PARTICIPATION AGREEMENT
[NW ____ _]
DATED AS OF
[----------------]
AMONG
NORTHWEST AIRLINES, INC.,
OWNER,
NORTHWEST AIRLINES CORPORATION,
GUARANTOR,
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
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
---------------------
ONE BRITISH AEROSPACE AVRO 146-RJ85A AIRCRAFT
N[_____]
TABLE OF CONTENTS
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.......................................................9
SECTION 7. Representations and Warranties of the Owner and the Guarantor; Indemnities.....................10
(a) Representations and Warranties......................................................10
(b) General Tax Indemnity...............................................................12
(c) General Indemnity...................................................................12
(d) Income Tax..........................................................................12
SECTION 8. Representations, Warranties and Covenants......................................................13
SECTION 9. Reliance of Liquidity Provider and Policy Provider.............................................21
SECTION 10. Other Documents................................................................................22
SECTION 11. Certain Covenants of the Owner.................................................................22
SECTION 12. [Intentionally Omitted]........................................................................22
SECTION 13. Certain Definitions; Notices; Consent to Jurisdiction..........................................22
SECTION 14. [Intentionally Omitted]........................................................................23
SECTION 15. Miscellaneous..................................................................................23
SECTION 16. Sale/leaseback Transaction.....................................................................24
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-1 - Form of Opinion of Vedder, Price, ▇▇▇▇▇▇▇ & Kammholz, special
counsel for the Manufacturer
Exhibit C-2 - 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 Section 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
Exhibit K - Section 7(b) - General Tax Indemnity
Exhibit L - Section 7(c) - General Indemnity
ii
PARTICIPATION AGREEMENT
[NW ____ _]
THIS PARTICIPATION AGREEMENT [NW ____ _] 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 OF CONNECTICUT, NATIONAL
ASSOCIATION, 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") (this "AGREEMENT");
W I T N E S S E T H:
WHEREAS, pursuant to the Purchase Agreement between the Owner
and the Supplier, the Supplier has agreed to sell to the Owner, among other
things, certain British Aerospace Avro 146-RJ85A aircraft, including the
Aircraft which has been [or is being] delivered by the Supplier 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 _____ __]
(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 ____ _], 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 ____ _], 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) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital
Services, Inc. (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 the
obligations of the Liquidity Provider under each Liquidity Facility were
guaranteed by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ & Co.; and (ii) the Pass Through
Trustee, the Liquidity Provider and the Subordination Agent entered into the
Intercreditor Agreement, dated [_________], 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 [__________], 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
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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 [____ __], not later than 9:30 a.m., New York City time, on the
Closing Date in immediately available funds in 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].
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(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 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.
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:
(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
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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 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 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).
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(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
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
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Owner, an opinion substantially in the form of EXHIBIT C -1
hereto from Vedder, Price, ▇▇▇▇▇▇▇ & Kammholz, special counsel
for the Manufacturer and, (ii) an opinion substantially in the
form of EXHIBIT C-2 hereto from counsel to the Manufacturer.
(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].
(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. Section 1110 with respect to the Aircraft.
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(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 (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),
-8-
and (C)(1) an incumbency certificate of the Pass Through Trustee as
to the person or persons authorized to execute and deliver this
Agreement and any other documents to be executed on behalf of the
Pass Through Trustee in connection with the transactions
contemplated hereby and the signatures of such person or persons;
(2) a copy of the articles of association and by-laws of the Pass
Through Trustee, each certified by the Secretary of an Assistant
Secretary of the Pass Through Trustee; and (3) 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 necessary action 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].
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
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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 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;
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(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 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 Supplier 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 (x) the
termination of the Mortgage and (y) the Trust Indenture and the
Trust Indenture Supplement covering the Aircraft attached thereto
and made a part
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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
(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,
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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:
(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
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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 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.
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(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) it 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
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
-15-
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.
(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
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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].
(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
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(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 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 a duly organized national
banking association, validly existing and in good standing with the
Comptroller of the Currency under the laws of the United States,
has the full power, authority and legal right under the laws of the
United States pertaining to its banking, trust and fiduciary powers
to execute and deliver 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
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Intercreditor Agreement and this Agreement, and has its chief
executive office located in Hartford, Connecticut;
(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 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 State of Connecticut 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 Connecticut 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 State of Connecticut 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 State of
Connecticut 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 for federal income
tax purposes 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
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under subpart E, Part I, of Subchapter J of the Code or as a
partnership, such trusts will not be subject to any Taxes imposed
by the State of Connecticut 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 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
-20-
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 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 AND POLICY PROVIDER.
Each of the parties hereto agrees and acknowledges that the Liquidity Provider
and the Policy Provider
-21-
shall be a third party beneficiary of each of the representations and warranties
made herein by such party, and that the Liquidity Provider and the Policy
Provider may rely on such representations and warranties to the same extent as
if such representations and warranties were made to the Liquidity Provider and
the Policy Provider directly. The Owner agrees and acknowledges that the
Liquidity Provider, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and the Policy Provider shall each 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, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and the Policy Provider directly.
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,
-22-
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.
(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
-23-
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 Trustee under the Trust Indenture. The terms of this Agreement
shall inure to the benefit of the Liquidity Provider, its successors and
permitted assigns, to the Policy Provider, its successors and permitted assigns
and to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇. 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. Section 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 (a
"SALE/LEASEBACK TRANSACTION"). In connection with such Sale/Leaseback
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 Sale/Leaseback
Transaction, the parties agree that (a) the documents to be utilized shall be
(i) an amended and restated participation agreement [NW ____ __] 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 ____ __], such lease agreement to be
-24-
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 connection with a leveraged
lease transaction, (iii) an amended and restated trust indenture [NW ____ __]
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 ____ ___],
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 ____ __], 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 ____ __] 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). Such new secured certificates will have
the same payment terms as the Secured Certificates except that in the event that
the Owner enters into a Sale/Leaseback Transaction prior to July 31, 2000, the
Owner shall have the right to reoptimize the new secured certificates to be
issued to the Certificate Holders by the owner trustee in compliance with the
Mandatory Economic Terms (as such term is defined in the Note Purchase
Agreement). Notwithstanding the foregoing, the Owner shall not have the right to
enter into a Sale/Leaseback Transaction unless the Owner causes to be delivered
to the Indenture Trustee (a) 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
(other than such change in amount, manner and timing of interest that results
from any reoptimization of the new secured certificates permitted pursuant to
this Section 16)and that the Pass Through Trusts will not be subject to Federal
income taxation as a result of such assumption and release and (b) written
confirmation from ▇▇▇▇▇'▇ Investors Services, Inc. and Standard & Poor's Ratings
Services, a division of ▇▇▇▇▇▇-▇▇▇▇, Inc., that the Sale/Leaseback Transaction
and/or reoptimization of the
-25-
new secured certificates in connection therewith will not result in a
withdrawal, suspension or downgrading of the ratings of any class of Pass
Through Certificates (without regard to the Policy (as such term is defined in
the Policy Provider Agreement)).
-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: U.S. MAIL
Corporate Trust Department
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
OVERNIGHT COURIER
Corporate Trust Department
▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT, NATIONAL
ASSOCIATION, not in its individual capacity,
except as otherwise provided herein, but
solely as Pass Through Trustee,
PASS THROUGH TRUSTEE
By:
--------------------------------------
Name:
Title:
Address: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Square
Hartford, CT 06103
Attn: Corporate/Muni 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: U.S. MAIL
Corporate Trust Department
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
OVERNIGHT COURIER
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
U.S. MAIL
Corporate Trust Department
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
OVERNIGHT COURIER
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 [____ _]
SCHEDULE I-1
Loan Participant: State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Square
Hartford, CT 06103
Attn: Corporate/Muni Department
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Subordination Agent: State Street Bank and Trust Company
U.S. MAIL
Corporate Trust Department
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
OVERNIGHT COURIER
Corporate Trust Department
▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
SCHEDULE I-2
SCHEDULE II
COMMITMENTS
INTEREST RATE
PURCHASERS AND MATURITY PURCHASE PRICE
Northwest Airlines
Pass Through Trust
1999-3G 7.935% Series G Secured $[___________]
Certificates due
[___________]
1999-3B 9.485% Series B Secured $[___________]
Certificates due
[___________]
1999-3C 9.152% Series C Secured $[___________]
Certificates due
[___________]
SCHEDULE II-1
SCHEDULE III
PASS THROUGH TRUST AGREEMENTS
1. Pass Through Trust Agreement, dated as of June 3, 1999, among Northwest
Airlines Corporation, Northwest Airlines, Inc., and State Street Bank
and Trust Company of Connecticut, National Association, as supplemented
by Trust Supplement No. 1999-3G, dated as of December 9, 1999 among
Northwest Airlines, Inc., Northwest Airlines Corporation and State
Street Bank and Trust Company of Connecticut, National Association.
2. Pass Through Trust Agreement, dated as of June 3, 1999, among Northwest
Airlines Corporation, Northwest Airlines, Inc., and State Street Bank
and Trust Company of Connecticut, National Association, as supplemented
by Trust Supplement No. 1999-3B, dated as of December 9, 1999 among
Northwest Airlines, Inc., Northwest Airlines Corporation and State
Street Bank and Trust Company of Connecticut, National Association.
3. Pass Through Trust Agreement, dated as of June 3, 1999, among Northwest
Airlines Corporation, Northwest Airlines, Inc., and State Street Bank
and Trust Company of Connecticut, National Association, as supplemented
by Trust Supplement No. 1999-3C, dated as of December 9, 1999 among
Northwest Airlines, Inc., Northwest Airlines Corporation and State
Street Bank and Trust Company of Connecticut, National Association.
SCHEDULE III-1
EXHIBIT A
TO PARTICIPATION
AGREEMENT
[NW ____ _]
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
EXHIBIT ▇-▇
▇▇▇▇▇▇▇ ▇-▇ TO PARTICIPATION AGREEMENT
[FORM OF OPINION OF ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SPECIAL COUNSEL FOR THE OWNER AND THE GUARANTOR
[-------- ---, ----]
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)
$150,203,000 aggregate principal amount of 7.935% Pass Through Trust
Certificates, Series 1999-3G (the "Class G Certificates"), (ii) $58,013,000
aggregate principal amount of 9.485% Pass Through Trust Certificates, Series
1999-3B (the "Class B Certificates") and (iii) $31,947,000 aggregate principal
amount of 9.152% Pass Through Trust Certificates, Series 1999-3C (the "Class C
Certificates" and, together with the Class G Certificates and the Class B
Certificates, the "Certificates") pursuant to the Underwriting Agreement, dated
as ofDecember 2, 1999 (the "Underwriting Agreement"), by and among ▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Co. Incorporated, Chase Securities Inc., ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.,
and U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc., as underwriters, the Company and NWA Corp.
Capitalized terms used herein unless otherwise defined herein have the
respective meanings given them in the Underwriting Agreement.
In connection with this opinion we have examined the
following:
(i) the Pass Through Trust Agreement dated as of June 3, 1999
by and among NWA Corp., the Company and State Street Bank and Trust
Company of Connecticut, National Association ("State Street"), as
trustee (the "Trustee") (the "Basic Agreement");
(ii) the Trust Supplement No. 1999-3G, dated as of December 9,
1999, to the Basic Agreement, by and among NWA Corp., the Company
and the Trustee (the Basic Agreement as so supplemented, the
"1999-3G Pass Through Trust Agreement"); the Trust Supplement No.
1999-3B, dated as of December 9, 1999, to the Basic Agreement, by
and among NWA Corp., the Company and the Trustee (the Basic
Agreement as so supplemented, the "1999-3B Pass Through Trust
Agreement"); and the Trust Supplement No. 1999-3C, dated as of
December 9, 1999, to the Basic Agreement, by and among NWA Corp.,
the Company and the Trustee (the Basic Agreement as so
supplemented, the "1999-3C Pass Through Trust Agreement" and,
together with the 1999-3G Pass Through Trust Agreement and the
1999-3B 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");
The Persons Listed on Annex A hereto ________ __, ____
(iii) the Intercreditor Agreement dated as of December 9, 1999
(the "Intercreditor Agreement"), by and among the Trustee, ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Capital Services, Inc. (the "Liquidity Provider"), State
Street Bank and Trust Company, not in its individual capacity,
except as set forth therein, but solely as subordination agent (the
"Subordination Agent"), and MBIA Insurance Corporation;
(iv) the Revolving Credit Agreement, Class G Certificates, the
Revolving Credit Agreement, Class B Certificates and the Revolving
Credit Agreement, Class C Certificates (collectively, the
"Liquidity Facilities"), each dated as of December 9, 1999, by and
between the Subordination Agent and the Liquidity Provider; and
(v) the Indemnity Agreement, dated as of December 9, 1999,
between ABN AMRO Bank, N.V., and the Company.
Unless otherwise indicated, "Pass Through Documents" refers to
the documents described in (i) and (ii) above.
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 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.
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.
In addition, for purposes of this opinion we have assumed the
following:
(a) each of the Company and the Trustee has been duly
incorporated and, since the date of execution of each Pass Through Document, has
been validly existing and in good standing as a corporation and trust company,
respectively, under the laws of the jurisdiction of its incorporation and
qualification, respectively;
(b) each of the Company and the Trustee has duly
authorized, executed and delivered each Pass Through Document to which it is a
party;
(c) each of the Company and the Trustee has full power,
authority and legal right to enter into and perform its respective obligations
under, and consummate the transactions contemplated by, each Pass Through
Document to which it is a party;
(d) the execution, delivery and performance of the Pass
Through Documents by the Company and the Trustee do not violate the laws of the
jurisdiction in which each entity is organized or any other applicable laws,
excepting the laws of the State of New York and the General Corporation Law of
the State of Delaware; and
-3-
The Persons Listed on Annex A hereto ________ __, ____
(e) the execution, delivery and performance of the Pass
Through Documents by the Company and the Trustee do not constitute a breach or
violation of any agreement or instrument which is binding upon such entity
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 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 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.
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 or NWA Corp.
of, and the performance by the Company 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:
-4-
The Persons Listed on Annex A hereto ________ __, ____
(a) 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.
(b) We express no opinion with respect to matters
governed by the Federal Aviation Act and the rules and regulations promulgated
thereunder.
(c) The remedy of specific performance and injunctive and
other forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought.
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 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 Indenture Trustee
State Street Bank and Trust Company of Connecticut, National Association, as
Pass Through Trustee
Standard & Poor's Ratings Service
▇▇▇▇▇'▇ Investors Service, Inc.
MBIA Insurance Corporation
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 ______]
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 ______], dated as of
[___________ ___, ___] (the "PARTICIPATION AGREEMENT"), among the Owner,
Guarantor, State Street Bank and Trust Company of Connecticut, National
Association, 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
but not defined herein have the respective meanings given to them in or by
reference to the Participation Agreement, unless the context otherwise requires.
We are rendering this opinion letter to you at the request of the Owner pursuant
to Section 4(a)(xi) of the Participation Agreement.
In rendering the opinions set forth below, we have examined and relied
upon the originals, copies or specimens, certified or otherwise identified to
our satisfaction, of the Transaction Documents (as defined below) and such
certificates, corporate and public records, agreements and instruments and other
documents, including, among other things, the documents delivered on the date
hereof, as we have deemed appropriate as a basis for the opinions expressed
below. In such examination we have assumed the genuineness of all signatures,
the authenticity of all documents, agreements and instruments submitted to us as
originals, the conformity to original documents, agreements and instruments of
all documents, agreements and instruments submitted to us as copies or
specimens, the authenticity of the originals of such documents, agreements and
instruments submitted to us as copies or specimens, and the accuracy of the
matters set forth in the documents, agreements and instruments we reviewed. We
have also assumed that the Owner is an "air carrier" within the meaning of the
Federal Aviation Act. As to any facts material to such opinions that were not
known to us, we have relied upon statements and representations of officers and
other representatives of the Owner, Guarantor and the other parties to the
Operative Documents and of public officials. Except as expressly set forth
herein, we have not undertaken any independent investigation (including, without
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -2-
limitation, conducting any review, search or investigation of any public files,
records or dockets) to determine the existence or absence of the facts that are
material to our opinions, and no inference as to our knowledge concerning such
facts should be drawn from our reliance on the representations and warranties of
the Owner, Guarantor and the other parties to the Operative Documents contained
in the Participation Agreement and the other Operative Documents (including,
without limitation, in Sections 7 and 8 of the Participation Agreement) in
connection with the preparation and delivery of this letter.
In particular, we have examined and relied upon:
A the Participation Agreement;
B the Trust Indenture;
C the Trust Indenture Supplement
D the Secured Certificates;
E the Consent and Agreement; and
F the Guarantee.
Items A to F above are referred to in this letter as the
"TRANSACTION DOCUMENTS". References in this letter to "APPLICABLE LAWS" shall
mean those laws, rules and regulations of the State of New York which, in our
experience, are normally applicable to transactions of the type contemplated by
the Transaction Documents. References in this letter to the term "GOVERNMENTAL
AUTHORITIES" means executive, legislative, judicial, administrative or
regulatory bodies of the State of New York. References in this letter to the
term "GOVERNMENTAL APPROVAL" means any consent, approval, license, authorization
or validation of, or filing, recording or registration with, any Governmental
Authority pursuant to Applicable Laws.
We have also assumed that all documents, agreements and
instruments have been duly authorized, executed and delivered by all parties
thereto, that all such parties had the power and legal right to execute and
deliver all such documents, agreements and instruments, and that such documents,
agreements and instruments are (other than with respect to the Owner and
Guarantor) valid, binding and enforceable obligations of such parties. As used
herein, "to our knowledge", "known to us" or words of similar import mean the
actual knowledge, without independent investigation, of any lawyer in our firm
actively involved in the transactions contemplated by the Participation
Agreement.
We express no opinion concerning the laws of any jurisdiction
other than the laws of the State of New York and the federal laws of the United
States of America.
Based upon and subject to the foregoing, and subject further
to the assumptions, limitations and qualifications set forth below, we are of
opinion that:
The execution and delivery by the Owner of the
Participation Agreement, the Secured Certificates, the Trust
Indenture and the Trust Indenture Supplement (collectively,
the "OWNER DOCUMENTS") and the performance by the Owner of its
obligations thereunder (a) do not require any Governmental
Approval to be obtained on the part of the Owner, except those
that have been obtained and, to our knowledge, are in effect,
and those required by the terms of the Operative
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -3-
Documents after the Delivery Date, and (b) do not result in a
violation of any provision of any Applicable Laws applicable
to the Owner.
The execution and delivery by Guarantor of its
obligations under the Guarantee and the performance by
Guarantor of its obligations thereunder (a) do not require any
Governmental Approval to be obtained on the part of Guarantor,
except those that have been obtained and, to our knowledge,
are in effect, and those required by the terms of the
Operative Documents after the Delivery Date, and (b) do not
result in a violation of any provision of any Applicable Laws
applicable to Guarantor.
Each of the Owner Documents constitutes a legal,
valid and binding agreement of the Owner, enforceable against
the Owner in accordance with its terms and the Guarantee
constitutes a legal, valid and binding agreement of Guarantor
enforceable against Guarantor in accordance with its terms, in
each case subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium,
receivership or other similar laws relating to or affecting
creditors' or lessors' rights generally, and to general
principles of equity (regardless of whether enforcement is
sought in a proceeding at law or in equity) and requirements
of commercial reasonableness, good faith and fair dealing, and
to 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 except that the enforcement of rights with
respect to indemnification may be limited by considerations of
public policy.
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
Supplier to the Owner, [(B) the termination of the Mortgage,]
and (C) the Trust Indenture and 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 Trust Indenture Estate, 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
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -4-
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 Trust Indenture Estate as against the
Owner and any third parties in any applicable jurisdiction
within the United States. The Trust Indenture creates for the
benefit of the Indenture Trustee a valid security interest in
the Trust Indenture Estate to the extent a security interest
may be created therein under the Uniform Commercial Code as in
effect in the State of New York (the "NYUCC").
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 except for the filings and recordations contemplated or
referred to herein, [other than the Mortgage, and UCC-1 financing statement
filed in the Office of the Secretary of State of the State of Minnesota on
[__________], filing number [__________], naming the Owner as Debtor and
[____________________], as Secured Party (as to which a UCC-3 termination
statement is being filed on the date hereof),] there are no filings or
recordations with respect to 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 respect of all or any
portion of the Trust Indenture Estate (other than any such financing statements
as have been filed therein in favor of the Indenture Trustee as secured party
under the Trust Indenture) 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 also 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. We have further assumed that as to such portion of the
Trust Indenture Estate as is in existence on the date hereof, the Owner has
rights therein and value has been given, in each case within the meaning of
Section 9-203 of the NYUCC. 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. We express no opinion herein as to: (A) any section
of any Operative Document relating to concepts of "severability" of certain
provisions in such Operative Document; (B) any provision in any Operative
Document insofar as it constitutes: (i) a waiver of FORUM NON CONVENIENS in
respect of any court other than the Supreme Court of the State of New York; or
(ii) a waiver of the right to object to improper venue in respect of any court
other than the Supreme Court of the State of New York; (C) the effect of any law
of any jurisdiction (other than the State of New York) wherein any Certificate
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -5-
Holder may be located that limits rates of interest, fees or other charges that
may be charged by such Certificate Holder; and (D) any provision contained in
the Operative Documents relating to jurisdiction or service of process other
than in respect of the courts of the State of New York or the courts of the
United States of America located in the State of New York. 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
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. 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 letter 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 are furnishing this opinion letter to you solely for your
benefit in connection with the transactions referred to herein. This opinion
letter is not to be relied upon, used, circulated, quoted or otherwise referred
to by any person or entity for any other purpose without our prior written
consent. In addition, we disclaim any obligation to update this opinion letter
for changes in fact or law, or otherwise.
Very truly yours,
SCHEDULE A
State Street Bank and Trust Company of Connecticut, National Association, as
Pass Through Trustee
State Street Bank and Trust Company, as Indenture Trustee
Standard & Poor's Ratings Services
▇▇▇▇▇'▇ Investors Service, Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Chase Securities Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc.
MBIA Insurance Corporation
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 _____]
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 _______], dated as
of [____________ __, ____] (the "PARTICIPATION AGREEMENT"), among the Owner,
Guarantor, State Street Bank and Trust Company of Connecticut, National
Association, 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).
Based upon and subject to the foregoing, and subject further
to the assumptions, limitations and qualifications set forth below, it is my
opinion that:
To the Addressees listed
on Page 1 hereof
__________________, ____
Page 2
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) violate 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, violate 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
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.
To the Addressees listed
on Page 1 hereof
__________________, ____
Page 3
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, (B) the termination of the Mortgage and the Predecessor Lease, and
(C) 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 Trust Indenture Estate, 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 Trust Indenture Estate 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 ▇▇▇▇▇ & ▇▇▇▇▇▇▇, 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, [other than the Mortgage, the Predecessor Lease and a UCC-1
financing statement filed in the Office of the Secretary of State of the State
of Minnesota on [___________], filing number [_____________], naming the Owner
as Debtor and
To the Addressees listed
on Page 1 hereof
__________________, ____
Page 4
[__________________], as Secured Party (as to which a UCC-3 termination
statement is being filed on the date hereof),] 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 respect of all or any portion of the Trust
Indenture Estate (other than any such financing statements as have been filed
therein in favor of the Indenture Trustee as secured party under the Trust
Indenture) 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 benefit and no
other person or entity shall be entitled to rely upon this opinion without my
express written consent.
Very truly yours,
NORTHWEST AIRLINES, INC.
SCHEDULE A
State Street Bank and Trust Company of Connecticut, National Association, as
Pass Through Trustee
State Street Bank and Trust Company, as Indenture Trustee
Standard & Poor's Ratings Services
▇▇▇▇▇'▇ Investors Service, Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Chase Securities Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc.
MBIA Insurance Corporation
EXHIBIT C-1 TO PARTICIPATION AGREEMENT
[Form of Opinion of Vedder, Price, ▇▇▇▇▇▇▇ & Kammholz,
special counsel for the Manufacturer]
[________________, ____]
To the Parties on Schedule 1
Re: Purchase Agreement dated as of February 5, 1997, as amended
(the "AGREEMENT") between Aero International (Regional) SAS as
agent for and on behalf of British Aerospace (Operations)
Limited ("OPERATIONS") and Northwest Airlines, Inc. (the
"COMPANY") and the Manufacturer Support Agreement dated
February 5, 1997, as amended (the "SUPPORT AGREEMENT") between
Aero International (Regional) SAS, as agent for and on behalf
of Operations, and the Company (the Agreement, together with
the Support Agreement, are herein referred to collectively as
the "PURCHASE AGREEMENT").
Ladies and Gentlemen:
We have acted as special counsel to Operations in connection
with the Purchase Agreement and the transactions contemplated thereby.
Capitalized terms not otherwise defined herein shall have the respective
meanings specified in the Purchase Agreement.
In connection with the opinions set forth below, we have
examined originals, or copies certified to our satisfaction, of the Purchase
Agreement and the Consent and Agreement [NW ______] dated as of
[____________,____] (the "CONSENT AND AGREEMENT") executed by British
Aerospace Regional Aircraft SA acting as an agent for and on behalf of
Operations (the Purchase Agreement together with the Consent and Agreement
are herein referred to as the "DOCUMENTS") and such other agreements,
certificates and other statements of corporate officers of Operations as we
have deemed relevant and necessary as a basis therefor. As to any facts
material to such opinions, we have relied, to the extent that we deem such
reliance proper, upon such agreements, certificates, statements and documents
and on the representations and warranties set forth in the Documents. In
rendering such opinions, we have assumed:
(x) the genuineness of all signatures, the authenticity of all
documents submitted to us as originals and the conformity to the
authentic original documents of all documents submitted to us as
copies;
(y) the due authorization, execution and delivery by each of
the parties of each of the Documents and of each other document
examined by us for the purposes hereof; and
To the Addressees listed
on Page 1 hereof
__________________, ____
Page 2
(z) that each party to each of the Documents has the power,
corporate or otherwise, and authority to execute, deliver and perform
the Documents and that such execution, delivery and performance do not
and will not contravene such party's charter, by-laws or other
constituent document or any agreement or other document to which such
party or any of its property is subject or any law, rule, regulation or
judicial or administrative mandate applicable to such party or any of
its property.
Based upon and subject to the foregoing and to the matters set
forth below, we are of the opinion that the Documents are legal, valid and
binding obligations of Operations, enforceable against Operations in accordance
with their terms.
The foregoing opinions are subject to the following
qualifications and exceptions:
(a) The opinions set forth above are subject to the
qualifications that the enforceability of the
Documents may be limited by (x) bankruptcy,
insolvency, reorganization, moratorium or similar
laws affecting creditors' rights generally and (y)
general principles of equity, regardless of whether
enforcement is pursuant to a proceeding in equity or
at law; and
(b) We express no opinion as to:
(i) whether a Federal court of the United States
would have subject matter jurisdiction over
any action brought pursuant to any of the
Documents;
(ii) whether a Federal court of the United States
or a New York State court would recognize
any claim that any action brought pursuant
to any of the Documents is brought in an
inconvenient forum;
(iii) the validity, binding effect and
enforceability of any provision of any of
the Documents which purports to bind the
parties to agree to conclude an agreement at
a future date;
(iv) the availability of the remedy of specific
performance;
(v) the enforceability of any provision in the
Documents which requires a party to make any
or all payments thereunder without setoff or
counterclaim or any other right which such
party may have; or
(vi) the enforceability of any indemnity against
loss from a court judgment in another
currency.
We are members of the Bar of the State of New York and no
opinion is expressed herein with respect to any jurisdiction other than the
Federal laws of the United States and the laws of the State of New York.
To the Addressees listed
on Page 1 hereof
__________________, ____
Page 3
This opinion is solely for your benefit. No other person or
entity shall be entitled to rely on this opinion without our prior written
consent. This opinion is limited to the matters stated herein and no opinion is
implied or may be inferred beyond the matters expressly stated herein.
Very truly yours,
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 of Connecticut, National Association,
as Pass Through Trustee
Standard & Poor's Ratings Services
▇▇▇▇▇'▇ Investors Service, Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Chase Securities Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc.
MBIA Insurance Corporation
EXHIBIT C-2 TO PARTICIPATION AGREEMENT
[FORM OF OPINION OF IN-HOUSE COUNSEL TO THE MANUFACTURER]
[________________, ____]
To the Addressees Listed
in the Attached Schedule A
Re: British Aerospace Avro 146-RJ85A Aircraft Manufacturer's
Serial No. [________] Registration No. N[_____]
Ladies and Gentlemen,
I have acted as counsel to British Aerospace Regional Aircraft S.A., a SOCIETE
ANONYME, with a share capital of 250 000 FF, whose registered office is at ▇,
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, registered at the companies
registry in Toulouse under number 419 099 148 ("BAERASA"), in connection with
the Relevant Documents (as defined below).
In rendering the opinions expressed herein, I have examined copies, certified or
otherwise identified to my satisfaction, of the following documents:
1. the Purchase Agreement, dated as of 5 February 1997, as amended,
between Aero International (Regional) SAS ("AI(R)") (acting as agent on
behalf of British Aerospace (Operations) Limited ("BAe") and Northwest
Airlines, Inc. ("NORTHWEST") (the "PURCHASE AGREEMENT") in relation to,
INTER ALIA, the Aircraft.
2. the Manufacturer Support Agreement, dated 5 February 1997, as
amended, between AI(R), acting as agent of BAe, and Northwest (the
"MANUFACTURER SUPPORT AGREEMENT").
3. the Trust Indenture and Security Agreement [_________] (the
"TRUST INDENTURE"), dated as of [________, ____], between Northwest, as
owner, and State Street Bank and Trust Company, as indenture trustee,
relating to the Avro RJ Aircraft bearing registration ▇▇▇▇ N[____] (the
"AIRCRAFT").
4. the Consent and Agreement [__________], dated as of [_______, ____]
(the "CONSENT AND AGREEMENT"), in respect of the Trust Indenture,
executed by BAeRASA acting as the agent of BAe.
(the documents at 1 to 4 above being referred to herein as the "RELEVANT
DOCUMENTS")
I have examined, or caused to be examined, such records and documents and such
questions of law, limited to the laws of England, and facts as I have considered
necessary or appropriate to
To the Addressees listed
on Page 1 hereof
__________________, ____
Page 2
form the basis of the opinions hereinafter expressed. I have relied upon the
Relevant Documents and on the information contained therein as to factual
matters.
Based upon the foregoing, and subject to the qualifications and assumptions
herein contained and to the provisions of any law other than English law, I am
of the opinion that at the date hereof:
1. BAeRASA (a) is duly empowered and authorized to act as, and is acting
as, agent for BAe under the Consent and Agreement, (b) has taken all
action necessary for the authorization, execution, delivery and
performance of the Consent and Agreeement and any instrument or
agreement required thereunder, (c) requires no authorizations,
approvals, exemptions nor similar consents from any governmental
authority in England in connection with the execution, delivery and
performance of the Consent and Agreement and any instrument or
agreement required thereunder or any transaction contemplated thereby,
and (d) such execution, delivery and performance do not and will not
contravene its charter, by-laws or other constituent document or any
agreement or other document to which it or any its property is subject
or any law, rule, regulation or judicial or administrative mandate
applicable to any of its property.
2. AI(R) (a) was duly empowered and authorized to act as, and was acting
as, agent for BAe under the Purchase Agreement and the Manufacturer
Support Agreement, (b) has taken all action necessary for the
authorization, execution, delivery and performance of the Relevant
Documents to which it is a party and any instrument or agreement
required thereunder, (c) requires no authorizations, approvals,
exemptions nor similar consents from any governmental authority in
England in connection with the execution, delivery and performance of
the Relevant Documents to which it is a party and any instrument or
agreement required thereunder or any transaction contemplated thereby,
and (d) to the best of my knowledge, such execution, delivery and
performance do not and will not contravene its charter, by-laws or
other constituent document or any agreement or other document to which
it or any its property is subject or any law, rule, regulation or
judicial or administrative mandate applicable to any of its property.
3. The Consent and Agreement constitutes the legal, valid and binding
obligation of BAeRASA (acting as agent of BAe) enforceable against BAe
in accordance with its terms and would be so treated in the courts of
England except as set out below.
4. Upon execution of the Trust Indenture and the Consent and Agreement,
the Trust Indenture and the Consent and Agreement shall be effective to
perfect as against BAe, BAeRASA [(AIR)], and third parties the
assignment to the Indenture Trustee of the rights of Northwest under
the Manufacturer Support Agreement.
5. Those of the Relevant Documents to which AI(R) is a party (acting as
agent of BAe) constitute the legal, valid and binding obligations of
AI(R) (acting as agent of BAe) enforceable against BAe in accordance
with their terms and would be so treated in the courts of England
except as set out below.
To the Addressees listed
on Page 1 hereof
__________________, ____
Page 3
6. To the extent that, notwithstanding any provision in the Relevant
Documents to the contrary, a court should deem applicable the laws of
England, those of the Relevant Documents to which either AI(R) or
BAeRASA is a party (acting as agent of BAe) would represent the legal,
valid and binding obligations of BAe (as principal) under the laws of
England, enforceable against BAe in accordance with their respective
terms except as set out below.
The opinions set forth above are subject to the following reservations:
(i) the enforceability of the Relevant Documents may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the rights of creditors generally and/or the
general principles of equity;
(ii) provisions in the Relevant Documents as to severability of certain
provisions on the grounds of illegality may not be binding under
English law and would be decided by the court in its absolute
discretion;
(iii) English courts do not necessarily give effect to an indemnity for the
costs of litigation;
(iv) the Relevant Documents may be amended orally by the parties thereto
notwithstanding provisions therein to the contrary;
(v) any provision for interest to be paid on overdue amounts at a rate in
excess of the rate applicable prior to a default may amount to a
penalty and may therefore not be recoverable;
(vi) failure or delay in exercising any right may constitute a waiver of
that right notwithstanding provisions to the contrary in the Relevant
Documents; and
(vii) an instrument liable to stamp duty in the United Kingdom cannot be
relied upon, enforced or registered unless it is duly stamped. I
express no opinion on the application of United Kingdom legislation
relating to stamp duties.
In rendering this opinion I have assumed the due authorization, execution and
delivery of all Relevant Documents by all parties thereto (other than BAeRASA
and AI(R)) and that the Relevant Documents constitute the legal, valid and
binding obligation of the parties thereto in so far as the laws of New York are
concerned which is the law expressed to govern certain of the Relevant
Documents.
To the Addressees listed
on Page 1 hereof
__________________, ____
Page 4
The law covered by this opinion letter is limited to the laws of England. This
opinion is solely for your benefit in connection with the transactions referred
to therein and may not be relied upon by any other person.
Yours faithfully,
[__________________]
[LEGAL COUNSEL]
SCHEDULE A
Northwest Airlines, Inc., as Owner
Northwest Airlines Corporation, as Guarantor
State Street Bank and Trust Company, not in its individual capacity but solely
as Indenture Trustee
State Street Bank and Trust Company of Connecticut, National Association, as
Pass Through Trustee
Standard & Poor's Ratings Services
▇▇▇▇▇'▇ Investors Service, Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Chase Securities Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc.
MBIA Insurance Corporation
EXHIBIT F TO PARTICIPATION AGREEMENT
[FORM OF OPINION OF ▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.C.]
[________________, ____]
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO
Re: British Aerospace model Avro 146-RJ85A 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 [___________], [(i) the Mortgage and
Security Agreement Release and Termination Agreement dated [__________] between
[_________] and Northwest Airlines, Inc., which released the Aircraft and the
AllliedSignal, Inc. model LF507 aircraft engines with manufacturer's serial
numbers PO ___, PO ___, PO ___, and PO ___ (the "Engines") from the terms of
Conveyance No. [_________] and (ii)] the Trust Indenture and Security Agreement
[NW ____ __] 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 ____ __] dated [______________] (the "Indenture
Supplement") covering the Aircraft and the AllliedSignal, Inc. model LF507
aircraft engines with manufacturer's serial numbers PO ___, PO ___, PO ___, and
PO ___ (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 Release,] the Indenture with the Indenture
Supplement attached, [are][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 of Connecticut, National Association, as
Pass Through Trustee
State Street Bank and Trust Company, as Indenture Trustee
Northwest Airlines, Inc., as Owner
Northwest Airlines Corporation, as Guarantor
Standard & Poor's Ratings Services
▇▇▇▇▇'▇ Investors Service, Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Chase Securities Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc.
MBIA Insurance Corporation
EXHIBIT G TO PARTICIPATION AGREEMENT
[Form of Opinion of ▇▇▇▇▇▇▇ ▇▇▇▇ LLP,
special counsel for the Indenture Trustee]
[________________,____]
TO THE PARTIES SET FORTH
IN SCHEDULE A HERETO
RE: Northwest Airlines, Inc./Financing of One British Aerospace
model Avro 146-RJ85A Aircraft [NW _______]
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
____] dated as of [________________] (the "INDENTURE") between Northwest
Airlines, Inc. and State Street, as Indenture Trustee, in connection with the
execution and delivery of the Participation Agreement [NW ____] dated as of
[________________] (the "PARTICIPATION AGREEMENT") by and among the Indenture
Trustee, Northwest Airlines, Inc., the Owner, Northwest Airlines Corporation
(the "GUARANTOR"), State Street Bank and Trust Company of Connecticut, National
Association, as Pass Through Trustee (the "PASS THROUGH TRUSTEE") and State
Street Bank, as Subordination Agent (the "SUBORDINATION AGENT") and the
transactions contemplated thereby. Capitalized terms not otherwise defined
herein shall have the meanings specified in or referenced in 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
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -2- ________________, ____
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 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 such qualification is required generally or necessary in order
for such party to enforce its rights
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -3- ________________, ____
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.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).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.We express no opinion
as to the availability of any specific or equitable relief of any
kind.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.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
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -4- ________________, ____
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.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
▇▇▇▇▇.▇▇ 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 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 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
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -5- ________________, ____
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 are imposed solely because State Street has its
principal place of business in Massachusetts or performs 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, as Indenture Trustee
State Street Bank and Trust Company of Connecticut, National Association, as
Pass Through Trustee
Northwest Airlines, Inc., as Owner
Northwest Airlines Corporation, as Guarantor
Standard & Poor's Ratings Services
▇▇▇▇▇'▇ Investors Service, Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Chase Securities Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc.
MBIA Insurance Corporation
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 ____ ___], dated as of
[______________] (the "PARTICIPATION AGREEMENT"), among the Owner, Northwest
Airlines Corporation, as Guarantor, State Street Bank and Trust Company of
Connecticut, National Association, 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 but not defined herein have the respective meanings given to them in
or by reference to the Participation Agreement, unless the context otherwise
requires. As used herein, the term "Airframe" shall mean the British Aerospace
Avro 146-RJ85A Airframe bearing U.S. Registration No. N[________] and
Manufacturer's Serial No. [_____], the term "Engines" shall mean the four
AllliedSignal, Inc. Model LF507 Engines bearing manufacturer's Serial Nos.
PO___, PO ___, PO ___ and PO ___, 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. We are rendering this opinion letter to you at the request
of the Owner pursuant to Section 4(a)(xxiii) of the Participation Agreement.
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 officer
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -2-
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.
We express no opinion concerning the laws of any jurisdiction
other than the laws of the State of New York and the federal laws of the United
States of America.
You have requested our opinion as to whether the 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
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -3-
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 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(1) and a
review of the cases decided under the former version of Section 1110. We are not
aware of any judicial decisions interpreting the amendments to Section 1110
enacted in the Bankruptcy Reform Act of 1994 that are directly applicable to the
facts and circumstances present in this transaction. Accordingly, our opinion is
not based on directly applicable judicial precedent, but rather on what we
believe to be a sound analysis of such authorities as exist. We call to your
attention, however, the decision of the United States District Court for the
District of Colorado in WESTERN PACIFIC AIRLINES, INC. V. GATX CAPITAL (IN RE
WESTERN PACIFIC AIRLINES, INC.), ▇▇▇ ▇.▇. ▇▇▇, ▇▇ REHEARING, 221 B.R. 1 (D.
Colo. 1998), APPEAL DISMISSED AS MOOT SUB NOM., BOULLIOUN AIRCRAFT HOLDING CO.,
INC. ▇. ▇▇▇▇▇ MANAGEMENT, Nos. 98-1018, 98-1214, 1999 WL ▇▇▇▇▇▇ (▇▇▇▇ ▇▇▇. July
7, 1999), where the District Court concluded that the relief provided by Section
1110 is relevant only if the debtor does not satisfy the conditions set forth in
Section 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.
----------------------
(1) Pub. L. 103-394
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -4-
We believe that this decision construes Section 1110 in a manner that is
inconsistent with both the language of Section 1110 and the legislative history
explaining the purpose and operation of Section 1110. Accordingly, we believe
that the decision is an incorrect interpretation of Section 1110.
We express no opinion concerning whether any 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 express no opinions except as expressly set
forth herein, and no opinion is implied or may be inferred beyond the opinions
expressly stated herein.
We are furnishing this opinion letter to you solely for your
benefit in connection with the transactions referred to herein. This opinion
letter is not to be relied upon, used, circulated, quoted or otherwise referred
to by any person or entity for any other purpose without our prior written
consent. In addition, we disclaim any obligation to update this opinion letter
for changes in fact or law, or otherwise.
Very truly yours,
SCHEDULE A
Northwest Airlines, Inc., as Owner
Northwest Airlines Corporation, as Guarantor
State Street Bank and Trust Company of Connecticut, National Association, as
Pass Through Trustee
State Street Bank and Trust Company, as Indenture Trustee
Standard & Poor's Ratings Services
▇▇▇▇▇'▇ Investors Service, Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Chase Securities Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc.
MBIA Insurance Corporation
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 British Aerospace Avro 146 - RJ85A airframe FAA Registration No.
N[_____] and MSN [_____], and AllliedSignal, Inc. Model LF507 engine MSN PO
____, AlliedSignal, Inc. Model LF507 engine MSN PO ___, AlliedSignal, Inc. Model
LF507 engine MSN PO ___, and AllliedSignal, Inc. Model LF507 engine PO [____]
(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:
CWT\NYLIB1\399161.5
EXHIBIT J-1 TO PARTICIPATION AGREEMENT
[FORM OF OPINION OF ▇▇▇▇▇▇▇ ▇▇▇▇ LLP,
SPECIAL COUNSEL FOR THE PASS THROUGH TRUSTEE]
[----------------------, ----]
TO THE PARTIES SET FORTH
IN SCHEDULE A HERETO
RE: Northwest Airlines, Inc./Financing of British Aerospace Avro
146-RJ85A Aircraft [NW ---- ----]
Ladies and Gentlemen:
We have acted as special counsel for State Street Bank and Trust
Company of Connecticut, National Association, 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, 1999, among Northwest Airlines
Corporation, Northwest Airlines, Inc. and State Street as supplemented by Trust
Supplement ▇▇. ▇▇▇▇-▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇-▇▇ and Trust Supplement No.
1999-3C, each dated as of December 9, 1999 and each among Northwest Airlines,
Inc., Northwest Airlines Corporation 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 _______] dated as
of [_______________] (the "PARTICIPATION AGREEMENT") by and among State Street
Bank and Trust Company, as Indenture Trustee, Northwest Airlines, Inc.,
Northwest Airlines Corporation (the "GUARANTOR"), State Street, as Pass Through
Trustee and State Street Bank and Trust Company, as Subordination Agent (the
"SUBORDINATION AGENT") and the transactions contemplated thereby. Capitalized
terms not otherwise defined herein shall have the meanings specified in or
referenced in 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.
We have examined the Participation Agreement, the Liquidity Facility
for each of the Class G, Class B, and Class C Trusts, the Intercreditor
Agreement, the Note Purchase Agreement, the Escrow and Paying Agent Agreement
for each of the Class G, Class B and Class C Trusts each dated as of December 9,
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 Bank and Trust Company, as Paying Agent, each of the
Pass Through Trusts and the Insurance and Indemnity Agreement dated as of
December 9, 1999, among MBIA Insurance Corporation, Northwest Airlines, Inc.,
State Street Bank and Trust Company as Subordination Agent and State Street Bank
and Trust Company of Connecticut, National Association as Pass Through Trustee
under the Class G Trust (together, the "OPERATIVE DOCUMENTS"), the Certificate
of the Comptroller of the Currency 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 national banking association and exercise trust powers,
our opinion relies upon and is limited by such Certificate of the Comptroller of
the Currency.
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 State of Connecticut as applied by courts located in
Connecticut 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 State of Connecticut, 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 State of Connecticut.
Our opinion is further subject to the following exceptions,
qualifications and assumptions: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
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 Pass Through
Trustee with respect to the laws of the United States of America and
the internal substantive laws of the State of Connecticut, 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.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
State of Connecticut 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).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 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 Pass Through Trustee,
as applicable, under any of the Operative Documents.We express no
opinion as the availability of any specific or equitable relief of any
kind.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.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 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.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 ▇▇▇▇▇.▇▇ 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
Connecticut 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 or as a partnership.
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 national banking association, validly formed and
authorized to operate as a national banking association under the laws of the
United States of America 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 Connecticut 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
Connecticut 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 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 State of Connecticut 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
Documents (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 are imposed solely because State Street has its
principal place of business in Connecticut or performs its administrative duties
under the Operative Documents in Connecticut. Neither State Street, in its
individual capacity or as the Pass Through Trustee, as the case may be, the
Indenture Trustee, the Owner Participant, the Owner Trustee, 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 State of
Connecticut or any political subdivision thereof (except for Taxes on any fees
payable to State Street in its individual capacity) which are imposed because
State Street has its principal place of business in Connecticut or performs its
administrative duties under the Operative Documents in Connecticut, and there
are no Taxes under the laws of the State of Connecticut 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 are imposed because State Street has its
principal place of business in Connecticut or performs its administrative duties
under the Operative Documents in Connecticut.
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, as Indenture Trustee
State Street Bank and Trust Company of Connecticut, National Association, as
Pass Through Trustee
Northwest Airlines, Inc., as Owner
Northwest Airlines Corporation, as Guarantor
Standard & Poor's Ratings Services
▇▇▇▇▇'▇ Investors Service, Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Chase Securities Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc.
MBIA Insurance Corporation
EXHIBIT J-2 TO PARTICIPATION AGREEMENT
[FORM OF OPINION OF ▇▇▇▇▇▇▇ ▇▇▇▇ LLP,
SPECIAL COUNSEL FOR THE SUBORDINATION AGENT]
[-------------, ----]
TO THE PARTIES SET FORTH
IN SCHEDULE A HERETO
RE: Northwest Airlines, Inc./Financing of British Aerospace Avro
146-RJ85A Aircraft [NW ---- ----]
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
December 9, 1999 (the "INTERCREDITOR AGREEMENT") among State Street Bank and
Trust Company of Connecticut, National Association, in its capacity as Trustee
under the Northwest Airlines Pass Through Trust ▇▇▇▇-▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
Through Trust 1999-3B and Northwest Airlines Pass Through Trust 1999-3C, ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Capital Services, Inc.., as Class G 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 ____] 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 Bank and Trust Company of Connecticut, National
Association, 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 or referenced in 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, the Intercreditor Agreement and the Insurance and Indemnity Agreement
(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,
Page 2
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 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: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 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
Page 3
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.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).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.We express no opinion as the availability of any specific or
equitable relief of any kind.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.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.We express no opinion as to the
effect
Page 4
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 ▇▇▇▇▇.▇▇ 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 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 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 duly obtained, given or
taken); and such authorization, execution, delivery,
Page 5
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 are imposed solely because State Street has its
principal place of business in Massachusetts or performs 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 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
Subordination Agent, as the case may be, to enter into or perform its
obligations under the Operative Documents.
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
SCHEDULE A
State Street Bank and Trust Company, as Indenture Trustee
State Street Bank and Trust Company of Connecticut, National Association, as
Pass Through Trustee
Northwest Airlines, Inc., as Owner
Northwest Airlines Corporation, as Guarantor
Standard & Poor's Ratings Services
▇▇▇▇▇'▇ Investors Service, Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Chase Securities Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc.
MBIA Insurance Corporation
EXHIBIT K-1
EXHIBIT K
TO PARTICIPATION
AGREEMENT
[NW ____ _]
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
EXHIBIT K-2
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,
the Policy Provider 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 or the Pass Through 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 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
EXHIBIT K-3
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;
(14) to any Tax imposed on any Tax Indemnitee under
Section 4975 of the Internal Revenue Code or under subtitle B
of ERISA or equivalent state law 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;
(15) to any Tax that would not have been imposed but
for an amendment to any Operative Document to which the Owner
is not a party, which amendment was not requested or consented
to by the Owner in writing; or
(16) in the case of the Policy Provider, to any
premium or similar Tax.
(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.
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 benefit
(whether by deduction, allocation, apportionment 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
EXHIBIT K-4
such Tax Indemnitee which is attributable to such tax benefit 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 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
EXHIBIT K-5
or otherwise prejudice any Tax Indemnitee'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 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.
EXHIBIT K-6
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 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
EXHIBIT K-7
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 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.
EXHIBIT K-8
(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-9
EXHIBIT L
TO PARTICIPATION
AGREEMENT
[NW ___9 __]
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, the Policy Provider Agreement 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, the
Policy Provider Agreement 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
EXHIBIT L-1
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.
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
EXHIBIT L-2
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).
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
EXHIBIT L-3
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 of this Agreement may
proceed directly against the Owner without first seeking to enforce any other
right of indemnification.
EXHIBIT L-4