through Trustee, each
other Pass Through Trustee and each Rating Agency): (A) Xxxxxxxx, Xxxxxx
& Finger, counsel for the Delaware Trust, substantially to the effect set
forth in Exhibit F-1 hereto, (B) Xxxxxxx Xxxxxxx & Xxxxxxxx, counsel for
the Company and the Guarantor, substantially to the effect set forth in
Exhibit F-2 hereto, (C) the Vice President, Law & Secretary of the
Company and the Guarantor, substantially to the effect set forth in
Exhibit F-3 hereto, and (D) Xxxxxxx Xxxx LLP, counsel to the Class D Pass
Through Trustee, substantially to the effect set forth in Exhibit F-4
hereto;
v. cause the Intercreditor Agreement to be amended by written
agreement of the parties thereto to add the Class D Pass Through Trustee
as a party to the Intercreditor Agreement, to revise the definition of
Stated Interest Rate to reflect the issuance of the Class D Certificates,
and to make any other changes in the Intercreditor Agreement in
connection with the issuance of the Class D Certificates as shall not
materially adversely affect any Trustee; and
vi. deliver to each party hereto written confirmation from each
Rating Agency that the issuance of such Series D Equipment Notes will not
result in a Ratings Event.
(b) On or prior to each Closing Date for an Aircraft which is not a
Selected Aircraft on which Series D Equipment Notes under the Indenture
relating to such Aircraft are to
19
be issued and purchased by the Class D Pass Through Trustee pursuant to the
related Participation Agreement, the Company shall:
i. notify or cause to be notified the Class D Pass Through Trustee
of the principal amount of Series D Equipment Notes to be so purchased;
and
ii. make a capital contribution to the Delaware Trust in an amount
sufficient to pay the purchase price of such Series D Equipment Notes and
cause the Delaware Trust to transfer such amount to the Class D Pass
Through Trustee for purchase of such Series D Equipment Notes, as
provided in Section 2.11(b) of the Trust Agreement.
(c) The parties hereto agree that upon execution of the Class D
Trust Supplement, the Class D Pass Through Trustee shall become a party to
this Agreement.
Section 12. Third Party Beneficiary. The Policy Provider shall be an
express third party beneficiary with respect to enforcement of Section
5(a)(vi) and the second paragraph of Section 10 hereof.
Section 13. Termination. This Agreement shall terminate on the
Delivery Period Termination Date or, if earlier, the date on which Equipment
Notes issued with respect to all of the Aircraft have been purchased by the
Pass Through Trustees in accordance with this Agreement; provided, that, the
provisions of Sections 7, 8, 9 and the second paragraph of Section 10 hereof
shall survive any termination of this Agreement.
Section 14. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
20
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. Xxxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Senior Vice President &
Treasurer
Address: 0000 Xxxx Xxx Xxxx.
Xxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx
Facsimile: 000-000-0000
21
XXXXX FARGO BANK NORTHWEST, NATIONAL
ASSOCIATION, as Escrow Agent
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Assistant Vice President
Address: 000 Xxxxx Xxxx Xxxxxx,
00xx Floor, MAC X0000-000
Xxxx Xxxx Xxxx, XX 00000
Corporate Trust Services
Attention: Xxxxxxx X. Xxxxxx
Facsimile: 000-000-0000
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
not in its individual capacity,
except as otherwise provided herein,
but solely as Pass Through Trustee
By: /s/ Xxxxxxx X. Ring
----------------------------------
Name: Xxxxxxx X. Ring
Title: Assistant Vice President
Address: 0 Xxxxxx xx Xxxxxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Ring
Facsimile: 000-000-0000
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity,
except as otherwise provided herein,
but solely as Subordination Agent
By: /s/ Xxxxxxx X. Ring
----------------------------------
Name: Xxxxxxx X. Ring
Title: Assistant Vice President
Address: 0 Xxxxxx xx Xxxxxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Ring
Facsimile: 000-000-0000
STATE STREET BANK AND TRUST COMPANY,
as Paying Agent
By: /s/ Xxxxxxx X. Ring
----------------------------------
Name: Xxxxxxx X. Ring
Title: Assistant Vice President
Address: 0 Xxxxxx xx Xxxxxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Ring
Facsimile: 000-000-0000
SCHEDULE I TO
NOTE PURCHASE AGREEMENT
ELIGIBLE AIRCRAFT AND SCHEDULED DELIVERY MONTHS
Aircraft Type Scheduled Delivery Months
------------- -------------------------
Airbus A319-100 October 2002
Airbus A319-100 February 2003
Airbus A319-100 March 2003
Airbus A319-100 May 2003
Airbus A319-100 May 2003
Airbus A319-100 June 2003
Airbus A319-100 June 2003
Airbus A319-100 July 2003
Airbus A319-100 August 2003
Airbus A319-100 September 2003
Airbus A319-100 October 2003
Airbus A319-100 October 2003
Airbus A319-100 November 2003
Airbus A319-100 December 2003
Airbus A319-100 December 2003
Boeing 757-300 November 2002
Boeing 757-300 December 2002
Boeing 757-300 February 2003
Boeing 757-300 March 2003
Boeing 757-300 April 2003
Boeing 757-300 May 2003
Boeing 757-300 June 2003
Boeing 757-300 July 2003
Boeing 757-300 August 2003
Boeing 757-300 September 2003
Boeing 757-300 October 2003
Airbus A330-300 June 2003
Airbus A330-300 July 2003
Airbus A330-300 August 2003
Airbus A330-300 September 2003
Airbus A330-300 October 2003
Airbus A330-300 December 2003
I-1
SCHEDULE II TO
NOTE PURCHASE AGREEMENT
TRUST SUPPLEMENTS
Trust Supplement, dated as of the Issuance Date, among the Company,
NWA Corp. and the Pass Through Trustee in respect of Northwest Airlines Pass
Through Trust, Series 2002-1G-1.
Trust Supplement, dated as of the Issuance Date, among the Company,
NWA Corp. and the Pass Through Trustee in respect of Northwest Airlines Pass
Through Trust, Series 2002-1G-2.
Trust Supplement, dated as of the Issuance Date, among the Company,
NWA Corp. and the Pass Through Trustee in respect of Northwest Airlines Pass
Through Trust, Series 2002-1C-1.
Trust Supplement, dated as of the Issuance Date, among the Company,
NWA Corp. and the Pass Through Trustee in respect of Northwest Airlines Pass
Through Trust, Series 2002-1C-2.
II-1
SCHEDULE III TO
NOTE PURCHASE AGREEMENT
DEPOSIT AGREEMENTS
Deposit Agreement (Class G-1), dated as of the Issuance Date,
between the Depositary and the Escrow Agent.
Deposit Agreement (Class G-2), dated as of the Issuance Date,
between the Depositary and the Escrow Agent.
Deposit Agreement (Class C-1), dated as of the Issuance Date,
between the Depositary and the Escrow Agent.
Deposit Agreement (Class C-2), dated as of the Issuance Date,
between the Depositary and the Escrow Agent.
III-1
SCHEDULE IV TO
NOTE PURCHASE AGREEMENT
ESCROW AND PAYING AGENT AGREEMENTS
Escrow and Paying Agent Agreement (Class G-1), 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 G-2), 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-1), 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-2), dated as of the
Issuance Date, among the Escrow Agent, the Underwriters, the Pass Through
Trustee and the Paying Agent.
IV-1
SCHEDULE V TO
NOTE PURCHASE AGREEMENT
MANDATORY DOCUMENT TERMS
The terms "Trust Indenture Form," "Lease Form" and "Participation
Agreement Form" shall have the respective meanings specified in Schedule VI to
the Note Purchase Agreement.
1. May not modify in any material adverse respect as regards the
interests of the Note Holders, the Subordination Agent, the Liquidity
Provider, the Policy Provider or the Indenture Trustee, the Granting Clause of
the Trust Indenture Form so as to deprive the Note Holders of a first priority
security interest in and mortgage lien on the Aircraft and, in the case of a
Leased Aircraft Indenture, the Lease or to eliminate any of the obligations
intended to be secured thereby or otherwise modify in any material adverse
respect as regards the interests of the Note Holders, the Subordination Agent,
the Liquidity Providers, the Policy Provider or the Indenture Trustee the
provisions of Article II or III or Sections 4.02, 4.03, 4.04, 5.02, 5.06, 9.01
or the first sentence of Section 10.11 of the Leased Aircraft Indenture Form
for the Leased Aircraft or Article II or III or Sections 4.01, 4.02, 5.02,
7.06(a), 7.06(b), 10.01, or the first sentence of Section 11.11 of the Owned
Aircraft Indenture Form for the Owned Aircraft.
2. May not modify in any material adverse respect as regards the
interests of the Note Holders, the Subordination Agent, the Liquidity
Providers, the Policy Provider or the Indenture Trustee the provisions of
Section 3(d)(v), Section 3(f), Section 7(a)(I)(i), clause (6) of the final
paragraph of Section 10(a), Section 16, Section 18, the first and third
sentences of Section 20 or the penultimate sentence of Section 24 of the Lease
Form or otherwise modify the terms of the Lease Form so as to deprive the
Indenture Trustee of rights expressly granted to the "Indenture Trustee"
therein.
3. May not modify in any material adverse respect as regards the
interests of the Note Holders, the Subordination Agent, the Liquidity
Provider, the Policy 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 Providers, the Policy
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
Providers, the Policy Provider or the Indenture Trustee, the definition of
"Break Amount", "Prepayment Premium" or "Make-Whole Amount" or "Make-Whole
Premium" in the Leased Aircraft Indenture Form (with respect to
V-1
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 Providers, the Policy
Provider, the Indenture Trustee or the Certificate Holders.
V-2
SCHEDULE VI TO
NOTE PURCHASE AGREEMENT
MANDATORY ECONOMIC TERMS
EQUIPMENT NOTES
Obligor: Northwest Airlines, Inc. or an Owner Trust
o The maximum principal amount of all the Equipment Notes issued with
respect to an Eligible Aircraft shall not exceed the maximum principal
amount of Equipment Notes indicated for each such Eligible Aircraft as
set forth in the following table:
Maximum Principal
Scheduled Amount of Series
Delivery G-1, G-2, C-1 and C-2
Aircraft Type(1) Month(2) Equipment Notes(3)
---------------- -------- -------------------
Airbus A319-100........ October 2002 $29,987,650.00
Airbus A319-100........ February 2003 30,868,016.67
Airbus A319-100........ March 2003 30,893,683.33
Airbus A319-100........ May 2003 31,075,916.67
Airbus A319-100........ May 2003 31,075,916.67
Airbus A319-100........ June 2003 31,102,866.67
Airbus A319-100........ June 2003 31,102,866.67
Airbus A319-100........ July 2003 31,254,300.00
Airbus A319-100........ August 2003 31,279,966.67
Airbus A319-100........ September 2003 31,308,200.00
Airbus A319-100........ October 2003 31,462,200.00
Airbus A319-100........ October 2003 31,462,200.00
Airbus A319-100........ November 2003 31,490,433.33
Airbus A319-100........ December 2003 31,517,383.33
Airbus A319-100........ December 2003 31,517,383.33
Boeing 757-300......... November 2002 46,970,000.00
Boeing 757-300......... December 2002 46,970,000.00
Boeing 757-300......... February 2003 47,262,600.00
Boeing 757-300......... March 2003 47,262,600.00
Boeing 757-300......... April 2003 47,555,200.00
Boeing 757-300......... May 2003 47,555,200.00
Boeing 757-300......... June 2003 47,555,200.00
Boeing 757-300......... July 2003 47,847,800.00
Boeing 757-300......... August 2003 47,847,800.00
Boeing 757-300......... September 2003 47,847,800.00
Boeing 757-300......... October 2003 48,148,100.00
Airbus A330-300........ June 2003 81,951,100.00
Airbus A330-300........ July 2003 82,443,900.00
Airbus A330-300........ August 2003 82,443,900.00
Airbus A330-300........ September 2003 82,443,900.00
Airbus A330-300........ October 2003 82,952,100.00
Airbus A330-300........ December 2003 82,952,100.00
-----------
VI-1
(1) Includes all 32 Eligible Aircraft from which Northwest will
choose the 20 Aircraft to be financed pursuant to the terms of
the Note Purchase Agreement.
(2) The actual principal amount issued for any Aircraft may be
less than the amounts set forth in this table depending upon
the circumstances of the financing of such Aircraft. The
aggregate principal amount of all of the Equipment Notes of
each series will not exceed the aggregate face amount of
Certificates of the corresponding Class.
(3) The actual principal amount issued for any Aircraft may be
less than the amounts set forth in this table depending upon
the circumstances of the financing of such Aircraft. The
aggregate principal amount of all of the equipment notes of
each series will not exceed the aggregate face amount of
Certificates of the corresponding class. Series G-1 and/or
Series G-2 Equipment Notes, Series C-1 and/or Series C-2
Equipment Notes and Series D Equipment Notes will be issued
with respect to each Owned Aircraft (other than a Selected
Aircraft). Only Series G-2 and Series C-2 Equipment Notes
will be issued with respect to each Selected Aircraft.
o One Airbus A33-300 Aircraft and one Boeing 757-300 Aircraft shall be
designated as a Selected Aircraft.
o The loan to aircraft value ratio with respect to each Eligible Aircraft
(computed on the basis of the Appraised Base Value of such Aircraft and
the Depreciation Assumption) at the time of issuance of the related
Equipment Notes and on any Regular Distribution Date thereafter shall not
exceed the amounts set forth in the following table:
Scheduled Series G-1 Series G-2 Series C-1 Series C-2 Series D
Delivery Equipment Equipment Equipment Equipment Equipment
Aircraft Type(1) Month Notes Notes Notes Notes Notes
---------------- -------- ----- ----- ----- ----- -----
Airbus A319-100 October 2002 56.5% 56.5% 68.0% 68.0% 73.7%
Airbus A319-100 February 2003 57.6% 57.6% 69.3% 69.3% 75.2%
Airbus A319-100 March 2003 57.6% 57.6% 69.5% 69.5% 75.4%
Airbus A319-100 May 2003 57.6% 57.6% 69.3% 69.3% 75.2%
Airbus A319-100 May 2003 57.6% 57.6% 69.3% 69.3% 75.2%
Airbus A319-100 June 2003 57.6% 57.6% 69.5% 69.5% 75.3%
Airbus A319-100 June 2003 57.6% 57.6% 69.5% 69.5% 75.3%
Airbus A319-100 July 2003 57.4% 57.4% 69.3% 69.3% 75.2%
Airbus A319-100 August 2003 57.6% 57.6% 69.3% 69.3% 75.1%
Airbus A319-100 September 2003 57.6% 57.6% 69.4% 69.4% 75.3%
Airbus A319-100 October 2003 57.4% 57.4% 69.3% 69.3% 75.2%
Airbus A319-100 October 2003 57.4% 57.4% 69.3% 69.3% 75.2%
Airbus A319-100 November 2003 57.4% 57.4% 69.3% 69.3% 75.2%
Airbus A319-100 December 2003 57.4% 57.4% 69.3% 69.3% 75.2%
Airbus A319-100 December 2003 57.4% 57.4% 69.3% 69.3% 75.2%
Boeing 757-300 November 2002 57.6% 57.6% 69.8% 69.8% 75.7%
Boeing 757-300 December 2002 57.5% 57.5% 69.6% 69.6% 75.5%
Boeing 757-300 February 2003 57.6% 57.6% 69.8% 69.8% 75.7%
VI-2
Scheduled Series G-1 Series G-2 Series C-1 Series C-2 Series D
Delivery Equipment Equipment Equipment Equipment Equipment
Aircraft Type(1) Month Notes Notes Notes Notes Notes
---------------- -------- ----- ----- ----- ----- -----
Boeing 757-300 March 2003 57.5% 57.5% 69.6% 69.6% 75.5%
Boeing 757-300 April 2003 57.6% 57.6% 69.9% 69.9% 75.8%
Boeing 757-300 May 2003 57.6% 57.6% 69.8% 69.8% 75.8%
Boeing 757-300 June 2003 57.6% 57.6% 69.8% 69.8% 75.8%
Boeing 757-300 July 2003 57.6% 57.6% 69.8% 69.8% 75.8%
Boeing 757-300 August 2003 57.6% 57.6% 69.8% 69.8% 75.8%
Boeing 757-300 September 2003 57.6% 57.6% 69.8% 69.8% 75.8%
Boeing 757-300 October 2003 57.6% 57.6% 69.8% 69.8% 75.8%
Airbus A330-300 June 2003 57.6% 57.6% 70.1% 70.1% 76.0%
Airbus A330-300 July 2003 57.6% 57.6% 70.2% 70.2% 76.2%
Airbus A330-300 August 2003 57.6% 57.6% 70.1% 70.1% 76.1%
Airbus A330-300 September 2003 57.6% 57.6% 70.1% 70.1% 76.1%
Airbus A330-300 October 2003 57.6% 57.6% 70.1% 70.1% 76.1%
Airbus A330-300 December 2003 57.6% 57.6% 70.1% 70.1% 76.1%
-----------
(1) Includes all 32 Eligible Aircraft from which Northwest will choose the
20 Aircraft to be financed pursuant to the terms of the Note Purchase
Agreement.
o As of each Regular Distribution Date after the Delivery Period
Termination Date, the LTV for each Class of Certificates (computed as of
any such date on the basis of the Appraised Base Value of the Aircraft
that have been delivered and the Depreciation Assumption) will not exceed
56.0% for the Class G-1 Certificates, 56.0% for the Class G-2
Certificates, 67.8% for the Class C-1 Certificates, 67.8% for the Class
C-2 Certificates and 74.0% for the Class D Certificates.
o The initial average life of the Series G-1 Equipment Notes, Series G-2
Equipment Notes, the Series C-1 Equipment Notes, the Series C-2 Equipment
Notes and the Series D Equipment Notes on any Aircraft shall not be less
than the minimum nor more than the maximum years from the Issuance Date
set forth in the following table:
Series G-1 Series G-2 Series C-1 Series C-2 Series D
Equipment Equipment Equipment Equipment Equipment
Notes Notes Notes Notes Notes
----------- ----------- ----------- ----------- --------
Minimum....... 6.5 8.5 3.0 3.5 6.0
Maximum....... 9.0 12.5 9.8 7.5 11.8
o As of the first Regular Distribution Date following the Delivery Period
Termination Date the average life of each Class of Certificates (computed
without regard to the acceleration of any Equipment Notes and after
giving effect to any special distribution on the Certificates thereafter
required in respect of unused Deposits) shall be not less than the
minimum nor more than the maximum years from the Issuance Date set forth
in the following table:
VI-3
Class G-1 Class G-2 Class C-1 Class C-2 Class D
Certificates Certificates Certificates Certificates Certificates
------------ ------------ ------------ ------------ ------------
Minimum....... 6.9 9.9 4.6 5.4 7.0
Maximum....... 7.9 10.9 5.1 5.9 11.8
o The final maturity date of the Series G-1 Equipment Notes, the Series G-2
Equipment Notes, the Series C-1 Equipment Notes, the Series C-2 Equipment
Notes and the Series D Equipment Notes will not extend beyond May 20,
2014, November 20, 2021, May 20, 2012, May 20, 2012 and May 20, 2014,
respectively.
o At the earlier of the date on which all Aircraft have been delivered and
all Equipment Notes issued and the Delivery Period Termination Date, the
aggregate principal amount of each Series of Equipment Notes (other than
the Series D Equipment Notes) shall equal the original Pool Balance of
the related Class of Certificates without giving effect to any principal
payments on such Equipment Notes but after giving effect to any
reductions to the Pool Balance for such Class of Certificates from
Deposits not used to purchase Equipment Notes on or before such date.
o 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.
o The payment dates for the Equipment Notes and basic rent under the Leases
must be February 20, May 20, August 20 and November 20, provided that, at
Northwest's election, basic rent may also be paid at the commencement of
a Lease.
o Basic rent (and supplemental rent), stipulated loss values and
termination values under the Leases must be sufficient to pay amounts due
with respect to the related Equipment Notes.
o The amounts payable under the all-risk aircraft hull insurance maintained
with respect to each Aircraft must be sufficient to pay the applicable
stipulated loss value or, in the case of Owned Aircraft, 105% of the
unpaid principal amount of the related Equipment Notes, subject to
certain rights of self-insurance.
o (a) The past due rate in the Indentures and the Leases, (b) the Break
Amount or Make-Whole Premium payable under the Indentures, (c) the
provisions relating to the redemption and purchase of Equipment Notes in
the Indentures, (d) the minimum liability insurance amount on Aircraft in
the Leases and (e) the indemnification of the Loan Trustees,
Subordination Agent, Liquidity Providers, the Policy Provider, Trustees,
Escrow Agents and registered holders of the Equipment Notes (in such
capacity, the "Note Holders") with respect to certain taxes and expenses,
in each case must be no less favorable to the Loan Trustees,
Subordination Agent, Liquidity Providers, the Policy Provider, the
Trustees, the Escrow Agents and the Note Holders than as set forth in the
form of Participation Agreements (the "Participation Agreement Form") and
Leases (the "Lease Form") and the form of Leased Aircraft Indentures and
Owned Aircraft Indentures (the "Trust Indenture Form") (collectively, the
"Aircraft Operative Agreements") attached as exhibits to the Note
Purchase Agreement.
Past Due Rate: Debt Rate (as defined in each Trust Indenture Form) plus 2% per
annum.
VI-4
Payment Dates: February 20, May 20, August 20 and November 20, commencing with
the first such date after the applicable Equipment Notes are issued.
Lease Term: The Basic Lease Term (as defined in the Lease Form) shall expire
by its terms on or after final maturity date of the related Series G-2 and
Series C-2 Equipment Notes, as the case may be.
VI-5
SCHEDULE VII TO
NOTE PURCHASE AGREEMENT
AGGREGATE AMORTIZATION SCHEDULE
2002-1G-1 Trust 2002-1G-2 Trust 2002-1C-1 Trust 2002-1D Trust
Equipment Notes Equipment Notes Equipment Notes 2002-1C-2 Trust Equipment Notes
Scheduled Scheduled Scheduled Equipment Notes Scheduled
Payments of Payments of Payments of Scheduled Payments Payments of
Principal Principal Principal of Principal Principal
Date Class G-1 Class G-2 Class C-1 Class C-2 Class D
---- --------- --------- --------- --------- -------
Closing 0.00 0.00 0.00 0.00 0.00
August 20, 2002 0.00 0.00 0.00 0.00 0.00
November 20, 2002 0.00 0.00 0.00 0.00 0.00
February 20, 2003 0.00 0.00 0.00 0.00 0.00
May 20, 2003 0.00 0.00 0.00 0.00 0.00
August 20, 2003 0.00 0.00 0.00 257,974.99 0.00
November 20, 2003 3,234,525.47 0.00 0.00 1,079,643.12 187,459.62
February 20, 2004 7,046,032.20 1,189,548.99 2,310,032.92 1,775,329.62 640,602.42
May 20, 2004 4,959,363.95 731,304.62 622,268.72 1,611,383.85 1,082,149.51
August 20, 2004 5,275,568.76 2,179,058.12 966,329.19 2,468,394.82 1,258,643.06
November 20, 2004 2,064,039.96 2,057,962.20 0.00 0.00 1,294,514.38
February 20, 2005 6,143,461.28 2,417,911.84 11,990,378.87 3,170,525.42 1,331,408.04
May 20, 2005 3,548,530.94 0.00 0.00 0.00 1,369,353.17
August 20, 2005 6,709,087.28 1,323,547.31 3,255,248.35 4,972,931.38 1,408,379.74
November 20, 2005 2,618,818.85 2,057,962.20 0.00 0.00 1,448,518.56
February 20, 2006 9,149,991.91 2,405,130.94 11,270,736.33 4,477,963.31 1,489,801.34
May 20, 2006 4,971,834.48 0.00 0.00 0.00 1,532,260.68
August 20, 2006 11,358,323.81 1,188,092.60 2,091,835.04 4,096,118.59 1,575,930.11
November 20, 2006 4,519,939.66 2,057,962.20 0.00 0.00 1,620,844.12
February 20, 2007 12,065,409.03 2,267,035.06 6,283,265.96 4,046,327.12 1,667,038.17
May 20, 2007 13,387,901.54 0.00 0.00 0.00 1,714,548.76
August 20, 2007 10,294,450.06 1,048,148.41 1,311,145.33 1,448,185.28 1,763,413.40
November 20, 2007 7,005,941.11 2,057,962.20 0.00 0.00 1,813,670.68
February 20, 2008 15,177,955.13 2,124,399.43 884,448.46 3,424,274.24 1,865,360.30
May 20, 2008 19,486,933.48 0.00 0.00 0.00 1,918,523.07
August 20, 2008 9,802,084.60 903,621.99 0.00 441,842.02 1,973,200.97
November 20, 2008 8,911,725.38 2,057,962.20 0.00 0.00 2,029,437.20
February 20, 2009 19,409,230.86 2,103,532.75 0.00 1,304,187.32 2,087,276.16
May 20, 2009 28,481,484.82 0.00 0.00 0.00 2,146,763.53
August 20, 2009 5,169,354.00 924,426.42 0.00 452,014.71 2,207,946.29
November 20, 2009 4,667,852.00 2,057,962.20 0.00 0.00 2,270,872.76
February 20, 2010 9,540,917.00 5,301,516.55 0.00 407,220.87 2,335,592.64
May 20, 2010 14,544,146.00 0.00 0.00 0.00 2,402,157.03
August 20, 2010 6,934,111.00 808,190.62 0.00 395,179.09 2,470,618.50
November 20, 2010 6,341,867.67 1,964,090.24 0.00 0.00 2,541,031.13
February 20, 2011 15,182,085.67 1,984,595.79 0.00 412,346.55 2,613,450.52
May 20, 2011 21,087,762.17 0.00 0.00 0.00 2,687,933.86
August 20, 2011 5,667,754.50 861,590.19 0.00 421,289.82 2,764,539.97
November 20, 2011 5,164,140.00 1,964,090.24 0.00 0.00 2,843,329.36
February 20, 2012 12,101,259.00 2,064,791.28 0.00 451,559.56 2,924,364.25
May 20, 2012 16,538,296.96 1,755,754.07 15,014,310.84 18,885,308.33 2,646,325.00
August 20, 2012 5,233,595.00 3,825,666.09 0.00 0.00 1,752,288.54
November 20, 2012 5,154,167.33 1,816,061.38 0.00 0.00 820,958.89
February 20, 2013 12,601,588.33 4,826,254.05 0.00 0.00 155,799.65
VII-1
2002-1G-1 Trust 2002-1G-2 Trust 2002-1C-1 Trust 2002-1D Trust
Equipment Notes Equipment Notes Equipment Notes 2002-1C-2 Trust Equipment Notes
Scheduled Scheduled Scheduled Equipment Notes Scheduled
Payments of Payments of Payments of Scheduled Payments Payments of
Principal Principal Principal of Principal Principal
Date Class G-1 Class G-2 Class C-1 Class C-2 Class D
---- --------- --------- --------- --------- -------
May 20, 2013 15,776,287.00 165,190.63 0.00 0.00 0.00
August 20, 2013 4,495,120.00 3,471,048.96 0.00 0.00 0.00
November 20, 2013 4,415,238.00 2,575,708.81 0.00 0.00 0.00
February 20, 2014 10,846,492.50 6,884,025.09 0.00 0.00 0.00
May 20, 2014 90,046,331.31 30,983,071.08 0.00 0.00 6,343,694.61
August 20, 2014 0.00 0.00 0.00 0.00 0.00
November 20, 2014 0.00 1,548,887.34 0.00 0.00 0.00
February 20, 2015 0.00 2,762,220.03 0.00 0.00 0.00
May 20, 2015 0.00 0.00 0.00 0.00 0.00
August 20, 2015 0.00 0.00 0.00 0.00 0.00
November 20, 2015 0.00 1,548,887.34 0.00 0.00 0.00
February 20, 2016 0.00 4,158,119.13 0.00 0.00 0.00
May 20, 2016 0.00 0.00 0.00 0.00 0.00
August 20, 2016 0.00 0.00 0.00 0.00 0.00
November 20, 2016 0.00 1,548,887.34 0.00 0.00 0.00
February 20, 2017 0.00 9,958,142.32 0.00 0.00 0.00
May 20, 2017 0.00 0.00 0.00 0.00 0.00
August 20, 2017 0.00 0.00 0.00 0.00 0.00
November 20, 2017 0.00 198,672.72 0.00 0.00 0.00
February 20, 2018 0.00 285,323.92 0.00 0.00 0.00
May 20, 2018 0.00 0.00 0.00 0.00 0.00
August 20, 2018 0.00 0.00 0.00 0.00 0.00
November 20, 2018 0.00 1,198,672.72 0.00 0.00 0.00
February 20, 2019 0.00 6,113,031.12 0.00 0.00 0.00
May 20, 2019 0.00 0.00 0.00 0.00 0.00
August 20, 2019 0.00 0.00 0.00 0.00 0.00
November 20, 2019 0.00 794,301.20 0.00 0.00 0.00
February 20, 2020 0.00 7,894,199.04 0.00 0.00 0.00
May 20, 2020 0.00 0.00 0.00 0.00 0.00
August 20, 2020 0.00 0.00 0.00 0.00 0.00
November 20, 2020 0.00 491,022.56 0.00 0.00 0.00
February 20, 2021 0.00 0.00 0.00 0.00 0.00
May 20, 2021 0.00 0.00 0.00 0.00 0.00
August 20, 2021 0.00 0.00 0.00 0.00 0.00
November 20, 2021 0.00 6,094,456.48 0.00 0.00 0.00
VII-2
ANNEX A TO
NOTE PURCHASE AGREEMENT
DEFINITIONS
"Above-Cap Liquidity Agreements" has the meaning set forth in the
recitals to the Note Purchase Agreement.
"Above-Cap Liquidity Provider" has the meaning set forth in the
recitals to the Note Purchase Agreement.
"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.
"Airbus" means AVSA, S.A.R.L.
"Aircraft" has the meaning set forth in the recitals to the Note
Purchase Agreement.
"Aircraft Purchase Agreement" means in the case of the Airbus
A319-100 aircraft, the A319 Purchase Agreement dated as of September 19, 1997
between Airbus and the Company, in the case of the Boeing 757-300 aircraft,
the Purchase Agreement No. 2159 between Boeing and the Company dated January
16, 2001, and in the case of the Airbus A330-300 aircraft, the A330 Purchase
Agreement dated as of December 21, 2000 between Airbus and the Company
(including, in each case, all exhibits thereto, together with all letter
agreements entered into that by their terms constitute part of any such
Purchase Agreement); and "Aircraft Purchase Agreements" means all such
agreements.
"Aircraft Purchase Agreement Assignment" means, in the case of an
Airbus A319-100 aircraft or Airbus A330-300 aircraft, a Purchase Agreement
Assignment substantially in the form of Exhibit A-4(a) to the Note Purchase
Agreement, and in the case of a Boeing 757-300 aircraft, a Purchase Agreement
Assignment substantially in the form of Exhibit A-4(b) 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.
Annex A-1
"Bankruptcy Code" means the United States Bankruptcy Code, 11 U.S.C.
xx.xx. 101 et seq.
"Basic Pass Through Trust Agreement" means the Pass Through Trust
Agreement, dated as of June 3, 1999, among the Company, Northwest Airlines
Corporation and the Pass Through Trustee, as amended, supplemented or
modified, but does not include any Trust Supplement.
"Boeing" means The Boeing Company, a Delaware corporation.
"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, Hartford, Connecticut, Boston,
Massachusetts or Salt Lake City, Utah.
"Certificate" has the meaning set forth in the recitals to the Note
Purchase Agreement.
"Certificate Holder" means the Person in whose name a Certificate is
registered in the Register.
"Class" means the class of Certificates issued by each Pass Through
Trust.
"Class C-1 Certificates" means the Class C-1 Certificates issued by
the Northwest Airlines Pass Through Trust, Class 2002-1C-1.
"Class C-1 Trust" means the Northwest Airlines Pass Through Trust,
Class 2002-1C-1 formed pursuant to the Basic Pass Through Trust Agreement and
Class C-1 Trust Supplement.
"Class C-1 Trust Supplement" means Trust Supplement No. 2002-1 C-1,
dated as of the Issuance Date, by and among the Guarantor, the Company and the
Pass Through Trustee, as amended, supplemented or modified, to the Basic Pass
Through Trust Agreement.
"Class C-2 Certificates" means the Class C-2 Certificates issued by
the Northwest Airlines Pass Through Trust, Class 2002-1C-2.
"Class C-2 Trust" means the Northwest Airlines Pass Through Trust,
Class 2002-1C-2 formed pursuant to the Basic Pass Through Trust Agreement and
Class C-2 Trust Supplement.
"Class C-2 Trust Supplement" means Trust Supplement No. 2002-1C-2,
dated as of the Issuance Date, by and among the Guarantor, the Company and the
Pass Through Trustee, as amended, supplemented or modified, to the Basic Pass
Through Trust Agreement.
"Class D Certificates" means the Class D Certificates, if any,
issued by the Northwest Airlines Pass Through Trust, Class 2002-1D.
Annex A-2
"Class D Notice" has the meaning set forth in Section 2(b) of the
Note Purchase Agreement.
"Class D Pass Through Trustee" means the trustee under the Class D
Trust Supplement.
"Class D Trust" means the Northwest Airlines Pass Through Trust,
Class 2002-1D to be formed upon execution of the Class D Trust Supplement to
the Basic Pass Through Trust Agreement.
"Class D Trust Supplement" means the Trust Supplement No. 2002-1D
substantially in the form of Exhibit G to the Note Purchase Agreement.
"Class G-1 Certificates" means the Class G-1 Certificates issued by
the Northwest Airlines Pass Through Trust, Class 2002-1G-1.
"Class G-1 Trust" means the Northwest Airlines Pass Through Trust,
Class 2002-1G1 formed pursuant to the Basic Pass Through Trust Agreement and
Class G-1 Trust Supplement.
"Class G-1 Trust Supplement" means Trust Supplement No. 2002-1G-1,
dated as of the Issuance Date, by and among the Guarantor, the Company and the
Pass Through Trustee, as amended, supplemented or modified, to the Basic Pass
Through Trust Agreement.
"Class G-2 Certificates" means the Class G-2 Certificates issued by
the Northwest Airlines Pass Through Trust, Class 2002-1G-2.
"Class G-2 Trust" means the Northwest Airlines Pass Through Trust,
Class 2002-1G2 formed pursuant to the Basic Pass Through Trust Agreement and
Class G-2 Trust Supplement.
"Class G-2 Trust Supplement" means Trust Supplement No. 2002-1G-2,
dated as of the Issuance Date, by and among the Guarantor, the Company and the
Pass Through Trustee, as amended, supplemented or modified, to the Basic Pass
Through Trust Agreement.
"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) of the
Note Purchase Agreement.
"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 March 31, 2004.
Annex A-3
"Deposit" has the meaning set forth in the recitals to the Note
Purchase Agreement.
"Deposit Account" means with respect to any Trust (other than the
Class D Trust) an account established under Section 1.2 of the Deposit
Agreement relating to such Trust.
"Deposit Agreement" has the meaning set forth in the recitals to the
Note Purchase Agreement.
"Deposit Break Amount" means, with respect to the distribution to
holders of Class G-1 and Class C-1 Certificates of any Deposits held for them
that are not used to purchase Equipment Notes, as of the date the Depositary
is obligated to pay the amount of such unused Deposits to the Paying Agent for
purposes of such distribution (the "Applicable Date"), an amount determined by
the Reference Agent on the date that is two Business Days prior to the
Applicable Date pursuant to the formula set forth below, provided, however,
that no Deposit Break Amount will be payable (x) if the Deposit Break Amount,
as calculated pursuant to the formula set forth below, is equal to or less
than zero or (y) on or in respect of any Applicable Date that is a Regular
Distribution Date.
Deposit Break Amount = Z-Y
Where:
X = with respect to any applicable Interest
Period, the sum of (i) the amount of such
unused Deposits plus (ii) interest payable
thereon during such entire Interest Period
at the effective LIBOR.
Y = X, discounted to present value from the
last day of the then applicable Interest
Period to the Applicable Date, using then
effective LIBOR as the discount rate.
Z = X, discounted to present value from the
last day of the then applicable Interest
Period to the Applicable Date, using a
rate equal to the applicable London
interbank offered rate for a period
commencing on the Applicable Date and
ending on the last day of the then
applicable Interest Period, determined by
the Reference Agent as of two Business
Days prior to the Applicable Date as the
discount rate.
"Deposit Make-Whole Amount" means, (a) with respect to the
distribution of unused Deposits to holders of any Class G-2 or Class C-2
Certificates, as of any date of determination, an amount equal to the excess,
if any, of (i) the present value of the excess of (x) the scheduled payment of
principal and interest to maturity of the related Series of Equipment Notes,
in a principal amount equal to the maximum principal amount thereof (the
"Maximum Amount") minus the Non-Premium Amount, on each remaining Regular
Distribution Date for such Class under the Assumed Amortization Schedule over
(y) 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 quarterly basis on each Regular Distribution Date (assuming a
360-day year of
Annex A-4
twelve 30-day months) using a discount rate equal to the Treasury Yield plus
175 basis points in the case of the Class G-2 Certificates, and 526.5 basis
points in the case of the Class C-2 Certificates, over (ii) 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) and (b) with respect to the
distribution of unused Deposits to holders of the Class G-2 or Class C-2
Certificates resulting from the non-issuance of a Series D Equipment Note for
an Aircraft other than a Selected Aircraft, an amount equal to the excess, if
any, of (i) the present value of the scheduled payments of principal and
interest to maturity of the related Series of Equipment Notes in a principal
amount equal to the amount of such unused Deposits for such Class under
(assuming (x) the principal payments in respect of such Equipment Notes will
be made based upon the Assumed Amoritization Schedule applies proportionately
to such Equipment Notes and (y) such present value will otherwise be computed
on the basis set forth in clause (a) above) using a discount rate equal to the
Treasury Yield over (ii) the amount of such unused Deposits to be distributed
to the holders of such Certificates plus accrued and unpaid interest on such
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 Credit Suisse First Boston, New York Branch.
"Depositary Threshold Rating" means, with respect to the Depositary
or any Replacement Depositary, short-term corporate credit rating of A-1+ from
Standard & Poor's and short-term unsecured debt ratings of P-1 from Moody's
and F-1+ from Fitch.
"Distribution Date" means a Regular Distribution Date or a Special
Distribution Date.
"Eligible Aircraft" has the meaning set forth in the recitals to the
Note Purchase Agreement.
"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.
"Fee Letter" means the Fee Letter dated as of the date of the Note
Purchase Agreement among the Primary Liquidity Provider, the Subordination
Agent and Northwest with respect to the Primary Liquidity Facilities.
Annex A-5
"Final Withdrawal" with respect to each Escrow and Paying Agent
Agreement, has the meaning set forth in Section 1.2 thereof.
"Financing Agreements" means, collectively, the Lease Financing
Agreements and the Owner Financing Agreements.
"Government Entity" means (a) any federal, state, provincial or
similar government, and any body, board, department, commission, court,
tribunal, authority, agency or other instrumentality of any such government or
otherwise exercising any executive, legislative, judicial, administrative or
regulatory functions of such government or (b) any other government entity
having jurisdiction over any matter contemplated by the Operative Documents or
relating to the observance or performance of the obligations of any of the
parties to the Operative Documents.
"Guarantee" means a Guarantee whereby Northwest Airlines Corporation
guarantees (i) the Company's obligations under a Lease (in the case of a
Leased Aircraft) or (ii) the Company's obligations under an Owned Aircraft
Indenture (in the case of an Owned Aircraft).
"Guarantor" means Northwest Airlines Corporation, a Delaware
corporation, and its successors and assigns.
"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
Annex A-6
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 Selected Aircraft subject to a Lease.
"Leased Aircraft Indenture" means a Trust Indenture and Security
Agreement substantially in the form of Exhibit A-3 to the Note Purchase
Agreement.
"Leased Aircraft Participation Agreement" means a Participation
Agreement substantially in the form of Exhibit A-1 to the Note Purchase
Agreement.
"LIBOR" has the meaning set forth in the Reference Agency Agreement.
"Liquidity Facility" has the meaning set forth in the Intercreditor
Agreement.
"Liquidity Providers" means the Primary Liquidity Provider and the
Above-Cap Liquidity Provider.
"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.
"Non-Premium Amount" means the amount equal to the sum of (i) the
amount of Deposits relating to any Aircraft not 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-2 Certificates,
$5.6 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 or 2.4 thereof.
"NWA Corp." means Northwest Airlines Corporation, a Delaware
corporation.
"Offered Certificates" means, collectively, the Class G-1
Certificates, the Class G-2 Certificates, the Class C-1 Certificates and the
Class C-2 Certificates.
"Offered Trusts" means, collectively, the Class G-1 Trust, the Class
G-2 Trust, the Class C-1 Trust and the Class C-2 Trust.
Annex A-7
"Operative Documents" means, collectively, the Pass Through Trust
Agreements, the Escrow and Paying Agent Agreements, the Deposit Agreements,
the Primary Liquidity Facilities, the Above-Cap Liquidity Agreements, the
Intercreditor Agreement, the Certificates and the Financing Agreements, the
Policy Provider Agreement, the Reference Agency Agreement and the Policies.
"Owned Aircraft" means an Aircraft subject to an Owned Aircraft
Indenture.
"Owned Aircraft Indenture" means, in the case of an Aircraft other
than a Selected Aircraft, a Trust Indenture and Security Agreement
substantially in the form of Exhibit C-2(a) to the Note Purchase Agreement,
and in the case of a Selected Aircraft, a Trust Indenture and Security
Agreement substantially in the form of Exhibit C-2(b) to the Note Purchase
Agreement.
"Owned Aircraft Participation Agreement" means, in the case of an
Aircraft other than a Selected Aircraft, a Participation Agreement
substantially in the form of Exhibit C-1(a) to the Note Purchase Agreement and
in the case of a Selected Aircraft, a Participation Agreement substantially in
the form of Exhibit C-1(b) 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 four (or five, upon
execution of the Class D Trust Supplement) separate Trust Supplements,
together in each case with the Basic Pass Through Trust Agreement, each dated
as of the Issuance Date (except the Class D Trust Supplement) by and among the
Company, the Guarantor and Pass Through Trustee.
"Pass Through Trustee" has the meaning set forth in the first
paragraph of the Note Purchase Agreement.
Annex A-8
"Paying Agent" has the meaning set forth in the first paragraph of
the Note Purchase Agreement.
"Person" means any individual, firm, partnership, joint venture,
trust, trustee, Government Entity, organization, association, corporation,
government agency, committee, department, authority and other body, corporate
or incorporate, whether having distinct legal status or not, or any member of
any of the same.
"Policy" means the Financial Guaranty Insurance Policy No. 38687 or
the Financial Guaranty Insurance Policy No. 38688, as applicable, issued as of
the Closing Date, by the Policy Provider in favor of the Subordination Agent,
for the benefit of the Class G-1 and Class G-2 Certificateholders,
respectively, as amended, supplemented or otherwise modified from time to time
in accordance with their terms.
"Policy Fee Letter" means the fee letter, dated as of August 5, 2002
from the Policy Provider to Northwest and the Subordination Agent setting
forth the Policy premium and certain other amounts payable in respect of the
Policy.
"Policy Provider" means MBIA Insurance Corporation, or any successor
thereto, as issuer of the Policy.
"Policy Provider Agreement" means the Insurance and Indemnity
Agreement, dated as of the date of initial issuance of the Offered
Certificates, among the Subordination Agent, the Class G-1 Trustee, Class G-2
Trustee, Northwest and the Policy Provider pursuant to which, among other
things, the Subordination Agent agrees to reimburse the Policy Provider for
amounts paid pursuant to claims made under the Policy.
"Policy Premium" has the meaning specified in the Policy Fee Letter.
"Primary Liquidity Facility" has the meaning set forth in the
recitals to the Note Purchase Agreement.
"Primary Liquidity Provider" has the meaning set forth in the
recitals to the Note Purchase Agreement.
"Qualified Owner Participant" means a Person which has a tangible
net worth (exclusive of goodwill) greater than $50,000,000 in the case of a
Boeing 757-300 Aircraft and $75,000,000 in the case of a Airbus A330-300.
"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 Fitch Ratings, Xxxxx'x Investors Service, Inc. and
Standard & Poor's Ratings Services, a division of The XxXxxx-Xxxx Companies,
Inc.
"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, a written confirmation from
each of the Rating Agencies that the use of
Annex A-9
such Financing Agreement with such modifications would not result in (i) a
reduction of the rating for any Class of Certificates below the then current
rating for such Class of Certificates (without regard to any Policy) or (ii) a
withdrawal or suspension of the rating of any Class of Certificates (without
regard to any Policy).
"Ratings Event" with respect to each Rating Agency means (i) a
reduction of its rating for any Class of Certificates below its then current
rating for such Class of Certificates (without regard to any Policy) or (ii) a
withdrawal or suspension of its rating of any Class of Certificates (without
regard to any Policy).
"Reference Agent" means State Street Bank and Trust Company, or any
successor thereto, as reference agent under the Reference Agency Agreement.
"Reference Agency Agreement" means the Reference Agency Agreement,
dated as of the date of initial issuance of the Offered Certificates, among
Northwest, the Reference Agent, the Subordination Agent, the Loan Trustee and
the Escrow Agent.
"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 20, May 20, August
20 or November 20 of each year, commencing August 20, 2002.
"Remaining Weighted Average Life" means, with respect to any
Equipment Note, at the redemption date of such 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
installment of principal of such Equipment Note, including the payment due on
the maturity date of such Equipment Note by (ii) the number of days from and
including the redemption date to but excluding the schedule payment date of
such principal installment, by (b) the then unpaid principal amount of such
Equipment Note.
"Replacement Depositary" has the meaning set forth in Section
5(a)(vi) of the Note Purchase Agreement.
"Replacement Deposit Agreement" means, for any Class of
Certificates, a deposit agreement substantially in the form of the replaced
Deposit Agreement for any Class of Certificates as shall permit the Rating
Agencies to confirm in writing, and the Rating Agencies shall have confirmed
in writing, their respective ratings then in effect for such Class of
Certificates (before the downgrading of such ratings, if any, as a result of
the downgrading of the Depositary and without regard to any Policies).
"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.
Annex A-10
"Selected Aircraft" means the one Boeing 757-300 aircraft and one
Airbus A330-300 aircraft that Northwest may either elect to be a Leased
Aircraft or to convert from an Owned Aircraft to a Leased Aircraft.
"Series C-1 Equipment Notes" means Equipment Notes issued under an
Indenture and designated as "Series C-1" thereunder.
"Series C-2 Equipment Notes" means Equipment Notes issued under an
Indenture and designated as "Series C-2" thereunder.
"Series D Equipment Notes" means Equipment Notes issued under an
Indenture and designated as "Series D" thereunder.
"Series D Non-Issuance Withdrawal", with respect to each Escrow and
Paying Agent Agreement, has the meaning set forth in Section 1.2 thereof.
"Series G-1 Equipment Notes" means Equipment Notes issued under an
Indenture and designated as "Series G-1" thereunder.
"Series G-2 Equipment Notes" means Equipment Notes issued under an
Indenture and designated as "Series G-2" thereunder.
"Subordination Agent" has the meaning set forth in the first
paragraph of the Note Purchase Agreement.
"Substitute Aircraft" has the meaning set forth in Section 2(g) of
the Note Purchase Agreement.
"Substitute Closing Date" has the meaning set forth in Section 2(e)
of the Note Purchase Agreement.
"Taxes" means all license, recording, documentary, registration and
other similar fees and all taxes, levies, imposts, duties, charges,
assessments or withholdings of any nature whatsoever imposed by any Taxing
Authority, together with any penalties, additions to tax, fines or interest
thereon or additions thereto.
"Taxing Authority" means any federal, state or local government or
other taxing authority in the United States, any foreign government or any
political subdivision or taxing authority thereof, any international taxing
authority or any territory or possession of the United States or any taxing
authority thereof.
"Treasury Yield" means, at the time of determination with respect to
any Equipment Note, the interest rate (expressed as a semiannual equivalent
and 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
quarterly 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
Annex A-11
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 in the most recent
H.15(519), such weekly average yield to maturity as published in such
H.15(519). The "most recent H.15(519)" means the H.15(519) published prior to
the close of business on the third business day prior to the applicable
payment or redemption date.
"Triggering Event" has the meaning assigned to such term in the
Intercreditor Agreement.
"Trust" means the Class G-1 Trust, the Class G-2 Trust, the Class
C-1 Trust, the Class C-2 Trust or, upon its formation, the Class D Trust.
"Trust 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-12
