Exhibit 4(i)
EXECUTION COPY
NOTE PURCHASE AGREEMENT
Dated as of December 9, 1999
Among
NORTHWEST AIRLINES, INC.,
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
as Pass Through Trustee under each of the Pass Through Trust Agreements
STATE STREET BANK AND TRUST COMPANY,
as Subordination Agent
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
as Escrow Agent
and
STATE STREET BANK AND TRUST COMPANY,
as Paying Agent
INDEX TO NOTE PURCHASE AGREEMENT
Page
Section 1. Definitions ................................................... 2
Section 2. Financing of New Aircraft ..................................... 2
Section 3. Conditions Precedent .......................................... 6
Section 4. Representations and Warranties ................................ 7
Section 5. Covenants ..................................................... 11
Section 6. Notices ....................................................... 12
Section 7. Expenses ...................................................... 12
Section 8. Further Assurances ............................................ 13
Section 9. Miscellaneous ................................................. 13
Section 10. Indemnity .................................................... 14
Section 11. Termination .................................................. 17
Section 12. Governing Law ................................................ 17
SCHEDULES
Schedule I New Aircraft and Scheduled Closing Months
Schedule II Trust Supplements
Schedule III Deposit Agreements
Schedule IV Escrow and Paying Agent Agreements
Schedule V Mandatory Document Terms
Schedule VI Mandatory Economic Terms
Schedule VII Aggregate Amortization Schedule
ANNEX
Annex A Definitions
Annex B Form of Opinion of Special English Counsel
Annex C Form of Opinion Re: ss. 1110 (Mesaba)
EXHIBITS
Exhibit A-1 Form of Leased Aircraft Participation Agreement
Exhibit A-2 Form of Lease
Exhibit A-3 Form of Leased Aircraft Indenture
Exhibit A-4 Form of Aircraft Purchase Agreement Assignment
Exhibit A-5 Form of Leased Aircraft Trust Agreement
Exhibit A-6 Form of Leased Aircraft Guarantee
Exhibit B Form of Closing Notice
Exhibit C-1 Form of Owned Aircraft Participation Agreement
Exhibit C-2 Form of Owned Aircraft Indenture
Exhibit C-3 Form of Owned Aircraft Guarantee
ii
NOTE PURCHASE AGREEMENT
This NOTE PURCHASE AGREEMENT, dated as of December 9, 1999, among
(i) Northwest Airlines, Inc., a Minnesota corporation (the "Company"), (ii)
State Street Bank and Trust Company of Connecticut, National Association, a
national banking association, not in its individual capacity except as otherwise
expressly provided herein, but solely as trustee (in such capacity together with
its successors in such capacity, the "Pass Through Trustee") under each of the
three separate Pass Through Trust Agreements (as defined below), (iii) State
Street Bank and Trust Company, a Massachusetts trust company, as subordination
agent and trustee (in such capacity together with its successors in such
capacity, the "Subordination Agent") under the Intercreditor Agreement (as
defined below), (iv) First Security Bank, National Association, a national
banking association, as Escrow Agent (in such capacity together with its
successors in such capacity, the "Escrow Agent"), under each of the Escrow and
Paying Agent Agreements (as defined below) and (v) State Street Bank and Trust
Company, a Massachusetts trust company, as Paying Agent (in such capacity
together with its successors in such capacity, the "Paying Agent") under each of
the Escrow and Paying Agent Agreements.
W I T N E S S E T H:
WHEREAS, Northwest Airlines, Inc. has obtained commitments from the
Manufacturer pursuant to the Aircraft Purchase Agreement for the delivery of the
fourteen (14) aircraft listed in Schedule I hereto (together with any aircraft
substituted therefor in accordance with the Aircraft Purchase Agreement prior to
the delivery thereof, the "New Aircraft");
WHEREAS, pursuant to the Basic Pass Through Trust Agreement and each
of the Trust Supplements set forth in Schedule II hereto, and concurrently with
the execution and delivery of this Agreement, separate grantor trusts
(collectively, the "Pass Through Trusts" and, individually, a "Pass Through
Trust") have been created to facilitate certain of the transactions contemplated
hereby, including, without limitation, the issuance and sale of pass through
certificates pursuant thereto (collectively, the "Certificates") to provide for
a portion of the financing or refinancing of the Aircraft;
WHEREAS, the Company has entered into the Underwriting Agreement
dated as of December 2, 1999 (the "Underwriting Agreement") with the several
underwriters (the "Underwriters") named therein, which provides that the Company
will cause the Pass Through Trustee of each of the Class G Trust, the Class B
Trust and the Class C Trust to issue and sell the Class G Certificates, the
Class B Certificates and the Class C Certificates to the Underwriters;
WHEREAS, concurrently with the execution and delivery of this
Agreement, (i) the Escrow Agents and the Depositaries entered into the Deposit
Agreements set forth in Schedule III hereto (the "Deposit Agreements") whereby
the applicable Escrow Agent agreed to direct the Underwriters to make certain
deposits referred to therein on the Issuance Date (the "Initial Deposits") and
to permit the applicable Pass Through Trustee to make additional deposits from
time to time thereafter (the Initial Deposits together with such additional
deposits are collectively referred to as the "Deposits") and (ii) the Pass
Through Trustees, the Underwriters, the Paying Agents and the Escrow Agents
entered into the Escrow and Paying Agent Agreements
set forth in Schedule IV hereto (the "Escrow and Paying Agent Agreements")
whereby, among other things, (a) the applicable Escrow Agents have directed the
Underwriters, and the Underwriters agreed to deliver an amount equal to the
amount of the Initial Deposits to the applicable Depositary on behalf of the
applicable Escrow Agent and (b) the applicable Escrow Agent, upon the applicable
Depositary receiving such amount, has agreed to deliver escrow receipts to be
affixed to each Certificate;
WHEREAS, the Company will determine whether to enter into a
leveraged lease transaction as lessee with respect to such New Aircraft (a
"Leased Aircraft") or to issue secured equipment notes in order to finance or
refinance such New Aircraft (an "Owned Aircraft") and will give to the Pass
Through Trustee a Closing Notice (as defined below) specifying its election;
WHEREAS, upon receipt of a Closing Notice with respect to a New
Aircraft, subject to the terms and conditions of this Agreement, the applicable
Pass Through Trustees will enter into the applicable Financing Agreements
relating to such New Aircraft;
WHEREAS, on the Closing Date under the applicable Financing
Agreements, each Pass Through Trustee will fund its purchase of Equipment Notes
with the proceeds of one or more Deposits withdrawn by the applicable Escrow
Agent under the related Deposit Agreement bearing the same interest rate as the
Certificates issued by such Pass Through Trust; and
WHEREAS, concurrently with the execution and delivery of this
Agreement, (i) Xxxxxx Xxxxxxx Capital Services, Inc., a Delaware corporation
(the "Liquidity Provider"), has entered into three (3) revolving credit
agreements (each, a "Liquidity Facility"), one each for the benefit of the
Certificate Holders of each Pass Through Trust, with the Subordination Agent, as
agent for the Pass Through Trustee on behalf of each such Pass Through Trust;
(ii) the Pass Through Trustee, the Liquidity Provider, the Policy Provider (as
defined below) and the Subordination Agent have entered into the Intercreditor
Agreement, dated as of the date hereof (the "Intercreditor Agreement") and (iii)
MBIA Insurance Corporation (the "Policy Provider"), the Company and the
Subordination Agent have entered into an Insurance and Indemnity Agreement (the
"Policy Provider Agreement") providing for the issuance by the Policy Provider
of the Policy (as defined in the Intercreditor Agreement).
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual agreements herein contained and other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the parties hereto
agree as follows:
Section 1. Definitions. Capitalized terms used but not defined
herein shall have the respective meanings set forth or incorporated by reference
in Annex A.
Section 2. Financing of New Aircraft. The Company confirms that it
has entered into the Aircraft Purchase Agreement with the Manufacturer pursuant
to which it has agreed to purchase or has purchased, and the Manufacturer has
agreed to deliver or has delivered, the New Aircraft in the months specified in
Schedule I hereto, all on and subject to terms and conditions specified in the
Aircraft Purchase Agreement. The Company agrees to finance or
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refinance the New Aircraft in the manner provided herein, all on and subject to
the terms and conditions hereof and of the relevant Financing Agreements.
(b) In furtherance of the foregoing, the Company agrees to give the
parties hereto, each Depositary and each of the Rating Agencies not less than
two (2) Business Days' prior notice (a "Closing Notice") of the scheduled
closing date (the "Scheduled Closing Date") (or, in the case of a Substitute
Closing Notice under Section 2(f) or (g) hereof, one (1) Business Day's prior
notice) of a financing in respect of each New Aircraft, which notice shall:
i. specify whether the Company has elected to treat such New
Aircraft as a Leased Aircraft or an Owned Aircraft;
ii. specify the Scheduled Closing Date on which the financing
therefor in the manner provided herein shall be consummated;
iii instruct the Pass Through Trustees to instruct each Escrow Agent
to provide a Notice of Purchase Withdrawal to the Depositary with respect
to the Equipment Notes to be issued in connection with the financing of
such New Aircraft;
iv. instruct the Pass Through Trustees to enter into the
Participation Agreement with respect to such Aircraft in such form and at
such a time on or before the Scheduled Closing Date specified in such
Closing Notice and to perform its obligations thereunder;
v. specify the aggregate principal amount of each series of
Equipment Notes to be issued, and purchased by the Pass Through Trustees,
in connection with the financing of such New Aircraft on such Scheduled
Closing Date (which shall in all respects comply with the Mandatory
Economic Terms); and
vi. if such New Aircraft is to be a Leased Aircraft, certify that
the related Owner Participant (A) is not an Affiliate of the Company and
(B) based on the representations of such Owner Participant, is either (1)
a Qualified Owner Participant or (2) any other person the obligations of
which under the Owner Participant Documents (as defined in the applicable
Participation Agreement) are guaranteed by a Qualified Owner Participant.
Notwithstanding the foregoing, in the event the Scheduled Closing
Date for any Aircraft to be financed pursuant to the terms hereof is on or
within 3 Business Days following the date of issuance of the Certificates, the
Closing Notice therefor may be delivered to the parties hereto on such Scheduled
Closing Date.
(c) Upon receipt of a Closing Notice, the Pass Through Trustees
shall, and shall cause the Subordination Agent to, enter into and perform their
obligations under the Participation Agreement specified in such Closing Notice,
provided, however, that such Participation Agreement and the other Financing
Agreements to be entered into pursuant to such Participation Agreement shall be
in the forms thereof annexed hereto in all material respects with such changes
therein as shall have been requested by the related Owner Participant (in the
case of Lease Financing Agreements), agreed to by the Company and, if modified
in any material
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respect, as to which prior written consent of the Policy Provider shall have
been obtained and as to which Rating Agency Confirmation shall have been
obtained from each Rating Agency by the Company (to be delivered by the Company
to the applicable Pass Through Trustee on or before the relevant Closing Date,
it being understood that if Policy Provider consent and Rating Agency
Confirmation shall have been received with respect to any Financing Agreements
and such Financing Agreements are utilized for subsequent New Aircraft (or
Substitute Aircraft) without material modifications, no additional Policy
Provider consent or Rating Agency Confirmation shall be required); provided,
however, that the relevant Financing Agreements as executed and delivered shall
not vary the Mandatory Economic Terms and shall contain the Mandatory Document
Terms (as such Mandatory Document Terms may be modified in accordance with
Schedule V hereto). Notwithstanding the foregoing, if any Financing Agreement
annexed hereto shall not have been reviewed by either Rating Agency prior to the
Issuance Date, then, prior to the use thereof in connection with the financing
of any Aircraft hereunder, the Company shall obtain from each Rating Agency a
confirmation that the use of such Financing Agreement would not result in (A) a
reduction of the rating for any Class of Certificates below the then current
rating for such Class of Certificates (without regard to the Policy) or (B) a
withdrawal or suspension of the rating of any Class of Certificates, in each
case, without reference to the Policy.
(d) With respect to each New Aircraft, the Company shall cause (i)
State Street Bank and Trust Company (or such other person that meets the
eligibility requirements to act as loan trustee under the Leased Aircraft
Indenture or Owned Aircraft Indenture) to execute as Loan Trustee the Financing
Agreements relating to such Aircraft to which such Loan Trustee is intended to
be a party and (ii) Northwest Airlines Corporation to execute a Guarantee, and
shall concurrently therewith execute such Financing Agreements to which the
Company is intended to be a party and perform its respective obligations
thereunder. Upon the request of the Policy Provider or either Rating Agency, the
Company shall deliver or cause to be delivered to the Policy Provider or each
Rating Agency, as the case may be, a true and complete copy of each Financing
Agreement relating to the financing of each New Aircraft together with a true
and complete set of the closing documentation (including legal opinions)
delivered to the related Loan Trustee, Subordination Agent and Pass Through
Trustee under the related Participation Agreement.
(e) If after giving any Closing Notice, there shall be a delay in
the delivery of a New Aircraft, or if on the Scheduled Closing Date of a New
Aircraft the financing thereof in the manner contemplated hereby shall not be
consummated for whatever reason, the Company shall give the parties hereto and
the Policy Provider prompt notice thereof. Concurrent with the giving of such
notice of postponement or subsequent thereto, the Company shall give the parties
hereto and the Policy Provider a substitute Closing Notice specifying the date
(the "Substitute Closing Date") to which the applicable financing shall have
been rescheduled (which shall be a Business Day before the Cut-Off Date on which
the Escrow Agents shall be entitled to withdraw one or more Deposits under each
of the applicable Deposit Agreements to enable each applicable Pass Through
Trustee to fund its purchase of the related Equipment Notes). Upon receipt of
any such notice of postponement, each applicable Pass Through Trustee shall
comply with its obligations under Article IV of each of the Trust Supplements
and thereafter the financing of the relevant New Aircraft shall take place on
the Substitute Closing Date therefor (all on and subject to the
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terms and conditions of the relevant Financing Agreements) unless further
postponed as provided herein.
(f) Anything in this Section 2 to the contrary notwithstanding, the
Company shall have the right at any time on or before the Scheduled Closing Date
of any New Aircraft, and subsequent to its giving a Closing Notice therefor, to
postpone the Scheduled Closing Date of such New Aircraft so as to enable the
Company to change its election to treat such New Aircraft as a Leased Aircraft
or an Owned Aircraft by written notice of such postponement to the other parties
hereto. The Company shall subsequently give the parties hereto a substitute
Closing Notice complying with the provisions of Section 2(b) hereof and
specifying the new Closing Date for such postponed New Aircraft (which shall be
a Business Day occurring before the Cut-Off Date and on which the Escrow Agents
shall be entitled to withdraw Deposits under each of the applicable Deposit
Agreements sufficient to enable each applicable Pass Through Trustee to fund its
purchase of the related Equipment Notes). In addition the Company shall have the
further right, anything in this Section 2 to the contrary notwithstanding, to
accept delivery of a New Aircraft under the Aircraft Purchase Agreement on the
Closing Date thereof by utilization of bridge financing of such New Aircraft and
thereafter give the parties hereto a Closing Notice specifying a Closing Date no
later than the Cut-Off Date and otherwise complying with the provisions of
Section 2(b) hereof. All other terms and conditions of this Note Purchase
Agreement shall apply to the financing of any such New Aircraft on the
re-scheduled Closing Date therefor except the re-scheduled Closing Date shall be
deemed the Closing Date of such New Aircraft for all purposes of this Section 2.
(g) Anything in this Section 2 to the contrary notwithstanding, the
Company shall have the right at any time to convert an Owned Aircraft to a
Leased Aircraft by entering into a sale/leaseback transaction; provided, that,
prior to, or concurrent with, such conversion, the Company must (i) comply with
the conditions set forth in the Leased Aircraft Participation Agreement with
respect to such aircraft, (ii) deliver an opinion of counsel that holders of
Certificates related to such Aircraft will not recognize income, gain or loss
for federal income tax purposes as a result of such conversion and will be
subject to federal income tax on the same amount and in the same manner and at
the same time as would have been the case if such conversion had not occurred
(other than such change in amount, manner and timing of interest that results
from any reoptimization of the Equipment Notes permitted pursuant to Section 16
of the applicable Owned Aircraft Participation Agreement in connection with such
conversion) and that the Pass Through Trusts will not be subject to federal
income tax as a result of such conversion and (iii) obtain Rating Agency
Confirmation. If the delivery date for any New Aircraft under the Aircraft
Purchase Agreement is delayed for more than 30 days beyond the month scheduled
for delivery or beyond the Cut-Off Date, the Company may identify for delivery a
substitute aircraft therefor meeting the following conditions (together with the
substitute aircraft referred to in the next sentence, a "Substitute Aircraft"):
(i) a Substitute Aircraft must be an Avro RJ85 aircraft delivered by the
Manufacturer to the Company after the date of this Agreement, (ii) the
Substitute Aircraft must have been manufactured after the Issuance Date and
(iii) the Company shall be obligated to obtain prior written consent of the
Policy Provider and Rating Agency Confirmation in respect of the replacement of
any New Aircraft by Substitute Aircraft. Upon the satisfaction of the conditions
set forth above with respect to a Substitute Aircraft, the New Aircraft to be
replaced shall cease to be subject to this Agreement and all rights
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and obligations of the parties hereto concerning such New Aircraft shall cease,
and such Substitute Aircraft shall become and thereafter be subject to the terms
and conditions of this Agreement to the same extent as such New Aircraft.
(h) The Company shall have no liability for the failure of the Pass
Through Trustees to purchase Equipment Notes with respect to any New Aircraft or
Substitute Aircraft, other than the Company's obligation, if any, to pay the
Deposit Make-Whole Amount pursuant to Section 5(a)(i) of this Agreement.
(i) The parties agree that if, in connection with the delivery of a
New Aircraft or a Substitute Aircraft or the conversion of an Owned Aircraft to
a Leased Aircraft, any Owner Participant who is to be a party to any Lease
Financing Agreements shall not be a "citizen of the United States" within the
meaning of 49 U.S.C. ss. 40102 (a)(15), then the applicable Lease Financing
Agreements shall be modified, consistent with the Mandatory Document Terms (as
such Mandatory Document Terms may be modified in accordance with Schedule V
hereto), to require such Owner Participant to enter into a voting trust, voting
powers or similar arrangement satisfactory to the Company that (A) enables such
New Aircraft or Substitute Aircraft to be registered in the United States and
(B) complies with the FAA regulations issued under the Act applicable thereto.
(j) Anything herein to the contrary notwithstanding, the Company
shall not have the right, and shall not be entitled, at any time to request the
issuance of Equipment Notes of any series to any Pass Through Trustee in an
aggregate principal amount in excess of the amount of the Deposits then
available for withdrawal by the Escrow Agent under and in accordance with the
provisions of the related Deposit Agreement.
Section 3. Conditions Precedent. The obligation of the Pass Through
Trustees to enter into, and to cause the Subordination Agent to enter into, any
Participation Agreement as directed pursuant to a Closing Notice and to perform
its obligations under such Participation Agreement is subject to satisfaction of
the following conditions:
(a) no Triggering Event shall have occurred;
(b) the Company shall have delivered a certificate to each such Pass
Through Trustee , each Liquidity Provider and the Policy Provider stating that
(i) such Participation Agreement and the other Financing Agreements to be
entered into pursuant to such Participation Agreement do not vary the Mandatory
Economic Terms and contain the Mandatory Document Terms (as such Mandatory
Document Terms may be modified in accordance with Schedule V hereto) and (ii)
any substantive modification of such Financing Agreements from the forms thereof
attached to this Agreement do not materially and adversely affect the Liquidity
Provider or the Certificate Holders or the Policy Provider, and such
certification shall be true and correct; and
(c) if required by Section 2(c) and in place of the statement in
clause (ii) of Section 3(b) above, Rating Agency Confirmation from each Rating
Agency and Policy Provider consent.
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Anything herein to the contrary notwithstanding, the obligation of
each Pass Through Trustee to purchase Equipment Notes shall terminate on the
Cut-Off Date.
In addition to the conditions specified in the Participation
Agreements, the obligation of the Pass Through Trustees to purchase on any
Scheduled Closing Date (or Substitute Closing Date) Equipment Notes is
subject to the receipt by Standard & Poor's of (x) an opinion of special
English counsel to the Company substantially in the form of Annex B hereto
and (y), if related to an Aircraft which is to be contemporaneously leased or
subleased to Mesaba, an opinion of special counsel to the Company
substantially in the form of Annex C hereto.
Section 4. Representations and Warranties.
(a) The Company represents and warrants on the date hereof and on
each Closing Date that:
i. the Company is duly incorporated, validly existing and in good
standing under the laws of the State of Minnesota and is a "citizen of the
United States" as defined in 49 U.S.C. ss. 40102 (a)(15), and has the full
corporate power, authority and legal right under the laws of the State of
Minnesota to execute and deliver this Agreement and each Financing
Agreement to which it will be a party and to carry out the obligations of
the Company under this Agreement and each Financing Agreement to which it
will be a party;
ii. the execution and delivery by the Company of this Agreement and
the performance by the Company of its obligations under this Agreement
have been duly authorized by the Company and will not violate its
Certificate of Incorporation or by-laws or the provisions of any material
indenture, mortgage, contract or other agreement to which it is a party or
by which it is bound; and
iii. this Agreement constitutes the legal, valid and binding
obligation of the Company, enforceable against it in accordance with its
terms, except as the same may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
rights of creditors generally and by general principles of equity, whether
considered in a proceeding at law or in equity.
(b) State Street Bank and Trust Company represents and warrants on
the date hereof and on each Closing Date that:
i. State Street Bank and Trust Company is duly incorporated, validly
existing and in good standing under the laws of the Commonwealth of
Massachusetts and is a "citizen of the United States" as defined in 49
X.X.X.xx. 40102 (a)(15), and has the full corporate power, authority and
legal right under the laws of the Commonwealth of Massachusetts and the
United States pertaining to its banking, trust and fiduciary powers to
execute and deliver this Agreement and each Financing Agreement to which
it will be a party and to carry out the obligations of State Street Bank
and Trust Company, in its capacity as Subordination Agent or Paying Agent,
as the case may be, under this Agreement and each Financing Agreement to
which it will be a party;
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ii. the execution and delivery by State Street Bank and Trust
Company, in its capacity as Subordination Agent or Paying Agent, as the
case may be, of this Agreement and the performance by State Street Bank
and Trust Company, in its capacity as Subordination Agent or Paying Agent,
as the case may be, of its obligations under this Agreement have been duly
authorized by State Street Bank and Trust Company, in its capacity as
Subordination Agent or Paying Agent, as the case may be, and will not
violate its articles of association or by-laws or the provisions of any
indenture, mortgage, contract or other agreement to which it is a party or
by which it is bound; and
iii. this Agreement constitutes the legal, valid and binding
obligation of State Street Bank and Trust Company in its capacity as
Subordination Agent or Paying Agent, as the case may be, enforceable
against it in accordance with its terms, except as the same may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the rights of creditors generally and by general
principles of equity, whether considered in a proceeding at law or in
equity.
(c) The Pass Through Trustee hereby confirms to each of the other
parties hereto that its representations and warranties set forth in Section 7.14
of the Basic Pass Through Trust Agreement are true and correct as of the date
hereof.
(d) The Subordination Agent represents and warrants that:
i. the Subordination Agent is duly incorporated, validly existing
and in good standing under the laws of the Commonwealth of Massachusetts,
and has the full corporate power, authority and legal right under the laws
of the Commonwealth of Massachusetts and the United States pertaining to
its banking, trust and fiduciary powers to execute and deliver this
Agreement and each Financing Agreement to which it is or will be a party
and to perform its obligations under this Agreement and each Financing
Agreement to which it is or will be a party;
ii. this Agreement has been duly authorized, executed and delivered
by the Subordination Agent; this Agreement constitutes the legal, valid
and binding obligations of the Subordination Agent enforceable against it
in accordance with its terms, except as the same may be limited by
applicable bankruptcy, insolvency reorganization, moratorium or similar
laws affecting the rights of creditors generally and by general principles
of equity, whether considered in a proceeding at law or in equity;
iii. none of the execution, delivery and performance by the
Subordination Agent of this Agreement contravenes any law, rule or
regulation of the Commonwealth of Massachusetts or any United States
governmental authority or agency regulating the Subordination Agent's
banking, trust or fiduciary powers or any judgment or order applicable to
or binding on the Subordination Agent and do not contravene the
Subordination Agent's articles of association or by-laws or result in any
breach of, or constitute a default under, any Agreement or instrument to
which the Subordination Agent is a party or by which it or any of its
properties may be bound;
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iv. neither the execution and delivery by the Subordination Agent of
this Agreement nor the consummation by the Subordination Agent of any of
the transactions contemplated hereby requires the consent or approval of,
the giving of notice to, the registration with, or the taking of any other
action with respect to, any Massachusetts governmental authority or agency
or any federal Governmental authority or agency regulating the
Subordination Agent's banking, trust or fiduciary powers;
v. there are no Taxes payable by the Subordination Agent imposed by
the Commonwealth of Massachusetts or any political subdivision or taxing
authority thereof in connection with the execution, delivery and
performance by the Subordination Agent of this Agreement (other than
franchise or other taxes based on or measured by any fees or compensation
received by the Subordination Agent for services rendered in connection
with the transactions contemplated by the Intercreditor Agreement or any
of the Liquidity Facilities), and there are no Taxes payable by the
Subordination Agent imposed by the Commonwealth of Massachusetts or any
political subdivision thereof in connection with the acquisition,
possession or ownership by the Subordination Agent of any of the Equipment
Notes (other than franchise or other taxes based on or measured by any
fees or compensation received by the Subordination Agent for services
rendered in connection with the transactions contemplated by the
Intercreditor Agreement or any of the Liquidity Facilities); and
vi. there are no pending or threatened actions or proceedings
against the Subordination Agent before any court or administrative agency
which individually or in the aggregate, if determined adversely to it,
would materially adversely affect the ability of the Subordination Agent
to perform its obligations under this Agreement.
(e) The Escrow Agent represents and warrants that:
i. the Escrow Agent is a national banking association duly
organized, validly existing and in good standing under the laws of the
United States and has the full corporate power, authority and legal right
under the laws of the United States pertaining to its banking, trust and
fiduciary powers to execute and deliver this Agreement, each Deposit
Agreement and each Escrow and Paying Agent Agreement (collectively, the
"Escrow Agent Agreements") and to carry out the obligations of the Escrow
Agent under each of the Escrow Agent Agreements;
ii. the execution and delivery by the Escrow Agent of each of the
Escrow Agent Agreements and the performance by the Escrow Agent of its
obligations hereunder and thereunder have been duly authorized by the
Escrow Agent and will not violate its articles of association or by-laws
or the provisions of any indenture, mortgage, contract or other agreement
to which it is a party or by which it is bound; and
iii. each of the Escrow Agent Agreements constitutes the legal,
valid and binding obligations of the Escrow Agent enforceable against it
in accordance with its terms, except as the same may be limited by
applicable bankruptcy, insolvency, reorganization,
9
moratorium or similar laws affecting the rights of creditors generally and
by general principles of equity, whether considered in a proceeding at law
or in equity.
(f) The Paying Agent represents and warrants that:
i. the Paying Agent is duly incorporated, validly existing and in
good standing under the laws of the Commonwealth of Massachusetts and has
the full corporate power, authority and legal right under the laws of the
United States pertaining to its banking, trust and fiduciary powers to
execute and deliver this Agreement and each Escrow and Paying Agent
Agreement (collectively, the "Paying Agent Agreements") and to carry out
the obligations of the Paying Agent under each of the Paying Agent
Agreements;
ii. the execution and delivery by the Paying Agent of each of the
Paying Agent Agreements and the performance by the Paying Agent of its
obligations hereunder and thereunder have been duly authorized by the
Paying Agent and will not violate its articles of association or by-laws
or the provisions of any indenture, mortgage, contract or other agreement
to which it is a party or by which it is bound; and
iii. each of the Paying Agent Agreements constitutes the legal,
valid and binding obligations of the Paying Agent enforceable against it
in accordance with its terms, except as the same may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the rights of creditors generally and by general principles
of equity, whether considered in a proceeding at law or in equity.
(g) State Street Bank and Trust Company of Connecticut, National
Association represents and warrants on the date hereof and on each Closing Date
that:
i. State Street Bank and Trust Company of Connecticut, National
Association is a national association validly existing and in good
standing with the Comptroller of the Currency under the laws of the United
States and is a "citizen of the United States" as defined in 49 X.X.X.xx.
40102 (a)(15), and has the full power, authority and legal right under the
laws of the United States pertaining to its banking, trust and fiduciary
powers to execute and deliver this Agreement and each Financing Agreement
to which it will be a party and to carry out the obligations of State
Street Bank and Trust Company of Connecticut, National Association, in its
capacity as Pass Through Trustee under this Agreement and each Financing
Agreement to which it will be a party;
ii. the execution and delivery by State Street Bank and Trust
Company of Connecticut, National Association, in its capacity as Pass
Through Trustee under this Agreement and the performance by State Street
Bank and Trust Company of Connecticut, National Association, in its
capacity as Pass Through Trustee, of its obligations under this Agreement
have been duly authorized by State Street Bank and Trust Company of
Connecticut, National Association, in its capacity as Pass Through Trustee
and will not violate its articles of association or by-laws or the
provisions of any indenture, mortgage, contract or other agreement to
which it is a party or by which it is bound; and
10
iii. this Agreement constitutes the legal, valid and binding
obligation of State Street Bank and Trust Company of Connecticut, National
Association in its capacity as Pass Through Trustee enforceable against it
in accordance with its terms, except as the same may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the rights of creditors generally and by general principles
of equity, whether considered in a proceeding at law or in equity.
Section 5. Covenants. (a) The Company covenants with each of the
other parties hereto that:
i. on the date that the Depositary is obligated to pay the amount of
the Final Withdrawal to the Paying Agent pursuant to a Deposit Agreement
relating to any Trust, the Company shall pay to the Pass Through Trustee
of such Trust no later than 1:00 p.m. (New York time) an amount equal to
the Deposit Make-Whole Amount, if any, required to be paid in respect of
such Final Withdrawal amount;
ii. subject to Section 5(a)(iv) of this Agreement, the Company shall
at all times maintain its corporate existence and shall not wind up,
liquidate or dissolve or take any action, or fail to take any action, that
would have the effect of any of the foregoing;
iii. the Company shall at all times remain a U.S. Air Carrier (as
defined in the Financing Agreements) and shall at all times be otherwise
certificated and registered to the extent necessary to entitle (i) in the
case of Leased Aircraft, the Owner Trustee (and the Indenture Trustee as
assignee of the Owner Trustee's rights under each Lease) to the rights
afforded to lessors of aircraft equipment under Section 1110 and (ii) in
the case of Owned Aircraft, the Indenture Trustee to the rights afforded
to secured parties of aircraft equipment under Section 1110;
iv. Section 8(y) of each Participation Agreement is hereby
incorporated by reference herein; and
v. the Company shall not issue Series D Equipment Notes pursuant to
any Indenture, unless it shall have received Rating Agency Confirmation,
without regard to the Policy. If Series D Equipment Notes are initially
issued to other than the pass through trustee for the Class D
Certificates, the Company will cause such Series D Equipment notes to be
subject to the provisions of the Intercreditor Agreement that allow the
"Controlling Party" (as defined in the Intercreditor Agreement), during
the continuance of an "Indenture Default" (as defined in the Intercreditor
Agreement), to direct the Loan Trustee in taking action under the
applicable Indenture.
(b) State Street Bank and Trust Company, in its individual capacity,
covenants with each of the other parties to this Agreement that it will,
immediately upon obtaining knowledge of any facts that would cast doubt upon its
continuing status as a "citizen of the United States" as defined in 49 U.S.C.
ss. 40102(a)(15) and promptly upon public disclosure of negotiations in respect
of any transaction which would or might adversely affect such status, notify in
writing all parties hereto of all relevant matters in connection therewith. Xxxx
Xxxxx
00
Xxxxxx Xxxx and Trust Company giving any such notice, State Street Bank and
Trust Company shall, subject to Section 9.01 of any Indenture then entered into,
resign as Trustee in respect of such Indenture.
Section 6. Notices. Unless otherwise specifically provided herein,
all notices required or permitted by the terms of this Agreement shall be in
English and in writing, and any such notice shall become effective upon being
delivered personally or, if promptly confirmed by mail, when dispatched by
facsimile or other written telecommunication, addressed to such party hereto at
its address or facsimile number set forth below the signature of such party at
the foot of this Agreement. Notice shall be given to the Policy Provider at the
address specified in the Policy Provider Agreement.
Section 7. Expenses. (a) The Company agrees to pay to the
Subordination Agent when due an amount or amounts equal to the fees payable to
the Liquidity Provider under Section 2.03 of each Liquidity Facility and the
related Fee Letter multiplied by a fraction the numerator of which shall be the
then outstanding aggregate amount of the Deposits under the Deposit Agreements
and the denominator of which shall be the sum of (x) the then outstanding
aggregate principal amount of the Series G Equipment Notes, Series B Equipment
Notes and Series C Equipment Notes issued under all of the Indentures and (y)
the then outstanding aggregate amount of the Deposits under the Deposit
Agreements. The Company agrees to pay the Subordination Agent when due for
application in accordance with the Intercreditor Agreement an amount or amounts
equal to the fees payable to the Policy Provider under Section 3.02 of the
Policy Provider Agreement multiplied by a fraction the numerator of which shall
be the then outstanding aggregate amount of the Deposits under the Deposit
Agreement pertaining to the Class G Trust and the denominator of which shall be
the sum of (x) the then outstanding aggregate principal amount of the Series G
Equipment Notes issued under all of the Indentures and (y) the then outstanding
aggregate amount of the Deposits under the Deposit Agreement pertaining to the
Class G Trust.
(b) So long as no Equipment Notes have been issued in respect of any
Aircraft, the Company agrees to pay (i) to the Subordination Agent when due (A)
the amount equal to interest on any Downgrade Advance (other than Applied
Downgrade Advance) payable under Section 3.07 of each Liquidity Facility minus
Investment Earnings while such Downgrade Advance shall be outstanding, (B) the
amount equal to interest on any Non-Extension Advance (other than an Applied
Non-Extension Advance) payable under Section 3.07 of each Liquidity Facility
minus Investment Earnings while such Non-Extension Advance shall be outstanding,
and (C) any other amounts owed to the Liquidity Provider by the Subordination
Agent as borrower under each Liquidity Facility (other than amounts due as
repayment of advances thereunder or as interest on such advances, except to the
extent payable pursuant to clause (A) or (B)), (ii) all compensation and
reimbursement of expenses, disbursements and advances payable by the Company
under the Pass Through Trust Agreements, (iii) all compensation and
reimbursement of expenses and disbursements payable to the Subordination Agent
under the Intercreditor Agreement except with respect to any income or franchise
taxes incurred by the Subordination Agent in connection with the transactions
contemplated by the Intercreditor Agreement and (iv) in the event the Company
requests any amendment to any Operative Document, all reasonable fees and
expenses (including, without limitation, fees and
12
disbursements of counsel) of the Policy Provider, the Escrow Agent and/or the
Paying Agent in connection therewith. For purposes of this Section 7(b), (i) the
terms "Applied Non-Extension Advance," "Applied Downgrade Advance," "Downgrade
Advance" and "Non-Extension Advance" shall have the meanings specified in each
Liquidity Facility and (ii) the term "Investment Earnings" shall have the
meaning specified in the Intercreditor Agreement.
Section 8. Further Assurances. Each party hereto shall duly execute,
acknowledge and deliver, or shall cause to be executed, acknowledged and
delivered, all such further agreements, instruments, certificates or documents,
and shall do and cause to be done such further acts and things, in any case, as
any other party hereto shall reasonably request in connection with its
administration of, or to carry out more effectually the purposes of, or to
better assure and confirm unto it the rights and benefits to be provided under,
this Agreement.
Section 9. Miscellaneous. (a) Provided that the transactions
contemplated hereby have been consummated, and except as otherwise provided for
herein, the representations, warranties and agreements herein of the Company,
the Subordination Agent, the Escrow Agent, the Paying Agent and the Pass Through
Trustee, and the Company's, the Subordination Agent's, the Escrow Agent's, the
Paying Agent's and the Pass Through Trustee's obligations under any and all
thereof, shall survive the expiration or other termination of this Agreement and
the other agreements referred to herein.
(b) This Agreement may be executed in any number of counterparts
(and each of the parties hereto shall not be required to execute the same
counterpart). Each counterpart of this Agreement, including a signature page
executed by each of the parties hereto, shall be an original counterpart of this
Agreement, but all of such counterparts together shall constitute one
instrument. Neither this Agreement nor any of the terms hereof may be
terminated, amended, supplemented, waived or modified orally, but only by an
instrument in writing signed by the party against which the enforcement of the
termination, amendment, supplement, waiver or modification is sought. The index
preceding this Agreement and the headings of the various Sections of this
Agreement are for convenience of reference only and shall not modify, define,
expand or limit any of the terms or provisions hereof. The terms of this
Agreement shall be binding upon, and shall inure to the benefit of, the Company
and its successors and permitted assigns, the Pass Through Trustee and its
successors as Pass Through Trustee (and any additional trustee appointed) under
any of the Pass Through Trust Agreements, the Escrow Agent and its successors as
Escrow Agent under the Escrow and Paying Agent Agreements, the Paying Agent and
its successors as Paying Agent under the Escrow and Paying Agent Agreement and
the Subordination Agent and its successors as Subordination Agent under the
Intercreditor Agreement.
(c) This Agreement is not intended to, and shall not provide any
person not a party hereto (other than the Underwriters and each of the
beneficiaries of Section 7 hereof) with any rights of any nature whatsoever
against any of the parties hereto, and no person not a party hereto (other than
the Underwriters and each of the beneficiaries of Section 7 hereof) shall have
any right, power or privilege in respect of, or have any benefit or interest
arising out of, this Agreement.
13
(d) So long as the Certificates are rated by the Ratings Agencies,
the Company shall provide the Ratings Agencies written notice of any Lease
(other than to Mesaba) under an Owned Aircraft Indenture (such notice to be
given not later than five days prior to entering into such Lease, if
practicable, but in any event promptly after entering into any such Lease) and a
copy of any such Lease which has a term of more than three months.
Section 10. Indemnity. The Company hereby agrees to indemnify each
Indemnitee against, and agrees to protect, defend, save and keep harmless each
thereof from any and all liabilities, obligations, losses, damages, penalties,
claims, actions, suits, out-of-pocket costs, expenses, and disbursements, of
whatsoever kind and nature (collectively called "Expenses") imposed on, incurred
by or asserted against any Indemnitee, in any way relating to or arising out of
(A) any of the Financing Agreements or any lease or sublease of any Aircraft or
the enforcement of any of the terms thereof or any amendment, modification or
waiver in respect thereof, (B) the manufacture, purchase, acceptance or
rejection of the Airframe (as defined in the Participation Agreement) or any
Engine (as defined in the Participation Agreement), (C) the Aircraft (or any
portion thereof or any Engine or engine affixed to the Airframe) whether or not
arising out of the finance, refinance, ownership, delivery, nondelivery,
storage, lease, sublease, sub-sublease, possession, use, non-use, operation,
maintenance, registration, reregistration, condition, modification, alteration,
replacement, repair, substitution, sale, return or other disposition of the
Aircraft (or any portion thereof or any Engine or engine affixed to the
Airframe) including, without limitation, latent or other defects, whether or not
discoverable, strict tort liability and any claim for patent, trademark or
copyright infringement, or (D) the offer, sale or delivery of the Equipment
Notes (the indemnity in this clause (D) to extend also to any person who
controls an Indemnitee within the meaning of Section 15 of the Securities Act of
1933, as amended); provided that the foregoing indemnity as to any Indemnitee
shall not extend to any Expense resulting from or arising out of or which would
not have occurred but for one or more of the following: (A) any representation
or warranty by such Indemnitee (or any of its affiliates) in the Financing
Agreements or in connection therewith being incorrect in any material respect,
or (B) the failure by such Indemnitee (or any of its affiliates) to perform or
observe any agreement, covenant or condition in any of the Financing Agreements
applicable to it (except to the extent such failure was caused directly by the
failure of the Company to perform any obligation under a Financing Agreement),
or (C) the willful misconduct or the gross negligence of such Indemnitee (or any
of its affiliates) other than gross negligence imputed to such Indemnitee (or
any of its affiliates) solely by reason of its interest in the Aircraft), or (D)
any Tax, or (E) the authorization or giving or withholding of any future
amendments, supplements, waivers or consents with respect to any of the
Financing Agreements other than such as have been consented to, approved,
authorized or requested by the Company, or (F) subject to the next succeeding
paragraph, any loss of tax benefits or increase in tax liability under any tax
law whether or not the Company is required to indemnify therefor pursuant to
this Agreement, or (G) any Expense which is specified to be for the account of
an Indemnitee pursuant to any Financing Agreement without express right of
reimbursement under any Financing Agreement. The foregoing indemnity shall not
extend to any Expense to the extent that such Expense is not caused by, or does
not arise out of, an act, omission or event which occurs prior to the payment of
all payments required to be paid by the Company under the Financing Agreements.
14
The Company further agrees that any payment or indemnity pursuant to
this Section 10 in respect of any Expenses shall be in an amount which, after
deduction of all Taxes required to be paid by such recipient with respect to
such payment or indemnity under the laws of any Federal, state or local
government or taxing authority in the United States, or under the laws of any
taxing authority or governmental subdivision of a foreign country, or any
territory or possession of the United States or any international authority,
shall be equal to the excess, if any, of (A) the amount of such Expense over (B)
the net reduction in Taxes required to be paid by such recipient resulting from
the accrual or payment of such Expense.
If, by reason of any Expense payment made to or for the account of
an Indemnitee by the Company pursuant to this Section 10, such Indemnitee
subsequently realizes a tax deduction or credit (including foreign tax credit
and any reduction in Taxes) not previously taken into account in computing such
payment, such Indemnitee shall promptly pay to the Company, but only if the
Company shall have made all payments then due and owing to such Indemnitee under
the Financing Agreements, an amount equal to the sum of (I) the actual reduction
in Taxes realized by such Indemnitee which is attributable to such deduction or
credit, and (II) the actual reduction in Taxes realized by such Indemnitee as a
result of any payment made by such Indemnitee pursuant to this sentence.
If a claim is made against an Indemnitee involving one or more
Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly,
upon receiving such notice, give notice of such claim to the Company; provided
that the failure to provide such notice shall not release the Company from any
of its obligations to indemnify hereunder, and no payment by the Company to an
Indemnitee pursuant to this Section 10 shall be deemed to constitute a waiver or
release of any right or remedy which the Company may have against such
Indemnitee for any actual damages as a result of the failure by such Indemnitee
to give the Company such notice. The Company shall be entitled, at its sole cost
and expense, acting through counsel acceptable to the respective Indemnitee, (A)
so long as the Company has agreed in a writing acceptable to such Indemnitee
that the Company is liable to such Indemnitee for such Expense hereunder (unless
such Expense is covered by the proviso to the first paragraph of this Section
10), in any judicial or administrative proceeding that involves solely a claim
for one or more Expenses, to assume responsibility for and control thereof, (B)
so long as the Company has agreed in a writing acceptable to such Indemnitee
that the Company is liable to such Indemnitee for such Expense hereunder (unless
such Expense is covered by the proviso to the first paragraph of this Section
10), in any judicial or administrative proceeding involving a claim for one or
more Expenses and other claims related or unrelated to the transactions
contemplated by the Financing Agreements, to assume responsibility for and
control of such claim for Expenses to the extent that the same may be and is
severed from such other claims (and such Indemnitee shall use its best efforts
to obtain such severance), and (C) in any other case, to be consulted by such
Indemnitee with respect to judicial proceedings subject to the control of such
Indemnitee. Notwithstanding any of the foregoing to the contrary, the Company
shall not be entitled to assume responsibility for and control of any such
judicial or administrative proceedings (M) while an event of default shall have
occurred and be continuing under any of the Financing Agreements or (N) if such
proceeding could be in the good faith opinion of such Indemnitee entail any
material risk of criminal liability or present a conflict of interest making
separate representation necessary. The
15
affected Indemnitee may participate at its own expense and with its own counsel
in any judicial proceeding controlled by the Company pursuant to the preceding
provisions.
The affected Indemnitee shall supply the Company with such
information reasonably requested by the Company as is necessary or advisable for
the Company to control or participate in any proceeding to the extent permitted
by this Section 10. Such Indemnitee shall not enter into a settlement or other
compromise with respect to any Expense without the prior written consent of the
Company, which consent shall not be unreasonably withheld or delayed, unless
such Indemnitee waives its right to be indemnified with respect to such Expense
under this Section 10.
The Company shall supply the affected Indemnitee with such
information reasonably requested by such Indemnitee as is necessary or advisable
for such Indemnitee to control or participate in any proceeding to the extent
permitted by this Section 10.
When the Company or the insurers under a policy of insurance
maintained by the Company undertakes the defense of an Indemnitee with respect
to an Expense, no additional legal fees or expenses of such Indemnitee in
connection with the defense of such Indemnitee shall be indemnified hereunder
unless such fees or expenses were incurred at the written request of the Company
or such insurers, provided that no such defense shall be compromised or settled
on a basis that admits any gross negligence or willful misconduct on the part of
such Indemnitee without such Indemnitee's prior consent.
In the event that the Company shall have paid an amount to an
Indemnitee pursuant to this Section 10, and such Indemnitee subsequently shall
be reimbursed in respect of such indemnified amount from any other Person, such
Indemnitee shall promptly pay to the Company an amount equal to the amount of
such reimbursement (but in no event more than such payment from the Company)
plus any net tax benefit (or minus any net tax detriment) realized by such
Indemnitee as a result of any reimbursement received and payment made by such
Indemnitee pursuant to this sentence, provided that (i) no event of default has
occurred and is continuing under any of the Financing Agreements and (ii) such
Indemnitee shall have no obligation to reimburse the Company if the Company has
not paid such Indemnitee all amounts required pursuant to this Section 10 and
any other amounts then due to such Indemnitee from the Company under any of the
Financing Agreements.
The Company's obligations under the indemnities provided for in this
Agreement shall be those of a primary obligor, whether or not the Person
indemnified shall also be indemnified with respect to the same matter under the
terms of any other document or instrument, and the Person seeking
indemnification from the Company pursuant to this Section 10 may proceed
directly against the Company without first seeking to enforce any other right of
indemnification.
Section 11. Termination. This Agreement shall terminate on the
Delivery Period Termination Date; provided, that, the provisions of Sections 7,
8 and 9 hereof shall survive any termination of this Agreement.
16
Section 12. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
(This space intentionally left blank.)
17
IN WITNESS WHEREOF, the parties hereto have caused this Note
Purchase Agreement to be duly executed by their respective officers thereunto
duly authorized as of the day and year first above written.
NORTHWEST AIRLINES, INC.
By:
-------------------------------------
Name:
Title:
Address:
Attention:
Facsimile:
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION, not
in its individual capacity, except as
otherwise provided herein, but solely
as Pass Through Trustee
By:
------------------------------------
Name:
Title:
Address:
Attention:
Facsimile:
00
XXXXX XXXXXX BANK AND TRUST COMPANY,
not in its individual capacity, except
as otherwise provided herein, but
solely as Subordination Agent
By:
------------------------------------
Name:
Title:
Address:
Attention:
Facsimile:
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, as Escrow Agent
By:
-------------------------------------
Name:
Title:
Address:
Attention:
Facsimile:
STATE STREET BANK AND TRUST COMPANY, as
Paying Agent
By:
-------------------------------------
Name:
Title:
Address:
Attention:
Facsimile:
19
SCHEDULE I TO
NOTE PURCHASE AGREEMENT
NEW AIRCRAFT AND SCHEDULED CLOSING MONTHS
-----------------------------------------------------------------------------------------------
Expected
Expected Manufacturer's Scheduled
New Aircraft Type Registration Number Serial Number Delivery Months
-----------------------------------------------------------------------------------------------
Avro RJ85 N523XJ E2348 April 1999
-----------------------------------------------------------------------------------------------
Avro RJ85 N524XJ E2349 April 1999
-----------------------------------------------------------------------------------------------
Avro RJ85 N525XJ E2350 May 1999
-----------------------------------------------------------------------------------------------
Avro RJ85 N526XJ E2351 May 1999
-----------------------------------------------------------------------------------------------
Avro RJ85 N527XJ E2352 June 1999
-----------------------------------------------------------------------------------------------
Avro RJ85 N528XJ E2353 June 1999
-----------------------------------------------------------------------------------------------
Avro RJ85 N529XJ E2363 December 1999
-----------------------------------------------------------------------------------------------
Avro RJ85 N530XJ E2364 January 2000
-----------------------------------------------------------------------------------------------
Avro RJ85 N531XJ E2365 January 2000
-----------------------------------------------------------------------------------------------
Avro RJ85 N532XJ TBD March 2000
-----------------------------------------------------------------------------------------------
Avro RJ85 N533XJ TBD March 2000
-----------------------------------------------------------------------------------------------
Avro RJ85 N534XJ TBD April 2000
-----------------------------------------------------------------------------------------------
Avro RJ85 N535XJ TBD April 2000
-----------------------------------------------------------------------------------------------
Avro RJ85 N536XJ TBD May 2000
-----------------------------------------------------------------------------------------------
SCHEDULE II TO
NOTE PURCHASE AGREEMENT
TRUST SUPPLEMENTS
Trust Supplement, dated as of the Issuance Date, among the Company,
NWA Corp. and the Pass Through Trustee in respect of Northwest Airlines Pass
Through Trust, Series 1999-3G.
Trust Supplement, dated as of the Issuance Date, among the Company,
NWA Corp. and the Pass Through Trustee in respect of Northwest Airlines Pass
Through Trust, Series 1999-3B.
Trust Supplement, dated as of the Issuance Date, among the Company,
NWA Corp. and the Pass Through Trustee in respect of Northwest Airlines Pass
Through Trust, Series 1999-3C.
SCHEDULE III TO
NOTE PURCHASE AGREEMENT
DEPOSIT AGREEMENTS
Deposit Agreement (Class G), dated as of the Issuance Date, between
the Depositary and the Escrow Agent.
Deposit Agreement (Class B), dated as of the Issuance Date, between
the Depositary and the Escrow Agent.
Deposit Agreement (Class C), dated as of the Issuance Date, between
the Depositary and the Escrow Agent.
SCHEDULE IV TO
NOTE PURCHASE AGREEMENT
ESCROW AND PAYING AGENT AGREEMENTS
Escrow and Paying Agent Agreement (Class G), dated as of the
Issuance Date, among the Escrow Agent, the Underwriters, the Pass Through
Trustee and the Paying Agent.
Escrow and Paying Agent Agreement (Class B), dated as of the
Issuance Date, among the Escrow Agent, the Underwriters, the Pass Through
Trustee and the Paying Agent.
Escrow and Paying Agent Agreement (Class C), dated as of the
Issuance Date, among the Escrow Agent, the Underwriters, the Pass Through
Trustee and the Paying Agent.
SCHEDULE V TO
NOTE PURCHASE AGREEMENT
MANDATORY DOCUMENT TERMS
The terms "Trust Indenture Form," "Lease Form" and "Participation
Agreement Form" shall have the respective meanings specified in Schedule VI to
the Note Purchase Agreement.
1. May not modify in any material adverse respect as regards the
interests of the Note Holders, the Subordination Agent, the Liquidity Provider,
the Policy Provider or the Indenture Trustee, the Granting Clause of the Trust
Indenture Form so as to deprive the Note Holders of a first priority security
interest in and mortgage lien on the Aircraft and, in the case of a Leased
Aircraft Indenture, the Lease or to eliminate any of the obligations intended to
be secured thereby or otherwise modify in any material adverse respect as
regards the interests of the Note Holders, the Subordination Agent, the
Liquidity Provider, the Policy Provider or the Indenture Trustee the provisions
of Article II or III or Sections 4.02, 4.03, 4.04, 5.02, 5.06, 9.01 or the first
sentence of Section 10.11 of the Leased Aircraft Indenture Form for the Leased
Aircraft or Article II or III or Sections 4.01, 4.02, 5.02, 7.06(a), 7.06(b),
10.01, or the first sentence of Section 11.11 of the Owned Aircraft Indenture
Form for the Owned Aircraft.
2. May not modify in any material adverse respect as regards the
interests of the Note Holders, the Subordination Agent, the Liquidity Provider,
the Policy Provider or the Indenture Trustee the provisions of Section 3(d)(v),
Section 3(f), Section 7(a)(I)(i), clause (6) of the final paragraph of Section
10(a), Section 16, Section 18, the first and third sentences of Section 20 or
the penultimate sentence of Section 24 of the Lease Form or otherwise modify the
terms of the Lease Form so as to deprive the Indenture Trustee of rights
expressly granted to the "Indenture Trustee" therein.
3. May not modify in any material adverse respect as regards the
interests of the Note Holders, the Subordination Agent, the Liquidity Provider
or the Indenture Trustee the provisions of Section 4(a)(ix)(1), 4(a)(ix)(2),
4(a)(ix)(3), 4(a)(xxiii) to the extent such section requires special counsel for
the Lessee to deliver an opinion relating to Section 1110 of the Bankruptcy
Code, Sections 8(q), 8(cc), 11(b), 12 or the penultimate sentence of Section
15(c), 15(e) or the provisions of Sections 4(a)(xi), 4(a)(xii), 4(a)(xiii),
4(a)(xiv), 4(a)(xv) and 4(a)(xvi) of the Participation Agreement Form so as to
eliminate the requirement to deliver to the Loan Participant or the Indenture
Trustee, as the case may be, the legal opinions to be provided to such Persons
thereunder (recognizing that the lawyers rendering such opinions may be changed)
or the provisions of Section 8(f)(ii)(C) or otherwise modify the terms of the
Participation Agreement Form to deprive the Subordination Agent, the Liquidity
Provider or the Indenture Trustee of any indemnity or right of reimbursement in
its favor for Expenses or Taxes.
4. May not modify, in any material adverse respect as regards the
interests of the Note Holders, the Subordination Agent, the Liquidity Provider
or the Indenture Trustee, the definition of "Make-Whole Amount" in the Leased
Aircraft Indenture Form (with respect to
Equipment Notes relating to Leased Aircraft) or in Annex A to the Owned Aircraft
Indenture Form (with respect to Equipment Notes relating to Owned Aircraft).
Notwithstanding the foregoing, any such Mandatory Document Term may
be modified to correct or supplement any such provision which may be defective
or to cure any ambiguity or correct any mistake, provided, however, that any
such action shall not materially adversely affect the interests of the Note
Holders, the Subordination Agent, the Liquidity Provider, the Policy Provider,
the Indenture Trustee or the Certificate Holders.
Sch. V-2
SCHEDULE VI TO
NOTE PURCHASE AGREEMENT
MANDATORY ECONOMIC TERMS
EQUIPMENT NOTES
Obligor: Northwest Airlines, Inc. or an Owner Trust
Maximum Principal Amount:
The principal amount of all the Equipment Notes issued with respect
to an Aircraft shall not exceed the maximum principal amount of Equipment Notes
indicated for each such Aircraft as set forth in the Prospectus Supplement in
"Summary of Terms--Equipment Notes and the Aircraft" under the column "Maximum
Principal Amount of Equipment Notes."
Initial Loan to Aircraft Value (with the value of any Aircraft for
these purposes equal to the value (the "Assumed Appraised Value") for such
Aircraft set forth in the Prospectus Supplement in "Prospectus Supplement
Summary of Terms--Equipment Notes and the Aircraft'` under the column "Appraised
Base Value"):
Series G: not in excess of 44.1%
Series B: not in excess of 64.1%
Series C: not in excess of 69.1%
The Loan to Aircraft Value for each series of Equipment Notes issued
in respect of each Aircraft (computed as of the date of the issuance thereof on
the basis of the Assumed Appraised Value of such Aircraft and the Depreciation
Assumption (as defined in the Prospectus Supplement in "Description of the
Equipment Notes - Loan to Value Ratios of Equipment Notes")) will not exceed at
the time of issuance thereof and as of any Regular Distribution Date thereafter
(assuming no default in the payment of the Equipment Notes) 44.3% in the case of
the Series G Equipment Notes and 64.1% in the case of the Series B Equipment
Notes and 72.2% in the case of the Series C Equipment Notes. Initial Average
Life (in years) of the Series G Equipment Notes, the Series B Equipment Notes
and the Series C Equipment Notes on any Aircraft will not be more than 13.0
years, 10.5 years and 5.5 years, respectively, in each case from the Issuance
Date.
AVERAGE LIFE (IN YEARS)
As of the first Regular Distribution Date following the Delivery
Period Termination Date, the average life of the Class G Certificateswill not be
less than 10.0 years or more than 12.7 years and the average life of the Class B
Certificates and the Class C Certificates shall not be more than 10.0 years and
5.0 years, respectively, from the Issuance Date (computed without regard to the
acceleration of any Equipment Notes and after giving effect to any special
distribution on the Certificates thereafter required in respect of unused
Deposits).
FINAL EXPECTED DISTRIBUTION DATE
Class G Certificates: April 1, 2019
Class B Certificates: April 1, 2015
Class C Certificates: April 1, 2010
Past Due Rate: Debt Rate plus 2% per annum.
Payment Dates: April 1 and October 1, commencing with the first such date after
the applicable Equipment Notes are issued
Make-Whole Amounts: As provided in Article II of the form of Leased Aircraft
Indenture marked as Exhibit A-3 of the Note Purchase Agreement (the "Leased
Aircraft Indenture Form") or the form of Owned Aircraft Indenture marked as
Exhibit C-2 of the Note Purchase Agreement (the "Owned Aircraft Indenture Form",
together with the Leased Aircraft Indenture Form, the "Trust Indenture Form").
Redemption and Purchase: As provided in Article II of the Trust Indenture Form.
At the earlier of the date all Aircraft have been delivered and all Equipment
Notes issued and the Delivery Period Termination Date, the aggregate principal
amount of each Series of Equipment Notes shall equal the original aggregate face
amount of the related Class of Certificates without giving effect to any
scheduled principal payments on such Equipment Notes but after giving effect to
any reductions to the Pool Balance for such Class of Certificates from Deposits
not used to purchase Equipment Notes on or before such date.
The interest rate applicable to each Series of Equipment Notes must be equal to
the rate applicable to the Certificates issued by the corresponding Trust.
All-risk hull insurance: Not less than an amount equal to the stipulated loss
value (in the case of a Leased Aircraft) or unpaid
principal amount of the related Equipment Notes (in the
case of an Owned Aircraft).
Sch. VI-2
LEASE
Term: The Basic Lease Term shall expire by its terms on or
after final maturity date of the related Series G,
Series B or Series C Equipment Notes.
Lease Period Dates: Each April 1 and October 1, commencing with the first
such date after the Lease is entered into, to and
including the last such date in the Term.
Minimum Rent: Basic Rent (and supplemental rent, if any) due and
payable on each Lease Period Date shall be at least
sufficient to pay in full, as of such Lease Period Date
(assuming timely payment of the related Equipment Notes
prior to such Date), the aggregate principal amount of
scheduled installments due on the related Equipment
Notes outstanding on such Lease Period Date, together
with accrued and unpaid interest thereon.
Termination Value At all times equal to or greater than the then
and Stipulated outstanding principal amount of the related Equipment
Loss Value: Notes together with accrued interest thereon.
Minimum Liability $150,000,000 per occurrence.
Insurance Amount:
Past Due Rate: As set forth in the Lease Form (the "Lease Form")
marked as Exhibit A-2 to the Note Purchase Agreement.
PARTICIPATION AGREEMENT
The Loan Trustee, the Subordination Agent, the Liquidity Provider,
the Policy Provider, the Pass Through Trustees and the Note Holders shall be
indemnified against Expenses and Taxes in a manner no less favorable to the Loan
Trustee, the Subordination Agent, the Liquidity Provider, the Policy Provider,
the Pass Through Trustees and the Note Holders than that set forth in Sections
7(b) and 7(c) of the form of the Participation Agreement (the "Participation
Form") marked as Exhibit A-1 to the Note Purchase Agreement for the Leased
Aircraft or as Exhibit C-1 to the Note Purchase Agreement for the Owned
Aircraft.
Sch.VI-3
SCHEDULE VII TO
NOTE PURCHASE AGREEMENT
AGGREGATE AMORTIZATION SCHEDULE
1999-3G 1999-3B 1999-3C
Trust Equipment Trust Equipment Trust Equipment
Notes Scheduled Notes Scheduled Notes Scheduled
Payments of Payments of Payments of
Principal Principal Principal
Date Class G Class B Class C
--------------- --------------- ---------------
April 1, 2000 $ 1,877,080 $ 0 $ 2,811,252
October 1, 2000 670,672 25,197 3,394,963
April 1, 2001 3,834,855 0 3,139,199
October 1, 2001 110,888 1,346,446 0
April 1, 2002 4,395,129 0 164,065
October 1, 2002 0 4,130,347 0
April 1, 2003 4,506,107 0 998,406
October 1, 2003 0 4,729,928 79,280
April 1, 2004 4,506,107 0 1,970,004
October 1, 2004 0 4,019,460 0
April 1, 2005 4,506,107 0 2,970,293
October 1, 2005 1,667,306 3,062,620 0
April 1, 2006 2,838,801 0 4,855,816
October 1, 2006 2,593,787 3,092,979 0
April 1, 2007 1,912,320 0 5,258,194
October 1, 2007 4,930,689 2,393,023 0
April 1, 2008 918,291 0 4,660,226
October 1, 2008 5,565,945 2,041,333 0
April 1, 2009 94,275 0 590,014
October 1, 2009 6,930,313 2,211,444 920,250
April 1, 2010 0 2,286,960 135,039
October 1, 2010 6,484,234 1,190,988 0
April 1, 2011 0 4,947,981 0
October 1, 2011 7,024,588 1,290,238 0
April 1, 2012 0 7,061,669 0
October 1, 2012 6,484,236 444,619 0
April 1, 2013 0 5,004,836 0
October 1, 2013 7,024,589 158,557 0
April 1, 2014 0 2,374,855 0
October 1, 2014 6,484,235 6,033,714 0
April 1, 2015 0 165,805 0
October 1, 2015 7,024,588 0 0
April 1, 2016 0 0 0
October 1, 2016 10,274,207 0 0
April 1, 2017 2,411,812 0 0
October 1, 2017 16,880,017 0 0
April 1, 2018 0 0 0
October 1, 2018 26,140,607 0 0
April 1, 2019 2,111,121 0 0
Sch. VII-2
ANNEX A TO
NOTE PURCHASE AGREEMENT
DEFINITIONS
"Act" means 49 U.S.C. xx.xx. 40101-46507.
"Affiliate" means, with respect to any person, any other person
directly or indirectly controlling, controlled by or under common control with
such person. For purposes of this definition, "control" means the power,
directly or indirectly, to direct or cause the direction of the management and
policies of such person, whether through the ownership of voting securities or
by contract or otherwise and "controlling," "controlled by" and "under common
control with" have correlative meanings.
"Aircraft Purchase Agreement" means the Sale and Purchase Agreement,
dated as of February 5, 1997, between the Company and the Manufacturer
(including the Manufacturer Support Agreement).
"Aircraft Purchase Agreement Assignment" means a Purchase Agreement
Assignment substantially in the form of Exhibit A-4 to the Note Purchase
Agreement.
"Assumed Amortization Schedule" means Schedule VII to the Note
Purchase Agreement.
"Average Life Date" means, for any Equipment Note, the date which
follows the time of determination by a period equal to the Remaining Weighted
Average Life at the redemption date of such Equipment Note.
"Bankruptcy Code" means the United States Bankruptcy Code, 11 U.S.C.
xx.xx. 101 et seq.
"Basic Pass Through Trust Agreement" means the Pass Through Trust
Agreement, dated as of June 3, 1999, among the Company, Northwest Airlines
Corporation and the Pass Through Trustee, as amended, supplemented, amended or
modified, but does not include any Trust Supplement.
"Business Day" means any day, other than a Saturday, Sunday or other
day on which commercial banks are authorized or required by law to close in New
York, New York, Minneapolis, Minnesota, Chicago, Illinois, Hartford,
Connecticut, Boston, Massachusetts or Salt Lake City, Utah.
"Certificate" has the meaning set forth in the recitals to the Note
Purchase Agreement.
"Certificate Holder" means the Person in whose name a Certificate is
registered in the Register.
Annex A-1
"Class" means the class of Certificates issued by each Pass Through
Trust.
"Class B Certificates" means the Class B Certificates issued by the
Northwest Airlines Pass Through Trust, Series 1999-3B.
"Class B Trust" means the Northwest Airlines Pass Through Trust,
Series 1999-3B formed pursuant to the Basic Pass Through Trust Agreement and
Class B Trust Supplement.
"Class C Certificates" means the Class C Certificates issued by the
Northwest Airlines Pass Through Trust, Series 1999-3C.
"Class C Trust" means the Northwest Airlines Pass Through Trust,
Series 1999-3C formed pursuant to the Basic Pass Through Trust Agreement and
Class C Trust Supplement.
"Class D Certificates" means the certificates, if any, issued by
Northwest Airlines, Inc. and designated Class D certificates, in connection with
a secured financing or leveraged lease transaction relating to an aircraft which
will be used in its operations.
"Class G Certificates" means the Class G Certificates issued by the
Northwest Airlines Pass Through Trust, Series 1999-3G.
"Class G Trust" means the Northwest Airlines Pass Through Trust,
Series 1999-3G formed pursuant to the Basic Pass Through Trust Agreement and
Class G Trust Supplement.
"Closing Date" means the Business Day on which a closing occurs
under the Financing Agreements.
"Closing Notice" has the meaning set forth in Section 2(b) hereof.
"Company" means Northwest Airlines, Inc., a Minnesota corporation.
"Cut-Off Date" means the earlier of (a) the day after the Delivery
Period Termination Date and (b) the date on which a Triggering Event occurs.
"Delivery Period Termination Date" means July 31, 2000..
"Deposit" has the meaning set forth in the recitals to the Note
Purchase Agreement.
"Deposit Agreement" has the meaning set forth in the recitals to the
Note Purchase Agreement.
Annex A-2
"Deposit Make-Whole Amount" means, with respect to the distribution
of unused Deposits to holders of any Class of Certificates, as of any date of
determination, an amount equal to the excess, if any, of (a) the present value
of the excess of (i) the scheduled payment of principal and interest to maturity
of the related series of Equipment Notes, assuming the maximum principal amount
thereof (the "Maximum Amount") minus the Non-Premium Amount were issued, on each
remaining Regular Distribution Date for such Class under the Assumed
Amortization Schedule over (ii) the scheduled payment of principal and interest
to maturity of the Equipment Notes actually acquired by the Trustee for such
Class on each such Regular Distribution Date, such present value computed by
discounting such excess on a semiannual basis on each Regular Distribution Date
(assuming a 360-day year of twelve 30-day months) using a discount rate equal to
the Treasury Yield plus [ ] basis points in the case of the Class G Certificates
and [ ] basis points in the case of the Class B Certificates and [ ] basis
points in the case of Class C Certificates over (b) the amount of such unused
Deposits to be distributed to the holders of such Certificates, minus the
Non-Premium Amount plus accrued and unpaid interest on such net amount to but
excluding the date of determination from and including the preceding Regular
Distribution Date (or if such date of determination precedes the first Regular
Distribution Date, the Issuance Date).
"Depositary" means ABN AMRO Bank N.V., doing business through a
United States branch, a banking institution organized under the laws of The
Netherlands.
"Equipment Notes" means and includes any secured certificates issued
under any Indenture in the form specified in Section 2.01 thereof (as such form
may be varied pursuant to the terms of such Indenture) and any Equipment Note
issued under any Indenture in exchange for or replacement of any other Equipment
Note.
"Escrow Agent" has the meaning set forth in the first paragraph of
the Note Purchase Agreement.
"Escrow and Paying Agent Agreement" has the meaning set forth in the
recitals to the Note Purchase Agreement.
"FAA" means the Federal Aviation Administration of the United
States.
"Fee Letter" means the Fee Letter dated as of the date hereto among
the Liquidity Provider, the Subordination Agent and Northwest with respect to
the Liquidity Facilities.
"Final Withdrawal" with respect to each Escrow and Paying Agent
Agreement, has the meaning set forth in Section 1.2 thereof.
"Financing Agreements" means, collectively, the Lease Financing
Agreements and the Owner Financing Agreements.
"Government Entity" means (a) any federal, state, provincial or
similar government, and any body, board, department, commission, court,
tribunal, authority, agency or other instrumentality of any such government or
otherwise exercising any executive, legislative,
Annex A-3
judicial, administrative or regulatory functions of such government or (b) any
other government entity having jurisdiction over any matter contemplated by the
Operative Documents or relating to the observance or performance of the
obligations of any of the parties to the Operative Documents.
"Guarantee" means a Guarantee whereby Northwest Airlines Corporation
guarantees (i) the Company's obligations under a Lease (in the case of a Leased
Aircraft) or (ii) the Company's obligations under an Owned Aircraft Indenture
(in the case of an Owned Aircraft).
"H.15(519)" means the weekly statistical release designated as such,
or any successor publication, published by the Board of Governors of the Federal
Reserve System.
"Indemnitee" means the Escrow Agent and the Paying Agent.
"Indentures" means, collectively, the Leased Aircraft Indentures and
the Owned Aircraft Indentures.
"Initial Deposits" has the meaning set forth in the recitals to the
Note Purchase Agreement.
"Intercreditor Agreement" has the meaning set forth in the recitals
to the Note Purchase Agreement.
"Issuance Date" means the date of the original issuance of the
Certificates.
"Law" means (a) any constitution, treaty, statute, law, decree,
regulation, order, rule or directive of any Government Entity, and (b) any
judicial or administrative interpretation or application of, or decision under,
any of the foregoing.
"Lease" means a Lease Agreement substantially in the form of Exhibit
A-2 to the Note Purchase Agreement.
"Lease Financing Agreements" means, collectively, the Aircraft
Purchase Agreement Assignment, the Leased Aircraft Participation Agreement, the
Lease, the Leased Aircraft Indenture, the Equipment Notes issued under the
Leased Aircraft Indenture, the Guarantee and the Trust Agreement relating to the
financing of a Leased Aircraft.
"Lease Period" has the meaning set forth in the Participation
Agreement.
"Leased Aircraft" means a New Aircraft subject to a Lease.
"Leased Aircraft Indenture" means a Trust Indenture and Security
Agreement substantially in the form of Exhibit A-3 to the Note Purchase
Agreement.
Annex A-4
"Leased Aircraft Participation Agreement" means a Participation
Agreement substantially in the form of Exhibit A-1 to the Note Purchase
Agreement.
"Liquidity Facility" has the meaning set forth in the recitals to
the Note Purchase Agreement.
"Liquidity Provider" has the meaning set forth in the recitals to
the Note Purchase Agreement.
"Loan Trustee" means the "Indenture Trustee" as defined in the
Financing Agreements.
"Mandatory Document Terms" means the terms set forth on Schedule V
to the Note Purchase Agreement.
"Mandatory Economic Terms" means the terms set forth on Schedule VI
to the Note Purchase Agreement.
"Manufacturer" means British Aerospace (Operations) Limited.
"Manufacturer Support Agreement" means that certain Manufacturer
Support Agreement, dated February 5, 1997, between the Company and the
Manufacturer.
"Mesaba" means Mesaba Aviation, Inc.
"New Aircraft" has the meaning set forth in the recitals to the Note
Purchase Agreement.
"Non-Premium Amount" means the amount equal to the sum of unused
Deposits to be distributed (i) due to the failure of an Aircraft to be delivered
prior to the Delivery Period Termination Date due to any reason not occasioned
by the Company's fault or negligence and (ii) in the case of Class C
Certificates, $5.0 million.
"Note Purchase Agreement" means the Note Purchase Agreement to which
this Annex A is attached.
"Notice of Purchase Withdrawal" with respect to each Deposit
Agreement, has the meaning set forth in Section 2.3 thereof.
"NWA Corp." means Northwest Airlines Corporation, a Delaware
corporation.
"Operative Documents" means, collectively, the Pass Through Trust
Agreements, the Escrow and Paying Agent Agreements, the Deposit Agreements, the
Liquidity Facilities, the Intercreditor Agreement, the Certificates and the
Financing Agreements.
"Owned Aircraft" means a New Aircraft subject to an Owned Aircraft
Indenture.
Annex A-5
"Owned Aircraft Indenture" means a Trust Indenture and Security
Agreement substantially in the form of Exhibit C-2 to the Note Purchase
Agreement.
"Owned Aircraft Participation Agreement" means a Participation
Agreement substantially in the form of Exhibit C-1 to the Note Purchase
Agreement.
"Owner Financing Agreements" means, collectively, the Owned Aircraft
Participation Agreement, the Guarantee, the Owned Aircraft Indenture and the
Equipment Notes issued thereunder.
"Owner Participant" means, with respect to any Leased Aircraft, the
Person named as the Owner Participant in the Participation Agreement with
respect to such Leased Aircraft.
"Owner Trust" means with respect to any Leased Aircraft, the trust
created by the "Trust Agreement" referred to in the Leased Aircraft Indenture
related thereto.
"Owner Trustee" means with respect to any Leased Aircraft, the
"Owner Trustee" party to the "Trust Agreement" referred to in the Leased
Aircraft Indenture related thereto
"Participation Agreements" means, collectively, the Leased Aircraft
Participation Agreements and the Owned Aircraft Participation Agreements.
"Pass Through Trust" has the meaning set forth in the recitals to
the Note Purchase Agreement.
"Pass Through Trust Agreement" means each of the three separate
Trust Supplements, together in each case with the Basic Pass Through Trust
Agreement, each dated as of the Issuance Date, by and between the Lessee and
Pass Through Trustee.
"Pass Through Trustee" has the meaning set forth in the first
paragraph of the Note Purchase Agreement.
"Paying Agent" has the meaning set forth in the first paragraph of
the Note Purchase Agreement.
"Person" means any individual, firm, partnership, joint venture,
trust, trustee, Government Entity, organization, association, corporation,
government agency, committee, department, authority and other body, corporate or
incorporate, whether having distinct legal status or not, or any member of any
of the same.
"Policy" means the Financial Guaranty Insurance Policy No. 30951
issued as of the Closing Date, by the Policy Provider in favor of the
Subordination Agent, for the benefit of the Class G Certificateholders, as
amended, supplemented or otherwise modified from time to time in accordance with
its terms.
Annex A-6
"Policy Provider" means MBIA Insurance Corporation, or any successor
thereto, as issuer of the Policy.
"Qualified Owner Participant" means a Person which has a tangible
net worth (exclusive of goodwill) greater than $50,000,000.
"Rating Agencies" means, collectively, at any time, each nationally
recognized rating agency which shall have been requested to rate the
Certificates and which shall then be rating the Certificates. The initial Rating
Agencies will be Xxxxx'x Investors Service, Inc. and Standard & Poor's Ratings
Services, a division of XxXxxx-Xxxx Inc.
"Rating Agency Confirmation" means, with respect to any Financing
Agreement that has been modified in any material respect from the forms thereof
attached to the Note Purchase Agreement or with respect to the issuance of Class
D Certificates or Series D Equipment Notes, a written confirmation from each of
the Rating Agencies that the use of such Financing Agreement with such
modifications or the issuance of such Class D Certificates or Series D Equipment
Notes, as the case may be, whichever of the foregoing shall in a particular case
require Rating Agency Confirmation, would not result in (i) a reduction of the
rating for any Class of Certificates below the then current rating for such
class of Certificates (without regard to the Policy) or (ii) a withdrawal or
suspension of the rating of any Class of Certificates, in each case, without
reference to the Policy.
"Register" means the register maintained pursuant to Sections 3.04
and 7.11 of the Basic Pass Through Trust Agreement with respect to each Pass
Through Trust.
"Regular Distribution Dates" shall mean April 1 and October 1 of
each year, commencing April 1, 2000.
"Remaining Weighted Average Life" means, on a given date with
respect to any Equipment Note, the number of days equal to the quotient obtained
by dividing (a) the sum of each of the products obtained by multiplying (i) the
amount of each then remaining scheduled payment of principal of such Equipment
Note, including the payment due on the maturity of such Equipment Note by (ii)
the number of days from and including such determination date to but excluding
the date on which such payment of principal is scheduled to be made, by (b) the
then outstanding principal amount of such Equipment Note.
"Scheduled Closing Date" has the meaning set forth in Section 2(b)
hereof.
"Section 1110" means 11 U.S.C. ss. 1110 of the Bankruptcy Code or
any successor or analogous Section of the federal bankruptcy law in effect from
time to time.
"Series B Equipment Notes" means Equipment Notes issued under an
Indenture and designated as "Series B" thereunder.
"Series C Equipment Notes" means Equipment Notes issued under an
Indenture and designated as "Series C" thereunder.
Annex A-7
"Series D Equipment Notes" means Equipment Notes issued under an
Indenture and designated as "Series D" thereunder.
"Series G Equipment Notes" means Equipment Notes issued under an
Indenture and designated as "Series G" thereunder.
"Subordination Agent" has the meaning set forth in the first
paragraph of the Note Purchase Agreement.
"Substitute Aircraft" has the meaning set forth in Section 2(g) of
the Note Purchase Agreement.
"Substitute Closing Date" has the meaning set forth in Section 2(e)
of the Note Purchase Agreement.
"Taxes" means all license, recording, documentary, registration and
other similar fees and all taxes, levies, imposts, duties, charges, assessments
or withholdings of any nature whatsoever imposed by any Taxing Authority,
together with any penalties, additions to tax, fines or interest thereon or
additions thereto.
"Taxing Authority" means any federal, state or local government or
other taxing authority in the United States, any foreign government or any
political subdivision or taxing authority thereof, any international taxing
authority or any territory or possession of the United States or any taxing
authority thereof.
"Treasury Yield" means, as of any date of determination, with
respect to any Equipment Note (utilizing the Assumed Amortization Schedule
applicable thereto), the interest rate (expressed as a decimal and, in the case
of United States Treasury bills, converted to a bond equivalent yield)
determined to be the per annum rate equal to the semi-annual yield to maturity
for United States Treasury securities maturing on the Average Life Date of such
Equipment Note and trading in the public securities markets either as determined
by interpolation between the most recent weekly average yield to maturity for
two series of United States Treasury securities, trading in the public
securities markets, (A) one maturing as close as possible to, but earlier than,
the Average Life Date of such Equipment Note and (B) the other maturing as close
as possible to, but later than, the Average Life Date of such Equipment Note, in
each case as published in the most recent H.15(519) or, if a weekly average
yield to maturity for United States Treasury securities maturing on the Average
Life Date of such Equipment Note is reported on the most recent H.15(519), such
weekly average yield to maturity as published in such H.15(519).
"Triggering Event" has the meaning assigned to such term in the
Intercreditor Agreement.
"Trust Agreement" means a Trust Agreement substantially in the form
of Exhibit A-5 to the Note Purchase Agreement.
Annex A-8
"Trust Supplement" means an agreement supplemental to the Basic Pass
Through Trust Agreement pursuant to which (i) a separate trust is created for
the benefit of the holders of the Certificates of a class, (ii) the issuance of
the Certificates of such class representing fractional undivided interests in
such trust is authorized and (iii) the terms of the Certificates of such class
are established.
"Underwriters" has the meaning set forth in the recitals to the Note
Purchase Agreement.
"Underwriting Agreement" has the meaning set forth in the recitals
to the Note Purchase Agreement.
Annex X-0
Xxxxx X-0 to Note Purchase Agreement
[Form of Opinion of Freshfields, special counsel for the Manufacturer]
for aircraft sold to Northwest Airlines Inc]
To: Standard & Poor's Rating Service
00 Xxxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, XX 00000
Our Ref: Dated
Dear Sirs
BRITISH AEROSPACE AVRO 146-RJ85 PASSENGER TRANSPORT AIRCRAFT (MSN ----) (THE
AIRCRAFT)
INTRODUCTION
1. We have acted as Special English and French Counsel to British Aerospace
(Operations) Limited (BAE) in relation to (i) the assignment of warranties by
Northwest Airlines, Inc. (NORTHWEST) to State Street Bank and Trust Company, as
Indenture Trustee and (ii) certain aspects of the sale of the Aircraft from BAe
to Northwest. We have been asked to provide an opinion to you in connection
therewith.
2. In connection with the transaction mentioned in paragraph 1(i) above, we have
examined the documents detailed in Schedule 1 to this letter (the SCHEDULE 1
DOCUMENTS) and in connection with the transaction mentioned in paragraph 1(ii)
above we have examined the documents detailed in Schedule 2 to this letter (the
SCHEDULE 2 DOCUMENTS) together the DOCUMENTS.
In giving this opinion we have relied upon the statements as to factual matters
contained in or made pursuant to the Documents.
3.
(a) The opinions given in paragraph 5(a) below are in respect of the
Schedule 1 Documents only and are confined to matters of English and
French law. In relation to the Schedule 1 Documents we express no
opinion herein with regard to any system of law other than the laws of
England and France as currently applied by the English courts and, as
the case may be, the French courts. In particular, we express no
opinion on European Community law as it affects any jurisdiction other
than England and France.
(b) The opinions given in paragraph 5(b) below are in respect of the
Schedule 2 Documents and are confined to matters of English law. In
relation to the Schedule 2 Documents we express no opinion herein with
regard to any system of law other than the laws of England as currently
applied by the English courts. In particular, we express no opinion on
European Community law as it affects any jurisdiction other than
England.
4. ASSUMPTIONS
SCHEDULE 1 DOCUMENTS
(a) In rendering this opinion on the Schedule 1 Documents we have, with your
consent and without any further enquiry, assumed:
(i) that the Schedule 1 Documents have been duly authorised,
executed and delivered by each of the parties thereto in
accordance with all applicable laws and each party had and
still has the necessary corporate power to enter into and
perform the obligations on its part pursuant to or in
connection with the Schedule 1 Documents;
(ii) that the Purchase Agreement Assignment [_________], dated as
of [___________] (the ASSIGNMENT) between Northwest and First
Security Bank, National Association constitutes legal, valid
and binding obligations of each of the parties thereto
enforceable under all applicable laws;
(iii) that subject only to the effectiveness of the Agency Agreement
(AGENCY AGREEMENT) dated [1 July 1998] between BAe and British
Aerospace (Regional) Aircraft S.A. (BARASA) to bind BAe as
principal (as to which we opine below), the Consent and
Agreement [_______________], dated as of [____________]
(CONSENT AND AGREEMENT) signed by BARASA as agent for and on
behalf of BAe constitutes legal, valid and binding obligations
of BAe enforceable under all applicable laws;
(iv) that the substance of the Consent and Agreement conforms to
the subject matter of, and the conditions set out in the
Agency Agreement;
(v) the Manufacturers Support Agreement dated 5 February 1997, as
amended, between Aero International (Regional) SAS, acting as
agent of BAe, and Northwest constitutes legal, valid and
binding obligations of BAe enforceable under all applicable
laws; and
Page 2
(vi) that the faxed copies of the Schedule 1 Documents which we
have received accurately reflect the original Schedule 1
Documents in their entirety.
(vii) that satisfactory evidence of the laws of France or the State
of New York which are required to be pleaded and proved as a
fact in any proceedings before the English Court, could be so
pleaded and proved.
(viii) that there has been no amendment, rescission or termination of
the Agency Agreement or any breach of any of its provisions by
any of the parties to it and that the Agency Agreement is not
affected in any way by any other document or agreement (not
seen) or any course of dealing between the parties.
SCHEDULE 2 DOCUMENTS
(b) In rendering this opinion on the Schedule 2 Documents we have, with
your consent and without any further enquiry, assumed:
(i) that Schedule 2 Documents have been duly authorised, executed
and delivered by each of the parties thereto in accordance
with all applicable laws;
(ii) that the Schedule 2 Documents constitute legal, valid and
binding obligations of each of the parties thereto enforceable
under all applicable laws;
(iii) that, pursuant to appropriate documentation governed by the
laws of the State of New York (the SALE AGREEMENT), legal and
beneficial ownership in the Aircraft is to be transferred to
Northwest (or a trustee on behalf of a leveraged lease lessor)
by the parties referred to in the Sale Agreement and that, as
a matter of New York law, such transfer of legal and
beneficial ownership is legal, valid and binding.
(iv) that the faxed copies of the Schedule 2 Documents which we
have received accurately reflect the original Schedule 2
Documents in their entirety.
5. OPINION
SCHEDULE 1 DOCUMENTS
(a) On the basis of, and subject to, paragraphs 3(a) and 4(a) and the
Page 3
matters set out in paragraphs 6 and 7 below and any matters not
disclosed to us, and
(i) having regard to such considerations of French law in force as
at the date of this letter as we consider relevant, we are of
the opinion that the execution and delivery by BARASA of the
Consent and Agreement is, pursuant to the Agency Agreement
which is expressed to be governed by the laws of France,
effective to bind BAe as principal in respect of the
obligations and other provisions expressed to be undertaken by
BAe therein;
(ii) having regard to such considerations of English law in force
at the date of this letter as we consider relevant, we are of
the opinion that an English court would regard obligations
validly undertaken by BAe through BARASA pursuant to the
operation of the Agency Agreement to be enforceable against
BAe.
SCHEDULE 2 DOCUMENTS
(b) In respect of the Schedule 2 Documents, on the basis of, and subject
to, paragraphs 3(b) and 4(b) and the matters set out in paragraph 6
below and any matters not disclosed to us, and having regard to such
considerations of English law in force as at the date of this letter as
we consider relevant, we are of the opinion that if a liquidator or
administrator is appointed in relation to BAe, neither the liquidator
nor the administrator nor any creditor of BAe would be able to contest
successfully or avoid or have set aside the transfer of title in the
Aircraft pursuant to the Sale Agreement by reason of the terms of the
Schedule 2 Documents.
OBSERVATIONS
6. We should also like to make the following observations:
(a) it should be understood that we have not been responsible for
investigating or verifying the accuracy of the facts including
statements of foreign law, or the reasonableness of any statement of
opinion or intention, contained in or relevant to any document referred
to herein, or that no material facts have been omitted therefrom;
(b) the term "enforceable" as used in the opinion given in paragraph 5(a)
means that the obligations assumed by the relevant party under the
relevant document are of the type which the English
Page 4
courts enforce. The opinion given is not to be taken to imply that any
obligation would necessarily be capable of enforcement in all
circumstances in accordance with its terms. In particular:
(i) an English court will not necessarily grant any remedy the
availability of which is subject to equitable considerations
or which is otherwise in the discretion of the court. In
particular, orders for specific performance and injunctions
are, in general, discretionary remedies under English law and
specific performance is not available where damages are
considered by the court to be an adequate alternative remedy;
(ii) claims may become barred under the Limitation Xxx 0000 or the
Foreign Limitation Periods Act 1984 or may be or become
subject to the defence of set-off or to counterclaim;
(iii) where obligations are to be performed in a jurisdiction
outside England, they may not be enforceable in England to the
extent that performance would be illegal under the laws, or
contrary to the exchange control regulations, of the other
jurisdiction; and
(iv) the enforcement of obligations may be limited by the
provisions of English law applicable to agreements held to
have been frustrated by events happening after their
execution.
(v) English courts can give judgments in currencies other than
sterling if, subject to the terms of the contract, it is the
currency which most fairly expresses the plaintiff's loss but
such judgments may be required to be converted into sterling
for enforcement purposes;
(vi) an English court has power to stay an action where it is shown
that there is some other forum, having competent jurisdiction,
which is more appropriate for the trial of the action, that is
in which the case can be tried more suitably for the interests
of all the parties and the ends of justice, and where staying
the action is not inconsistent with the EEC Convention on
Jurisdiction and the Enforcement of Judgments in Civil and
Commercial Matters of 1968 (as amended) as applied by virtue
of the Civil Jurisdiction and Judgments Xxx 0000 (as amended)
and subordinate legislation made thereunder or with the Lugano
Convention on Jurisdiction and the Enforcement of Judgments in
Civil
Page 5
and Commercial Matters of 1988 as applied by virtue of the
Civil Jurisdiction and Judgments Xxx 0000;
(vii) under the rules of procedure applicable, an English court may,
at its discretion, order a plaintiff in an action, being a
party who is not ordinarily resident in some part of the
United Kingdom, to provide security for costs;
(viii) an English court may refuse to give effect to any provision in
an agreement (a) for the payment of expenses in respect of the
costs of enforcement (actual or contemplated) or of
unsuccessful litigation brought before an English court or
where the court has itself made an order for costs or (b)
which would involve the enforcement of foreign revenue or
penal law
QUALIFICATION
7. The choice of the applicable law to govern the Schedule 1 Documents would not
be recognised or upheld if there were reasons for avoiding the choice of law on
the grounds that its application would be manifestly incompatible with public
policy. The choice of the applicable law would not be upheld, for example, if it
was made with the intention of evading the law of the jurisdiction with which
the relevant agreement had its most substantial connection and which, in the
absence of the applicable law, would have invalidated the agreement or been
inconsistent therewith. We are not aware of any circumstances which would result
in the choice of the applicable law to govern the Schedule 1 Documents not being
recognised and upheld.
BENEFIT OF OPINION
8. This opinion is addressed to the addressee solely for its benefit in relation
to the transaction described above and, except with our prior written consent,
none of the opinions given in respect of either the Schedule 1 Documents or the
Schedule 2 Documents is to be transmitted or disclosed to or used or relied upon
by any other person or used or relied upon for any other purpose.
Yours faithfully
Page 6
SCHEDULE 1
DOCUMENTS
[A faxed copy of the] Purchase Agreement Assignment [______________], dated
[_____ _____] between (1) Northwest and (2) First Security Bank, National
Association [transmitted to Freshfields on [_____]].
[A faxed copy of the] Consent and Agreement [___________], dated [________]
signed by BARASA as agent for and on behalf of BAe [transmitted to Freshfields
on [_____]].
[A faxed copy of the] Agency Agreement dated [1 July 1998] between (1) BAe and
(2) BARASA [transmitted to Freshfields on [_____].]
A faxed copy of the Manufacturer's Support Agreement dated 5 February 1997, as
amended, between Aero International (Regional) SAS, acting as agent for and on
behalf of BAe [transmitted to Freshfields on [_____]].
SCHEDULE 2
DOCUMENTS
Purchase Agreement dated 5 February 1997 between (1) Aero International
(Regional), SAS and (2) Northwest
[Amendment to Purchase Agreement dated [_____ _____] between (1) Aero
International (Regional), SAS and (2) Northwest]
Asset Value Agreement (N ______) dated [_____ _____] between Northwest and BAe
in relation to the Aircraft.
Page 7
Annex B-2 to Note Purchase Agreement
[Form of Opinion of Freshfields, special counsel for the Manufacturer]
Aircraft sold direct to trustee]
To: Standard & Poor's Rating Service
00 Xxxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, XX 00000
Our Ref: Dated
Dear Sirs
BRITISH AEROSPACE AVRO 146-RJ85 PASSENGER TRANSPORT AIRCRAFT (MSN ----) (THE
AIRCRAFT)
INTRODUCTION
1. We have acted as Special English and French Counsel to British Aerospace
(Operations) Limited (BAE) in relation to (i) the assignment of warranties by
Northwest Airlines, Inc. (NORTHWEST) to State Street Bank and Trust Company
(INDENTURE TRUSTEE) and (ii) certain aspects of the sale of the Aircraft from
BAe to First Security Bank, National Association, as Owner Trustee. We have been
asked to provide an opinion to you in connection therewith.
2. In connection with the transaction mentioned in paragraph 1(i) above, we have
examined the documents detailed in the Schedule 1 to this letter (the SCHEDULE 1
DOCUMENTS) and in connection with the transaction mentioned in paragraph 1(ii)
above we have examined the documents detailed in Schedule 2 to this letter (the
SCHEDULE 2 DOCUMENTS) together the DOCUMENTS.
In giving this opinion we have relied upon the statements as to factual matters
contained in or made pursuant to the Documents.
3.
(a) The opinions given in paragraph 5(a) below are in respect of the
Schedule 1 Documents only and are confined to matters of English and
French law. In relation to the Schedule 1 Documents, we express no
opinion herein with regard to any system of law other than the laws of
England and France as currently applied by the English courts and, as
the case may be, the French courts. In particular, we express no
opinion on
European Community law as it affects any jurisdiction other than
England and France.
(b) The opinions given in paragraph 5(b) below are in respect of the
Schedule 2 Documents and are confined to matters of English law. In
relation to the Schedule 2 Documents, we express no opinion herein with
regard to any system of law other than the laws of England as currently
applied by the English courts. In particular, we express no opinion on
European Community law as it affects any jurisdiction other than
England.
4. ASSUMPTIONS
SCHEDULE 1 DOCUMENTS
(a) In rendering this opinion on the Schedule 1 Documents we have, with
your consent and without any further enquiry, assumed:
(i) that the Schedule 1 Documents have been duly authorised,
executed and delivered by each of the parties thereto in
accordance with all applicable laws and each party had and
still has the necessary corporate power to enter into and
perform the obligations on its part pursuant to or in
connection with the Schedule 1 Documents;
(ii) that the Trust Indenture and Security Agreement [_________]
(TRUST INDENTURE), dated as of [___________], between
Northwest, as owner, and the Indenture Trustee, as indenture
trustee, constitute legal, valid and binding obligations of
each of the parties thereto enforceable under all applicable
laws;
(iii) that subject only to the effectiveness of the Agency Agreement
(AGENCY AGREEMENT) dated [1 July 1998] between BAe and British
Aerospace (Regional) Aircraft S.A. (BARASA) to bind BAe as
principal (as to which we opine below), the Consent and
Agreement [_______________], dated as of [____________]
(CONSENT AND AGREEMENT) signed by BARASA as agent for and on
behalf of BAe constitutes legal, valid and binding obligations
of BAe enforceable under all applicable laws;
(iv) that the substance of the Consent and Agreement conforms to
the subject matter of, and the conditions set out in the
Agency Agreement;
(v) the Manufacturers Support Agreement dated 5 February
Page 2
1997, as amended, between Aero International (Regional) SAS,
acting as agent of BAe, and Northwest constitutes legal,
valid and binding obligations of BAe enforceable under all
applicable laws; and
(vi) that the faxed copies of the Schedule 1 Documents we have
received accurately reflect the original Schedule 1 Documents
in their entirety.
(vii) that satisfactory evidence of the laws of France or the State
of New York which are required to be pleaded and proved as a
fact in any proceedings before the English Court, could be so
pleaded and proved.
(viii) that there has been no amendment, rescission or termination of
the Agency Agreement or any breach of any of its provisions by
any of the parties to it and that the Agency Agreement is not
affected in any way by any other document or agreement (not
seen) or any course of dealing between the parties.
SCHEDULE 2 DOCUMENTS
(b) In rendering this opinion on the Schedule 2 Documents we have, with
your consent and without any further enquiry, assumed:
(i) that Schedule 2 Documents have been duly authorised, executed
and delivered by each of the parties thereto in accordance
with all applicable laws;
(ii) that the Schedule 2 Documents constitute legal, valid and
binding obligations of each of the parties thereto enforceable
under all applicable laws;
(iii) that, pursuant to appropriate documentation governed by the
laws of the State of New York (the SALE AGREEMENT), legal and
beneficial ownership in the Aircraft is to be transferred to
Atlantic (or a trustee on behalf of a leveraged lease lessor)
by the parties referred to in the Sale Agreement and that, as
a matter of New York law, such transfer of legal and
beneficial ownership is legal, valid and binding.
(iv) that the faxed copies of the Schedule 2 Documents we have
received accurately reflect the original Schedule 2 Documents
in their entirety.
Page 3
5. OPINION
SCHEDULE 1 DOCUMENTS
(a) On the basis of, and subject to, paragraphs 3(a) and 4(a) and the
matters set out in paragraphs 6 and 7 below and any matters not
disclosed to us, and
(i) having regard to such considerations of French law in force as
at the date of this letter as we consider relevant, we are of
the opinion that the execution and delivery by BARASA of the
Consent and Agreement is, pursuant to the Agency Agreement
which is expressed to be governed by the laws of France,
effective to bind BAe as principal in respect of the
obligations and other provisions expressed to be undertaken by
BAe therein;
(ii) having regard to such considerations of English law in force
at the date of this letter as we consider relevant, we are of
the opinion that an English court would regard obligations
validly undertaken by BAe through BARASA pursuant to the
operation of the Agency Agreement to be enforceable against
BAe.
SCHEDULE 2 DOCUMENTS
(b) In respect of the Schedule 2 Documents, on the basis of, and subject
to, paragraphs 3(b) and 4(b) and the matters set out in paragraph 6
below and any matters not disclosed to us, and having regard to such
considerations of English law in force as at the date of this letter as
we consider relevant, we are of the opinion that if a liquidator or
administrator is appointed in relation to BAe, neither the liquidator
nor the administrator nor any creditor of BAe would be able to contest
successfully or avoid or have set aside the transfer of title in the
Aircraft pursuant to the Sale Agreement by reason of the terms of the
Schedule 2 Documents.
OBSERVATIONS
6. We should also like to make the following observations:
(a) in respect of the Documents it should be understood that we have not
been responsible for investigating or verifying the accuracy of the
facts including statements of foreign law, or the reasonableness of any
statement of opinion or intention, contained in or relevant to any
document referred to herein, or
Page 4
that no material facts have been omitted therefrom;
(b) the term "enforceable" as used in the opinion given in paragraph 5(a)
means that the obligations assumed by the relevant party under the
relevant document are of the type which the English courts enforce. The
opinion given in respect of the Schedule 1 Documents is not to be taken
to imply that any obligation would necessarily be capable of
enforcement in all circumstances in accordance with its terms. In
particular:
(i) an English court will not necessarily grant any remedy the
availability of which is subject to equitable considerations
or which is otherwise in the discretion of the court. In
particular, orders for specific performance and injunctions
are, in general, discretionary remedies under English law and
specific performance is not available where damages are
considered by the court to be an adequate alternative remedy;
(ii) claims may become barred under the Limitation Xxx 0000 or the
Foreign Limitation Periods Act 1984 or may be or become
subject to the defence of set-off or to counterclaim;
(iii) where obligations are to be performed in a jurisdiction
outside England, they may not be enforceable in England to the
extent that performance would be illegal under the laws, or
contrary to the exchange control regulations, of the other
jurisdiction; and
(iv) the enforcement of obligations may be limited by the
provisions of English law applicable to agreements held to
have been frustrated by events happening after their
execution.
(v) English courts can give judgments in currencies other than
sterling if, subject to the terms of the contract, it is the
currency which most fairly expresses the plaintiff's loss but
such judgments may be required to be converted into sterling
for enforcement purposes;
(vi) an English court has power to stay an action where it is shown
that there is some other forum, having competent jurisdiction,
which is more appropriate for the trial of the action, that is
in which the case can be tried more suitably for the interests
of all the parties and the ends of justice, and where staying
the action is not inconsistent with the EEC Convention on
Jurisdiction and the Enforcement of
Page 5
Judgments in Civil and Commercial Matters of 1968 (as amended)
as applied by virtue of the Civil Jurisdiction and Judgments
Xxx 0000 (as amended) and subordinate legislation made
thereunder or with the Lugano Convention on Jurisdiction and
the Enforcement of Judgments in Civil and Commercial Matters
of 1988 as applied by virtue of the Civil Jurisdiction and
Judgments Xxx 0000;
(vii) under the rules of procedure applicable, an English court may,
at its discretion, order a plaintiff in an action, being a
party who is not ordinarily resident in some part of the
United Kingdom, to provide security for costs;
(viii) an English court may refuse to give effect to any provision in
an agreement (a) for the payment of expenses in respect of the
costs of enforcement (actual or contemplated) or of
unsuccessful litigation brought before an English court or
where the court has itself made an order for costs or (b)
which would involve the enforcement of foreign revenue or
penal law
QUALIFICATION
7. The choice of the applicable law to govern the Schedule 1 Documents would not
be recognised or upheld if there were reasons for avoiding the choice of law on
the grounds that its application would be manifestly incompatible with public
policy. The choice of the applicable law would not be upheld, for example, if it
was made with the intention of evading the law of the jurisdiction with which
the relevant agreement had its most substantial connection and which, in the
absence of the applicable law, would have invalidated the agreement or been
inconsistent therewith. We are not aware of any circumstances which would result
in the choice of the applicable law to govern the Schedule 1 Documents not being
recognised and upheld.
BENEFIT OF OPINION
8. This opinion is addressed to the addressee solely for your its benefit in
relation the transaction described above and, except with our prior written
consent, none of the opinions given in respect of either the Schedule 1
Documents or the Schedule 2 Documents is to be transmitted or disclosed to or
used or relied upon by any other person or used or relied upon for any other
purpose.
Yours faithfully
Page 6
SCHEDULE 1
DOCUMENTS
[A faxed copy of the] Trust Indenture and Security Agreement [______________]
dated as of [_____ _____] between (1) Northwest, as owner, and (2) State Street
Bank and Trust Company, as indenture trustee, [transmitted to Freshfields on
[_____]].
[A faxed copy of the] Consent and Agreement [___________] dated [________]
signed by BARASA as agent for and on behalf of BAe [transmitted to Freshfields
on [_____]].
[A faxed copy of the] Agency Agreement dated [1 July 1998] between (1) BAe and
(2) BARASA [transmitted to Freshfields on [_____].]
A faxed copy of the Manufacturer's Support Agreement dated 5 February 1997, as
amended, between Aero International (Regional) SAS, acting as agent for and on
behalf of BAe [transmitted to Freshfields on [_____]].
SCHEDULE 2
DOCUMENTS
Purchase Agreement dated 5 February 1997 between (1) Aero International
(Regional), SAS and (2) Northwest
[Amendment to Purchase Agreement dated [_____ _____] between (1) Aero
International (Regional), SAS and (2) Northwest]
Asset Value Agreement (N ______) dated [_____ _____] between Northwest and BAe
in relation to the Aircraft.
Page 7
Annex C to Note Purchase Agreement
[Form of Opinion of Cadwalader, Xxxxxxxxxx & Xxxx,
Special Counsel for the Company]
[_____________________]
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO
Re: Northwest Airlines, Inc.
Opinion of Special Counsel to [Lessor][Sublessor] Concerning
Section 1110 of the Federal Bankruptcy Code
Gentlemen:
We have acted as special counsel for Northwest Airlines, Inc., a
Minnesota corporation (["LESSOR"]["SUBLESSOR"]), in connection with the
transactions contemplated by the [Lease][Sublease] Agreement listed on
Exhibit A hereto (the ["LEASE"]["SUBLEASE"]). Capitalized terms used herein
but not defined herein have the respective meanings given to them in or by
reference to the [Lease][Sublease], unless the context otherwise requires. As
used herein, the term "Airframe" shall mean the Airframe related to the
[Lease][Sublease] as identified on Exhibit A hereto, the term "Engines" shall
mean the Engines related to the [Lease][Sublease] as identified on Exhibit A
hereto, and the term "Aircraft" shall mean the Airframe and the related
Engines, collectively, but expressly excludes any portion of the Aircraft
that does not constitute an aircraft, aircraft engine, appliance, or spare
part as such terms are defined in section 40102 of title 49 of the United
States Code.
In acting as such special counsel, we have examined, among other
things, with respect to the Aircraft, executed counterparts of the [Lease]
[Sublease] and [Lease][Sublease] Supplement. As to any facts material to our
opinions expressed herein, we have, without independent investigation, relied
upon the representations and warranties contained in the [Lease][Sublease]
(including, without limitation, in Sections 29 and 30 thereof), and
certificates of officers of each of the [Lessor][Sublessor] and the [Lessee]
[Sublessee] including, without limitation, the certificates delivered in
connection with the [Lease][Sublease], and upon originals or copies
(certified or otherwise identified to our satisfaction) of such corporate
records, documents and other instruments as, in our judgment, are necessary
or appropriate to enable us to render this opinion.
We express no opinion concerning the laws of any jurisdiction other
than the laws of the State of New York and the federal laws of the United
States of America.
You have requested our opinion as to whether the [Lessor][Sublessor],
as [lessor][sublessor] under the [Lease][Sublease], would be entitled to the
benefits of section 1110 ("SECTION 1110") of title 11 of the United States
Code (the "BANKRUPTCY CODE") if the [Lessee][Sublessee] were to become a
debtor in a case under chapter 11 of the Bankruptcy Code.
ASSUMPTIONS
The opinions expressed herein are based upon and subject to the assumed
compliance by the relevant parties, at all relevant times, with the
assumptions set forth herein and the assumption that all matters relied on
herein continue to be true and that there are no additional facts of which we
are not aware which would be material to a court's decision on this issue.
We have assumed that:
(i) the [Lessor][Head Lessor] will continue to be the registered
owner of the Aircraft;
(ii) the [Lessee][Sublessee] is and will continue to be a citizen of
the United States (as defined in section 40102 of title 49 of the United
States Code) holding an air carrier operating certificate issued by the
Secretary of Transportation pursuant to chapter 447 of title 49 of the United
States Code for aircraft capable of carrying 10 or more individuals or 6,000
pounds or more of cargo;
(iii) the [Lease][Sublease] and [Lease][Sublease] Supplement
constitute the legal, valid and binding obligations of [Lessee][Sublessee]
and the [Lessor][Sublessor] in accordance with their respective terms;
(iv) all Uniform Commercial Code financing statements and all filings
necessary under the recording system of the Federal Aviation Act have been
properly filed and duly recorded in all necessary places to properly record
the leasehold interest of [Lessor][Sublessor] as [lessor][sublessor] in the
Aircraft;
(v) all of the statements, representations, warranties, agreements,
disclosures and other information furnished by the [Lessee][Sublessee] and
contained in the [Lease][Sublease], [Lease][Sublease] Supplement, and other
documents delivered in connection therewith are true, accurate and complete
in all respects;
(vi) the Aircraft identified on Exhibit A hereto was first placed
in service after October 22, 1994;
-2-
(vii) all documents executed and delivered by any Person referred to
herein have been duly authorized, executed and delivered pursuant to adequate
corporate power and authority; and
(viii) the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, the conformity with the originals of
all documents submitted to us as copies, and the accuracy of all factual
statements of parties made on or before the date hereof.
DISCUSSION
We have assumed that the Aircraft identified on Exhibit A hereto was
first placed in service after October 22, 1994. Therefore the Aircraft is
within the scope of the provisions of Section 1110.
CONCLUSION
Based upon the foregoing, and subject to the assumptions and
qualifications contained herein, it is our opinion that if the [Lessee]
[Sublessee] were to become a debtor under chapter 11 of the Bankruptcy Code,
[Lessor][Sublessor] as [lessor][sublessor] under the [Lease][Sublease], would
be entitled to the benefits of Section 1110 with respect to the Airframe and
the Engines comprising the Aircraft but may not be entitled to such benefits
with respect to any replacement of an Aircraft after an Event of Loss in the
future.
QUALIFICATIONS
Section 1110 was amended effective October 22, 1994. Our opinion
respecting Section 1110 is based solely on the assumptions set forth herein,
our review of the language of Section 1110 as currently in effect, a review
of the legislative history of the Bankruptcy Reform Act of 1994(1) and a
review of the cases decided under the former version of Section 1110. We are
not aware of any judicial decisions interpreting the amendments to Section
1110 enacted in the Bankruptcy Reform Act of 1994 that are directly
applicable to the facts and circumstances present in this transaction.
Accordingly, our opinion is not based on directly applicable judicial
precedent, but rather on what we believe to be a sound analysis of such
authorities as exist. We call to your attention, however, the decision of the
United States District Court for the District of Colorado in WESTERN PACIFIC
AIRLINES, INC. V. GATX CAPITAL (IN RE WESTERN PACIFIC AIRLINES, INC.), 000
X.X. 000, XX REHEARING, 221 B.R. 1 (D. Colo. 1998), APPEAL DISMISSED AS MOOT
SUB NOM., BOULLIOUN AIRCRAFT HOLDING CO., INC. X. XXXXX MANAGEMENT, Nos.
98-1018, 98-1214, 1999 WL 000000 (00xx Xxx. July 7, 1999), where the District
Court concluded that the relief provided by Section 1110 is relevant only if
the debtor does not satisfy the conditions set forth in Section
------------------------
1 Pub. L. 103-394.
-3-
1110(a)(1)(A) and (B) during the first 60 days of the bankruptcy case.
Thus, in the District Court's view, once the debtor satisfies those
conditions, all rights and obligations in connection with subsequent defaults
are governed by the more general provisions of the Bankruptcy Code. We
believe that this decision construes Section 1110 in a manner that is
inconsistent with both the language of Section 1110 and the legislative
history explaining the purpose and operation of Section 1110. Accordingly,
we believe that the decision is an incorrect interpretation of Section 1110.
We express no opinion concerning whether any proceeds or any substitute
or replacement airframe, engine or part would have the benefits of Section 1110.
We express no opinion as to the availability or effect of a
preliminary injunction, temporary restraining order or other such temporary
relief, nor do we express any opinion, either implicitly or otherwise, with
respect to any subject not addressed expressly in the Conclusion.
We express no opinion as to the availability of Section 1110 with
respect to any bankruptcy proceedings of any possible
[sublessee][sub-sublessee] of the Aircraft which may be
[subleased][sub-subleased] by the [Lessee][Sublessee].
We do not purport to be experts with respect to, or express any opinion
concerning, aviation law or other laws, rules or regulations applicable to
the particular nature of the equipment to be [leased][subleased] by the
[Lessee][Sublessee] which may require the consent or approval of, the giving
of notice to, the registration with or the taking of any other action in
respect of, any federal or state governmental authority in connection with
the operation or maintenance of such equipment on an ongoing basis.
We express no opinions except as expressly set forth herein, and no
opinion is implied or may be inferred beyond the opinions expressly stated
herein.
We are furnishing this opinion letter to you solely for your benefit in
connection with the transactions referred to herein. This opinion letter is
not to be relied upon, used, circulated, quoted or otherwise referred to by
any person or entity for any other purpose without our prior written consent.
In addition, we disclaim any obligation to update this opinion letter for
changes in fact or law, or otherwise.
Very truly yours,
-4-
SCHEDULE A
Standard & Poor's Ratings Services
EXHIBIT A
1. [Lease][Sublease] Agreement [ ], dated as of [ ],
between Northwest Airlines, Inc., as [Lessor][Sublessor], and Mesaba
Aviation, Inc., as [Lessee][Sublessee].
Airframe: British Aerospace Avro 146-RJ85A bearing U.S. Registration No.
N[ ]and Manufacturer Serial No. [ ].
Engines: AlliedSignal LF507 type bearing manufacturer Serial Nos. LFO
[ ], LFO [ ], LFO [ ]and LFO [ ]
