Exhibit 4(d)(4)
INTERCREDITOR AGREEMENT
Dated as of
September 25, 1997
BY AND AMONG
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity
but solely as Trustee under the
Northwest Airlines Pass Through Trust 0000-0X,
Xxxxxxxxx Xxxxxxxx Xxxx Through Trust 1997-1B
and
Northwest Airlines Pass Through Trust 0000-0X
XXXXX XXXX XX XXXXXX
as Class A Liquidity Provider,
Class B Liquidity Provider
and Class C Liquidity Provider,
AND
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
not in its individual capacity except
as expressly set forth herein but
solely as Subordination Agent and trustee hereunder
TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions..................................................... 2
ARTICLE II
TRUST ACCOUNTS; CONTROLLING PARTY
SECTION 2.1 Agreement to Terms of Subordination;
Payments from Monies Received Only............................ 20
SECTION 2.2 Trust Accounts................................................ 21
SECTION 2.3 Deposits to the Collection Account and
Special Payments Account...................................... 22
SECTION 2.4 Distributions of Special Payments............................. 22
SECTION 2.5 Designated Representatives.................................... 25
SECTION 2.6 Controlling Party............................................. 25
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF
AMOUNTS RECEIVED
SECTION 3.1 Written Notice of Distribution................................ 27
SECTION 3.2 Distribution of Amounts on Deposit in
the Collection Account........................................ 29
SECTION 3.3 Distribution of Amounts on Deposit
Following a Triggering Event.................................. 30
SECTION 3.4 Other Payments................................................ 32
SECTION 3.5 Payments to the Trustees and the
Liquidity Providers........................................... 32
SECTION 3.6 Liquidity Facilities.......................................... 32
ARTICLE IV
EXERCISE OF REMEDIES
SECTION 4.1 Directions from the Controlling Party......................... 39
SECTION 4.2 Remedies Cumulative........................................... 40
SECTION 4.3 Discontinuance of Proceedings................................. 40
SECTION 4.4 Right of Certificateholders to Receive
Payments Not to Be Impaired................................... 41
SECTION 4.5 Undertaking for Costs......................................... 41
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ARTICLE V
DUTIES OF THE SUBORDINATION AGENT;
AGREEMENTS OF TRUSTEES, ETC.
SECTION 5.1 Notice of Indenture Default or
Triggering Event.............................................. 41
SECTION 5.2 Indemnification............................................... 42
SECTION 5.3 No Duties Except as Specified in
Intercreditor Agreement....................................... 42
SECTION 5.4 Notice from the Liquidity Providers and
Trustees...................................................... 43
ARTICLE VI
THE SUBORDINATION AGENT
SECTION 6.1 Authorization; Acceptance of Trusts and
Duties........................................................ 43
SECTION 6.2 Absence of Duties............................................. 43
SECTION 6.3 No Representations or Warranties as to
Documents..................................................... 43
SECTION 6.4 No Segregation of Monies; No Interest......................... 44
SECTION 6.5 Reliance; Agents; Advice of Counsel........................... 44
SECTION 6.6 Capacity in Which Acting...................................... 45
SECTION 6.7 Compensation.................................................. 45
SECTION 6.8 May Become Certificateholder.................................. 45
SECTION 6.9 Subordination Agent Required;
Eligibility................................................... 45
SECTION 6.10 Money to Be Held in Trust..................................... 46
ARTICLE VII
INDEMNIFICATION OF SUBORDINATION AGENT
SECTION 7.1 Scope of Indemnification...................................... 46
ARTICLE VIII
SUCCESSOR SUBORDINATION AGENT
SECTION 8.1 Replacement of Subordination Agent;
Appointment of Successor...................................... 46
ARTICLE IX
SUPPLEMENTS AND AMENDMENTS
SECTION 9.1 Amendments, Waivers, Etc...................................... 48
SECTION 9.2 Subordination Agent Protected................................. 49
SECTION 9.3 Effect of Supplemental Agreements............................. 49
SECTION 9.4 Notice to Rating Agencies..................................... 49
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ARTICLE X
MISCELLANEOUS
SECTION 10.1 Termination of Intercreditor Agreement........................ 49
SECTION 10.2 Intercreditor Agreement for Benefit of
Trustees, Liquidity Providers and Subordination Agent......... 50
SECTION 10.3 Notices....................................................... 50
SECTION 10.4 Severability.................................................. 51
SECTION 10.5 No Oral Modifications or Continuing
Waivers....................................................... 51
SECTION 10.6 Successors and Assigns........................................ 51
SECTION 10.7 Headings...................................................... 51
SECTION 10.8 Counterpart Form.............................................. 51
SECTION 10.9 Subordination................................................. 51
SECTION 10.10 Governing Law................................................. 53
SECTION 10.11 Submission to Jurisdiction; Waiver of
Jury Trial; Waiver of Immunity................................ 53
Schedule 1 Indentures
Schedule 2 Participation Agreements
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INTERCREDITOR AGREEMENT
INTERCREDITOR AGREEMENT dated as of September 25, 1997, by and among
STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust company ("STATE
STREET"), not in its individual capacity but solely as Trustee of each Trust
(each as defined below), ROYAL BANK OF CANADA ("ROYAL BANK") as Class A
Liquidity Provider, Royal Bank, as Class B Liquidity Provider, Royal Bank, as
Class C Liquidity Provider, and STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION, a Connecticut trust company ("STATE STREET OF
CONNECTICUT"), not in its individual capacity except as expressly set forth
herein, but solely as Subordination Agent and trustee hereunder (in such
capacity, together with any successor appointed pursuant to Article VIII hereof,
the "SUBORDINATION AGENT").
WHEREAS, all capitalized terms used herein shall have the respective
meanings referred to in Article I hereof;
WHEREAS, pursuant to each Indenture, the related Owner Trustee
proposes to issue on a nonrecourse basis three series of Equipment Notes to
finance a portion of the indebtedness of such Owner Trustee incurred to finance
the purchase of the Aircraft referred to in such Indenture which has been or
will be leased to Northwest pursuant to the related Lease;
WHEREAS, pursuant to the Participation Agreements, each Trust will
acquire those Equipment Notes having an interest rate equal to the interest rate
applicable to the Certificates to be issued by such Trust;
WHEREAS, pursuant to each Trust Agreement, the Trust created thereby
proposes to issue a single class of Certificates (a "CLASS") bearing the
interest rate and having the final distribution date described in such Trust
Agreement on the terms and subject to the conditions set forth therein;
WHEREAS, pursuant to the Underwriting Agreement (as defined below),
the Underwriters propose to purchase the Certificates issued by each Trust in
the aggregate face amount set forth opposite the name of such Trust on
Schedule I thereto on the terms and subject to the conditions set forth therein;
WHEREAS, each Liquidity Provider proposes to enter into a revolving
credit agreement (each, a "LIQUIDITY FACILITY") with the Subordination Agent, as
agent for the respective Trustee of each Trust, for the benefit of the
Certificateholders of such Trust; and
WHEREAS, it is a condition precedent to the obligations of the
Underwriters under the Underwriting Agreement that the Subordination Agent, the
Trustees and the Liquidity Providers agree to the terms of subordination set
forth in this Agreement
in respect of each Class of Certificates, and the Subordination Agent, the
Trustees and the Liquidity Providers, by entering into this Agreement, hereby
acknowledge and agree to such terms of subordination and the other provisions of
this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, and of other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS. For all purposes of this Agreement, except
as otherwise expressly provided or unless the context otherwise requires:
(1) the terms used herein that are defined in this Article have the
meanings assigned to them in this Article, and include the plural as well
as the singular;
(2) all references in this Agreement to designated "Articles",
"Sections" and other subdivisions are to the designated Articles, Sections
and other subdivisions of this Agreement;
(3) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision; and
(4) the term "including" shall mean "including without limitation".
"ACCELERATION" means, with respect to the amounts payable in respect of the
Equipment Notes issued under any Indenture, the declaration or deemed
declaration of such amounts to be immediately due and payable. "ACCELERATE" and
"ACCELERATED" have meanings correlative to the foregoing.
"ADJUSTED EXPECTED DISTRIBUTIONS" means with respect to the Certificates of
any Class on any Current Distribution Date the sum of (x) the amount of accrued
and unpaid interest on such Certificates plus (y) the greater of:
(A) the difference between (x) the Pool Balance of such Certificates
as of the immediately preceding Distribution Date and (y) the Pool Balance
of such Certificates as of the Current Distribution Date calculated on the
basis that (i) the principal of the Non-Performing Equipment Notes held in
such Trust has been paid in full and such payments have been
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distributed to the holders of such Certificates, (ii) the principal of the
Performing Equipment Notes has been paid when due (but without giving
effect to any acceleration of Performing Equipment Notes) and has been
distributed to the holders of such Certificates and (iii) the principal of
any Equipment Notes formerly held in such Pass Through Trust which have
been sold pursuant to the terms hereof have been paid in full and such
payments have been distributed to the holders of such Certificates; and
(B) the amount if any by which (i) the Pool Balance of such Class of
Certificates as of the immediately preceding Distribution Date (less the
aggregate principal amount of the Equipment Notes relating to any Prefunded
Aircraft (as defined in the Trust Agreement) for which the date of sale to
the Owner Trustee has not occurred and which Northwest has not assumed)
exceeds (ii) the Aggregate LTV Collateral Amount for such Class of
Certificates for the Current Distribution Date;
provided that, until the date of the initial LTV Appraisals, clause (B) above
shall not be applicable.
"AFFILIATE" means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by or under common control with such Person.
For the 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 the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"AGGREGATE LTV COLLATERAL AMOUNT" means for any Class of Certificates for
any Distribution Date the sum of the applicable LTV Collateral Amounts for each
Aircraft minus the Pool Balance for each Class of Certificates, if any, senior
to such Class after giving effect to any distribution of principal on such
Distribution Date on such senior Class or Classes.
"AIRCRAFT" means, with respect to any Indenture, the "Aircraft" referred to
therein.
"APPRAISED CURRENT MARKET VALUE" of any Aircraft means the lower of the
average and the median of the most recent three LTV Appraisals of such Aircraft.
"APPRAISERS" means Aircraft Information Services, Inc., BK Associates, Inc.
and Xxxxxx Xxxxx and Xxxxx, Inc.
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"AVAILABLE AMOUNT" means, with respect to any Liquidity Facility on any
drawing date, an amount equal to (a) the Stated Amount of such Liquidity
Facility, LESS (b) the amount of each Interest Drawing honored by the Liquidity
Provider under such Liquidity Facility on or prior to such date which has not
been reimbursed or reinstated as of such date; PROVIDED that, following a
Downgrade Drawing or a Final Drawing under such Liquidity Facility, the
Available Amount of such Liquidity Facility shall be zero.
"BUSINESS DAY" means any day other than a Saturday or Sunday or a day on
which commercial banks are required or authorized to close in Minneapolis,
Minnesota, New York, New York, or the city and state in which any Trustee, the
Subordination Agent or any Loan Trustee maintains its Corporate Trust Office or
receives and disburses funds.
"CASH COLLATERAL ACCOUNT" means the Class A Cash Collateral Account, the
Class B Cash Collateral Account or the Class C Cash Collateral Account, as
applicable.
"CERTIFICATE" means a Class A Certificate, a Class B Certificate or a Class
C Certificate, as applicable.
"CERTIFICATEHOLDER" means any holder of one or more Certificates.
"CLASS" has the meaning assigned to such term in the preliminary statements
to this Agreement.
"CLASS A CASH COLLATERAL ACCOUNT" means an Eligible Deposit Account in the
name of the Subordination Agent maintained at an Eligible Institution, which
shall be the Subordination Agent if it shall so qualify, into which all amounts
drawn under the Class A Liquidity Facility pursuant to Section 3.6(c) or 3.6(i)
shall be deposited.
"CLASS A CERTIFICATEHOLDER" means, at any time, any holder of one or more
Class A Certificates.
"CLASS A CERTIFICATES" means the certificates issued by the Class A Trust,
substantially in the form of Exhibit A to the Class A Trust Agreement, and
authenticated by the Class A Trustee, representing fractional undivided
interests in the Class A Trust, and any certificates issued in exchange therefor
or replacement thereof pursuant to the terms of the Class A Trust Agreement.
"CLASS A LIQUIDITY FACILITY" means, initially, the Revolving Credit
Agreement dated as of September 25, 1997, by and between the Subordination
Agent, as agent of the Class A Trustee, and the Class A Liquidity Provider, and,
from and after the replacement of such Agreement pursuant hereto, the
Replacement Liquidity Facility therefor, if any,
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in each case as amended, supplemented or otherwise modified from time to time in
accordance with its terms.
"CLASS A LIQUIDITY PROVIDER" means Royal Bank, together with any
Replacement Liquidity Provider which has issued a Replacement Liquidity Facility
to replace the Class A Liquidity Facility pursuant to Section 3.6(e).
"CLASS A TRUST" means Northwest Airlines 1997-1A Pass Through Trust created
and administered pursuant to the Class A Trust Agreement.
"CLASS A TRUST AGREEMENT" means the Pass Through Trust Agreement dated as
of June 3, 1996, by and among Northwest, NWA Corp. and the Class A Trustee, as
supplemented by Trust Supplement No. 1997-1A thereto dated as of September 25,
1997, by and among Northwest, NWA Corp. and the Trustee, governing the creation
and administration of the Class A Trust and the issuance of the Class A
Certificates, as the same may be amended, supplemented or otherwise modified
from time to time in accordance with its terms.
"CLASS A TRUSTEE" means State Street, not in its individual capacity except
as expressly set forth in the Class A Trust Agreement, but solely as trustee
under the Class A Trust Agreement, together with any successor trustee appointed
pursuant thereto.
"CLASS B CASH COLLATERAL ACCOUNT" means an Eligible Deposit Account in the
name of the Subordination Agent maintained at an Eligible Institution, which
shall be the Subordination Agent if it shall so qualify, into which all amounts
drawn under the Class B Liquidity Facility pursuant to Section 3.6(c) or 3.6(i)
shall be deposited.
"CLASS B CERTIFICATEHOLDER" means, at any time, any holder of one or more
Class B Certificates.
"CLASS B CERTIFICATES" means the certificates issued by the Class B Trust,
substantially in the form of Exhibit A to the Class B Trust Agreement, and
authenticated by the Class B Trustee, representing fractional undivided
interests in the Class B Trust, and any certificates issued in exchange therefor
or replacement thereof pursuant to the terms of the Class B Trust Agreement.
"CLASS B LIQUIDITY FACILITY" means, initially, the Revolving Credit
Agreement dated as of September 25, 1997, by and between the Subordination
Agent, as agent of the Class B Trustee, and the Class B Liquidity Provider, and,
from and after the replacement of such Agreement pursuant hereto, the
Replacement Liquidity Facility therefor, if any, in each case as amended,
supplemented or otherwise modified from time to time in accordance with its
terms.
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"CLASS B LIQUIDITY PROVIDER" means Royal Bank, together with any
Replacement Liquidity Provider which has issued a Replacement Liquidity Facility
to replace the Class B Liquidity Facility pursuant to Section 3.6(e).
"CLASS B TRUST" means Northwest Airlines 1997-1B Pass Through Trust created
and administered pursuant to the Class B Trust Agreement.
"CLASS B TRUST AGREEMENT" means the Pass Through Trust Agreement dated as
of June 3, 1996, by and among Northwest, NWA Corp. and the Class B Trustee, as
supplemented by Trust Supplement No. 1997-1B thereto dated as of September 25,
1997, by and among Northwest, NWA Corp. and the Trustee, governing the creation
and administration of the Class B Trust and the issuance of the Class B
Certificates, as the same may be amended, supplemented or otherwise modified
from time to time in accordance with its terms.
"CLASS B TRUSTEE" means State Street, not in its individual capacity except
as expressly set forth in the Class B Trust Agreement, but solely as trustee
under the Class B Trust Agreement, together with any successor trustee appointed
pursuant thereto.
"CLASS C CASH COLLATERAL ACCOUNT" means an Eligible Deposit Account in the
name of the Subordination Agent and maintained at an Eligible Institution, which
shall be the Subordination Agent if it shall so qualify, into which all amounts
drawn under the Class C Liquidity Facility pursuant to Section 3.6(c) or 3.6(i)
shall be deposited.
"CLASS C CERTIFICATEHOLDER" means, at any time, any holder of one or more
Class C Certificates.
"CLASS C CERTIFICATES" means the certificates issued by the Class C Trust,
substantially in the form of Exhibit A to the Class C Trust Agreement, and
authenticated by the Class C Trustee, representing fractional undivided
interests in the Class C Trust, and any certificates issued in exchange therefor
or in replacement thereof pursuant to the terms of the Class C Trust Agreement.
"CLASS C LIQUIDITY FACILITY" means, initially, the Revolving Credit
Agreement dated as of September 25, 1997, by and between the Subordination
Agent, as agent of the Class C Trustee, and the Class C Liquidity Provider and,
from and after the replacement of such Agreement pursuant hereto, the
Replacement Liquidity Facility therefor, if any, in each case as amended,
supplemented or otherwise modified from time to time in accordance with its
terms.
"CLASS C LIQUIDITY PROVIDER" means Royal Bank, together with any
Replacement Liquidity Provider which has issued a
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Replacement Liquidity Facility to replace the Class C Liquidity Facility
pursuant to Section 3.6(e).
"CLASS C TRUST" means Northwest Airlines 1997-1C Pass Through Trust created
and administered pursuant to the Class C Trust Agreement.
"CLASS C TRUST AGREEMENT" means the Pass Through Trust Agreement dated as
of June 3, 1996, by and among Northwest, NWA Corp. and the Class C Trustee, as
supplemented by Trust Supplement No. 1997-1C thereto dated as of September 25,
1997, by and among Northwest, NWA Corp. and the Trustee, governing the creation
and administration of the Class C Trust and the issuance of the Class C
Certificates, as the same may be amended, supplemented or otherwise modified
from time to time in accordance with its terms.
"CLASS C TRUSTEE" means State Street, not in its individual capacity except
as expressly set forth in the Class C Trust Agreement, but solely as trustee
under the Class C Trust Agreement, together with any successor trustee appointed
pursuant thereto.
"CLOSING DATE" means September 25, 1997.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time, and Treasury Regulations promulgated thereunder.
"COLLECTION ACCOUNT" means the Eligible Deposit Account established by the
Subordination Agent pursuant to Section 2.2 which the Subordination Agent shall
make deposits in and withdrawals from in accordance with this Agreement.
"CONTROLLING PARTY" means the Person entitled to act as such pursuant to
the terms of Section 2.6.
"CORPORATE TRUST OFFICE" means, with respect to any Trustee, the
Subordination Agent or any Loan Trustee, the office of such Person in the city
at which, at any particular time, its corporate trust business shall be
principally administered.
"CURRENT DISTRIBUTION DATE" means a Distribution Date specified as a
reference date for calculating the Adjusted Expected Distributions or Expected
Distributions with respect to the Certificates of any Trust as of such
Distribution Date.
"DESIGNATED REPRESENTATIVES" means the Trustee Representatives and the LP
Representatives identified under Section 2.5.
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"DISTRIBUTION DATE" means a Regular Distribution Date or a Special
Distribution Date.
"DOLLARS"or "$" means United States dollars.
"DOWNGRADE DRAWING" has the meaning assigned to such term in Section
3.6(c).
"DOWNGRADED FACILITY" has the meaning assigned to such term in Section
3.6(c).
"DRAWING" means an Interest Drawing, a Final Drawing or a Downgrade
Drawing, as the case may be.
"ELIGIBLE DEPOSIT ACCOUNT" means either (a) a segregated account with an
Eligible Institution or (b) a segregated trust account with the corporate trust
department of a depository institution organized under the laws of the United
States of America or any one of the states thereof or the District of Columbia
(or any U.S. branch of a foreign bank), having corporate trust powers and acting
as trustee for funds deposited in such account, so long as any of the securities
of such depository institution has a long-term unsecured debt rating from each
Rating Agency of at least A-3 or its equivalent. An Eligible Deposit Account
may be maintained with a Liquidity Provider so long as such Liquidity Provider
is an Eligible Institution (as defined below); PROVIDED that such Liquidity
Provider shall have waived all rights of set-off and counterclaim with respect
to such account.
"ELIGIBLE INSTITUTION" means, subject to the last sentence of subsection
2.2(c), (a) the corporate trust department of the Subordination Agent or any
Trustee, as applicable, or (b) a depository institution organized under the laws
of the United States of America or any one of the states thereof or the District
of Columbia (or any U.S. branch of a foreign bank), which has a long-term
unsecured debt rating from each Rating Agency of at least A-3 or its equivalent.
"ELIGIBLE INVESTMENTS" means (a) investments in obligations of, or
guaranteed by, the United States Government having maturities no later than 90
days following the date of such investment, (b) investments in open market
commercial paper of any corporation incorporated under the laws of the United
States of America or any state thereof with a short-term unsecured debt rating
issued by Xxxxx'x and Standard & Poor's of at least A-1 and P-1, respectively,
and, if rated by Fitch, F-1, having maturities no later than 90 days following
the date of such investment or (c) investments in negotiable certificates of
deposit, time deposits, banker's acceptances, commercial paper or other direct
obligations of, or obligations guaranteed by,
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commercial banks organized under the laws of the United States or of any
political subdivision thereof (or any U.S. branch of a foreign bank including
the Liquidity Provider) with issuer ratings of at least B/C by Thomson
Bankwatch, having maturities no later than 90 days following the date of such
investment; PROVIDED, HOWEVER, that (x) all Eligible Investments that are bank
obligations shall be denominated in U.S. dollars; and (y) the aggregate amount
of Eligible Investments at any one time that are bank obligations issued by any
one bank shall not be in excess of 5% of such bank's capital surplus; PROVIDED
FURTHER that (1) any investment of the types described in clauses (a), (b) and
(c) above may be made through a repurchase agreement in commercially reasonable
form with a bank or other financial institution qualifying as an Eligible
Institution so long as such investment is held by a third party custodian also
qualifying as an Eligible Institution, and (2) all such investments set forth in
(a), (b) and (c) above mature no later than the Business Day immediately
preceding the next Regular Distribution Date; PROVIDED FURTHER, HOWEVER, that in
the case of any Eligible Investment issued by a domestic branch of a foreign
bank, the income from such investment shall be from sources within the United
States for purposes of the Code. Notwithstanding the foregoing, no investment
of the types described in clause (b) or (c) above which is issued or guaranteed
by a Liquidity Provider or Northwest or any of their respective Affiliates shall
be an Eligible Investment.
"EQUIPMENT NOTES" means, at any time, the Series A Equipment Notes, the
Series B Equipment Notes and the Series C Equipment Notes, collectively, and in
each case, any Equipment Notes issued in exchange therefor or replacement
thereof pursuant to the terms of the Indentures.
"EXPECTED DISTRIBUTIONS" means, with respect to the Certificates of any
Trust on any Current Distribution Date, the sum of (x) accrued and unpaid
interest on such Certificates and (y) the difference between (A) the Pool
Balance of such Certificates as of the immediately preceding Distribution Date
and (B) the Pool Balance of such Certificates as of the Current Distribution
Date, calculated on the basis that (1) the principal of the Equipment Notes held
in such Trust has been paid when due (whether at stated maturity or upon
redemption, prepayment, purchase or acceleration or otherwise) and such payments
have been distributed to the holders of such Certificates and (2) the principal
of any Equipment Notes formerly held in such Trust that have been sold pursuant
to this Agreement has been paid in full and such payments distributed to the
Certificateholders. For purposes of calculating Expected Distributions, any
premium paid on the Equipment Notes held in any Trust which has not been
distributed to the Certificateholders of such Trust (other than such premium or
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a portion thereof applied to the payment of interest on the Certificates of such
Trust or the reduction of the Pool Balance of such Trust) shall be added to the
amount of such Expected Distributions.
"FINAL DISTRIBUTIONS" means, with respect to the Certificates of any Trust
on any Distribution Date, the sum of (a) the aggregate amount of all accrued and
unpaid interest on such Certificates and (b) the Pool Balance of such
Certificates as of the immediately preceding Distribution Date. For purposes of
calculating Final Distributions, any premium paid on the Equipment Notes held in
any Trust which has not been distributed to the Certificateholders of such Trust
(other than such premium or a portion thereof applied to the payment of interest
on the Certificates of such Trust or the reduction of the Pool Balance of such
Trust) shall be added to the amount of such Final Distributions.
"FINAL DRAWING" means, in respect of a Liquidity Facility, a borrowing or
drawing, other than a Downgrade Drawing, of all available and undrawn amounts
under such Liquidity Facility in accordance with the provisions thereof.
"FINAL LEGAL DISTRIBUTION DATE" means, for the Class A Certificates, July
2, 2017, for the Class B Certificates, July 2, 2014 and, for the Class C
Certificates, July 2, 2008.
"FITCH" means Fitch Investors Service, L.P.
"INDENTURE" means each Trust Indenture and Mortgage listed on Schedule 1
hereto, as the same may be amended, supplemented or otherwise modified from time
to time in accordance with its terms.
"INDENTURE DEFAULT" means, with respect to any Indenture, any Event of
Default (as such term is defined in such Indenture) thereunder.
"INTEREST DRAWING" has the meaning assigned to such term in Section 3.6(a).
"INVESTMENT EARNINGS" means investment earnings on funds on deposit in the
Trust Accounts net of losses and investment expenses of the Subordination Agent
in making such investments.
"LEASE" means, with respect to any Indenture, the "Lease" referred to
therein.
"LIEN" means any mortgage, pledge, lien, charge, claim, disposition of
title, encumbrance, lease, sublease,
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sub-sublease or security interest of any kind, including, without limitation,
any thereof arising under any conditional sales or other title retention
agreement.
"LIQUIDITY EVENT OF DEFAULT" with respect to any Liquidity Facility, has
the meaning assigned to such term in such Liquidity Facility.
"LIQUIDITY EXPENSES" means all Liquidity Obligations other than (i) the
principal amount of any Drawings under the Liquidity Facilities and (ii) any
interest accrued on any Liquidity Obligations.
"LIQUIDITY FACILITY" means, at any time, the Class A Liquidity Facility,
the Class B Liquidity Facility or the Class C Liquidity Facility, as applicable.
"LIQUIDITY OBLIGATIONS" means all principal, interest, fees and other
amounts owing to the Liquidity Providers under the Liquidity Facilities and
Section 7 of the Participation Agreements.
"LIQUIDITY PROVIDER" means, at any time, the Class A Liquidity Provider,
the Class B Liquidity Provider or the Class C Liquidity Provider, as applicable.
"LOAN TRUSTEE" means, with respect to any Indenture, the indenture trustee
thereunder.
"LP INCUMBENCY CERTIFICATE" has the meaning assigned to such term in
Section 2.5(b).
"LP REPRESENTATIVES" has the meaning assigned to such term in Section
2.5(b).
"LTV APPRAISAL" means a current fair market appraisal (which may be a
"desktop" appraisal) performed by any Appraiser or any other nationally
recognized appraiser on the basis of an arm's-length transaction between an
informed and willing purchaser under no compulsion to buy and an informed and
willing seller under no compulsion to sell and both having knowledge of all
relevant facts.
"LTV COLLATERAL AMOUNT" of any Aircraft for any Class of Certificates on
any Distribution Date means the lesser of (i) the LTV Ratio for such Class of
Certificates multiplied by the Appraised Current Market Value of such Aircraft
and (ii) the outstanding principal amount of the Equipment Notes secured by such
Aircraft after giving effect to any principal payments of such Equipment Notes
on or before such Distribution Date.
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"LTV RATIO" means, for the Class A Certificates, 43%, for the Class B
Certificates, 61% and, for the Class C Certificates, 68.9%.
"MINIMUM SALE PRICE" means, with respect to any Aircraft or the Equipment
Notes issued in respect of such Aircraft, at any time, the lesser of (a) 75% of
the Appraised Current Market Value of such Aircraft based upon the most recent
LTV Appraisal and (b) the aggregate outstanding principal amount of such
Equipment Notes, plus accrued and unpaid interest thereon.
"MOODY'S" means Xxxxx'x Investors Service, Inc.
"NON-CONTROLLING PARTY" means, at any time, any Trustee or Liquidity
Provider which is not the Controlling Party at such time.
"NON-EXTENSION DRAWING" has the meaning provided in Section 3.6(d).
"NORTHWEST" means Northwest Airlines, Inc., a Minnesota corporation, and
its successors and assigns.
"NORTHWEST BANKRUPTCY EVENT" means the occurrence and continuation of any
of the following:
(a) the commencement of an involuntary case or other proceeding in
respect of Northwest in an involuntary case under the federal bankruptcy
laws, as now or hereafter constituted, or any other applicable federal or
state bankruptcy, insolvency or other similar law in the United States or
seeking the appointment of a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of Northwest or for all or
substantially all of its property, or seeking the winding-up or liquidation
of its affairs and the continuation of any such case or other proceeding
undismissed and unstayed for a period of ninety (90) consecutive days or an
order, judgment or decree shall be entered in any proceeding by any court
of competent jurisdiction appointing, without the consent of Northwest, a
receiver, trustee or liquidator of Northwest, or of any substantial part of
its property, or sequestering any substantial part of the property of
Northwest and any such order, judgment or decree or appointment or
sequestration shall be final or shall remain in force undismissed, unstayed
or unvacated for a period of ninety (90) days after the date of entry
thereof; or
(b) the commencement by Northwest of a voluntary case under the
federal bankruptcy laws, as now constituted or hereafter amended, or any
other
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applicable federal or state bankruptcy, insolvency or other similar law in
the United States, or the consent by Northwest to the appointment of or
taking possession by a receiver, liquidator, assignee, trustee, custodian,
sequestrator (or other similar official) of Northwest or for all or
substantially all of its property, or the making by Northwest of any
assignment for the benefit of creditors or the taking by Northwest of any
corporate action to authorize any of the foregoing.
"NWA CORP." means Northwest Airlines Corporation, a Delaware corporation,
and its successors and assigns.
"OFFICER'S CERTIFICATE" of any Person means a certification signed by a
Responsible Officer of such Person.
"OPERATIVE AGREEMENTS" means this Agreement, the Liquidity Facilities, the
Indentures, the Trust Agreements, the Underwriting Agreement, the Leases, the
Participation Agreements, the Equipment Notes and the Certificates and any other
document which is an "Operative Agreement" under any Participation Agreement,
together with all exhibits and schedules included with any of the foregoing.
"OUTSTANDING" means, when used with respect to each Class of Certificates,
as of the date of determination, all Certificates of such Class theretofore
authenticated and delivered under the related Trust Agreement, except:
(i) Certificates of such Class theretofore cancelled by the
Registrar (as defined in such Trust Agreement) or delivered to the Trustee
thereunder or such Registrar for cancellation;
(ii) Certificates of such Class for which money in the full
amount required to make the final distribution with respect to such
Certificates pursuant to Section 11.01 of such Trust Agreement has been
theretofore deposited with the related Trustee in trust for the holders of
such Certificates as provided in Section 4.01 of such Trust Agreement
pending distribution of such money to such Certificateholders pursuant to
such final distribution payment; and
(iii) Certificates of such Class in exchange for or in lieu of
which other Certificates have been authenticated and delivered pursuant to
such Trust Agreement;
PROVIDED, HOWEVER, that in determining whether the holders of the requisite
Outstanding amount of such Certificates have given any request, demand,
authorization, direction,
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notice, consent or waiver hereunder, any Certificates owned by Northwest or any
of its Affiliates shall be disregarded and deemed not to be Outstanding, except
that, in determining whether such Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or waiver, only
Certificates that such Trustee knows to be so owned shall be so disregarded.
Certificates so owned that have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the applicable
Trustee the pledgee's right so to act with respect to such Certificates and that
the pledgee is not Northwest or any of its Affiliates.
"OVERDUE SCHEDULED PAYMENT" means any Scheduled Payment which is not in
fact received by the Subordination Agent within five days of the Scheduled
Payment Date relating thereto.
"OWNER TRUSTEE" means, with respect to any Indenture, the Owner Trustee (as
defined therein) not in its individual capacity but solely as trustee under the
related owner trust agreement, together with any successor trustee appointed
pursuant to such owner trust agreement.
"PARTICIPATION AGREEMENTS" means, with respect to each Indenture, each of
the Participation Agreements listed on Schedule 2 hereto, as the same may be
amended, supplemented or otherwise modified from time to time in accordance with
its terms.
"PERFORMING EQUIPMENT NOTE" means an Equipment Note issued pursuant to an
Indenture with respect to which no payment default has occurred and is
continuing (without giving effect to any acceleration thereof); PROVIDED that in
the event of a bankruptcy proceeding involving Northwest under Title 11 of the
United States Code (the "Bankruptcy Code"), (i) any payment default existing
during 60-day period under Section 1110(a)(1)(A) of the Bankruptcy Code (or such
longer period as may apply under Section 1110(b) of the Bankruptcy Code) (the
"Section 1110 Period") shall not be taken into consideration, unless during such
period the trustee in such proceeding or Northwest refuses to assume or agree to
perform its obligations under the Lease related to such Equipment Notes and (ii)
any payment default occurring after the date of the order of relief in such
proceeding shall not be taken into consideration if such payment default is
cured under Section 1110(a)(1)(B) of the Bankruptcy Code before the later of 30
days after the date of such default or the expiration of the Section 1110
Period.
"PERFORMING NOTE DEFICIENCY" means any time that less than 65% of the then
aggregate outstanding principal amount of all Equipment Notes are Performing
Equipment Notes.
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"PERSON" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust, trustee,
unincorporated organization or government or any agency or political subdivision
thereof.
"POOL BALANCE" means, with respect to each Trust or the Certificates issued
by any Trust, as of any date, (i) the original aggregate face amount of the
Certificates of such Trust LESS (ii) the aggregate amount of all payments made
in respect of the Certificates of such Trust other than payments made in respect
of interest or premium thereon or reimbursement of any costs and expenses in
connection therewith. The Pool Balance for each Trust or the Certificates
issued by any Trust as of any Distribution Date shall be computed after giving
effect to any payment of principal, if any, on the Equipment Notes or other
Trust Property held in such Trust and the distribution thereof to be made on
such date.
"PROCEEDING" means any suit in equity, action at law or other judicial or
administrative proceeding.
"PTC EVENT OF DEFAULT" means, with respect to each Trust Agreement, the
failure to pay within 10 Business Days of the due date thereof: (i) the
outstanding Pool Balance of the applicable Class of Certificates on the Final
Legal Distribution Date for such Class or (ii) interest due on such Certificates
on any Distribution Date (unless, in the case of the Class A, Class B or Class C
Certificates, the Subordination Agent shall have made an Interest Drawing with
respect thereto in an amount sufficient to pay such interest and shall have
distributed such amount to the holders of the Certificates entitled thereto).
"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. Initially, the
Rating Agencies shall consist of Moody's, Standard & Poor's and Fitch.
"RATINGS CONFIRMATION" means, with respect to any action proposed to be
taken, a written confirmation from each of the Rating Agencies that such action
would not result in (i) a reduction of the rating for any Class of Certificates
below the then current rating for such Class of Certificates or (ii) a
withdrawal or suspension of the rating of any Class of Certificates.
"REGULAR DISTRIBUTION DATES" means each January 2 and July 2, commencing
on January 2, 1998; PROVIDED, HOWEVER, that, if any such day shall not be a
Business Day, the related distribution shall be made on the next succeeding
Business Day without additional interest.
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"REPLACEMENT LIQUIDITY FACILITY" means, for any Trust, an irrevocable
revolving credit agreement in substantially the form of the initial Liquidity
Facility for such Trust, including reinstatement provisions or in such other
form (which may include a letter of credit) as shall permit the Rating Agencies
to confirm in writing their respective ratings then in effect for the
Certificates (before downgrading of such ratings, if any, as a result of the
downgrading of the Liquidity Provider), in a face amount equal to the Required
Amount for such Liquidity Facility and issued by a Replacement Liquidity
Provider, PROVIDED that, if a form of Liquidity Facility that is not
substantially in the form of the replaced Liquidity Facility is to be used,
Northwest shall have received a satisfactory opinion of tax counsel satisfactory
to Northwest with respect to such form of Replacement Liquidity Facility (and a
copy of such opinion shall be furnished to the Subordination Agent).
"REPLACEMENT LIQUIDITY PROVIDER" means a Person having unsecured debt
ratings which are equal to or higher than the Threshold Rating.
"REQUIRED AMOUNT" means, with respect to each Liquidity Facility and each
Cash Collateral Account related thereto, for any day, the sum of the aggregate
amount of interest, calculated at the rate per annum equal to the Stated
Interest Rate for the related Class of Certificates, that would be payable on
such Class of Certificates on each of the three successive Regular Distribution
Dates immediately following such day or, if such day is a Regular Distribution
Date, on such day and the succeeding two Regular Distribution Dates, in each
case calculated on the basis of the Pool Balance of such Class of Certificates
on such date and without regard to expected future payments of principal on such
Class of Certificates.
"RESPONSIBLE OFFICER" means (i) with respect to the Subordination Agent and
each of the Trustees, any officer in the corporate trust administration
department of the Subordination Agent or such Trustee or any other officer
customarily performing functions similar to those performed by the Persons who
at the time shall be such officers, respectively, or to whom any corporate trust
matter is referred because of his knowledge of and familiarity with a particular
subject and (ii) with respect to each Liquidity Provider, any authorized officer
or agent of such Liquidity Provider.
"ROYAL BANK" has the meaning assigned to it in the preamble to this
Agreement.
"SCHEDULED PAYMENT" means, with respect to any Equipment Note, (i) any
payment of principal and interest on such Equipment Note (other than an Overdue
Scheduled
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Payment) due from the obligor thereon or (ii) any payment of interest on the
corresponding Class of Certificates with funds drawn under any Liquidity
Facility, which payment represents the installment of principal at the stated
maturity of such installment of principal on such Equipment Note, the payment of
regularly scheduled interest accrued on the unpaid principal amount of such
Equipment Note, or both; PROVIDED that any payment of principal of, premium, if
any, or interest resulting from the redemption or purchase of any Equipment Note
shall not constitute a Scheduled Payment. The Certificates of any Class shall
be deemed to be comprised of interest and principal components, with the
interest component equaling interest accrued at the Stated Interest Rate for
such Class of Certificates from (i) the later of (1) the date of the issuance
thereof and (2) the most recent but preceding Regular Distribution Date to (ii)
the Regular Distribution Date on which such Scheduled Payment is being made,
such interest to be considered payable in arrears on such Regular Distribution
Date and to be calculated and allocated in the same manner as interest on the
Equipment Notes.
"SCHEDULED PAYMENT DATE" means, with respect to any Scheduled Payment, the
date on which such Scheduled Payment is scheduled to be made.
"SERIES A EQUIPMENT NOTES" means the 7.068% Series A Equipment Notes issued
pursuant to each Indenture by the related Owner Trustee and authenticated by the
Loan Trustee thereunder, and any such Equipment Notes issued in exchange
therefor or replacement thereof pursuant to the terms of such Indenture.
"SERIES B EQUIPMENT NOTES" means the 7.248% Series B Equipment Notes issued
pursuant to each Indenture by the related Owner Trustee and authenticated by the
Loan Trustee thereunder, and any such Equipment Notes issued in exchange
therefor or replacement thereof pursuant to the terms of such Indenture.
"SERIES C EQUIPMENT NOTES" means the 7.039% Series C Equipment Notes issued
pursuant to the Indentures relating to certain of the Aircraft (as specified in
such Indentures) by the related Owner Trustee and authenticated by the Loan
Trustee thereunder, and any such Equipment Notes issued in exchange therefor or
replacement thereof pursuant to the terms of such Indenture.
"SPECIAL DISTRIBUTION DATE" means, with respect to any Special Payment, the
date chosen by the Subordination Agent pursuant to Section 2.4(a) for the
distribution of such Special Payment in accordance with this Agreement;
PROVIDED, HOWEVER, that, if any such day shall not be a Business Day,
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the related distribution shall be made on the next succeeding Business Day
without additional interest.
"SPECIAL PAYMENT" means any payment (other than a Scheduled Payment) in
respect of, or any proceeds of, any Equipment Note or Trust Indenture Estate (as
defined in each Indenture), including Overdue Scheduled Payments, payments in
respect of the redemption or repurchase of any Equipment Note and payments in
respect of the sale of any Equipment Note to the related Owner Trustee, Owner
Participant or any other Person.
"SPECIAL PAYMENTS ACCOUNT" means the Eligible Deposit Account created
pursuant to Section 2.2 as a sub-account to the Collection Account.
"STANDARD & POOR'S" means Standard & Poor's Rating Group, a division of
XxXxxx-Xxxx Inc.
"STATED AMOUNT" with respect to any Liquidity Facility, means the
Commitment (as defined in such Liquidity Facility) of the applicable Liquidity
Provider thereunder.
"STATED INTEREST RATE" means (i) with respect to the Class A Certificates,
7.068% per annum, (ii) with respect to the Class B Certificates, 7.248% per
annum, and (iii) with respect to the Class C Certificates, 7.039% per annum.
"STATE STREET" has the meaning assigned to it in the preamble to this
Agreement.
"STATE STREET OF CONNECTICUT" has the meaning assigned to it in the
preamble to this Agreement.
"SUBORDINATION AGENT" has the meaning assigned to it in the preamble to
this Agreement.
"TAX" and "TAXES" mean any and all taxes, fees, levies, duties, tariffs,
imposts, and other charges of any kind (together with any and all interest,
penalties, loss, damage, liability, expense, additions to tax and additional
amounts or costs incurred or imposed with respect thereto) imposed or otherwise
assessed by the United States or by any state, local or foreign government (or
any subdivision or agency thereof) or other taxing authority, including, without
limitation: taxes or other charges on or with respect to income, franchises,
windfall or other profits, gross receipts, property, sales, use, capital stock,
payroll, employment, social security, workers' compensation, unemployment
compensation, or net worth and similar charges; taxes or other charges in the
nature of excise, withholding, ad valorem, stamp, transfer, value added, taxes
on goods and services, gains taxes, license, registration and
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documentation fees, customs duties, tariffs, and similar charges.
"THRESHOLD RATING" means the short-term unsecured debt rating of P-1 by
Moody's and A-1 by Standard & Poor's, and F-1+ by Fitch PROVIDED that, if Fitch
does not provide short-term unsecured debt ratings for such financial
institution and Moody's and Standard & Poor's do provide such ratings, then such
financial institution shall be required only to have short-term unsecured debt
ratings equal to or higher than the Threshold Ratings provided by Moody's and
Standard & Poor's or, in the event a person's short-term unsecured debt is not
rated by either Moody's or Standard Poor's, the long-term unsecured debt rating
by Moody's and Standard & Poor's at least equal to the initial rating by each of
Moody's and Standard Poor's on the Class A Certificates.
"TREASURY REGULATIONS" means regulations, including proposed or temporary
regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
"TRIGGERING EVENT" means (x) the occurrence of an Indenture Default under
all of the Indentures resulting in a PTC Event of Default with respect to the
most senior Class of Certificates then Outstanding, (y) the Acceleration of, or
a failure to pay at final maturity, all of the outstanding Equipment Notes or
(z) the occurrence of a Northwest Bankruptcy Event.
"TRUST" means any of the Class A Trust, the Class B Trust or the Class C
Trust.
"TRUST ACCOUNTS" has the meaning assigned to such term in Section 2.2(a).
"TRUST AGREEMENT" means any of the Class A Trust Agreement, Class B Trust
Agreement or Class C Trust Agreement.
"TRUSTEE" means any of the Class A Trustee, the Class B Trustee or the
Class C Trustee.
"TRUSTEE INCUMBENCY CERTIFICATE" has the meaning assigned to such term in
Section 2.5(a).
"TRUSTEE REPRESENTATIVES" has the meaning assigned to such term in Section
2.5(a).
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"UNDERWRITERS" means Credit Suisse First Boston Corporation, Xxxxxx
Brothers Inc. and Xxxxxx Xxxxxxx & Co. Incorporated.
"UNDERWRITING AGREEMENT" means the Underwriting Agreement dated as of
September 16, 1997, by and among the Underwriters, NWA Corp. and Northwest,
relating to the purchase of the Certificates by the Underwriters, as the same
may be amended, supplemented or otherwise modified from time to time in
accordance with its terms.
"WRITTEN NOTICE" means, from (i) any Trustee or Liquidity Provider, a
written instrument executed by the Designated Representative of such Person, and
(ii) the Subordination Agent, a written instrument executed by a Person
designated in the Officer's Certificate of the Subordination Agent delivered on
the Closing Date. An invoice delivered by a Liquidity Provider pursuant to
Section 3.1 in accordance with its normal invoicing procedures shall constitute
Written Notice under such Section.
ARTICLE II
TRUST ACCOUNTS; CONTROLLING PARTY
SECTION 2.1 AGREEMENT TO TERMS OF SUBORDINATION; PAYMENTS FROM MONIES
RECEIVED ONLY. (a) Each Trustee hereby acknowledges and agrees to the terms of
subordination set forth in this Agreement in respect of each Class of
Certificates and agrees to enforce such provisions and cause all payments in
respect of the Equipment Notes and the Liquidity Facilities to be applied in
accordance with the terms of this Agreement. In addition, each Trustee hereby
agrees to cause the Equipment Notes purchased by the related Trust to be
registered in the name of the Subordination Agent, as agent and trustee for such
Trustee, to be held in trust by the Subordination Agent solely for the purpose
of facilitating the enforcement of the subordination and other provisions of
this Agreement.
(b) Except as otherwise expressly provided in the next succeeding
sentence of this Section 2.1, all payments to be made by the Subordination Agent
hereunder shall be made only from amounts received by it that constitute
Scheduled Payments, Special Payments or payments under Section 7 of the
Participation Agreements, and only to the extent that the Subordination Agent
shall have received sufficient income or proceeds therefrom to enable it to make
such payments in accordance with the terms hereof. Each of the Trustees and the
Subordination Agent hereby agrees and, as provided in each Trust Agreement, each
Certificateholder, by its acceptance of a Certificate, and each Liquidity
Provider, by entering into the Liquidity Facility to which it is a party, has
agreed to look solely to such amounts
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to the extent available for distribution to it as provided in this Agreement and
that none of the Trustees, Owner Trustees, Loan Trustees, Owner Participants nor
the Subordination Agent is personally liable to any of them for any amounts
payable or any liability under this Agreement, any Trust Agreement, any
Liquidity Facility or such Certificate, except (in the case of the Subordination
Agent) as expressly provided herein or (in the case of the Trustees) as
expressly provided in each Trust Agreement or (in the case of the Owner Trustees
and the Loan Trustees) as expressly provided in any Operative Agreement.
SECTION 2.2 TRUST ACCOUNTS. (a) Upon the execution of this
Agreement, the Subordination Agent shall establish and maintain in its name (i)
the Collection Account as an Eligible Deposit Account, bearing a designation
clearly indicating that the funds deposited therein are held in trust for the
benefit of the Trustees, the Certificateholders and the Liquidity Providers and
(ii) as a sub-account in the Collection Account, the Special Payments Account as
an Eligible Deposit Account, bearing a designation clearly indicating that the
funds deposited therein are held in trust for the benefit of the Trustees, the
Certificateholders and the Liquidity Providers. The Subordination Agent shall
establish and maintain the Cash Collateral Accounts pursuant to and under the
circumstances set forth in Section 3.6(f) hereof. Upon such establishment and
maintenance under Section 3.6(f) hereof, the Cash Collateral Accounts shall,
together with the Collection Account, constitute the "TRUST ACCOUNTS" hereunder.
(b) Funds on deposit in the Trust Accounts shall be invested and
reinvested by the Subordination Agent in Eligible Investments selected by the
Subordination Agent if such investments are reasonably available and have
maturities no later than the earlier of (i) 90 days following the date of such
investment and (ii) the Business Day immediately preceding the Regular
Distribution Date or the date of the related distribution pursuant to
Section 2.4 hereof, as the case may be, next following the date of such
investment; PROVIDED, HOWEVER, that following the making of a Downgrade Drawing
or a Non-Extension Drawing, the Subordination Agent shall invest and reinvest
such amounts at the direction of Northwest funding such Drawing and the
Subordination Agent shall use reasonable efforts to cause such amounts to be
invested in Specified Investments which yield at least an amount equal to the
interest (excluding the Applicable Margin) that is payable to such Liquidity
Provider in respect of such amounts pursuant to Section 3.7 of the relevant
Liquidity Facility (it being understood that it may not be feasible to obtain
such a yield). Unless otherwise expressly provided in this Agreement
(including, without limitation, with respect to Investment Earnings on deposit
in the Cash Collateral Accounts, Section 3.6(f) hereof), any Investment Earnings
shall be deposited in the Collection Account when received by the Subordination
Agent and shall be applied by the Subordination Agent in the same manner as the
principal amount of such
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investment is to be applied and any losses shall be charged against the
principal amount invested, in each case net of the Subordination Agent's
reasonable fees and expenses in making such investments. The Subordination
Agent shall not be liable for any loss resulting from any investment,
reinvestment or liquidation required to be made under this Agreement other than
by reason of its willful misconduct or gross negligence or, with respect to the
handling or transfer of funds, ordinary negligence. Eligible Investments and
any other investment required to be made hereunder shall be held to their
maturities except that any such investment may be sold (without regard to its
maturity) by the Subordination Agent without instructions whenever such sale is
necessary to make a distribution required under this Agreement. Uninvested
funds held hereunder shall not earn or accrue interest.
(c) The Subordination Agent shall possess all right, title and
interest in all funds on deposit from time to time in the Trust Accounts and in
all proceeds thereof (including all income thereon, except as otherwise provided
herein with respect to Investment Earnings). The Trust Accounts shall be held
in trust by the Subordination Agent under the sole dominion and control of the
Subordination Agent for the benefit of the Trustees, the Certificateholders and
the Liquidity Providers, as the case may be. If, at any time, any of the Trust
Accounts ceases to be an Eligible Deposit Account, the Subordination Agent shall
within 10 Business Days (or such longer period, not to exceed 30 calendar days,
to which each Rating Agency may consent) establish a new Collection Account,
Special Payments Account or Cash Collateral Account, as the case may be, as an
Eligible Deposit Account and shall transfer any cash and/or any investments to
such new Collection Account, Special Payments Account or Cash Collateral
Account, as the case may be. So long as the Subordination Agent is an Eligible
Institution, the Trust Accounts shall be maintained with it as Eligible Deposit
Accounts.
SECTION 2.3 DEPOSITS TO THE COLLECTION ACCOUNT AND SPECIAL PAYMENTS
ACCOUNT. (a) The Subordination Agent shall, upon receipt thereof, deposit in
the Collection Account all Scheduled Payments received by it.
(b) The Subordination Agent shall, on each date when one or more
Special Payments are made to the Subordination Agent as holder of the Equipment
Notes, deposit in the Special Payments Account the aggregate amount of such
Special Payments.
SECTION 2.4 DISTRIBUTIONS OF SPECIAL PAYMENTS. (a) NOTICE OF SPECIAL
PAYMENT. Except as provided in Section 2.4(e), upon receipt by the
Subordination Agent, as registered holder of the Equipment Notes, of any notice
of a Special Payment (or, in the absence of any such notice, upon receipt by the
Subordination Agent of a Special Payment), the Subordination Agent shall
promptly give notice thereof to each Trustee and the Liquidity
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Providers. The Subordination Agent shall promptly calculate the amount of the
redemption or purchase of Equipment Notes or the amount of any Overdue Scheduled
Payment, as the case may be, comprising such Special Payment under the
applicable Indenture or Indentures and shall promptly send to each Trustee and
the Liquidity Provider a Written Notice of such amount and the amount allocable
to each Trust. Such Written Notice shall also set the distribution date for
such Special Payment (a "SPECIAL DISTRIBUTION DATE"), which shall be a Business
Day which follows the later to occur of (x) the 10th day after the date of such
Written Notice or (y) the date the Subordination Agent has received or expects
to receive such Special Payment. Amounts on deposit in the Special Payments
Account shall be distributed in accordance with Sections 2.4(b) and 2.4(c)
hereof, as applicable.
(b)(i) REDEMPTIONS AND PURCHASES OF EQUIPMENT NOTES. So long as no
Triggering Event shall have occurred (whether or not continuing), the
Subordination Agent shall make distributions pursuant to this Section 2.4(b) of
amounts on deposit in the Special Payments Account on account of the redemption
or purchase (including, without limitation, a purchase resulting from the sale
of the Equipment Notes permitted by Article IV hereof) of all of the Equipment
Notes issued pursuant to an Indenture on the Special Distribution Date for such
Special Payment in the following order of priority:
FIRST, such amount as shall be required to pay (A) all accrued and
unpaid Liquidity Expenses then in arrears PLUS (B) the product of (x) the
aggregate amount of all accrued and unpaid Liquidity Expenses not in
arrears to such Special Payment Date MULTIPLIED BY (y) a fraction, the
numerator of which is the aggregate outstanding principal amount of
Equipment Notes being redeemed, purchased or prepaid on such Special
Payment Date and the denominator of which is the aggregate outstanding
principal amount of all Equipment Notes, shall be distributed to the
Liquidity Providers PARI PASSU on the basis of the amount of Liquidity
Expenses owed to each Liquidity Provider;
SECOND, such amount as shall be required to pay (A) all accrued and
unpaid interest then in arrears on all Liquidity Obligations PLUS (B) the
product of (x) the aggregate amount of all accrued and unpaid interest on
all Liquidity Obligations not in arrears to such Special Payment Date (at
the rate provided in the applicable Liquidity Facility) MULTIPLIED BY (y) a
fraction, the numerator of which is the aggregate outstanding principal
amount of Equipment Notes being redeemed, purchased or prepaid on such
Special Payment Date and the denominator of which is the aggregate
outstanding principal amount of all Equipment Notes, shall be distributed
to the Liquidity Providers PARI PASSU on the basis of the amount of such
accrued and unpaid interest owed to each Liquidity Provider;
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THIRD, such amount as shall be required (A) to pay or reimburse the
Liquidity Providers in an amount equal to the amount of any unreimbursed
Interest Drawings under the Liquidity Facilities shall be distributed to
the Liquidity Providers or (B) so long as no Liquidity Event of Default
shall have occurred and be continuing, to replenish the Cash Collateral
Accounts up to their respective Required Amounts shall be deposited in the
Cash Collateral Accounts, in each such case, PARI PASSU on the basis of the
amounts of such unreimbursed Interest Drawings and deficiencies;
FOURTH, such amount as shall be required to pay in full Expected
Distributions to the holders of Class A Certificates on such Special
Distribution Date shall be distributed to the Class A Trustee;
FIFTH, such amount as shall be required to pay in full Expected
Distributions to the holders of Class B Certificates on such Special
Distribution Date shall be distributed to the Class B Trustee;
SIXTH, such amount as shall be required to pay in full Expected
Distributions to the holders of Class C Certificates on such Special
Distribution Date shall be distributed to the Class C Trustee; and
SEVENTH, the balance, if any, of such Special Payment shall be
transferred to the Collection Account for distribution in accordance with
Section 3.2 hereof.
(ii) Upon the occurrence of a Triggering Event (whether or not
continuing), the Subordination Agent shall make distributions pursuant to
this Section 2.4(b) of amounts on deposit in the Special Payments Account
on account of the redemption or purchase of all of the Equipment Notes
issued pursuant to an Indenture on the Special Distribution Date for such
Special Payment in accordance with Section 3.3 hereof.
(c) OTHER SPECIAL PAYMENTS. Except as provided in clause (e) below,
any amounts on deposit in the Special Payments Account other than in respect of
amounts to be distributed pursuant to Section 2.4(b) shall be distributed on the
Special Distribution Date therefor in accordance with Article III hereof.
(d) INVESTMENT OF AMOUNTS IN SPECIAL PAYMENTS ACCOUNT. Any amounts on
deposit in the Special Payments Account prior to the distribution thereof
pursuant to Section 2.4(b) or (c) shall be invested in accordance with Section
2.2(b). Investment Earnings on such investments shall be distributed in
accordance with Section 2.4(b) or (c), as the case may be.
(e) CERTAIN PAYMENTS. The Subordination Agent will distribute
promptly upon receipt thereof (i) any indemnity
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payment received by it from the Owner Participant, the Owner Trustee or
Northwest in respect of any Trustee or any Liquidity Provider (collectively, the
"PAYEES") and (ii) any compensation (including, without limitation, any fees
payable to any Liquidity Provider under Section 2.03 of any Liquidity Facility)
received by it from the Owner Participant, the Owner Trustee or Northwest under
any Operative Agreement in respect of any Payee, directly to the Payee entitled
thereto.
SECTION 2.5 DESIGNATED REPRESENTATIVES. (a) With the delivery of
this Agreement, each Trustee shall furnish to the Subordination Agent, and from
time to time thereafter may furnish to the Subordination Agent, at such
Trustee's discretion, or upon the Subordination Agent's request (which request
shall not be made more than one time in any 12-month period), a certificate (a
"TRUSTEE INCUMBENCY CERTIFICATE") of a Responsible Officer of such Trustee
certifying as to the incumbency and specimen signatures of the officers of such
Trustee and the attorney-in-fact and agents of such Trustee (the "TRUSTEE
REPRESENTATIVES") authorized to give Written Notices on behalf of such Trustee
hereunder. Until the Subordination Agent receives a subsequent Trustee
Incumbency Certificate, it shall be entitled to rely on the last Trustee
Incumbency Certificate delivered to it hereunder.
(b) With the delivery of this Agreement, each Liquidity Provider shall
furnish to the Subordination Agent, and from time to time thereafter may furnish
to the Subordination Agent, at such Liquidity Provider's discretion, or upon the
Subordination Agent's request (which request shall not be made more than one
time in any 12-month period), a certificate (an "LP INCUMBENCY CERTIFICATE") of
any authorized signatory of such Liquidity Provider certifying as to the
incumbency and specimen signatures of any officer, attorney-in-fact, agent or
other designated representative of such Liquidity Provider (the "LP
REPRESENTATIVES" and, together with the Trustee Representatives, the "DESIGNATED
REPRESENTATIVES") authorized to give Written Notices on behalf of such Liquidity
Provider hereunder. Until the Subordination Agent receives a subsequent LP
Incumbency Certificate, it shall be entitled to rely on the last LP Incumbency
Certificate delivered to it hereunder.
SECTION 2.6 CONTROLLING PARTY. (a) The Trustees and the Liquidity
Providers hereby agree that, with respect to any Indenture at any given time,
the Loan Trustee thereunder will be directed (i) in taking, or refraining from
taking, any action with respect to such Indenture or the Equipment Notes issued
thereunder, so long as no Indenture Default has occurred and is continuing
thereunder, by the holders of at least a majority of the outstanding principal
amount of such Equipment Notes (PROVIDED that, for so long as the Subordination
Agent is the registered holder of the Equipment Notes, the Subordination Agent
shall act with respect to this clause (i) in accordance with the directions of
the Trustees representing holders of Certificates
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representing an undivided interest in such principal amount of Equipment Notes),
and (ii) after the occurrence and during the continuance of an Indenture Default
thereunder (which has not been cured by the applicable Owner Trustee or the
applicable Owner Participant pursuant to Section 4.3 of such Indenture), in
taking, or refraining from taking, any action with respect to such Indenture or
such Equipment Notes, including exercising remedies thereunder (including
accelerating the Equipment Notes issued thereunder or foreclosing the Lien on
the Aircraft securing such Equipment Notes), by the Controlling Party.
(b) The Person who shall be the "CONTROLLING PARTY" with respect to
any Indenture shall be: (w) the Class A Trustee; (x) upon payment of Final
Distributions to the holders of Class A Certificates, the Class B Trustee; and
(y) upon payment of Final Distributions to the holders of Class B Certificates,
the Class C Trustee. For purposes of giving effect to the foregoing, the
Trustees (other than the Controlling Party) irrevocably agree (and the
Certificateholders (other than the Certificateholders represented by the
Controlling Party) shall be deemed to agree by virtue of their purchase of
Certificates) that the Subordination Agent, as record holder of the Equipment
Notes, shall exercise its voting rights in respect of the Equipment Notes as
directed by the Controlling Party and any vote so exercised shall be binding
upon the Trustees and all Certificateholders.
The Subordination Agent shall give written notice to all of the other
parties to this Agreement promptly upon a change in the identity of the
Controlling Party. Each of the parties hereto agrees that it shall not exercise
any of the rights of the Controlling Party at such time as it is not the
Controlling Party hereunder; PROVIDED, HOWEVER, that nothing herein contained
shall prevent or prohibit any Non-Controlling Party from exercising such rights
as shall be specifically granted to such Non-Controlling Party hereunder and
under the other Operative Agreements.
(c) Notwithstanding the foregoing, the Liquidity Provider with the
then greatest amount of unreimbursed Liquidity Obligations payable to it under
the Liquidity Facilities shall have the right to elect, by Written Notice to the
Subordination Agent, each of the Trustees and each of the other Liquidity
Providers, to become the Controlling Party hereunder with respect to any
Indenture at any time after the 18 months from the Acceleration of the Equipment
Notes under such Indenture, if at the time of such election the Liquidity
Obligations have not been paid in full; provided that if there is more than one
Liquidity Provider, the Liquidity Provider with the greatest amount of
unreimbursed Liquidity Obligations shall have such right.
(d) The exercise of remedies by the Controlling Party under this
Agreement shall be expressly limited by Section 4.1(a)(ii) hereof.
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(e) The Controlling Party shall not be entitled to require or obligate
any Non-Controlling Party to provide funds necessary to exercise any right or
remedy hereunder.
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF
AMOUNTS RECEIVED
SECTION 3.1 WRITTEN NOTICE OF DISTRIBUTION. (a) No later than 3:00
P.M. (New York City time) on the Business Day immediately preceding each
Distribution Date (or Special Distribution Date for purposes of Section 2.4(b)
hereof, as the case may be), each of the following Persons shall deliver to the
Subordination Agent a Written Notice setting forth the following information as
at the close of business on such Business Day:
(i) With respect to the Class A Certificates, the Class A
Trustee shall separately set forth the amounts to be paid in accordance
with clause "FOURTH" of Section 3.2 or Section 2.4(b), as the case may be,
hereof;
(ii) With respect to the Class B Certificates, the Class B
Trustee shall separately set forth the amounts to be paid in accordance
with clause "FIFTH" of Section 3.2 or Section 2.4(b), as the case may be,
hereof;
(iii) With respect to the Class C Certificates, the Class C
Trustee shall separately set forth the amounts to be paid in accordance
with clause "SIXTH" of Section 3.2 or Section 2.4(b), as the case may be,
hereof; and
(iv) With respect to each Liquidity Facility, the Liquidity
Provider thereunder shall separately set forth the amounts to be paid in
accordance with clauses "FIRST", "SECOND" and "THIRD" of Section 3.2 or
Section 2.4(b), as the case may be, hereof.
The notices required under this Section 3.1(a) are in the form of Schedule 3
hereto or may be in the form of a similar document provided to the Subordination
Agent by the parties referenced therein or by any one of them pursuant to an
agreement between the parties referred to therein, which schedule or similar
document may state that, unless there has been a prepayment of the Certificates,
such schedule or similar document is to remain in effect until any substitute
notice or amendment shall be given to the Subordination Agent by the party
providing such notice.
(b) Following the occurrence of a Triggering Event, the Subordination
Agent shall request the following information from the following Persons, and
each of the following Persons shall, upon the request of the Subordination
Agent, deliver a
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Written Notice to the Subordination Agent setting forth for such Person the
following information:
(i) With respect to the Class A Certificates, the Class A
Trustee shall separately set forth the amounts to be paid in accordance
with clauses "FIRST" (relating to indemnity payments made by the Class A
Certificateholders) and "SIXTH" of Section 3.3 hereof;
(ii) With respect to the Class B Certificates, the Class B
Trustee shall separately set forth the amounts to be paid in accordance
with clauses "FIRST" (relating to indemnity payments made by the Class B
Certificateholders) and "SEVENTH" of Section 3.3 hereof;
(iii) With respect to the Class C Certificates, the Class C
Trustee shall separately set forth the amounts to be paid in accordance
with clauses "FIRST" (relating to indemnity payments made by the Class C
Certificateholders) and "EIGHTH" of Section 3.3 hereof; and
(iv) With respect to each Liquidity Facility, the Liquidity
Provider thereunder shall separately set forth the amounts to be paid in
accordance with clauses "SECOND, "THIRD" and "FOURTH" of Section 3.3
hereof.
(c) At such time as a Trustee or a Liquidity Provider shall have
received all amounts owing to it (and, in the case of a Trustee, the
Certificateholders for which it is acting) pursuant to Section 2.4, 3.2 or 3.3
hereof, as applicable, and, in the case of a Liquidity Provider, its commitment
under the related Liquidity Facility shall have terminated or expired, such
Person shall, by a Written Notice, so inform the Subordination Agent and each
other party to this Agreement.
(d) As provided in Section 6.5 hereof, the Subordination Agent shall
be fully protected in relying on any of the information set forth in a Written
Notice provided by any Trustee or any Liquidity Provider pursuant to paragraphs
(a) through (c) above and shall have no independent obligation to verify,
calculate or recalculate any amount set forth in any Written Notice delivered in
accordance with such paragraphs.
(e) Any Written Notice delivered by a Trustee or a Liquidity Provider,
as applicable, pursuant to Section 3.1(a), 3.1(b) or 3.1(c) hereof, if made
prior to 10:00 A.M. (New York City time) shall be effective on the date
delivered (or if delivered later shall be effective as of the next Business
Day). Subject to the terms of this Agreement, the Subordination Agent shall as
promptly as practicable comply with any such instructions; PROVIDED, HOWEVER,
that any transfer of funds pursuant to any instruction received after 10:00 A.M.
(New York City time) on any Business Day may be made on the next succeeding
Business Day.
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(f) In the event the Subordination Agent shall not receive from any
Person any information set forth in paragraphs (a) or (b) above which is
required to enable the Subordination Agent to make a distribution to such Person
pursuant to Section 3.2 or 3.3 hereof, the Subordination Agent shall request
such information in writing and, failing to receive any such information, the
Subordination Agent shall, after written notice to such person, not make such
distribution(s) to such Person. In such event, the Subordination Agent shall
make distributions pursuant to clauses "FIRST" through "SEVENTH" of Section 3.2
and clauses "FIRST" through "EIGHTH" of Section 3.3 to the extent it shall have
sufficient information to enable it to make such distributions, and shall
continue to hold any funds remaining, after making such distributions, until the
Subordination Agent shall receive all necessary information to enable it to
distribute any funds so withheld.
(g) On such dates (but, prior to a Triggering Event, not more
frequently than monthly) as any Liquidity Provider or any Trustee shall request,
the Subordination Agent shall send to such party a written statement reflecting
all amounts on deposit with the Subordination Agent pursuant to Section 3.1(f)
hereof.
SECTION 3.2 DISTRIBUTION OF AMOUNTS ON DEPOSIT IN THE COLLECTION
ACCOUNT. Except as otherwise provided in Sections 2.4, 3.1(f), 3.3, 3.4 and
3.6(b), amounts on deposit in the Collection Account (or, in the case of any
amount described in Section 2.4(c), on deposit in the Special Payments Account)
shall be promptly distributed on each Distribution Date (or, in the case of any
amount described in Section 2.4(c), on the Special Distribution Date therefor)
in the following order of priority and in accordance with the information
provided to the Subordination Agent pursuant to Section 3.1(a) hereof:
FIRST, such amount as shall be required to pay all accrued and unpaid
Liquidity Expenses owed to each Liquidity Provider shall be distributed to
the Liquidity Providers PARI PASSU on the basis of the amount of Liquidity
Expenses owed to each Liquidity Provider;
SECOND, such amount as shall be required to pay in full the aggregate
amount of interest accrued on all Liquidity Obligations (at the rate
provided in the applicable Liquidity Facility) shall be distributed to the
Liquidity Providers PARI PASSU on the basis of the amount of Liquidity
Obligations owed to each Liquidity Provider;
THIRD, such amount as shall be required (A) to pay or reimburse the
Liquidity Providers in an amount equal to the amount of all Liquidity
Obligations then due (other than amounts payable pursuant to clause "FIRST"
or "SECOND" of this Section 3.2) shall be distributed to the Liquidity
Providers, and (B) if applicable, to replenish the Cash Collateral Accounts
up to their respective Required Amounts
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shall be deposited in the Cash Collateral Accounts, in each such case, PARI
PASSU on the basis of the amounts of such unreimbursed Liquidity
Obligations and/or deficiencies;
FOURTH, such amount as shall be required to pay in full Expected
Distributions to the holders of the Class A Certificates on such
Distribution Date shall be distributed to the Class A Trustee;
FIFTH, such amount as shall be required to pay in full Expected
Distributions to the holders of the Class B Certificates on such
Distribution Date shall be distributed to the Class B Trustee;
SIXTH, such amount as shall be required to pay in full Expected
Distributions to the holders of the Class C Certificates on such
Distribution Date shall be distributed to the Class C Trustee; and
SEVENTH, such amount as shall be required to pay in full the aggregate
unpaid amount of fees and expenses payable as of such Distribution Date to
the Subordination Agent and each Trustee pursuant to the terms of this
Agreement and the Trust Agreements, as the case may be, shall be
distributed to the Subordination Agent and such Trustee; and
EIGHTH, the balance, if any, of any such payment remaining thereafter
shall be held in the Collection Account for later distribution in
accordance with this Article III (including the priorities set forth
therein).
SECTION 3.3 DISTRIBUTION OF AMOUNTS ON DEPOSIT FOLLOWING A TRIGGERING
EVENT. (a) Except as otherwise provided in Sections 3.1(f) and 3.6(b) hereof,
upon the occurrence of a Triggering Event and at all times thereafter, all funds
in the Collection Account or the Special Payments Account shall be promptly
distributed by the Subordination Agent in the following order of priority:
FIRST, such amount as shall be required to reimburse (i) the
Subordination Agent for any out-of-pocket costs and expenses actually
incurred by it (to the extent not previously reimbursed) in the protection
of, or the realization of the value of, the Equipment Notes or any Trust
Indenture Estate, shall be applied by the Subordination Agent in
reimbursement of such costs and expenses, (ii) each Trustee for any amounts
of the nature described in clause (i) above actually incurred by it under
the applicable Trust Agreement (to the extent not previously reimbursed),
shall be distributed to such Trustee and (iii) any Liquidity Provider or
Certificateholder for payments, if any, made by it to the Subordination
Agent or any Trustee in respect of amounts described in clause (i)
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above, shall be distributed to such Liquidity Provider or to the applicable
Trustee for the account of such Certificateholder, in each such case, PARI
PASSU on the basis of all amounts described in clauses (i) through (iii)
above;
SECOND, such amount remaining as shall be required to pay all accrued
and unpaid Liquidity Expenses (including fees in respect of a Downgrade
Drawing) shall be distributed to each Liquidity Provider PARI PASSU on the
basis of the amount of Liquidity Expenses owed to each Liquidity Provider;
THIRD, such amount remaining as shall be required to pay accrued and
unpaid interest on the Liquidity Obligations (other than interest in
respect of a Downgrade Drawing) as provided in the Liquidity Facilities
shall be distributed to each Liquidity Provider PARI PASSU on the basis of
the amount of such accrued and unpaid interest owed to each Liquidity
Provider;
FOURTH, such amount remaining as shall be required (A) to pay in full
the outstanding amount of all Liquidity Obligations, whether or not then
due (other than amounts payable pursuant to clause "SECOND" or "THIRD" of
this Section 3.3) shall be distributed to each Liquidity Provider that has
not funded a Cash Collateral Account in accordance with Section 3.6(c) or
3.6(i) hereof, and/or (B) if applicable, so long as no Performing Note
Deficiency exists or Liquidity Event of Default has occurred and is
continuing, to replenish the Cash Collateral Accounts up to their
respective Required Amounts shall be deposited in the Cash Collateral
Accounts, in each case, PARI PASSU on the basis of the amount of Liquidity
Obligations owed to each Liquidity Provider and/or such deficiencies;
FIFTH, such amount as shall be required to reimburse or pay (i) the
Subordination Agent for any Tax (other than Taxes imposed on compensation
paid hereunder), expense, fee, charge or other loss incurred by or any
other amount payable to the Subordination Agent in connection with the
transactions contemplated hereby (to the extent not previously reimbursed),
shall be applied by the Subordination Agent in reimbursement of such
amount, (ii) each Trustee for any Tax (other than Taxes imposed on
compensation paid under the applicable Trust Agreement), expense, fee,
charge, loss or any other amount payable to such Trustee under the
applicable Trust Agreements (to the extent not previously reimbursed),
shall be distributed to such Trustee and (iii) each Certificateholder for
payments, if any, made by it pursuant to Section 5.2 hereof in respect of
amounts described in clause (i) above, shall be distributed to the
applicable Trustee for the account of such Certificateholder, in each such
case, PARI PASSU on the
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basis of all amounts described in clauses (i) through (iii) above;
SIXTH, such amount remaining as shall be required to pay in full
Adjusted Expected Distributions on the Class A Certificates shall be
distributed to the Class A Trustee;
SEVENTH, such amount remaining as shall be required to pay in full
Adjusted Expected Distributions on the Class B Certificates shall be
distributed to the Class B Trustee;
EIGHTH, such amount remaining as shall be required to pay in full
Adjusted Expected Distributions on the Class C Certificates shall be
distributed to the Class C Trustee;
NINTH, such amount remaining shall be retained in the Collection
Account until the immediately succeeding Distribution Date or, if all
Classes of Certificates shall have been paid in full, shall be distributed
to the Owner Trustee to the extent that the amount received from the Loan
Trustees and deposited in the Collection Account exceed the amounts
described in clauses "first" through "eighth" above; and
TENTH, such amount remaining shall be distributed to the
Certificateholders of the related Trust.
SECTION 3.4 OTHER PAYMENTS. Any payments received by the
Subordination Agent for which no provision as to the application thereof is made
in this Agreement shall be distributed by the Subordination Agent in the order
of priority specified in Section 3.3 hereof.
SECTION 3.5 PAYMENTS TO THE TRUSTEES AND THE LIQUIDITY PROVIDERS.
Any amounts distributed hereunder to any Liquidity Provider shall be paid to
such Liquidity Provider by wire transfer of funds to the address such Liquidity
Provider shall provide to the Subordination Agent. The Subordination Agent
shall provide a Written Notice of any such transfer to the applicable Liquidity
Provider, as the case may be, at the time of such transfer. Any amounts
distributed hereunder by the Subordination Agent to any Trustee which shall not
be the same institution as the Subordination Agent shall be paid to such Trustee
by wire transfer of funds to the address such Trustee shall provide to the
Subordination Agent.
SECTION 3.6 LIQUIDITY FACILITIES. (a) INTEREST DRAWINGS. If on any
Distribution Date, after giving effect to the subordination provisions of this
Agreement, the Subordination Agent shall not have sufficient funds for the
payment of any amounts due and owing in respect of accrued interest on the
Class A Certificates, the Class B Certificates or the Class C Certificates (at
the Stated Interest Rate for such Class of Certificates), then, prior to 12:00
noon (New York City time) on
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the Business Day following such Distribution Date, the Subordination Agent shall
request a drawing (each such drawing, an "INTEREST DRAWING") under the Liquidity
Facility with respect to such Class of Certificates in an amount equal to the
lesser of (i) an amount sufficient to pay the amount of such accrued interest
(at the Stated Interest Rate for such Class of Certificates) and (ii) the
Available Amount under such Liquidity Facility, and shall pay such amount to the
Trustee with respect to such Class of Certificates in payment of such accrued
interest.
(b) APPLICATION OF INTEREST DRAWINGS. Notwithstanding anything to the
contrary contained in this Agreement, (i) all payments received by the
Subordination Agent in respect of an Interest Drawing under the Class A
Liquidity Facility and all amounts withdrawn by the Subordination Agent from the
Class A Cash Collateral Account, and payable in each case to the Class A
Certificateholders, shall be promptly distributed to the Class A Trustee, (ii)
all payments received by the Subordination Agent in respect of an Interest
Drawing under the Class B Liquidity Facility and all amounts withdrawn by the
Subordination Agent from the Class B Cash Collateral Account, and payable in
each case to the Class B Certificateholders, shall be promptly distributed to
the Class B Trustee and (iii) all payments received by the Subordination Agent
in respect of an Interest Drawing under the Class C Liquidity Facility and all
amounts withdrawn by the Subordination Agent from the Class C Cash Collateral
Account, and payable in each case to the Class C Certificateholders, shall be
promptly distributed to the Class C Trustee.
(c) DOWNGRADE DRAWINGS. If at any time the debt rating of any
Liquidity Provider issued by either Rating Agency is lower than the applicable
Threshold Rating, within 30 days after receiving notice of such downgrading (but
no later than the expiration date of the Liquidity Facility issued by the
downgraded Liquidity Provider (the "DOWNGRADED FACILITY")), such Liquidity
Provider may arrange, or the Subordination Agent (in consultation with
Northwest), may arrange for a Replacement Liquidity Provider to issue and
deliver a Replacement Liquidity Facility to the Subordination Agent. If a
Downgraded Facility has not been replaced in accordance with the terms of this
paragraph, the Subordination Agent shall, on such 30th day (or if such 30th day
is not a Business Day, on the next succeeding Business Day) (or, if earlier, the
expiration date of such Downgraded Facility), request a drawing in accordance
with and to the extent permitted by such Downgraded Facility (such drawing, a
"DOWNGRADE DRAWING") of all available and undrawn amounts thereunder. Amounts
drawn pursuant to a Downgrade Drawing shall be maintained and invested as
provided in Section 3.6(f) hereof. The Liquidity Provider may also arrange for
a Replacement Liquidity Provider to issue and deliver a Replacement Liquidity
Facility at any time after such Downgrade Drawing so long as such
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Downgrade Drawing has not been reimbursed in full to the Liquidity Provider.
(d) NON-EXTENSION DRAWINGS. If any Liquidity Facility with respect to
any Class of Certificates is scheduled to expire on a date (the "STATED
EXPIRATION DATE") prior to the date that is 15 days after the Final Legal
Distribution Date for such Class of Certificates, then, no earlier than the
180th day and no later than the 90th day prior to the then Stated Expiration
Date, the Subordination Agent shall request that such Liquidity Provider extend
the Stated Expiration Date for a period of 364 days after the Stated Expiration
Date (unless the obligations of such Liquidity Provider thereunder are earlier
terminated in accordance with such Liquidity Facility). The Liquidity Provider
shall advise the Subordination Agent, no earlier than 90 days and no later than
60 days prior to such Stated Expiration Date, whether, in its sole discretion,
it agrees to so extend the Stated Expiration Date. If, on or before such 25th
day prior to the Stated Expiration Date, such Liquidity Facility shall not have
been so extended or replaced in accordance with Section 3.6(e), or if the
Liquidity Provider fails irrevocably and unconditionally to advise the
Subordination Agent on or before the 25th day prior to the Stated Expiration
Date then in effect that such Stated Expiration Date shall be so extended, the
Subordination Agent shall, on such 25th day (or as soon as possible thereafter),
in accordance with and to the extent permitted by the terms of the expiring
Liquidity Facility (a "NON-EXTENDED FACILITY"), request a drawing under such
expiring Liquidity Facility (such drawing, a "NON-EXTENSION DRAWING") of all
available and undrawn amounts thereunder. Amounts drawn pursuant to any
Non-Extension Drawing shall be maintained and invested in accordance with
Section 3.6(f) hereof.
(e) ISSUANCE OF REPLACEMENT LIQUIDITY FACILITY. At any time, the
Subordination Agent may, at its option, in consultation with Northwest, arrange
for a Replacement Liquidity Facility to replace the Liquidity Facility for any
Class of Certificates; PROVIDED that, the initial Liquidity Provider may not be
replaced unless there shall have become due to the initial Liquidity Provider
amounts pursuant to Section 3.1, 3.2 or 3.3 of the Liquidity Facilities and the
replacement of the initial Liquidity Provider would reduce or eliminate the
obligation to pay such amounts. In any such consultation, the Subordination
Agent shall accept the recommendations of Northwest in the absence of a good
faith reason not to do so. If such Replacement Liquidity Facility is provided
at any time after [an advance has been made by the then current Liquidity
Provider], all funds on deposit in the relevant Cash Collateral Account will be
returned to the Liquidity Provider being replaced. No such Replacement
Liquidity Facility executed in connection therewith shall become effective and
no such Replacement Liquidity Facility shall be deemed a "Liquidity Facility"
under the Operative Agreements, unless and until (i) the conditions referred to
in the immediately following paragraph shall have been satisfied and
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(ii) if such Replacement Liquidity Facility shall materially adversely affect
the rights, remedies, interests or obligations of the Class A
Certificateholders, the Class B Certificateholders or the Class C
Certificateholders under any of the Operative Agreements, the applicable Trustee
shall have consented, in writing, to the execution and issuance of such
Replacement Liquidity Facility.
In connection with the issuance of each Replacement Liquidity
Facility, the Subordination Agent shall (x) prior to the issuance of such
Replacement Liquidity Facility, obtain written confirmation from each Rating
Agency that such Replacement Liquidity Facility will not cause a reduction of
the rating then in effect for any Class of Certificates by such Rating Agency
(without regard to the ratings of any Liquidity Provider being replaced pursuant
to Section 3.6(c) hereof), (y) pay all Liquidity Obligations then owing to the
replaced Liquidity Provider (which payment shall be made first from available
funds in the Cash Collateral Account as described in clause (vii) of Section
3.6(f) hereof and thereafter from any other available source, including, without
limitation, a drawing under the Replacement Liquidity Facility, it being
understood that no Replacement Liquidity Facility shall become effective (other
than insofar as necessary to permit the repayment of amounts owed to the
replaced Liquidity Provider) until all amounts owed to the replaced Liquidity
Provider have been paid) and (z) cause the issuer of the Replacement Liquidity
Facility to deliver the Replacement Liquidity Facility to the Subordination
Agent, together with a legal opinion opining that such Replacement Liquidity
Facility is an enforceable obligation of such Replacement Liquidity Provider.
Upon satisfaction of the conditions set forth in this Section 3.6(e), (i) the
replaced Liquidity Facility shall terminate and (ii) such Replacement Liquidity
Provider shall be deemed to be a Liquidity Provider with the rights and
obligations of a Liquidity Provider hereunder and under the other Operative
Agreements and such Replacement Liquidity Facility shall be deemed to be a
Liquidity Facility hereunder and under the other Operative Agreements.
(f) CASH COLLATERAL ACCOUNTS; WITHDRAWALS; INVESTMENTS. In the event
the Subordination Agent shall draw all available amounts under the Class A
Liquidity Facility, the Class B Liquidity Facility or the Class C Liquidity
Facility pursuant to Section 3.6(c) or a Final Drawing shall be made as provided
in the Liquidity Facility, amounts so drawn shall be deposited by the
Subordination Agent in the Class A Cash Collateral Account, the Class B Cash
Collateral Account or the Class C Cash Collateral Account, respectively.
Amounts so deposited shall be invested in Eligible Investments in accordance
with Section 2.2(b) hereof. Investment Earnings on amounts on deposit in the
Cash Collateral Accounts as a result of any drawings under Section 3.6(c) hereof
(other than to the extent it becomes a Final Drawing) shall be paid to the
respective Liquidity Provider entitled thereto prior to giving effect to the
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distributions below on each Distribution Date commencing on the first
Distribution Date after any such drawing. Investment Earnings on amounts on
deposit in the Cash Collateral Accounts as a result of any drawings under
Section 3.6(i) hereof (and amounts which become a Final Drawing) shall be
deposited in the Collection Account. The Subordination Agent shall deliver a
written statement to the respective Liquidity Provider to be paid one day prior
to each Distribution Date setting forth the aggregate amount of Investment
Earnings held in the Cash Collateral Accounts as of such date. In addition,
from and after the date funds are so deposited, the Subordination Agent shall
make withdrawals from such account as follows:
(i) on each Distribution Date, the Subordination Agent shall, to
the extent it shall not have received funds to pay accrued and unpaid
interest on the Class A Certificates (at the Stated Interest Rate for the
Class A Certificates) from any other source, withdraw from the Class A Cash
Collateral Account, and pay to the Class A Trustee an amount equal to the
lesser of (x) an amount necessary to pay accrued and unpaid interest (at
the Stated Interest Rate for the Class A Certificates) on such Class A
Certificates and (y) the amount on deposit in the Class A Cash Collateral
Account;
(ii) on each Distribution Date, the Subordination Agent shall, to
the extent it shall not have received funds to pay accrued and unpaid
interest on the Class B Certificates (at the Stated Interest Rate for the
Class B Certificates) from any other source, withdraw from the Class B Cash
Collateral Account, and pay to the Class B Trustee an amount equal to the
lesser of (x) an amount necessary to pay accrued and unpaid interest (at
the Stated Interest Rate for the Class B Certificates) on such Class B
Certificates and (y) the amount on deposit in the Class B Cash Collateral
Account;
(iii) on each Distribution Date, the Subordination Agent shall, to
the extent it shall not have received funds to pay accrued and unpaid
interest on the Class C Certificates (at the Stated Interest Rate for the
Class C Certificates) from any other source, withdraw from the Class C Cash
Collateral Account, and pay to the Class C Trustee an amount equal to the
lesser of (x) an amount necessary to pay accrued and unpaid interest (at
the Stated Interest Rate for the Class C Certificates) on such Class C
Certificates and (y) the amount on deposit in the Class C Cash Collateral
Account;
(iv) on each date on which the Pool Balance of the Class A Trust
shall have been reduced by payments made to the Class A Certificateholders
pursuant to Section 2.4, 3.2 or 3.3 hereof, the Subordination Agent shall
withdraw from the Class A Cash Collateral Account such amount as is
necessary so that, after giving effect to the reduction of the Pool Balance
on such date (including any such reduction resulting from a prior
withdrawal of amounts on deposit in
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the Class A Cash Collateral Account on such date), the Required Amount
(with respect to the Class A Liquidity Facility) will be on deposit in the
Class A Cash Collateral Account and shall FIRST, pay such amount to the
Class A Liquidity Provider until the Liquidity Obligations (with respect to
the Class A Certificates) shall have been paid in full, and SECOND, deposit
any remaining amount in the Collection Account;
(v) on each date on which the Pool Balance of the Class B Trust
shall have been reduced by payments made to the Class B Certificateholders
pursuant to Section 2.4, 3.2 or 3.3 hereof, the Subordination Agent shall
withdraw from the Class B Cash Collateral Account such amount as is
necessary so that, after giving effect to the reduction of the Pool Balance
on such date (including any such reduction resulting from a prior
withdrawal of amounts on deposit in the Class B Cash Collateral Account on
such date), the Required Amount (with respect to the Class B Liquidity
Facility) will be on deposit in the Class B Cash Collateral Account and
shall FIRST, pay such amount to the Class B Liquidity Provider until the
Liquidity Obligations (with respect to the Class B Certificates) shall have
been paid in full, and SECOND, deposit any remaining amount in the
Collection Account;
(vi) on each date on which the Pool Balance of the Class C Trust
shall have been reduced by payments made of the Class C Certificateholders
pursuant to Section 2.4, 3.2 or 3.3 hereof, the Subordination Agent shall
withdraw from the Class C Cash Collateral Account such amount as is
necessary so that, after giving effect to the reduction of the Pool Balance
on such date (including any such reduction resulting from a prior
withdrawal of amounts on deposit in the Class C Cash Collateral Account on
such date), the Required Amount (with respect to the Class C Liquidity
Facility) will be on deposit in the Class C Cash Collateral Account and
shall FIRST, pay such amount to the Class C Liquidity Provider until the
Liquidity Obligations (with respect to the Class C Certificates) shall have
been paid in full, and SECOND, deposit any remaining amount in the
Collection Account;
(vii) if a Replacement Liquidity Facility for any Class of
Certificates shall be delivered to the Subordination Agent following the
date on which funds have been deposited into the Cash Collateral Account
for such Class of Certificates, the Subordination Agent shall withdraw all
amounts on deposit in such Cash Collateral Account and shall pay such
amounts to each replaced Liquidity Provider pari passu until all Liquidity
Obligations owed to such Person shall have been paid in full, and shall
deposit any remaining amount in the Collection Account; and
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(viii) following the payment of Final Distributions with respect to
any Class of Certificates, on the date on which the Subordination Agent
shall have been notified by the Liquidity Provider for such Class of
Certificates that the Liquidity Obligations owed to such Liquidity Provider
have been paid in full, the Subordination Agent shall withdraw all amounts
on deposit in the Cash Collateral Account in respect of such Class of
Certificates and shall deposit such amount in the Collection Account.
(g) REINSTATEMENT. With respect to any Interest Drawing under the
Liquidity Facility for any Trust, upon the reimbursement of the applicable
Liquidity Provider for all or any part of the amount of such Interest Drawing,
together with any accrued interest thereon, the Available Amount of such
Liquidity Facility shall be reinstated by an amount equal to the amount so
reimbursed to the applicable Liquidity Provider, but not to exceed the Required
Amount for such Liquidity Facility; PROVIDED, HOWEVER, that such Liquidity
Facility shall not be so reinstated in part or in full at any time if (x) both
(i) a Triggering Event shall have occurred and (ii) a Performing Note Deficiency
exists or (y) a Liquidity Event of Default shall have occurred and be continuing
under such Liquidity Facility. In the event that at any time prior to both the
occurrence of a Triggering Event and the existence of a Performing Note
Deficiency funds are withdrawn from any Cash Collateral Account pursuant to
clauses (i), (ii) or (iii) of Section 3.6(f) hereof, then funds received by the
Subordination Agent prior to both the occurrence of a Triggering Event and the
existence of a Performing Note Deficiency shall be deposited in such Cash
Collateral Account as provided in clause "THIRD" of Section 2.4(b), clause
"THIRD" of Section 3.2 or clause "FOURTH" of Section 3.3, as applicable, and
applied in accordance with Section 3.6(f) hereof.
(h) REIMBURSEMENT. The amount of each drawing under the Liquidity
Facilities shall be due and payable, together with interest thereon, on the
dates and at the rates, respectively, provided in the Liquidity Facilities.
(i) FINAL DRAWING. If any action is required under a Liquidity
Facility to be taken by the Subordination Agent in order to make a Final Drawing
thereunder, the Subordination Agent shall not fail to take such action. Upon
receipt of the proceeds of a Final Drawing under the related Liquidity Facility,
the Subordination Agent shall maintain and invest such proceeds in accordance
with Section 3.6(f) hereof.
(j) REDUCTION OF STATED AMOUNT. Promptly following each date on which
the Required Amount of the Liquidity Facility for a Class of Certificates is
reduced as a result of a distribution to the Certificateholders of such Class of
Certificates, the Subordination Agent shall, if such Liquidity Facility provides
for reductions of the Stated Amount of such Liquidity Facility and if such
reductions are not automatic,
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request the Liquidity Provider for such Class of Certificates to reduce such
Stated Amount to an amount equal to the Required Amount with respect to such
Liquidity Facility (as calculated by the Subordination Agent after giving effect
to such payment). Each such request shall be made in accordance with the
provisions of the applicable Liquidity Facility.
(k) RELATION TO SUBORDINATION PROVISIONS. Interest Drawings under the
Liquidity Facilities and withdrawals from the Cash Collateral Accounts, in each
case, in respect of interest on the Certificates of any Class, will be
distributed to the Trustee for such Class of Certificates, notwithstanding
Sections 3.2, 3.3 and 3.6(h) hereof.
ARTICLE IV
EXERCISE OF REMEDIES
SECTION 4.1 DIRECTIONS FROM THE CONTROLLING PARTY. (a)(i) Following
the occurrence and during the continuation of an Indenture Default under any
Indenture, the Controlling Party shall direct the Loan Trustee under such
Indenture in the exercise of remedies available to the holders of the Equipment
Notes issued pursuant to such Indenture, including, without limitation, the
ability to vote all such Equipment Notes in favor of declaring all of the unpaid
principal amount of such Equipment Notes and accrued interest thereon to be due
and payable under, and in accordance with, the provisions of such Indenture.
Subject to the Owner Trustees' and the Owner Participants' rights set forth in
the Indentures to purchase the Equipment Notes, if the Equipment Notes issued
pursuant to any Indenture have been Accelerated following an Indenture Default
with respect thereto, the Controlling Party may sell, assign, contract to sell
or otherwise dispose of and deliver all (but not less than all) of such
Equipment Notes to any Person at public or private sale, at any location at the
option of the Controlling Party, all upon such terms and conditions as it may
reasonably deem advisable in accordance with applicable law.
(ii) Subject to the Owner Trustees' and the Owner Participants'
rights set forth in the Indentures to purchase the Equipment Notes, and
notwithstanding the foregoing, so long as any Certificates remain Outstanding,
during the period ending on the date which is nine months after the earlier of
(x) the Acceleration of the Equipment Notes issued pursuant to any Indenture or
(y) the occurrence of a Northwest Bankruptcy Event, without the consent of each
Trustee, (A) no Aircraft subject to the Lien of such Indenture or such Equipment
Notes may be sold if the net proceeds from such sale would be less than the
Minimum Sale Price for such Aircraft or such Equipment Notes, and (B) the amount
and payment dates of rentals payable by Northwest under the Lease for such
Aircraft may not be adjusted, if, as a result of such adjustment, the discounted
present value of all such
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rentals would be less than 75% of the discounted present value of the rentals
payable by Northwest under such Lease before giving effect to such adjustment,
in each case, using the weighted average interest rate of the Equipment Notes
issued pursuant to such Indenture as the discount rate.
(iii) At the request of the Controlling Party, the Subordination
Agent may from time to time during the continuance of an Indenture Default (and
before the occurrence of a Triggering Event) commission LTV Appraisals with
respect to the related Aircraft.
(iv) After a Triggering Event occurs and any Equipment Note
becomes a Non-Performing Equipment Note, the Subordination Agent shall obtain
LTV Appraisals for the Aircraft as soon as practicable and additional LTV
Appraisals on or prior to each anniversary of the date of such initial LTV
Appraisals; PROVIDED that, if the Controlling Party reasonably objects to the
appraised value of the Aircraft shown in any such LTV Appraisals, the
Controlling Party shall have the right to obtain or cause to be obtained at its
expense substitute LTV Appraisals (including any LTV Appraisals based upon
physical inspection of the Aircraft).
(b) The Controlling Party shall take such actions as it may reasonably
deem most effectual to complete the sale or other disposition of such Aircraft
or Equipment Notes. In addition, in lieu of any sale, assignment, contract to
sell or other disposition, the Subordination Agent, on behalf of the Controlling
Party, may maintain possession of such Equipment Notes and continue to apply
monies received in respect of such Equipment Notes in accordance with Article
III hereof. In addition, in lieu of such sale, assignment, contract to sell or
other disposition, or in lieu of such maintenance of possession, the Controlling
Party may instruct the Loan Trustee under such Indenture to foreclose on the
Lien on the related Aircraft or to take any other remedial action permitted
under such Indenture or applicable law.
SECTION 4.2 REMEDIES CUMULATIVE. Each and every right, power and
remedy given to the Trustees, the Controlling Party or the Subordination Agent
specifically or otherwise in this Agreement shall be cumulative and shall be in
addition to every other right, power and remedy herein specifically given or now
or hereafter existing at law, in equity or by statute, and each and every right,
power and remedy whether specifically herein given or otherwise existing may,
subject always to the terms and conditions hereof, be exercised from time to
time and as often and in such order as may be deemed expedient by any Trustee,
the Controlling Party or the Subordination Agent, as appropriate, and the
exercise or the beginning of the exercise of any power or remedy shall not be
construed to be a waiver of the right to exercise at the same time or thereafter
any other right, power or remedy. No delay or omission by any Trustee, the
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Controlling Party or the Subordination Agent in the exercise of any right,
remedy or power or in the pursuit of any remedy shall impair any such right,
power or remedy or be construed to be a waiver of any default or to be an
acquiescence therein.
SECTION 4.3 DISCONTINUANCE OF PROCEEDINGS. In case any party to this
Agreement (including the Controlling Party in such capacity) shall have
instituted any Proceeding to enforce any right, power or remedy under this
Agreement by foreclosure, entry or otherwise, and such Proceedings shall have
been discontinued or abandoned for any reason or shall have been determined
adversely to the Person instituting such Proceeding, then and in every such case
each such party shall, subject to any determination in such proceedings, be
restored to its former position and rights hereunder, and all rights, remedies
and powers of such party shall continue as if no such Proceedings had been
instituted.
SECTION 4.4 RIGHT OF CERTIFICATEHOLDERS TO RECEIVE PAYMENTS NOT TO BE
IMPAIRED. Anything in this Agreement to the contrary notwithstanding but
subject to each Trust Agreement, the right of any Certificateholder or any
Liquidity Provider, respectively, to receive payments pursuant to Section 2.4,
3.2 or 3.3 hereof when due, or to institute suit for the enforcement of any such
payment on or after the applicable Distribution Date, shall not be impaired or
affected without the consent of such Certificateholder or such Liquidity
Provider, respectively.
SECTION 4.5 UNDERTAKING FOR COSTS. In any suit for the enforcement
of any right or remedy under this Agreement or in any suit against any
Controlling Party or the Subordination Agent for any action taken or omitted by
it as Controlling Party or Subordination Agent, as the case may be, a court in
its discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees and expenses,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. The provisions of
this Section do not apply to a suit instituted by the Subordination Agent, a
Liquidity Provider or a Trustee or a suit by Certificateholders holding more
than 10% of the original principal amount of any Class of Certificates.
ARTICLE V
DUTIES OF THE SUBORDINATION AGENT;
AGREEMENTS OF TRUSTEES, ETC.
SECTION 5.1 NOTICE OF INDENTURE DEFAULT OR TRIGGERING EVENT. (a) In
the event the Subordination Agent shall have actual knowledge of the occurrence
of an Indenture Default or a Triggering Event, as promptly as practicable, and
in any event
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within 10 days after obtaining knowledge thereof, the Subordination Agent shall
transmit by mail to the Rating Agencies, the Liquidity Providers and the
Trustees notice of such Indenture Default or Triggering Event, unless such
Indenture Default or Triggering Event shall have been cured or waived. For all
purposes of this Agreement, in the absence of actual knowledge on the part of a
Responsible Officer, the Subordination Agent shall not be deemed to have
knowledge of any Indenture Default or Triggering Event unless notified in
writing by one or more Trustees, one or more Liquidity Providers or one or more
Certificateholders.
(b) OTHER NOTICES. The Subordination Agent will furnish to each
Liquidity Provider and Trustee, promptly upon receipt thereof, duplicates or
copies of all reports, notices, requests, demands, certificates, financial
statements and other instruments furnished to the Subordination Agent as
registered holder of the Equipment Notes or otherwise in its capacity as
Subordination Agent to the extent the same shall not have been otherwise
directly distributed to such Liquidity Provider or Trustee, as applicable,
pursuant to the express provision of any other Operative Agreement.
SECTION 5.2 INDEMNIFICATION. The Subordination Agent shall not be
required to take any action or refrain from taking any action under Section 5.1
(other than the first sentence thereof) or Article IV hereof unless the
Subordination Agent shall have been indemnified (to the extent and in the manner
reasonably satisfactory to the Subordination Agent) against any liability, cost
or expense (including counsel fees and expenses) which may be incurred in
connection therewith. The Subordination Agent shall not be under any obligation
to take any action under this Agreement and nothing contained in this Agreement
shall require the Subordination Agent to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder or in the exercise of any of its rights or powers if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it. The
Subordination Agent shall not be required to take any action under Section 5.1
(other than the first sentence thereof) or Article IV hereof, nor shall any
other provision of this Agreement be deemed to impose a duty on the
Subordination Agent to take any action, if the Subordination Agent shall have
been advised by counsel that such action is contrary to the terms hereof or is
otherwise contrary to law.
SECTION 5.3 NO DUTIES EXCEPT AS SPECIFIED IN INTERCREDITOR AGREEMENT.
The Subordination Agent shall not have any duty or obligation to take or refrain
from taking any action under, or in connection with, this Agreement, except as
expressly provided by the terms of this Agreement; and no implied duties or
obligations shall be read into this Agreement against the Subordination Agent.
The Subordination Agent agrees that it
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will, in its individual capacity and at its own cost and expense (but without
any right of indemnity in respect of any such cost or expense under Section 7.1
hereof) promptly take such action as may be necessary to duly discharge all
Liens on any of the Trust Accounts or any monies deposited therein which result
from claims against it in its individual capacity not related to its activities
hereunder or as a result of a breach of its obligations that constitute willful
misconduct or gross negligence hereunder or any other Operative Agreement.
SECTION 5.4 NOTICE FROM THE LIQUIDITY PROVIDERS AND TRUSTEES. If a
Responsible Officer of any Liquidity Provider or Trustee has actual notice of an
Indenture Default or a Triggering Event, such Person shall promptly use its best
efforts give notice thereof to all other Liquidity Providers and Trustees and to
the Subordination Agent, PROVIDED, HOWEVER, that no such Person shall have any
liability hereunder as a result of its failure to deliver any such notice.
ARTICLE VI
THE SUBORDINATION AGENT
SECTION 6.1 AUTHORIZATION; ACCEPTANCE OF TRUSTS AND DUTIES. Each of
the Class A Trustee, Class B Trustee and Class C Trustee hereby designates and
appoints the Subordination Agent as the agent and trustee of such Trustee under
the applicable Liquidity Facility and authorizes the Subordination Agent to
enter into the applicable Liquidity Facility as agent and trustee for such
Trustee. Each of the Liquidity Providers and the Trustees hereby designates and
appoints the Subordination Agent as the Subordination Agent under this
Agreement.
State Street of Connecticut hereby accepts the duties hereby created
and applicable to it as the Subordination Agent and agrees to perform the same
but only upon the terms of this Agreement and agrees to receive and disburse all
monies received by it in accordance with the terms hereof. The Subordination
Agent shall not be answerable or accountable under any circumstances, except (a)
for its own willful misconduct or gross negligence or, with respect to the
handling or transfer of funds, ordinary negligence, (b) as provided in Section
2.2 hereof and (c) for liabilities that may result from the material inaccuracy
of any representation or warranty of the Subordination Agent made in its
individual capacity in any Operative Agreement. The Subordination Agent shall
not be liable for any error of judgment made in good faith by a Responsible
Officer of the Subordination Agent, unless it is proved that the Subordination
Agent was negligent in ascertaining the pertinent facts.
SECTION 6.2 ABSENCE OF DUTIES. The Subordination Agent shall have no
duty to see to any recording or filing of
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this Agreement or any other document, or to see to the maintenance of any such
recording or filing.
SECTION 6.3 NO REPRESENTATIONS OR WARRANTIES AS TO DOCUMENTS. The
Subordination Agent in its individual capacity does not make nor shall be deemed
to have made any representation or warranty as to the validity, legality or
enforceability of this Agreement or any other Operative Agreement or as to the
correctness of any statement contained in any thereof, except for the
representations and warranties of the Subordination Agent, made in its
individual capacity, under any Operative Agreement to which it is a party. The
Certificateholders, the Trustees and the Liquidity Providers make no
representation or warranty hereunder whatsoever.
SECTION 6.4 NO SEGREGATION OF MONIES; NO INTEREST. Any monies paid
to or retained by the Subordination Agent pursuant to any provision hereof and
not then required to be distributed to any Trustee or any Liquidity Provider as
provided in Articles II and III hereof need not be segregated in any manner
except to the extent required by such Articles II and III and by law, and the
Subordination Agent shall not (except as otherwise provided in Section 2.2
hereof) be liable for any interest thereon; PROVIDED, HOWEVER, that any payments
received or applied hereunder by the Subordination Agent shall be accounted for
by the Subordination Agent so that any portion thereof paid or applied pursuant
hereto shall be identifiable as to the source thereof.
SECTION 6.5 RELIANCE; AGENTS; ADVICE OF COUNSEL. The Subordination
Agent shall not incur liability to anyone in acting upon any signature,
instrument, notice, resolution, request, consent, order, certificate, report,
opinion, bond or other document or paper believed by it to be genuine and
believed by it to be signed by the proper party or parties. As to the Pool
Balance of any Trust as of any date, the Subordination Agent may for all
purposes hereof rely on a certificate signed by any Responsible Officer of the
applicable Trustee, and such certificate shall constitute full protection to the
Subordination Agent for any action taken or omitted to be taken by it in good
faith in reliance thereon. As to any fact or matter relating to the Liquidity
Providers or the Trustees the manner of ascertainment of which is not
specifically described herein, the Subordination Agent may for all purposes
hereof rely on a certificate, signed by any Responsible Officer of the
applicable Liquidity Provider or Trustee, as the case may be, as to such fact or
matter, and such certificate shall constitute full protection to the
Subordination Agent for any action taken or omitted to be taken by it in good
faith in reliance thereon. The Subordination Agent shall assume, and shall be
fully protected in assuming, that each of the Liquidity Providers and each of
the Trustees are authorized to enter into this Agreement and to take all action
to be taken by them pursuant to the provisions hereof, and shall not inquire
into the authorization of each of the
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Liquidity Providers and each of the Trustees with respect thereto. In the
administration of the trusts hereunder, the Subordination Agent may execute any
of the trusts or powers hereof and perform its powers and duties hereunder
directly or through agents or attorneys and may consult with counsel,
accountants and other skilled persons to be selected and retained by it, and the
Subordination Agent shall not be liable for the acts or omissions of any agent
appointed with due care or for anything done, suffered or omitted in good faith
by it in accordance with the advice or written opinion of any such counsel,
accountants or other skilled persons.
SECTION 6.6 CAPACITY IN WHICH ACTING. The Subordination Agent acts
hereunder solely as agent and trustee herein and not in its individual capacity,
except as otherwise expressly provided in the Operative Agreements.
SECTION 6.7 COMPENSATION. The Subordination Agent shall be entitled
to reasonable compensation, including expenses and disbursements, for all
services rendered hereunder and shall have a priority claim to the extent set
forth in Article III hereof on all monies collected hereunder for the payment of
such compensation, to the extent that such compensation shall not be paid by
others. The Subordination Agent agrees that it shall have no right against any
Trustee or Liquidity Provider for any fee as compensation for its services as
agent under this Agreement. The provisions of this Section 6.7 shall survive
the termination of this Agreement.
SECTION 6.8 MAY BECOME CERTIFICATEHOLDER. The institution acting as
Subordination Agent hereunder may become a Certificateholder and have all rights
and benefits of a Certificateholder to the same extent as if it were not the
institution acting as the Subordination Agent.
SECTION 6.9 SUBORDINATION AGENT REQUIRED; ELIGIBILITY. There shall
at all times be a Subordination Agent hereunder which shall be a corporation
organized and doing business under the laws of the United States of America or
of any State or the District of Columbia having a combined capital and surplus
of at least $100,000,000 (or the obligations of which, whether now in existence
or hereafter incurred, are fully and unconditionally guaranteed by a corporation
organized and doing business under the laws of the United States, any State
thereof or of the District of Columbia and having a combined capital and surplus
of at least $100,000,000), if there is such an institution willing and able to
perform the duties of the Subordination Agent hereunder upon reasonable or
customary terms. Such corporation shall be a citizen of the United States and
shall be authorized under the laws of the United States or any State thereof or
of the District of Columbia to exercise corporate trust powers and shall be
subject to supervision or examination by federal, state or District of Columbia
authorities. If such corporation publishes reports of condition at least
annually, pursuant to law
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or to the requirements of any of the aforesaid supervising or examining
authorities, then, for the purposes of this Section 6.9, the combined capital
and surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published.
In case at any time the Subordination Agent shall cease to be eligible
in accordance with the provisions of this Section, the Subordination Agent shall
resign immediately in the manner and with the effect specified in Section 8.1.
SECTION 6.10 MONEY TO BE HELD IN TRUST. All Equipment Notes, monies
and other property deposited with or held by the Subordination Agent pursuant to
this Agreement shall be held in trust for the benefit of the parties entitled to
such Equipment Notes, monies and other property. All such Equipment Notes,
monies or other property shall be held in the Trust Department of the
institution acting as Subordination Agent hereunder.
ARTICLE VII
INDEMNIFICATION OF SUBORDINATION AGENT
SECTION 7.1 SCOPE OF INDEMNIFICATION. The Subordination Agent shall
be indemnified hereunder to the extent and in the manner described in
Section 7(c) of the Participation Agreements. The indemnities contained in such
Section 7(c) shall survive the termination of this Agreement.
ARTICLE VIII
SUCCESSOR SUBORDINATION AGENT
SECTION 8.1 REPLACEMENT OF SUBORDINATION AGENT; APPOINTMENT OF
SUCCESSOR. The Subordination Agent may resign at any time by so notifying the
Trustees and the Liquidity Providers. The Liquidity Provider or the Controlling
Party (or, prior to the occurrence of a Triggering Event, the Person who would
be the Controlling Party if a Triggering Event had occurred) may remove the
Subordination Agent for cause by so notifying the Subordination Agent and may
appoint a successor Subordination Agent. The Controlling Party (or, prior to
the occurrence of a Triggering Event, the Person who would be the Controlling
Party if a Triggering Event had occurred) shall remove the Subordination Agent
if:
(1) the Subordination Agent fails to comply with Section 6.9 hereof;
(2) the Subordination Agent is adjudged bankrupt or insolvent;
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(3) a receiver or other public officer takes charge of the
Subordination Agent or its property; or
(4) the Subordination Agent otherwise becomes incapable of acting.
If the Subordination Agent resigns or is removed or if a vacancy
exists in the office of Subordination Agent for any reason (the Subordination
Agent in such event being referred to herein as the retiring Subordination
Agent), the Controlling Party (or, prior to the occurrence of a Triggering
Event, the Person who would be the Controlling Party if a Triggering Event had
occurred) in consultation with Northwest shall promptly appoint a successor
Subordination Agent.
Any corporation into which the Subordination Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Subordination Agent
shall be a party, or any corporation to which substantially all the corporate
trust business of the Subordination Agent may be transferred, shall, subject to
the terms of Section 6.9 hereof, be the Subordination Agent hereunder and under
the other Operative Agreements to which the Subordination Agent is a party
without further act, except that such Person shall give prompt subsequent notice
of such transaction to the Liquidity Provider and each Trustee,
A successor Subordination Agent shall deliver a written acceptance of
its appointment as Subordination Agent hereunder to the retiring Subordination
Agent, upon which the resignation or removal of the retiring Subordination Agent
shall become effective, and the successor Subordination Agent shall have all the
rights, powers and duties of the Subordination Agent under this Agreement. The
successor Subordination Agent shall send a written notice of its succession to
the Liquidity Providers and the Trustees. The retiring Subordination Agent
shall promptly transfer its rights under each of the Liquidity Facilities and
all of the property held by it as Subordination Agent to the successor
Subordination Agent.
If a successor Subordination Agent does not take office within 60 days
after the retiring Subordination Agent resigns or is removed, the retiring
Subordination Agent or one or more of the Trustees may petition any court of
competent jurisdiction for the appointment of a successor Subordination Agent.
If the Subordination Agent fails to comply with Section 6.9 hereof (to
the extent applicable), one or more of the Trustees or one or more of the
Liquidity Providers or Northwest may petition any court of competent
jurisdiction for the removal of the Subordination Agent and the appointment of a
successor Subordination Agent.
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Notwithstanding the foregoing, no resignation or removal of the
Subordination Agent shall be effective unless and until a successor has been
appointed. No appointment of a successor Subordination Agent shall be effective
unless and until the Rating Agencies shall have delivered a Ratings
Confirmation.
ARTICLE IX
SUPPLEMENTS AND AMENDMENTS
SECTION 9.1 AMENDMENTS, WAIVERS, ETC. (a) This Agreement may not be
supplemented, amended or modified without the consent of each Trustee (acting
with the consent of holders of Certificates of the related Class evidencing
interests in the related Trust aggregating not less than a majority in interest
in such Trust), the Subordination Agent and each Liquidity Provider; PROVIDED,
HOWEVER, that this Agreement may be supplemented, amended or modified without
the consent of any Trustee (i) if such supplement or amendment cures an
ambiguity or inconsistency or does not materially adversely affect such Trustee
or the holders of the related Class of Certificates or (ii) to provide for a
drawing (a "NON-EXTENSION DRAWING") under a Replacement Facility which is
scheduled to expire prior to the date which is 15 days after the Final Legal
Distribution Date and for the deposit of such Non-Extension Drawing in the Class
A Cash Collateral Account PROVIDED, in the case of this clause (ii), that the
Subordination Agent shall have received a Ratings Confirmation after giving
effect to such amendment or modification. Notwithstanding the foregoing,
without the consent of each Certificateholder and each Liquidity Provider, no
supplement, amendment or modification of this Agreement may (i) reduce the
percentage of the interest in any Trust evidenced by the Certificates issued by
such Trust necessary to consent to modify or amend any provision of this
Agreement or to waive compliance therewith or (ii) modify Section 2.4, 3.2 or
3.3 hereof, relating to the distribution of monies received by the Subordination
Agent hereunder from the Equipment Notes or pursuant to the Liquidity
Facilities. Nothing contained in this Section shall require the consent of a
Trustee at any time following the payment of Final Distributions with respect to
the related Class of Certificates.
(b) In the event that the Subordination Agent, as the registered
holder of any Equipment Notes, receives a request for its consent to any
amendment, modification or waiver under such Equipment Notes, the Indenture
pursuant to which such Equipment Notes were issued, or the Lease, Participation
Agreement or other related document, (i) if no Indenture Default shall have
occurred and be continuing, the Subordination Agent shall request instructions
with respect to each Series of Equipment Notes from the Trustee of the Trust
which holds such Equipment Notes and shall vote or consent in accordance with
the instructions of such Trustee and (ii) if any Indenture Default (which has
not been
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cured by the applicable Owner Trustee or the applicable Owner Participant
pursuant to Section 4.03 of such Indenture) shall have occurred and be
continuing with respect to such Indenture, the Subordination Agent will exercise
its voting rights as directed by the Controlling Party; PROVIDED that no such
amendment, modification or waiver shall, without the consent of each Liquidity
Provider, reduce the amount of rent, supplemental rent or stipulated loss values
payable by Northwest under the Lease; and PROVIDED FURTHER that no amendment of
or supplement to any Indenture, any Lease or any Participation Agreement or
waiver or modification of the terms of, or consent under, any thereof, shall,
without the consent of each Liquidity Provider, have any of the effects listed
in the provisos to Section 7.11 or 13.02 or Section 8.01(c) of the Indenture.
SECTION 9.2 SUBORDINATION AGENT PROTECTED. If, in the reasonable
opinion of the institution acting as the Subordination Agent hereunder, any
document required to be executed pursuant to the terms of Section 9.1 affects
any right, duty, immunity or indemnity with respect to it under this Agreement
or any Liquidity Facility, the Subordination Agent may in its discretion decline
to execute such document.
SECTION 9.3 EFFECT OF SUPPLEMENTAL AGREEMENTS. Upon the execution of
any amendment or supplement hereto pursuant to the provisions hereof, this
Agreement shall be and be deemed to be modified and amended in accordance
therewith and the respective rights, limitations of rights, obligations, duties
and immunities under this Agreement of the parties hereto and beneficiaries
hereof shall thereafter be determined, exercised and enforced hereunder subject
in all respects to such modifications and amendments, and all the terms and
conditions of any such supplemental agreement shall be and be deemed to be part
of the terms and conditions of this Agreement for any and all purposes. In
executing or accepting any supplemental agreement permitted by this Article IX,
the Subordination Agent shall be entitled to receive, and shall be fully
protected in relying upon, an opinion of counsel stating that the execution of
such supplemental agreement is authorized or permitted by this Agreement.
SECTION 9.4 NOTICE TO RATING AGENCIES. Promptly following its
receipt of each amendment, consent, modification, supplement or waiver
contemplated by this Article IX, the Subordination Agent shall send a copy
thereof to each Rating Agency.
ARTICLE X
MISCELLANEOUS
SECTION 10.1 TERMINATION OF INTERCREDITOR AGREEMENT. Following
payment of Final Distributions with respect to each
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Class of Certificates and the payment in full of all Liquidity Obligations to
the Liquidity Providers and PROVIDED that there shall then be no other amounts
due to the Certificateholders, the Trustees, the Liquidity Providers and the
Subordination Agent hereunder or under the Trust Agreements, and that the
commitment of the Liquidity Providers under the Liquidity Facilities shall have
expired or been terminated, this Agreement and the trusts created hereby shall
terminate and this Agreement shall be of no further force or effect. Except as
aforesaid or otherwise provided, this Agreement and the trusts created hereby
shall continue in full force and effect in accordance with the terms hereof.
SECTION 10.2 INTERCREDITOR AGREEMENT FOR BENEFIT OF TRUSTEES,
LIQUIDITY PROVIDERS AND SUBORDINATION AGENT. Nothing in this Agreement, whether
express or implied, shall be construed to give to any Person other than the
Trustees, the Liquidity Providers and the Subordination Agent any legal or
equitable right, remedy or claim under or in respect of this Agreement.
SECTION 10.3 NOTICES. Unless otherwise expressly specified or
permitted by the terms hereof, all notices, requests, demands, authorizations,
directions, consents, waivers or documents provided or permitted by this
Agreement to be made, given, furnished or filed shall be in writing, mailed by
certified mail, postage prepaid, or by confirmed telecopy and
(i) if to the Subordination Agent, addressed to at its office
at:
State Street Bank and Trust Company of Connecticut, National
Association
x/x Xxxxx Xxxxxx Xxxx and Trust Company
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Corporate Trust Department
(ii) if to any Trustee, addressed to it at its office at:
x/x Xxxxx Xxxxxx Xxxx and Trust Company
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Corporate Trust Department
(iii) if to any Liquidity Provider, addressed to it at its office
at:
Royal Bank of Canada
Xxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Loans Administration
Telecopy: 000-000-0000
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Whenever any notice in writing is required to be given by any Trustee or
Liquidity Provider or the Subordination Agent to any of the other of them, such
notice shall be deemed given and such requirement satisfied when such notice is
received, if such notice is received, if such notice is mailed by certified
mail, postage prepaid or by courier service or is sent by confirmed telecopy
addressed as provided above. Any party hereto may change the address to which
notices to such party will be sent by giving notice of such change to the other
parties to this Agreement.
SECTION 10.4 SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 10.5 NO ORAL MODIFICATIONS OR CONTINUING WAIVERS. No terms
or provisions of this Agreement may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by the party or other Person
against whom enforcement of the change, waiver, discharge or termination is
sought and any other party or other Person whose consent is required pursuant to
this Agreement and any waiver of the terms hereof shall be effective only in the
specific instance and for the specific purpose given.
SECTION 10.6 SUCCESSORS AND ASSIGNS. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, each of the
parties hereto and the successors and assigns of each, all as herein provided.
SECTION 10.7 HEADINGS. The headings of the various Articles and
Sections herein and in the table of contents hereto are for convenience of
reference only and shall not define or limit any of the terms or provisions
hereof.
SECTION 10.8 COUNTERPART FORM. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same agreement.
SECTION 10.9 SUBORDINATION. (a) As between the Liquidity Providers,
on the one hand, and the Trustees and the Certificateholders, on the other hand,
this Agreement shall be a subordination agreement for purposes of Xxxxxxx 000 xx
xxx Xxxxxx Xxxxxx Bankruptcy Code, as amended from time to time.
(b) Notwithstanding the provisions of this Agreement, if prior to the
payment in full to the Liquidity Providers of all
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Liquidity Obligations then due and payable, any party hereto shall have received
any payment or distribution in respect of Equipment Notes or any other amount
under the Indentures or other Operative Agreements which, had the subordination
provisions of this Agreement been properly applied to such payment, distribution
or other amount, would not have been distributed to such Person, then such
payment, distribution or other amount shall be received and held in trust by
such Person and paid over or delivered to the Subordination Agent for
application as provided herein.
(c) If any Trustee, any Liquidity Provider or the Subordination Agent
receives any payment in respect of any obligations owing hereunder (or, in the
case of the Liquidity Providers, in respect of the Liquidity Obligations), which
is subsequently invalidated, declared preferential, set aside and/or required to
be repaid to a trustee, receiver or other party, then, to the extent of such
payment, such obligations (or, in the case of the Liquidity Providers, such
Liquidity Obligations) intended to be satisfied shall be revived and continue in
full force and effect as if such payment had not been received.
(d) The Trustees (on behalf of themselves and the holders of
Certificates), the Liquidity Providers and the Subordination Agent confirm that
the payment priorities specified in Sections 2.4, 3.2 and 3.3 shall apply in all
circumstances, notwithstanding the fact that the obligations owed to the
Trustees and the holders of Certificates are secured by certain assets and the
Liquidity Obligations are not so secured. The Trustees expressly agree (on
behalf of themselves and the holders of Certificates) not to assert priority
over the holders of Liquidity Obligations due to their status as secured
creditors in any bankruptcy, insolvency or other legal proceeding.
(e) Each of the Trustees (on behalf of themselves and the holders of
Certificates), the Liquidity Providers and the Subordination Agent may take any
of the following actions without impairing its rights under this Agreement:
(i) obtain a lien on any property to secure any amounts owing to
it hereunder, including, in the case of the Liquidity Providers, the
Liquidity Obligations,
(ii) obtain the primary or secondary obligation of any other
obligor with respect to any amounts owing to it hereunder, including, in
the case of the Liquidity Providers, any of the Liquidity Obligations,
(iii) renew, extend, increase, alter or exchange any amounts owing
to it hereunder, including, in the case of the Liquidity Providers, any of
the Liquidity Obligations, or release or compromise any obligation of any
obligor with respect thereto,
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(iv) refrain from exercising any right or remedy, or delay in
exercising such right or remedy, which it may have, or
(v) take any other action which might discharge a subordinated
party or a surety under applicable law;
PROVIDED, HOWEVER, that the taking of any such actions by any of the Trustees,
the Liquidity Providers or the Subordination Agent shall not prejudice the
rights or adversely affect the obligations of any other party under this
Agreement.
SECTION 10.10 GOVERNING LAW. THIS AGREEMENT SHALL IN ALL RESPECTS BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK,
INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
SECTION 10.11 SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL;
WAIVER OF IMMUNITY. (a) Each of the parties hereto hereby irrevocably and
unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Agreement or any other Operative Agreement, or
for recognition and enforcement of any judgment in respect hereof or
thereof, to the nonexclusive general jurisdiction of the courts of the
State of New York, the courts of the United States of America for the
Southern District of New York, and the appellate courts from any thereof;
(ii) consents that any such action or proceedings may be brought in
such courts, and waives any objection that it may now or hereafter have
that the venue of any 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 and mail), postage prepaid, to each
party hereto at its address set forth in Section 10.3 hereof, or at such
other address of which the other parties shall have been notified pursuant
thereto; 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 xxx in any other jurisdiction.
(b) EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF
THIS AGREEMENT AND THE RELATIONSHIP THAT IS BEING ESTABLISHED,
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including, without limitation, contract claims, tort claims, breach of duty
claims and all other common law and statutory claims. Each of the parties
warrants and represents that it has reviewed this waiver with its legal counsel,
and that it knowingly and voluntarily waives its jury trial rights following
consultation with such legal counsel. THIS WAIVER IS IRREVOCABLE, AND CANNOT BE
MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
(c) The Liquidity Provider hereby waives any immunity it may have
from the jurisdiction of the courts of the United States or of any State and
waives any immunity any of its properties located in the United States may have
from attachment or execution upon a judgement entered by any such court under
the United States Foreign Sovereign Immunities Act of 1976 or any similar
successor legislation.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective officers thereunto duly authorized, as of
the day and year first above written, and acknowledge that this Agreement has
been made and delivered in the City of New York, and this Agreement has become
effective only upon such execution and delivery.
STATE STREET BANK AND TRUST COMPANY, not
in its individual capacity but
solely as Trustee for each of the
Trusts
By /s/ Xxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
ROYAL BANK OF CANADA, as Class A
Liquidity Provider, Class B
Liquidity Provider and Class C
Liquidity Provider
By /s/ Xxxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Manager
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION,
not in its individual capacity
except as expressly set forth
herein but solely as Subordination
Agent and trustee
By /s/ Xxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
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Indenture Default SCHEDULE 1
Intercreditor Agreement
-----------------------
Indentures
----------
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Indenture Default SCHEDULE 2
Intercreditor Agreement
-----------------------
Participation Agreements
------------------------
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Indenture Default SCHEDULE 3
Intercreditor Agreement
-----------------------
Schedule of Notices
-------------------
Pursuant to Section 3.1
-----------------------
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