PROMISSORY NOTE
$28,356,015.00 New York, New York
April 14, 1998
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE, AND MAY NOT BE REOFFERED OR SOLD UNLESS AN
EXEMPTION FROM REGISTRATION IS AVAILABLE.
FOR VALUE RECEIVED, the undersigned, AIR PARTNERS, L.P., a Texas
limited partnership (the "Partnership"), promises to pay to NORTHWEST AIRLINES
CORPORATION, a Delaware corporation ("Parent"), at 0000 Xxxx Xxx Xxxxxxx,
Xxxxx, Xxxxxxxxx 00000 (or at such other place as Parent shall notify the
Partnership in writing), without setoff or counterclaim, the principal amount
of TWENTY-EIGHT MILLION THREE HUNDRED FIFTY-SIX THOUSAND FIFTEEN DOLLARS AND
NO CENTS ($28,356,015.00) at the earlier to occur of (i) the date the
Investment Agreement, dated as of January 25, 1998 (the "Agreement";
capitalized terms used and not specifically defined herein shall have the
meanings set forth in the Agreement), among Parent, Newbridge Parent
Corporation, the Partnership, the Partners of the Partnership named therein
and the Transferors named therein, is terminated in accordance with its terms
and (ii) the Closing and to pay interest on the unpaid principal balance
hereunder (such principal amount, the "Loan") (A) for any period ending on or
prior to July 25, 1998 at the Revolving Interest Rate and (B) for any period
from and including July 25, 1998, at a rate of 10% per annum. If the Closing
occurs, the aggregate Cash Election Share Price payable and/or the aggregate
number of Exchange Shares to be delivered by Parent and Holdco Sub at the
Closing shall be reduced by the amount of principal and interest payable by
the Partnership hereunder (the "Payoff Amount") in respect of each Partner in
proportion to each Partner's allocable share of the Payoff Amount, the
determination of the portion of the Payoff Amount allocable to the Cash
Electing Partners and the Share Electing Partners to be made by the
Partnership and notified to Parent in writing at least three Business Days in
advance of the Closing. Any reduction in the Exchange Shares to be issued
shall be based on the average closing price for the Parent Class A Common
Stock as of the close of business for each of the ten trading days ending on
and including the third Business Day preceding the Closing Date. In the event
the Agreement is terminated, this Note shall be repaid in full in cash. In
the event that any amount payable hereunder is not paid when due, such amount
shall bear interest at a rate per annum equal to the rate per annum applicable
to the unpaid principal balance hereof, as described above, plus 2% per annum.
Interest shall accrue from and including the date hereof to but
excluding the date of payment, and shall be calculated on the basis of a 365-
day year. All accrued but unpaid interest shall in any event be paid in full
in cash, shares of Holdco Sub Class A Common Stock or a combination thereof
(in accordance with the preceding paragraph), as the case may be, on the
earlier to occur of (i) the Closing, (ii) the date the Agreement is terminated
in accordance with its terms and (iii) the date on which the Loan becomes due
by acceleration or otherwise; provided, however, in the event the Agreement is
terminated, all accrued and unpaid interest shall be repaid in full in cash.
For purposes of this Note, if any day referenced herein shall not be a
Business Day, such reference shall be deemed to be the next succeeding
Business Day.
This Note may be prepaid in whole or in part at any time without
premium or penalty. Each payment under this Note shall first be credited to
accrued and unpaid interest, and the remainder shall be credited to principal.
All interest due hereunder shall be paid to the date of payment on principal
amount prepaid. All cash payments (including prepayments) to be made by the
Partnership hereunder, whether on account of principal, interest, fees or
otherwise, shall be made without setoff or counterclaim and shall be made
prior to the close of business on the due date thereof to or for the account
of Parent at 0000 Xxxx Xxx Xxxxxxx, Xxxxx, Xxxxxxxxx 00000 (or at such other
place as Parent shall notify the Partnership in writing), in dollars in lawful
currency of the United States of America and in immediately available funds.
All payments of principal, interest and any other amounts hereunder by
the Partnership shall be made free and clear of, and without deduction or
withholding for, any and all present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings of any
nature whatsoever, now or hereafter imposed, levied, collected, withheld or
assessed by any governmental authority (the foregoing, "Taxes").
If any of the following events (each, an "Event of Default") shall
occur and be continuing:
(a) The Partnership shall fail to pay any principal hereunder
when due in accordance with the terms hereof, or the Partnership shall
fail to pay any interest in respect of the Loan, or any other amount
payable hereunder, when any such interest or other amounts becomes due
in accordance with the terms hereof; or
(b) (i) The Partnership shall commence any case, proceeding or
other action (A) under any existing or future law or any jurisdiction,
domestic or foreign, relating to bankruptcy, insolvency, reorganization
or relief of debtors, seeking to have an order for relief entered with
respect to it, or seeking or adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to
it or its debts, or (B) seeking appointment of a receiver, trustee,
custodian, conservator or other similar official for it or for all or
any substantial part of its assets, or the Partnership shall make a
general assignment for the benefit of its creditors; or (ii) there
shall be commenced against the Partnership any case, proceeding or
other action or a nature referred to in clause (i) above which (A)
results in the entry of an order for relief or any such adjudication or
appointment or (B) remains undismissed, undischarged or unbonded for a
period of 60 days; or (iii) there shall be commenced against the
Partnership any case, proceeding or other action seeking issuance of a
warrant of attachment, execution, restraint or similar process against
any or any substantial part of its assets which results in the entry of
an order for any such relief which shall not have been vacated,
discharged, or stayed or bonded pending appeal within 60 days from the
entry thereof; or (iv) the Partnership shall take any action in
furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or
(iii) above; or (v) the Partnership shall generally not, or shall be
unable to, or shall admit in writing its inability to, pay its debts as
they become due.
then, and in any such event, (A) if such event is an Event of Default
specified in clause (i) or (ii) of paragraph (b) above with respect to the
Partnership, automatically the Loan (with accrued interest thereon) and all
other amounts owing under this Note shall immediately become due and payable,
and (B) if such event is any other Event of Default, Parent may, in its sole
discretion by notice to the Partnership, declare the Loan (with accrued
interest thereon) and all other amounts owing under this Note to be due and
payable forthwith, whereupon the same shall immediately become due and
payable, and Parent may avail itself of all other remedies of a secured
creditor, including as set forth under the Pledge Agreement date as of the
date hereof among Parent, the Partnership and the Partners.
The Partnership agrees (a) to pay or reimburse Parent for all its costs
and expenses incurred in connection with the enforcement or preservation of
any rights under this Note and any other documents related hereto, including,
without limitation, the fees and disbursements of counsel and (b) to pay,
indemnify, and hold Parent harmless from, any and all recording and filing
fees, stamp or similar taxes or duties or any amendment, supplement or
modification of, or any waiver or consent under or in respect of, this Note.
The agreements in this paragraph shall survive repayment of the Loan and all
other amounts payable hereunder.
The right to plead any and all statutes of limitation as a defense to
a demand hereunder is hereby waived to the full extent permitted by law. None
of the provisions hereof and none of Xxxxxx's rights or remedies hereunder on
account of any past or future defaults shall be deemed to have been waived by
Parent's acceptance of any past due installments or by any indulgence granted
by Parent to the Partnership. The Partnership, for itself and any guarantors
hereof, and their successors and assigns, waives presentment, demand, protest
and notice thereof or of dishonor, and waives any right to be released by
reason of any extension of time or change in the terms of payment or any
change, alteration or release of any security given for the payment hereof.
The Partnership hereby irrevocably and unconditionally (i) submits for
itself and its property in any legal action or proceeding relating to or
arising from this Note, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the courts of
the United States of America sitting in the Southern District of New York or,
in the absence of Federal jurisdiction, the Commercial Part of the Supreme
Court of the State of New York for New York County, and appellate courts from
any thereof; (ii) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same; (iii) agrees that service of process in any such
action or proceeding may be effected by mailing a copy thereof by registered
or certified mail (or any substantially similar form of mail), postage
prepaid, to the Partnership at its address previously notified to Parent; and
(iv) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to sue
in any other appropriate jurisdiction.
The terms of this Note may be amended, supplemented or modified only
with the written consent of Parent and the Partnership. Neither this Note nor
any of the rights, interests or obligations under this Note shall be assigned,
in whole or in part, by operation of law or otherwise by either of the parties
without the prior written consent of the other party. The Note will be
binding upon and, inure to the benefit of, and be enforceable by, the parties
and their respective successors, assigns and heirs.
The Partnership hereby represents and warrants to Parent that (i) the
execution, delivery and performance by the Partnership of the Note and its
obligations hereunder have been duly authorized by all necessary Partnership
action, and by all necessary action on the part of each Partner; (ii) no
consent or authorization of, filing with, notice to or other act by or in
respect of, any governmental authority or any other person is required in
connection with the borrowing hereunder or with the execution, delivery,
performance, validity or enforceability of this Note except consents,
authorizations, filings and notices that have been obtained or made and are in
full force and effect; (iii) this Note constitutes a valid and binding
obligation of the Partnership, enforceable against the Partnership in
accordance with its terms (subject to applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and other similar laws
affecting creditors' rights generally from time to time in effect and to
general principles of equity, including concepts of materiality,
reasonableness, good faith and fair dealing, regardless of whether in a
proceeding at equity or at law) and (iv) the execution, delivery and
performance by the Partnership of this Note, the borrowing hereunder, the use
of the proceeds thereof and the compliance by the Partnership with any of the
provisions hereof will not violate any material requirement of law or any
material contractual obligation of the Partnership or conflict with or result
in any breach of any applicable trust or other organizational documents
applicable to the Partnership.
This Note shall be governed by and construed in accordance with the
laws of the State of New York.
IN WITNESS WHEREOF, the Partnership has caused this Note to be duly
executed the day and year first above written.
AIR PARTNERS, L.P.
By: 1992 Air GP, Managing General Partner
By: 1992 Air, Inc., Managing Partner
By: /s/ Xxxxx X. X'Xxxxx
Name: Xxxxx X. X'Xxxxx
Title: Vice President
