EXHIBIT 1(b)
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
XXXXXXXXX XXXXXXXX, XXX., ISSUER
NORTHWEST AIRLINES CORPORATION, GUARANTOR
7 5/8% NOTES DUE 2005
7 7/8% NOTES DUE 2008
UNDERWRITING AGREEMENT
Dated: February 26, 0000
XXXXXXXXX XXXXXXXX, XXX., ISSUER
NORTHWEST AIRLINES CORPORATION, GUARANTOR
7 5/8% Notes due 2005
7 7/8% Notes due 2008
UNDERWRITING AGREEMENT
February 26, 1998
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxx, Sachs & Co.
BT Alex. Xxxxx Incorporated
Chase Securities Inc.
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Northwest Airlines, Inc., a Minnesota corporation (the "Company"),
proposes to issue and sell to the underwriters named in Schedule I hereto (i)
an aggregate of $200,000,000 principal amount of 7 5/8% Notes due 2005 (the
"7 5/8 Notes") and (ii) an aggregate of $200,000,000 principal amount of 7
7/8 Notes due 2008 (the "7 7/8% Notes" and, together with the 7 5/8% Notes,
the "Notes"), each with the guarantee (the "Guarantees") endorsed thereon of
Northwest Airlines Corporation, a Delaware corporation and the ultimate
parent company of the Company (the "Guarantor"). The Notes are to be issued
pursuant to an Indenture dated as of March 1, 1997 (the "Indenture") among
the Company, the Guarantor and State Street Bank and Trust Company, as
trustee (the "Trustee"). As used herein, unless the context otherwise
requires, the term "Underwriters" shall mean the firms named as Underwriters
in Schedule I and the term "you" shall mean Xxxxxx Xxxxxxx & Co. Incorporated.
The Guarantor and the Company have filed with the Securities and
Exchange Commission (the "Commission") three shelf registration statements on
Form S-3 (File No. 333-41579, File No. 333-28649 and File No. 333-13307)
relating to certain classes of securities ("Registration Statement
333-41579", "Registration Statement 333-28649" and "Registration Statement
333-13307," respectively; Registration Statement 333-41579, Registration
Statement 333-28649 and Registration Statement 333-13307, collectively,
including the exhibits to each thereto and the documents filed by the
Guarantor with the Commission pursuant to the Securities
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Exchange Act of 1934, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Exchange Act") that are
incorporated by reference therein, as amended at the date hereof, being
herein referred to as the "Registration Statements") and, in each case, the
offering thereof from time to time in accordance with Rule 415 of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Securities Act"). The Guarantor
and the Company have prepared and will file an amendment to such Registration
Statements, including a final prospectus and a final prospectus supplement,
promptly after execution and delivery of this Agreement. A prospectus
supplement reflecting the terms of the Notes, the terms of the offering
thereof and the other matters set forth therein, as further specified in
Section 5(b) hereof, will be prepared and filed together with the basic
prospectus referred to below (such prospectus supplement, in the form first
furnished to the Underwriters for use in the confirmation of sales of the
Notes, being herein referred to as the "Prospectus Supplement" and any such
prospectus supplement in the form or forms filed prior to the filing of the
Prospectus Supplement being herein referred to as a "Preliminary Prospectus
Supplement"). The basic prospectus included in the Registration Statements
relating to all offerings of debt securities under the Registration
Statements, as supplemented by the Prospectus Supplement, and including the
documents incorporated by reference therein, is herein called the
"Prospectus". Any reference herein to the terms "amendment" or "supplement"
with respect to the Registration Statements, the Prospectus, any Preliminary
Prospectus Supplement or any preliminary prospectus shall be deemed to refer
to and include any documents filed with the Commission under the Exchange Act
after the date hereof, the date the Prospectus is filed with the Commission,
or the date of such Preliminary Prospectus Supplement or preliminary
prospectus, as the case may be, and incorporated therein by reference
pursuant to Item 12 of Form S-3 under the Securities Act.
SECTION 1. REPRESENTATIONS AND WARRANTIES. The Guarantor and the
Company jointly and severally represent and warrant to, and agree with each
Underwriter that:
(a) The Guarantor and the Company meet the requirements for use of
Form S-3 under the Securities Act; on the original effective date of such
Registration Statements, on the effective date of the most recent
post-effective amendment thereto, if any, on the date the Registration
Statements shall have become effective and on the date of the filing by the
Guarantor of any annual report on Form 10-K after the original effective
date of the Registration Statements, the Registration Statements, and any
amendments and supplements thereto complied and will comply in all material
respects with the requirements of the Securities Act and the Registration
Statements did not and will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; as of the date of
the Prospectus or any amendments thereto and on the Closing Date (as
defined below), neither the Prospectus nor any amendments thereof and
supplements thereto, included or will include an untrue statement of a
material fact or omitted or will omit to
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state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
PROVIDED, HOWEVER, that this representation and warranty shall not apply to
any statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by any Underwriter
expressly for use in the Prospectus or to statements or omissions in those
parts of the Registration Statements which shall constitute the Statement
of Eligibility of the Trustee under the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"), on Form T-1.
(b) The documents incorporated by reference in the Prospectus
pursuant to Item 12 of Form S-3 under the Securities Act, at the time they
were or hereafter are filed with the Commission, complied and will comply
in all material respects with the requirements of the Exchange Act.
(c) Ernst & Young LLP, who have reported upon the audited
consolidated financial statements and the financial statement schedules, if
any, included or incorporated by reference in the Registration Statements,
are independent public accountants within the meaning of the Securities
Act.
(d) This Agreement has been duly authorized, executed and delivered
by each of the Company and the Guarantor.
(e) The Company does not have any "significant subsidiaries" as
defined in Regulation S-X, and the Guarantor does not have any significant
subsidiaries (other than the Company).
(f) The consolidated financial statements included or incorporated by
reference in the Registration Statements present fairly the consolidated
financial position of the Guarantor and its consolidated subsidiaries as of
the dates indicated and the consolidated results of operations and cash
flows or changes in financial position of the Guarantor and its
consolidated subsidiaries for the periods specified. Except as stated
therein, such financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the periods involved. The financial statement schedules, if
any, included or incorporated by reference in the Registration Statements
present fairly the information required to be stated therein. The summary
consolidated financial data included in the Prospectus present fairly the
information shown therein and have been compiled on a basis consistent with
that of the audited consolidated financial statements included or
incorporated by reference in the Registration Statements.
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(g) Each of the Company and the Guarantor is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Minnesota and Delaware, respectively, with corporate power and
authority under such laws to own, lease and operate its properties and
conduct its business as described in the Prospectus and to perform its
obligations under this Agreement; and each of the Guarantor and the Company
is duly qualified to transact business as a foreign corporation and is in
good standing in each other jurisdiction in which it owns or leases
property of a nature, or transacts business of a type, that would make such
qualification necessary, except to the extent that the failure to so
qualify or be in good standing would not have a material adverse effect on
the condition (financial or other), earnings, business or prospects of the
Guarantor and its subsidiaries, considered as one enterprise (a "Material
Adverse Effect").
(h) The Company is a "citizen of the United States" (as defined in
Section 40102(a)(15) of Title 49 of the United States Code) and is an air
carrier operating under a certificate issued by the Secretary of
Transportation pursuant to Chapter 447 of Title 49, United States Code, for
aircraft capable of carrying 10 or more individuals or 6,000 pounds or more
of cargo. There is in force with respect to the Company an air carrier
operating certificate issued pursuant to Part 121 of the regulations under
the sections of Xxxxx 00, Xxxxxx Xxxxxx Code, relating to aviation
(the "Federal Aviation Act"). All of the outstanding shares of capital
stock of the Company have been duly authorized and validly issued and are
fully paid and non-assessable and are owned by the Guarantor, indirectly
through NWA Inc., a Delaware corporation, free and clear of any pledge,
lien, security interest, charge, claim, equity or encumbrance of any kind.
(i) The Indenture, each supplement thereto, if any, to the date
hereof and the supplement thereto or board resolution setting forth the
terms of the Notes (the Indenture, as so supplemented by such supplement or
supplements and board resolution, being herein referred to as the
"Designated Indenture") have been duly authorized by the Company and the
Guarantor, will be substantially in the form heretofore delivered to you
and, when duly executed and delivered by the Company, the Guarantor and the
Trustee, will constitute a valid and binding obligation of the Company and
the Guarantor, except as may be subject to (A) bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, (B) general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law) and (C) an implied covenant of good faith
and fair dealing; the Designated Indenture conforms in all material
respects to the description thereof in the Prospectus. The Indenture as
executed is substantially in the form filed as an exhibit to the
Registration Statements.
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(j) When executed, authenticated, issued and delivered in the manner
provided for in the Designated Indenture and sold and paid for as provided
in this Agreement, the Notes and the related Guarantees will constitute
valid and binding obligations of the Company or the Guarantor, as the case
may be, entitled to the benefits of the Designated Indenture and
enforceable against the Company or the Guarantor, as the case may be, in
accordance with their terms, except as may be subject to (A) bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally, (B)
general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law) and (C) an implied covenant
of good faith and fair dealing; each of the Notes and the related
Guarantees conforms in all material respects to the descriptions thereof in
the Prospectus.
(k) Since the respective dates as of which information is given in
the Prospectus, except as otherwise stated therein or contemplated thereby,
there has not been (A) any material adverse change in the condition
(financial or otherwise), earnings, business or prospects of the Guarantor
and its subsidiaries, considered as one enterprise, whether or not arising
in the ordinary course of business; (B) any transaction entered into by the
Company, the Guarantor or any of their respective subsidiaries, other than
in the ordinary course of business, that is material to the Guarantor and
its subsidiaries, considered as one enterprise, or (C) any dividend or
distribution of any kind declared, paid or made by the Company or the
Guarantor on any class of its capital stock (other than dividends or
distributions payable solely in shares of such capital stock).
(l) Neither the Company nor the Guarantor is in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan agreement,
note, lease or other agreement or instrument to which it is a party or by
which it may be bound or to which any of its properties may be subject,
except for such defaults that would not have a Material Adverse Effect.
The execution and delivery by the Company and the Guarantor of this
Agreement and the Designated Indenture, the issuance and delivery of the
Notes and the related Guarantees and the consummation by the Company and
the Guarantor of the transactions contemplated by this Agreement and in the
Prospectus, have been duly authorized by all necessary corporate action on
the part of the Company and the Guarantor and do not and will not result in
any violation of the charter or by-laws of the Company or the Guarantor,
and do not and will not result in a breach of any of the terms or
provisions of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets
of the Company or the Guarantor under (A) any contract, indenture,
mortgage, loan agreement, note, lease or other agreement or other
instrument to which the Company or the Guarantor is a party or by which
either may be bound or to which any of its properties may be subject and
which is included or
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incorporated by reference as an exhibit to the Guarantor's Annual Report on
Form 10-K for the fiscal year ended December 31, 1996, the Guarantor's
Quarterly Report on Form 10-Q for the fiscal quarters ended March 31, 1997,
June 30, 1997 and September 30, 1997 and the Guarantor's Current Reports on
Form 8-K dated March 6, 1997, November 25, 1997, January 25, 1998 and
February 19, 1998, or included as an exhibit to the Registration Statement,
except for such breaches, defaults, liens, charges or encumbrances that
would not have a Material Adverse Effect or (B) any existing applicable
law, rule, regulation, judgment, order or decree of any government,
governmental instrumentality or court, domestic or foreign, having
jurisdiction over the Company or the Guarantor or any of their respective
properties (other than the securities or blue sky laws of the various
states), except for such breaches, defaults, liens, charges or encumbrances
that would not have a Material Adverse Effect.
(m) No authorization, approval, consent, order or license of or
filing with or notice to any government, governmental instrumentality or
court, domestic or foreign (other than under the Securities Act, the Trust
Indenture Act and the securities or blue sky laws of the various states and
of any foreign country or jurisdiction), is required for the sale of the
Notes and the related Guarantees or for the consummation of the
transactions contemplated by this Agreement.
(n) Except as disclosed in the Prospectus, there is no action, suit
or proceeding before or by any government, governmental instrumentality or
court, domestic or foreign, now pending or, to the knowledge of the Company
or the Guarantor, threatened against the Company or the Guarantor that is
required to be disclosed in the Prospectus or that could reasonably be
expected to have a Material Adverse Effect or that could reasonably be
expected to materially and adversely affect the consummation of the
transactions contemplated by this Agreement; the aggregate of all pending
legal or governmental proceedings that are not described in the Prospectus
to which the Company or the Guarantor is a party or which affect any of
their respective properties, including ordinary routine litigation
incidental to their business, would not reasonably be expected to have a
Material Adverse Effect.
(o) There are no contracts or documents of a character required to be
described in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not described and filed as
required.
(p) The Company and the Guarantor each possess all adequate
certificates, authorizations and permits issued by appropriate governmental
agencies or bodies which are necessary to conduct, in all material
respects, the business now operated by them and have not received any
notice of proceedings relating to the revocation or modification of
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any such certificate, authorization or permit that, if determined adversely
to the Company or the Guarantor, would have, singly or in the aggregate, a
Material Adverse Effect.
(q) No labor dispute with the employees of the Company or the
Guarantor exists or, to the knowledge of the Company and the Guarantor, is
imminent, in either case which might reasonably be expected to have a
Material Adverse Effect.
(r) Neither the Company nor the Guarantor is, and after giving effect
to the application of the proceeds of the sale of the Notes as described in
the Prospectus, neither the Company nor the Guarantor will be, required to
register as an "investment company" under the Investment Company Act of
1940, as amended (the "Investment Company Act").
(s) The Company and the Guarantor have not taken and will not take,
directly or indirectly, any action prohibited by Regulation M under the
Exchange Act in connection with the offering of the Notes and the related
Guarantees.
Any certificate signed by a duly authorized officer of the Company or the
Guarantor and delivered to an Underwriter or to counsel for the Underwriters in
connection with the offering of the Notes and the related Guarantees shall be
deemed a representation and warranty by the Company or the Guarantor, as the
case may be, to the Underwriters as to the matters covered thereby.
SECTION 2. PURCHASE AND SALE. Subject to the terms and conditions set
forth herein and in reliance upon the representations and warranties herein
contained, each of the Company and the Guarantor agree to sell to each
Underwriter, and each Underwriter agrees, severally and not jointly, to purchase
from the Company $200,000,000 aggregate principal amount of 7 5/8% Notes, at a
purchase price of 98.365% of the principal amount thereof (plus accrued
interest, if any, from March 4, 1998 to, but excluding, the Closing Date) and
$200,000,000 aggregate principal amount of 7 7/8% Notes at a purchase price of
98.420% of the principal amount thereof (plus accrued interest, if any, from
March 4, 1998 to, but excluding, the Closing Date), the aggregate principal
amounts of Notes set forth opposite the name of such Underwriter on Schedule I.
An amendment to the Registration Statements containing such price information
will be filed before the Registration Statements become effective, which
effectiveness shall not, without your reasonable consent, be later than 2:00
p.m. on the first business day following the date hereof. This Agreement shall
not become effective until the Registration Statements become effective under
the Securities Act.
SECTION 3. DELIVERY OF AND PAYMENT FOR THE NOTES.
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(a) Delivery of and payment for the Notes shall be made at the
offices of Shearman & Sterling, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
at 10:00 A.M. on March 4, 1998 or on such other date, time and place as may be
agreed upon by the Company, the Guarantor and you (such date and time of
delivery and payment for the Notes being herein called the "Closing Date").
Delivery of the Notes shall be made to your account at The Depository Trust
Company for the respective accounts of the several Underwriters against payment
by the Underwriters to or upon the order of the Company of the purchase price by
wire transfer of immediately available funds to the Company's account at Norwest
Bank (National Association) or as otherwise instructed in writing by the
Company. Upon delivery, the Notes shall be in fully registered form in such
denominations and registered in such names, or otherwise, as you shall have
requested in writing at least two full business days in advance of the Closing
Date. The Company and the Guarantor shall not be obligated to deliver any of
the Notes except upon payment for all the Notes to be purchased as provided
herein.
(b) The Company agrees to have one or more global certificates
representing the Notes available for inspection by you in New York, New York not
later than one full business day prior to the Closing Date.
SECTION 4. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several
obligations of the Underwriters to purchase and pay for the Notes pursuant to
this Agreement are subject to the following conditions:
(a) The Registration Statements shall not, without your reasonable
consent, have become effective later than 2:00 p.m.. on the first business
day following the date hereof; on the Closing Date, no stop order
suspending the effectiveness of the Registration Statements shall have been
issued under the Securities Act and no proceedings therefor shall have been
instituted or threatened by the Commission.
(b) On the Closing Date, you shall have received an opinion of
Xxxxxxx Xxxxxxx & Xxxxxxxx, as counsel for the Company and the Guarantor,
dated the Closing Date and in form and substance reasonably satisfactory to
you and counsel for the Underwriters, substantially to the effect set forth
in Exhibit A hereto.
(c) On the Closing Date, you shall have received an opinion of the
General Counsel of the Company and the Guarantor, dated the Closing Date
and in form and substance reasonably satisfactory to you and counsel for
the Underwriters, substantially to the effect set forth in Exhibit B
hereto.
(d) On the Closing Date, you shall have received an opinion of
Shearman & Sterling, as counsel for the Underwriters, dated the Closing
Date, with respect to the
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issuance and sale of the Notes and the related Guarantees, the Registration
Statements, the Prospectus and other related matters as the Underwriters
may reasonably require.
(e) At the Closing Date, (i) the Registration Statements, as they may
then be amended or supplemented, shall not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, (ii)
the Prospectus, as it may then be amended or supplemented, shall not
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances under which they were
made, (iii) there shall not have been, since the respective dates as of
which information is given in the Registration Statements, any material
adverse change in the condition (financial or otherwise), earnings,
business or prospects of the Guarantor and its subsidiaries, considered as
one enterprise, whether or not arising in the ordinary course of business,
(iv) the Company and the Guarantor shall have complied with all agreements
and satisfied all conditions on their respective parts to be performed or
satisfied at or prior to the Closing Date, and (v) the other
representations and warranties of the Company and the Guarantor set forth
in Section 1(a) shall be accurate as though expressly made at and as of the
Closing Date. At the Closing Date, you shall have received a certificate
of the President or a Senior or Executive Vice President, and other senior
officers of the Company and the Guarantor approved by you, dated as of the
Closing Date, to such effect.
(f) On the Closing Date, you shall have received the letter or
letters from Ernst & Young LLP specified in Exhibit C at the date hereof
and on the Closing Date.
(g) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date, there shall not have been any downgrading nor
any notice given to the Company or the Guarantor or any public notice
given, in either case by a rating agency described below, of any intended
or potential downgrading or of a possible change that does not indicate the
direction of the possible change, in the rating accorded any of the
Company's or the Guarantor's securities, including the Notes and the
related Guarantees, by any "nationally recognized statistical rating
organization", as such term is defined for purposes of Rule 436(g)(2) under
the Securities Act.
(h) The Company and the Guarantor shall have furnished to you and to
counsel for the Underwriters, in form and substance satisfactory to you and
to them, such other documents, certificates and opinions as such counsel
may reasonably request in order to pass upon the matters referred to in
Section 4(d) and in order to evidence the accuracy and completeness of any
of the representations, warranties or statements, the performance of any
covenant by the Company or the Guarantor theretofore to be performed, or
the compliance with any of the conditions herein contained.
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If any of the conditions specified in this Section 4 shall not have
been fulfilled when and as required by this Agreement to be fulfilled, this
Agreement may be terminated by you on notice to the Company and the Guarantor at
any time prior to the Closing Date and such termination shall be without
liability of any party to any other party, except as provided in Section 6.
Notwithstanding any such termination, the provisions of Sections 7 and 11 shall
remain in effect.
SECTION 5. CERTAIN COVENANTS OF THE COMPANY AND THE GUARANTOR. The
Company and the Guarantor covenant with each Underwriter as follows:
(a) To furnish to you as many conformed copies of the Registration
Statements (as originally filed) and of all amendments thereto, whether
filed before or after such Registration Statements became effective, as
many copies of all exhibits and documents filed therewith or incorporated
by reference therein (through the end of the period mentioned in
paragraph (d) below) and one signed and as many conformed copies of all
consents and certificates of experts as you may reasonably request and, if
requested by you, will furnish to you, for each of the Underwriters, one
conformed copy of the Registration Statements (as originally filed) and of
each amendment thereto (including documents incorporated by reference into
the Prospectus but without exhibits).
(b) Promptly following the execution of this Agreement, the Company
and the Guarantor will prepare a Prospectus Supplement that complies with
the Securities Act and that sets forth the principal amount of the Notes
and their terms not otherwise specified in the Preliminary Prospectus
Supplement or the basic prospectus included in the Registration Statements,
the name of each Underwriter participating in the offering and the
principal amount of the Notes that each severally has agreed to purchase,
the name of each Underwriter, if any, acting as a representative of the
Underwriters in connection with the offering, the price at which the Notes
are to be purchased by the Underwriters from the Company, any initial
public offering price, any selling concession and reallowance and any
delayed delivery arrangements, and such other information as you, the
Company and the Guarantor deem appropriate in connection with the offering
of the Notes. The Company and the Guarantor will use their respective best
efforts to cause the Registration Statements to become effective.
(c) Before amending or supplementing the Registration Statements or
the Prospectus, to furnish each Underwriter with a copy of each such
proposed amendment or supplement, and to file no such proposed amendment or
supplement to which you reasonably object by notice to the Company after a
reasonable period of review; PROVIDED that the foregoing shall not prevent
the Guarantor from filing reports required to be filed by it pursuant to
the Exchange Act, and PROVIDED, FURTHER, that the Guarantor shall have
provided you with a copy of any such report prior to its filing with the
Commission.
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(d) If, during such period after the first date of the public
offering of the Notes when the Prospectus is required by law to be
delivered in connection with sales of the Notes by an Underwriter or dealer
any event shall occur as a result of which it is necessary, in the
reasonable opinion of counsel for the Underwriters or counsel for the
Company and the Guarantor, to amend the Registration Statements or amend or
supplement the Prospectus in order to make the statements therein, in the
light of the circumstances when the Prospectus is delivered to a purchaser,
not misleading, or if it is necessary, in the reasonable opinion of either
such counsel, to amend the Registration Statements or amend or supplement
the Prospectus to comply with law, forthwith to prepare and furnish, at its
own expense, to the Underwriters and to the dealers (whose names and
addresses you will furnish to the Company) to which the Notes may have been
sold by you on behalf of the Underwriters and to any other dealers upon
request, either amendments or supplements to the Prospectus so that the
statements in the Prospectus as so amended or supplemented will not, in the
light of the circumstances when the Prospectus is delivered to a purchaser,
be misleading or so that the Registration Statements or the Prospectus, as
so amended or supplemented, will comply with law and to cause such
amendments or supplements to be filed promptly with the Commission.
(e) To notify you immediately when the Registration Statements become
effective and, during the period mentioned in paragraph (d) above, to
notify you immediately, (i) of the effectiveness of any amendment to the
Registration Statements, (ii) of the transmittal to the Commission for
filing of any supplement to the Prospectus or any document that would as a
result thereof be incorporated by reference in the Prospectus, (iii) of the
receipt of any comments from the Commission with respect to the
Registration Statements, the Prospectus or the Prospectus Supplement,
(iv) of any request by the Commission for any amendment to the Registration
Statements or any supplement to the Prospectus or for additional
information relating thereto or to any document incorporated by reference
in the Prospectus and (v) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statements, of the
suspension of the qualification of the Notes for offering or sale in any
jurisdiction, or of the institution or threatening of any proceeding for
any of such purposes; and to use every reasonable effort to prevent the
issuance of any such stop order or of any order suspending such
qualification and, if any such order is issued, to obtain the lifting
thereof at the earliest possible moment.
(f) To use their respective reasonable efforts, in cooperation with
the Underwriters, to qualify the Notes and related Guarantees for offer and
sale under the securities laws of such states and other jurisdictions as
you may designate and to maintain such qualifications in effect for so long
as required for the distribution of such Notes and related Guarantees;
PROVIDED, HOWEVER, that neither the Company nor the Guarantor shall be
obligated to file any general consent to service of process or to qualify
as a foreign
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corporation or as a dealer in securities in any jurisdiction in which it is
not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject. The
Company and the Guarantor will use their reasonable efforts to file such
statement and reports as may be required by the laws of each jurisdiction
in which the Notes and the related Guarantees have been qualified as above
provided. The Company and the Guarantor will also supply you with such
information as is necessary for the determination of legality of the Notes
and the related Guarantees for investment under the laws of such
jurisdictions as you may reasonably request.
(g) To make generally available to the Guarantor's security holders
as soon as practicable, but not later than 45 days after the close of the
period covered thereby, an earnings statement of the Guarantor (in form
complying with the provisions of Rule 158 of the Securities Act), covering
(i) a period of 12 months beginning after the effective date of the
Registration Statements and any post-effective amendment thereof but not
later than the first day of the Guarantor's fiscal quarter next following
such effective date and (ii) a period of 12 months beginning after the date
of this Agreement but not later than the first day of the Guarantor's
fiscal quarter next following the date of this Agreement.
(h) For a period of two years after the Closing Date, to make
available upon request to the Underwriters, copies of all annual reports,
quarterly reports and current reports filed with the Commission on
Forms 10-K, 10-Q and 8-K, or such other similar forms as may be designated
by the Commission, and such other documents, reports and information as
shall be furnished by the Company or the Guarantor to the holders of Notes
and the related Guarantees or to their security holders generally provided
that at such time the Guarantor is required to furnish such reports under
the Exchange Act.
(i) Between the date of this Agreement and the Closing Date, the
Company and the Guarantor will not, without your prior written consent,
directly or indirectly offer, sell, or enter into any agreement to sell,
any debt securities issued or guaranteed by the Company or the Guarantor
with a maturity of more than one year in any offering (other than the
Notes).
(j) The Company and the Guarantor shall use the proceeds from the
sale of the Notes in the manner described in the Prospectus Supplement
under the caption "Use of Proceeds."
(k) The Company and the Guarantor, during the period when a
prospectus relating to the Notes is required to be delivered under the
Securities Act, subject to Section 5(c), will file promptly all documents
required to be filed with the Commission pursuant to Section 13, 14 or
15(d) of the Exchange Act.
13
(l) In connection with the offering, until the completion of the
resale of the Notes by the Underwriters, none of the Company, the Guarantor
or any of their affiliated purchasers (as defined in Rule 100 under the
Exchange Act), either alone or with one or more other persons, will bid for
or purchase, for any account in which it or any of its affiliated
purchasers has a beneficial interest, any Notes, or attempt to induce any
person to purchase any Notes; and neither they nor any of their affiliated
purchasers will make bids or purchases for the purpose of creating actual,
or apparent, active trading in the Notes or of raising the price of the
Notes.
(m) To comply to the best of their abilities with the Securities Act,
the Exchange Act and the Trust Indenture Act so as to permit the completion
of the distribution of the Notes as contemplated in this Agreement and in
the Prospectus.
SECTION 6. PAYMENT OF EXPENSES. The Company and the Guarantor will pay or
cause to be paid all costs and expenses incident to the performance of their
obligations under this Agreement, including, without limitation, (a) the
preparation, printing and filing of the Registration Statements (including
financial statements and exhibits), as originally filed and as amended, the
preliminary prospectuses and the Prospectus and any amendments or supplements
thereto, and the cost of furnishing copies thereof to the Underwriters, (b) the
printing or processing and distribution of this Agreement, the Notes, the Blue
Sky Survey and any Legal Investment Survey, (c) the delivery of the Notes,
(d) the fees and disbursements of counsel and accountants for the Company and
the Guarantor, (e) the qualification of the Notes with the National Association
of Securities Dealers, Inc. (the "NASD") and under the applicable securities
laws in accordance with Section 5(f), including filing fees and reasonable fees
and disbursements of counsel for the Underwriters in connection therewith and in
connection with the Blue Sky Survey, (f) any fees charged by rating agencies for
rating the Notes (including annual surveillance fees relating to the Notes as
long as they are outstanding) and (g) the fees and expenses of the Trustee,
including the reasonable fees and disbursements of counsel for the Trustee, in
connection with the Notes.
If this Agreement is terminated by the Underwriters in accordance with the
provisions of Section 4 or 8 (a)(i), the Company and the Guarantor, jointly and
severally, agree to reimburse the Underwriters for all their reasonable
out-of-pocket expenses, including the fees and disbursements of counsel for the
Underwriters.
SECTION 7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company and the Guarantor, jointly and severally, agree to
indemnify and hold harmless each Underwriter and each person, if any, who
controls such Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against any and
all losses, claims, damages and liabilities
14
(including, without limitation, any legal or other expenses reasonably
incurred by any Underwriter or any such controlling person in connection
with defending or investigating any such action or claim) caused by any
untrue statement or alleged untrue statement of a material fact contained
in the Registration Statements or any amendment thereof, any preliminary
prospectus or the Prospectus (as amended or supplemented if the Company or
the Guarantor shall have furnished any amendments or supplements thereto),
or caused by any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information relating to any
Underwriter furnished to the Company in writing by such Underwriter through
you expressly for use therein; PROVIDED that such indemnity with respect to
the Prospectus shall not inure to the benefit of any Underwriter (or any
person controlling such Underwriter) from whom the person asserting any
such loss, claim, damage or liability purchased the Notes which are the
subject thereof if such person was not sent a copy of the Prospectus at or
prior to the confirmation of the sale of such Notes to such person in any
case where such delivery is required by the Securities Act and the untrue
statement or omission of a material fact contained in the Prospectus was
corrected in such subsequent Prospectus, unless such failure to deliver the
Prospectus was a result of noncompliance by the Company and the Guarantor
with their delivery requirements set forth in Section 5(b) hereof.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company and the Guarantor, each of their directors,
each of their officers who signed the Registration Statements and each
person, if any, who controls the Company or the Guarantor within the
meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from the Company
and the Guarantor to such Underwriter, but only with reference to
information relating to such Underwriter furnished to the Company in
writing by such Underwriter through you expressly for use in the
Registration Statements, any preliminary prospectus, the Prospectus or any
amendments or supplements thereto.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may
be sought pursuant to either of the two preceding paragraphs, such person
(the "indemnified party") shall promptly notify the person against whom
such indemnity may be sought (the "indemnifying party") in writing. An
indemnifying party may participate at its own expense in the defense of
such action. If it so elects within a reasonable time after receipt of
such notice, an indemnifying party, jointly with any other indemnifying
parties receiving such notice, may, except as provided in the immediately
following sentence, assume the defense of such action, with counsel
reasonably satisfactory to the
15
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees
and disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified
party and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them.
It is understood that the indemnifying party shall not, in respect of the
legal expenses of any indemnified party in connection with any proceeding
or related proceedings in the same jurisdiction, be liable for the fees and
expenses of more than one separate firm (in addition to any local counsel)
for all such indemnified parties and that all such fees and expenses shall
be reimbursed as they are incurred. Such firm shall be designated in
writing by Xxxxxx Xxxxxxx & Co. Incorporated, in the case of parties
indemnified pursuant to paragraph (a) above, and by the Company or the
Guarantor, in the case of parties indemnified pursuant to paragraph (b).
The indemnifying party shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss
or liability by reason of such settlement or judgment. No indemnifying
party shall, without the prior written consent of the indemnified party,
effect any settlement of any pending or threatened proceeding in respect of
which any indemnified party is or could have been a party and indemnity
could have been sought hereunder by such indemnified party, unless such
settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such proceeding.
(d) If the indemnification provided for in paragraphs (a) and (b) of
this Section 7 is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities referred to therein,
then each indemnifying party under such paragraph, in lieu of indemnifying
such indemnified party thereunder, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect
the relative benefits received by the Company and the Guarantor on the one
hand and the Underwriters on the other hand from the offering of the Notes
or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only
the relative benefits referred to in clause (i) above but also the relative
fault of the Company and the Guarantor on the one hand and of the
Underwriters on the other hand in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative benefits
received by the Company and the
16
Guarantor on the one hand and the Underwriters on the other hand in
connection with the offering of the Notes shall be deemed to be in the same
respective proportions as the net proceeds from the offering of the Notes
(before deducting expenses) received by the Company and the total
underwriting discounts and commissions received by the Underwriters, in
each case as set forth in the table on the cover of the Prospectus, bear to
the aggregate public offering price of the Notes. The relative fault of
the Company and the Guarantor on the one hand and of the Underwriters on
the other hand shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Company or the Guarantor or by the Underwriters
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The
Underwriters' respective obligations to contribute pursuant to this
Section 7 are several in proportion to the respective principal amounts of
Notes they have purchased hereunder, and not joint.
(e) The Company, the Guarantor and the Underwriters agree that it
would not be just or equitable if contribution pursuant to this Section 7
were determined by PRO RATA allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations
referred to in paragraph (d) above. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages and
liabilities referred to in paragraph (d) above shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 7, no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at
which the Notes underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages that such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The remedies provided for
in this Section 7 are not exclusive and shall not limit any rights or
remedies which may otherwise be available to any indemnified party at law
or in equity.
(f) The indemnity and contribution provisions contained in this
Section 7 and the representations and warranties of the Company or the
Guarantor contained in this Agreement shall remain operative and in full
force and effect regardless of (i) any termination of this Agreement, (ii)
any investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter or by or on behalf of the Guarantor or Company,
its officers or directors or any person controlling the Guarantor or the
Company and (iii) acceptance of and payment for any of the Notes.
17
SECTION 8. TERMINATION OF AGREEMENT. (a) You may terminate this
Agreement, by notice to the Company and the Guarantor, at any time at or prior
to the Closing Date (i) if there has been, since the respective dates as of
which information is given in the Registration Statements, any material adverse
change in the condition (financial or otherwise), earnings, business or
prospects of the Guarantor and its subsidiaries, considered as one enterprise,
whether or not arising in the ordinary course of business, (ii) if there has
occurred any outbreak of hostilities or escalation thereof involving the United
States or other calamity or crisis the effect of which is such as to make it, in
your reasonable judgment, impracticable or inadvisable to market the Notes and
the related Guarantees or enforce contracts for the sale of the Notes and the
related Guarantees, (iii) if trading in any securities of the Company or the
Guarantor has been suspended by the Commission, by the NASD, or on any exchange
generally or in the over-the-counter market, or if trading generally on a
national securities exchange or in the over-the-counter market has been
suspended or materially limited, or minimum or maximum prices for trading have
been fixed, or maximum ranges for prices for securities have been required, by
such exchange or by order of the Commission, the NASD or any other governmental
authority, (iv) if a banking moratorium has been declared by either federal or
New York authorities or (v) if there shall have been any downgrading, or any
notice given to the Company or the Guarantor or any public notice given, in
either case by a rating agency described below, of any intended or potential
downgrading or of a possible change that does not indicate the direction of the
possible change in the rating accorded any of the Company's or the Guarantor's
securities, including the Notes and the related Guarantees, by any "nationally
recognized statistical rating organization" as such term is defined for purposes
of Rule 436(g)(2) under the Securities Act.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party, except
to the extent provided in Section 6. Notwithstanding any such termination, the
provisions of Sections 7 and 11 shall remain in effect.
(c) This Agreement may also terminate pursuant to the provisions of
Section 4, with the effect stated in such Section.
SECTION 9. DEFAULT. If, on the Closing Date any one or more of the
Underwriters shall fail or refuse to purchase Notes that it has or they have
agreed to purchase hereunder on such date, and the aggregate principal amount of
Notes which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase is not more than one-tenth of the aggregate principal amount
of the Notes to be purchased on such date, the other Underwriters shall be
obligated severally in the proportions that the principal amount of Notes
specified to be purchased by them on Schedule I bears to the aggregate principal
amount of Notes specified to be purchased by all such non-defaulting
Underwriters, or in such other proportions as you may specify, to purchase the
Notes which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase on such date; PROVIDED that in no event shall the principal
amount of
18
Notes that any Underwriter has agreed to purchase pursuant to Section 2 be
increased pursuant to this Section 9 by an amount in excess of one-ninth of such
principal amount of Notes without the written consent of such Underwriter. If
on the Closing Date any Underwriter or Underwriters shall fail or refuse to
purchase Notes and the aggregate principal amount of Notes with respect to which
such default occurs is more than one-tenth of the aggregate principal amount of
Notes to be purchased on such date, and arrangements satisfactory to you and the
Company for the purchase of such Notes are not made within 36 hours after such
default, this Agreement shall terminate without liability on the part of any
non-defaulting Underwriter, the Company or the Guarantor, except that the
Company and the Guarantor will continue to be liable for the payment of expenses
to the extent set forth in Section 6. In any such case either you or the
Company shall have the right to postpone the Closing Date, but in no event for
longer than seven days, in order that the required changes, if any, in the
Registration Statements and in the Prospectus or in any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
SECTION 10. COUNTERPARTS. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
SECTION 11. GOVERNING LAW AND TIME. This Agreement shall be governed by
and construed in accordance with the internal laws of the State of New York.
Specified times of the day refer to New York City time.
SECTION 12. NOTICES. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if delivered, mailed,
or transmitted by any standard form of telecommunication, including telex or
facsimile transmission. Notices to the Underwriters shall be directed to Xxxxxx
Xxxxxxx & Co. Incorporated, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Telephone
No.: 000-000-0000, Facsimile No.: 000-000-0000, Attention: Debt Syndicate
Department. Notices to the Company shall be directed to it by mail at
Northwest Airlines, Inc., 0000 Xxxxxxxxx Xxxxx, Xx. Xxxx, Xxxxxxxxx 00000, with
a copy to Northwest Airlines Corporation at the same address, attention of
Senior Vice President-Finance and Treasurer, or by delivery to the Company and
the Guarantor at 0000 Xxxx Xxx Xxxxxxx, Xxxxx, Xxxxxxxxx 00000, attention of
Senior Vice President-Finance and Treasurer.
SECTION 13. PARTIES. This Agreement is made solely for the benefit of the
Underwriters, the Company, the Guarantor and, to the extent expressed, any
person controlling the Company, the Guarantor or the Underwriters within the
meaning of Section 15 of the Securities Act, and their respective executors,
administrators, successors and assigns and no other person shall acquire or have
any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include any purchaser, as such purchaser, from the
Underwriters of the Notes.
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us a counterpart hereof, whereupon this instrument
will become a binding agreement among the Company, the Guarantor and each
Underwriter in accordance with its terms.
Very truly yours,
NORTHWEST AIRLINES, INC.
By: /s/ Xxxxxx Xxxxxxx
----------------------------------
Name: Xxxxxx Xxxxxxx
Title: Senior Vice President
Finance and Treasurer
NORTHWEST AIRLINES
CORPORATION
By: /s/ Xxxxxx Xxxxxxx
----------------------------------
Name: Xxxxxx Xxxxxxx
Title: Senior Vice President
Finance and Treasurer
Accepted as of the date first
above written:
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxx, Sachs & Co.
BT Alex. Xxxxx Incorporated
Chase Securities Inc.
By: XXXXXX XXXXXXX & CO. INCORPORATED
By: /s/ Xxxxxx Xxxxxxxxxx
-----------------------
Name: Xxxxxx Xxxxxxxxxx
EXHIBIT A
Form of Opinion of
Xxxxxxx Xxxxxxx & Xxxxxxxx
(i) The Guarantor has been duly incorporated and is validly existing
and in good standing as a corporation under the laws of the State of
Delaware and has full corporate power and authority to conduct its business
as described in the Registration Statements, and Prospectus.
(ii) The Guarantees have been duly authorized, executed and issued by
the Guarantor and, upon payment for and delivery of the Notes in accordance
with this Agreement, will constitute valid and legally binding obligations
of the Guarantor; enforceable against the Guarantor in accordance with
their respective terms.
(iii) The Notes have been duly authorized, executed and issued by
the Company and, assuming due authentication thereof by the Trustee and
upon payment and delivery in accordance with this Agreement, will
constitute valid and legally binding obligations of the Company,
enforceable against the Company in accordance with their respective terms.
(iv) The Designated Indenture has been duly authorized, executed and
delivered by the Guarantor and duly qualified under the Trust Indenture
Act, and, assuming due authorization, execution and delivery thereof by the
Trustee, constitutes a valid and legally binding obligation of the Company
and the Guarantor, enforceable against the Company and the Guarantor in
accordance with its terms.
(v) The statements in the Prospectus under the captions "Description
of Notes" and "Description of Debt Securities", insofar as they purport to
constitute summaries of certain terms of the Notes, the Guarantees and the
Designated Indenture specifically referred to therein, constitute accurate
summaries of such terms in all material respects.
(vi) This Agreement has been duly authorized, executed and delivered
by each of the Company and the Guarantor.
(vii) No consent, approval, authorization, order, registration,
qualification of or with any Federal or New York governmental agency or
body or any Delaware governmental agency or body acting pursuant to the
Delaware General Corporation Law or, to our knowledge, any Federal or New
York court or any Delaware court acting pursuant to the Delaware General
Corporation Law is required for issuance and sale of the Notes and the
Guarantees in the manner contemplated by this Agreement, except for the
registration under the Securities Act of the Notes and the Guarantees, and
such consents, approvals,
A-2
authorizations, registrations or qualifications as may be required under
state securities or Blue Sky laws in connection with the purchase and
distribution of the Notes, and the related Guarantees, by the Underwriters.
(viii) Neither the Company nor the Guarantor is, and, after giving
effect to the application of the proceeds of the sale of the Notes as
described in the Prospectus, neither the Company nor the Guarantor will be,
required to register as an "investment company" within the meaning of and
subject to regulation under the Investment Company Act of 1940, as amended.
(ix) Each of the Registration Statements has become effective under
the Securities Act and, to the knowledge of such counsel, no stop order
suspending the effectiveness of any of the Registration Statements has been
issued or proceeding for that purpose has been instituted or threatened by
the Commission.
(x) Each Registration Statement as of the effective date of
Registration Statement 333-41579 and the Prospectus as of February 27,
1998, (except for the financial statements and other financial data
contained or incorporated by reference therein, as to which such counsel
need express no opinion) complied as to form in all material respects with
the requirements of the Securities Act, the Trust Indenture Act and the
applicable rules and regulations of the Commission thereunder and the
Exchange Act Documents complied as to form when filed in all material
respects with the requirements of the Exchange Act and the applicable rules
and regulations of the Commission thereunder.
Such counsel may state that its opinion set forth in paragraphs (ii),
(iii) and (iv) are subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing. In addition, such counsel shall also state that they
have not independently verified the accuracy, completeness or fairness of the
statements made or included in the Registration Statements or the Prospectus,
including (i) the Annual Report on Form 10-K of the Guarantor for the fiscal
year ended December 31, 1996 and (ii) the Quarterly Reports on Form 10-Q of the
Guarantor for the fiscal quarters ended March 31, 1997, June 30, 1997 and
September 30, 1997 and the Current Reports on Form 8-K of the Guarantor, dated
March 6, 1997, November 25, 1997, January 25, 1997 and February 19, 1998
(collectively, the "Exchange Act Documents") and take no responsibility
therefor, except as and to the extent set forth in paragraph (v) above, and in
the course of the preparation by the Company and the Guarantor of the
Registration Statements, and the Prospectus (excluding the Exchange Act
Documents), such counsel participated in conferences with certain officers and
employees of the Company and the Guarantor, with representatives of the
independent public accountants for the Company and the Guarantor and with
counsel to the Company and the Guarantor. Such counsel
A-3
may state that they did not prepare the Exchange Act Documents, however, such
counsel discussed the Exchange Act Documents with the Company and the Guarantor
and with counsel to the Company and the Guarantor prior to their filing with the
Commission, and, based upon such counsel's examination of the Registration
Statements, the Prospectus (including the Exchange Act Documents) and the
Designated Indenture, such counsel's investigations made in connection with the
preparation of Registration Statements and the Prospectus (excluding the
Exchange Act Documents) and such counsel's participation in the conferences
referred to above, such counsel has no reason to believe (A) that each
Registration Statement (except for the financial statements and other financial
data contained or incorporated by reference, as to which such counsel need
express no opinion), as of its effective date contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein not misleading, (B) that
the Prospectus (except for the financial statements and other financial data
contained or incorporated by reference therein or omitted therefrom, as to which
such counsel need express no opinion), at the time the Prospectus was issued and
at the Closing Date contains an untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading or (C)
that the documents incorporated by reference in the Prospectus (except for the
financial statements and other financial data contained or incorporated by
reference therein or omitted therefrom, as to which such counsel express no
opinion), as of the dates they were filed with the Commission, included an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein not
misleading.
Insofar as the opinions expressed herein relate to or are dependent
upon matters governed by the laws of the State of Minnesota, such counsel may
state that it has relied upon the opinion of the Office of the General Counsel
of the Company, delivered to you concurrently herewith.
EXHIBIT B
Form of Opinion of the General Counsel
of the Guarantor and the Company
(i) The Company has been duly incorporated, is validly existing and
in good standing under the laws of the State of Minnesota with corporate
power and corporate authority under such laws to own, lease and operate its
properties and conduct its business as described in the Prospectus and to
perform its obligations under this Agreement, the Designated Indenture and
the Notes.
(ii) The Company is duly qualified to transact business as a foreign
corporation and is in good standing in each other jurisdiction in which it
owns or leases property of a nature, or transacts business of a type, that
would make such qualification necessary, except to the extent that the
failure to so qualify or be in good standing would not have a Material
Adverse Effect.
(iii) The Guarantor is duly qualified to transact business as a
foreign corporation and is in good standing in the State of Minnesota.
(iv) The Company is a "citizen of the United States" (as defined in
Section 40102(a)(15) of Title 49 of the United States Code) and is an air
carrier operating under a certificate issued by the Secretary of
Transportation pursuant to Chapter 447 of Title 49, United States Code, for
aircraft capable of carrying 10 or more individuals or 6,000 pounds or more
of cargo; there is in force with respect to the Company an air carrier
operating certificate issued pursuant to Part 121 of the regulations under
the Federal Aviation Act; all of the outstanding shares of capital stock of
the Company have been duly authorized and validly issued and are fully paid
and non-assessable and are owned by the Guarantor, indirectly through NWA
Inc., a Delaware corporation, free and clear of any pledge, lien, security
interest, charge, claim, equity or encumbrance of any kind.
(v) To the best of such counsel's knowledge, except as disclosed in
the Exchange Act Documents, there are no pending or threatened legal or
governmental proceedings, required to be described in the Prospectus that
are not described as required, nor any contracts or documents of a
character required to be described or referred to in the Registration
Statements or the Prospectus or to be filed as exhibits to the Registration
Statements that are not described, referred to or filed as required.
(vi) The execution and delivery by the Guarantor and the Company of
this Agreement and the Indenture, the issuance and sale of the Notes and
the related Guarantees, the consummation by the Guarantor and the Company
of the transactions contemplated by this Agreement and the Designated
Indenture and compliance by the Company and the Guarantor with the terms
hereof and thereof do not and will not result in any violation of
B-2
the charter or by-laws of the Company or the Guarantor, and do not and will
not result in a breach of any of the terms or provisions of, or constitute
a default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or the
Guarantor under (A) any contract, indenture, mortgage, loan agreement,
note, lease or other agreement or instrument included or incorporated by
reference as an exhibit to the Guarantor's Annual Report on Form 10-K for
the fiscal year ended December 31, 1996, the Guarantor's Quarterly Report
on Form 10-Q for the fiscal quarters ended March 31, 1997, June 30, 1997
and September 30, 1997 and the Guarantor's Current Reports on Form 8-K,
dated March 6, 1997, November 25, 1997, January 25, 1998 and February 19,
1998 (collectively, the "Exchange Act Documents") (except for such
breaches, defaults, liens, charges or encumbrances that would not have a
Material Adverse Effect) or included as an exhibit to the Registration
Statements (except for such breaches, defaults, liens, charges or
encumbrances that would not have a Material Adverse Effect), (B) any
existing law, rule or regulation of the State of Minnesota or the United
States of America applicable to the Company or the Guarantor (other than
the securities or Blue Sky laws of the State of Minnesota, as to which such
counsel need express no opinion), or (C) any judgment, order or decree of
any government, governmental instrumentality or court, domestic or foreign,
known to such counsel having jurisdiction over the Company or the Guarantor
or any of their respective properties.
(vii) Under any provision of law or regulation applicable to the
Company or the Guarantor of the State of Minnesota or the United States of
America, no authorization, approval, consent, order or license of or filing
with or notice to any governmental agency or body or any court is required
for the valid authorization, issuance and delivery of the Notes or the
related Guarantees, the valid authorization, execution, delivery and
performance by the Company and the Guarantor of, and the performance by the
Company and the Guarantor of their respective obligations under, this
Agreement and the Designated Indenture, except such as are required under
the securities or Blue Sky laws of Minnesota.
(viii) This Agreement has been duly authorized, executed and
delivered by the Company.
(ix) The Designated Indenture has been duly authorized, executed and
delivered by the Company; the Notes have been duly authorized by requisite
corporate action on the part of the Company and have been duly executed and
issued by the Company.
(x) The Exchange Act Documents incorporated by reference in the
Prospectus (except for the financial statements and schedules and other
financial data included or incorporated by reference therein or omitted
therefrom, as to which such counsel need express no opinion), as of the
dates they were filed with the Commission, or, if any such
B-3
incorporated document was amended, when such amendment was filed, complied
as to form in all material respects with the requirements of the Exchange
Act.
In addition, counsel shall state that such counsel or lawyers on his
staff have participated in the preparation of the Registration Statements, the
Prospectus and the Exchange Act Documents incorporated or deemed to be
incorporated by reference therein and have participated in conferences with
officers and employees of the Company and the Guarantor, counsel employed by the
Company and the Guarantor, representatives of the independent public accountants
for the Company and the Guarantor, representatives of the Underwriters and
counsel for the Underwriters, at which conferences the contents of the
Registration Statements and Prospectus and related matters were discussed. Such
counsel shall also state that, although such counsel is not passing upon and
does not assume any responsibility for the accuracy, completeness or fairness of
the statements contained in the Registration Statements, the Prospectus or the
Exchange Act Documents and has not made any independent check or verification
thereof, on the basis of the participation of such counsel or lawyers on his
staff in the conferences referred to above and their examination of the
Registration Statements, the Prospectus and the Exchange Act Documents, nothing
has come to such counsel's attention that leads him to believe that the
Registration Statements (including the documents incorporated by reference
therein pursuant to Item 12 of Form S-3) at the time such Registration
Statements became effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, or the Prospectus (including the
documents incorporated by reference therein pursuant to Item 12 of Form S-3) as
of the date of this Agreement or at the Closing Date contained or contains an
untrue statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that such
counsel need express no opinion with respect to the financial statements,
schedules and other financial data included or incorporated or deemed to be
incorporated by reference in the Registration Statements or Prospectus or the
Statement of Qualification on Form T-1.
EXHIBIT C
Matters to be covered by Letter or Letters of
Independent Auditors
Ernst & Young LLP shall have furnished to the Underwriters letters, dated
as of the date of this Agreement and as of the Closing Date, in form and
substance satisfactory to the Underwriters, confirming that they are independent
auditors with respect to Northwest Airlines Corporation under Rule 101 of the
AICPA's Code of Professional Conduct and its interpretations and rulings and
stating in effect that:
(a) In their opinion, the consolidated financial statements of NWA
Corp. and its subsidiaries and the supporting schedules included or
incorporated by reference in the Registration Statements and the Prospectus
and audited by them comply as to form in all material respects with the
applicable accounting requirements of the Securities Act and the Exchange
Act and the related published rules and regulations thereunder.
(b) On the basis of a reading of the unaudited consolidated financial
statements of NWA Corp. and its subsidiaries contained in the Quarterly
Report of NWA Corp. on Form 10-Q for the quarters ended March 31, 1997,
June 30, 1997 and September 30, 1997 incorporated by reference in the
Registration Statements and the Prospectus, and of the latest unaudited
consolidated financial statements made available by NWA Corp. carrying out
certain specified procedures (but not an audit in accordance with generally
accepted auditing standards), a reading of the minutes of the meetings of
the directors of NWA Corp. and inquiries of certain officials of NWA Corp.
and its subsidiaries who have responsibility for financial and accounting
matters of NWA Corp. and its subsidiaries, as to transactions and events
subsequent to the date of the most recent audited consolidated financial
statements incorporated by reference in the Registration Statements and the
Prospectus, nothing came to their attention that caused them to believe
that:
(A) any material modifications should be made to the unaudited
consolidated financial statements of NWA Corp. and its subsidiaries
included or incorporated by reference in the Registration Statements
and the Prospectus for them to be in conformity with generally
accepted accounting principles applied on a basis substantially
consistent with that of the audited consolidated financial statements
of NWA Corp. and its subsidiaries incorporated by reference in the
Registration Statements and the Prospectus or that such unaudited
consolidated financial statements do not comply as to form in all
material respects with the applicable accounting requirements of the
Securities Act and the Exchange Act and the published instructions,
rules and regulations thereunder;
(B) the unaudited capsule information of NWA Corp. and its
subsidiaries, if any, included or incorporated by reference in the
Registration
C-2
Statements and the Prospectus does not agree with the amounts set forth in the
unaudited consolidated financial statements of NWA Corp. from which it was
derived or was not determined on a basis substantially consistent with that of
the corresponding financial information in the latest audited financial
statements of NWA Corp. included or incorporated by reference in the
Registration Statements and the Prospectus;
(C) (I) as of the latest date as of which NWA Corp. and its
subsidiaries have monthly financial statements, there was any decrease
in the capital stock or additional paid-in capital, or increase in
long-term indebtedness of NWA Corp. and its subsidiaries, or any
decrease in retained earnings, as compared with the amounts shown in
the most recent consolidated statement of financial condition of NWA
Corp. and its subsidiaries included or incorporated by reference in
the Registration Statements and the Prospectus or (II) with respect to
the period subsequent to the date of the most recent financial
statements included or incorporated by reference in the Registration
Statements and the Prospectus and extending through the latest date as
of which NWA Corp. and its subsidiaries have monthly financial
statements, there was a consolidated net loss; or
(D) as of specified date not more than three business days prior
to the date of the letter, there was any decrease in the capital stock
or additional paid-in capital, or increase in long-term indebtedness
of NWA Corp. and its subsidiaries as compared with the amounts shown
in the most recent consolidated statement of financial condition of
NWA Corp. and its subsidiaries included in the Registration Statements
and the Prospectus;
except in all instances for increases or decreases set forth in such
letter, in which case the letter shall be accompanied by an explanation by
NWA Corp. as to the significance thereof, unless said explanation is not
deemed necessary by the Underwriters.
(c) They have performed certain other specified procedures as a
result of which they determined that certain information of an accounting,
financial or statistical nature (which is expressed in dollars, or
percentages derived from dollar amounts, and has been obtained from the
general accounting records of NWA Corp.) set forth in the Registration
Statements, as amended, and the Prospectus, as amended or supplemented, and
in Exhibit 12 to the Registration Statements, including specified
information, if any, included or incorporated from NWA Corp.'s Annual
Report on Form 10-K incorporated therein or specified information, if any,
included or incorporated from any of NWA Corp.'s Quarterly Reports on Form
10-Q or its current reports on Form 8-K incorporated therein, agrees with
the accounting records of NWA Corp. and its subsidiaries or computations
made therefrom, excluding any questions of legal interpretation.
SCHEDULE I
UNDERWRITERS PRINCIPAL AMOUNT
7 5/8% NOTES DUE 2005
Xxxxxx Xxxxxxx & Co. Incorporated.................... $100,000,000
Xxxxxxx, Sachs & Co. ................................ 40,000,000
BT Alex. Xxxxx Incorporated.......................... 30,000,000
Chase Securities Inc................................. 30,000,000
------------
Total $200,000,000
------------
------------
7 7/8% NOTES DUE 2008
Xxxxxx Xxxxxxx & Co. Incorporated.................... $100,000,000
Xxxxxxx, Sachs & Co.................................. 40,000,000
BT Alex. Xxxxx Incorporated.......................... 30,000,000
Chase Securities Inc................................. 30,000,000
------------
Total $200,000,000
------------
------------
