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PARTICIPATION AGREEMENT
[NW 1999 _]
Dated as of
[----------------]
Among
NORTHWEST AIRLINES, INC.,
Owner,
NORTHWEST AIRLINES CORPORATION,
Guarantor,
STATE STREET BANK AND TRUST COMPANY,
Pass Through Trustee under each of
the Pass Through Trust Agreements,
STATE STREET BANK AND TRUST COMPANY,
Subordination Agent,
and
STATE STREET BANK AND TRUST COMPANY,
in its Individual Capacity and as Indenture Trustee
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One Boeing 747-451 Aircraft
N[_____]
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INDEX TO PARTICIPATION AGREEMENT
Page
SECTION 1. Purchase of Secured Certificates by Pass Through Trustees..........2
SECTION 2. Owner's Notice of Closing Date.....................................3
SECTION 3. [Intentionally Omitted]............................................3
SECTION 4. Conditions.........................................................3
(a) Conditions Precedent to Purchase of Secured Certificates......3
(b) Conditions Precedent to the Obligations of the Owner and
the Guarantor.................................................8
SECTION 5. [Intentionally Omitted]............................................9
SECTION 6. Extent of Interest of Certificate Holders.........................10
SECTION 7. Representations and Warranties of the Owner and the Guarantor;
Indemnities.......................................................10
(a) Representations and Warranties...............................10
(b) General Tax Indemnity........................................13
(c) General Indemnity............................................13
(d) Income Tax...................................................13
SECTION 8. Representations, Warranties and Covenants.........................13
SECTION 9. Reliance of Liquidity Provider....................................22
SECTION 10. Other Documents...................................................23
SECTION 11. Certain Covenants of the Owner....................................23
SECTION 12. [Intentionally Omitted]...........................................23
SECTION 13. Certain Definitions; Notices; Consent to Jurisdiction.............23
SECTION 14. [Intentionally Omitted]...........................................24
SECTION 15. Miscellaneous.....................................................24
SECTION 16. Sale/leaseback Transaction........................................25
(i)
SCHEDULES
SCHEDULE I - Names and Addresses
SCHEDULE II - Commitments
SCHEDULE III - Pass Through Trust Agreements
EXHIBITS
Exhibit A - Schedule of Countries Authorized for Reregistration
Exhibit B-1 - Form of Opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, special counsel
for the Owner and the Guarantor
Exhibit B-2 - Form of Opinion of Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇, special counsel
for the Owner and the Guarantor
Exhibit B-3 - Form of Opinion of the Owner's Legal Department
Exhibit C - Form of Opinion of in-house counsel for the Manufacturer
Exhibit D - [Intentionally Omitted]
Exhibit E-1 - [Intentionally Omitted]
Exhibit E-2 - [Intentionally Omitted]
Exhibit F - Form of Opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.C.
Exhibit G - Form of Opinion of ▇▇▇▇▇▇▇ ▇▇▇▇ LLP, special counsel for the
Indenture Trustee
Exhibit H-1 - [Intentionally Omitted]
Exhibit H-2 - [Intentionally Omitted]
Exhibit I - Form of ss.1110 Opinion of Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇, special
counsel for the Owner
Exhibit J-1 - Form of Opinion of ▇▇▇▇▇▇▇ ▇▇▇▇ LLP, special counsel for the Pass
Through Trustee
Exhibit J-2 - Form of Opinion of ▇▇▇▇▇▇▇ ▇▇▇▇ LLP, special counsel for the
Subordination Agent
(ii)
Exhibit K - Section 7(b) - General Tax Indemnity
Exhibit L - Section 7(c) - General Indemnity
(iii)
PARTICIPATION AGREEMENT
[NW 1999 _]
THIS PARTICIPATION AGREEMENT [NW 1999 _] dated as of
[_______________], among (i) NORTHWEST AIRLINES, INC., a Minnesota corporation
(the "Owner"), (ii) NORTHWEST AIRLINES CORPORATION, a Delaware corporation (the
"Guarantor"), (iii) STATE STREET BANK AND TRUST COMPANY, not in its individual
capacity except as otherwise provided herein, but solely as trustee (in such
capacity, the "Pass Through Trustee") under each of [three] separate Pass
Through Trust Agreements (as defined below), (iv) STATE STREET BANK AND TRUST
COMPANY, not in its individual capacity, but solely as subordination agent and
trustee (in such capacity, the "Subordination Agent") under the Intercreditor
Agreement (defined below), and (v) STATE STREET BANK AND TRUST COMPANY, a
Massachusetts trust company, in its individual capacity and as Indenture Trustee
under the Trust Indenture (as hereinafter defined) (herein, in such latter
capacity together with any successor indenture trustee, called the "Indenture
Trustee");
W I T N E S S E T H:
WHEREAS, pursuant to the Purchase Agreement between the Owner and
the Manufacturer, the Manufacturer has agreed to sell to the Owner, among other
things, certain Boeing 747-451 aircraft, including the Aircraft which has been
[or is being] delivered by the Manufacturer to the Owner and is the subject of
this Agreement;
WHEREAS, concurrently with the execution and delivery of this
Agreement, the Manufacturer has executed the Consent and Agreement [NW 1999
_](herein called the "Consent and Agreement");
WHEREAS, the Indenture Trustee and the Owner concurrently with the
execution and delivery of this Agreement are entering into the Trust Indenture
and Security Agreement [NW 1999 _], dated as of the date hereof (said Trust
Indenture and Security Agreement, as the same may be amended or supplemented
from time to time, being herein called the "Trust Indenture", such term to
include, unless the context otherwise requires, the Trust Indenture Supplement
referred to below) pursuant to which the Owner will issue secured certificates
substantially in the form set forth in Section 2.01 thereof (the "Secured
Certificates", and individually, a "Secured Certificate") in [three] series,
which Secured Certificates are to be secured by the mortgage and security
interests created by the Owner in favor of the Indenture Trustee, and the Owner
shall execute and deliver a Trust Indenture Supplement substantially in the form
of Exhibit A to the Trust Indenture (the "Trust Indenture Supplement") covering
the Aircraft, supplementing the Trust Indenture;
WHEREAS, concurrently with the execution and delivery of this
Agreement; the Guarantor is entering into a Guarantee [NW 1999 _], dated as of
the date hereof, pursuant to which the Guarantor guarantees certain obligations
of the Owner under the Operative Documents (the "Guarantee");
WHEREAS, pursuant to the Pass Through Trust Agreement and each of
the Pass Through Trust Supplements set forth in Schedule III hereto
(collectively, the "Pass Through Trust Agreements"), on the Issuance Date
[three] separate trusts (collectively, the "Pass Through Trusts" and,
individually, a "Pass Through Trust") were created to facilitate the
transactions contemplated hereby, including, without limitation, the issuance
and sale by each Pass Through Trust of pass through certificates pursuant
thereto (collectively, the "Certificates");
WHEREAS, the proceeds from the issuance and sale of the Certificates
by each Pass Through Trust will be applied in part by the Pass Through Trustee
on the Closing Date to purchase from the Owner, on behalf of each Pass Through
Trust, all of the Secured Certificates bearing the same interest rate as the
Certificates issued by such Pass Through Trust;
WHEREAS, on the Issuance Date (i) Citibank, N.A. (the "Liquidity
Provider") entered into [three] revolving credit agreements (each, a "Liquidity
Facility"), one for the benefit of the holders of Certificates of each Pass
Through Trust, with the Subordination Agent, as agent for the Pass Through
Trustee on behalf of each such Pass Through Trust; and (ii) the Pass Through
Trustee, the Liquidity Provider and the Subordination Agent entered into the
Intercreditor Agreement, dated February 16, 1999 (the "Intercreditor
Agreement");
WHEREAS, the Secured Certificates will be held by the Subordination
Agent pursuant to the Intercreditor Agreement on behalf of the Pass Through
Trusts;
WHEREAS, in order to facilitate the transactions contemplated
hereby, the Owner and the Guarantor have entered into the Underwriting
Agreement, dated as of February 4, 1999, among the Owner, the Guarantor and the
several underwriters named therein (the "Underwriting Agreement"); and
WHEREAS, certain terms are used herein as defined in Section 13(a)
hereof;
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, the parties hereto agree as follows:
SECTION 1. Purchase of Secured Certificates by Pass Through
Trustees. (a) Purchase of Secured Certificates by Pass Through Trustees. Subject
to the terms and conditions of this Agreement, the Pass Through Trustee for each
Pass Through Trust agrees to purchase the Secured Certificates set forth on
Schedule II opposite the name of such Pass Through Trust by paying to the Owner
the aggregate purchase price of the Secured Certificates being issued to such
Pass Through Trustee as set forth on Schedule II opposite the name of such Pass
Through Trust. The Pass Through Trustees shall make such payments to the Owner
on a date to be designated pursuant to Section 2 hereof, but in no event later
than [__________], by transferring to the account of the Owner at USBank,
Minneapolis, ABA No. ▇▇▇-▇▇▇-▇▇▇, Account No. 1502-5009-9440, Reference:
Northwest/NW 1999 _, not later than 9:30 a.m., New York City time, on the
Closing Date in immediately available funds in
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Dollars, the amount set forth opposite the name of such Pass Through Trust on
Schedule II hereto.
Upon the occurrence of the above transfers by the Pass Through
Trustee for each Pass Through Trust to the Owner, the Owner shall issue,
pursuant to Article II of the Trust Indenture, to the Subordination Agent on
behalf of the Pass Through Trustee for each of the Pass Through Trusts, Secured
Certificates of the maturity and aggregate principal amount, bearing the
interest rate and for the purchase price set forth on Schedule II hereto
opposite the name of such Pass Through Trust.
(b) [Intentionally Omitted].
(c) General Provisions. The amount of the payment of each Pass
Through Trustee to be made as provided above is hereinafter called such party's
"Commitment" for the Aircraft.
SECTION 2. Owner's Notice of Closing Date. The Owner agrees to give
the Pass Through Trustee and the Indenture Trustee at least two Business Days'
telecopy or other written notice of the Closing Date, which Closing Date shall
be a Business Day, which notice shall specify the amount of each Pass Through
Trustee's Commitment for the Aircraft. As to each Pass Through Trustee, the
making of its Commitment for the Aircraft available in the manner required by
Section 1 shall constitute a waiver of such notice.
SECTION 3. [Intentionally Omitted].
SECTION 4. Conditions. (a) Conditions Precedent to Purchase of
Secured Certificates. It is agreed that the obligations of each Pass Through
Trustee to purchase Secured Certificates and to make available the amount of its
Commitment is subject to the satisfaction prior to or on the Closing Date of the
following conditions precedent:
(i) The Pass Through Trustee shall have received due notice with
respect to such participation pursuant to Section 2 hereof (or shall have
waived such notice either in writing or as provided in Section 2).
(ii) No change shall have occurred after the date of the execution
and delivery of this Agreement in applicable law or regulations or
guidelines or interpretations thereof by appropriate regulatory
authorities which would make it a violation of law or regulations or
guidelines for the Pass Through Trustee to make its Commitment available
in accordance with Section 1 hereof.
(iii) [Intentionally Omitted].
(iv) [Intentionally Omitted].
(v) The following documents shall have been duly authorized,
executed and delivered by the respective party or parties thereto, shall
each be satisfactory in form
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and substance to the Pass Through Trustee and shall be in full force and
effect and executed counterparts shall have been delivered to the Pass
Through Trustee or its counsel, provided that only the Subordination Agent
on behalf of each Pass Through Trustee shall receive an executed original
of such Pass Through Trustee's respective Secured Certificate and
provided, further, that an excerpted copy of the Purchase Agreement shall
only be delivered to and retained by the Indenture Trustee, which copy may
be inspected and reviewed by the Indenture Trustee if and only if there
shall occur and be continuing an Event of Default:
(1) an excerpted copy of the Purchase Agreement (insofar as it
relates to the Aircraft);
(2) the Trust Indenture;
(3) the Trust Indenture Supplement covering the Aircraft dated
the Closing Date;
(4) the Secured Certificates;
(5) the Consent and Agreement; and
(6) the Guarantee
All of the foregoing documents, together with this Agreement, are
sometimes referred to herein, collectively, as the "Operative Documents"
and, individually, as an "Operative Document".
In addition, the Pass Through Trustee shall have received executed
counterparts or conformed copies of the following documents:
(1) each of the Pass Through Trust Agreements;
(2) the Intercreditor Agreement; and
(3) the Liquidity Facility for each of the Pass Through
Trusts.
(vi) A Uniform Commercial Code financing statement or statements
covering all the security interests created by or pursuant to the Granting
Clause of the Trust Indenture that are not covered by the recording system
established by the Federal Aviation Act, shall have been executed and
delivered by the Owner, and such financing statement or statements shall
have been duly filed in all places necessary or advisable, and any
additional Uniform Commercial Code financing statements deemed advisable
by the Pass Through Trustee shall have been executed and delivered by the
Owner and duly filed.
(vii) The Pass Through Trustee shall have received the following:
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(A)(1) an incumbency certificate of the Owner and the
Guarantor (as the case may be) as to the person or persons
authorized to execute and deliver this Agreement, the Pass Through
Trust Agreements, the Guarantee and any other documents to be
executed on behalf of the Owner or the Guarantor (as the case may
be) in connection with the transactions contemplated hereby and the
signatures of such person or persons;
(2) a copy of the resolutions of the board of directors of the
Owner and the Guarantor or the executive committee thereof,
certified by the Secretary or an Assistant Secretary of the Owner
and the Guarantor (as the case may be), duly authorizing the
transactions contemplated hereby and the execution and delivery of
each of the documents required to be executed and delivered on
behalf of the Owner or the Guarantor (as the case may be) in
connection with the transactions contemplated hereby; and
(3) a copy of the certificate of incorporation of the Owner
and the Guarantor, certified by the Secretary of State of the State
of Minnesota in the case of the Owner and certified by the Secretary
of State of the State of Delaware in the case of the Guarantor, a
copy of the by-laws of the Owner and the Guarantor, certified by the
Secretary or Assistant Secretary of the Owner and the Guarantor (as
the case may be), and a certificate or other evidence from the
Secretary of State of the State of Minnesota in the case of the
Owner and from the Secretary of State of the State of Delaware in
the case of the Guarantor, dated as of a date reasonably near the
Closing Date, as to the due incorporation and good standing of the
Owner or the Guarantor (as the case may be) in such state.
(B)(1) an incumbency certificate of the Indenture Trustee as
to the person or persons authorized to execute and deliver this
Agreement, the Trust Indenture, the Pass Through Trust Agreements
and any other documents to be executed on behalf of the Indenture
Trustee in connection with the transactions contemplated hereby and
the signatures of such person or persons;
(2) a copy of the resolutions of the board of directors of the
Indenture Trustee, certified by the Secretary or an Assistant
Secretary of the Indenture Trustee, duly authorizing the
transactions contemplated hereby and the execution and delivery of
each of the documents required to be executed and delivered on
behalf of the Indenture Trustee in connection with the transactions
contemplated hereby;
(3) a copy of the articles of association and by-laws of the
Indenture Trustee, each certified by the Secretary or an Assistant
Secretary of the Indenture Trustee; and
(4) a certificate signed by an authorized officer of the
Indenture Trustee, dated the Closing Date, certifying that the
representations and
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warranties contained herein of the Indenture Trustee are correct as
though made on and as of the Closing Date, except to the extent that
such representations and warranties relate solely to an earlier date
(in which case such representations and warranties are correct on
and as of such earlier date).
(viii) All appropriate action required to have been taken prior to
the Closing Date in connection with the transactions contemplated by this
Agreement shall have been taken by the Federal Aviation Administration, or
any governmental or political agency, subdivision or instrumentality of
the United States, and all orders, permits, waivers, authorizations,
exemptions and approvals of such entities required to be in effect on the
Closing Date in connection with the transactions contemplated by this
Agreement shall have been issued, and all such orders, permits, waivers,
authorizations, exemptions and approvals shall be in full force and effect
on the Closing Date.
(ix) On the Closing Date the Pass Through Trustee shall have
received a certificate signed by an authorized officer of the Owner (and
with respect to the matters set forth in clause (4) below, the Guarantor)
to the effect that:
(1) the Aircraft has been duly certified by the Federal
Aviation Administration as to type and has a current certificate of
airworthiness, and the Owner has good title to the Aircraft free and
clear of Liens other than Permitted Liens;
(2) the Trust Indenture and the Trust Indenture Supplement
covering the Aircraft shall have been duly filed for recordation (or
shall be in the process of being so duly filed for recordation) with
the Federal Aviation Administration;
(3) application for registration of the Aircraft in the name
of the Owner has been duly made with the Federal Aviation
Administration; and
(4) the representations and warranties contained herein of the
Owner and the Guarantor are correct as though made on and as of the
Closing Date, except to the extent that such representations and
warranties (other than those contained in clause (F) of Section
7(a)(iv)) relate solely to an earlier date (in which case such
representations and warranties were correct on and as of such
earlier date).
(x) The Owner and the Guarantor shall have entered into the
Underwriting Agreement and each of the Pass Through Trust Agreements, the
Certificates shall have been issued and sold pursuant to the Underwriting
Agreement and the Pass Through Trust Agreements.
(xi) The Pass Through Trustee shall have received, addressed to the
Pass Through Trustee and the Indenture Trustee, and reasonably
satisfactory as to scope and substance to the Pass Through Trustee, an
opinion substantially in the form of Exhibit
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B-1 hereto from ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, special counsel for the Owner
and the Guarantor, an opinion substantially in the form of Exhibit B-2
hereto from Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇, special counsel for the Owner
and the Guarantor, and an opinion substantially in the form of Exhibit B-3
hereto from the Owner's legal department.
(xii) The Pass Through Trustee shall have received, addressed to the
Pass Through Trustee, the Indenture Trustee, the Guarantor and the Owner
and reasonably satisfactory as to scope and substance to the Pass Through
Trustee, the Guarantor and the Owner, an opinion substantially in the form
of Exhibit C hereto from in-house counsel to the Manufacturer, with
respect to the Manufacturer Documents.
(xiii) [Intentionally Omitted].
(xiv) [Intentionally Omitted].
(xv) The Pass Through Trustee shall have received, addressed to the
Pass Through Trustee, the Indenture Trustee, the Guarantor and the Owner,
and reasonably satisfactory as to scope and substance to the Pass Through
Trustee, the Guarantor and the Owner, an opinion substantially in the form
of Exhibit F hereto from ▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.C.
(xvi) The Pass Through Trustee shall have received, addressed to the
Pass Through Trustee, the Guarantor and the Owner, and reasonably
satisfactory as to scope and substance to the Pass Through Trustee, the
Guarantor and the Owner, an opinion substantially in the form of Exhibit G
hereto from ▇▇▇▇▇▇▇ ▇▇▇▇ LLP, special counsel for the Indenture Trustee.
(xvii) [Intentionally Omitted].
(xviii) The Pass Through Trustee shall have received an independent
insurance broker's report, in form and substance satisfactory to the Pass
Through Trustee, as to the due compliance with the terms of Section 7.04
of the Trust Indenture relating to insurance with respect to the Aircraft.
(xix) [Intentionally Omitted].
(xx) No action or proceeding shall have been instituted nor shall
governmental action be threatened before any court or governmental agency,
nor shall any order, judgment or decree have been issued or proposed to be
issued by any court or governmental agency at the time of the Closing Date
to set aside, restrain, enjoin or prevent the completion and consummation
of this Agreement or the transactions contemplated hereby.
(xxi) [Intentionally Omitted].
(xxii) [Intentionally Omitted].
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(xxiii) The Pass Through Trustee shall have received a favorable
opinion substantially in the form of Exhibit I hereto addressed to the
Pass Through Trustee, and reasonably satisfactory as to scope and
substance to the Pass Through Trustee, from Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇,
special counsel for the Owner, which opinion shall state (with customary
assumptions and qualifications) that the Indenture Trustee would be
entitled to the benefits of 11 U.S.C. ss.1110 with respect to the
Aircraft.
(xxiv) [Intentionally Omitted].
(xxv) The Pass Through Trustee shall have received, addressed to the
Pass Through Trustee, the Indenture Trustee, the Guarantor and the Owner,
and reasonably satisfactory as to scope and substance, to the Pass Through
Trustee, the Guarantor and the Owner, an opinion substantially in the form
of Exhibit J-2 hereto from ▇▇▇▇▇▇▇ ▇▇▇▇ LLP, special counsel to the
Subordination Agent.
Promptly upon the recording of the Trust Indenture and the Trust
Indenture Supplement covering the Aircraft pursuant to the Federal Aviation Act,
the Owner will cause ▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.C., special counsel in Oklahoma City,
Oklahoma, to deliver to the Pass Through Trustee, the Indenture Trustee and the
Owner an opinion as to the due and valid registration of the Aircraft in the
name of the Owner, the due recording of the Trust Indenture and such Trust
Indenture Supplement and the lack of filing of any intervening documents with
respect to the Aircraft.
(b) Conditions Precedent to the Obligations of the Owner and the
Guarantor. It is agreed that the obligations of the Owner and the Guarantor to
enter into the other Operative Documents are all subject to the fulfillment to
the satisfaction of the Owner and the Guarantor prior to or on the Closing Date
of the following conditions precedent:
(i) All appropriate action required to have been taken on or prior
to the Closing Date in connection with the transactions contemplated by
this Agreement shall have been taken by the Federal Aviation
Administration, or any governmental or political agency, subdivision or
instrumentality of the United States, and all orders, permits, waivers,
exemptions, authorizations and approvals of such entities required to be
in effect on the Closing Date in connection with the transactions
contemplated by this Agreement shall have been issued, and all such
orders, permits, waivers, exemptions, authorizations and approvals shall
be in full force and effect on the Closing Date.
(ii) The condition specified in Section 4(a)(ii) hereof shall have
been satisfied.
(iii) Those documents described in Section 4(a)(v) shall have been
duly authorized, executed and delivered by the respective party or parties
thereto (other than the Owner and the Guarantor) in the manner specified
in Section 4(a)(v), shall each be satisfactory in form and substance to
the Owner and the Guarantor, shall be in full force and effect on the
Closing Date, and an executed counterpart of each thereof
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(other than the Secured Certificates) shall have been delivered to the
Owner or its special counsel and the Guarantor or its special counsel.
(iv) The Owner and the Guarantor shall have received (A) each
certificate referred to in Section 4(a)(vii) (other than the certificate
referred to in clause (A) thereof), (B) a certificate signed by an
authorized officer of the Pass Through Trustee, dated the Closing Date,
certifying that the representations and warranties contained herein of the
Pass Through Trustee are correct as though made on and as of the Closing
Date, except to the extent that such representations and warranties relate
solely to an earlier date (in which case such representations and
warranties are correct on and as of such earlier date), and (C) such other
documents and evidence with respect to the Pass Through Trustee as the
Owner or its special counsel and the Guarantor or its special counsel may
reasonably request in order to establish the due consummation of the
transactions contemplated by this Agreement, the taking of all corporate
proceedings in connection therewith and compliance with the conditions
herein set forth.
(v) The Owner and the Guarantor shall have received (A) an opinion
substantially in the form of Exhibit J-1 hereto addressed to the Guarantor
and the Owner of ▇▇▇▇▇▇▇ ▇▇▇▇ LLP, special counsel for the Pass Through
Trustee, and reasonably satisfactory as to scope and substance to the
Guarantor and the Owner, and (B) the opinions set forth in Sections
4(a)(xii), 4(a)(xv), 4(a)(xvi) and 4(a)(xxv) in each case addressed to the
Owner and the Guarantor and dated the Closing Date and in each case in
scope and substance reasonably satisfactory to the Owner and its special
counsel and the Guarantor and its special counsel.
(vi) No action or proceeding shall have been instituted nor shall
governmental action be threatened before any court or governmental agency,
nor shall any order, judgment or decree have been issued or proposed to be
issued by any court or governmental agency at the time of the Closing Date
to set aside, restrain, enjoin or prevent the completion and consummation
of this Agreement or the transactions contemplated hereby.
(vii) No change shall have occurred after the date of the execution
and delivery of this Agreement in applicable law or regulations or
guidelines or interpretations by appropriate regulatory authorities which
would make it a violation of law or regulations or guidelines for the
Owner or the Guarantor to enter into any transaction contemplated by the
Operative Documents.
(viii) [Intentionally Omitted].
(ix) The Owner shall have been paid by the Pass Through Trustee for
each Pass Through Trust the aggregate purchase price set forth on Schedule
II opposite the name of such Pass Through Trust.
SECTION 5. [Intentionally Omitted].
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SECTION 6. Extent of Interest of Certificate Holders. No Certificate
Holder (as defined in the Trust Indenture) shall have any further interest in,
or other right with respect to, the mortgage and security interests created by
the Trust Indenture when and if the principal of and interest on all Secured
Certificates held by such holder and all other sums payable to such holder
hereunder, under the Trust Indenture and under such Secured Certificates shall
have been paid in full.
SECTION 7. Representations and Warranties of the Owner and the
Guarantor; Indemnities. (a) Representations and Warranties. The Owner and the
Guarantor represent and warrant to the Pass Through Trustee, the Indenture
Trustee, the Liquidity Provider and the Subordination Agent that as of the
Closing Date:
(i) each of the Owner and the Guarantor is a corporation duly
organized, validly existing and in good standing under the laws of the
state of its incorporation, has the corporate power and authority to own
or hold under lease its properties, has, or had on the respective dates of
execution thereof, the corporate power and authority to enter into and
perform its obligations under (i) in the case of the Owner, the Owner
Documents, the Pass Through Trust Agreements, the Underwriting Agreement
and the other Operative Documents to which it is a party and (ii) in the
case of the Guarantor, this Agreement, the Pass Through Trust Agreements,
the Underwriting Agreement and the other Operative Documents to which it
is a party, and is duly qualified to do business as a foreign corporation
in each state in which its operations or the nature of its business
requires other than failures to so qualify which would not have a material
adverse effect on the condition (financial or otherwise), consolidated
business or properties of it and its subsidiaries considered as one
enterprise;
(ii) The Owner is a Certificated Air Carrier, and its chief
executive office (as such term is used in Article 9 of the Uniform
Commercial Code in effect in the State of Minnesota) is located at Eagan,
Minnesota;
(iii) the execution and delivery by the Owner or the Guarantor (as
the case may be) of the Owner Documents, the Pass Through Trust
Agreements, the Underwriting Agreement and each other Operative Document
to which the Owner or the Guarantor (as the case may be) is a party, and
the performance of the obligations of the Owner or the Guarantor (as the
case may be) under the Owner Documents, the Pass Through Trust Agreements,
the Underwriting Agreement and each other Operative Document to which the
Owner or the Guarantor (as the case may be) is a party, have been duly
authorized by all necessary corporate action on the part of the Owner or
the Guarantor, do not require any stockholder approval, or approval or
consent of any trustee or holder of any material indebtedness or material
obligations of the Owner or the Guarantor, except such as have been duly
obtained and are in full force and effect, and do not contravene any law,
governmental rule, regulation or order binding on the Owner or the
Guarantor (as the case may be) or the certificate of incorporation or
by-laws of the Owner or the Guarantor (as the case may be), or contravene
the provisions of, or constitute a default under, or result in the
creation of any Lien (other
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than Permitted Liens) upon the property of the Owner or the Guarantor (as
the case may be) under, any indenture, mortgage, contract or other
agreement to which the Owner or the Guarantor (as the case may be) is a
party or by which it may be bound or affected which contravention, default
or Lien, individually or in the aggregate, would be reasonably likely to
have a material adverse effect on the condition (financial or otherwise),
business or properties of the Guarantor and its subsidiaries considered as
one enterprise;
(iv) neither the execution and delivery by the Owner or the
Guarantor (as the case may be) of the Owner Documents, the Pass Through
Trust Agreements, the Underwriting Agreement or any other Operative
Document to which the Owner or the Guarantor (as the case may be) is a
party, nor the performance of the obligations of the Owner or the
Guarantor (as the case may be) under the Owner Documents, the Pass Through
Trust Agreements, the Underwriting Agreement or the other Operative
Documents to which the Owner or the Guarantor (as the case may be) is a
party, requires the consent or approval of, the giving of notice to, the
registration with, or the taking of any other action in respect of, the
Department of Transportation, the FAA, or any other federal, state or
foreign governmental authority having jurisdiction over the Owner or the
Guarantor, other than (A) the registration of the Certificates under the
Securities Act of 1933, as amended, and under the securities laws of any
state in which the Certificates may be offered for sale if the laws of
such state require such action, (B) the qualification of the Pass Through
Trust Agreements under the Trust Indenture Act of 1939, as amended,
pursuant to an order of the Securities and Exchange Commission, (C) the
orders, permits, waivers, exemptions, authorizations and approvals of the
regulatory authorities having jurisdiction over the operation of the
Aircraft by the Owner or any Lessee required to be obtained on or prior to
the Closing Date, which orders, permits, waivers, exemptions,
authorizations and approvals have been duly obtained and are, or on the
Closing Date will be, in full force and effect (other than a flying time
wire, all steps to obtain the issuance of which will have been, on the
Closing Date, taken or caused to be taken by the Owner), (D) the
registration of the Aircraft referred to in Section 4(a)(ix)(3), (E) the
registrations and filings referred to in Section 7(a)(vi), and (F)
authorizations, consents, approvals, actions, notices and filings required
to be obtained, taken, given or made either only after the date hereof or
the failure of which to obtain, take, give or make would not be reasonably
likely to have a material adverse effect on the condition (financial or
otherwise), business or properties of the Guarantor and its subsidiaries
considered as one enterprise;
(v) this Agreement, each of the other the Owner Documents, the Pass
Through Trust Agreements and the Guarantee constitute the legal, valid and
binding obligations of the Owner or the Guarantor (as the case may be)
enforceable against the Owner or the Guarantor (as the case may be) in
accordance with their respective terms, except as the same may be limited
by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or similar laws affecting the rights of
creditors or lessors generally and by general principles of equity,
whether considered in a proceeding at law or in equity, and except, in the
case of the Trust Indenture, as
-11-
limited by applicable laws which may affect the remedies provided in the
Trust Indenture, which laws, however, do not make the remedies provided in
the Trust Indenture inadequate for practical realization of the benefits
intended to be afforded thereby;
(vi) except for (A) the filing for recording pursuant to the Federal
Aviation Act of a ▇▇▇▇ of sale on AC form 8050-2 (or such other form as
may be approved by the FAA) relating to the Aircraft from the Manufacturer
to the Owner, (B) the registration of the Aircraft pursuant to the Federal
Aviation Act, (C) the filing for recording pursuant to the Federal
Aviation Act of the Trust Indenture and the Trust Indenture Supplement
covering the Aircraft attached thereto and made a part thereof, (D) the
filing of financing statements (and continuation statements at periodic
intervals) with respect to the security interests created by such
documents under the Uniform Commercial Code of Minnesota and such other
states as may be specified in the opinions furnished pursuant to Section
4(a)(xi) hereof, and (E) the taking of possession by the Indenture Trustee
of the original counterparts of the Trust Indenture and the Trust
Indenture Supplement covering the Aircraft, no further filing or recording
of any document (including any financing statement in respect thereof
under Article 9 of the Uniform Commercial Code of any applicable
jurisdiction) is necessary under the laws of the United States of America
or any State thereof in order to perfect the security interest in favor of
the Indenture Trustee in the Aircraft as against the Owner and any third
parties in any applicable jurisdiction in the United States;
(vii) neither the Owner, the Guarantor nor any of their affiliates
has directly or indirectly offered the Certificates for sale to any Person
other than in a manner permitted by the Securities Act of 1933, as
amended, and by the rules and regulations thereunder;
(viii) neither the Owner nor the Guarantor is an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended;
(ix) no event has occurred and is continuing which constitutes an
Event of Default or would constitute an Event of Default but for the
requirement that notice be given or time lapse or both;
(x) no event has occurred and is continuing which constitutes an
Event of Loss or would constitute an Event of Loss with the lapse of time;
(xi) the Owner is solvent and has no intention or belief that it is
about to incur debts beyond its ability to pay as they mature;
(xii) none of the proceeds from the issuance of the Secured
Certificates will be used directly or indirectly by the Owner to purchase
or carry any "margin security" as such term is defined in Regulation U of
the Board of Governors of the Federal Reserve System; and
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(xiii) On the Closing Date, all sales or use tax then due and for
which the Owner is responsible pursuant to Section 7(b)(i) hereof shall
have been paid, other than such taxes which are being contested by the
Owner in good faith and by appropriate proceedings so long as such
proceedings do not involve any material risk of the sale, forfeiture or
loss of the Aircraft.
(b) General Tax Indemnity. Exhibit K, which is a complete statement
of the provisions of Section 7(b), is incorporated herein in its entirety as if
fully set forth herein.
(c) General Indemnity. Exhibit L, which is a complete statement of
the provisions of Section 7(c), is incorporated herein in its entirety as if
fully set forth herein.
(d) Income Tax. For purposes of this Section 7, the term "Income
Tax" means any Tax based on or measured by gross or net income or receipts
(other than sales, use, license or property Taxes or Taxes in the nature
thereof) (including, without limitation, capital gains taxes, minimum taxes,
income taxes collected by withholding and taxes on tax preference items), and
Taxes which are capital, doing business, excess profits or net worth taxes and
interest, additions to tax, penalties, or other charges in respect thereof.
SECTION 8. Representations, Warranties and Covenants.
(a) [Intentionally Omitted].
(b) [Intentionally Omitted].
(c) [Intentionally Omitted].
(d) [Intentionally Omitted].
(e) Each Loan Participant represents and warrants that neither it
nor anyone acting in its behalf has offered any Secured Certificates for sale
to, or solicited any offer to buy any Secured Certificate from, any Person other
than in a manner in compliance with, and which does not require registration
under, the Securities Act of 1933, as amended, or the rules and regulations
thereunder.
(f) The Indenture Trustee agrees that the Owner may elect to effect
a change in registration of the Aircraft, at the Owner's cost and expense, so
long as (a) the country of registry of the Aircraft is a country listed on
Exhibit A hereto and (b) the following conditions are met: (i) unless the
country of registry is Taiwan, the United States maintains normal diplomatic
relations with the country of registry of the Aircraft, and if the country of
registry is Taiwan, the United States maintains diplomatic relations at least as
good as those in effect on the Closing Date; and (ii) the Indenture Trustee
shall have received a favorable opinion (subject to customary exceptions)
addressed to the Indenture Trustee, from counsel of recognized reputation
qualified in the laws of the relevant jurisdiction to the effect that:
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(A) the Owner's ownership interest in the Aircraft shall be
recognized under the laws of such jurisdiction, (B) the obligations of the
Owner, and the rights and remedies of the Indenture Trustee, under the
Trust Indenture shall remain valid, binding and (subject to customary
bankruptcy and equitable remedies exceptions and to other exceptions
customary in foreign opinions generally) enforceable under the laws of
such jurisdiction (or the laws of the jurisdiction to which the laws of
such jurisdiction would refer as the applicable governing law), (C) after
giving effect to such change in registration, the Lien of the Trust
Indenture on the Owner's right, title and interest in and to the Aircraft
shall continue as a valid and duly perfected first priority security
interest and all filing, recording or other action necessary to protect
the same shall have been accomplished (or, if such opinion cannot be given
at the time of such proposed change in registration because such change in
registration is not yet effective, (1) the opinion shall detail what
filing, recording or other action is necessary and (2) the Indenture
Trustee shall have received a certificate from the Owner that all possible
preparations to accomplish such filing, recording and other action shall
have been done, and such filing, recording and other action shall be
accomplished and a supplemental opinion to that effect shall be delivered
to the Indenture Trustee on or prior to the effective date of such change
in registration), (D) it is not necessary, solely as a consequence of such
change in registration and without giving effect to any other activity of
the Indenture Trustee (or any Affiliate thereof) for the Indenture Trustee
to qualify to do business in such jurisdiction, (E) there is no tort
liability of the owner of an aircraft not in possession thereof under the
laws of such jurisdiction (it being agreed that, in the event such latter
opinion cannot be given in a form satisfactory to the Indenture Trustee,
such opinion shall be waived if insurance reasonably satisfactory to the
Indenture Trustee is provided to cover such risk), and (F) (unless the
Owner shall have agreed to provide insurance covering the risk of
requisition of use of such Aircraft by the government of such jurisdiction
so long as such Aircraft is registered under the laws of such
jurisdiction) the laws of such jurisdiction require fair compensation by
the government of such jurisdiction payable in currency freely convertible
into Dollars for the loss of use of such Aircraft in the event of the
requisition by such government of such use.
In addition, as a condition precedent to any such change in registration, the
Owner shall furnish to the Indenture Trustee an Officer's Certificate to the
effect that the insurance required by Section 7.04 of the Trust Indenture shall
be in full force and effect at the time of such change in registration after
giving effect to such change in registration and that the new country of
registry imposes aircraft maintenance standards not materially different from
those of the United States, France, Germany, Japan, the Netherlands or the
United Kingdom. The Owner shall pay all costs, expenses, fees, recording and
registration taxes, including the reasonable fees and expenses of counsel to the
Indenture Trustee, and other charges in connection with any such change in
registration.
(g) Each Loan Participant and each of the Indenture Trustee, the
Subordination Agent and each Pass Through Trustee covenants and agrees that, so
long as no Event of Default shall have occurred and be continuing and the Owner
has not been duly
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declared in default and, notwithstanding default by any Loan Participant, the
Indenture Trustee, any Pass Through Trustee or the Subordination Agent, that
such Person shall not (and shall not permit any Affiliate or other Person
claiming by, through or under it to) interfere with the Owner's continued
possession, use and operation of, and quiet enjoyment of, the Aircraft.
(h) [Intentionally Omitted].
(i) State Street Bank and Trust Company, in its individual capacity,
covenants and agrees that it shall not cause or permit to exist any Lien,
arising as a result of (A) claims against the Indenture Trustee not related to
its interest in the Aircraft or the administration of the Collateral pursuant to
the Trust Indenture, (B) acts of the Indenture Trustee not permitted by, or
failure of the Indenture Trustee to take any action required by, the Operative
Documents to the extent such acts arise or such failure arises from or
constitutes gross negligence or willful misconduct, (C) claims against the
Indenture Trustee relating to Taxes or Expenses which are excluded from the
indemnification provided by Section 7 pursuant to said Section 7, or (D) claims
against the Indenture Trustee arising out of the transfer by the Indenture
Trustee of all or any portion of its interest in the Aircraft, the Collateral or
the Operative Documents other than a transfer of the Aircraft pursuant to
Article IV of the Trust Indenture while an Event of Default is continuing and
prior to the time that the Indenture Trustee has received all amounts due
pursuant to the Trust Indenture.
(j) [Intentionally Omitted].
(k) Each Loan Participant represents and warrants that the Secured
Certificate to be issued to it pursuant to the Trust Indenture is being acquired
by it for investment and not with a view to resale or distribution (it being
understood that such Loan Participant may pledge or assign as security its
interest in each Secured Certificate issued to it), provided that the
disposition of its property shall at all times be and remain within its control,
except that the Loan Participants may sell, transfer or otherwise dispose of any
Secured Certificate or any portion thereof, or grant participations therein, in
a manner which in itself does not require registration under the Securities Act
of 1933, as amended.
(l) The Indenture Trustee, and by acceptance of the Secured
Certificates the Certificate Holders, hereby (i) make (and hereby agree to
make), with respect to the Collateral, the election provided for in Section
1111(b)(2) of Title 11 of the United States Code.
(m) State Street Bank and Trust Company represents, warrants and
covenants, in its individual capacity, to the Owner, the Guarantor, the Pass
Through Trustee, the Subordination Agent and the Liquidity Provider as follows:
(i) the Indenture Trustee is a Massachusetts trust company duly
incorporated, validly existing and in good standing under the laws of
Massachusetts, is a Citizen of the United States (without making use of
any voting trust, voting powers agreement or similar arrangement), will
notify promptly all parties to this Agreement if
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in its reasonable opinion its status as a Citizen of the United States
(without making use of any voting trust, voting powers agreement or
similar arrangement) is likely to change and will resign as Indenture
Trustee as provided in Section 9.01 of the Trust Indenture promptly after
it obtains actual knowledge that it has ceased to be such a Citizen of the
United States (without making use of a voting trust, voting powers
agreement or similar arrangement), 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 each of this Agreement, the Trust
Indenture and each other Operative Document to which it is a party and to
carry out its obligations under this Agreement, the Trust Indenture, each
other Operative Document to which it is a party and to authenticate the
Secured Certificates;
(ii) the execution and delivery by the Indenture Trustee of the
Indenture Trustee Documents and the authentication of the Secured
Certificates and the performance by the Indenture Trustee of its
obligations under the Indenture Trustee Documents have been duly
authorized by the Indenture 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;
(iii) this Agreement and each of the other Indenture Trustee
Documents constitute the legal, valid and binding obligations of the
Indenture Trustee enforceable against it in accordance with their
respective 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;
(iv) there are no pending or, to its knowledge, threatened actions
or proceedings against the Indenture Trustee, either in its individual
capacity or as Indenture Trustee, before any court or administrative
agency which, if determined adversely to it, would materially adversely
affect the ability of the Indenture Trustee, in its individual capacity or
as Indenture Trustee as the case may be, to perform its obligations under
the Operative Documents to which it is a party; and
(v) there are no Indenture Trustee's Liens on the Aircraft or any
other portion of the Collateral.
(n) [Intentionally Omitted].
(o) [Intentionally Omitted].
(p) State Street Bank and Trust Company, in its individual capacity,
agrees for the benefit of the Owner to comply with the terms of the Trust
Indenture which it is required to comply with in its individual capacity.
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(q) Each Loan Participant agrees that it will not transfer any
Secured Certificate (or any part thereof) to any entity unless such entity makes
(or is deemed to have made) a representation and warranty as of the date of
transfer that either no part of the funds to be used by it for the purchase and
holding of such Secured Certificate (or any part thereof) constitutes assets of
any "employee benefit plan" or that such purchase and holding will not result in
a non-exempt prohibited transaction (under Section 4975 of the Code and Section
406 of ERISA).
(r) Each Loan Participant and the Indenture Trustee agrees for the
benefit of the Manufacturer and the Owner that it will not disclose or suffer to
be disclosed the terms of the Purchase Agreement to any third party except (A)
as may be required by any applicable statute, court or administrative order or
decree or governmental ruling or regulation or to any regulatory authorities
having official jurisdiction over them, (B) in connection with the financing of
the Aircraft and the other transactions contemplated by the Operative Documents
(including any transfer of Secured Certificates (including by way of
participation or assignment of an interest, provided such participant or
assignee agrees to hold such terms confidential to the same extent as herein
provided) and any exercise of remedies under the Trust Indenture), (C) with the
prior written consent of the Manufacturer and the Owner, or (D) to the Indenture
Trustee's and each Loan Participant's counsel or special counsel, independent
insurance brokers or other agents who agree to hold such information
confidential.
(s) [Intentionally Omitted].
(t) Each Loan Participant covenants and agrees that it shall not
cause or permit to exist a Loan Participant Lien attributable to it with respect
to the Aircraft or any other portion of the Collateral. Each Loan Participant
agrees that it will promptly, at its own expense, take such other action as may
be necessary duly to discharge such Loan Participant Lien attributable to it.
Each Loan Participant agrees to make restitution to the Owner for any damages or
expenses of the Owner resulting from such Loan Participant Lien attributable to
it.
(u) State Street Bank and Trust Company, in its individual capacity,
covenants and agrees that it shall not cause or permit to exist any Indenture
Trustee's Liens with respect to the Collateral. State Street Bank and Trust
Company, in its individual capacity, agrees that it will promptly, at its own
expense, take such action as may be necessary duly to discharge such Indenture
Trustee's Liens. State Street Bank and Trust Company, in its individual
capacity, agrees to make restitution to the Owner for any actual diminution of
the assets of the Collateral resulting from such Indenture Trustee's Liens.
(v) [Intentionally Omitted].
(w) [Intentionally Omitted].
(x) [Intentionally Omitted].
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(y) (A) The Owner will not consolidate with or merge into any other
corporation or convey, transfer or lease substantially all of its assets as an
entirety to any Person unless:
(i) the corporation formed by such consolidation or into which the
Owner is merged or the Person which acquires by conveyance, transfer or
lease substantially all of the assets of the Owner as an entirety shall be
a Certificated Air Carrier;
(ii) the corporation formed by such consolidation or into which the
Owner is merged or the Person which acquires by conveyance, transfer or
lease substantially all of the assets of the Owner as an entirety shall
execute and deliver to the Indenture Trustee an agreement in form and
substance reasonably satisfactory to the Indenture Trustee containing an
assumption by such successor corporation or Person of the due and punctual
performance and observance of each covenant and condition of this
Agreement, the Trust Indenture and the Secured Certificates to be
performed or observed by the Owner;
(iii) immediately after giving effect to such transaction, no
Default or Event of Default under the Trust Indenture shall have occurred
and be continuing; and
(iv) The Owner shall have delivered to the Indenture Trustee a
certificate signed by the President, any Executive Vice President, any
Senior Vice President, the Treasurer or any Vice President and by the
Secretary or an Assistant Secretary of the Owner, and an opinion of
counsel reasonably satisfactory to the Indenture Trustee, each stating
that such consolidation, merger, conveyance, transfer or lease and the
assumption agreement mentioned in clause (ii) above comply with this
subparagraph (A) of Section 8(y) and that all conditions precedent herein
provided for relating to such transaction have been complied with.
Upon any such consolidation or merger or any such conveyance,
transfer or lease of substantially all of the assets of the Owner as an entirety
in accordance with this subparagraph (A) of Section 8(y), the successor
corporation or Person formed by such consolidation or into which the Owner is
merged or to which such conveyance, transfer or lease is made shall succeed to,
and be substituted for, and may exercise every right and power of, the Owner
under this Agreement with the same effect as if such successor corporation or
Person had been named as the Owner herein. No such conveyance, transfer or lease
of substantially all of the assets of the Owner as an entirety shall have the
effect of releasing the Owner or any successor corporation or Person which shall
theretofore have become such in the manner prescribed in this subparagraph (A)
of Section 8(y) from its liability in respect of any Operative Document to which
it is a party.
(B) The Owner shall at all times maintain its corporate
existence except as permitted by subparagraph (A) of this Section 8(y).
(z) The Owner, at its expense, will take, or cause to be taken, such
action with respect to the recording, filing, re-recording and refiling of the
Trust Indenture, the Trust
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Indenture Supplement and any financing statements or other instruments as are
necessary to maintain, so long as the Trust Indenture is in effect, the
perfection of the security interests created by the Trust Indenture or will
furnish to the Indenture Trustee timely notice of the necessity of such action,
together with such instruments, in execution form, and such other information as
may be required to enable it to take such action. The Owner will notify the
Indenture Trustee of any change in the location of its chief executive office
(as such term is used in Article 9 of the Uniform Commercial Code) promptly
after making such change or in any event within the period of time necessary
under applicable law to prevent the lapse of perfection (absent refiling) of
financing statements filed under the Operative Documents.
(aa) [Intentionally Omitted].
(bb) [Intentionally Omitted].
(cc) Each Loan Participant hereby represents, warrants and agrees
that it shall not transfer any interest in any Secured Certificate unless and
until the transferee agrees in writing (copies of which shall be provided by the
Indenture Trustee to the Owner) to make the representations contemplated to be
made by a Loan Participant in this Agreement and to be bound by the terms of
this Agreement and the Trust Indenture (including, without limitation, the
representations and covenants set forth in Sections 8(e), 8(k), 8(l), 8(q), and
8(t) hereof and this Section 8(cc) and Section 2.03 of the Trust Indenture).
(dd) The Pass Through Trustee represents and warrants to the Owner,
the Guarantor, the Indenture Trustee, the Subordination Agent and the Liquidity
Provider, in its capacity as such and in its individual capacity, as follows:
(i) the Pass Through Trustee 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 each of the
Pass Through Trust Agreements, the Intercreditor Agreement and this
Agreement and to perform its obligations under the Pass Through Trust
Agreements, the Intercreditor Agreement and this Agreement;
(ii) this Agreement, each of the Pass Through Trust Agreements and
the Intercreditor Agreement have been duly authorized, executed and
delivered by the Pass Through Trustee; this Agreement, each of the Pass
Through Trust Agreements and the Intercreditor Agreement constitute the
legal, valid and binding obligations of the Pass Through Trustee
enforceable against it in accordance with their respective 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 Pass
Through Trustee of any of the Pass Through Trust Agreements, the
Intercreditor Agreement or
-19-
this Agreement, the purchase by the Pass Through Trustee of the Secured
Certificates pursuant to this Agreement, or the issuance of the
Certificates pursuant to the Pass Through Trust Agreements, contravenes
any law, rule or regulation of the Commonwealth of Massachusetts or any
United States governmental authority or agency regulating the Pass Through
Trustee's banking, trust or fiduciary powers or any judgment or order
applicable to or binding on the Pass Through Trustee and does not
contravene or result in any breach of, or constitute a default under, the
Pass Through Trustee's articles of association or by-laws or any agreement
or instrument to which the Pass Through Trustee is a party or by which it
or any of its properties may be bound;
(iv) neither the execution and delivery by the Pass Through Trustee
of any of the Pass Through Trust Agreements, the Intercreditor Agreement
or this Agreement, nor the consummation by the Pass Through Trustee of any
of the transactions contemplated hereby or thereby, 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 Pass Through Trustee's banking, trust or fiduciary powers;
(v) there are no Taxes payable by the Pass Through Trustee imposed
by the Commonwealth of Massachusetts or any political subdivision or
taxing authority thereof in connection with the execution, delivery and
performance by the Pass Through Trustee of this Agreement, any of the Pass
Through Trust Agreements or the Intercreditor Agreement (other than
franchise or other taxes based on or measured by any fees or compensation
received by the Pass Through Trustee for services rendered in connection
with the transactions contemplated by any of the Pass Through Trust
Agreements), and there are no Taxes payable by the Pass Through Trustee
imposed by the Commonwealth of Massachusetts or any political subdivision
thereof in connection with the acquisition, possession or ownership by the
Pass Through Trustee of any of the Secured Certificates (other than
franchise or other taxes based on or measured by any fees or compensation
received by the Pass Through Trustee for services rendered in connection
with the transactions contemplated by any of the Pass Through Trust
Agreements), and, assuming that the trusts created by the Pass Through
Trust Agreements will not be taxable as corporations, but rather, each
will be characterized as a grantor trust under subpart E, Part I, of
Subchapter J of the Code, such trusts will not be subject to any Taxes
imposed by the Commonwealth of Massachusetts or any political subdivision
thereof;
(vi) there are no pending or threatened actions or proceedings
against the Pass Through Trustee 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 Pass Through Trustee
to perform its obligations under this Agreement, the Intercreditor
Agreement or any Pass Through Trust Agreement;
(vii) except for the issue and sale of the Certificates, the Pass
Through Trustee has not directly or indirectly offered any Secured
Certificate for sale to any
-20-
Person or solicited any offer to acquire any Secured Certificates from any
Person, nor has the Pass Through Trustee authorized anyone to act on its
behalf to offer directly or indirectly any Secured Certificate for sale to
any Person, or to solicit any offer to acquire any Secured Certificate
from any Person; and the Pass Through Trustee is not in default under any
Pass Through Trust Agreement; and
(viii) the Pass Through Trustee is not directly or indirectly
controlling, controlled by or under common control with any Underwriter,
the Owner or the Guarantor.
(ee) The Subordination Agent represents and warrants to the Owner,
the Guarantor, the Indenture Trustee, the Pass Through Trustee and the Liquidity
Provider in its capacity as such and in its individual capacity, as follows:
(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 each of the
Liquidity Facilities, the Intercreditor Agreement and this Agreement and
to perform its obligations under this Agreement, the Liquidity Facilities
and the Intercreditor Agreement;
(ii) this Agreement, each of the Liquidity Facilities and the
Intercreditor Agreement have been duly authorized, executed and delivered
by the Subordination Agent; this Agreement, each of the Liquidity
Facilities and the Intercreditor Agreement constitute the legal, valid and
binding obligations of the Subordination Agent enforceable against it in
accordance with their respective 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 each of the Liquidity Facilities, the Intercreditor
Agreement or 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 or result in any breach of, or
constitute a default under, the Subordination Agent's articles of
association or by-laws or any agreement or instrument to which the
Subordination Agent is a party or by which it or any of its properties may
be bound;
(iv) neither the execution and delivery by the Subordination Agent
of any of the Liquidity Facilities, the Intercreditor Agreement or this
Agreement nor the consummation by the Subordination Agent of any of the
transactions contemplated hereby or thereby 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
-21-
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, any of the
Liquidity Facilities or the Intercreditor 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 Secured Certificates
(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);
(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, the Intercreditor
Agreement or any Liquidity Facility;
(vii) the Subordination Agent has not directly or indirectly offered
any Secured Certificate for sale to any Person or solicited any offer to
acquire any Secured Certificates from any Person, nor has the
Subordination Agent authorized anyone to act on its behalf to offer
directly or indirectly any Secured Certificate for sale to any Person, or
to solicit any offer to acquire any Secured Certificate from any Person;
and the Subordination Agent is not in default under any Liquidity
Facility; and
(viii) the Subordination Agent is not directly or indirectly
controlling, controlled by or under common control with any Underwriter,
the Owner or the Guarantor.
SECTION 9. Reliance of Liquidity Provider. Each of the parties
hereto agrees and acknowledges that the Liquidity Provider shall be a third
party beneficiary of each of the representations and warranties made herein by
such party, and that the Liquidity Provider may rely on such representations and
warranties to the same extent as if such representations and warranties were
made to the Liquidity Provider directly. The Owner agrees and acknowledges that
the Liquidity Provider shall be a third party beneficiary of the indemnities
contained in Section 7(c) hereof, and may rely on such indemnities to the same
extent as if such indemnities were made to the Liquidity Provider directly.
-22-
SECTION 10. Other Documents. The Indenture Trustee agrees to
promptly furnish to the Owner copies of any supplement, amendment or waiver or
modification of any of the Operative Documents to which the Owner is not a
party. Each Loan Participant agrees that it will not take any action in respect
of the Collateral except through the Indenture Trustee pursuant to the Trust
Indenture or as otherwise permitted by the Trust Indenture.
SECTION 11. Certain Covenants of the Owner. The Owner covenants and
agrees with each of the Loan Participants and the Indenture Trustee:
(a) The Owner will cause to be done, executed, acknowledged and
delivered all and every such further acts, conveyances and assurances as the
Indenture Trustee shall reasonably require for accomplishing the purposes of
this Agreement and the other Operative Documents; provided that any instrument
or other document so executed by the Owner will not expand any obligations or
limit any rights of the Owner in respect of the transactions contemplated by any
Operative Documents.
(b) The Owner will cause the Trust Indenture, all supplements and
amendments to the Trust Indenture and this Agreement to be promptly filed and
recorded, or filed for recording, to the extent permitted under the Federal
Aviation Act, or required under any other applicable law. Upon the execution and
delivery of the Trust Indenture, the Trust Indenture and the Trust Indenture
Supplement covering the Aircraft shall be filed for recording with the Federal
Aviation Administration.
SECTION 12. [Intentionally Omitted].
SECTION 13. Certain Definitions; Notices; Consent to Jurisdiction.
(a) Except as otherwise defined in this Agreement, terms used herein in
capitalized form shall have the meanings attributed thereto in the Annex A to
the Trust Indenture. Unless the context otherwise requires, any reference herein
to any of the Operative Documents refers to such document as it may be amended
from time to time.
(b) All notices, demands, instructions and other communications
required or permitted to be given to or made upon any party hereto or to the
Guarantor shall be in writing and shall be personally delivered or sent by
registered or certified mail, postage prepaid, or by telecopier, or by prepaid
courier service, and shall be deemed to be given for purposes of this Agreement
on the day that such writing is delivered or sent to the intended recipient
thereof in accordance with the provisions of this Section 13(b). Unless
otherwise specified in a notice sent or delivered in accordance with the
foregoing provisions of this Section 13(b), notices, demands, instructions and
other communications in writing shall be given to or made upon the respective
parties hereto at their respective addresses (or to their respective telecopier
numbers) as follows: (A) if to the Owner, the Guarantor, the Pass Through
Trustee, the Subordination Agent or the Indenture Trustee, to the respective
addresses set forth below the signatures of such parties at the foot of this
Agreement, or (B) if to any subsequent Certificate Holder, addressed to such
Certificate Holder at its address set forth in the Secured Certificate register
maintained pursuant to Section 2.07 of the Trust Indenture.
-23-
(c) Each of the parties hereto (A) hereby irrevocably submits itself
to the non-exclusive jurisdiction of the United States District Court for the
Southern District of New York and to the non-exclusive jurisdiction of the
Supreme Court of the State of New York, New York County, for the purposes of any
suit, action or other proceeding arising out of this Agreement or any other
Operative Document, the subject matter of any thereof or any of the transactions
contemplated hereby or thereby brought by any party or parties thereto, or their
successors or assigns, and (B) hereby waives, and agrees not to assert, by way
of motion, as a defense, or otherwise, in any such suit, action or proceeding,
to the extent permitted by applicable law, that the suit, action or proceeding
is brought in an inconvenient forum, that the venue of the suit, action or
proceeding is improper, or that this Agreement or any other Operative Document
or the subject matter of any thereof or any of the transactions contemplated
hereby or thereby may not be enforced in or by such courts. The Owner hereby
generally consents to service of process at Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇, ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Managing Attorney, or such
office of the Owner in New York City as from time to time may be designated by
the Owner in writing to the Indenture Trustee.
SECTION 14. [Intentionally Omitted].
SECTION 15. Miscellaneous.
(a) [Intentionally Omitted].
(b) The representations, warranties, indemnities and agreements of
the Owner, the Guarantor, the Indenture Trustee, the Subordination Agent and the
Pass Through Trustee provided for in this Agreement, and the Owner's, the
Guarantor's, the Indenture Trustee's, the Subordination Agent's and the Pass
Through Trustee's obligations under any and all thereof, shall survive the
making available of the Commitments by each Pass Through Trustee, the transfer
of any interest by any Loan Participant in any Secured Certificate or the
Collateral and the expiration or other termination of this Agreement or any
other Operative Document.
(c) This Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original,
but all such counterparts shall together constitute but one and the same
instrument. Neither this Agreement nor any of the terms hereof may be
terminated, amended, supplemented, waived or modified, except by an instrument
in writing signed by the party against which the enforcement of the termination,
amendment, supplement, waiver or modification is sought; and no such
termination, amendment, supplement, waiver or modification shall be effective
unless a signed copy thereof shall have been delivered to the Indenture Trustee.
The terms of this Agreement shall be binding upon, and inure to the benefit of,
the Owner and, subject to the terms of this Agreement, its successors and
permitted assigns, the Guarantor, the Pass Through Trustee and its successors as
Pass Through Trustee (and any additional trustee appointed) under any of the
Pass Through Trust Agreements, each Certificate Holder and its successors and
registered assigns and the Indenture Trustee and its successors as Indenture
-24-
Trustee under the Trust Indenture. The terms of this Agreement shall inure to
the benefit of the Liquidity Provider, its successors and permitted assigns.
THIS AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE. THIS AGREEMENT IS BEING DELIVERED IN THE STATE OF NEW
YORK.
(d) [Intentionally Omitted].
(e) It is the intention of the parties hereto that the Indenture
Trustee will be entitled to the benefits of 11 U.S.C. ss. 1110 in the event of
any reorganization of the Owner under Chapter 11 of the Bankruptcy Code.
SECTION 16. Sale/leaseback Transaction. Notwithstanding anything to
the contrary contained herein or any other Operative Document, upon not less
than __ days prior written notice to the parties hereto, the Owner shall have
the right to sell the Aircraft and transfer title to the Aircraft to an owner
trustee for the benefit of an owner participant (which shall be a "Transferee"
(as defined in the form of Leased Aircraft Participation Agreement (as such term
is defined in the Note Purchase Agreement)) in a transaction in which such owner
trustee assumes all of the obligations of the Owner under the Secured
Certificates and the Trust Indenture on a non-recourse basis (with the Owner
being released from such obligations, except to the extent accrued prior
thereto), leases the Aircraft to the Owner and assigns such lease to the
Indenture Trustee pursuant to an amended and restated trust indenture. In
connection with such a transaction, each of the parties hereto and each
Certificate Holder will execute and deliver appropriate documentation permitting
the owner trustee to assume the obligations of the Owner under the Secured
Certificates and the Trust Indenture on a non-recourse basis, releasing the
Owner from all obligations in respect of the Secured Certificates and the Trust
Indenture (except to the extent accrued prior thereto), and take all other
actions as are reasonably necessary to permit such assumption by the owner
trustee. In connection with any such transaction, the parties agree that (a) the
documents to be utilized shall be (i) an amended and restated participation
agreement [NW 1999 __] amending and restating the Participation Agreement, such
amended and restated participation agreement to be substantially in the form of
the Leased Aircraft Participation Agreement (as such term is defined in the Note
Purchase Agreement), among the parties hereto, any Certificate Holder which is
not a party hereto and the owner trustee and owner participant, with (x) such
changes to such form to reflect the assumption of the Secured Certificates by
the owner trustee on a non-recourse basis rather than the issuance thereof by
the owner trustee and purchase thereof by the Purchasers and also to reflect the
release of the Owner from all obligations under the Secured Certificates and the
Trust Indenture (except to the extent accrued prior thereto) and (y) such other
changes as may be permitted in accordance with the Note Purchase Agreement
applicable to the revision of the Leased Aircraft Participation Agreement in
connection with a leveraged lease transaction, (ii) a lease agreement [NW 1999
__], such lease agreement to be substantially in the form of the Lease (as such
term is defined in the Note Purchase Agreement), between the Owner and the owner
trustee with such changes as may be permitted in accordance with the provisions
of the Note Purchase Agreement applicable to the revision of the Lease in
-25-
connection with a leveraged lease transaction, (iii) an amended and restated
trust indenture [NW 1999 __] amending and restating the Trust Indenture, such
amended and restated trust indenture to be substantially in the form of the
Leased Aircraft Indenture (as such term is defined in the Note Purchase
Agreement), between the owner trustee and the Indenture Trustee, with (x) such
changes to such form to reflect the assumption of all of the obligations of the
Owner under the Secured Certificates and the Trust Indenture on a non-recourse
basis and a release of the Contract Rights from the Granting Clause of the Trust
Indenture and (y) such other changes as may be permitted in accordance with the
Note Purchase Agreement applicable to the revision of the Leased Aircraft
Indenture in connection with a leveraged lease transaction, a (iv) purchase
agreement assignment [NW 1999 ___], such purchase agreement assignment to be
substantially in the form of the Aircraft Purchase Agreement Assignment (as such
term is defined in the Note Purchase Agreement) between the Owner and the owner
trustee with such changes as may be permitted in accordance with the provisions
of the Note Purchase Agreement applicable to the Aircraft Purchase Agreement
Assignment in connection with a leveraged lease transaction, (v) a trust
agreement [NW 1999 __], such trust agreement to be substantially in the form of
the Leased Aircraft Trust Agreement (as such term is defined in the Note
Purchase Agreement), between the owner trustee and the owner participant with
such changes as may be permitted in accordance with the provisions of the Note
Purchase Agreement applicable to the Leased Aircraft Trust Agreement in
connection with a leveraged lease transaction, and (vi) an amended and restated
guarantee [NW 1999 __] amending and restating the Guarantee, such amended and
restated guarantee to be substantially in the form of the Leased Aircraft
Guarantee (as such term is defined in the Note Purchase Agreement) with such
changes as may be permitted in accordance with the Note Purchase Agreement
applicable to the Leased Aircraft Guarantee in connection with a leveraged lease
transaction and (b) the Secured Certificates shall be delivered to the Indenture
Trustee for cancellation in exchange for new secured certificates to be issued
to the Certificate Holders by the owner trustee, such new secured certificate to
be substantially in the form contained in Section 2.01 of the Leased Aircraft
Indenture (as such term is defined in the Note Purchase Agreement).
Notwithstanding the foregoing, the Owner shall not have the right to sell the
Aircraft and transfer title to the Aircraft to an owner trustee for the benefit
of the owner participant in a transaction in which such owner trustee assumes
all of the obligations of the Owner under the Secured Certificates and the Trust
Indenture on a non-recourse basis (with the Owner being released from such
obligations), leases the Aircraft to the Owner and assigns such lease to the
Indenture Trustee in a transaction such as that described above unless the Owner
causes to be delivered to the Indenture Trustee an opinion of counsel to the
effect that the Certificate Holders will not recognize income, gain or loss for
Federal income tax purposes as a result of such assumption and release and will
be subject to Federal income tax in the same amounts, in the same manner and at
the same time as would have been the case if such assumption and release had not
occurred and that the Pass Through Trusts will not be subject to Federal income
taxation as a result of such assumption and release.
-26-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective officers thereunto duly authorized as of
the day and year first above written.
NORTHWEST AIRLINES, INC.,
Owner
By:
-------------------------------------
Name:
Title:
Address: U.S. Mail
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇)
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Overnight Courier
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ (▇▇▇▇▇)
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Treasurer
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
NORTHWEST AIRLINES CORPORATION,
Guarantor
By:
-------------------------------------
Name:
Title:
Address: U.S. Mail
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇)
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Overnight Courier
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ (▇▇▇▇▇)
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Treasurer
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
- Signature Page -
STATE STREET BANK AND
TRUST COMPANY,
Indenture Trustee
By:
-------------------------------------
Name:
Title:
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Corporate Trust Department
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
STATE STREET BANK AND TRUST COMPANY, not
in its individual capacity, except as
otherwise provided herein, but solely as
Pass Through Trustee,
Pass Through Trustee
By:
-------------------------------------
Name:
Title:
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Corporate Trust Department
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
- Signature Page -
STATE STREET BANK AND TRUST COMPANY, not
in its individual capacity, except as
otherwise provided herein, but solely as
Subordination Agent,
Subordination Agent
By:
-------------------------------------
Name:
Title:
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Corporate Trust Department
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
- Signature Page -
SCHEDULE I
Names and Addresses
Owner: Northwest Airlines, Inc.
U.S. Mail
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇)
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Overnight Courier
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ (▇▇▇▇▇)
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Treasurer
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Wire Transfer
USBank, Minneapolis
ABA No. ▇▇▇▇▇▇▇▇▇
Acct. No. 150250099440
Indenture Trustee: State Street Bank and Trust Company
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Corporate Trust Department
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Wire Transfer
State Street Bank and Trust Company
ABA No. ▇▇▇-▇▇▇-▇▇▇
for credit to State Street Bank and Trust Company
Acct. No. ▇▇▇▇-▇▇▇-▇
Attn: Corporate Trust Department
Reference: Northwest/NW 1999 _
Loan Participant: State Street Bank and Trust Company
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Corporate Trust Department
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Subordination Agent: State Street Bank and Trust Company
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Corporate Trust Department
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
SCHEDULE II
Commitments
Interest Rate
Purchasers and Maturity Purchase Price
---------- ------------- --------------
Northwest Airlines
Pass Through Trust
1999-1A 6.81% Series A Secured $[___________]
Certificates due [___________]
1999-1B 7.36% Series B Secured $[___________]
Certificates due [___________]
1999-1C 8.13% Series C Secured $[___________]
Certificates due [___________]
SCHEDULE III
Pass Through Trust Agreements
1. Pass Through Trust Agreement, dated as of June 3, 1996, among Northwest
Airlines Holdings Corporation (formerly known as Northwest Airlines
Corporation, "Holdings"), Northwest Airlines, Inc., and State Street Bank
and Trust Company, as amended by the Supplemental Agreement, dated as of
November 20, 1998, among Northwest Airlines, Inc., Northwest Airlines
Corporation, Holdings and State Street Bank and Trust Company, as
supplemented by Trust Supplement No. 1999-1A, dated as of February 16,
1999 among Northwest Airlines, Inc., Northwest Airlines Corporation,
Holdings and State Street Bank and Trust Company.
2. Pass Through Trust Agreement, dated as of June 3, 1996, among Northwest
Airlines Holdings Corporation (formerly known as Northwest Airlines
Corporation, "Holdings"), Northwest Airlines, Inc., and State Street Bank
and Trust Company, as amended by the Supplemental Agreement, dated as of
November 20, 1998, among Northwest Airlines, Inc., Northwest Airlines
Corporation, Holdings and State Street Bank and Trust Company, as
supplemented by Trust Supplement No. 1999-1B, dated as of February 16,
1999 among Northwest Airlines, Inc., Northwest Airlines Corporation,
Holdings and State Street Bank and Trust Company.
3. Pass Through Trust Agreement, dated as of June 3, 1996, among Northwest
Airlines Holdings Corporation (formerly known as Northwest Airlines
Corporation, "Holdings"), Northwest Airlines, Inc., and State Street Bank
and Trust Company, as amended by the Supplemental Agreement, dated as of
November 20, 1998, among Northwest Airlines, Inc., Northwest Airlines
Corporation, Holdings and State Street Bank and Trust Company, as
supplemented by Trust Supplement No. 1999-1C, dated as of February 16,
1999 among Northwest Airlines, Inc., Northwest Airlines Corporation,
Holdings and State Street Bank and Trust Company.
EXHIBIT A
TO PARTICIPATION
AGREEMENT
[NW 1999 _]
SCHEDULE OF COUNTRIES FOR REREGISTRATION
Argentina Malta
Australia Mexico
Austria Morocco
Bahamas Netherlands
Belgium New Zealand
Brazil Norway
Canada Paraguay
Chile People's Republic of China
Denmark Philippines
Egypt Portugal
Finland Republic of China (Taiwan)*
France Singapore
Germany South Africa
Greece South Korea
Hungary Spain
Iceland Sweden
India Switzerland
Indonesia Thailand
Ireland Trinidad and Tobago
Italy United Kingdom
Japan Uruguay
Luxembourg Venezuela
Malaysia
--------------------------
* So long as on the date of entering into the proposed sublease such country and
the United States have diplomatic relations at least as good as those in effect
on the Closing Date.
Exhibit B-1 to Participation Agreement
[Form of Opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
special counsel for the Owner and the Guarantor]
___________, 1999
The Persons Listed on
Annex A hereto
Ladies and Gentlemen:
We have acted as counsel to Northwest Airlines Corporation, a
Delaware corporation ("NWA Corp."), and Northwest Airlines, Inc., a Minnesota
corporation (the "Company"), in connection with the issuance and sale of (i)
$235,505,000 aggregate principal amount of 6.81% Pass Through Trust
Certificates, Series 1999-1A (the "Class A Certificates"), (ii) $111,555,000
aggregate principal amount of 7.36% Pass Through Trust Certificates, Series
1999-1B (the "Class B Certificates") and (iii) $74,140,000 aggregate principal
amount of 8.13% Pass Through Trust Certificates, Series 1999-1C (the "Class C
Certificates" and, together with the Class A Certificates and the Class B
Certificates, the "Certificates") pursuant to the Underwriting Agreement, dated
as of February 4, 1999 (the "Underwriting Agreement"), by and among ▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Co. Incorporated, Credit Suisse First Boston Corporation, ABN AMRO
Incorporated, Chase Securities Inc. and ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., as
underwriters, and the Company and NWA Corp. Capitalized terms used herein unless
otherwise defined herein have the respective meanings given them in the
Underwriting Agreement.
The Persons Listed on Annex A hereto ________ __, 1999
In connection with this opinion we have examined the following:
(i) the Pass Through Trust Agreement dated as of June 3, 1996 by and
among Northwest Airlines Holdings Corporation (formerly known as Northwest
Airlines Corporation, "Holdings"), the Company and State Street Bank and
Trust Company ("State Street"), as trustee (the "Trustee"), as amended by
the Supplemental Agreement, dated as of November 20, 1998, among the
Company, NWA Corp., Holdings and the Trustee (the "Basic Agreement");
(ii) the Trust Supplement No. 1999-1A, dated as of February 16,
1999, to the Basic Agreement, by and among NWA Corp., the Company,
Holdings and the Trustee (the Basic Agreement as so supplemented, the
"1999-1A Pass Through Trust Agreement"); the Trust Supplement No. 1999-1B,
dated as of February 16, 1999, to the Basic Agreement, by and among NWA
Corp., the Company, Holdings and the Trustee (the Basic Agreement as so
supplemented, the "1999-1B Pass Through Trust Agreement"); and the Trust
Supplement No. 1999-1C, dated as of February 16, 1999, to the Basic
Agreement, by and among NWA Corp., the Company, Holdings and the Trustee
(the Basic Agreement as so supplemented, the "1999-1C Pass Through Trust
Agreement" and, together with the 1999-1A Pass Through Trust Agreement and
the 1999-1B Pass Through Trust Agreement, the "Pass Through Trust
Agreements"; the Pass Through Trust Agreement related to a Certificate
being referred to as the "Applicable Pass Through Trust Agreement");
(iii) the Intercreditor Agreement dated as of February 16, 1999 (the
"Intercreditor Agreement"), by and among the Trustee, Citibank, N.A. (the
"Liquidity Provider"), and State Street Bank and Trust Company, not in its
individual capacity, except as set forth therein, but solely as
subordination agent (the "Subordination Agent");
(iv) the Revolving Credit Agreement, Class A Certificates, the
Irrevocable Revolving Credit Agreement, Class B Certificates and the
Irrevocable Revolving Credit Agreement, Class C Certificates
(collectively, the "Liquidity Facilities"), each dated as of February 16,
1999, by and between the Subordination Agent and the Liquidity Provider;
(v) the Indemnity Agreement, dated as of February 16, 1999, between
ABN AMRO Bank, N.Y., acting through its Chicago Branch, and the Company;
and
(vi) the form of each of the other agreements listed on Schedule I
to this opinion (such agreements being collectively referred to as the
"Operative Documents").
In addition, we have examined, and have relied as to matters of fact
upon, the documents delivered to you at the closing, and upon originals or
copies, certified or otherwise
-2-
The Persons Listed on Annex A hereto ________ __, 1999
identified to our satisfaction, of such corporate records, agreements, documents
and other instruments and such certificates or comparable documents of public
officials and of officers and representatives of the Company and NWA Corp., and
have made such other and further investigations, as we have deemed relevant and
necessary as a basis for the opinions hereinafter set forth. Our opinion set
forth in paragraph 4 is based on oral advice from the staff of the Commission
that the Registration Statement has been declared effective under the Securities
Act.
In such examination, we have assumed the genuineness of all
signatures, the legal capacity of natural persons, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified or photostatic copies, and the
authenticity of originals of such latter documents.
Based upon the foregoing, and subject to the qualifications and
limitations stated herein, we are of the opinion that:
1. The Basic Agreement and each Pass Through Trust Agreement
have been duly authorized, executed and delivered by Holdings and NWA
Corp. and, assuming due authorization, execution and delivery thereof by
the Company and the Trustee, constitute valid and legally binding
obligations of NWA Corp., the Company, Holdings and the Trustee in
accordance with their terms.
2. The Basic Agreement has been duly qualified under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act").
3. Assuming the Certificates have been duly authorized,
executed, authenticated and issued by the Trustee, upon payment and
delivery therefor in accordance with the Underwriting Agreement, the
Certificates will constitute valid and legally binding obligations of the
Trustee enforceable against the Trustee in accordance with their terms and
entitled to the benefits of the Applicable Pass Through Trust Agreement.
-3-
The Persons Listed on Annex A hereto ________ __, 1999
4. No consent, approval, authorization, order, registration
or qualification of or with any Federal or New York governmental agency
or body or any Delaware governmental agency or body acting pursuant to
the Delaware General Corporation Law or, to our knowledge, any Federal
or New York court or any Delaware court acting pursuant to the Delaware
General Corporation Law is required for the valid authorization,
issuance and delivery of the Certificates, the valid authorization,
execution and delivery by the Company, Holdings or NWA Corp. of, and the
performance by the Company, Holdings and NWA Corp. of their respective
obligations under, the Basic Agreement, the Pass Through Trust
Agreements and the Underwriting Agreement, except such as have been
obtained and made under the Securities Act and the Trust Indenture Act
and such as may be required under state securities laws or the Federal
Aviation Act of 1958, as amended (the "Federal Aviation Act").
Our opinions set forth in paragraphs 1 and 3 above are subject to
the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law), an implied covenant of good faith and fair dealing and, in
the case of indemnification and contribution provisions therein, considerations
of public policy.
Our opinion is subject to the following additional qualifications:
(a) We express no opinion with respect to the creation, perfection
or priority of any security interest, mortgage, pledge or other lien
purported to be created by the Operative Documents.
(b) We express no opinion with respect to the enforceability of
provisions of the Operative Sale-Leaseback Documents providing for
default interest rates to the extent that such rates would be deemed to
be the imposition of a penalty.
(c) We express no opinion with respect to the rights of any party to
collect or enforce, any insurance maintained by the Company, any proceeds
thereof or payments or refunds of any premiums in respect thereof.
(d) We express no opinion with respect to matters governed by the
Federal Aviation Act and the rules and regulations promulgated thereunder.
-4-
The Persons Listed on Annex A hereto _______ __, 1999
We are members of the Bar of the State of New York and we do not
express any opinion herein concerning any law other than the law of the State of
New York, the federal law of the United States and the Delaware General
Corporation Law.
This opinion letter is rendered to you in connection with the above
described transactions. This opinion letter may not be relied upon by you for
any other purpose, or relied upon by, or furnished to, any other person, firm or
corporation without our prior written consent.
Very truly yours,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
-5-
Annex A
State Street Bank and Trust Company, as Pass Through Trustee and Indenture
Trustee
Standard & Poor's Ratings Services
▇▇▇▇▇'▇ Investors Service, Inc.
Schedule 1
OPERATIVE DOCUMENTS
Exhibit B-2 to Participation Agreement
[Form of Opinion of Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇,
Special Counsel for the Owner and the Guarantor]
[Date]
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO
Re: Northwest Airlines, Inc. [NW 1999__]
Opinion of Special Counsel to the Owner and Guarantor
Gentlemen:
We have acted as special counsel for Northwest Airlines, Inc., a
Minnesota corporation (the "Owner") and Northwest Airlines Corporation, a
Delaware corporation ("Guarantor"), in connection with the transactions
contemplated by the Participation Agreement [NW 1999 __], dated as of
[___________ __, __] (the "Participation Agreement"), among the Owner,
Guarantor, State Street Bank and Trust Company, as Pass Through Trustee under
each of the Pass Through Trust Agreements referred to therein, State Street Bank
and Trust Company, as Subordination Agent, and State Street Bank and Trust
Company, as Indenture Trustee under the Indenture referred to therein.
Capitalized terms used herein without definition shall have the respective
meanings ascribed to them in or by reference to the Participation Agreement,
unless the context otherwise requires. This opinion is delivered pursuant to
Section 4(a)(xi) of the Participation Agreement.
In rendering this opinion, we have examined, among other things,
executed counterparts of the Participation Agreement, the Trust Indenture, the
Trust Indenture Supplement, the Secured Certificates, the Consent and Agreement
and the Guarantee. As to any facts material to our opinions expressed herein, we
have, without independent investigation, relied upon the representations and
warranties contained in the Participation Agreement and the other Operative
Documents (including, without limitation, in Sections 7 and 8 of the
Participation Agreement) 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 have assumed that all documents executed and delivered
by the Owner and Guarantor and referred to herein have been duly authorized,
executed and delivered pursuant to adequate corporate
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -2- ____________ ___, ____
power and authority. We have also assumed that the Owner is an "air carrier"
within the meaning of the Federal Aviation Act. We have also assumed, and have
not independently verified, 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 (and have relied thereon
as we have deemed appropriate).
Based upon and subject to the foregoing, and subject further to the
assumptions, limitations and qualifications set forth below, it is our opinion
that:
1. The execution, delivery and performance of the Participation
Agreement, the Secured Certificates, the Trust Indenture and the Trust Indenture
Supplement (collectively, the "Owner Documents") by the Owner do not contravene
any New York law, governmental rule or regulation applicable to or binding on
the Owner, and the execution, delivery and performance of the Guarantee by
Guarantor does not contravene any New York law, governmental rule or regulation
applicable to or binding on Guarantor.
2. Neither the execution and delivery by the Owner of any of the
Owner Documents or the execution and delivery by Guarantor of the Guarantee, nor
the performance by the Owner or Guarantor of their respective obligations
thereunder, requires the consent or approval of, or the giving of notice to, or
the registration with, or the taking of any other action in respect of, any New
York governmental authority, except for such consents, approvals, notices,
registrations and other actions required by the terms of the Operative Documents
after the Closing Date.
3. The Owner Documents constitute the legal, valid and binding
obligations of the Owner enforceable against the Owner in accordance with their
respective terms and the Guarantee constitutes the legal, valid and binding
obligation of Guarantor enforceable against Guarantor in accordance with its
terms, except as enforceability may be limited by (A) general principles of
equity, (B) applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or similar laws affecting the rights of creditors or
lessors generally, (C) applicable laws which may affect the remedies provided in
the Trust Indenture, which laws, however, do not, in our opinion, make the
remedies provided in the Trust Indenture inadequate for the practical
realization of the benefits provided thereby, except that no opinion is
expressed as to the amount or priority of any recovery under any particular
circumstances, and (D) in the case of indemnity provisions contained in such
documents, public policy considerations.
4. Subject to the registration of the Aircraft with the Federal
Aviation Administration in the name of the Owner, and assuming the due and
timely filing or filing for recordation in accordance with the provisions of the
Federal Aviation Act of (A) a ▇▇▇▇ of sale on AC form 8050-2 (or such other form
as may be approved by the FAA) relating to the Aircraft from the Manufacturer to
the Owner, and (B) the Trust Indenture and the Trust Indenture Supplement
covering the Aircraft attached thereto and made a part thereof, with
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -3- ____________ ___, ____
respect to such portion of the Aircraft as is covered by the recording system
established by the Federal Aviation Administration pursuant to Section 44107 of
Title 49 of the United States Code by virtue of the same constituting an
"aircraft" or an "aircraft engine" as defined in the Federal Aviation Act, no
further filing or recording of any document (including any financing statement
with respect to the Trust Indenture under Article 9 of the Uniform Commercial
Code of Minnesota) is necessary in any applicable jurisdiction within the United
States in order to create and perfect the Indenture Trustee' s security interest
in such portion of the Aircraft as against the Owner or any third parties. With
respect to such portion of the Aircraft, if any, as may not be deemed to
constitute an "aircraft" or "aircraft engine" as defined in the Federal Aviation
Act, except for the filing of financing statements in the appropriate filing
offices in the State of Minnesota (as to the filing of which we refer you to the
opinion of corporate counsel of the Owner, delivered to you on the date hereof)
and the filing of periodic continuation statements with respect to such filings,
as and when required, under the federal laws of the United States and the laws
of the State of New York, no filing or recording of any document (including any
financing statement) is necessary or advisable under Article 9 of the Uniform
Commercial Code in order to create or perfect the Indenture Trustee's security
interest in such portion of the Aircraft as against the Owner and any third
parties in any applicable jurisdiction within the United States.
In rendering the opinions expressed herein, we have relied
exclusively, and without independent investigation, on the opinion (being
furnished to you today) of ▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.C., referred to in Section
4(a)(xv) of the Participation Agreement, as to all matters stated in such
opinion (including the qualifications and exceptions therein).
In addition, in rendering our opinions expressed herein, we have
assumed that each agreement referred to herein constitutes the legal, valid and
binding obligation of each party thereto, other than the Owner and Guarantor,
enforceable against each such party in accordance with its terms. We have also
assumed that, except for the filings and recordations contemplated or referred
to herein, there are no filings or recordations with respect to the Aircraft,
the Trust Indenture or the Trust Indenture Supplement with the Federal Aviation
Administration, or of Uniform Commercial Code financing statements naming the
Owner as a debtor in the filing offices of the Secretary of State of the State
of Minnesota or in any other filing office in the State of Minnesota. We have
further assumed that each of the documents and Uniform Commercial Code financing
statements referred to in Paragraph 4 above to be recorded with the Federal
Aviation Administration or filed with the appropriate filing office in the State
of Minnesota was in due form for such recording or filing and that each of the
above-mentioned documents has been duly and timely recorded or filed, as the
case may be, under the Federal Aviation Act and under the laws of the State of
Minnesota. Except as expressly set forth in paragraph 4 above, we express no
opinion as to the right, title or interest in or to the Collateral on the part
of any Person. Moreover, the opinions expressed herein relating to the
enforceability of any agreement or instrument are subject to the further
qualification that no opinion is expressed as to the specific remedy or remedies
that any court, governmental authority, board of arbitration or arbitrator may
grant, impose or render under particular
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -4- ____________ ___, ______
circumstances. In particular, no opinion is expressed concerning the
availability of equitable remedies, as such, for the enforcement of any
provision of any such agreement or instrument.
Finally, we call to your attention that, in connection with our
opinions expressed above, 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 acquired by the Owner, as
contemplated in the Operative Documents, and 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, in accordance with the Owner's or Guarantor's undertakings in the
Operative Documents. We are qualified to practice law in the State of New York,
and we do not purport to be experts on, or to express any opinion concerning,
any laws except the laws of the State of New York and the federal laws of the
United States. Further, we do not purport to give any opinion regarding the
securities laws in any jurisdiction or with respect to the Employee Retirement
Income Security Act of 1974, as amended. All references in this opinion to
federal laws are to the federal laws of the United States of America. 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 assume no
obligation to supplement the opinions expressed herein if any applicable laws
change after the date hereof or if we become aware of any facts that might
change such opinions after the date hereof.
This opinion is being delivered for your sole benefit, and no other
person or entity shall be entitled to rely upon this opinion without our express
written consent.
Very truly yours,
SCHEDULE A
State Street Bank and Trust Company, as Pass Through Trustee
State Street Bank and Trust Company, as Indenture Trustee
Standard & Poor's Ratings Services
▇▇▇▇▇'▇ Investors Service, Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Credit Suisse First Boston Corporation
ABN AMRO Incorporated
Chase Securities Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
Exhibit B-3 to Participation Agreement
[Form of Opinion of Northwest]
[Date]
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO
Re: Northwest Airlines, Inc. [NW 1999 __]
Opinion of Counsel to the Owner and Guarantor
Gentlemen:
I act as legal counsel for Northwest Airlines, Inc., a Minnesota
corporation (the "Owner"), and Northwest Airlines Corporation, a Delaware
corporation ("Guarantor"), and in such capacity am familiar with the
transactions contemplated by the Participation Agreement [NW 1999 __], dated as
of [_______ __, ___] (the "Participation Agreement"), among the Owner,
Guarantor, State Street Bank and Trust Company, as Pass Through Trustee under
each of the Pass Through Trust Agreements referred to therein, State Street Bank
and Trust Company, as Subordination Agent, and State Street Bank and Trust
Company, as Indenture Trustee under the Indenture referred to therein.
Capitalized terms used herein without definition shall have the respective
meanings ascribed to them in or by reference to the Participation Agreement,
unless the context otherwise requires. This opinion is delivered pursuant to
Section 4(a)(xi) of the Participation Agreement.
In rendering this opinion, I, or lawyers under my direction, have
examined, among other things, executed counterparts of the Participation
Agreement, the Trust Indenture, the Trust Indenture Supplement, the Secured
Certificates, the Consent and Agreement and the Guarantee. As to any facts
material to my opinions expressed herein, I have relied upon the representations
and warranties contained in the Operative Documents (including, without
limitation, in Sections 7 and 8 of the Participation Agreement) and upon
originals or copies (certified or otherwise identified to my satisfaction) of
such corporate records, documents and other instruments as, in my judgment, are
necessary or appropriate to enable me to render this opinion. I have assumed,
and have not independently verified, the genuineness of all signatures, the
authenticity of all documents submitted to me as originals, the conformity with
the originals of all documents submitted to me as copies, and the accuracy of
all factual statements of parties made on or before the date hereof (and have
relied thereon as I have deemed appropriate).
To the Addressees listed
in Schedule A hereto
_____________ __, _____
Page 2
Based upon and subject to the foregoing, and subject further to the
assumptions, limitations and qualifications set forth below, it is my opinion
that:
1. The Owner is a corporation duly organized and validly existing
pursuant to the laws of the State of Minnesota, has the corporate power and
authority to carry on its business as now conducted and to enter into and
perform its obligations under the Participation Agreement, the Secured
Certificates, the Trust Indenture and the Trust Indenture Supplement
(collectively, the "Owner Documents"), and is duly qualified to transaction
business in each jurisdiction in which the conduct of its business requires such
qualification, except to the extent that the failure to be so qualified would
not have a material adverse effect on the Owner and its subsidiaries, taken as a
whole. The Owner is a Certificated Air Carrier. Guarantor is a corporation duly
organized and validly existing pursuant to the laws of the State of Delaware and
has the corporate power and authority to enter into and perform its obligations
under the Guarantee.
2. The execution, delivery and performance of the Owner Documents by
the Owner and of the Guarantee by Guarantor have been duly authorized by all
necessary corporate action on the part of the Owner and Guarantor, as the case
may be, do not require any approval of stockholders of the Owner or Guarantor,
as the case may be, or, to my knowledge after due inquiry and investigation, any
approval or consent of any trustee of holders of any indebtedness or obligations
of the Owner or Guarantor, as the case may be (other than any such approval or
consent as has been obtained), and the execution and delivery of any thereof by
the Owner or Guarantor, as the case may be, nor the performance by the Owner or
Guarantor, as the case may be, of its obligations thereunder does not (A)
contravene any law, governmental rule or regulation or, to my knowledge after
due inquiry and investigation, judgment or order applicable to or binding on the
Owner or Guarantor, as the case may be, or (B) to my knowledge after due inquiry
and investigation, contravene or result in any breach of, or constitute any
default under or result in the creation of any Lien (other than Permitted Liens)
upon any property of the Owner or Guarantor, as the case may be, under, (i) the
Owner's or Guarantor's corporate charter or by-laws or (ii) any indenture,
mortgage, chattel mortgage, deed of trust, conditional sales contract, bank loan
or credit agreement, or any other agreement or instrument, or permit issued by
any Minnesota or United States governmental authority to which the Owner or
Guarantor, as the case may be, is a party or by which the Owner or Guarantor, as
the case may be, or its properties may be bound or affected.
3. Neither the execution and delivery by the Owner of any of the
Owner Documents or by Guarantor of the Guarantee, nor the performance by the
Owner or Guarantor of their respective obligations thereunder, requires the
consent or approval of, or the giving of notice to, or the registration with, or
the taking of any other action in respect of, any federal or state governmental
authority in the United States, except for (A) the registration of the Aircraft
(including the placement on board of the owner's copy of the application for
To the Addressees listed
in Schedule A hereto
___________ __, ____
Page 3
registration of the Aircraft and, if necessary, a flying time wire),
recordations, and other actions referred to in Paragraph 5 below, and (B) such
consents, approvals, notices, registrations and other actions required by the
terms of the Owner Documents or the Guarantee after the Closing Date.
4. The Guarantee has been duly entered into and delivered by
Guarantor, and each of the Owner Documents has been duly entered into and
delivered by the Owner.
5. Subject to the registration of the Aircraft with the Federal
Aviation Administration in the name of the Owner, and assuming the due and
timely filing for recordation in accordance with the provisions of the Federal
Aviation Act of (A) a ▇▇▇▇ of sale on AC form 8050-2 (or such other form as may
be approved by the FAA) relating to the Aircraft from the Manufacturer to the
Owner, and the Trust Indenture, with the Trust Indenture Supplement covering the
Aircraft attached thereto and made a part thereof, with respect to such portion
of the Aircraft as is covered by the recording system established by the Federal
Aviation Administration pursuant to Section 44107 of Title 49 of the United
States Code by virtue of the same constituting an "aircraft" or an "aircraft
engine" as defined in the Federal Aviation Act, no further filing or recording
of any document (including any financing statement with respect to the Trust
Indenture under Article 9 of the Uniform Commercial Code of Minnesota) is
necessary in any applicable jurisdiction within the United States in order to
create and perfect the Indenture Trustee's security interest in such portion of
the Aircraft as against the Owner or any third parties. With respect to such
portion of the Aircraft, if any, as may not be deemed to constitute an
"aircraft" or "aircraft engine," as defined in the Federal Aviation Act, except
for the filing of financing statements in the appropriate filing offices in the
State of Minnesota, which filing has been made, and the filing of periodic
continuation statements with respect to such filings, as and when required,
under Minnesota law no filing or recording of any document (including any
financing statement) is necessary under Article 9 of the Uniform Commercial Code
in order to create or perfect the Indenture Trustee's security interest in such
portion of the Aircraft as against the Owner and any third parties in any
applicable jurisdiction within the United States.
6. There are no legal or governmental proceedings pending or, to the
best of my knowledge, threatened to which the Owner or Guarantor or any of their
respective subsidiaries is a party or to which any of the properties of the
Owner or Guarantor or any of their respective subsidiaries is subject other than
those proceedings summarized in the Guarantor's publicly filed annual, quarterly
and other reports filed with the Securities and Exchange Commission, and
proceedings which I believe would not reasonably be expected to have a material
adverse effect on the Owner and its subsidiaries, taken as a whole, or on the
power or ability of the Owner to perform its obligations under the Owner
Documents.
In rendering the opinions expressed herein, I have relied
exclusively, and without independent investigation, on the opinion (being
furnished to you today) of ▇▇▇▇▇ &
To the Addressees listed
in Schedule A hereto
___________ __, ____
Page 4
▇▇▇▇▇▇▇, P.C., referred to in Section 4(a)(xv) of the Participation Agreement,
as to all matters stated in such opinion, including the qualifications and
exceptions therein.
In addition, in rendering the opinions expressed herein, I have
assumed that each agreement referred to herein constitutes the legal, valid and
binding obligation of each party thereto, other than the Owner and Guarantor,
enforceable against each such party in accordance with its terms. I have also
assumed that, except for the filings and recordations contemplated or referred
to herein, there are no filings or recordations with respect to the Aircraft,
the Trust Indenture or the Trust Indenture Supplement with the Federal Aviation
Administration not shown on the indices of filed but unrecorded documents
maintained by the Federal Aviation Administration and made available to ▇▇▇▇▇ &
▇▇▇▇▇▇▇, P.C., for purposes of their aforesaid opinion, or of Uniform Commercial
Code financing statements naming the Owner as a debtor in the filing offices of
the Secretary of State of the State of Minnesota or in any other filing office
in the State of Minnesota. I have further assumed that each of the documents and
Uniform Commercial Code financing statements referred to in Paragraph 5 above to
be recorded with the Federal Aviation Administration or filed with the
appropriate filing office in the State of Minnesota was in due form for such
recording or filing and that each of such documents has been duly and timely
recorded or filed, as the case may be, under the Federal Aviation Act and under
the laws of the State of Minnesota.
I am qualified to practice law in the State of Minnesota, and I do
not purport to be an expert on, or to express any opinion concerning, any laws
except the laws of the State of Minnesota, the Delaware General Corporation Law
and the federal laws of the United States. Further, I do not purport to give any
opinion regarding the securities laws in any jurisdiction or with respect to the
Employee Retirement Income Security Act of 1974, as amended. All references in
this opinion to federal laws are to the Federal laws of the United States.
I assume no obligations to supplement the opinions expressed herein
if any applicable laws change after the date hereof or if I become aware of any
facts that might change such opinions after the date hereof.
I express no opinions except as expressly set forth herein, and no
opinion is implied or may be inferred beyond the opinions expressly stated
herein. This opinion is being delivered for your sole benefits and no other
person or entity shall be entitled to rely upon this opinion without my express
written consent.
To the Addressees listed
in Schedule A hereto
___________ __, ____
Page 5
Very truly yours,
NORTHWEST AIRLINES, INC.
_______________________________
_______________________________
Associate General Counsel
SCHEDULE A
Citibank, N.A.
State Street Bank and Trust Company, as Pass Through Trustee and Indenture
Trustee
Standard & Poor's Ratings Services
▇▇▇▇▇'▇ Investors Service, Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Credit Suisse First Boston Corporation
ABN AMRO Incorporated
Chase Securities Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
Exhibit C to Participation Agreement
[Form of opinion of in-house counsel to the Manufacturer]
_____________, 1999
To the Addressees Listed
in the Attached Schedule
Subject: One Boeing Model 747-451 Aircraft Bearing
Manufacturer's Serial No. ________
Ladies and Gentlemen:
I am an attorney employed by The Boeing Company ("Boeing") and I am licensed to
practice law in the State of Washington. As such, I have represented Boeing in
connection with the sale of the Boeing Model 747-451 aircraft bearing
Manufacturer's Serial No. _________ (including the engines installed thereon but
excluding equipment furnished by Northwest Airlines Inc. ("Northwest") (the
"Aircraft")), pursuant to Purchase Agreement No. 1630 between Boeing and
Northwest, dated December 1, 1989, as subsequently amended (the "Purchase
Agreement").
For the purpose of this opinion, I have examined and relied upon originals, or
copies certified to my satisfaction, of the Purchase Agreement and of the
following documents (the "Documents"):
(i) the Consent and Agreement [NW 1999_], dated as of [] executed by Boeing
(the "Consent and Agreement");
[(ii) the ▇▇▇▇ of Sale for the Aircraft executed by Boeing in favor of Northwest
(the "▇▇▇▇ of Sale"); and
(iii) the FAA ▇▇▇▇ of Sale for the Aircraft executed by Boeing in favor of
Northwest (the "FAA ▇▇▇▇ of Sale")](1).
----------
(1) To be inserted if the mortgage financing occurs on the same day as the
delivery of the aircraft to Northwest by Boeing.
I have also examined such other documents and records as I have deemed relevant
or necessary for the purpose of giving this opinion. Based upon such
examination, I am of the opinion that:
(a) Boeing is a corporation duly incorporated, validly existing, and in
good standing under the laws of the State of Delaware.
(b) The Documents have been duly authorized, executed and delivered by,
and constitute the legal, valid, and binding obligations of Boeing enforceable
against it in accordance with the respective terms thereof, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium, or other similar
laws affecting the enforcement of creditors' rights in general and except as the
enforceability of such obligations may be subject to general principles of
equity.
(c) Boeing has the full power, authority, and legal right to enter into
and perform its obligations under the Documents and Boeing's execution,
performance, and delivery of such documents have been duly authorized by all
necessary corporate action, and do not contravene the Restated Certificate of
Incorporation or By-Laws of Boeing, or any indenture, mortgage, contract,
instrument, or other agreement, in each case known to me, to which Boeing is a
party or by which it or any of its properties is bound.
[(d) Good title to the Aircraft was at the time of delivery to Northwest
vested in Boeing free and clear of all liens, claims, encumbrances, and rights
of others; and good title to the Aircraft has been duly conveyed by Boeing to
Northwest, free and clear of all liens, claims, encumbrances, and rights of
others.
(e) Each of the ▇▇▇▇ of Sale and the FAA ▇▇▇▇ of Sale constitutes an
effective instrument for the conveyance of good title to the Aircraft to
Northwest, assuming the filing for recordation of the FAA ▇▇▇▇ of Sale for the
Aircraft in accordance with the provisions of Title 49 of the United States
Code, as amended.](2)
For the purpose of this opinion, I have assumed that Northwest has the power and
authority to accept title to and delivery of the Aircraft and that the
representative acting on behalf of Northwest was duly authorized to accept title
to and delivery of the Aircraft on its behalf.
With respect to the conclusions set forth herein, I express no opinion as to any
laws other than the laws of the State of Washington, the corporate laws of the
State of Delaware, and the federal laws of the United States.
----------
(2) To be inserted if the mortgage financing occurs on the same day as the
delivery of the aircraft to Northwest by Boeing.
-3-
Very truly yours,
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Counsel
-4-
SCHEDULE
Northwest Airlines, Inc.
Northwest Airlines Corporation
State Street Bank and Trust Company,
not in its individual capacity but solely as Indenture Trustee
State Street Bank and Trust Company,
as Pass Through Trustee
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Credit Suisse First Boston Corporation
ABN AMRO Incorporated
Chase Securities Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
Exhibit F to Participation Agreement
[Form of Opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.C.]
________ __, 1999
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO
Re: Boeing model 747-451 aircraft with manufacturer's serial
number _____ and United States nationality and registration
marks N [ ] (the "Aircraft")
Ladies and Gentlemen:
This letter confirms that we filed with the Federal Aviation
Administration (the "FAA") today at [ __________ ], the Trust Indenture and
Security Agreement [NW 1999 ] dated as of [ _________ ] (the "Indenture")
between Northwest Airlines, Inc. (the "Owner") and State Street Bank and Trust
Company as Indenture Trustee (the "Indenture Trustee"), to which was attached
the Trust Indenture Supplement [NW 1999 __] dated [ _________________ ] (the
"Indenture Supplement") covering the Aircraft and the ▇▇▇▇▇ & Whitney model PW
4056 aircraft engines with manufacturer's serial numbers [ ________ ], [
____________ ], [ _____________ ] and [ _______ ] (the "Engines").
Based upon our examination of the above described instruments and of
such records of the FAA as we deemed necessary to render this opinion and as
were made available to us by the FAA, it is our opinion that:
(a) the Indenture with the Indenture Supplement attached, is in
due form for recordation by and has been duly filed for
recordation with the FAA pursuant to and in accordance with
the provisions of Section 44107 of Title 49 of the United
States Code;
(b) legal title to the Aircraft is vested in the Owner and all
instruments necessary to cause the FAA in due course to issue
to the Owner an AC Form 8050-3 Certificate of Aircraft
Registration covering the Aircraft have been duly filed with
the FAA pursuant to and in accordance with the provisions of
Sections 44102 and 44103 of Title 49 of the United States
Code;
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -2- ________________ __, ____
(c) the Aircraft and the Engines are free and clear of Liens (as
such term is defined in the Indenture) other than such as are
created by the Indenture, as supplemented by the Indenture
Supplement;
(d) the Indenture, as supplemented by the Indenture Supplement
creates a duly and validly perfected first priority security
interest in favor of the Indenture Trustee in the Aircraft and
the Engines (insofar as such security interest affects an
interest covered by the recording system established by the
FAA pursuant to Section 44107 of Title 49 of the United States
Code);
(e) the Indenture, as supplemented by the Indenture Supplement, is
not required to be refilled with the FAA or filed or recorded
in any other place within the United States in order to
perfect or maintain the perfection of the security interest
created thereby in the Aircraft and the Engines under the
applicable laws of any jurisdiction within the United States;
and
(f) no other registration of the Aircraft and no filings or
recordings (other than the filings and recordings with the FAA
which have been effected) are necessary to perfect in any
jurisdiction within the United States the Owner's title to the
Aircraft or the security interest created by the Indenture, as
supplemented by the Indenture Supplement in the Aircraft and
the Engines under the applicable laws of any jurisdiction
within the United States.
No opinion is herein expressed as to: (i) laws other than the
federal laws of the United States; (ii) the validity or enforceability under
local law of the Indenture, as supplemented by the Indenture Supplement; and
(iii) the recognition of the perfection of the security interest created by the
Indenture, as supplemented by the Indenture Supplement against third parties in
any legal proceedings outside the United States. Since our examination was
limited to records maintained by the FAA Aircraft Registry, our opinion does not
cover liens which are perfected without the filing of notice thereof with the
FAA, such as federal tax liens, liens arising under Section 1368(a) of Title 29
of the United States Code and possessory artisans' liens, and was subject to the
accuracy of FAA personnel in the filing, indexing and recording of instruments
filed with the FAA and in the search for encumbrance cross-reference index cards
for the Engines. This opinion is rendered in reliance upon the opinion of the
Aeronautical Center Counsel dated [ ________________ ] (a copy of which is
attached hereto) and upon the past practice of the FAA which is consistent with
said opinion.
Very truly yours,
SCHEDULE A
State Street Bank and Trust Company, as Indenture Trustee
Northwest Airlines, Inc.
Citibank, N.A.
Standard & Poor's Ratings Services
▇▇▇▇▇'▇ Investors Service, Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Credit Suisse First Boston Corporation
ABN AMRO Incorporated
Chase Securities Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
Exhibit G to Participation Agreement
[Form of Opinion of ▇▇▇▇▇▇▇ ▇▇▇▇ LLP,
special counsel for the Indenture Trustee]
__________, 1999
TO THE PARTIES SET FORTH
IN SCHEDULE A HERETO
RE: Northwest Airlines, Inc./Leveraged Lease Financing of One
Boeing 747-451 Aircraft [NW 1999__]
Ladies and Gentlemen:
We have acted as special counsel for State Street Bank and Trust
Company in its individual capacity ("State Street") and as Indenture Trustee
(the "Indenture Trustee") under the Trust Indenture and Security Agreement [NW
1999 ] dated as of [______] (the "Indenture") between Northwest Airlines, Inc.
(the "Owner"), and State Street, as Indenture Trustee, in connection with the
execution and delivery of the Participation Agreement (NW 1999 ___] dated as of
[_______] (the "Participation Agreement") by and among the Indenture Trustee,
the Owner, Northwest Airlines Corporation (the "Guarantor"), State Street, as
Pass Through Trustee (the "Pass Through Trustee") and State Street, as
Subordination Agent (the "Subordination Agent") and the transactions
contemplated thereby. Capitalized terms not otherwise defined herein shall have
the meanings specified in Annex A to the Trust Indenture and Section 13 of the
Participation Agreement. This opinion is being delivered pursuant to Section
4(a)(xvi) of the Participation Agreement.
Our representation of State Street and the Indenture Trustee has
been as special counsel for the limited purposes stated above. As to all matters
of fact (including factual conclusions and characterizations and descriptions of
purpose, intention or other state of mind), we have relied, with your
permission, entirely upon (i) the representations and warranties of the parties
set forth in the Operative Documents and (ii) certificates delivered to us by
the management of State Street and have assumed, without independent inquiry,
the accuracy of those representations, warranties and certificates.
We have examined the Participation Agreement, the Note Purchase
Agreement, the Indenture and the other documents to which State Street,
individually or as Indenture Trustee, is a party (together, the "Operative
Documents"), the Certificate of the Massachusetts Commissioner of Banks relating
to State Street and originals, or copies certified or otherwise identified to
our satisfaction, of such other records, documents, certificates, or other
instruments as we have deemed necessary or advisable for the purposes of this
opinion. For purposes of our opinion rendered in paragraph 1 below, with respect
to the authority of State Street to operate as a state-chartered trust company
and exercise trust powers, our
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -2- _________________ __, ____
opinion relies upon and is limited by such Certificate of the Massachusetts
Commissioner of Banks.
We have assumed the genuineness of all signatures (other than those
on behalf of State Street and the Indenture Trustee), the conformity to the
originals of all documents reviewed by us as copies, and the authenticity and
completeness of all original documents reviewed by us in original or copy form
and the legal competence of each individual executing any document (other than
on behalf of State Street and the Indenture Trustee).
When an opinion set forth below is given to the best of our
knowledge, or to our knowledge, or with reference to matters of which we are
aware or which are known to us, or with another similar qualification, the
relevant knowledge or awareness is limited to the actual knowledge or awareness
of the individual lawyer in the firm that signed this opinion, the individual
lawyers in the firm who have participated directly in the specific transactions
to which this opinion relates and the partner of the firm responsible for State
Street corporate trust matters, and without any special or additional
investigation undertaken for the purposes of this opinion.
Subject to the limitation set forth below, we have made such
examination of law as we have deemed necessary for the purposes of this opinion.
The opinions set forth below are limited solely to the internal substantive laws
of the Commonwealth of Massachusetts as applied by courts located in
Massachusetts and the federal laws of the United States. No opinion is given
herein as to the choice of law or internal substantive rules of law that any
court or other tribunal may apply to the transactions contemplated by the
Operative Documents. No opinion is expressed herein as to the application or
effect of federal securities laws or as to the securities or so-called "Blue
Sky" laws of any state or other jurisdiction. In addition, no opinion is
expressed as to matters governed by any law, statute, rule or regulation of the
United States relating to the acquisition, ownership, registration, use,
operation, maintenance, repair, replacement or sale of or the nature of the
Aircraft.
To the extent to which this opinion deals with matters governed by
or relating to the laws of the State of New York, or other jurisdiction other
than the Commonwealth of Massachusetts, by which the Operative Documents are
stated to be governed, we have assumed, with your permission that the Operative
Documents are governed by the internal substantive laws of the Commonwealth of
Massachusetts.
Our opinion is further subject to the following exceptions,
qualifications and assumptions:
(a) We have assumed without any independent investigation that (i)
each party to the Operative Documents, other than State Street, in its
individual capacity or as Indenture Trustee, as applicable, at all times
relevant thereto, is validly existing and in good standing under the laws
of the jurisdiction in which it is organized, and is qualified to do
business and in good standing under the laws of each jurisdiction where
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -3- __________________ __, ____
such qualification is required generally or necessary in order for such
party to enforce its rights under such Operative Documents, and (ii) each
party to the Operative Documents, at all times relevant thereto, had and
has the full power, authority and legal right under its certificate of
incorporation, partnership agreement, by-laws, and other governing
organizational documents, and the applicable corporate, partnership, or
other enterprise legislation and other applicable laws, as the case may be
(other than State Street and the Indenture Trustee with respect to the
laws of the United States of America and the internal substantive laws of
the Commonwealth of Massachusetts, but only in each case to the limited
extent the same may be applicable to State Street or the Indenture
Trustee, and relevant to our opinions expressed below) to execute, and to
perform its obligations under, the Operative Documents, and (iii) each
party to the Operative Documents (other than State Street or the Indenture
Trustee, as applicable) has duly executed and delivered each of such
agreements and instruments to which it is a party and that (other than
with respect to State Street and the Indenture Trustee, as applicable) the
execution and delivery of such agreements and instruments and the
transactions contemplated thereby have been duly authorized by proper
corporate or other organizational proceedings as to such party.
(b) We have assumed without any independent investigation (i) that
each of the Operative Documents is a valid, binding and enforceable
obligation of each party thereto other than State Street or the Indenture
Trustee, as applicable, and (ii) that each of the Operative Documents is a
valid, binding and enforceable obligation of State Street or the Indenture
Trustee, as applicable, to the extent that laws other than those of the
Commonwealth of Massachusetts are relevant thereto (other than the laws of
the United States of America, but only to the limited extent the same may
be applicable to State Street or the Indenture Trustee, as applicable, and
relevant to our opinions expressed below).
(c) The enforcement of any obligations of State Street or the
Indenture Trustee, as applicable, under any of the Operative Documents may
be limited by the receivership, conservatorship and supervisory powers of
bank regulatory agencies generally, as well as by bankruptcy, insolvency,
reorganization, moratorium, marshaling or other laws and rules of law
affecting the enforcement generally of creditors' rights and remedies
(including such as may deny giving effect to waivers of debtors' or
guarantors' rights); and we express no opinion as to the status under any
fraudulent conveyance laws or fraudulent transfer laws of any of the
obligations of State Street or the Indenture Trustee, as applicable, under
any of the Operative Documents.
(d) We express no opinion as to the availability of any specific or
equitable relief of any kind.
(e) The enforcement of any rights may in all cases be subject to an
implied duty of good faith and fair dealing and to general principles of
equity (regardless of
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -4- __________________ __, _____
whether such enforceability is considered in a proceeding at law or in
equity) and, as to any rights to collateral security, will be subject to a
duty to act in a commercially reasonable manner.
(f) We express no opinion as to the enforceability of any particular
provision of any of the Operative Documents relating to (i) waivers of
rights to object to jurisdiction or venue, or consents to jurisdiction or
venue, (ii) waivers of rights to (or methods of) service of process, or
rights to trial by jury, or other rights or benefits bestowed by operation
of law, (iii) waivers of any applicable defenses, setoffs, recoupments, or
counterclaims, (iv) the grant of powers of attorney to any person or
entity, (v) exculpation or exoneration clauses, indemnity clauses, and
clauses relating to releases or waivers of unmatured claims or rights,
(vi) the imposition or collection of interest on overdue interest or
providing for a penalty rate of interest or late charges on overdue or
defaulted obligations, or the payment of any premium, liquidated damages,
or other amount which may be held by any court to be a "penalty" or a
"forfeiture," or (vii) so-called "usury savings clauses" purporting to
specify methods of (or otherwise assure) compliance with usury laws or
other similar laws of any jurisdiction.
(g) We express no opinion as to the effect of events occurring,
circumstances arising, or changes of law becoming effective or occurring,
after the date hereof on the matters addressed in this opinion letter, and
we assume no responsibility to inform you of additional or changed facts,
or changes in law, of which we may become aware.
(h) No opinion is given herein as to the effect of usury laws (or
other similar laws) of any jurisdiction with respect to the Operative
Documents.
This opinion is rendered solely for the benefit of those
institutions listed on Schedule A hereto and their successors and assigns in
connection with the transactions contemplated by the Operative Documents and may
not be used or relied upon by any other person or for any other purpose.
1. State Street is a Massachusetts trust company, validly formed and
authorized to operate as a state-chartered trust company under the laws of the
Commonwealth of Massachusetts and, in its individual capacity or as Indenture
Trustee, as the case may be, has the requisite corporate and trust power and
authority to execute, deliver and perform its obligations under the Operative
Documents and in its capacity as Indenture Trustee, to authenticate the Secured
Certificates to be delivered on the Closing Date.
2. State Street, in its individual capacity or as Indenture Trustee,
as the case may be, has duly authorized by all necessary corporate action the
Operative Documents and has duly executed and delivered the Operative Documents,
and the Operative Documents constitute valid and binding obligations of State
Street, in its individual capacity or as
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -5- __________________ __, ____
Indenture Trustee, as the case may be, enforceable against State Street, in its
individual capacity or as Indenture Trustee, as the case may be, in accordance
with their respective terms.
3. The Secured Certificates to be issued and dated the Closing Date
have been duly authenticated and delivered by State Street as Indenture Trustee
pursuant to the terms of the Indenture.
4. The authorization, execution, delivery and performance by State
Street, in its individual capacity or as Indenture Trustee, as the case may be,
of the Operative Documents and the consummation of the transactions therein
contemplated and compliance with the terms thereof do not and will not result in
the violation of the provisions of the charter documents or by-laws of State
Street and, to the best of our knowledge, do not conflict with, or result in a
breach of any terms or provisions of, or constitute a default under, or result
in the creation or the imposition of any lien, charge or encumbrance upon any
property or assets of State Street under any indenture, mortgage or other
agreement or instrument, in each case known to us, to which State Street is a
party or by which it is bound, or violates any applicable Massachusetts or
federal law, rule or regulation governing State Street's banking or trust
powers, or, to the best of our knowledge, of any judgment, order or decree, in
each case known to us, applicable to State Street of any court, regulatory body,
administrative agency, government or governmental body having jurisdiction over
State Street.
5. No authorization, approval, consent, license or order of, giving
of notice to, registration with, or taking of any other action in respect of,
any federal or state governmental authority or agency pursuant to any federal or
Massachusetts law governing the banking or trust powers of State Street is
required for the authorization, execution, delivery and performance by State
Street, in its individual capacity or as Indenture Trustee, as the case may be,
of the Operative Documents or the consummation of any of the transactions by
State Street, in its individual capacity or as Indenture Trustee, as the case
may be, contemplated thereby (except as shall have been duly obtained, given or
taken); and such authorization, execution, delivery, performance, consummation
and issuance do not conflict with or result in a breach of the provisions of any
such law.
6. There are no taxes, fees or other governmental charges payable
under the laws of the Commonwealth of Massachusetts or any political subdivision
of such State in connection with the execution and delivery by State Street, in
its individual capacity or as Indenture Trustee, as the case may be, of the
Operative Documents (except for taxes on any fees payable to State Street in its
individual capacity) which would not have been imposed if State Street did not
have its principal place of business in Massachusetts or did not perform its
administrative duties under the Operative Documents in Massachusetts, and there
are no Taxes under the laws of the Commonwealth of Massachusetts or any
political subdivision thereof (except for Taxes on any fees payable to State
Street in its individual capacity) upon or with respect to the Aircraft or any
Engine or any part of any interest therein, or the purchase, ownership,
delivery, lease, sublease, possession, presence, use, operation, condition,
storage,
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -6- __________________ __, ____
maintenance, modification, alteration, repair, sale, return, transfer or other
disposition of the Aircraft or any Engine which would not have been imposed if
State Street did not have its principal place of business in Massachusetts or
did not perform its administrative duties under the Operative Documents in
Massachusetts.
7. To our knowledge, but without having investigated any
governmental records or court dockets, and without having made any other
independent investigation, there are no proceedings pending or overtly
threatened in writing against or affecting State Street in any court or before
any governmental authority, agency, arbitration board or tribunal which, if
adversely determined, individually or in the aggregate, could reasonably be
expected to affect materially and adversely the trust related to the Indenture
or affect the right, power and authority of State Street, in its individual
capacity or as Indenture Trustee, as the case may be, to enter into or perform
its obligations under the Operative Documents.
Very truly yours,
▇▇▇▇▇▇▇ ▇▇▇▇ LLP
SCHEDULE A
State Street Bank and Trust Company
Northwest Airlines, Inc.
Northwest Airlines Corporation
Standard & Poor's Ratings Services
▇▇▇▇▇'▇ Investors Service, Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Credit Suisse First Boston Corporation
ABN AMRO Incorporated
Chase Securities Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
Exhibit I to Participation Agreement
[Form of CW&T 1110 Opinion]
[Date]
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO
Re: Northwest Airlines, Inc.
Opinion of Special Counsel to the Owner Concerning
Section 1110 of the Federal Bankruptcy Code
Gentlemen:
We have acted as special counsel for Northwest Airlines, Inc., a
Minnesota corporation (the "Owner"), in connection with the transactions
contemplated by the Participation Agreement [NW 1999 ____], dated as of
[__________] (the "Participation Agreement"), among the Owner, Northwest
Airlines Corporation, as Guarantor, State Street Bank and Trust Company, as Pass
Through Trustee under each of the Pass Through Trust Agreements referred to
therein, State Street Bank and Trust Company, as Subordination Agent, and State
Street Bank and Trust Company, as Indenture Trustee under the Indenture referred
to therein. Capitalized terms used herein without definitions shall have the
respective meanings ascribed to them in or by reference to the Participation
Agreement, unless the context otherwise requires. This opinion is delivered
pursuant to Section 4(a)(xxiii) of the Participation Agreement. As used herein,
the term "Airframe" shall mean the Boeing 747-451 Airframe bearing U.S.
Registration No. N[_________] and Manufacturer's Serial No. [____], the term
"Engines" shall mean the four ▇▇▇▇▇ & Whitney Model PW4056 Engines bearing
manufacturer's Serial Nos. [__], [__], [__], and [__]. and the term "Aircraft"
shall mean the Airframe and the 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 Participation
Agreement, Consent and Agreement, Trust Indenture, Trust Indenture Supplement,
Guarantee and Secured Certificates. As to any facts material to our opinions
expressed herein, we have, without independent investigation, relied upon the
representations and warranties contained in the Operative Documents (including,
without limitation, in Sections 7 and 8 of the Participation Agreement and
certificates of officers of the Owner including, without limitation, the
certificate of an
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -2- ___________ __, ____
officer of the Owner delivered pursuant to Section 4(a)(ix) of the Participation
Agreement and the certificate of an officer of the Owner in the form attached as
Exhibit A hereto) 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 have also assumed, and have not independently verified,
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 (and have relied thereon as we have deemed
appropriate). We have delivered to you today our opinion of even date herewith
as to, among other things, the enforceability of certain of the Operative
Documents against the Owner. This Opinion is subject to the same assumptions,
exceptions, limitations and qualifications set forth therein and is given in
reliance on the same matters, including opinion letters, as are stated to be
relied on therein.
You have requested our opinion as to whether the Indenture Trustee
would be entitled to the benefits of section 1110 ("Section 1110") of title 11
of the United States Code (the "Bankruptcy Code") if the Owner 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 and will not be any amendments
to the Operative Documents or additional facts of which we are not aware which
would be material to a court's decision on this issue.
We have assumed, in addition to the assumptions set forth above,
that:
(i) the Owner will continue to be the registered owner of the
Aircraft, subject to the security interest of the Indenture Trustee;
(ii) the Owner 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 Trust Indenture constitutes the legal, valid and binding
obligation of the Owner in accordance with its terms, except as
enforcement thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of
creditors generally and general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at
law) and the Trust Indenture is effective to create a valid security
interest in favor of the Indenture Trustee for the benefit of the Loan
Participants in the Owner's right, title and interest
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -3- ___________ __, ____
in and to the Aircraft and that the Indenture Trustee has and will
continue to hold a perfected security interest in the Owner's interest in
the Aircraft; and
(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 ownership interest of the Owner in the Aircraft and to
perfect the security interest of the Indenture Trustee in the Owner's
interest in the Aircraft.
DISCUSSION
The Aircraft 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 Owner were to
become a debtor under chapter 11 of the Bankruptcy Code, the Indenture Trustee
for the benefit of the Loan Participants, would be entitled to the benefits of
Section 1110 with respect to the Airframe and the Engines but may not be
entitled to such benefits with respect to any replacement of the 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(3) 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.), 219 BR. 305, on rehearing, 221 B.R. 1 (D. Colo. 1998) 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 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
----------
(3) Pub. L. 103-394.
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -4- ___________ __, ____
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 collateral consisting
of 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 lessee of an Aircraft
which may be leased by the Owner. We are admitted to practice in the State of
New York, and we do not purport to be experts on, or to express any opinion
concerning, the laws of any jurisdiction other than the Federal laws of the
United States of America and the State of New York.
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 assume no obligation to supplement the opinions expressed herein if
any applicable laws change after the date hereof or if we become aware of any
facts that might change such opinions after the date hereof.
This opinion is being delivered for your sole benefit, and no other
person or entity shall be entitled to rely upon this opinion without our express
written consent.
Very truly yours,
SCHEDULE A
State Street Bank and Trust Company, as Pass Through Trustee
Northwest Airlines, Inc.
Standard & Poor's Ratings Services
▇▇▇▇▇'▇ Investors Service, Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Credit Suisse First Boston Corporation
ABN AMRO Incorporated
Chase Securities Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
EXHIBIT A
NORTHWEST AIRLINES, INC.
OFFICER'S CERTIFICATE
In connection with the opinion dated [______________ ___, ___] (the
"Opinion"), a copy of which is attached hereto as Exhibit A and which relates to
one Boeing 747-451 airframe FAA Registration No. N[______] and MSN [ ], and
▇▇▇▇▇ & Whitney Model PW4056 engine MSN [ ], and ▇▇▇▇▇ & ▇▇▇▇▇▇▇ Model PW4056
engine MSN [____], ▇▇▇▇▇ & Whitney Model PW4056 engine MSN [_____], and ▇▇▇▇▇ &
▇▇▇▇▇▇▇ Model PW4056 engine MSN [____] (collectively, the "Aircraft"), to be
delivered by Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇ ("CW&T") to the parties identified
therein in connection with the execution and delivery of certain of the
Operative Documents (as defined in the Participation Agreement as defined in the
Opinion), I, [____________________], [____________________] of Northwest
Airlines, Inc., do hereby certify that:
1. I understand that CW&T is relying on this Certificate in
connection with the execution and delivery of the Opinion.
2. To the best of my knowledge, information and belief, after due
inquiry, the assumptions contained in the section of the Opinion entitled
"Assumptions" are true and correct as of the date hereof.
3. I have no reason to believe that any statement, fact, or opinion
expressed in the Opinion is untrue, inaccurate or incomplete in any respect.
4. To the best of my knowledge, information and belief, after due
inquiry, all of the statements, representations, warranties, agreements,
disclosures and other information furnished by Northwest, Airlines, Inc. and
contained in the Operative Documents and other documents delivered in connection
with this transaction are true, accurate and complete in all respects.
5. Northwest Airlines, Inc. intends that the Indenture Trustee, for
the benefit of the Loan Participants (as such terms are defined in the
Participation Agreement), be entitled to the benefits of 11 U.S.C. ss. 1110 with
respect to the Aircraft.
6. The Aircraft was first placed in service after October 22, 1994.
7. I have been duly authorized by Northwest Airlines, Inc. to
execute and deliver this Certificate to CW&T.
Dated: [__________ __, ___]
NORTHWEST AIRLINES, INC.
By: _________________________
Name:
Title:
Exhibit J-1 to Participation Agreement
[Form of Opinion of ▇▇▇▇▇▇▇ ▇▇▇▇ LLP,
special counsel for the Pass Through Trustee]
_____________________, 1999
TO THE PARTIES SET FORTH
IN SCHEDULE A HERETO
RE: Northwest Airlines, Inc./Leveraged Lease Financing of One Boeing
747451 Aircraft [NW 1999 ____]
Ladies and Gentlemen:
We have acted as special counsel for State Street Bank and Trust
Company in its individual capacity ("State Street") and as Pass Through Trustee
(the "Pass Through Trustee") under the Pass Through Trust Agreement dated as of
June 3, 1996, among Northwest Airlines Holdings Corporation (formerly known as
Northwest Airlines Corporation, "Holdings"), Northwest Airlines, Inc. and State
Street, as amended by the Supplemental Agreement, dated as of November 20, 1998,
among Northwest Airlines, Inc., Northwest Airlines Corporation, Holdings and
State Street, as supplemented by Trust Supplement ▇▇. ▇▇▇▇-▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇. ▇▇▇▇-▇▇ and Trust Supplement No. 1999-1C, each dated as of February 16, 1999
and each among Northwest Airlines, Inc., Northwest Airlines Corporation,
Holdings and State Street (collectively, the "Pass Through Trusts" and,
individually a "Pass Through Trust") in connection with the execution and
delivery of the Participation Agreement [NW 1999__] dated as of [_______] (the
"Participation Agreement") by and among State Street, as Indenture Trustee,
Northwest Airlines, Inc., as Owner (the "Owner"), Northwest Airlines Corporation
(the "Guarantor"), State Street, as Pass Through Trustee and State Street, as
Subordination Agent (the "Subordination Agent") and the transactions
contemplated thereby. Capitalized terms not otherwise defined herein shall have
the meanings specified in Annex A to the Trust Indenture and Section 13 of the
Participation Agreement. This opinion is being delivered pursuant to Section
4(b)(v) of the Participation Agreement.
Our representation of State Street and the Pass Through Trustee has
been as special counsel for the limited purposes stated above. As to all matters
of fact (including factual conclusions and characterizations and descriptions of
purpose, intention or other state of mind), we have relied, with your
permission, entirely upon (i) the representations and warranties of the parties
set forth in the Operative Documents and (ii) certificates delivered to us by
the management of State Street and have assumed, without independent inquiry,
the accuracy of those representations, warranties and certificates.
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -2- ___________ __, ____
We have examined the Participation Agreement, the Liquidity Facility
for each of the Class A, Class B, and Class C Trusts, the Intercreditor
Agreement, the Note Purchase Agreement, the Escrow and Paying Agent Agreements
each dated as of February 16, 1999 and each among First Security Bank, National
Association, as Escrow Agent, the underwriters named therein, State Street, as
Pass Through Trustee and State Street, as Paying Agent and each of the Pass
Through Trusts (together, the "Operative Documents"), the Certificate of the
Massachusetts Commissioner of Banks relating to State Street and originals, or
copies certified or otherwise identified to our satisfaction, of such other
records, documents, certificates, or other instruments as we have deemed
necessary or advisable for the purposes of this opinion. For purposes of our
opinion rendered in paragraph 1 below, with respect to the authority of State
Street to operate as a state-chartered trust company and exercise trust powers,
our opinion relies upon and is limited by such Certificate of the Massachusetts
Commissioner of Banks.
We have assumed the genuineness of all signatures (other than those
on behalf of State Street and the Pass Through Trustee), the conformity to the
originals of all documents reviewed by us as copies, and the authenticity and
completeness of all original documents reviewed by us in original or copy form
and the legal competence of each individual executing any document (other than
on behalf of State Street and the Pass Through Trustee).
When an opinion set forth below is given to the best of our
knowledge, or to our knowledge, or with reference to matters of which we are
aware or which are known to us, or with another similar qualification, the
relevant knowledge or awareness is limited to the actual knowledge or awareness
of the individual lawyer in the firm that signed this opinion, the individual
lawyers in the firm who have participated directly in the specific transactions
to which this opinion relates and the partner of the firm responsible for State
Street corporate trust matters, and without any special or additional
investigation undertaken for the purposes of this opinion.
Subject to the limitation set forth below, we have made such
examinations of law as we have deemed necessary for the purposes of this
opinion. The opinions set forth below are limited solely to the internal
substantive laws of the Commonwealth of Massachusetts as applied by courts
located in Massachusetts and the federal laws of the United States. No opinion
is given herein as to the choice of law or internal substantive rules of law
that any court or other tribunal may apply to the transactions contemplated by
the Operative Documents. No opinion is expressed herein as to the application or
effect of federal securities laws or as to the securities or so-called "Blue
Sky" laws of any state or other jurisdiction. In addition, no opinion is
expressed as to matters governed by any law, statute, rule or regulation of the
United States relating to the acquisition, ownership, registration, use,
operation, maintenance, repair, replacement or sale of or the nature of the
Aircraft.
To the extent to which this opinion deals with matters governed by
or relating to the laws of the State of New York, or other jurisdictions other
than the Commonwealth of Massachusetts, by which the Operative Documents are
stated to be governed, we have
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -3- ___________ __, ____
assumed, with your permissions that the Operative Documents are governed by the
internal substantive laws of the Commonwealth of Massachusetts.
Our opinion is further subject to the following exceptions,
qualifications and assumptions:
(a) We have assumed without independent investigation that (i) each
party to the Operative Documents, other than State Street, in its
individual capacity or as Pass Through Trustee, as applicable, at all
times relevant thereto, is validly existing and in good standing under the
laws of the jurisdiction in which it is organized, and is qualified to do
business and in good standing under the laws of each jurisdiction where
such qualification is required generally or necessary in order for such
party to enforce its rights under such Operative Documents, and (ii) each
party to the Operative Documents, at all times relevant thereto, had and
has the full power, authority and legal right under its certificate of
incorporation, partnership agreement, by-laws, and other governmental
organizational documents, and the applicable corporate, partnership, or
other enterprise legislation and other applicable laws, as the case may be
(other than State Street and the Pass Through Trustee with respect to the
laws of the United States of America and the internal substantive laws of
the Commonwealth of Massachusetts, but only in each case to the limited
extent the same may be applicable to State Street or the Pass Through
Trustee, and relevant to our opinions expressed below) to execute, and to
perform its obligations under, the Operative Documents, and (iii) each
party to the Operative Documents (other than State Street or the Pass
Through Trustee, as applicable) has duly executed and delivered each of
such agreements and instruments to which it is a party and that (other
than with respect to State Street and the Pass Through Trustee, as
applicable) the execution and delivery of such agreements and instruments
and the transactions contemplated thereby have been duly authorized by
proper corporate or other organizational proceedings as to such party.
(b) We have assumed without any independent investigation (i) that
each of the Operative Documents is a valid, binding and enforceable
obligation of each party thereto other than State Street or the Pass
Through Trustee, as applicable, and (ii) that each of the Operative
Documents is a valid, binding and enforceable obligation of State Street
or the Pass Through Trustee, as applicable, to the extent that laws other
than those of the Commonwealth of Massachusetts are relevant thereto
(other than the laws of the United States of America, but only to the
limited extent the same may be applicable to State Street or the Pass
Through Trustee, as applicable, and relevant to our opinions expressed
below).
(c) The enforcement of any obligations of State Street or the Pass
Through Trustee, as applicable, under any of the Operative Documents may
be limited by the receivership, conservatorship and supervisory powers of
bank regulatory agencies generally, as well as by bankruptcy, insolvency,
reorganization, moratorium, marshaling or other laws and rules of law
affecting the enforcement generally of
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -4- ___________ __, ____
creditors' rights and remedies (including such as may deny giving effect
to waivers of debtors' or guarantors' rights); and we express no opinion
as to the status under any fraudulent conveyances laws or fraudulent
transfer laws of any of the obligations of State Street or the Pass
Through Trustee, as applicable, under any of the Operative Documents.
(d) We express no opinion as the availability of any specific or
equitable relief of any kind.
(e) The enforcement of any rights may in all cases be subject to an
implied duty of good faith and fair dealing and to general principles of
equity (regardless of whether such enforceability is considered in a
proceeding at law or in equity) and, as to any rights to collateral
security, will be subject to a duty to act in a commercially reasonable
manner.
(f) We express no opinion as to the enforceability of any particular
provision of any of the Operative Documents relating to the (i) waivers of
rights to object to jurisdiction or venue, or consents to jurisdiction or
venue, (ii) waivers of rights to (or methods of) service of process, or
rights to trial by jury, or other rights or benefits bestowed by operation
of law, (iii) waivers of any applicable defenses, setoffs, recoupments, or
counterclaims, (iv) the grant of powers of attorney to any person or
entity, (v) exculpation or exoneration clauses, indemnity clauses, and
clauses relating to release or waivers of unmatured claims or rights, (vi)
the imposition or collection of interest on overdue interest or providing
for penalty rate of interest or late charges on overdue or defaulted
obligations, or the payment of any premium, liquidated damages, or other
amount which maybe held by any court to be a "penalty" or a "forfeiture"
or (vii) so-called "usury savings clauses" purporting to specify methods
of (or otherwise assure) compliance with usury laws or other similar laws
of any jurisdiction.
(g) We express no opinion as to the effect of events occurring,
circumstances arising, or change of law becoming effective or occurring,
after the date hereof on the matters addressed in this opinion letter, and
we assume no responsibility to inform you of additional or changed facts,
or changes in law, of which we may become aware.
(h) No opinion is given herein as to the effect of usury laws (or
other similar laws) of any jurisdiction with respect to the Operative
Documents.
In rendering the opinion set forth below in paragraph 6 as to
certain Massachusetts tax matters, we have assumed that, for federal income tax
purposes, the trust created by the Trust Agreement will not be taxable as a
corporation, but rather, will be classified as a grantor trust under subpart E,
Part I of Subchapter J of Chapter 1 of Subtitle A of the Internal Revenue Code
of 1986, as amended.
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -5- ___________ __, ____
This opinion is rendered solely for the benefit of those
institutions listed on Schedule A hereto and their successors and assigns in
connection with the transactions contemplated by the Operative Documents and may
not be used or relied upon by any other person or for any other purpose.
1. State Street is a Massachusetts trust company, validly formed and
authorized to operate as a state-chartered trust company under the laws of the
Commonwealth of Massachusetts and, in its individual capacity or as Pass Through
Trustee, as the case may be, has or had, as the case may be, the requisite
corporate and trust power and authority to execute, deliver and perform its
obligations under the Operative Documents and in its capacity as Pass Through
Trustee, to issue and execute the Certificates delivered on the Issuance Date.
2. State Street, in its individual capacity or as Pass Through
Trustee, as the case may be, has duly authorized by all necessary corporate
action the Operative Documents and has duly executed and delivered the Operative
Documents, and the Operative Documents constitute valid and binding obligations
of State Street, in its individual capacity or as Pass Through Trustee, as the
case may be, enforceable against State Street, in its individual capacity or as
Pass Through Trustee, as the case may be, in accordance with their respective
terms.
3. The Certificates issued and dated the Issuance Date have been
duly issued, authenticated and delivered by State Street as Pass Through Trustee
pursuant to the terms of the Operative Documents and are enforceable against
the Pass Through Trustee and are entitled to the benefits of the applicable Pass
Through Trust.
4. The authorization, execution, delivery and performance by State
Street, in its individual capacity or as Pass Through Trustee, as the case may
be, of the Operative Documents and the consummation of the transactions therein
contemplated and compliance with the terms thereof do not and will not result in
the violation of the provisions of the charter documents or by-laws of State
Street and, to the best of our knowledge, do not conflict with, or result in a
breach of any terms or provisions of, or constitute a default under, or result
in the creation or the imposition of any lien, charge or encumbrance upon any
property or assets of State Street under any indenture, mortgage or other
agreement or instrument, in each case known to us, to which State Street is a
party or by which it is bound, or violates any applicable Massachusetts or
federal law, rule or regulation governing State Street's banking or trust
powers, or, to the best of our knowledge, of any judgment, order or decree, in
each case known to us. applicable to State Street of any court, regulatory body,
administrative agency, government or governmental body having jurisdiction over
State Street.
5. No authorization, approval, consent, license or order of, giving
of notice to, registration with, or taking of any other action in respect of,
any federal or state governmental authority or agency pursuant to any federal or
Massachusetts law governing the banking or trust powers of State Street is
required for the authorization, execution, delivery and performance by State
Street, in its individual capacity or as Pass Through Trustee, as the
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -6- ___________ __, ____
case may be, of the Operative Documents or the consummation of any of the
transactions by State Street, in its individual capacity or as Pass Through
Trustee, as the case may be, contemplated thereby (except as shall have been
duly obtained, given or taken); and such authorization, execution, delivery,
performance, consummation and issuance do not conflict with or result in a
breach of the provisions of any such law.
6. There are no taxes, fees or other governmental charges payable
under the laws of the Commonwealth of Massachusetts or any political subdivision
of such State in connection with the execution and delivery by State Street, in
its individual capacity or as Pass Through Trustee, as the case may be, of the
Operative Document (except for taxes on any fees payable to State Street in its
individual capacity) or in connection with the issuance, execution and delivery
of the Certificates by State Street, as Pass Through Trustee, pursuant to the
Pass Through Trusts which would not have been imposed if State Street did not
have its principal place of business in Massachusetts or did not perform its
administrative duties under the Operative Documents in Massachusetts. Neither
State Street, in its individual capacity or as the Pass Through Trustee, as the
case may be, nor the trust created by the Trust Agreement will, as a result of
the transactions contemplated thereby, be subject to any Taxes under the laws of
the Commonwealth of Massachusetts or any political subdivision thereof (except
for Taxes on any fees payable to State Street in its individual capacity) which
would have not been imposed if State Street did not have its principal place of
business in Massachusetts or did not perform its administrative duties under the
Operative Documents in Massachusetts, and there are no Taxes under the laws of
the Commonwealth of Massachusetts or any political subdivision thereof (except
for Taxes on any fees payable to State Street in its individual capacity) upon
or with respect to the Aircraft or any Engine or any part of any interest
therein, or the purchase, ownership, delivery, lease, sublease, possession,
presence, use, operation, condition, storage, maintenance, modification,
alteration, repair, sale, return, transfer or other disposition of the Aircraft
or any Engine which would not have been imposed if State Street did not have its
principal place of business in Massachusetts or did not perform its
administrative duties under the Operative Documents in Massachusetts.
7. To our knowledge, but without having investigated any
governmental records or court dockets, and without having made any other
independent investigation, there are no proceedings pending or overtly
threatened in writing against or affecting State Street in any court or before
any governmental authority, agency, arbitration board or tribunal which, if
adversely determined, individually or in the aggregate, could reasonably be
expected to affect materially and adversely the trust related to the Indenture
or affect the right, power and authority of State Street, in its individual
capacity or as Pass Through Trustee, as the case may be, to enter into or
perform its obligations under the Operative Documents.
Very truly yours,
▇▇▇▇▇▇▇ ▇▇▇▇ LLP
SCHEDULE A
State Street Bank and Trust Company
Northwest Airlines, Inc.
Northwest Airlines Corporation
Standard & Poor's Ratings Services
▇▇▇▇▇'▇ Investors Service, Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Credit Suisse First Boston Corporation
ABN AMRO Incorporated
Chase Securities Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
Exhibit J-2 to Participation Agreement
[Form of Opinion of ▇▇▇▇▇▇▇ ▇▇▇▇ LLP,
special counsel for the Subordination Agent]
____________, 1999
TO THE PARTIES SET FORTH
IN SCHEDULE A HERETO
Re: Northwest Airlines, Inc./Leveraged Lease Financing of
One Boeing 747-451 Aircraft [NW 1999____]
Ladies and Gentlemen:
We have acted as special counsel for State Street Bank and Trust
Company in its individual capacity ("State Street") and as Subordination Agent
(the "Subordination Agent") under the Intercreditor Agreement dated as of
February 16, 1999 (the "Intercreditor Agreement") among State Street in its
capacity as Trustee under the Northwest Airlines Pass Through Trust ▇▇▇▇-▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ Through Trust 1999-lB and Northwest Airlines Pass
Through Trust ▇▇▇▇-▇▇, ▇▇▇▇▇▇▇▇, N.A., as Class A Liquidity Provider, Class B
Liquidity Provider and Class C Liquidity Provider, and State Street, as
Subordination Agent in connection with the execution and delivery of the
Participation Agreement [NW 1999 ______] dated as of [________] (the
"Participation Agreement") by and among State Street, as Subordination Agent,
Northwest Airlines, Inc., as Owner (the "Owner"), Northwest Airlines Corporation
(the "Guarantor"), State Street, as Pass Through Trustee (the "Pass Through
Trustee") and State Street, as Subordination Agent and the transactions
contemplated thereby. Capitalized terms not otherwise defined herein shall have
the meanings specified in Annex A to the Trust Indenture and Section 13 of the
Participation Agreement. This opinion is being delivered pursuant to Section
4(a)(xxv) of the Participation Agreement.
Our representation of State Street and the Subordination Agent has
been as special counsel for the limited purposes stated above. As to all matters
of fact (including factual conclusions and characterizations and descriptions of
purpose, intention or other state of mind), we have relied, with your
permission, entirely upon (i) the representations and warranties of the parties
set forth in the Operative Documents and (ii) certificates delivered to us by
the management of State Street and have assumed, without independent inquiry,
the accuracy of those representations, warranties and certificates.
We have examined the Participation Agreement, the Note Purchase
Agreement and the Intercreditor Agreement (together, the "Operative Documents"),
the Certificate of the Massachusetts Commissioner of Banks relating to State
Street and originals, or copies certified
Page 2
or otherwise identified to our satisfaction, of such other records, documents,
certificates, or other instruments as we have deemed necessary or advisable for
the purposes of this opinion. For purposes of our opinion rendered in paragraph
1 below, with respect to the authority of State Street to operate as a
state-chartered trust company and exercise trust powers, our opinion relies upon
and is limited by such Certificate of the Massachusetts Commissioner of Banks.
We have assumed the genuineness of all signatures (other than those
on behalf of State Street and the Subordination Agent), the conformity to the
originals of all documents reviewed by us as copies, and the authenticity and
completeness of all original documents reviewed by us in original or copy form
and the legal competence of each individual executing any document (other than
on behalf of State Street and the Subordination Agent).
When an opinion set forth below is given to the best of our
knowledge, or to our knowledge, or with reference to matters of which we are
aware or which are known to us, or with another similar qualification, the
relevant knowledge or awareness is limited to the actual knowledge or awareness
of the individual lawyer in the firm that signed this opinion, the individual
lawyers in the firm who have participated directly in the specific transactions
to which this opinion relates and the partner of the firm responsible for State
Street corporate trust matters, and without any special or additional
investigation undertaken for the purposes of this opinion.
Subject to the limitation set forth below, we have made such
examination of law as we have deemed necessary for the purposes of this opinion.
The opinions set forth below are limited solely to the internal substantive laws
of the Commonwealth of Massachusetts as applied by courts located in
Massachusetts and the federal laws of the United States. No opinion is given
herein as to the choice of law or internal substantive rules of law that any
court or other tribunal may apply to the transactions contemplated by the
Operative Documents. No opinion is expressed herein as to the application or
effect of federal securities laws or as to the securities so-called "Blue Sky"
laws of any state or other jurisdiction. In addition, no opinion is expressed as
to matters governed by any law, statute, rule or regulation of the United States
relating to the acquisition, ownership, registration, use, operation,
maintenance, repair, replacement or sale of or the nature of the Aircraft.
To the extent to which this opinion deals with matters governed by
or relating to the laws of the State of New York, or other jurisdiction other
than the Commonwealth of Massachusetts, by which the Operative Documents are
stated to be governed, we have assumed, with your permission that the Operative
Documents are governed by the internal substantive laws of the Commonwealth of
Massachusetts.
Our opinion is further subject to the following exceptions,
qualifications and assumptions:
(a) We have assumed without any independent investigation that (i)
each party to the Operative Documents, other than State Street, in its
individual capacity or as Subordination Agent, as applicable, at all times
relevant thereto, is validly existing
Page 3
and in good standing under the laws of the jurisdiction in which it is
organized, and is qualified to do business and in good standing under the
laws of each jurisdiction where such qualification is required generally
or necessary in order for such party to enforce its rights under such
Operative Documents, and (ii) each party to the Operative Documents, at
all times relevant thereto, had and has the full power, authority and
legal right under its certificate of incorporation, partnership agreement,
by-laws, and other governing organizational documents, and the applicable
corporate, partnership, or other enterprise legislation and other
applicable laws, as the case may be (other than State Street and the
Subordination Agent with respect to the laws of the United States of
America and the internal substantive laws of the Commonwealth of
Massachusetts, but only in each case to the limited extent the same may be
applicable to State Street or the Subordination Agent, and relevant to our
opinions expressed below) to execute, and to perform its obligations
under, the Operative Documents, and (iii) each party to the Operative
Documents (other than State Street or the Subordination Agent, as
applicable) has duly executed and delivered each of such agreements and
instruments to which it is a party and that (other than with respect to
State Street and the Subordination Agent, as applicable) the execution and
delivery of such agreements and instruments and the transactions
contemplated thereby have been duly authorized by proper corporate or
other organizational proceedings as to such party.
(b) We have assumed without any independent investigation (i) that
each of the Operative Documents is a valid, binding and enforceable
obligation of each party thereto other than State Street or the
Subordination Agent, as applicable, and (ii) that each of the Operative
Documents is a valid, binding and enforceable obligation of State Street
or the Subordination Agent, as applicable, to the extent that laws other
than those of the Commonwealth of Massachusetts are relevant thereto
(other than the laws of the United States of America, but only to the
limited extent the same may be applicable to State Street or the
Subordination Agent, as applicable, and relevant to our opinions expressed
below).
(c) The enforcement of any obligations of State Street or the
Subordination Agent, as applicable, under any of the Operative Documents
may be limited by the receivership, conservatorship and supervisory powers
of bank regulatory agencies generally, as well as by bankruptcy,
insolvency, reorganization, moratorium, marshaling or other laws and rules
of law affecting the enforcement generally of creditors' rights and
remedies (including such as may deny giving effect to waivers of debtors'
or guarantors' rights); and we express no opinion as to the status under
any fraudulent conveyance laws or fraudulent transfer laws of any of the
obligations of State Street or the Subordination Agent, as applicable,
under any of the Operative Documents.
(d) We express no opinion as the availability of any specific or
equitable relief of any kind.
Page 4
(e) The enforcement of any rights may in all cases be subject to an
implied duty of good faith and fair dealing and to general principles of
equity (regardless of whether such enforceability is considered in a
proceeding at law or in equity) and, as to any rights to collateral
security, will be subject to a duty to act in a commercially reasonable
manner.
(f) We express no opinion as to the enforceability of any particular
provision of any of the Operative Documents relating to (i) waivers of
rights to object to jurisdiction or venue, or consents to jurisdiction or
venue, (ii) waivers of rights to (or methods of) service of process, or
rights to trial by jury, or other rights or benefits bestowed by operation
of law, (iii) waivers of any applicable defenses, setoffs, recoupments, or
counterclaims, (iv) the grant of power of attorney to any person or
entity, (v) exculpation or exoneration clauses, indemnity clauses, and
clauses relating to releases or waivers of unmatured claims or rights,
(vi) the imposition or collection of interest on overdue interest or
providing for a penalty rate of interest or late charges on overdue or
defaulted obligations, or the payment of any premium, liquidated damages,
or other amount which may be held by any court to be a "penalty" or a
"forfeiture," or (vii) so-called "usury savings clauses" purporting to
specify methods of (or otherwise assure) compliance with usury laws or
other similar laws of any jurisdiction.
(g) We express no opinion as to the effect of events occurring,
circumstances arising, or changes of law becoming effective or occurring,
after the date hereof on the matters addressed in this opinion letter, and
we assume no responsibility to inform you of additional or changed facts,
or changes in law, of which we may become aware.
(h) No opinion is given herein as to the effect of usury laws (or
other similar laws) of any jurisdiction with respect to the Operative
Documents.
This opinion is rendered solely for the benefit of those
institutions listed on Schedule A hereto and their successors and assigns in
connection with the transactions contemplated by the Operative Documents and may
not be used or relied upon by any other person or for any other purpose.
1. State Street is a Massachusetts trust company, validly formed and
authorized to operate as a state-chartered trust company under the laws of the
Commonwealth of Massachusetts and, in its individual capacity or as
Subordination Agent, as the case may be, has the requisite corporate and trust
power and authority to execute, deliver and perform its obligations under the
Operative Documents.
2. State Street, in its individual capacity or as Subordination
Agent, as the case may be, has duly authorized by all necessary corporate action
the Operative Documents and has duly executed and delivered the Operative
Documents, and the Operative Documents constitute valid and binding obligations
of State Street, in its individual capacity or as Subordination Agent, as the
case may be, enforceable against State Street, in its individual
Page 5
capacity or as Subordination Agent, as the case may be, in accordance with their
respective terms.
3. The authorization, execution, delivery and performance by State
Street, in its individual capacity or as Subordination Agent, as the case may
be, of the Operative Documents and the consummation of the transactions therein
contemplated and compliance with the terms thereof do not and will not result in
the violation of the provisions of the charter documents or by-laws of State
Street and, to the best of our knowledge, do not conflict with, or result in a
breach of any terms or provisions of, or constitute a default under, or result
in the creation or the imposition of any lien, charge or encumbrance upon any
property or assets of State Street under any indenture, mortgage or other
agreement or instrument, in each case known to us, to which State Street is a
party or by which it is bound, or violates any applicable Massachusetts or
federal law, rule or regulation governing State Street's banking or trust
powers, or, to the best of our knowledge, of any judgment, order or decree, in
each case known to us, applicable to State Street of any court, regulatory body,
administrative agency, government or governmental body having jurisdiction over
State Street.
4. No authorization, approval, consent, license or order of, giving
of notice to, registration with, or taking of any other action in respect of,
any federal or state governmental authority or agency pursuant to any federal or
Massachusetts law governing the banking or trust powers of State Street is
required for the authorization, execution, delivery and performance by State
Street, in its individual capacity or as Subordination Agent, as the case may
be, of the Operative Documents or the consummation of any of the transactions by
State Street, in its individual capacity or as Subordination Agent, as the case
may be, contemplated thereby (except as shall have been duty obtained, given or
taken); and such authorization, execution, delivery, performance, consummation
and issuance do not conflict with or result in a breach of the provisions of any
such law.
5. There are no taxes, fees or other governmental charges payable
under the laws of the Commonwealth of Massachusetts or any political subdivision
of such State in connection with the execution and delivery by State Street, in
its individual capacity or as Subordination Agent, as the case may be, of the
Operative Documents (except for taxes on any fees payable to State Street in its
individual capacity) which would not have been imposed if State Street did not
have its principal place of business in Massachusetts or did not perform its
administrative duties under the Operative documents in Massachusetts.
6. To our knowledge, but without having investigated any
governmental records or court dockets, and without having made any other
independent investigation, there are no proceedings pending or overtly
threatened in writing against or affecting State Street in any court or before
any governmental authority, agency, arbitration board of tribunal which, if
adversely determined, individually or in the aggregate, could reasonably be
expected to affect materially and adversely the trust related to the Indenture
or affect the right, power and authority of State Street, in its individual
capacity or as Subordination Agent, as the case may be, to enter into or perform
its obligations under the Operative Documents.
Page 6
7. Assuming that the Subordination Agent holds each of the Equipment
Notes delivered to and registered in its name pursuant to and as required by the
Intercreditor Agreement, it holds such Equipment Notes in trust as trustee for
the related Trustee in the exercise of the fiduciary powers conferred upon State
Street by Massachusetts law.
Very truly yours,
▇▇▇▇▇▇▇ ▇▇▇▇ LLP
Page 7
SCHEDULE A
State Street Bank and Trust Company
Northwest Airlines, Inc.
Northwest Airlines Corporation
Standard & Poor's Ratings Services
▇▇▇▇▇'▇ Investors Service, Inc.
Citibank, ▇.▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Credit Suisse First Boston Corporation
ABN AMRO Incorporated
Chase Securities Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
EXHIBIT K
TO PARTICIPATION
AGREEMENT
[NW 1999 _]
Section 7(b) - General Tax Indemnity
(b) General Tax Indemnity.
(i) Indemnity. Except as provided in Section 7(b)(ii) hereof, the Owner
shall pay, protect, save and on written demand shall indemnify and hold harmless
any Tax Indemnitee from and against any and all Taxes howsoever imposed against
any Tax Indemnitee, the Owner or the Aircraft, the Airframe, any Engine or any
Part thereof or interest therein by any Federal, state or local government or
other taxing authority in the United States or by any foreign government or any
political subdivision or taxing authority thereof or by any territory or
possession of the United States or by any international authority ("Taxing
Authority") upon or in connection with or relating to (A) the construction,
financing, refinancing, purchase, acquisition, acceptance, rejection, delivery,
nondelivery, transport, ownership, registration, reregistration, insuring,
assembly, possession, repossession, operation, location, use, control,
condition, maintenance, repair, sale, return, abandonment, installation,
storage, redelivery, replacement, manufacture, leasing, subleasing,
modification, rebuilding, importation, transfer of title, transfer of
registration, exportation or other application or disposition of the Aircraft,
the Airframe, any Engine or any Part thereof or interest therein, (B) the
rentals, receipts or earnings from the Aircraft, the Airframe, any Engine or any
Part, (C) any amount paid or payable pursuant to any Operative Document or any
document related thereto or the property or the income or other proceeds with
respect to the Collateral, (D) the Aircraft, the Airframe, any Engine or any
Part, (E) any or all of the Operative Documents, or the issuance of the Secured
Certificates and any other documents contemplated hereby or thereby and
amendments and supplements hereto and thereto or the execution, delivery or
performance of any thereof or the issuance, acquisition, modification, holding
or subsequent transfer thereof, (F) the payment of the principal of, or interest
or Make-Whole Amount or other premium on, or other amounts payable with respect
to, the Secured Certificates or the Pass Through Certificates, or (G) otherwise
with respect to or in connection with the transactions contemplated by the
Operative Documents.
(ii) Exclusions from General Tax Indemnity. The provisions of Section
7(b)(i) shall not apply:
(1) with respect to any Tax Indemnitee to any Income Tax (as defined in
Section 7(d) hereof) imposed by (A) the United States Federal government or (B)
any U.S. state or local taxing jurisdiction;
(2) with respect to any Tax Indemnitee, to any Income Taxes imposed by any
foreign or international government, jurisdiction or taxing authority or
territory or possession of the United States except to the extent that such Tax
Indemnitee would be subject to such Income Tax if the sole connection between
such Tax Indemnitee and the Taxing Authority had been the location and operation
of the Aircraft or the activities of the Owner or any lessee within such Taxing
Authority;
(3) to any capital gains taxes, excess profits taxes, value added taxes,
accumulated earnings taxes, personal holding company taxes, succession taxes or
estate or similar taxes;
(4) to any Tax imposed as a result of a transfer or disposition by a Tax
Indemnitee including, without limitation, a transfer or disposition of all or
any portion of its respective equitable or legal ownership interest in a Secured
Certificate (including sales of participations therein), the Collateral (as
defined in the Trust Indenture) or any Operative Document or any interest in
such Tax Indemnitee;
(5) to any Tax based on or measured by any fees received by the Pass
Through Trustee, the Indenture Trustee or any Agent in connection with any
transaction contemplated by the Operative Documents;
(6) [Intentionally Omitted]
(7) to any Tax in the nature of an intangible or similar tax upon or with
respect to the value or principal amount of the interest of any Tax Indemnitee
in any of the Secured Certificates;
(8) with respect to any Tax Indemnitee to any Tax imposed on or with
respect to a transferee (or subsequent transferee) of an original Tax Indemnitee
to the extent such Taxes would not have been required to be withheld or imposed
on or with respect to such original Tax Indemnitee;
(9) to any Tax which would not have been imposed but for an Indenture
Trustee's Lien;
(10) to any Tax to the extent such Tax would not have been imposed but for
a present or future connection between the Tax Indemnitee or any Affiliate
thereof and the jurisdiction imposing such Taxes (including, without limitation,
the Tax Indemnitee or an Affiliate thereof being or having been a citizen or
resident thereof, or being or having been organized, present or
EXHIBIT K - PAGE 2
engaged in a trade or business therein, or having or having had, a
permanent establishment or fixed place of business therein, or engaging,
or having engaged, in one or more transactions or activities therein
unrelated to the transactions contemplated by the Operative Documents),
other than a connection arising solely by reason of the transactions
contemplated by the Operative Documents;
(11) to any Tax imposed on a Tax Indemnitee to the extent imposed as
a result of such Tax Indemnitee's failure to comply with any
certification, information, documentation, reporting or similar procedure
that is required by law, treaty or regulation as a condition to the
allowance of any reduction in the rate of such Tax or any exemption or
other relief from such Tax;
(12) to any Tax on a Tax Indemnitee to the extent arising out of, or
caused by, or to the extent such Tax would not have been incurred but for,
(A) the willful misconduct or gross negligence of such Tax Indemnitee or
any of its Affiliates or (B) the inaccuracy or breach of any
representation, warranty, covenant or agreement by such Tax Indemnitee or
any of its Affiliates in any Operative Document;
(13) to any Tax on a Tax Indemnitee to the extent consisting of
interest, penalties, fines or additions to Tax resulting from the
negligence or willful misconduct of such Tax Indemnitee or any of its
Affiliates in connection with the filing of, or failure to file, any tax
return, the payment of, or failure to pay any Tax, or the conduct of any
proceeding in respect thereof unless resulting from the failure by the
Owner to perform its obligations under Section 7(b)(v) hereof; or
(14) to any excise tax imposed on any Tax Indemnitee under Section
4975 of the Internal Revenue Code as a result of the use by such Tax
Indemnitee or any of its Affiliates of the assets of an "employee benefit
plan" (as defined in Section 3(3) of ERISA) to purchase a Secured
Certificate or otherwise acquire any interest in any Secured Certificate.
(iii) Calculation of General Tax Indemnity Payments. Any payment which the
Owner shall be required to make to or for the account of any Tax Indemnitee with
respect to any Tax which is subject to indemnification under this Section 7(b)
shall be in an amount which, after reduction by the amount of all Taxes required
to be paid by such Tax Indemnitee in respect of the receipt or accrual of such
amount and after consideration of any current savings of such Tax Indemnitee
resulting by way of any deduction, credit or other tax benefit attributable to
such indemnified Tax that actually reduces any Taxes for which the Owner is not
required to indemnify such Tax Indemnitee pursuant to this Section 7(b) or the
Tax Indemnity Agreement, shall be equal to the payment otherwise required
hereunder.
EXHIBIT K - PAGE 3
If, by reason of any Tax payment made to or for the account of a Tax
Indemnitee by the Owner pursuant to this Section 7(b), such Tax Indemnitee or
any of its Affiliates subsequently realizes a tax deduction or credit (including
a foreign tax credit) not previously taken into account in computing such
payment, such Tax Indemnitee shall promptly pay to the Owner an amount equal to
the sum of (I) the actual reduction in Taxes, if any, realized by such Tax
Indemnitee which is attributable to such deduction or credit and (II) the actual
reduction in Taxes realized by such Tax Indemnitee as a result of any payment
made by such Tax Indemnitee pursuant to this sentence. For purposes of this
Section 7(b)(iii), items of foreign Tax of any Tax Indemnitee shall be deemed to
be utilized by such Tax Indemnitee as credits or deductions for any taxable year
in accordance with the following priorities:
First, all available foreign Taxes for which such Tax Indemnitee was
not indemnified or held harmless by anyone;
Second, all available foreign Taxes for which such Tax Indemnitee
was indemnified or held harmless by the Owner, and all available
foreign taxes indemnified under any other transaction (except any
described in Clause Third), on a pari passu basis; and
Third, any remaining foreign Taxes arising from any transaction in
which there is an express agreement that such Taxes shall be
utilized after foreign taxes from other transactions.
Once the foreign Tax for which such Tax Indemnitee was indemnified by the Owner
is deemed to be utilized pursuant to the ordering rules contained in this
paragraph, it shall not subsequently be recharacterized as not having been
utilized as a result of a foreign tax liability arising in a subsequent year.
Any Taxes that are imposed on any Tax Indemnitee as a result of the
disallowance or reduction of any tax benefit referred to in this subsection as
to which such Tax Indemnitee has made in full the payment to the Owner required
hereby (or as to which such Tax Indemnitee would have made its payment but for
Section 7(b)(viii) or which tax benefit was otherwise taken into account in
computing the Owner's indemnity obligation pursuant to this Section 7) in a
taxable year subsequent to the utilization by such Tax Indemnitee shall be
treated as a Tax for which the Owner is obligated to indemnify such Tax
Indemnitee pursuant to the provisions of this Section 7(b), without regard to
the exclusions set forth in Section 7(b)(ii) hereof (other than clauses (12) or
(13) thereto).
Each Tax Indemnitee shall in good faith use reasonable efforts in filing
its tax returns and in dealing with Taxing Authorities to seek and claim any tax
savings which would result in payments to the Owner under this Section 7(b).
(iv) General Tax Indemnity -- Contests. At the Owner's request, the Owner
shall be entitled at its sole cost and expense (A) in the case of a contest
involving only
EXHIBIT K - PAGE 4
Taxes indemnified hereunder ("Indemnified Taxes") or (B) in any proceeding
involving a claim for one or more Indemnified Taxes as well as a claim for other
Taxes, where the contest of the claim for Indemnified Taxes can be severed from
the contest of other Taxes, to assume responsibility for and control of the
contest ("Owner Controlled Contest"). Unless otherwise required by law, any such
contest shall be conducted by and in the name of the Owner. If a written claim
shall be made against and received by any Tax Indemnitee for any Tax for which
the Owner is obligated pursuant to this Section 7(b), such Tax Indemnitee shall
notify the Owner promptly of such claim (it being understood and agreed that
failure to provide such notice shall not adversely affect or otherwise prejudice
any Tax the Owner's right to indemnity under this Section 7(b) except to the
extent such failure has a materially adverse effect on the ability to contest
such claim). If the Tax cannot be contested in a Owner Controlled Contest, upon
request from the Owner within thirty (30) days after receipt of such notice,
such Tax Indemnitee shall in good faith at the Owner's sole cost and expense
contest the imposition of such Tax (a "Tax Indemnitee Controlled Contest").
After consulting with the Owner and the Owner's counsel concerning the forum in
which the adjustment is most likely to be favorably resolved, such Tax
Indemnitee may select in its sole discretion after considering in good faith the
Owner's and the Owner's counsel recommendation the forum for such contest and
determine whether any such contest shall be by (A) resisting payment of such
Tax, (B) paying such Tax under protest or (C) paying such Tax and seeking a
refund or other repayment thereof. Except as otherwise provided in clause (Z)
below, during the pendency of a contest pursuant to this Section 7(b)(iv) the
Owner may withhold payment of any Tax to the extent provided by applicable law.
In no event shall such Tax Indemnitee be required, or the Owner be permitted, to
contest the imposition of any Tax for which the Owner is obligated pursuant to
this Section 7(b) unless (W) no Event of Default shall have occurred and be
continuing (unless the Owner shall have provided security reasonably
satisfactory to such Tax Indemnitee securing the Owner's performance of its
obligations under this Section 7(b)), (X) the Owner shall have agreed to pay to
such Tax Indemnitee on demand all reasonable costs and expenses on an after-tax
basis that such Tax Indemnitee may incur in connection with contesting such
claim (including, without limitation, all reasonable legal and accounting fees),
(Y) such action to be taken will not result in a material risk of sale,
forfeiture or loss of, or the creation of any Lien on, the Aircraft, the Engines
or any Part, other than Permitted Liens, unless the Owner shall have provided
such Tax Indemnitee security against such risk in form and amount reasonably
acceptable to such Tax Indemnitee, and (Z) if such contest shall be conducted in
a manner requiring the payment of the claim, the Owner shall have paid the
amount required directly to the appropriate authority or made an advance of the
amount thereof to such Tax Indemnitee on an interest-free basis and agreed to
indemnify such Tax Indemnitee on an after-tax basis against any Taxes payable by
such Tax Indemnitee with respect to such advance.
Notwithstanding anything to the contrary in this Section 7(b), in any Tax
Indemnitee Controlled Contest the Tax Indemnitee may not settle or agree to any
claim without the prior written consent of the Owner, and the Tax Indemnitee
shall conduct
EXHIBIT K - PAGE 5
any such administrative proceedings and judicial contest in good faith in an
attempt to minimize the amount payable by the Owner under this Section 7(b). The
term "after-tax basis" for purposes of this Section 7(b) shall mean an amount
which, after deduction of all Taxes required to be paid by or on behalf of the
Tax Indemnitee in respect of the receipt or accrual of such amount, is equal to
the payment required under the provisions of this Section 7(b) which require
payments to be made on an after-tax basis.
If any Tax Indemnitee shall obtain a refund of all or any part of any Tax
paid by the Owner, such Tax Indemnitee shall pay the Owner an amount equal to
the amount of such refund, including interest received attributable thereto,
plus any net tax benefit (or minus any net tax detriment) realized by such Tax
Indemnitee as a result of any refund received and payment by such Tax Indemnitee
made pursuant to this sentence.
Nothing contained in this Section 7(b)(iv) shall require any Tax
Indemnitee to contest, or permit the Owner to contest, a claim which such Tax
Indemnitee would otherwise be required to contest pursuant to this Section
7(b)(iv), if such Tax Indemnitee shall waive payment by the Owner of any amount
that might otherwise be payable by the Owner under this Section 7(b) in respect
of such claim and any other claim, the contest of which would be adversely
affected.
(v) General Tax Indemnity -- Reports. If any report, return or statement
is required to be filed with respect to any Tax which is subject to
indemnification under this Section 7(b), the Owner shall timely file the same at
its sole expense (except for any such report, return or statement which the Tax
Indemnitee is required by law to file in its own name). The Owner shall have no
obligation under the preceding sentence if such Tax Indemnitee, after receipt of
the Owner's written request, shall have failed to furnish the Owner with such
information in a timely fashion as is in such Tax Indemnitee's control and is
not otherwise reasonably available to the Owner and is necessary to file such
returns.
(vi) Verification. At the Owner's written request after the Owner receives
a Tax Indemnitee's computations showing the amount of any indemnity payable by
the Owner to such Tax Indemnitee pursuant to this Section 7(b) or any amount
payable by any Tax Indemnitee to the Owner pursuant to this Section 7(b), such
computations shall be subject to confidential verification in writing by any
nationally recognized firm of certified public accountants selected by the Owner
and reasonably acceptable to such Tax Indemnitee, The accounting firm shall
complete its review within thirty (30) days of the Owner's receipt of such Tax
Indemnitee's computations. The computations of such accounting firm shall (i) be
delivered simultaneously to the Owner and such Tax Indemnitee and (ii) absent
manifest error, be final, binding and conclusive upon the Owner and such Tax
Indemnitee. If the Owner pays such indemnity in whole or in part before
completion of the verification procedure, appropriate adjustments will be made
promptly after completion of the verification procedure (and nothing in this
Section
EXHIBIT K - PAGE 6
7(b)(vi) shall be construed as changing the time when any such indemnity is
payable under this Section 7(b)) to take into account any redetermination of the
indemnity by the accounting firm. The fee and disbursements of such firm shall
be paid by the Owner unless such verification shall disclose an error made by
such Tax Indemnitee in favor of such Tax Indemnitee exceeding the lesser of five
percent (5%) of the original claim or $10,000, in which case such fee and
disbursements shall be paid by such Tax Indemnitee. Such Tax Indemnitee shall
cooperate with such accounting firm and (subject to such accounting firm's
execution of a confidentiality agreement satisfactory to such Tax Indemnitee)
shall supply such accounting firm with all information reasonably necessary to
permit accomplishment of such review and determination. The sole responsibility
of such accounting firm shall be to verify the computations of the amount
payable hereunder and the interpretation of this Agreement shall not be within
the scope of such accounting firm's responsibilities.
(vii) General Tax Indemnity -- Payment. Except as provided in Section
7(b)(iv) hereof, the Owner shall pay any Tax for which it is liable pursuant to
this Section 7(b) directly to the appropriate taxing authority if legally
permissible or upon demand of a Tax Indemnitee shall pay such Tax and any other
amounts due hereunder to such Tax Indemnitee within fifteen (15) Business Days
of such demand, but in no event shall any such payments be required to be made
by the Owner more than five (5) Business Days prior to the date the Tax to which
any such payment hereunder relates is due in immediately available funds. Any
such demand for payment from a Tax Indemnitee shall specify in reasonable detail
the payment and the facts upon which the right to payment is based. Each Tax
Indemnitee shall promptly forward to the Owner any notice, ▇▇▇▇ or advice
received by it concerning any Tax, provided, however, that the failure of any
Tax Indemnitee to forward any such notice, ▇▇▇▇ or advice shall not adversely
affect or otherwise prejudice such Tax Indemnitee's rights to indemnification
under this Section 7(b) unless such failure materially adversely affects the
ability to contest any claim reflected therein. Within thirty (30) days after
the date of each payment by the Owner of any Tax indemnified against hereunder,
the Owner shall furnish the appropriate Tax Indemnitee the original or a
certified copy of a receipt for the Owner's payment of such Tax or such other
evidence of payment of such Tax as is reasonably acceptable to such Tax
Indemnitee.
(viii) Application of Payments During Existence of Event of Default. Any
amount payable to the Owner pursuant to the terms of this Section 7(b) shall not
be paid to or retained by the Owner if at the time of such payment or retention
an Event of Default shall have occurred and be continuing under the Trust
Indenture. At such time as there shall not be continuing any such Event of
Default, such amount shall be paid to the Owner to the extent not previously
applied against the Owner's obligations hereunder as and when due after the
Indenture Trustee shall have declared the Trust Indenture in default pursuant to
Section 4 thereof.
(ix) Reimbursements by Tax Indemnitees Generally. If, for any reason, the
Owner is required to make any payment with respect to any Taxes imposed on any
Tax
EXHIBIT K - PAGE 7
Indemnitee, any Pass Through Trustee, any Loan Participant or the Subordination
Agent in respect of the transactions contemplated by the Operative Documents or
on the Aircraft, the Airframe, the Engines or any Part, which Taxes are not the
responsibility of the Owner under this Section 7(b), then such Tax Indemnitee,
Pass Through Trustee, Loan Participant or the Subordination Agent, as the case
may be, shall pay to the Owner an amount which equals the amount paid by the
Owner with respect to such Taxes plus interest thereon computed at an annual
interest rate equal to the Base Rate plus one percent from the date of payment
by the Owner.
(x) Forms, etc. Each Tax Indemnitee agrees to furnish to the Owner from
time to time such duly executed and properly completed forms that are requested
by the Owner or that the Tax Indemnitee knows, or has reason to know in the
ordinary course of its business, may be necessary or appropriate in order to
claim any reduction of or exemption from any withholding tax imposed by any
taxing authority in respect of any payments otherwise required to be made by the
Owner pursuant to the Operative Documents, which reduction or exemption may be
available to such Tax Indemnitee.
(xi) Non-Parties. If a Tax Indemnitee is not a party to this Agreement,
the Owner may require the Tax Indemnitee to agree to the terms of this Section
7(b) prior to making any payment to such Tax Indemnitee under this Section 7(b).
EXHIBIT K - PAGE 8
EXHIBIT L
TO PARTICIPATION
AGREEMENT
[NW 1999 _]
Section 7(c) - General Indemnity
(c) General Indemnity. The Owner hereby agrees to indemnify each
Indemnitee against, and agrees to protect, defend, save and keep harmless each
thereof from (whether or not the transactions contemplated herein or in any of
the other Operative Documents are consummated), 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 Operative Documents or
any lease or sublease of the Aircraft or the enforcement of any of the terms
thereof or any amendment, modification or waiver in respect thereof and, only in
the case of the Indemnitee who is the Subordination Agent or the Liquidity
Provider, the Intercreditor Agreement and the Liquidity Facilities, (B) the
manufacture, purchase, acceptance or rejection of the Airframe or any Engine,
(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 Secured Certificates (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 member of the Related
Indemnitee Group) in the Operative Documents, the Intercreditor Agreement, the
Liquidity Facilities or the Pass Through Trust Agreements or in connection
therewith being incorrect in any material respect, or (B) the failure by such
Indemnitee (or any member of the Related Indemnitee Group) to perform or observe
any agreement, covenant or condition in any of the Operative Documents, the
Intercreditor Agreement, the Liquidity Facilities or the Pass Through Trust
Agreements applicable to it including, without limitation, the creation or
existence of a Loan Participant Lien or an Indenture Trustee's Lien (except to
the extent such failure was caused directly by the failure of the Owner to
perform any obligation under an Owner Document), or (C) the willful misconduct
or the gross negligence of such Indemnitee (or any member of the Related
Indemnitee Group) (other than gross negligence imputed to such Indemnitee (or
any
member of the Related Indemnitee Group) solely by reason of its interest in the
Aircraft), or (D) with respect to any Indemnitee, a disposition (voluntary or
involuntary) by such Indemnitee of all or any part of such Indemnitee's interest
in the Airframe, any Engine or in the Operative Documents other than during the
continuance of an Event of Default under the Trust Indenture, or (E) any Tax
whether or not the Owner is required to indemnify for such Tax pursuant to
Section 7(b) hereof (it being understood that Section 7(b) hereof provides for
the Owner's liability with respect to Taxes), or (F) in the case of an
Indemnitee which is a Loan Participant, a Certificate Holder or the Indenture
Trustee (in its individual or trust capacity) and the affiliates, successors and
assigns thereof, a failure on the part of the Indenture Trustee to use ordinary
care to distribute in accordance with the Trust Indenture any amounts received
and distributable by it thereunder, or (G) the authorization or giving or
withholding of any future amendments, supplements, waivers or consents with
respect to any of the Operative Documents other than such as have been consented
to, approved, authorized or requested by the Owner, or (H) subject to the next
succeeding paragraph, any loss of tax benefits or increase in tax liability
under any tax law whether or not the Owner is required to indemnify therefor
pursuant to this Agreement, or (I) any Expense which is specified to be for the
account of an Indemnitee pursuant to any Operative Document without express
right of reimbursement under any Operative Document, or (J) as to any Indemnitee
the funding of such Indemnitee's participation in the transaction contemplated
by the Operative Documents giving rise to a "prohibited transaction" within the
meaning of the provisions of the Code or the Regulations of the United States
Department of Labor implementing ERISA or any other violation of the fiduciary
responsibility provisions of ERISA. 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 termination of the
Lien of the Trust Indenture and the payment of all other payments required to be
paid by the Owner under the Operative Documents.
The Owner further agrees that any payment or indemnity pursuant to
this Section 7(c) 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 Owner pursuant to this Section 7(c), 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 Owner, but only if the Owner
shall have made all payments then due and owing to such Indemnitee under the
Operative Documents, 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.
EXHIBIT L - PAGE 2
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 Owner; provided
that the failure to provide such notice shall not release the Owner from any of
its obligations to indemnify hereunder, and no payment by the Owner to an
Indemnitee pursuant to this Section 7(c) shall be deemed to constitute a waiver
or release of any right or remedy which the Owner may have against such
Indemnitee for any actual damages as a result of the failure by such Indemnitee
to give the Owner such notice. The Owner shall be entitled, at its sole cost and
expense, acting through counsel acceptable to the respective Indemnitee, (A) so
long as the Owner has agreed in a writing acceptable to such Indemnitee that the
Owner is liable to such Indemnitee for such Expense hereunder (unless such
Expense is covered by the proviso to the first paragraph of this Section 7(c)),
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 Owner has agreed in a writing acceptable to such Indemnitee that the
Owner is liable to such Indemnitee for such Expense hereunder (unless such
Expense is covered by the proviso to the first paragraph of this Section 7(c)),
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 Operative Documents, 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 Owner 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, (N) if such proceedings will involve a material risk of the sale,
forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien)
on the Aircraft, the Collateral or any part thereof, or (O) if such proceeding
could in the good faith opinion of such Indemnitee entail any material risk of
criminal liability or present a conflict of interest making separate
representation necessary. The affected Indemnitee may participate at its own
expense and with its own counsel in any judicial proceeding controlled by the
Owner pursuant to the preceding provisions.
The affected Indemnitee shall supply the Owner with such information
reasonably requested by the Owner as is necessary or advisable for the Owner to
control or participate in any proceeding to the extent permitted by this Section
7(c). Such Indemnitee shall not enter into a settlement or other compromise with
respect to any Expense without the prior written consent of the Owner, 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 7(c).
The Owner 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 7(c).
EXHIBIT L - PAGE 3
When the Owner or the insurers under a policy of insurance
maintained by the Owner (or any Lessee) 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 Owner 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 case of any Expense indemnified by the Owner hereunder which
is covered by a policy of insurance maintained by the Owner (or any Lessee)
pursuant to Section 7.04 of the Trust Indenture or otherwise, it shall be a
condition of such indemnity with respect to any particular Indemnitee that such
Indemnitee shall cooperate with the insurers in the exercise of their rights to
investigate, defend or compromise such Expense as may be required to retain the
benefits of such insurance with respect to such Expense. Notwithstanding any of
the foregoing to the contrary, with respect to any Expense which is covered
under policies of insurance maintained by the Owner (or any Lessee) pursuant to
Section 7.04 of the Trust Indenture or otherwise, the rights of an Indemnitee to
control or participate in any proceeding shall be modified to the extent
necessary to comply with the requirements of such policies and the rights of the
insurers thereunder.
Upon payment of any Expense or Tax pursuant to this Section 7, the
Owner or, if any Expense or Tax has been paid by insurers, the insurers, without
any further action, shall be subrogated to any claims the affected Indemnitee
may have relating thereto other than claims under Section 5.03 of the Trust
Indenture. Such Indemnitee agrees to give such further assurances or agreements
and to cooperate with the Owner or the insurers to permit the Owner or the
insurers to pursue such claims, if any, to the extent reasonably requested by
the Owner or the insurers.
In the event that the Owner shall have paid an amount to an
Indemnitee pursuant to this Section 7(c), and such Indemnitee subsequently shall
be reimbursed in respect of such indemnified amount from any other Person, such
Indemnitee shall promptly pay to the Owner an amount equal to the amount of such
reimbursement (but in no event more than such payment from the Owner) 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 and (ii) such Indemnitee shall have no obligation to reimburse
the Owner if the Owner has not paid such Indemnitee all amounts required
pursuant to this Section 7(c) and any other amounts then due to such Indemnitee
from the Owner under any of the Operative Documents.
The Owner'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 Owner pursuant to any provision
EXHIBIT L - PAGE 4
of this Agreement may proceed directly against the Owner without first seeking
to enforce any other right of indemnification.
EXHIBIT L - PAGE 5