EXHIBIT 99(a)
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PARTICIPATION AGREEMENT
[NW ____ _]
DATED AS OF
[________________]
AMONG
NORTHWEST AIRLINES, INC.,
LESSEE,
NORTHWEST AIRLINES CORPORATION,
GUARANTOR,
[__________________________________],
OWNER PARTICIPANT,
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
PASS THROUGH TRUSTEE UNDER EACH OF
THE PASS THROUGH TRUST AGREEMENTS,
▇▇▇▇▇ FARGO BANK NORTHWEST, NATIONAL ASSOCIATION,
NOT IN ITS INDIVIDUAL CAPACITY, EXCEPT AS EXPRESSLY PROVIDED
HEREIN, BUT SOLELY AS OWNER TRUSTEE,
STATE STREET BANK AND TRUST COMPANY,
SUBORDINATION AGENT,
AND
STATE STREET BANK AND TRUST COMPANY,
IN ITS INDIVIDUAL CAPACITY AND AS INDENTURE TRUSTEE
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ONE [AIRBUS A319113/114] [BOEING 757-351] [BOEING 747-451] AIRCRAFT
N[_____]
LEASED TO NORTHWEST AIRLINES, INC.
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INDEX TO PARTICIPATION AGREEMENT
PAGE
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SECTION 1. Participations in Lessor's Cost of the Aircraft...............................................3
SECTION 2. Lessee's Notice of Delivery Date..............................................................4
SECTION 3. Instructions to the Owner Trustee.............................................................4
SECTION 4. Conditions....................................................................................5
(a) Conditions Precedent to the Participations in the Aircraft...............................5
(b) Conditions Precedent to the Obligations of Lessee and the Guarantor.....................13
SECTION 5. [Intentionally Omitted]......................................................................14
SECTION 6. Extent of Interest of Certificate Holders....................................................14
SECTION 7. Representations and Warranties of Lessee and the Guarantor; Indemnities......................14
(a) Representations and Warranties..........................................................14
(b) General Tax Indemnity...................................................................17
(c) General Indemnity.......................................................................18
(d) Income Tax..............................................................................18
SECTION 8. Representations, Warranties and Covenants....................................................18
SECTION 9. Reliance of Liquidity Provider...............................................................36
SECTION 10. Other Documents..............................................................................36
SECTION 11. Certain Covenants of Lessee..................................................................37
SECTION 12. Owner for Federal Tax Purposes...............................................................37
SECTION 13. Certain Definitions; Notices; Consent to Jurisdiction........................................37
SECTION 14. Change of Situs of Owner Trust...............................................................38
SECTION 15. Miscellaneous................................................................................39
SECTION 16. Expenses.....................................................................................40
SECTION 17. Refinancings.................................................................................41
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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 Lessee and the Guarantor
Exhibit B-2 - Form of Opinion of Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇,
special counsel for the Lessee and the Guarantor
Exhibit B-3 - Form of Opinion of Lessee's Legal Department
Exhibit C - Form of Opinion of counsel for the Manufacturer [and the
Supplier-- A319'S ONLY]
Exhibit D - Form of Opinion of Ray, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, special
counsel for the Owner Trustee
Exhibit E-1 - Form of Opinion of [___________________], special
counsel for the Owner Participant
Exhibit E-2 - Form of Opinion of Owner Participant's in-house counsel
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 ofss.1110 Opinion of Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇,
special counsel for the Lessee
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
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Exhibit L - Section 7(c) - General Indemnity
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PARTICIPATION AGREEMENT
[NW ____ _]
THIS PARTICIPATION AGREEMENT [NW ____ _] dated as of
[_______________], among (i) NORTHWEST AIRLINES, INC., a Minnesota corporation
(the "LESSEE"), (ii) NORTHWEST AIRLINES CORPORATION, a Delaware corporation (the
"GUARANTOR"), (iii) [_________________________], a [__________] corporation (the
"OWNER PARTICIPANT"), (iv) 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 [four] [five -- option for A319's and 757's] separate
Pass Through Trust Agreements (as defined below), (v) ▇▇▇▇▇ FARGO BANK
NORTHWEST, NATIONAL ASSOCIATION, a national banking association, not in its
individual capacity, except as expressly provided herein, but solely as Owner
Trustee under the Trust Agreement (herein, in such latter capacity, together
with any successor owner trustee, called the "OWNER TRUSTEE"), (vi) 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 (vii) 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 (as such term is
defined in the Lease hereinafter referred to) between Lessee and the [Supplier]
[Manufacturer], the [Supplier] [Manufacturer] has agreed to sell to Lessee,
among other things, certain [Airbus Industrie [A319113/114] [Boeing 757351]
[Boeing 747-451] aircraft, including the Aircraft which has been delivered by
the [Supplier] [Manufacturer] to Lessee and is the subject of this Agreement;
WHEREAS, concurrently with the execution and delivery of this
Agreement,
(i) Lessee and the Owner Trustee are entering into a Purchase
Agreement Assignment [NW ____ _], dated as of the date hereof (herein
called the "PURCHASE AGREEMENT ASSIGNMENT"), whereby Lessee assigns to
the Owner Trustee certain rights and interests of Lessee under the
Purchase Agreement with respect to the Aircraft; and
(ii) [the Manufacturer and the Supplier have executed the
Manufacturer Consent and Agreement to Assignment of Warranties [NW ____
__] and the Supplier Consent and Agreement to Assignment of Warranties
[NW ____ _] (herein collectively called the "CONSENT AND AGREEMENT"),
substantially in the forms attached to the Purchase Agreement
Assignment; -- A319'S] [the Manufacturer has executed the Consent and
Agreement [NW ____ _] (herein called the "CONSENT AND AGREEMENT"),
substantially in the form attached to the Purchase Agreement
Assignment; -- 757'S AND 747'S]
WHEREAS, concurrently with the execution and delivery of this
Agreement, the Owner Participant is entering into a Trust Agreement [NW ____ _],
dated as of the date hereof (said Trust Agreement, as the same may be amended or
supplemented from time to time, being herein called the "TRUST AGREEMENT", such
term to include, unless the context otherwise requires, any Trust Supplement
referred to below), with the Owner Trustee, pursuant to which Trust Agreement
the Owner Trustee agrees, among other things, to hold the Trust Estate defined
in Section 1.01 thereof (herein called the "TRUST ESTATE") for the use and
benefit of the Owner Participant;
WHEREAS, the Indenture Trustee and the Owner Trustee
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
Supplement referred to below) pursuant to which the Owner Trustee will issue
secured certificates substantially in the form set forth in Section 2.01 thereof
(the "SECURED CERTIFICATES", and individually, a "SECURED CERTIFICATE") in
[four] [five] series, which Secured Certificates are to be secured by the
mortgage and security interests created by the Owner Trustee in favor of the
Indenture Trustee, and the Owner Trustee shall execute and deliver a Trust and
Indenture Supplement substantially in the form of EXHIBIT A to the Trust
Indenture (the "TRUST SUPPLEMENT") covering the Aircraft, supplementing the
Trust Agreement and the Trust Indenture;
WHEREAS, concurrently with the execution and delivery of this
Agreement, the Owner Trustee and Lessee have entered into the Lease Agreement
[NW ____ _], dated as of the date hereof (such Lease Agreement, as the same may
be amended or supplemented from time to time to the extent permitted by the
terms thereof and this agreement, herein called the "LEASE", such term to
include, unless the context otherwise requires, the Lease Supplement referred to
below), whereby, subject to the terms and conditions set forth therein, the
Owner Trustee agrees to lease to Lessee, and Lessee agrees to lease from the
Owner Trustee the Aircraft on the date (the "DELIVERY DATE") that the Aircraft
is sold and delivered by Lessee to the Owner Trustee under the ▇▇▇▇ of Sale, and
accepted by the Owner Trustee for all purposes of the Lease, such acceptance to
be evidenced by the execution of the Trust Supplement covering the Aircraft, and
such lease to be evidenced by the execution and delivery of a Lease Supplement
covering the Aircraft;
WHEREAS, concurrently with the execution and delivery of this
Agreement, the Owner Participant is entering into a Tax Indemnity Agreement [NW
____ _], dated as of the date hereof, with Lessee (the "TAX INDEMNITY
AGREEMENT");
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 Lessee 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
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TRUST AGREEMENTS"), on the Issuance Date [and on ____________, ____ -- option
for A319's and 757's] [four] [five -- option for A319's and 757's] 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 Delivery Date to purchase from the Owner Trustee, 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) Landesbank Hessen-Thuringen
Girozentrale (the "LIQUIDITY PROVIDER") entered into four revolving credit
agreements (each, a "LIQUIDITY FACILITY"), one for the benefit of the holders of
Certificates of each Pass Through Trust [other than the Class D Pass Through
Trust -- option for A319's and 757's] , with the Subordination Agent, as agent
for the Pass Through Trustee on behalf of each such Pass Through Trust; and (ii)
the Pass Through Trustee [(other than the Class D Trustee) -- option for A319's
and 757's], the Liquidity Provider and the Subordination Agent entered into the
Intercreditor Agreement, dated June 1, 2001;
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, Lessee and the Guarantor have entered into the Underwriting Agreement,
dated as of May 22, 2001, among Lessee, 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. PARTICIPATIONS IN LESSOR'S COST OF THE AIRCRAFT.
(a) PARTICIPATION BY PASS THROUGH TRUSTEES. Subject to the terms and conditions
of this Agreement, the Pass Through Trustee for each Pass Through Trust agrees
to finance, in part, the Owner Trustee's payment of Lessor's Cost for the
Aircraft by paying to the Owner Trustee the aggregate purchase price of the
Secured Certificates being issued to such Pass Through Trustee as set forth on
SCHEDULE II opposite the name of such Pass Through Trust. The Pass Through
Trustees shall make such payments to the Owner Trustee 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 Trustee at State
Street Bank and Trust Company, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
ABA No. ▇▇▇▇▇▇▇▇▇, Account No. ▇▇▇▇▇▇▇▇, Reference: Northwest/NW [_____ __], not
later than 9:30 a.m., New York City time, on the Delivery Date in immediately
available funds in Dollars, the amount set forth opposite the name of such Pass
Through Trust on SCHEDULE II hereto.
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Upon the occurrence of the above transfers by the Pass Through
Trustee for each Pass Through Trust to the Owner Trustee, the Owner Trustee, at
the direction of the Owner Participant, 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) PARTICIPATION BY OWNER PARTICIPANT. Subject to the
terms and conditions of this Agreement, the Owner Participant hereby agrees to
participate in the payment of Lessor's Cost for the Aircraft by making an equity
investment in the beneficial ownership of the Aircraft 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 Trustee at State
Street Bank and Trust Company, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
ABA No. ▇▇▇▇▇▇▇▇▇, Account No. ▇▇▇▇▇▇▇▇, Reference: Northwest/NW [_____ __], not
later than 9:30 a.m., New York City time, on the Delivery Date in immediately
available funds in Dollars, the amount set forth opposite the Owner
Participant's name on SCHEDULE II hereto.
(c) GENERAL PROVISIONS. The amount of the participation
of each of the Pass Through Trustee and the Owner Participant to be made as
provided above in the payment of Lessor's Cost for the Aircraft is hereinafter
called such party's "COMMITMENT" for the Aircraft. In case any of the Pass
Through Trustee or the Owner Participant shall default in its obligation under
the provisions of this Section 1, no other such party shall have any obligation
to make any portion of such defaulted amount available or to increase the amount
of its Commitment and the obligation of such nondefaulting party shall remain
subject to the terms and conditions set forth in this Agreement. Upon receipt by
the Owner Trustee of all amounts to be furnished to it on the Delivery Date
pursuant to this Section 1 and the satisfaction of the conditions set forth in
Section 4 hereof, Lessee shall transfer title to and deliver the Aircraft to the
Owner Trustee, and the Owner Trustee shall purchase and take title to and accept
delivery of the Aircraft. In consideration of the transfer of title to and
delivery of the Aircraft to the Owner Trustee, the Owner Trustee shall,
simultaneously with such transfer of title and delivery, pay to Lessee (from the
amounts so furnished it by the Participants) Lessor's Cost for the Aircraft.
SECTION 2. LESSEE'S NOTICE OF DELIVERY DATE. Lessee agrees to
give each Participant, the Owner Trustee and the Indenture Trustee at least two
Business Days' telecopy or other written notice of the Delivery Date for the
Aircraft, which Delivery Date shall be a Business Day, which notice shall
specify the amount of Lessor's Cost and the amount of each Participant's
Commitment for the Aircraft. As to each Participant, 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. INSTRUCTIONS TO THE OWNER TRUSTEE. The Owner
Participant agrees that its releasing the amount of its Commitment for the
Aircraft to the account of the Owner Trustee in accordance with the terms of
Section 1 shall constitute, subject to satisfaction or waiver of the conditions
set forth in Section 4(a), without further act, authorization and direction by
the Owner Participant to the Owner Trustee:
(i) to pay to Lessee Lessor's Cost for the Aircraft;
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(ii) to the extent not previously accomplished by a prior
authorization, to authorize a representative or representatives of the
Owner Trustee (who shall be an employee or employees, or an agent or
agents, of Lessee designated by Lessee) to accept delivery of the
Aircraft on the Delivery Date pursuant to the Acceptance Certificate;
(iii) to accept from Lessee the ▇▇▇▇ of Sale and the FAA ▇▇▇▇
of Sale for the Aircraft referred to in Section 4(a)(v)(8) and
4(a)(v)(9);
(iv) to execute an Aircraft Registration Application, the
Lease Supplement and the Trust Supplement, in each case covering the
Aircraft;
(v) to borrow from the Pass Through Trustee to finance a
portion of the Lessor's Cost for the Aircraft and to execute and
deliver to the Subordination Agent on behalf of the Pass Through
Trustee for each of the Pass Through Trusts a principal amount of
Secured Certificates bearing the interest rate set forth opposite the
name of such Pass Through Trust on Schedule II hereto, pursuant hereto
and to the Trust Indenture; and
(vi) to take such other action as may be required to be taken
by the Owner Trustee on the Delivery Date by the terms of any Operative
Document.
SECTION 4. CONDITIONS. (a) CONDITIONS PRECEDENT TO THE
PARTICIPATIONS IN THE AIRCRAFT. It is agreed that the obligations of each of the
Pass Through Trustee and the Owner Participant to participate in the payment of
Lessor's Cost and to make available the amount of its respective Commitment are
subject to the satisfaction prior to or on the Delivery Date of the following
conditions precedent, except that paragraphs (iii), (v)(5), (xxi), (xxii) and
(xxiv) shall not be a condition precedent to the obligations of the Pass Through
Trustee, and paragraphs (iv), (vii)(D) and (xiv) shall not be a condition
precedent to the obligation of the Owner Participant:
(i) The Pass Through Trustee and the Owner Participant 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 or the Owner
Participant to make its Commitment available in accordance with Section
1 hereof.
(iii) In the case of the Owner Participant, the Pass Through
Trustees shall have made available the amount of their Commitments for
the Aircraft in accordance with Section 1 hereof.
(iv) In the case of the Pass Through Trustees, the Owner
Participant shall have made available the amount of its Commitment for
the Aircraft in accordance with Section 1 hereof.
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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 the Owner Participant and shall be in full force and effect
and executed counterparts shall have been delivered to the Pass Through
Trustee and the Owner Participant, or their respective 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 Owner Trustee (but the Indenture Trustee shall also
retain an excerpted copy of the Purchase Agreement which may be
inspected by the Owner Participant and its counsel prior to the
Delivery Date and subsequent to the Delivery Date may be inspected and
reviewed by the Indenture Trustee if and only if there shall occur and
be continuing an Event of Default), the chattel paper counterpart of
the Lease and the Lease Supplement covering the Aircraft dated the
Delivery Date shall be delivered to the Indenture Trustee, and the Tax
Indemnity Agreement need only be satisfactory to the Owner Participant
and Lessee and shall only be delivered to Lessee and the Owner
Participant and their respective counsel:
(1) an excerpted copy of the Purchase Agreement
(insofar as it relates to the Aircraft) [and the Guaranty--
A319'S ONLY];
(2) the Purchase Agreement Assignment;
(3) the Lease;
(4) a Lease Supplement covering the Aircraft dated
the Delivery Date;
(5) the Tax Indemnity Agreement;
(6) the Trust Agreement;
(7) a Trust Supplement covering the Aircraft dated
the Delivery Date;
(8) the ▇▇▇▇ of Sale;
(9) the FAA ▇▇▇▇ of Sale;
(10) an acceptance certificate covering the Aircraft
in the form agreed to by the Owner Participant and Lessee
(herein called the "ACCEPTANCE CERTIFICATE") duly completed
and executed by the Owner Trustee or its agent, which may be a
representative of Lessee, and by such representative on behalf
of Lessee;
(11) the Trust Indenture;
(12) the Secured Certificates;
(13) the Consent and Agreement;
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(14) the Guarantee; and
(15) [the French Pledge Agreement.-- A319'S ONLY]
In addition, the Pass Through Trustee and the Owner
Participant each 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 [(other than the Class D Pass Through Trust --
option for A319's and 757's].
(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 Trustee, 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 Owner Participant or the
Pass Through Trustee shall have been executed and delivered by Lessee
or the Owner Trustee and duly filed.
(vii) The Pass Through Trustee and the Owner Participant shall
have received the following:
(A)(1) an incumbency certificate of Lessee and the
Guarantor (as the case may be) as to the person or persons
authorized to execute and deliver this Agreement, the Lease,
the Lease Supplement covering the Aircraft, the ▇▇▇▇ of Sale,
the FAA ▇▇▇▇ of Sale, the Purchase Agreement Assignment, the
Tax Indemnity Agreement, the Pass Through Trust Agreements,
the Guarantee and any other documents to be executed on behalf
of Lessee 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 Lessee and the Guarantor or the executive
committee thereof, certified by the Secretary or an Assistant
Secretary of Lessee 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 Lessee 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
Lessee and the Guarantor, certified by the Secretary of State
of the State of Minnesota in the case of Lessee and certified
by the Secretary of State of the State of Delaware in the case
of the Guarantor, a copy of the bylaws of Lessee and the
Guarantor, certified by the Secretary or Assistant Secretary
of Lessee and the Guarantor (as
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the case may be), and a certificate or other evidence from the
Secretary of State of the State of Minnesota in the case of
Lessee 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 Delivery Date, as to the due incorporation
and good standing of Lessee 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 Delivery Date, certifying
that the representations and warranties contained herein of
the Indenture Trustee are correct as though made on and as of
the Delivery 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).
(C)(1) an incumbency certificate of the Owner Trustee
as to the person or persons authorized to execute and deliver
this Agreement, the Lease, the Lease Supplement covering the
Aircraft, the Trust Agreement, the Trust Indenture, the
Purchase Agreement Assignment and any other documents to be
executed on behalf of the Owner 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 Owner Trustee, certified by the Secretary or
an Assistant Secretary of the Owner 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 Owner Trustee in connection with
the transactions contemplated hereby;
(3) a copy of the articles of association and by-laws
of the Owner Trustee, each certified by the Secretary or an
Assistant Secretary of the Owner Trustee; and
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(4) a certificate signed by an authorized officer of
the Owner Trustee, dated the Delivery Date, certifying that
the representations and warranties contained herein of the
Owner Trustee (in its individual capacity and as trustee) are
correct as though made on and as of the Delivery 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).
(D)(1) an incumbency certificate of the Owner
Participant as to the person or persons authorized to execute
and deliver this Agreement, the Tax Indemnity Agreement, the
Trust Agreement and any other documents to be executed on
behalf of the Owner Participant in connection with the
transactions contemplated hereby and the signatures of such
person or persons;
(2) a certificate signed by the Secretary or an
Assistant Secretary of the Owner Participant, to the effect
that 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 Participant in connection
with the transactions contemplated hereby have been duly
authorized;
(3) a copy of the articles of association and by-laws
of the Owner Participant, each certified by the Secretary or
an Assistant Secretary of the Owner Participant; and
(4) a certificate signed by an authorized officer of
the Owner Participant, dated the Delivery Date, certifying
that the representations and warranties contained herein of
the Owner Participant are correct as though made on and as of
the Delivery Date, except to the extent that such
representations and warranties relate solely to an earlier
date (in which case such representations and warranties are
correct on and as of such earlier date).
(viii) All appropriate action required to have been taken
prior to the Delivery 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 Delivery 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
Delivery Date.
(ix) On the Delivery Date the Pass Through Trustee and the
Owner Participant shall have received a certificate signed by an
authorized officer of Lessee (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;
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(2) the FAA ▇▇▇▇ of Sale, the Lease, the Lease
Supplement, the Trust Indenture and the Trust 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, and
the Trust Agreement shall have been filed (or shall be in the
process of being so filed) with the Federal Aviation
Administration;
(3) application for registration of the Aircraft in
the name of the Owner Trustee has been duly made with the
Federal Aviation Administration; and
(4) the representations and warranties contained
herein of Lessee and the Guarantor are correct as though made
on and as of the Delivery 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) Lessee 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 and the Owner Participant shall
have received, addressed to the Pass Through Trustee, the Indenture
Trustee, the Owner Participant and the Owner Trustee, and reasonably
satisfactory as to scope and substance to the Pass Through Trustee and
the Owner Participant, an opinion substantially in the form of EXHIBIT
B-1 hereto from ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, special counsel for Lessee
and the Guarantor, an opinion substantially in the form of EXHIBIT B-2
hereto from Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇, special counsel for Lessee
and the Guarantor, and an opinion substantially in the form of EXHIBIT
B-3 hereto from Lessee's legal department.
(xii) The Pass Through Trustee and the Owner Participant shall
have received, addressed to the Pass Through Trustee, the Indenture
Trustee, the Owner Participant, the Owner Trustee, the Guarantor and
Lessee and reasonably satisfactory as to scope and substance to the
Pass Through Trustee, the Owner Participant, the Guarantor and Lessee,
an opinion substantially in the form of EXHIBIT C hereto from [counsel
to the Supplier and the Manufacturer. -- A319'S] [counsel to the
Manufacturer -- 757'S AND 747'S]
(xiii) The Pass Through Trustee and the Owner Participant
shall have received, addressed to the Pass Through Trustee, the
Indenture Trustee, the Owner Participant, the Owner Trustee, the
Guarantor and Lessee, and reasonably satisfactory as to scope and
substance to the Pass Through Trustee, the Owner Participant, the
Guarantor and Lessee, an opinion substantially in the form of EXHIBIT D
hereto from Ray, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, special counsel for the Owner
Trustee.
(xiv) The Pass Through Trustee shall have received, addressed
to the Pass Through Trustee, the Indenture Trustee, the Owner Trustee,
the Guarantor and Lessee, and reasonably satisfactory as to scope and
substance to the Pass Through Trustee, the
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Guarantor and Lessee, an opinion substantially in the form of EXHIBIT
E-1 hereto from [________________], special counsel for the Owner
Participant, and an opinion substantially in the form of EXHIBIT E-2
hereto from the Owner Participant's in-house counsel.
(xv) The Pass Through Trustee and the Owner Participant shall
have received, addressed to the Pass Through Trustee, the Indenture
Trustee, the Owner Participant, the Owner Trustee, the Guarantor and
Lessee, and reasonably satisfactory as to scope and substance to the
Pass Through Trustee, the Owner Participant, the Guarantor and Lessee,
an opinion substantially in the form of EXHIBIT F hereto from ▇▇▇▇▇ &
▇▇▇▇▇▇▇, P.C.
(xvi) The Pass Through Trustee and the Owner Participant shall
have received, addressed to the Pass Through Trustee, the Owner
Participant, the Owner Trustee, the Guarantor and Lessee, and
reasonably satisfactory as to scope and substance to the Pass Through
Trustee, the Owner Participant, the Guarantor and Lessee, 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 and Owner Participant shall
have received an independent insurance broker's report, in form and
substance satisfactory to the Pass Through Trustee and the Owner
Participant, as to the due compliance with the terms of Section 11 of
the Lease relating to insurance with respect to the Aircraft.
(xix) Lessor's Cost for the Aircraft shall be
$[______________].
(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 Delivery Date to set aside, restrain, enjoin or prevent
the completion and consummation of this Agreement or the transactions
contemplated hereby.
(xxi) The Owner Participant shall have received from
[___________________], special tax counsel to the Owner Participant, an
opinion, in form and substance satisfactory to the Owner Participant,
with respect to certain Federal income tax aspects of the transaction
contemplated by the Operative Documents.
(xxii) In the opinion of the Owner Participant and its special
tax counsel, there shall have been, since the date hereof, no
amendment, modification, addition, or change in or to the provisions of
the Internal Revenue Code of 1986, as amended through the date hereof,
and the regulations promulgated under the Code (including temporary
regulations), Internal Revenue Service Revenue Procedures or Revenue
Rulings, or other administrative interpretations, applicable judicial
precedents or Executive Orders of the President of the United States,
all as in effect on the date hereof, the effect of which might preclude
the Owner Participant from obtaining any of the income tax benefits and
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consequences assumed to be available to the Owner Participant as set
forth in Section 2 of the Tax Indemnity Agreement.
(xxiii) The Pass Through Trustee and the Owner Participant
shall have received a favorable opinion substantially in the form of
EXHIBIT I hereto addressed to the Pass Through Trustee and the Owner
Participant, and reasonably satisfactory as to scope and substance to
the Pass Through Trustee and the Owner Participant, from Cadwalader,
▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇, special counsel for Lessee, which opinion shall
state (with customary assumptions and qualifications) that the Owner
Trustee, as lessor under the Lease, and the Indenture Trustee, as
assignee of the Owner Trustee's rights under the Lease pursuant to the
Trust Indenture, would be entitled to the benefits of 11 U.S.C. ss.1110
with respect to the Aircraft.
(xxiv) The Owner Participant shall have received (A) a
certificate signed by an authorized officer of the Pass Through
Trustee, dated the Delivery Date, certifying that the representations
and warranties contained herein of the Pass Through Trustee are correct
as though made on and as of the Delivery 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), (B) an opinion substantially in the form
of EXHIBIT J-1 hereto addressed to the Owner Participant, the Guarantor
and Lessee of ▇▇▇▇▇▇▇ ▇▇▇▇ LLP, special counsel for the Pass Through
Trustee, and reasonably satisfactory as to scope and substance to the
Owner Participant, the Guarantor and Lessee, 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 or an Assistant Secretary of the Pass Through Trustee; and
(3) such other documents and evidence with respect to the Pass Through
Trustee as it 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.
(xxv) The Pass Through Trustee and the Owner Participant shall
have received, addressed to the Pass Through Trustee, the Owner
Participant, the Owner Trustee, the Indenture Trustee, the Guarantor
and Lessee, and reasonably satisfactory as to scope and substance, to
the Pass Through Trustee, the Owner Participant, the Guarantor and
Lessee, an opinion substantially in the form of EXHIBIT J-2 hereto from
▇▇▇▇▇▇▇ ▇▇▇▇ LLP, special counsel to the Subordination Agent.
Promptly upon the registration of the Aircraft and the
recording of the Trust Indenture, the Lease, the Lease Supplement covering the
Aircraft and the Trust Supplement covering the Aircraft pursuant to the Federal
Aviation Act, Lessee will cause ▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.C., special counsel in
Oklahoma City, Oklahoma, to deliver to the Pass Through Trustee, the Indenture
Trustee, the Owner Participant, the Owner Trustee and Lessee an opinion as to
the due and valid registration of the Aircraft in the name of the Owner Trustee,
the due recording of the FAA ▇▇▇▇ of Sale, the Trust Indenture, such Lease
Supplement, such Trust Supplement and the
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Lease and the filing of the Trust Agreement and the lack of filing of any
intervening documents with respect to the Aircraft.
(b) CONDITIONS PRECEDENT TO THE OBLIGATIONS OF LESSEE AND
THE GUARANTOR. It is agreed that (A) the obligations of Lessee to sell the
Aircraft to the Owner Trustee and to accept delivery of the Aircraft under the
Lease, and (B) the obligations of Lessee and the Guarantor to enter into the
other Operative Documents, are all subject to the fulfillment to the
satisfaction of Lessee and the Guarantor prior to or on the Delivery Date of the
following conditions precedent:
(i) All appropriate action required to have been taken on or
prior to the Delivery 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 Delivery 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
Delivery Date.
(ii) The conditions specified in Sections 4(a)(ii), 4(a)(iii)
and 4(a)(iv) 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 Lessee and the Guarantor) in the manner
specified in Section 4(a)(v), shall each be satisfactory in form and
substance to Lessee and the Guarantor, shall be in full force and
effect on the Delivery Date, and an executed counterpart of each
thereof (other than the Secured Certificates) shall have been delivered
to Lessee or its special counsel and the Guarantor or its special
counsel.
(iv) Lessee 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) the certificate
referred to in Section 4(a)(xxiv)(A), 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 or an Assistant Secretary of the Pass Through Trustee; and
(3) such other documents and evidence with respect to the Pass Through
Trustee as Lessee 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) Lessee and the Guarantor shall have received the opinions
set forth in Sections 4(a)(xii), 4(a)(xiii), 4(a)(xiv), 4(a)(xv),
4(a)(xvi), 4(a)(xxiv)(B) and 4(a)(xxv) in each case addressed to Lessee
and the Guarantor and dated the Delivery Date and in each
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case in scope and substance reasonably satisfactory to Lessee 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 Delivery 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 Lessee or the Guarantor to enter into any transaction
contemplated by the Operative Documents.
(viii) In the opinion of Lessee and its special counsel, there
shall have been, since the date hereof, no amendment, modification,
addition or change in or to the Internal Revenue Code of 1986, as
amended through the date hereof, the regulations promulgated under the
Code (including temporary regulations), Internal Revenue Service
Revenue Procedures or Revenue Rulings, or other administrative
interpretations, applicable judicial precedents or Executive Orders of
the President of the United States which might give rise to an
indemnity obligation of Lessee under any of the Operative Documents.
(ix) Lessee shall have been paid Lessor's Cost for the
Aircraft.
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
holder hereunder, under the Trust Indenture and under such Secured Certificates
shall have been paid in full. Each Pass Through Trustee and, by its acceptance
of a Secured Certificate, each Certificate Holder agrees that it will look
solely to the income and proceeds from the Trust Indenture Estate to the extent
available for distribution to such Certificate Holder as provided in Article III
of the Trust Indenture and that neither the Owner Participant nor the Owner
Trustee shall be personally liable to the Pass Through Trustees or any
Certificate Holder for any amounts payable under the Secured Certificates, the
Trust Indenture or hereunder, except as expressly provided in the Operative
Documents.
SECTION 7. REPRESENTATIONS AND WARRANTIES OF LESSEE AND THE
GUARANTOR; INDEMNITIES. (a) REPRESENTATIONS AND WARRANTIES. Lessee and the
Guarantor represent and warrant to the Pass Through Trustee, the Owner Trustee,
the Indenture Trustee, the Liquidity Provider, the Subordination Agent and the
Owner Participant that as of the Delivery Date:
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(i) each of Lessee 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 Lessee, the
Lessee 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) Lessee 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 Lessee or the Guarantor
(as the case may be) of the Lessee Documents, the Pass Through Trust
Agreements, the Underwriting Agreement and each other Operative
Document to which Lessee or the Guarantor (as the case may be) is a
party, and the performance of the obligations of Lessee or the
Guarantor (as the case may be) under the Lessee Documents, the Pass
Through Trust Agreements, the Underwriting Agreement and each other
Operative Document to which Lessee or the Guarantor (as the case may
be) is a party, have been duly authorized by all necessary corporate
action on the part of Lessee 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 Lessee 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 Lessee or the Guarantor (as the case may
be) or the certificate of incorporation or bylaws of Lessee 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 Lessee or the
Guarantor (as the case may be) under, any indenture, mortgage, contract
or other agreement to which Lessee or the Guarantor (as the case may
be) is a party or by which it may be bound or affected which
contravention, default or Lien, individually or in the aggregate, would
be reasonably likely to have a material adverse effect on the condition
(financial or otherwise), business or properties of the Guarantor and
its subsidiaries considered as one enterprise;
(iv) neither the execution and delivery by Lessee or the
Guarantor (as the case may be) of the Lessee Documents, the Pass
Through Trust Agreements, the Underwriting Agreement or any other
Operative Document to which Lessee or the Guarantor (as the case may
be) is a party, nor the performance of the obligations of Lessee or the
Guarantor (as the case may be) under the Lessee Documents, the Pass
Through Trust Agreements, the Underwriting Agreement or the other
Operative Documents to which Lessee or the Guarantor (as the case may
be) is a party, requires the consent or approval of, the giving
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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 Lessee 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 Lessee or any
Sublessee required to be obtained on or prior to the Delivery Date,
which orders, permits, waivers, exemptions, authorizations and
approvals have been duly obtained and are, or on the Delivery 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 Delivery Date,
taken or caused to be taken by Lessee), (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 Lessee Documents, the
Pass Through Trust Agreements and the Guarantee constitute the legal,
valid and binding obligations of Lessee or the Guarantor (as the case
may be) enforceable against Lessee 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 Lease, as limited by applicable laws which may affect
the remedies provided in the Lease, which laws, however, do not make
the remedies provided in the Lease 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 the termination of the Mortgage, (B)] the
filing of the Trust Agreement with the FAA, [(B)] the registration of
the Aircraft pursuant to the Federal Aviation Act, [(C)] the filing for
recording pursuant to the Federal Aviation Act of the Lease with the
Lease Supplement covering the Aircraft, the Trust Indenture and the
Trust Supplement attached thereto and made a part thereof, the Trust
Indenture with the Trust Supplement attached thereto and made a part
thereof and the FAA ▇▇▇▇ of Sale, [(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 Utah and such other states as
may be specified in the opinions furnished pursuant to Section 4(a)(xi)
hereof [and the filing of a UCC3 termination statement relating to the
financing statement filed in connection with the Mortgage], and [(E)]
the taking of possession by the Indenture Trustee of the original
chattel paper counterpart of each of the Lease and the Lease Supplement
covering the Aircraft, no further filing or recording
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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 Owner Trustee's
interest in the Aircraft as against Lessee and any third parties, or to
perfect the security interest in favor of the Indenture Trustee in the
Owner Trustee's interest in the Aircraft (with respect to such portion
of the Aircraft as is covered by the recording system established by
the FAA pursuant to 49 U.S.C. Section 44107) and in the Lease in any
applicable jurisdiction in the United States;
(vii) neither Lessee, 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 Lessee 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) Lessee is solvent and will not be rendered insolvent by
the sale of the Aircraft; after the sale of the Aircraft the capital of
Lessee will not be unreasonably small for the conduct of the business
in which Lessee is engaged or is about to engage; Lessee has no
intention or belief that it is about to incur debts beyond its ability
to pay as they mature; and Lessee's sale of the Aircraft is made
without any intent to hinder, delay or defraud either present or future
creditors;
(xii) none of the proceeds from the issuance of the Secured
Certificates or from the acquisition by the Owner Participant of its
beneficial interest in the Trust Estate will be used directly or
indirectly by Lessee 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 Delivery Date, all sales or use tax then due and
for which Lessee is responsible pursuant to Section 7(b)(i) hereof
shall have been paid, other than such taxes which are being contested
by Lessee 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.
-17-
(d) INCOME TAX. For purposes of this Section 7, the term
"INCOME TAX" means any Tax based on or measured by gross or net income or
receipts (other than sales, use, license or property Taxes or Taxes in the
nature thereof) (including, without limitation, capital gains taxes, minimum
taxes, income taxes collected by withholding and taxes on tax preference items),
and Taxes which are capital, doing business, excess profits or net worth taxes
and interest, additions to tax, penalties, or other charges in respect thereof.
SECTION 8. REPRESENTATIONS, WARRANTIES AND COVENANTS.
(a) [Intentionally Omitted].
(b) [Intentionally Omitted].
(c) Each of the Owner Participant and ▇▇▇▇▇ Fargo Bank
Northwest, National Association, in its individual capacity, represents and
warrants to the other parties to this Agreement that it is, and on the Delivery
Date will be, a Citizen of the United States without making use of any voting
trust, voting powers agreement or similar arrangement. The Owner Participant
agrees, solely for the benefit of Lessee and the Loan Participants, that if (i)
it shall cease to be, or believes itself likely to cease to be, a Citizen of the
United States and (ii) the Aircraft shall or would therefore become ineligible
for registration in the name of the Owner Trustee under the Federal Aviation Act
and regulations then applicable thereunder, then the Owner Participant shall (at
its own expense and without any reimbursement or indemnification from Lessee)
promptly effect a voting trust, voting powers agreement or other similar
arrangement or take any other action as may be necessary to prevent any
deregistration and to maintain the United States registration of the Aircraft.
It is agreed that: (A) the Owner Participant shall be liable to pay on request
to each of the other parties hereto and to each holder of a Secured Certificate
for any damages suffered by any such other party or holder as the result of the
representation and warranty of the Owner Participant in the first sentence of
this Section 8(c) proving to be untrue as of the Delivery Date; and (B) the
Owner Participant shall be liable to pay on request to Lessee, any Sublessee and
the Loan Participants for any damages which may be incurred by Lessee, any
Sublessee or the Loan Participants as a result of the Owner Participant's
failure to comply with its obligations pursuant to the second sentence of this
Section 8(c). Each party hereto agrees, upon the request and at the sole expense
of the Owner Participant, to cooperate with the Owner Participant in complying
with its obligations under the provisions of the second sentence of this Section
8(c). ▇▇▇▇▇ Fargo Bank Northwest, National Association, in its individual
capacity, agrees that if at any time an officer or responsible employee of the
Corporate Trust Department of ▇▇▇▇▇ Fargo Bank Northwest, National Association,
shall obtain actual knowledge that ▇▇▇▇▇ Fargo Bank Northwest, National
Association, has ceased to be a Citizen of the United States without making use
of a voting trust, voting powers agreement or similar arrangement, it will
promptly resign as Owner Trustee (if and so long as such citizenship is
necessary under the Federal Aviation Act as in effect at such time or, if it is
not necessary, if and so long as the Owner Trustee's citizenship would have any
material adverse effect on the Loan Participants, Lessee or the Owner
Participant), effective upon the appointment of a successor Owner Trustee in
accordance with Section 9.01 of the Trust Agreement. If the Owner Participant or
▇▇▇▇▇ Fargo Bank Northwest, National Association, in its individual capacity,
does not comply with the requirements of this Section 8(c), the Owner Trustee,
the Indenture Trustee and the Participants hereby agree that an Event of Default
(or an
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event which would constitute an Event of Default but for lapse of time or the
giving of notice or both) shall not have occurred and be continuing under the
Lease due to non-compliance by Lessee with the registration requirements in the
Lease.
(d) ▇▇▇▇▇ Fargo Bank Northwest, National Association, in
its individual capacity, represents and warrants that both the principal place
of business of the Owner Trustee and the place where its records concerning the
Aircraft and all of its interest in, to and under the Operative Documents to
which it is a party are kept is Salt Lake City, Utah. ▇▇▇▇▇ Fargo Bank
Northwest, National Association, in its individual capacity, agrees that it will
not change the location of such office to a location outside of Salt Lake City,
Utah, without prior written notice to all parties. ▇▇▇▇▇ Fargo Bank Northwest,
National Association, in its individual capacity, further represents and
warrants that (A) on the Delivery Date the Owner Trustee shall have received
whatever title to the Aircraft as was conveyed to it by Lessee, and (B) the
Trust Agreement, and, assuming due authorization, execution and delivery of the
Trust Agreement by the Owner Participant, the other Owner Trustee Documents,
when executed and delivered, shall have been duly executed and delivered by one
of its officers who is duly authorized to execute and deliver such instruments
on behalf of the Owner Trustee. ▇▇▇▇▇ Fargo Bank Northwest, National
Association, in its individual capacity, represents that it has not offered any
interest in the Trust Estate or any Secured Certificates or any similar
securities for sale to, or solicited any offer to acquire the same from, anyone,
and that no officer or responsible employee of the Corporate Trust Department of
▇▇▇▇▇ Fargo Bank Northwest, National Association, has knowledge of any such
offer or solicitation by anyone other than Lessee.
(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 Owner Participant and the Indenture Trustee agree
that, at any time after the Depreciation Period, Lessee may elect to effect a
change in registration of the Aircraft, at Lessee's cost and expense, so long as
(a) the country of registry of the Aircraft is a country listed on EXHIBIT A
hereto (or such other country as the Owner Trustee approves) 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
Delivery Date; and (ii) the Owner Trustee and the Indenture Trustee shall have
received favorable opinions (subject to customary exceptions) addressed to each
such party, from counsel of recognized reputation qualified in the laws of the
relevant jurisdiction to the effect that:
(A) the Owner Trustee's ownership interest in the
Aircraft shall be recognized under the laws of such
jurisdiction, (B) the obligations of Lessee, and the rights
and remedies of the Owner Trustee, under the Lease 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
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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
Trustee's right, title and interest in and to the Aircraft and
the Lease 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 Owner Trustee and the Indenture Trustee shall have
received a certificate from Lessee 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 Owner Trustee and the
Indenture Trustee on or prior to the effective date of such
change in registration), (D) it is not necessary, solely as a
consequence of such change in registration and without giving
effect to any other activity of the Owner Trustee, the Owner
Participant or the Indenture Trustee (or any Affiliate
thereof), as the case may be, for the Owner Trustee, the Owner
Participant or 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
Owner Participant, such opinion shall be waived if insurance
reasonably satisfactory to the Owner Participant is provided
to cover such risk), and (F) (unless Lessee 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, Lessee
shall furnish to the Owner Trustee and the Indenture Trustee an Officer's
Certificate to the effect that the insurance required by Section 11 of the Lease
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. Lessee shall pay all costs, expenses, fees, recording and
registration taxes, including the reasonable fees and expenses of counsel to the
Owner Trustee, the Owner Participant and the Indenture Trustee, and other
charges in connection with any such change in registration.
(g) The Owner Participant represents and warrants to
Lessee, the Guarantor, the Indenture Trustee, the Pass Through Trustee, the
Subordination Agent, the Liquidity Provider and the Owner Trustee, in its
capacity as such and in its individual capacity, as follows:
(i) it is duly incorporated, validly existing and in good
standing under the laws of [_______________] and has the corporate
power and authority to carry on its present business and operations and
to own or lease its properties, and has the corporate
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power and authority to enter into and to perform its obligations under
the Owner Participant Documents; this Agreement and the other Owner
Participant Documents have been duly authorized, executed and delivered
by it; and this Agreement and each of the other Owner Participant
Documents constitute the legal, valid and binding obligations of the
Owner Participant enforceable against it in accordance with its
respective terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the rights of creditors generally and by general
principles of equity, whether considered in a proceeding at law or in
equity; and it has a tangible net worth (exclusive of goodwill) greater
than [$50,000,000 for A319's and 757's] [$75,000,000 for 747's];
(ii) neither (A) the execution and delivery by the Owner
Participant of the Owner Participant Documents nor (B) compliance by it
with all of the provisions thereof, (x) will contravene any law or
order of any court or governmental authority or agency applicable to or
binding on the Owner Participant (it being understood that no
representation or warranty is made with respect to laws, rules or
regulations relating to aviation or to the nature of the equipment
owned by the Owner Trustee other than such laws, rules or regulations
relating to the citizenship requirements of the Owner Participant under
applicable law), or (y) will contravene the provisions of, or
constitutes or has constituted or will constitute a default under, or
result in the creation of any Lien (other than Liens provided for in
the Operative Documents) upon any property of the Owner Participant
under, its certificate of incorporation or bylaws or any indenture,
mortgage, contract or other agreement or instrument to which the Owner
Participant is a party or by which it or any of its property may be
bound or affected;
(iii) no authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body
(other than as required by the Federal Aviation Act or the regulations
promulgated thereunder) is required for the due execution, delivery or
performance by it of the Owner Participant Documents;
(iv) there are no pending or, to its knowledge, threatened
actions or proceedings before any court or administrative agency or
arbitrator which would materially adversely affect the Owner
Participant's ability to perform its obligations under this Agreement,
the Tax Indemnity Agreement and the Trust Agreement;
(v) neither the Owner Participant nor anyone authorized by it
to act on its behalf (it being understood that in proposing,
facilitating and otherwise taking any action in connection with the
financing contemplated hereby and agreed to herein by the Owner
Participant, Lessee has not acted as agent of the Owner Participant)
has directly or indirectly offered any Secured Certificate or
Certificate or any interest in and to the Trust Estate, the Trust
Agreement or any similar interest for sale to, or solicited any offer
to acquire any of the same from, any Person; the Owner Participant's
interest in the Trust Estate and the Trust Agreement is being acquired
for its own account and is being purchased for investment and not with
a view to any resale or distribution thereof;
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(vi) on the Delivery Date, the Trust Estate shall be free of
Lessor Liens (including for this purpose Liens which would be Lessor
Liens but for the proviso in the definition of Lessor Liens)
attributable to the Owner Participant; and
(vii) it is a Citizen of the United States (without making use
of a voting trust agreement, voting powers agreement or similar
arrangement).
(h) Each of ▇▇▇▇▇ Fargo Bank Northwest, National
Association, in its individual capacity, and the Owner Participant covenants and
agrees that it shall not cause or permit to exist a Lessor Lien attributable to
it with respect to the Aircraft or any other portion of the Trust Estate. Each
of ▇▇▇▇▇ Fargo Bank Northwest, National Association, in its individual capacity,
and the Owner Participant agrees that it will promptly, at its own expense, take
such action as may be necessary duly to discharge such Lessor Lien attributable
to it. Each of ▇▇▇▇▇ Fargo Bank Northwest, National Association, in its
individual capacity, and the Owner Participant agrees to make restitution to the
Trust Estate for any actual diminution of the assets of the Trust Estate
resulting from Lessor Liens (including for this purpose Liens which would be
Lessor Liens but for the proviso in the definition of Lessor Liens) attributable
to it. The Owner Participant agrees to make restitution to the Trust Estate for
any actual diminution of the assets of the Trust Estate resulting from any Taxes
or Expenses imposed on the Trust Estate against which Lessee is not required to
indemnify the Trust Estate pursuant to Section 7 hereof.
(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 Trust
Indenture Estate 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
Trust Estate, the Trust Indenture Estate or the Operative Documents other than a
transfer of the Aircraft pursuant to Section 9, 10 or 19 of the Lease or Article
IV or V of the Trust Indenture or a transfer of the Aircraft pursuant to Section
15 of the Lease while an Event of Default is continuing and prior to the time
that the Indenture Trustee has received all amounts due pursuant to the Trust
Indenture.
(j) [Intentionally Omitted].
(k) Each Loan Participant represents and warrants that
the Secured Certificate to be issued to it pursuant to the Trust Indenture is
being acquired by it for investment and not with a view to resale or
distribution (it being understood that such Loan Participant may pledge or
assign as security its interest in each Secured Certificate issued to it),
PROVIDED that the disposition of its property shall at all times be and remain
within its control, except that the Loan Participants may sell, transfer or
otherwise dispose of any Secured Certificate or any portion thereof, or grant
participations therein, in a manner which in itself does not require
registration under the Securities Act of 1933, as amended.
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(l) The Indenture Trustee, and by acceptance of the
Secured Certificates the Certificate Holders, hereby (i) agree that for purposes
of the application of Section 1111(b) of Title 11 of the United States Code or
any successor provision or any comparable provisions that the "debtor" in any
bankruptcy proceeding involving the assets held or administered pursuant to the
Trust Agreement shall be strictly limited to the Trust Estate (excluding the
Excluded Payments) and (ii) make (and hereby agree to make), with respect to the
Trust Indenture Estate, the election provided for in Section 1111(b)(2) of Title
11 of the United States Code. It is hereby agreed by the Indenture Trustee, and
by the acceptance of the Secured Certificates the Certificate Holders hereby
agree, that if (i) all or any part of the Trust Estate becomes the property of,
or the Owner Participant becomes, a debtor subject to the reorganization
provisions of the Bankruptcy Reform Act of 1978 or any successor provision or
any comparable proceeding, (ii) pursuant to such reorganization provisions the
Owner Trustee (in its individual capacity) or the Owner Participant is required,
by reason of the Owner Trustee (in its individual capacity) or the Owner
Participant being held to have recourse liability to the holder(s) of the
Secured Certificates or to the Indenture Trustee, directly or indirectly (other
than the recourse liability of the Owner Participant under this Participation
Agreement), to make payment on account of any amount payable as principal or
interest on the Secured Certificates and (iii) any holder(s) of the Secured
Certificates or the Indenture Trustee actually receives any Excess Payment (as
hereinafter defined) which reflects any payment by the Owner Trustee (in its
individual capacity) or the Owner Participant on account of (ii) above, then
such holder(s) or the Indenture Trustee, as the case may be, shall promptly
refund to the Owner Trustee or the Owner Participant (whichever shall have made
such payment) such Excess Payment. For purposes of this Section 8(l), "EXCESS
Payment" means the amount by which such payment exceeds the amount which would
have been received by the holder(s) of the Secured Certificates or the Indenture
Trustee if the Owner Trustee (in its individual capacity) or the Owner
Participant had not become subject to the recourse liability referred to in (ii)
above. Nothing contained in this Section 8(l) shall prevent the holder of a
Secured Certificate or the Indenture Trustee from enforcing any personal
recourse obligation (and retaining the proceeds thereof) of the Owner Trustee
(in its individual capacity) or the Owner Participant under this Agreement or
the Trust Indenture (and any exhibits or annexes thereto).
(m) State Street Bank and Trust Company represents,
warrants and covenants, in its individual capacity, to Lessee, the Guarantor,
the Owner Trustee, the Pass Through Trustee, the Subordination Agent, the
Liquidity Provider and the Owner Participant 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
8.02 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
-23-
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 bylaws or the provisions of any indenture, mortgage,
contract or other agreement to which it is a party or by which it is
bound;
(iii) this Agreement and each of the other Indenture Trustee
Documents constitute the legal, valid and binding obligations of the
Indenture Trustee enforceable against it in accordance with their
respective terms, except as the same may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the rights of creditors generally and by general principles
of equity, whether considered in a proceeding at law or in equity;
(iv) there are no pending or, to its knowledge, threatened
actions or proceedings against the Indenture Trustee, either in its
individual capacity or as Indenture Trustee, before any court or
administrative agency which, if determined adversely to it, would
materially adversely affect the ability of the Indenture Trustee, in
its individual capacity or as Indenture Trustee as the case may be, to
perform its obligations under the Operative Documents to which it is a
party; and
(v) there are no Indenture Trustee's Liens on the Aircraft or
any portion of the Trust Estate.
(n) The Owner Participant will not, directly or
indirectly, sell, assign, convey or otherwise transfer any of its right, title
or interest in and to this Agreement, the Trust Estate or the Trust Agreement or
any proceeds therefrom to any person or entity, unless (i) the proposed
transferee is a "Transferee" (as defined below), (ii) Lessee shall have (1)
received an opinion (in form and substance reasonably satisfactory to Lessee) of
counsel to the Owner Participant (who shall be reasonably satisfactory to
Lessee) to the effect that such transfer will not result in any risk of loss of
tax benefits to, or any increase in the tax liability of, Lessee and (2)
received from the Owner Participant so seeking to transfer such right, title or
interest reasonably satisfactory indemnification for any loss of tax benefits
to, and increase in the tax liability of, Lessee, and (iii) the Owner
Participant sells, assigns, conveys or otherwise transfers all of its right,
title and interest in and to this Agreement, the Trust Estate, the Trust
Agreement and the proceeds therefrom to a single entity. A "TRANSFEREE" shall
mean either (A) a bank or other financial institution with a combined capital,
surplus and undivided profits of at least [$50,000,000 for A319's and 757's]
[$75,000,000 for 747's] or a corporation whose tangible net worth is at least
[$50,000,000 for A319's and 757's] [$75,000,000 for 747's], exclusive of
goodwill, in either case as of the proposed date of such transfer, as determined
in accordance with generally accepted accounting principles, or (B) any
subsidiary of such a bank, financial institution or corporation, PROVIDED that
such bank, financial institution or corporation furnishes to the Owner Trustee,
the Indenture Trustee and Lessee a guaranty with respect to the Owner
Participant's
-24-
obligations, in the case of the Owner Trustee, under the Trust Agreement and, in
the case of the Indenture Trustee and Lessee, the Owner Participant's
obligations hereunder, including but not limited to, under Section 8(c) and
Section 8(h) hereof, in form and substance reasonably satisfactory to Lessee,
the Owner Trustee and the Indenture Trustee; PROVIDED, HOWEVER, that any
Transferee shall not be an airline, a commercial air carrier, an air freight
forwarder, an entity engaged in the business of parcel transport by air or other
similar person or a corporation or other entity controlling, controlled by or
under common control with such an airline, a commercial air carrier, an air
freight forwarder, an entity engaged in the business of parcel transport by air
or other similar person. Each such transfer to a Transferee shall be subject to
the conditions that (M) upon giving effect to such transfer, the Transferee is a
Citizen of the United States (without making use of a voting trust agreement,
voting powers agreement or other similar arrangement unless approved by Lessee),
and has full power and authority to enter into the transactions contemplated
hereby, (N) the Transferee has the requisite power and authority to enter into
and carry out the transactions contemplated hereby and such Transferee shall
have delivered to Lessee, the Owner Trustee and the Indenture Trustee an opinion
of counsel in form and substance reasonably satisfactory to such persons as to
the due authorization, delivery, legal, valid and binding effect and
enforceability of the agreement or agreements referred to in the next clause
with respect to the Transferee and any guaranty provided pursuant to the
provisions of this Section 8(n) as to the guarantor, (O) the Transferee enters
into an agreement or agreements, in form and substance reasonably satisfactory
to the Owner Trustee, Lessee and the Indenture Trustee, whereby the Transferee
confirms that it shall be deemed a party to this Agreement and a party to the
Trust Agreement and agrees to be bound by all the terms of, and to undertake all
of the obligations of the transferor Owner Participant contained in, the Owner
Participant Documents (to the extent of the participation so transferred to it)
and makes the representations and warranties made by the Owner Participant
thereunder, (P) such transfer does not affect registration of the Aircraft under
the Federal Aviation Act, or any rules or regulations promulgated thereunder or
create a relationship which would be in violation thereof or violate any
provision of the Securities Act of 1933, as amended, or any other applicable
Federal or state law, (Q) the transferor Owner Participant assumes the risk of
any loss of Interest Deductions, Amortization Deductions and MACRS Deductions,
the risk of any Inclusion Event (each as defined in the Tax Indemnity
Agreement), and the risk of any sales, use, value added or similar tax resulting
from such transfer, (R) the transferor Owner Participant pays all of the costs
and expenses (including, without limitation, fees and expenses of counsel)
incurred in connection with such transfer, including the costs and expenses of
the Owner Trustee, the Indenture Trustee, Lessee and the Loan Participants in
connection therewith, and (S) the terms of the Operative Documents and the
Overall Transaction shall not be altered. Upon any such transfer by the Owner
Participant as above provided, the Transferee shall be deemed the Owner
Participant for all purposes hereof and of the other Operative Documents and
each reference herein to the transferor Owner Participant shall thereafter be
deemed for all purposes to be to the Transferee and the transferor Owner
Participant shall be relieved of all obligations of the transferor Owner
Participant under the Owner Participant Documents arising after the date of such
transfer except to the extent fully attributable to or arising out of acts or
events occurring prior thereto and not assumed by the Transferee (in each case,
to the extent of the participation so transferred). If the Owner Participant
intends to transfer any of its interests hereunder, it shall give 30 days prior
written notice thereof to the Indenture Trustee, the Owner Trustee and Lessee,
specifying the name and address of the proposed Transferee.
-25-
(o) Notwithstanding the provisions of Section 8(x)
hereof, unless waived by the Loan Participants, Lessee shall not be entitled to
assume the Secured Certificates on the date for purchase of the Aircraft
pursuant to Section 19(d) of the Lease if on such date an Event of Default shall
have occurred and be continuing or any condition or event shall exist which,
with the passage of time or giving of notice or both, would become such an Event
of Default.
(p) ▇▇▇▇▇ Fargo Bank Northwest, National Association, and
State Street Bank and Trust Company, each in its individual capacity, agrees for
the benefit of Lessee to comply with the terms of the Trust Indenture which it
is required to comply with in its individual capacity.
(q) The Owner Participant represents and warrants that it
is not acquiring its interest in the Trust Estate or any interests represented
thereby with the assets of any "employee benefit plan" as defined in Section
3(3) of ERISA or of any "plan" within the meaning of Section 4975(e)(1) of the
Code. Each Loan Participant agrees that it will not transfer any Secured
Certificate (or any part thereof) to any entity (except pursuant to Section 2.14
of the Trust Indenture) 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). The Owner Participant agrees that it will not transfer any of its right,
title or interest in and to this Agreement, the Trust Estate or the Trust
Agreement or any proceeds therefrom 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 of such
right, title and interest (or any part thereof) constitutes assets of any
"employee benefit plan" or that such transfer will not result in a non-exempt
prohibited transaction (under Section 4975 of the Code and Section 406 of
ERISA). The Pass Through Trustee agrees that it will not agree to any amendment,
modification or waiver of Section 1.01(e)(i) of the Trust Supplement to each
Pass Through Trust Agreement specified in Schedule III hereto without the prior
written consent of the Owner Participant.
(r) Each Participant, the Owner Trustee and the Indenture
Trustee agrees for the benefit of the Manufacturer and Lessee 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) or the Owner Participant's beneficial interest in the
Trust Estate and any exercise of remedies under the Lease and the Trust
Indenture), (C) with the prior written consent of the Manufacturer and Lessee,
(D) to the Owner Trustee's, the Indenture Trustee's and each Participant's
counsel or special counsel, independent insurance brokers or other agents who
agree to hold such information confidential, or (E) in the case of the Owner
Participant and/or the Owner Trustee, it may disclose so much of the Purchase
Agreement as has been assigned to the Owner Trustee under the Purchase Agreement
Assignment to bona fide potential purchasers of the Aircraft.
-26-
(s) The Owner Trustee and the Owner Participant
severally, not jointly, represent and warrant that none of the funds made
available by the Pass Through Trustee pursuant to Section 1 hereof will be used
for the purpose of purchasing or carrying any "margin security" as defined in
Regulation U of the Board of Governors of the Federal Reserve System or for the
purpose of reducing or retiring any indebtedness which was originally incurred
to purchase or carry such margin security or for any other purpose which might
cause the transaction contemplated by this Agreement to constitute a "purpose
credit" within the meaning of Regulation X of the Board of Governors of the
Federal Reserve System, assuming that the proceeds were and are applied as
contemplated by the provisions of this Agreement.
(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 Trust Estate. Each Loan
Participant agrees that it will promptly, at its own expense, take such other
action as may be necessary duly to discharge such Loan Participant Lien
attributable to it. Each Loan Participant agrees to make restitution to the
Trust Estate for any actual diminution of the assets of the Trust Estate
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 Trust Indenture Estate
or the Trust Estate. 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 Trust Estate for any actual diminution of the assets of the Trust
Indenture Estate or the Trust Estate resulting from such Indenture Trustee's
Liens.
(v) The Owner Trustee, in its individual capacity (except
as provided in clauses (iii) and (vii) below) and (but only as provided in
clauses (iii) and (vii) and, to the extent that it relates to the Owner Trustee,
clauses (ii), (ix) and (xi) below) as Owner Trustee, represents and warrants to
Lessee, the Guarantor, the Pass Through Trustee, the Subordination Agent, the
Liquidity Provider and the Owner Participant that:
(i) the Owner Trustee, in its individual capacity, is a
national banking association duly organized and validly existing in
good standing under the laws of the United States, has full corporate
power and authority to carry on its business as now conducted, has the
corporate power and authority to execute and deliver the Trust
Agreement, has the corporate power and authority to carry out the terms
of the Trust Agreement, and has (assuming the authorization, execution
and delivery of the Trust Agreement by the Owner Participant), as Owner
Trustee, and to the extent expressly provided herein or therein, in its
individual capacity, the corporate power and authority to execute and
deliver and to carry out the terms of this Agreement, the Trust
Indenture, the Secured Certificates, the Lease and each other Operative
Document (other than the Trust Agreement) to which it is a party;
(ii) the Owner Trustee in its trust capacity and, to the
extent expressly provided herein, in its individual capacity, has duly
authorized, executed and delivered
-27-
this Agreement, in its individual capacity, has duly authorized,
executed and delivered the Trust Agreement and in its trust capacity,
except as expressly provided therein, has duly authorized, executed and
delivered the other Owner Trustee Documents and (assuming the due
authorization, execution and delivery of the Trust Agreement by the
Owner Participant) this Agreement and each of the other Owner Trustee
Documents constitute the legal, valid and binding obligations of the
Owner Trustee, in its individual capacity or as Owner Trustee, as the
case may be, enforceable against it in its individual capacity or as
Owner Trustee, as the case may be, in accordance with its terms, except
as the same may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of
creditors generally and by general principles of equity, whether
considered in a proceeding at law or in equity;
(iii) assuming the due authorization, execution and delivery
of the Trust Agreement by the Owner Participant, the Owner Trustee has
duly authorized, and on the Delivery Date shall have duly issued,
executed and delivered to the Indenture Trustee for authentication, the
Secured Certificates pursuant to the terms and provisions hereof and of
the Trust Indenture, and each Secured Certificate on the Delivery Date
will constitute the valid and binding obligation of the Owner Trustee
and will be entitled to the benefits and security afforded by the Trust
Indenture in accordance with the terms of such Secured Certificate and
the Trust Indenture;
(iv) neither the execution and delivery by the Owner Trustee,
in its individual capacity or as Owner Trustee, as the case may be, of
any Owner Trustee Document, nor the consummation by the Owner Trustee,
in its individual capacity or as Owner Trustee, as the case may be, of
any of the transactions contemplated thereby, nor the compliance by the
Owner Trustee, in its individual capacity or as Owner Trustee, as the
case may be, with any of the terms and provisions thereof, (A) requires
or will require any approval of its stockholders, or approval or
consent of any trustees or holders of any indebtedness or obligations
of it, or (B) violates or will violate its articles of association or
bylaws, or contravenes or will contravene any provision of, or
constitutes or will constitute a default under, or results or will
result in any breach of, or results or will result in the creation of
any Lien (other than as permitted under the Operative Documents) upon
its property under, any indenture, mortgage, chattel mortgage, deed of
trust, conditional sale contract, bank loan or credit agreement,
license or other agreement or instrument to which it is a party or by
which it is bound, or contravenes or will contravene any law,
governmental rule or regulation of the United States of America or the
State of Utah governing the trust powers of the Owner Trustee, or any
judgment or order applicable to or binding on it;
(v) no consent, approval, order or authorization of, giving of
notice to, or registration with, or taking of any other action in
respect of, any Utah state or local governmental authority or agency or
any United States federal governmental authority or agency regulating
the trust powers of the Owner Trustee in its individual capacity is
required for the execution and delivery of, or the carrying out by, the
Owner Trustee, in its individual capacity or as Owner Trustee, as the
case may be, of any of the transactions contemplated hereby or by the
Trust Agreement, the Participation Agreement, the Trust Indenture, the
Lease or the Secured Certificates, or any other Operative Document to
which it is a party or by which it is bound, other than any such
consent, approval, order,
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authorization, registration, notice or action as has been duly
obtained, given or taken or which is described in Section 7(a)(iv);
(vi) there exists no Lessor Lien (including for this purpose
Liens which would be Lessor Liens but for the proviso in the definition
of Lessor Liens) attributable to the Owner Trustee, in its individual
capacity;
(vii) there exists no Lessor Lien (including for this purpose
Liens which would be Lessor Liens but for the proviso in the definition
of Lessor Liens) attributable to the Owner Trustee, as lessor under the
Lease;
(viii) there are no Taxes payable by the Owner Trustee, either
in its individual capacity or as Owner Trustee, imposed by the State of
Utah or any political subdivision thereof in connection with the
issuance of the Secured Certificates, or the execution and delivery in
its individual capacity or as Owner Trustee, as the case may be, of any
of the instruments referred to in clauses (i), (ii), (iii) and (iv)
above, that, in each case, would not have been imposed if the Trust
Estate were not located in the State of Utah and ▇▇▇▇▇ Fargo Bank
Northwest, National Association had not (a) had its principal place of
business in, (b) performed (in its individual capacity or as Owner
Trustee) any or all of its duties under the Operative Documents in, and
(c) engaged in any activities unrelated to the transactions
contemplated by the Operative Documents in, the State of Utah;
(ix) there are no pending or, to its knowledge, threatened
actions or proceedings against the Owner Trustee, either in its
individual capacity or as Owner Trustee, before any court or
administrative agency which, if determined adversely to it, would
materially adversely affect the ability of the Owner Trustee, in its
individual capacity or as Owner Trustee, as the case may be, to perform
its obligations under any of the instruments referred to in clauses
(i), (ii), (iii) and (iv) above;
(x) both its chief executive office, and the place where its
records concerning the Aircraft and all its interests in, to and under
all documents relating to the Trust Estate, are located in Salt Lake
City, Utah;
(xi) the Owner Trustee has not, in its individual capacity or
as Owner Trustee, directly or indirectly offered any Secured
Certificate or Certificate or any interest in or to the Trust Estate,
the Trust Agreement or any similar interest for sale to, or solicited
any offer to acquire any of the same from, anyone other than the Pass
Through Trustee and the Owner Participant; and the Owner Trustee has
not authorized anyone to act on its behalf (it being understood that in
arranging and proposing the financing contemplated hereby and agreed to
herein by the Owner Trustee, Lessee has not acted as agent of the Owner
Trustee) to offer directly or indirectly any Secured Certificate, any
Certificate or any interest in and to the Trust Estate, the Trust
Agreement or any similar interest for sale to, or to solicit any offer
to acquire any of the same from, any Person;
(xii) it is a Citizen of the United States (without making use
of a voting trust agreement, voting powers agreement or similar
arrangements); and
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(xiii) there has not occurred any event which constitutes (or,
to the best of its knowledge would, with the passing of time or the
giving of notice or both, constitute) an Event of Default as defined in
the Trust Indenture which has been caused by or relates to the Owner
Trustee, in its individual capacity, and which is presently continuing.
(w) The Owner Participant covenants and agrees that if
(i) Lessee has elected pursuant to Section 9(a)(2) of the Lease to terminate the
Lease by causing the Aircraft to be sold pursuant to Section 9(c) of the Lease
and (ii) the Owner Trustee has, pursuant to Section 9(c) of the Lease, given to
Lessee written notice of Lessor's election to retain title to the Aircraft and
(iii) the Owner Trustee has failed to make, on or before the Termination Date,
any payment required to be made by the Owner Trustee pursuant to Section 9(c) in
connection with its retention of title to the Aircraft, the Owner Participant
will indemnify Lessee for any losses, damages, costs or expenses of any kind
(including any additional rents paid by Lessee and any fees and expenses of
lawyers, appraisers, brokers or accountants) incurred as a consequence of such
failure by the Owner Trustee. The Owner Participant further covenants and agrees
to pay those costs and expenses specified to be paid by the Owner Participant
pursuant to EXHIBIT E to the Lease.
(x) Each of the Owner Participant, the Owner Trustee, the
Indenture Trustee and Lessee covenants and agrees that if Lessee elects to
terminate the Lease and purchase the Aircraft pursuant to Section 19(d) of the
Lease, then each of the parties will execute and deliver appropriate
documentation transferring all right, title and interest in the Aircraft to
Lessee (including, without limitation, such bills of sale and other instruments
and documents as Lessee shall reasonably request to evidence (on the public
record or otherwise) such transfer and the vesting of all right, title and
interest in and to the Aircraft in Lessee), and if Lessee, in connection with
such purchase, elects to assume the obligations of the Owner Trustee pursuant to
the Trust Indenture and the Secured Certificates each of the parties will
execute and deliver appropriate documentation permitting Lessee to assume such
obligations on the basis of full recourse to Lessee, maintaining the security
interest in the Aircraft created by the Trust Indenture, releasing the Owner
Participant and the Owner Trustee from all future obligations in respect of the
Secured Certificates, the Trust Indenture and all other Operative Documents and
all such other actions as are reasonably necessary to permit such assumption by
Lessee.
Notwithstanding the foregoing, Lessee shall not be entitled to
assume the obligations of the Owner Trustee in respect of the Secured
Certificates unless Lessee causes to be delivered to the Indenture Trustee (a)
an opinion of counsel to the effect that (i) the Lien of the Trust Indenture
continues to be a valid and duly perfected first priority security interest in
and to the Aircraft, (ii) the Indenture Trustee will be entitled to the benefits
of 11 U.S.C. ss.1110; PROVIDED that the opinion required by subclause (ii) need
only be given if immediately prior to such assumption the Owner Trustee will
have been entitled to the benefits of 11 U.S.C. ss.1110 and (iii) the Pass
Through Trusts [(other than the Class D Pass Through Trust) -- option for A319's
and 757's] will not be subject to Federal income taxation and the Certificate
Holders [(other than the Certificate Holders of the Series D Secured
Certificates) -- option for A319's and 757's] will not recognize income, gain or
loss for Federal income tax purposes as a result of such assumption 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 had not occurred
and (b) written confirmation from ▇▇▇▇▇'▇ Investors Services, Inc. and Standard
& Poor's
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Ratings Services, a division of the ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. that such
assumption will not result in a withdrawal, suspension or downgrading of the
rating of any class of Pass Through Certificates [(other than the Pass Through
Certificates issued pursuant to the Class D Pass Through Trust) -- option for
A319's and 757's].
(y) (A) Lessee 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
Lessee is merged or the Person which acquires by conveyance, transfer
or lease substantially all of the assets of Lessee as an entirety shall
be a Certificated Air Carrier;
(ii) the corporation formed by such consolidation or into
which Lessee is merged or the Person which acquires by conveyance,
transfer or lease substantially all of the assets of Lessee as an
entirety shall execute and deliver to the Owner Trustee, the Indenture
Trustee and the Owner Participant an agreement in form and substance
reasonably satisfactory to the Indenture Trustee and the Owner
Participant 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 Lease, the Purchase
Agreement Assignment and the Tax Indemnity Agreement to be performed or
observed by Lessee;
(iii) immediately after giving effect to such transaction, no
Default or Event of Default under the Lease shall have occurred and be
continuing; and
(iv) Lessee shall have delivered to the Owner Trustee, the
Indenture Trustee and the Owner Participant 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 Lessee, and an opinion of counsel reasonably satisfactory
to the Indenture Trustee and the Owner Participant, 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 Lessee as an entirety in
accordance with this subparagraph (A) of Section 8(y), the successor corporation
or Person formed by such consolidation or into which Lessee 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, Lessee under this
Agreement with the same effect as if such successor corporation or Person had
been named as Lessee herein. No such conveyance, transfer or lease of
substantially all of the assets of Lessee as an entirety shall have the effect
of releasing Lessee 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.
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(B) Lessee shall at all times maintain its corporate existence
except as permitted by subparagraph (A) of this Section 8(y).
(z) Lessee, at its expense, will take, or cause to be
taken, such action with respect to the recording, filing, re-recording and
refiling of the Lease, the Lease Supplement, the Trust Agreement, the Trust
Indenture, the Trust Supplement and any financing statements or other
instruments as are necessary to maintain, so long as the Trust Indenture or the
Lease is in effect, the perfection of the security interests created by the
Trust Indenture and any security interest that may be claimed to have been
created by the Lease and the interest of the Owner Trustee in the Aircraft or
will furnish to the Owner Trustee and 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 them to take such action.
Lessee will notify the Owner Trustee, the Owner Participant and 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) or of any change in
its jurisdiction of incorporation 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) Section 3 of the Lease contemplates that, under
certain circumstances, the Owner Participant will make certain recalculations of
Basic Rent, the Special Purchase Price, [the Initial Installment, the Remaining
Installments,] Stipulated Loss Value percentages and Termination Value
percentages, and the Owner Participant hereby agrees to make such recalculations
as and when contemplated by the Lease and subject to all the terms and
conditions of the Lease and promptly to take such further actions as may be
necessary or desirable to give effect to and to cause the Owner Trustee to give
effect to the provisions of Section 3 of the Lease.
(bb) The Owner Participant hereby agrees with Lessee that
it will pay, or cause to be paid, all costs and expenses that are for the
account of the Owner Trustee pursuant to Section 5(d) of the Lease.
(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 Lessee, the Owner Trustee and the Owner Participant) 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
Sections 2.03, 2.14 and 4.03 of the Trust Indenture).
(dd) The Pass Through Trustee represents and warrants to
Lessee, the Guarantor, the Indenture Trustee, the Subordination Agent, the
Liquidity Provider, the Owner Participant and the Owner Trustee, in its capacity
as such and in its individual capacity, as follows:
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(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 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 bylaws 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
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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 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 [(other than the Class D
Trustee) -- option for A319's and 757's] is not directly or indirectly
controlling, controlled by or under common control with the Owner
Participant, the Owner Trustee, any Underwriter, Lessee or the
Guarantor.
(ee) The Subordination Agent represents and warrants to
Lessee, the Guarantor, the Indenture Trustee, the Pass Through Trustee, the
Liquidity Provider, the Owner Participant and the Owner Trustee, 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
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applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the rights of creditors generally and by general
principles of equity, whether considered in a proceeding at law or in
equity;
(iii) none of the execution, delivery and performance by the
Subordination Agent of each of the Liquidity Facilities, the
Intercreditor Agreement or this Agreement contravenes any law, rule or
regulation of the Commonwealth of Massachusetts or any United States
governmental authority or agency regulating the Subordination Agent's
banking, trust or fiduciary powers or any judgment or order applicable
to or binding on the Subordination Agent and do not contravene or
result in any breach of, or constitute a default under, the
Subordination Agent's articles of association or bylaws 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
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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 the Owner
Participant, the Owner Trustee, any Underwriter, Lessee or the
Guarantor.
(ff) Each of Lessee, the Owner Participant, the Owner
Trustee, the Indenture Trustee, the Pass Through Trustee and the Subordination
Agent covenant that until the Series A1 Secured Certificates (as such term is
defined in the Trust Indenture) and the Series A2 Secured Certificates (as such
term is defined in the Trust Indenture) have been paid in full, it shall not
file an involuntary bankruptcy petition or initiate any other form of insolvency
proceeding against the respective Pass Through Trust holding such Secured
Certificates.
SECTION 9. RELIANCE OF LIQUIDITY PROVIDER. Each of the parties
hereto agrees and acknowledges that the Liquidity Provider shall be a third
party beneficiary of each of the representations and warranties made herein by
such party, and that the Liquidity Provider may rely on such representations and
warranties to the same extent as if such representations and warranties were
made to the Liquidity Provider directly. Lessee agrees and acknowledges that the
Liquidity Provider shall be a third party beneficiary of the indemnities
contained in Section 7(c) hereof and may rely on such indemnities to the same
extent as if such indemnities were made to the Liquidity Provider directly.
SECTION 10. OTHER DOCUMENTS. Each of the Owner Participant and
the Owner Trustee hereby (A) agrees with Lessee and the Loan Participants to
comply with all of the terms of the Trust Agreement (as the same may hereafter
be amended or supplemented from time to time in accordance with the terms
thereof) applicable to it; (B) agrees with Lessee and the Indenture Trustee not
to amend, supplement or otherwise modify any provision of the Trust Agreement in
a manner adversely affecting such party without the prior written consent of
such party; and (C) agrees with Lessee and the Loan Participants not to revoke
the Trust Agreement without the prior written consent of Lessee (so long as the
Lease remains in effect) and the Indenture Trustee (so long as the Lien of the
Trust Indenture remains in effect or there are any Secured Certificates
outstanding). Notwithstanding the foregoing, so long as the Lease has not been
terminated, the Indenture Trustee and the Owner Trustee hereby agree for the
benefit of Lessee that without the consent of Lessee they will not (i) amend or
modify Article III or IX of the Trust Indenture, (ii) make any amendment which
will affect the stated principal amount or interest on the Secured Certificates
or (iii) amend or modify the provisions of Sections 2.05 or 10.14 of the Trust
Indenture. The Indenture Trustee and the Owner Trustee agree to promptly furnish
to Lessee copies of any supplement, amendment, waiver or modification of any of
the Operative Documents to which Lessee is not a party. Notwithstanding anything
to the contrary contained herein, in the Trust Agreement or in any other
Operative Document, the Owner Participant will not consent to or direct a change
in the situs of the Trust Estate without the prior written consent of Lessee.
Each Loan Participant agrees that it will not take any action in respect of the
Trust Indenture Estate except through the Indenture Trustee pursuant to the
Trust Indenture or as otherwise permitted by the Trust Indenture.
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SECTION 11. CERTAIN COVENANTS OF LESSEE. Lessee covenants and
agrees with each of the Loan Participants, the Owner Participant, the Indenture
Trustee and the Owner Trustee, in its capacity as such and in its individual
capacity as follows:
(a) Lessee will cause to be done, executed, acknowledged
and delivered all and every such further acts, conveyances and assurances as the
Owner Trustee, the Indenture Trustee or the Owner Participant 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 Lessee
will not expand any obligations or limit any rights of Lessee in respect of the
transactions contemplated by any Operative Documents. Lessee, forthwith upon
delivery of the Aircraft under the Lease, shall cause the Aircraft to be duly
registered, and at all times thereafter to remain duly registered, in the name
of the Owner Trustee, except as otherwise required or permitted hereunder or
under the Lease, under the Federal Aviation Act, or shall furnish to the Owner
Trustee such information as may be required to enable the Owner Trustee to make
application for such registration, and shall promptly furnish to the Owner
Trustee such information as may be required to enable the Owner Trustee to
timely file any reports required to be filed by it as the lessor under the Lease
or as the owner of the Aircraft with any governmental authority.
(b) Lessee will cause the Lease, all Lease Supplements,
all amendments to the Lease, 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
FAA ▇▇▇▇ of Sale, the Lease, the Lease Supplement covering the Aircraft, the
Trust Supplement and the Trust Indenture shall be filed for recording with the
Federal Aviation Administration in the following order of priority; FIRST, the
FAA ▇▇▇▇ of Sale, SECOND, the Lease, with the Lease Supplement covering the
Aircraft, the Trust Indenture and the Trust Supplement attached, and THIRD, the
Trust Indenture, with the Trust Supplement attached.
SECTION 12. OWNER FOR FEDERAL TAX PURPOSES. It is hereby
agreed among Lessee, the Owner Participant and the Owner Trustee that for
Federal income tax purposes the Owner Participant will be the owner of the
Aircraft to be delivered under the Lease and Lessee will be the lessee thereof,
and each party hereto agrees to characterize the Lease as a lease for Federal
income tax purposes.
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
Lease. The term "TRUST OFFICE" shall have the meaning set forth in the Trust
Agreement. 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
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accordance with the provisions of this Section 13(b). Unless otherwise specified
in a notice sent or delivered in accordance with the foregoing provisions of
this Section 13(b), notices, demands, instructions and other communications in
writing shall be given to or made upon the respective parties hereto at their
respective addresses (or to their respective telecopier numbers) as follows: (A)
if to Lessee, the Guarantor, the Owner Trustee, the Pass Through Trustee, the
Subordination Agent, the Indenture Trustee or the Owner Participant, to the
respective addresses set forth below the signatures of such parties at the foot
of this Agreement, or (B) if to a subsequent Owner Participant, addressed to
such subsequent Owner Participant at such address as such subsequent Owner
Participant shall have furnished by notice to the parties hereto, or (C) 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, the Lease, the Tax Indemnity 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, the Lease, the Tax Indemnity
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. Lessee hereby generally consents to service of process at
Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Managing Attorney, or such office of Lessee in New York City as from
time to time may be designated by Lessee in writing to the Owner Participant,
the Owner Trustee and the Indenture Trustee.
SECTION 14. CHANGE OF SITUS OF OWNER TRUST. The Owner
Participant agrees that if, at any time, the Trust Estate becomes subject to any
Taxes for which it is indemnified pursuant to Section 7(b) hereof and if, as a
consequence thereof, Lessee should request that the situs of the trust be moved
to another state in the United States from the state in which it is then
located, the situs of the trust may be moved with the written consent of the
Owner Participant (which consent shall not be unreasonably withheld) and the
Owner Participant will take whatever action may be reasonably necessary to
accomplish such removal; PROVIDED that (A) Lessee shall provide such additional
tax indemnification as the Owner Participant and the Indenture Trustee may
reasonably request, (B) the rights and obligations under the Operative Documents
of the Owner Participant and the Indenture Trustee shall not be altered as a
result of the taking of such action, (C) the lien of the Trust Indenture on the
Trust Indenture Estate shall not be adversely affected by such action, (D) the
Owner Participant and the Indenture Trustee shall have received an opinion or
opinions of counsel (satisfactory to the Owner Participant and the Indenture
Trustee), in scope, form and substance satisfactory to the Owner Participant and
the Indenture Trustee to the effect that (I) the trust, as thus removed, shall
remain a validly established trust, (II) any amendments to the Trust Agreement
necessitated by such removal shall have been duly authorized, executed and
delivered by the parties thereto and shall constitute the valid and binding
obligations of such parties, enforceable in accordance with their terms, (III)
such
-38-
removal will not result in the imposition of, or increase in the amount of, any
Tax for which Lessee is not required to indemnify the Owner Participant, the
Indenture Trustee, the Owner Trustee or the Trust Estate pursuant to Section
7(b) hereof (taking into account any additional indemnification provided by
Lessee pursuant to clause (A) of this sentence), and (IV) such removal will not
result in any loss of Interest Deductions or MACRS Deductions or an Inclusion
Event (as defined in the Tax Indemnity Agreement) with respect to which Lessee
is not required to indemnify the Owner Participant pursuant to Section 4 of the
Tax Indemnity Agreement (taking into account any additional indemnification
provided by Lessee pursuant to clause (A) of this sentence), (E) if such removal
involves the replacement of the Owner Trustee, the Indenture Trustee and the
Owner Participant shall have received an opinion of counsel to such successor
Owner Trustee in form and substance reasonably satisfactory to the Indenture
Trustee and to the Owner Participant covering the matters described in the
opinion delivered pursuant to Section 4(a)(xiii) hereof and such other matters
as the Indenture Trustee and the Owner Participant may reasonably request, and
(F) Lessee shall indemnify and hold harmless the Owner Participant and the
Indenture Trustee on a net after-tax basis against any and all reasonable and
actual costs and expenses including reasonable counsel fees and disbursements,
registration fees, recording or filing fees and taxes incurred by the Owner
Trustee, the Owner Participant and the Indenture Trustee in connection with such
change of situs.
SECTION 15. MISCELLANEOUS. (a) The Owner Participant covenants
and agrees that it shall not unreasonably withhold its consent to any consent
requested of the Owner Trustee, as Lessor, under the terms of the Lease which by
its terms is not to be unreasonably withheld by the Owner Trustee, as Lessor.
(b) The representations, warranties, indemnities and
agreements of Lessee, the Guarantor, the Owner Trustee, the Indenture Trustee,
the Subordination Agent, the Pass Through Trustee and the Owner Participant
provided for in this Agreement, and Lessee's, the Guarantor's, the Owner
Trustee's, the Indenture Trustee's, the Subordination Agent's, the Pass Through
Trustee's and the Owner Participant's obligations under any and all thereof,
shall survive the making available of the respective Commitments by the Pass
Through Trustee and the Owner Participant, the delivery or return of the
Aircraft, the transfer of any interest of the Owner Participant in the Trust
Estate or the Aircraft or any Engine or the transfer of any interest by any Loan
Participant in any Secured Certificate or the Trust Indenture Estate 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
and the Owner Trustee. The terms of this Agreement shall be binding upon, and
inure to the benefit of, Lessee and, subject to the terms of this Agreement, its
successors and permitted assigns, the Guarantor, the Pass Through Trustee and
its successors as Pass Through Trustee (and any additional trustee appointed)
under any of the Pass Through Trust Agreements, the Owner Participant and,
subject to the terms of this
-39-
Agreement, its successors and permitted assigns, each Certificate Holder and its
successors and registered assigns, the Indenture Trustee and its successors as
Indenture Trustee under the Trust Indenture and the Owner Trustee and its
successors as Owner Trustee under the Trust Agreement. The terms of this
Agreement shall inure to the benefit of the Liquidity Provider, its successors
and permitted assigns. THIS AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL
MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE. THIS AGREEMENT IS BEING
DELIVERED IN THE STATE OF NEW YORK.
(d) The parties hereto agree that all of the statements,
representations, covenants and agreements made by the Owner Trustee (when made
in such capacity) contained in this Agreement and any agreement referred to
herein other than the Trust Agreement, unless expressly otherwise stated, are
made and intended only for the purpose of binding the Trust Estate and
establishing the existence of rights and remedies which can be exercised and
enforced against the Trust Estate. Therefore, anything contained in this
Agreement or such other agreements to the contrary notwithstanding (except for
any express provisions that the Owner Trustee is responsible for in its
individual capacity), no recourse shall be had with respect to this Agreement or
such other agreements against the Owner Trustee in its individual capacity or
against any institution or person which becomes a successor trustee or
co-trustee or any officer, director, trustee, servant or direct or indirect
parent or controlling person or persons of any of them; PROVIDED, HOWEVER, that
this Section 15(d) shall not be construed to prohibit any action or proceeding
against any party hereto for its own willful misconduct or grossly negligent
conduct for which it would otherwise be liable; and PROVIDED, FURTHER, that
nothing contained in this Section 15(d) shall be construed to limit the exercise
and enforcement in accordance with the terms of this Agreement or such other
agreements of rights and remedies against the Trust Estate. The foregoing
provisions of this Section 15(d) shall survive the termination of this Agreement
and the other Operative Documents.
(e) It is the intention of the parties hereto that the
Owner Trustee, as Lessor under the Lease, and the Indenture Trustee, as assignee
of such Owner Trustee's rights under the Lease pursuant to the Trust Indenture,
will be entitled to the benefits of 11 U.S.C. ss. 1110 in the event of any
reorganization of Lessee under Chapter 11 of the Bankruptcy Code.
SECTION 16. EXPENSES. (a) Invoices and Payment. Each of the
parties hereto shall promptly submit to the Owner Trustee and Lessee for their
prompt approval (which shall not be unreasonably withheld) copies of invoices in
reasonable detail of the Transaction Expenses for which it is responsible for
providing information as they are received (but in no event later than
[________________]). The Owner Participant agrees to transfer to the Owner
Trustee promptly but in any event no later than [______________] such amount as
shall be necessary in order to enable the Owner Trustee to pay Transaction
Expenses. To the extent of funds received by it, the Owner Trustee agrees to pay
all invoices of Transaction Expenses that have been approved by it and Lessee
promptly upon receipt thereof. Notwithstanding the foregoing, to the extent that
Transaction Expenses exceed [___]% of Lessor's Cost, Lessee at its sole option
shall have the right to pay directly any or all Transaction Expenses which are
in excess of [____]% of Lessor's Cost.
-40-
(b) PAYMENT OF OTHER EXPENSES. In the event that the
transaction contemplated by this Participation Agreement fails to close as a
result of the Owner Participant's failure to negotiate in good faith or to
comply with the terms and conditions upon which its participation in the
transaction was predicated, the Owner Participant will be responsible for all of
its fees and expenses, including but not limited to the fees, expenses and
disbursements of its special counsel.
SECTION 17. REFINANCINGS.
(a) So long as no Event of Default shall have occurred
and be continuing, Lessee shall have the right to refinance all (but not less
than all) of the Secured Certificates no more than three times by giving written
notice to the Owner Participant and the Owner Trustee that there be effected a
voluntary redemption of the Secured Certificates by the Owner Trustee, whereupon
the Owner Participant agrees to negotiate promptly in good faith to conclude an
agreement with Lessee as to the terms of such refinancing operation (including
the terms of any debt to be issued in connection with such refinancing);
PROVIDED that no such refinancing shall require an increase in the amount of the
Owner Participant's investment in the beneficial ownership of the Aircraft.
Upon such agreement:
(1) within ten Business Days after the reaching of such
agreement, the Owner Participant will deliver to Lessee a certificate of an
authorized representative of the Owner Participant (the "REFINANCING
CERTIFICATE") setting forth (i) the proposed date on which the outstanding
Secured Certificates will be redeemed, any new debt will be issued and the other
aspects of such refinancing will be consummated (such date, the "REFINANCING
DATE") and (ii) the following information calculated pursuant to the provisions
of paragraph (6) of this Section 17(a): (A) subject to the limitations set forth
in this Section 17, the proposed adjusted debt/equity ratio, (B) the principal
amount of debt to be issued by the Owner Trustee on the Refinancing Date, (C)
the amount, if any, by which the Owner Participant's aggregate investment in the
beneficial interest in the Aircraft is to be decreased and (D) the proposed
revised schedules of Basic Rent percentages, debt amortization, Special Purchase
Price, [Initial Installment, Remaining Installments,] Stipulated Loss Value
percentages and Termination Value percentages. The Refinancing Certificate shall
not provide for a debt/equity ratio of more than 4:1. Within fourteen days of
its receipt of the Refinancing Certificate, Lessee may demand a verification
pursuant to EXHIBIT E to the Lease of the information set forth in the
Refinancing Certificate. Upon the acceptance by Lessee of the accuracy of the
information set forth in the Refinancing Certificate (or the determination
pursuant to such verification procedures), as to the debt/equity ratio, the
principal amount of debt to be issued by the Owner Trustee on the Refinancing
Date and the revised Basic Rent percentages, debt amortization, Special Purchase
Price, [Initial Installment, Remaining Installments,] Stipulated Loss Value
percentages and Termination Value percentages (such information, whether as set
forth or as so determined, the "REFINANCING INFORMATION") the appropriate
parties will take the actions specified in paragraphs (2) through (5) below;
(2) the appropriate parties will enter into appropriate
documentation (which may involve an underwriting agreement in connection with
such sale) with the institution or
-41-
institutions to be named therein providing for (i) the issuance and sale by the
Owner Trustee to such institution or institutions on the Refinancing Date of
debt securities in an aggregate principal amount specified in the Refinancing
Information which amount shall be equal to the aggregate principal amount of all
Secured Certificates outstanding on the Refinancing Date (such debt securities,
the "NEW DEBT") except that the principal amount of New Debt may exceed the
principal amount of all outstanding Secured Certificates in connection with the
first refinancing under this Section 17, (ii) the application of the proceeds of
the sale of the New Debt to the redemption of all such Secured Certificates on
the Refinancing Date and (iii) the payment of the excess, if any, of such
proceeds over the amounts necessary to effect such redemption to the Owner
Trustee;
(3) Lessee shall give the notice to the Indenture Trustee
pursuant to Section 2.11 of the Trust Indenture, and Lessee and the Owner
Trustee will amend the Lease to provide that (i) Basic Rent payable in respect
of the period from and after the Refinancing Date shall be as provided in the
Refinancing Information and (ii) amounts payable in respect of the Special
Purchase Price, [Initial Installment, Remaining Installments,] Stipulated Loss
Value and Termination Value from and after the Refinancing Date shall be as
provided in the Refinancing Information;
(4) the Owner Trustee will enter into an agreement to
provide for the securing thereunder of the New Debt in like manner as the
Secured Certificates and will enter into such amendments and supplements to the
Trust Indenture (or such new indenture or other security agreement) as may be
necessary to effect such refinancing;
(5) the Owner Participant shall pay all of the expenses
(other than those of Lessee) of such refinancing (including, but not limited to,
the fees, expenses and disbursements of counsel and any placement or
underwriting fees) and such expenses shall be treated as Transaction Expenses;
and
(6) when calculating any of the information required to
be set forth in a Refinancing Certificate, the Owner Participant shall make such
calculations in a manner which (A) maintains the Owner Participant's Net
Economic Return (except to the extent the assumptions referred to in the
definition of "Net Economic Return" have been altered since the Delivery Date in
connection with an adjustment to Rents pursuant to Section 3(d) of the Lease or
such assumptions are the subject of the recalculations being conducted by the
Owner Participant), and (B) minimizes the Net Present Value of Rents to Lessee
to the extent possible consistent with clause (A).
(b) The Secured Certificates shall not be subject to
voluntary redemption by the Owner Trustee without the consent of Lessee except
as set forth in Section 2.14 of the Trust Indenture.
-42-
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.,
LESSEE
By:
---------------------------------------------------
Name:
Title:
Address: U.S. MAIL
----------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇)
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
OVERNIGHT COURIER
-----------------
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ (A4010)
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Treasurer
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
NORTHWEST AIRLINES CORPORATION,
GUARANTOR
By:
---------------------------------------------------
Name:
Title:
Address: U.S. MAIL
----------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇)
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
OVERNIGHT COURIER
-----------------
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ (A4010)
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Treasurer
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
- Signature Page -
[--------------------------],
OWNER PARTICIPANT
By:
----------------------------------------------------
Name:
Title:
Address:
Attn:
Telecopy No.:
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.: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇ FARGO BANK NORTHWEST,
NATIONAL ASSOCIATION, not in
its individual capacity,
except as expressly provided
herein, but solely as Owner
Trustee,
OWNER TRUSTEE
By:
---------------------------------------------------
Name:
Title:
Address: MAC: U1254-031
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: Corporate Trust Department
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
- Signature Page -
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.: (▇▇▇) ▇▇▇-▇▇▇▇
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
-------------------
Lessee: Northwest Airlines, Inc.
U.S. MAIL
----------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇)
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
OVERNIGHT COURIER
-----------------
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ (A4010)
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Treasurer
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
WIRE TRANSFER
USBank, Minneapolis
ABA No. ▇▇▇▇▇▇▇▇▇
Acct. No. 150250099440
Owner Participant: [__________________________]
Attn: __________________________________
Telecopy No.:___________________________
with a copy to:
[Address]
Attn: __________________________________
Telecopy No.: __________________________
Payments made to the Owner Participant
as provided in Section 3.06 of the Trust
Indenture shall be made to:
[Bank]
[Address]
ABA No. ________________________________
Account No. ____________________________
Account Name: __________________________
Reference: _____________________________
SCHEDULE I - PAGE 1
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 [____ _]
Owner Trustee: ▇▇▇▇▇ Fargo Bank Northwest, National
Association
MAC: U1254-031
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
Attn: Corporate Trust Department
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Payments made to the Owner Trustee as
provided in Section 3(f) of the Lease
shall be made to:
▇▇▇▇▇ Fargo Bank Northwest, National
Association
ABA No. ▇▇▇-▇▇▇▇-▇▇
Acct. No. 051-0922115
Attn: Corporate Trust Department
Credit: Northwest/NW [____ _]
Loan Participant: State Street Bank and Trust Company of
Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Square
Hartford, CT 06103
Attn: Corporate/Muni Department
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
SCHEDULE I - PAGE 2
Subordination Agent: State Street Bank and Trust Company
U.S. MAIL
---------
Corporate Trust Department
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
OVERNIGHT COURIER
Corporate Trust Department
▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
SCHEDULE I - PAGE 3
SCHEDULE II
COMMITMENTS
INTEREST RATE PERCENTAGE OF
PURCHASERS AND MATURITY PURCHASE PRICE LESSOR'S COST
---------- ------------- -------------- -------------
Northwest Airlines
Pass Through Trust
20011A-1 7.041% Series A-1 Secured $[___________] [___________]%
Certificates due [___________]
20011A-2 6.841% Series A-2 Secured $[___________] [___________]%
Certificates due April 1, 2011
20011B 7.691% Series B Secured $[___________] [___________]%
Certificates due [___________]
2001-1C 7.626% Series C Secured $[___________] [___________]%
Certificates due [___________]
[2001-1D [____]% Series D Secured $[___________] [___________]%-- option
Certificates due [___________] for A319's and 757's]
OWNER PARTICIPANT EQUITY INVESTMENT
---------------- -----------------
[___________] $[___________] [___________]%
Total Commitments $[___________] 100%
SCHEDULE II - PAGE 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. 2001-1A-1, dated as of June 1, 2001 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. 2001-1A-2, dated as of June 1, 2001 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. 2001-1B, dated as of June 1, 2001 among
Northwest Airlines, Inc., Northwest Airlines Corporation and State
Street Bank and Trust Company of Connecticut, National Association.
4. 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. 2001-1C, dated as of June 1, 2001 among
Northwest Airlines, Inc., Northwest Airlines Corporation and State
Street Bank and Trust Company of Connecticut, National Association.
[(5.) 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. 2001-1D, dated as of [________ __, 2001] among
Northwest Airlines, Inc., Northwest Airlines Corporation and State
Street Bank and Trust Company of Connecticut, National Association.--
option for A319's and 757's]
SCHEDULE III - PAGE 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 A - PAGE 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,
Lessee 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, Lessee 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 any of the property held
in the Trust Estate or the Trust Indenture Estate, (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 (or the
refinancing thereof) 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;
EXHIBIT K - PAGE 1
(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 (with respect to the Owner Trustee,
the Owner Participant and the Trust Estate) to the extent that
such Tax Indemnitee would be subject to such Income Tax if the
sole connection between such Tax Indemnitee and the Taxing
Authority had been the location and operation of the Aircraft
or the activities of Lessee or any sublessee within such
Taxing Authority;
(3) to any capital gains taxes, excess profits taxes,
value added taxes, branch profits 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,
the revocation of the trust created by the Trust Agreement or
a transfer or disposition of all or any portion of its
respective equitable or legal ownership interest in the
Aircraft, the Trust Estate, a Secured Certificate (including
sales of participations therein), the Trust Indenture Estate
(as defined in the Trust Indenture) or any Operative Document,
the Intercreditor Agreement, any of the Liquidity Facilities,
or any Pass Through Trust Agreement or any interest in such
Tax Indemnitee, unless such transfer or disposition shall
occur (A) pursuant to the exercise of remedies pursuant to
Section 15 of the Lease or (B) in connection with the
termination of the Lease pursuant to Sections 9, 10 or 19
thereof;
(5) to any Tax based on or measured by any fees
received by the Owner Trustee, any Pass Through Trustee, the
Indenture Trustee or the Subordination Agent in connection
with any transaction contemplated by the Operative Documents,
the Intercreditor Agreement, any of the Liquidity Facilities
or any Pass Through Trust Agreement;
(6) to any Tax imposed with respect to events
occurring or matters arising after the earlier of (x) the
expiration of the Term or the earlier termination of the Lease
pursuant to Section 9 or 19 thereof, (y) the return of
possession of the Aircraft to the Owner Trustee or its
designee pursuant to the terms of the Lease or (z) the
commencement of storage pursuant to Section 5(d) of the Lease
PROVIDED that this exclusion shall not apply to Taxes to the
extent such Taxes are imposed on or with respect to any events
or matters occurring or arising prior to such expiration,
termination, return of possession of the Aircraft or storage;
(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, the Owner Trust 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
EXHIBIT K - PAGE 2
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 on
(A) the Owner Trustee, the Trust Estate or the Owner
Participant but for, a Lessor Lien (including, for this
purpose, Liens which would be a Lessor Lien but for the
proviso in the definition of Lessor Liens), (B) the Indenture
Trustee but for an Indenture Trustee's Lien or (C) a Pass
Through Trustee or the Subordination Agent, but for a Loan
Participant Lien, in each case with respect to the Tax
Indemnitee to whom such Lien is attributable;
(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 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,
the Intercreditor Agreement, any of the Liquidity Facilities
or any Pass Through Trust Agreement;
(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 Lessee 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 any 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
EXHIBIT K - PAGE 3
purchase a Secured Certificate, make an equity investment or
otherwise acquire any interest in the Trust Estate or any
Secured Certificate;
(15) to any Tax that would not have been imposed but
for an amendment to any Operative Document to which Lessee is
not a party, the Intercreditor Agreement, any of the Liquidity
Facilities or any Pass Through Trust Agreement, which
amendment was not required or consented to by Lessee in
writing; or
(16) to any penalties imposed on a Tax Indemnitee
other than the Owner Trustee attributable to the failure of
such Tax Indemnitee or any Affiliate thereof to comply with
any requirement imposed on it under Sections 6011, 6111 or
6112 of the Code or the regulations (including temporary
regulations) promulgated thereunder.
(iii) CALCULATION OF GENERAL TAX INDEMNITY PAYMENTS. Any
payment which Lessee 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 Lessee 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 Lessee 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 Lessee an
amount equal to the sum of (I) the actual reduction in Taxes, if any,
realized by such Tax Indemnitee which is attributable to such 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 Lessee, and all
available foreign taxes indemnified under any other
transaction (except any described in Clause Third), on a pari
passu basis; and
EXHIBIT K - PAGE 4
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 Lessee 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 Lessee 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 Lessee'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 Lessee 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 Lessee
under this Section 7(b).
(iv) GENERAL TAX INDEMNITY--CONTESTS. At Lessee's request
Lessee 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
("LESSEE CONTROLLED CONTEST"). Unless otherwise required by law, any
such contest shall be conducted by and in the name of Lessee. If a
written claim shall be made against and received by any Tax Indemnitee
for any Tax for which Lessee is obligated pursuant to this Section
7(b), such Tax Indemnitee shall notify Lessee promptly of such claim
(it being understood and agreed that failure to provide such notice
shall not adversely affect 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 Lessee Controlled Contest,
upon request from Lessee within thirty (30) days after receipt of such
notice, such Tax Indemnitee shall in good faith at Lessee's sole cost
and expense contest the imposition of such Tax (a "TAX INDEMNITEE
CONTROLLED CONTEST"). After consulting with Lessee and Lessee'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 Lessee's and Lessee'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) Lessee may withhold payment of any Tax to the extent
provided by
EXHIBIT K - PAGE 5
applicable law. In no event shall such Tax Indemnitee be required, or
Lessee be permitted, to contest the imposition of any Tax for which
Lessee is obligated pursuant to this Section 7(b) unless (W) no Event
of Default shall have occurred and be continuing (unless Lessee shall
have provided security reasonably satisfactory to such Tax Indemnitee
securing Lessee's performance of its obligations under this Section
7(b)), (X) Lessee 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
Lessee 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, Lessee 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
Lessee, 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 Lessee 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 Lessee, such Tax Indemnitee shall pay Lessee an
amount equal to the amount of such refund, including interest received
attributable thereto, plus any net tax benefit (or minus any net tax
detriment) realized by such Tax Indemnitee as a result of any refund
received and payment by such Tax Indemnitee made pursuant to this
sentence.
Nothing contained in this Section 7(b)(iv) shall require any
Tax Indemnitee to contest, or permit Lessee 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
Lessee of any amount that might otherwise be payable by Lessee 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), Lessee shall timely
file the same at its sole expense (except for any such report, return
or statement which the Tax Indemnitee has notified Lessee that the Tax
Indemnitee intends to file or which the Tax Indemnitee is required by
law to file in its own name). Lessee shall have no obligation under the
preceding sentence if such Tax
EXHIBIT K - PAGE 6
Indemnitee, after receipt of Lessee's written request, shall have
failed to furnish Lessee with such information in a timely fashion as
is in such Tax Indemnitee's control and is not otherwise reasonably
available to Lessee and is necessary to file such returns. Lessee shall
either file such report, return or statement so as to show the
ownership of the Aircraft in the Owner Trustee and send a copy of such
report, return or statement to the Tax Indemnitee and Owner Trustee or,
where Lessee is not so permitted to file such report, return or
statement, it shall notify the Tax Indemnitee of such requirement and
prepare and deliver such report, return or statement to the Tax
Indemnitee in a manner satisfactory to such Tax Indemnitee within a
reasonable time prior to the time such report, return or statement is
to be filed. Lessee shall provide to the Owner Participant upon request
(or shall cause to be provided to the Owner Participant upon request)
such information maintained in the regular course of Lessee's business
and shall make available for inspection and copying by the Owner
Participant, at Lessee's expense, such records as Lessee retains in the
regular course of its business, or is required under applicable law to
retain, as shall be reasonably necessary for the Owner Participant to
prepare or support any required Federal, state, local or foreign tax
returns or other filings, or to comply with audit or litigation
requirements. The Owner Participant shall provide to Lessee upon
request (or shall cause to be provided to Lessee on request) such
information related to the Overall Transaction maintained in the
regular course of the Owner Participant's business, and shall make
available (or shall cause to be made available) for inspection and
copying by Lessee, at the Owner Participant's expense, such records
related to the Overall Transaction as the Owner Participant or the
Owner Trustee retain in the regular course of their business or are
required by law to retain, as shall be necessary for Lessee to prepare
or support any required Federal, state, local or foreign returns or
other filings or to comply with audit or litigation requirements.
(vi) VERIFICATION. At Lessee's written request after Lessee
receives a Tax Indemnitee's computations showing the amount of any
indemnity payable by Lessee to such Tax Indemnitee pursuant to this
Section 7(b) or any amount payable by any Tax Indemnitee to Lessee
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 Lessee and reasonably
acceptable to such Tax Indemnitee. The accounting firm shall complete
its review within thirty (30) days of Lessee's receipt of such Tax
Indemnitee's computations. The computations of such accounting firm
shall (i) be delivered simultaneously to Lessee and such Tax Indemnitee
and (ii) absent manifest error, be final, binding and conclusive upon
Lessee and such Tax Indemnitee. If Lessee 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 Lessee 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
EXHIBIT K - PAGE 7
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, Lessee shall pay any Tax for which it is
liable pursuant to this Section 7(b) directly to the appropriate taxing
authority if legally permissible or upon demand of a Tax Indemnitee
shall pay such Tax and any other amounts due hereunder to such Tax
Indemnitee within fifteen (15) Business Days of such demand, but in no
event shall any such payments be required to be made by Lessee 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 Lessee
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 Lessee of any Tax indemnified against
hereunder, Lessee shall furnish the appropriate Tax Indemnitee the
original or a certified copy of a receipt for Lessee'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 Lessee pursuant to the terms of this
Section 7(b) shall not be paid to or retained by Lessee if at the time
of such payment or retention an Event of Default shall have occurred
and be continuing under the Lease. At such time as there shall not be
continuing any such Event of Default, such amount shall be paid to
Lessee to the extent not previously applied against Lessee's
obligations hereunder as and when due after the Owner Trustee shall
have declared the Lease in default pursuant to Section 15 thereof.
(ix) REIMBURSEMENTS BY TAX INDEMNITEES GENERALLY. If, for any
reason, Lessee 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 Lessee 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 Lessee an amount which equals
the amount paid by Lessee 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 Lessee.
(x) FORMS, ETC. Each Tax Indemnitee agrees to furnish to
Lessee from time to time such duly executed and properly completed
forms that 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
EXHIBIT K - PAGE 8
made by Lessee pursuant to the Operative Documents, which reduction or
exemption may be available to such Tax Indemnitee.
(xi) NON-PARTIES. If a Tax Indemnitee is not a party to this
Agreement, Lessee may require the Tax Indemnitee to agree to the terms
of this Section 7(b) prior to making any payment to such Tax Indemnitee
under this Section 7(b).
EXHIBIT K - PAGE 9
EXHIBIT L
TO PARTICIPATION
AGREEMENT
[NW ____ _]
SECTION 7(C) - GENERAL INDEMNITY
(c)______GENERAL INDEMNITY. Lessee 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 (including reasonable legal fees and expenses
and Transaction Expenses to the extent not required to be paid by the Owner
Trustee or the Owner Participant pursuant to Section 16 hereof but excluding
internal costs and expenses such as salaries and overhead), 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 sublease or sub-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, (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) or (E) the
offer or sale of any interest in the Trust Estate or the Trust Agreement or any
similar interest with respect to the Aircraft on or prior to the Delivery Date;
PROVIDED that the foregoing indemnity as to any Indemnitee shall not extend to
any Expense resulting from or arising out of or which would not have occurred
but for one or more of the following: (A) any representation or warranty by such
Indemnitee (or any member of the Related Indemnitee Group) in the Operative
Documents, the Intercreditor Agreement, the Liquidity Facilities or any Pass
Through Trust Agreement or in connection therewith being incorrect in any
material respect, or (B) the failure by such Indemnitee (or any member of the
Related Indemnitee Group) to perform or observe any agreement, covenant or
condition in any of the Operative Documents, the Intercreditor Agreement, the
Liquidity Facilities or any Pass Through Trust Agreement applicable to it
including, without limitation, the creation or existence of a Lessor Lien
(including for this purpose Liens which would be Lessor Liens but for the
proviso in the definition of Lessor Liens), a Loan Participant Lien or an
Indenture Trustee's Lien (except to the extent such failure was caused directly
by the failure of Lessee to perform any obligation under a Lessee 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
EXHIBIT L - PAGE 1
Indemnitee (or any member of the Related Indemnitee Group) solely by reason
of its interest in the Aircraft), or (D) with respect to the Owner Trustee, a
disposition (voluntary or involuntary) by the Owner Trustee of all or any part
of its interest in the Airframe or any Engine (other than as contemplated by the
Lease or the Trust Indenture) or with respect to any Indemnitee, 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 Lease, or (E) any Tax whether or not Lessee is
required to indemnify for such Tax pursuant to Section 7(b) hereof (it being
understood that Section 7(b) hereof and the Tax Indemnity Agreement provide for
Lessee's liability with respect to Taxes), or (F) in the case of an Indemnitee
which is the Owner Participant or the Owner Trustee (in its individual or trust
capacity) (other than in connection with an Event of Default) or, in connection
with an exercise of remedies under the Trust Indenture upon a default thereunder
(other than a default under Section 4.02(a) of the Trust Indenture), the
Indenture Trustee or a Loan Participant, the offer or sale of any interest in
the Trust Estate or the Trust Agreement or any similar interest, or (G) in the
case of an Indemnitee which is the Owner Participant or the Owner Trustee (in
its individual or trust capacity) and the affiliates, successors and assigns
thereof, a failure on the part of the Owner Trustee to use ordinary care to
distribute in accordance with the Trust Agreement any amounts received and
distributable by it thereunder, and 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 (H) the authorization or giving or withholding of any future
amendments, supplements, waivers or consents with respect to any of the
Operative Documents, the Intercreditor Agreement, any of the Liquidity
Facilities or any Pass Through Trust Agreement other than such as have been
consented to, approved, authorized or requested by Lessee, or (I) subject to the
next succeeding paragraph, any loss of tax benefits or increase in tax liability
under any tax law whether or not Lessee is required to indemnify therefor
pursuant to this Agreement or the Tax Indemnity Agreement, or (J) except to the
extent fairly attributable to acts, omissions or events occurring prior thereto,
acts or events which occur with respect to the Airframe, any Engine or any Part
after the earliest of: (I) the return of possession of the Airframe or such
Engine or Part to the Owner Trustee or its designee pursuant to the terms of the
Lease, (II) the termination of the Lease in accordance with Section 9 or Section
19 thereof or (III) the commencement of storage pursuant to Section 5(d) of the
Lease, or (K) 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 (L) 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
Lease and the payment of all other payments required to be paid by Lessee under
the Operative Documents.
Lessee 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
EXHIBIT L - PAGE 2
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 Lessee 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 Lessee, but only
if Lessee 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.
Nothing in this Section 7(c) shall be construed as a guaranty
by Lessee of payments due pursuant to the Secured Certificates or of the
residual value of the Aircraft.
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 Lessee; PROVIDED that
the failure to provide such notice shall not release Lessee from any of its
obligations to indemnify hereunder, and no payment by Lessee to an Indemnitee
pursuant to this Section 7(c) shall be deemed to constitute a waiver or release
of any right or remedy which Lessee may have against such Indemnitee for any
actual damages as a result of the failure by such Indemnitee to give Lessee such
notice. Lessee shall be entitled, at its sole cost and expense, acting through
counsel acceptable to the respective Indemnitee, (A) so long as Lessee has
agreed in a writing acceptable to such Indemnitee that Lessee 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 Lessee has
agreed in a writing acceptable to such Indemnitee that Lessee 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, Lessee 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 Trust Indenture Estate or the Trust Estate 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
EXHIBIT L - PAGE 3
its own counsel in any judicial proceeding controlled by Lessee pursuant to the
preceding provisions.
The affected Indemnitee shall supply Lessee with such
information reasonably requested by Lessee as is necessary or advisable for
Lessee 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
Lessee, 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).
Lessee 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 Lessee or the insurers under a policy of insurance
maintained by Lessee (or any Sublessee) 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 Lessee 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 Lessee hereunder
which is covered by a policy of insurance maintained by Lessee (or any
Sublessee) pursuant to Section 11 of the Lease or otherwise, it shall be a
condition of such indemnity with respect to any particular Indemnitee that such
Indemnitee shall cooperate with the insurers in the exercise of their rights to
investigate, defend or compromise such Expense as may be required to retain the
benefits of such insurance with respect to such Expense. Notwithstanding any of
the foregoing to the contrary, with respect to any Expense which is covered
under policies of insurance maintained by Lessee (or any Sublessee) pursuant to
Section 11 of the Lease 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,
Lessee 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 or
7.01 of the Trust Indenture or Section 5.03 or 7.01 of the Trust Agreement. Such
Indemnitee agrees to give such further assurances or agreements and to cooperate
with Lessee or the insurers to permit Lessee or the insurers to pursue such
claims, if any, to the extent reasonably requested by Lessee or the insurers.
In the event that Lessee 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 Lessee an amount equal to the amount of such
reimbursement (but in no event more than such payment from Lessee) 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
EXHIBIT L - PAGE 4
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
Lessee if Lessee has not paid such Indemnitee all amounts required pursuant to
this Section 7(c) and any other amounts then due to such Indemnitee from Lessee
under any of the Operative Documents.
Lessee'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 Lessee pursuant to any provision of this Agreement may
proceed directly against Lessee without first seeking to enforce any other right
of indemnification.
Lessee agrees to pay the reasonable fees and expenses of the
Indenture Trustee and the Owner Trustee for acting as such, other than such fees
and expenses which constitute Transaction Expenses.
EXHIBIT L - PAGE 5
Exhibit B-1 to Participation Agreement
--------------------------------------
[Form of Opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
special counsel for the Lessee 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)
$201,112,000 aggregate principal amount of 7.041% Pass Through Trust
Certificates, Series 2001-1A-1 (the "Class A-1 Certificates"); (ii) $156,613,000
aggregate principal amount of 6.841% Pass Through Trust Certificates, Series
2001-1A-2 (the "Class A-2 Certificates"); (iii) $116,500,000 aggregate principal
amount of 7.691% Pass Through Trust Certificates, Series 2001-1B (the "Class B
Certificates") and (iv) $106,820,000 aggregate principal amount of 7.626% Pass
Through Trust Certificates, Series 2001-1C (the "Class C Certificates") pursuant
to the Underwriting Agreement, dated as of May 22, 2001 (the "Underwriting
Agreement"), by and among ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc., ▇.▇. ▇▇▇▇▇▇ Securities
Inc., Credit Suisse First Boston Corporation, Deutsche Banc Alex. ▇▇▇▇▇ Inc.,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated and U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc., as
underwriters, the Company and NWA Corp. [and the issuance and sale of
$[__________] aggregate principal amount of [___]% Pass Through Certificates,
Series 20011D (the "Class D Certificates") pursuant to a private placement --
option for A319's and 757's] (the Class A1 Certificates, the Class A2
Certificates, the Class B Certificates [and] the Class C Certificates [and the
Class D Certificates -- option for A319's and 757's], the "Certificates").
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. 2001-1A-1, dated as of June 1,
2001 to the Basic Agreement, by and among NWA Corp., the Company and
the Trustee (the Basic Agreement as so supplemented, the "2001-1A-1
Pass Through Trust Agreement"); the Trust Supplement No. 2001-1A-2,
dated as of June 1, 2001 to the Basic Agreement, by and among NWA
Corp., the Company and the Trustee (the Basic Agreement as so
The Persons Listed on Annex A hereto -2- [_________ __,____]
supplemented, the "2001-1A-2 Pass Through Trust Agreement"); the Trust
Supplement No. 2001-1B, dated as of June 1, 2001 to the Basic
Agreement, by and among NWA Corp., the Company and the Trustee (the
Basic Agreement as so supplemented, the "2001-1B Pass Through Trust
Agreement"); [and] the Trust Supplement No. 2001-1C, dated as of June
1, 2001, to the Basic Agreement, by and among NWA Corp., the Company
and the Trustee (the Basic Agreement as so supplemented, the "2001-1C
Pass Through Trust Agreement")[; and the Trust Supplement No. 2001-1D,
dated as of [__________, ____], to the Basic Agreement, by and among
NWA Corp., the Company and the Trustee (the Basic Agreement as so
supplemented, the "2001-1D Pass Through Trust Agreement") -- option for
A319's and 757's] (the 2001-1A-1 Pass Through Trust Agreement, the
2001-1A-2 Pass Through Trust Agreement, the 2001-1B Pass Through Trust
Agreement [and] the 20011C Pass Through Trust Agreement [and the 2001D
Pass Through Trust Agreement -- option for A319's and 757's], the "Pass
Through Trust Agreements"; the Pass Through Trust Agreement related to
a Certificate being referred to as the "Applicable Pass Through Trust
Agreement");
(iii) the Intercreditor Agreement dated as of June 1, 2001
(the "Intercreditor Agreement"), by and among the Trustee, Landesbank
Hessen-Thuringen Girozentrale (the "Liquidity Provider") and State
Street Bank and Trust Company, not in its individual capacity, except
as set forth therein, but solely as subordination agent (the
"Subordination Agent");
(iv) the Revolving Credit Agreement, Class A1 Certificates,
the Revolving Credit Agreement, Class A2 Certificates, the Revolving
Credit Agreement, Class B Certificates and the Revolving Credit
Agreement, Class C Certificates (collectively, the "Liquidity
Facilities"), each dated as of June 1, 2001, by and between the
Subordination Agent and the Liquidity Provider; and
(v) the Indemnity Agreement, dated as of June 1, 2001, 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.
The Persons Listed on Annex A hereto -3- [_________ __,____]
In addition, for purposes of this opinion we have assumed the
following:
(i) 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;
(ii) each of the Company and the Trustee has duly authorized,
executed and delivered each Pass Through Document to which it is a party;
(iii) 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;
(iv) 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
(v) 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
The Persons Listed on Annex A hereto -4- [_________ __,____]
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:
(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,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
ANNEX A
[_______________], as Owner Participant
▇▇▇▇▇ Fargo Bank Northwest, National Association, as Owner Trustee
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 Services
▇▇▇▇▇'▇ Investors Service, Inc.
EXHIBIT B-2 TO PARTICIPATION AGREEMENT
--------------------------------------
[Form of Opinion of Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇,
Special Counsel for the Lessee and the Guarantor]
[Date]
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO
Re: Northwest Airlines, Inc. [NW ____ __]
OPINION OF SPECIAL COUNSEL TO LESSEE AND GUARANTOR
---------------------------------------------------
Gentlemen:
We have acted as special counsel for Northwest Airlines, Inc.,
a Minnesota corporation ("LESSEE") 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 Lessee, Guarantor,
▇▇▇▇▇ Fargo Bank Northwest, National Association, as Owner Trustee under the
Trust Agreement referred to therein, 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, the Owner Participant named
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 Lessee 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 Lessee 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 Lessee, Guarantor and the other parties to
the Operative Documents, and of public officials. Except as expressly set forth
herein,
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -2- [_________ __,____]
we have not undertaken any independent investigation (including, without
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
Lessee, 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 Lease;
C. the Lease Supplement covering the Aircraft;
D. the Trust Agreement;
E. the Trust Supplement;
F. the Trust Indenture;
G. the Secured Certificates;
H. the Tax Indemnity Agreement;
I. the Purchase Agreement Assignment;
J. the ▇▇▇▇ of Sale;
K. the FAA ▇▇▇▇ of Sale; and
L. the Guarantee.
Items A to L 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 Lessee 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
the opinion that:
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -3- [_________ __,____]
1. The execution and delivery by Lessee of the Participation
Agreement, the Lease, the Lease Supplement covering the Aircraft, the ▇▇▇▇ of
Sale, the FAA ▇▇▇▇ of Sale, the Tax Indemnity Agreement and the Purchase
Agreement Assignment (collectively, the "LESSEE DOCUMENTS") and the performance
by Lessee of its obligations thereunder (a) do not require any Governmental
Approval to be obtained on the part of Lessee, 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 Lessee.
2. 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.
3. Each of the Lessee Documents constitutes a legal, valid and
binding agreement of Lessee, enforceable against Lessee 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
Lease, which laws, however, do not, in our opinion, make the remedies provided
in the Lease 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, in particular, no opinion is
expressed as to the effect on such remedies of Section 1-201(37) of the Uniform
Commercial Code, as in effect in any jurisdiction, and except that the
enforcement of rights with respect to indemnification may be limited by
considerations of public policy.
4. Subject to the registration of the Aircraft with the
Federal Aviation Administration in the name of the Owner Trustee, and assuming
the due and timely filing or filing for recordation in accordance with the
provisions of the Federal Aviation Act of (A) the FAA ▇▇▇▇ of Sale, (B) the
Lease, with the Lease Supplement covering the Aircraft, the Trust Indenture and
the Trust Supplement attached thereto and made a part thereof, (C) the Trust
Indenture, with the Trust Supplement attached thereto and made a part thereof,
(D) the Trust Agreement, and (E) the termination of the Mortgage, 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 Lease under Article 9 of the Uniform Commercial Code of
Minnesota or Utah) is necessary in any applicable jurisdiction within the United
States in order (x) to establish the Owner Trustee's title to such portion of
the Aircraft as against Lessee or any third parties or (y) to create
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -4- [_________ __,____]
and perfect the Indenture Trustee's security interest in such portion of the
Aircraft as against the Owner Trustee or any third parties. With respect to such
portion of the Aircraft, if any, as may not be deemed to constitute an
"aircraft" or "aircraft engine" as defined in the Federal Aviation Act, except
for the filing of financing statements in the appropriate filing offices in the
State of Utah and the State of Minnesota (as to the filing of which we refer you
to the opinion of corporate counsel of Lessee, delivered to you on the date
hereof) and the filing of periodic continuation statements with respect to such
filings, as and when required, (x) 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 under Article 9 of the Uniform
Commercial Code in order to establish the Owner Trustee's title in such portion
of the Aircraft as against Lessee and any third parties in any applicable
jurisdiction within the United States, and (y) under the federal laws of the
United States and the laws of the State of New York, no filing or recording of
any document (including any financing statement) is necessary or advisable under
Article 9 of the Uniform Commercial Code in order to create or perfect the
Indenture Trustee's security interest in such portion of the Aircraft as against
the Owner Trustee and any third parties in any applicable jurisdiction within
the United States.
In rendering the opinions expressed herein, we have relied
exclusively, and without independent investigation, on the following opinions of
counsel (being furnished to you today) as to all matters stated in such opinions
(including the qualifications and exceptions therein): (i) the opinion of ▇▇▇▇▇
& ▇▇▇▇▇▇▇, P.C., referred to in Section 4(a)(xv) of the Participation Agreement,
and (ii) with respect to the opinions in paragraphs 4 above, the opinion of Ray,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, referred to in Section 4(a)(xiii) of the Participation
Agreement.
In addition, in rendering our opinions expressed herein, we
have assumed that except for the filings and recordations contemplated or
referred to herein, there are no filings or recordations with respect to the
Aircraft (other than the previous recordation of title in the name of Lessee
[and the Mortgage and a UCC-1 financing statement filed in the Office of the
Secretary of State of the State of Minnesota on [___________], filing number
[_________], naming Lessee as Debtor and [ _______________ ], as Secured Party
(as to which a UCC-3 termination statement is being filed on the date hereof))],
the Lease, the Lease Supplement covering the Aircraft, the Trust Agreement, the
Trust Supplement or the Trust Indenture with the Federal Aviation
Administration, or of Uniform Commercial Code financing statements naming the
Owner Trustee as a debtor in the filing offices of the Secretary of State of the
State of Utah or in any other filing office in the State of Utah or 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 and the State
of Utah 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 and the State of Utah. Except as expressly set forth in paragraph 4
above, we express no opinion as to the right, title or interest in or to the
Trust Estate or the Trust Indenture Estate 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)
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -5- [_________ __,____]
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 the Owner Trustee or any assignee of the Owner Trustee may
be located that limits rates of interest, fees or other charges that may be
charged by the Owner Trustee or such assignee; 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 Trustee, as contemplated in the Participation Agreement, 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 Trustee's, Lessee'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
[____________], as Owner Participant
State Street Bank and Trust Company of Connecticut, National Association, as
Pass Through Trustee
▇▇▇▇▇ Fargo Bank Northwest, National Association, as Owner Trustee
State Street Bank and Trust Company, as Indenture Trustee
Standard & Poor's Ratings Services
▇▇▇▇▇'▇ Investors Service, Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇.▇. ▇▇▇▇▇▇ Securities Inc.
Credit Suisse First Boston Corporation
Deutsche Banc Alex. ▇▇▇▇▇ Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc.
Landesbank Hessen-Thuringen Girozentrale
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 LESSEE AND GUARANTOR
------------------------------------------
Gentlemen:
I act as legal counsel for Northwest Airlines, Inc., a
Minnesota corporation ("LESSEE"), 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 Lessee, Guarantor,
▇▇▇▇▇ Fargo Bank Northwest, National Association, as Owner Trustee under the
Trust Agreement referred to therein, 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, the Owner Participant named
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 Lease, the Lease Supplement covering the Aircraft, the Trust
Agreement, the Trust Supplement, the Trust Indenture, the Secured Certificates,
the Tax Indemnity Agreement, the Purchase Agreement Assignment, the ▇▇▇▇ of
Sale, the FAA ▇▇▇▇ of Sale and the Guarantee. As to any facts material to my
opinions expressed herein, I have relied upon the representations and warranties
contained in the Operative Documents (including, without limitation, in Sections
7 and 8 of the Participation Agreement) and upon originals or copies (certified
or otherwise identified to my satisfaction) of such corporate records, documents
and other instruments as, in my judgment, are necessary or appropriate to enable
me to render this opinion. I have assumed, and have not independently verified,
the genuineness of all signatures, the authenticity of all documents submitted
to me as originals, the conformity with the originals of all documents submitted
to me as copies, and the accuracy of all factual statements of parties made on
or before the date hereof (and have relied thereon as I have deemed
appropriate).
To The Addressees Listed
On Page 1 Hereof
[_________ __,____]
Page 2
Based upon and subject to the foregoing, and subject further
to the assumptions, limitations and qualifications set forth below, it is my
opinion that:
1. Lessee 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 Lease, the Lease
Supplement covering the Aircraft, the ▇▇▇▇ of Sale, the FAA ▇▇▇▇ of Sale, the
Tax Indemnity Agreement and the Purchase Agreement Assignment (collectively, the
"LESSEE 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 Lessee and its subsidiaries, taken as a whole. Lessee
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 Lessee
Documents by Lessee and of the Guarantee by Guarantor have been duly authorized
by all necessary corporate action on the part of Lessee and Guarantor, as the
case may be, do not require any approval of stockholders of Lessee 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 Lessee 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
Lessee or Guarantor, as the case may be, nor the performance by Lessee 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 Lessee
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 Lessee or Guarantor, as the case may be, under, (i) Lessee'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 Lessee or Guarantor,
as the case may be, is a party or by which Lessee or Guarantor, as the case may
be, or its properties may be bound or affected.
3. Neither the execution and delivery by Lessee of any of the
Lessee Documents or by Guarantor of the Guarantee, nor the performance by Lessee
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
To The Addressees Listed
On Page 1 Hereof
[_________ __,____]
Page 3
Paragraph 5 below, and (B) such consents, approvals, notices, registrations and
other actions required by the terms of the Lessee Documents or the Guarantee
after the Delivery Date.
4. The Guarantee has been duly entered into and delivered by
Guarantor, and each of the Lessee Documents has been duly entered into and
delivered by Lessee.
5. Subject to the registration of the Aircraft with the
Federal Aviation Administration in the name of the Owner Trustee, and assuming
the due and timely filing for recordation in accordance with the provisions of
the Federal Aviation Act of (A) the FAA ▇▇▇▇ of Sale, (B) the Lease, with the
Lease Supplement covering the Aircraft, the Trust Indenture and the Trust
Supplement attached thereto and made a part thereof, (C) the Trust Indenture,
with the Trust Supplement attached thereto and made a part thereof, (D) the
Trust Agreement, and (E) the termination of the Mortgage, 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
Lease under Article 9 of the Uniform Commercial Code of Minnesota or Utah) is
necessary in any applicable jurisdiction within the United States in order (x)
to establish the Owner Trustee's title to such portion of the Aircraft as
against Lessee or any third parties or (y) to create and perfect the Indenture
Trustee's security interest in such portion of the Aircraft as against the Owner
Trustee or any third parties. With respect to such portion of the Aircraft, if
any, as may not be deemed to constitute an "aircraft" or "aircraft engine," as
defined in the Federal Aviation Act, except for the filing of financing
statements in the appropriate filing offices in the State of Utah and 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, (x)
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 establish the Owner Trustee's title in such portion of the Aircraft
as against Lessee and any third parties in any applicable jurisdiction within
the United States, and (y) under Minnesota law no filing or recording of any
document (including any financing statement) is necessary under Article 9 of the
Uniform Commercial Code in order to create or perfect the Indenture Trustee's
security interest in such portion of the Aircraft as against the Owner Trustee
and any third parties in any applicable jurisdiction within the United States.
6. Under Minnesota law the transfer to the Owner Trustee of
title to the Aircraft and the contemporaneous lease of the Aircraft to Lessee
under circumstances involving fair consideration but not involving an ostensible
surrender of possession of the Aircraft by Lessee is not void against or
voidable by present or subsequent creditors of Lessee by reason thereof.
7. There are no legal or governmental proceedings pending or,
to the best of my knowledge, threatened to which Lessee or Guarantor or any of
their respective subsidiaries is a party or to which any of the properties of
Lessee or Guarantor or any of their respective subsidiaries is subject other
than those proceedings summarized in the Guarantor's publicly filed
To The Addressees Listed
On Page 1 Hereof
[_________ __,____]
Page 4
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 Lessee and its subsidiaries, taken as a
whole, or on the power or ability of Lessee to perform its obligations under
the Lessee Documents.
In rendering the opinions expressed herein, I have relied
exclusively, and without independent investigation, on the opinion (being
furnished to you today) of (i) ▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.C., referred to in Section
4(a)(xv) of the Participation Agreement and (ii) with respect to the opinion in
paragraph 5 above, Ray, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, referred to in Section 4(a)(xiii) of
the Participation Agreement, as to all matters stated in such opinions,
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 Lessee and Guarantor,
enforceable against each such party in accordance with its terms. I have also
assumed that, except for the filings and recordations contemplated or referred
to herein, there are no filings or recordations with respect to the Aircraft
(other than the previous recordation of title in the name of Lessee) [and the
Mortgage and a UCC-1 financing statement filed in the Office of the Secretary of
State of the State of Minnesota on [___________], filing number [_________],
naming Lessee as Debtor and [ _______________ ], as Secured Party (as to which a
UCC-3 termination statement is being filed on the date hereof))], the Lease, the
Lease Supplement covering the Aircraft, the Trust Agreement, the Trust
Supplement or the Trust Indenture 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 Trustee as a debtor in the filing offices of the
Secretary of State of the State of Utah or in any other filing office in the
State of Utah or 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 Utah 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 Utah.
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.
To The Addressees Listed
On Page 1 Hereof
[_________ __,____]
Page 5
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.
_____________________________________
_____________________________________
Associate General Counsel
SCHEDULE A
[_________________], as Owner Participant
▇▇▇▇▇ Fargo Bank Northwest, National Association, as Owner Trustee
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.
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
▇.▇. ▇▇▇▇▇▇ Securities Inc.
Credit Suisse First Boston Corporation
Deutsche Banc Alex. ▇▇▇▇▇ Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc.
Landesbank Hessen-Thuringen Girozentrale
[FOR A319'S]
EXHIBIT C TO PARTICIPATION AGREEMENT
------------------------------------
[Form of opinion of counsel to the Supplier and the Manufacturer]
[_____________, ____]
To the Addressees Listed
IN THE ATTACHED SCHEDULE
Re: Airbus [A319-113/114] Aircraft
Manufacturer's Serial No. [________]
REGISTRATION NO. N[_____] (THE "AIRCRAFT")
------------------------------------------
Dear Sirs:
We have acted as special French counsel for Airbus Industrie G.I.E. ("Airbus")
and AVSA S.A.R.L. ("AVSA") in connection with the sale of the Aircraft by AVSA
to Northwest Airlines, Inc. ("Northwest").
We have examined a facsimile copy of:
(a) an executed Manufacturer Consent and Agreement to Assignment
of Warranties [NW _____], dated [______________], made by
Airbus;
(b) an executed Supplier Consent and Agreement to Assignment of
Warranties [NW ______], dated [______________], made by AVSA;
(c) a document executed both in the English language as "French
Pledge Agreement" and in the French language as "CONVENTION DE
NANTISSEMENT DE CREANCES" (collectively referred to as the
"CONVENTION DE NANTISSEMENT DE CREANCES"), dated the date
hereof made between ▇▇▇▇▇ Fargo Bank Northwest, National
Association, as Owner Trustee and State Street Bank and Trust
Company, as Indenture Trustee;
(d) a ▇▇▇▇ of Sale dated [___________] executed by AVSA in favour
of Northwest; and
(e) an FAA ▇▇▇▇ of Sale dated [___________] executed by AVSA in
favour of Northwest;
(documents (a) through (e) hereinafter referred to as the "Documents").
To The Addressees Listed
On Page 1 Hereof
[_________ __,____]
Page 2
Based on the foregoing, and such other documents, records and other instruments
as we have deemed it necessary or appropriate for the purposes of this opinion,
and assuming the Document to have been duly executed by the parties thereto, we
are of the opinion that, subject to the qualifications set out below:
1. Airbus is a GROUPEMENT D'INTERET ECONOMIQUE duly organized and existing
under the laws of the French Republic, and has the power and authority
to carry on its business as now conducted. The present members of
Airbus are (i) EADS Airbus GmbH (formerly known as Daimler-Chrysler
Aerospace Airbus GmbH), (ii) ▇▇▇▇ Construcciones Aeronauticas S.A.
(formerly known as Construcciones Aeronauticas S.A.), (iii) ▇▇▇▇ Airbus
S.A. (formerly known as Aerospatiale Matra Airbus S.A.) and (iv) Airbus
UK Limited, and each of such corporations is, without the need to
proceed against any collateral security for the indebtedness of Airbus
or to take any other legal action or process (except for service on
Airbus by HUISSIER of notice to perform and subsequent failure by
Airbus to do so), jointly and severally liable with the other members
for the debts of Airbus arising out of obligations contracted by Airbus
while such corporation is a member of Airbus, including those arising
under each Document, and will remain so liable even after such
corporation ceases to be a member of Airbus after such Document is
entered into; PROVIDED such Document is not modified without its
consent after it has ceased to be a member.
2. AVSA is a SOCIETE A RESPONSABILITE LIMITEE duly established and
existing under the laws of the French Republic and has the power and
authority to carry on its business as now conducted.
3. Each of Airbus and AVSA has full power and authority to enter into and
to execute, deliver and perform its obligations under those of the
Documents to which it is a party; such obligations are legal, valid and
binding upon them, respectively, are enforceable in accordance with
their respective terms and rank PARI PASSU with the other unsecured
obligations of Airbus or AVSA, as the case may be.
4. Assuming that under New York law, the Indenture Trustee would be
entitled to take proceedings in its own name and on its own account to
recover from the Owner Trustee the full amount of all amounts secured
by the CONVENTION DE NANTISSEMENT DE CREANCES, the CONVENTION DE
NANTISSEMENT DE CREANCES (i) duly creates for the benefit of the
Indenture Trustee the security interests which the CONVENTION DE
NANTISSEMENT DE CREANCES purports to create and the Indenture Trustee
is entitled to the benefits and security afforded thereby (ii) subject
to the registration and "HUISSIER" requirements of paragraph 9(d)
hereof and the observation set forth in paragraph 9(f) hereof, and with
respect to non-monetary claims, should be effective as against Airbus,
AVSA and third parties to perfect the pledge of the obligations of
Airbus and AVSA that are the subject of the CONVENTION DE NANTISSEMENT
DE CREANCES and (iii) subject to the registration and "HUISSIER"
requirements of paragraph 9(d) hereof, and with respect to monetary
claims, would be effective as against Airbus, AVSA and third parties to
perfect the pledge of the
To The Addressees Listed
On Page 1 Hereof
[_________ __,____]
Page 3
obligations of Airbus and AVSA that are the subject of the CONVENTION
DE NANTISSEMENT DE CREANCES.
5. All actions, authorizations, approvals, consents, conditions and things
required at law to be taken, fulfilled and done to authorize the
execution, delivery and performance by Airbus and AVSA of those of the
Documents to which they respectively are party have been taken,
obtained, fulfilled and done; and no consents under any exchange
control laws, rules or regulations of the French Republic are necessary
in connection therewith.
6. Neither the execution and delivery and performance of the Documents to
which Airbus and AVSA respectively are a party, nor the consummation of
the transactions contemplated thereby, contravenes or violates any law,
judgment, governmental rule, regulation or order applicable to or
binding on Airbus or AVSA.
7. No French value added tax was due upon the transfer of title in the
Aircraft from AVSA to Northwest.
8. Under the laws of the French Republic, Airbus and AVSA are subject to
private commercial law and to suit, and neither Airbus nor AVSA, nor
their respective properties have any immunity from the jurisdiction of
any court or any legal process (whether through service of notice,
attachment prior to notice, attachment prior to judgment, attachment in
aid of execution, execution or otherwise), except that, with respect to
Airbus:
(a) to the extent that Airbus occupies or possesses any property
by virtue of any license or grant from the French State, such
property and the title of Airbus thereto may be immune from
suit or execution on the grounds of sovereignty, and
(b) suit and execution against Airbus or its property may be
affected by action taken by the French public authorities in
the interests of national defense or on the occurrence of
exceptional circumstances of paramount importance to the
national interest of France, as such concept is understood
under the Constitution, laws and regulations of France.
9. In connection with the obligations of Airbus and AVSA under the
Documents, this opinion must be read subject to the following
qualifications and observations as to French law:
(a) the remedy of specific performance may not be available in a
French court;
(b) the enforcement of any of the Documents may be limited by
applicable bankruptcy, insolvency, or similar arrangements, or
by moratorium or other similar laws relating to or affecting
the enforcement of creditors' rights generally;
To The Addressees Listed
On Page 1 Hereof
[_________ __,____]
Page 4
(c) in respect of payment obligations, a French court has power
under Article 1244-1 of the French Civil Code to grant time to
a debtor (not in excess of two years), taking into account the
position of the debtor and the economic circumstances;
(d) in order to ensure the validity as against third parties of
the pledge ("NANTISSEMENT") created by the "CONVENTION DE
NANTISSEMENT DE CREANCES" in accordance with the provisions of
Article 2075 of the French Civil Code, it is necessary for the
"CONVENTION DE NANTISSEMENT DE CREANCES" to be registered with
the French tax administration, involving payment of a stamp
duty of a nominal amount. In addition, the "NANTISSEMENT"
created by the "CONVENTION DE NANTISSEMENT DE CREANCES" will
need to be served on each of Airbus and AVSA by "HUISSIER", in
accordance with the provisions of Article 2075 of the French
Civil Code. We have been instructed by the Indenture Trustee
to carry out the above formalities on its behalf, which we
intend to do on receipt of the executed originals of the
CONVENTION DE NANTISSEMENT DE CREANCES. We anticipate that
there will be no difficulty in accomplishing these
formalities;
(e) in the event of any proceedings being brought in a French
court in respect of a monetary obligation expressed to be
payable in a currency other than French Francs or euros, a
French court would probably give judgment expressed as an
order to pay, not such currency, but its French Franc or euro
equivalent at the time of payment or enforcement of judgment.
With respect to a bankruptcy, insolvency, liquidation,
moratorium, reorganization, reconstruction or similar
proceedings, French law may require that all claims or debts
be converted into French Francs or euros at an exchange rate
determined by the court at a date related thereto, such as the
date of commencement of a winding-up;
(f) pledges over non monetary claims are unusual under French law.
In principal, pledges over claims of this type should be
effective against Airbus, AVSA and third parties but in the
absence of case law, there is a lack of certainty about the
Pledge being effective;
(g) a determination or certificate as to any matter provided for
in the Documents might be held by a French court not to be
final, conclusive or binding, if such determination or
certificate could be shown to have an unreasonable, incorrect
or arbitrary basis or not to have been given or made in good
faith;
(h) claims may become barred by effluxion of time or may be or
become subject to defense of set-off or counterclaim;
(i) a French court may stay proceedings if concurrent proceedings
are being brought elsewhere;
To The Addressees Listed
On Page 1 Hereof
[_________ __,____]
Page 5
(j) we express no opinion as to whether any provision in the
Documents conferring a right of set-off or similar right would
be effective against a liquidator or a creditor; and
(k) our opinion as to the enforceability of the Documents relates
only to their enforceability in France in circumstances where
the competent French court has and accepts jurisdiction. The
term "enforceability" refers to the legal character of the
obligations assumed by the parties under the documents, i.e.,
that they are of a character which French law enforces or
recognizes. It does not mean that the Documents will be
enforced in all circumstances or in foreign jurisdictions or
by or against third parties or that any particular remedy will
be available.
In rendering the foregoing opinions, we have assumed that the Documents, other
than the CONVENTION DE NANTISSEMENT DE CREANCES, constitute the legal, valid and
binding obligations of the parties under New York law.
We are qualified as French Avocats.
No opinion is expressed herein as to laws other than the laws of the French
Republic as of the date hereof. The opinion is for your use and that of no one
else, and is limited to (i) the matter specifically mentioned herein, and (ii)
the purpose set out above.
Yours sincerely,
SCHEDULE
--------
Northwest Airlines, Inc.
Northwest Airlines Corporation
▇▇▇▇▇ Fargo Bank Northwest, National Association, not in its individual capacity
but solely as Owner Trustee
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
[_________________], as Owner Participant
Standard & Poor's Ratings Services
▇▇▇▇▇'▇ Investors Service, Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇.▇. ▇▇▇▇▇▇ Securities Inc.
Credit Suisse First Boston Corporation
Deutsche Banc Alex. ▇▇▇▇▇ Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc.
Landesbank Hessen-Thuringen Girozentrale
[FOR 757'S AND 747'S]
EXHIBIT C TO PARTICIPATION AGREEMENT
------------------------------------
[Form of opinion of in-house counsel to the Manufacturer]
_______________, ____
To the Addressees Listed
in the Attached Schedule
Subject: One Boeing Model [757-351] [747-451] Aircraft
Bearing Manufacturer's Serial No. ________
----------------------------------------------
Ladies and Gentlemen:
I am an attorney employed by The Boeing Company ("Boeing") and I am licensed to
practice law in the State of Washington. As such, I have represented Boeing in
connection with the sale of the Boeing Model [757-351] [747-451] aircraft
bearing Manufacturer's Serial No. _________ (including the engines installed
thereon but excluding equipment furnished by Northwest Airlines Inc.
("Northwest") (the "Aircraft")), pursuant to [Purchase Agreement No. 2159]
[Purchase Agreement No. 1630] between Boeing and Northwest, dated [January 16,
2001] [December 1, 1989], as subsequently amended (the "Purchase Agreement") and
as assigned by the Purchase Agreement Assignment [NW ____ _], dated as of
[______] with respect to the Aircraft between Northwest, as Assignor, and ▇▇▇▇▇
Fargo Bank Northwest, National Association, not in its individual capacity but
solely as Owner Trustee, as Assignee (the "Purchase Agreement Assignment").
For the purpose of this opinion, I have examined and relied upon originals, or
copies certified to my satisfaction, of the Purchase Agreement and of the
Consent and Agreement [NW ____ _], dated as of [_____] to the Purchase Agreement
Assignment executed by Boeing (the "Consent and Agreement").
I have also examined such other documents and records as I have deemed relevant
or necessary for the purpose of giving this opinion. Based upon such
examination, I am of the opinion that:
(a) Boeing is a corporation duly incorporated, validly existing, and in
good standing under the laws of the State of Delaware.
(b) The Purchase Agreement and the Consent and Agreement have been duly
authorized, executed and delivered by, and constitute the legal, valid, and
binding obligations of Boeing enforceable against it in accordance with the
respective terms thereof, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium, or other similar laws affecting
the enforcement of creditors' rights in general and except as the enforceability
of such obligations may be subject to general principles of equity.
(c) Boeing has the full power, authority, and legal right to enter into
and perform its obligations under the Purchase Agreement and the Consent and
Agreement and Boeing's execution, performance, and delivery of such documents
have been duly authorized by all necessary corporate action, and do not
contravene the Restated Certificate of Incorporation or by-laws of Boeing, or
any indenture, mortgage, contract, instrument, or other agreement, in each case
known to me, to which Boeing is a party or by which it or any of its properties
is bound.
With respect to the conclusions set forth herein, I express no opinion as to any
laws other than the laws of the State of Washington, the corporate laws of the
State of Delaware, and the federal laws of the United States.
Very truly yours,
___________________________
Counsel
SCHEDULE
--------
Northwest Airlines, Inc.
Northwest Airlines Corporation
▇▇▇▇▇ Fargo Bank Northwest, National Association, not in its individual capacity
but solely as Owner Trustee
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
[_________________], as Owner Participant
Standard & Poor's Ratings Service
▇▇▇▇▇'▇ Investors Service, Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
▇.▇. ▇▇▇▇▇▇ Securities Inc.
Credit Suisse First Boston Corporation
Deutsche Banc Alex. ▇▇▇▇▇ Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc.
Landesbank Hessen-Thuringen Girozentrale
EXHIBIT D TO PARTICIPATION AGREEMENT
------------------------------------
[Form of Opinion of Ray, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇]
[__________ ___, ____]
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO:
Re: NORTHWEST AIRLINES, INC. [NW ____ __]
--------------------------------------
Dear Sir or Madam:
We have acted as special counsel for ▇▇▇▇▇ Fargo Bank
Northwest, National Association, a national banking association, in its
individual capacity ("▇▇▇▇▇ Fargo") and in its capacity as trustee (the "Owner
Trustee") under the Trust Agreement [NW ____ __] dated as of [____________] (the
"Trust Agreement") between ▇▇▇▇▇ Fargo and [________________], as beneficiary
(the "Owner Participant"), in connection with the transactions contemplated by
the Participation Agreement (as defined below). Except as otherwise defined
herein, the terms used herein shall have the meanings specified in, or by
reference in, Section 13 of the Participation Agreement [NW ____ __], dated as
of [____________] among the Owner Participant, ▇▇▇▇▇ Fargo, not in its
individual capacity except as provided therein, but as Owner Trustee, Northwest
Airlines, Inc., as Lessee, Northwest Airlines Corporation, as Guarantor, State
Street Bank and Trust Company of Connecticut, National Association, not in its
individual capacity except as expressly provided therein, but solely as Pass
Through Trustee under each of the Pass Through Agreements, State Street Bank and
Trust Company, as Subordination Agent and State Street Bank and Trust Company,
as Indenture Trustee (the "Participation Agreement"). This opinion is furnished
pursuant to Section 4(a)(xiii) of the Participation Agreement.
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records and other
instruments as we have deemed necessary or advisable for the purpose of
rendering this opinion.
Based upon the foregoing, we are of the opinion that:
(1) ▇▇▇▇▇ Fargo is a national banking association duly
organized, validly existing and in good standing under the laws of the
United States, is a "citizen of the United States" within the meaning
of Section 40102(a)(15) of the Act and has the full power and authority
to enter into and perform its obligations under the Trust Agreement and
each other Operative Document to which it, in its individual capacity
or as Owner Trustee, as the case may be, is a party and, as Owner
Trustee, to issue, execute, and deliver and perform the Secured
Certificates.
TO THE ADDRESSES LISTED
ON SCHEDULE HERETO -2- [_________ __,____]
(2) The Owner Trustee is the duly appointed trustee under the
Trust Agreement and the Trust Agreement creates a legal and valid trust
under the laws of the State of Utah; the trust created by the Trust
Agreement has been duly created and exists for the benefit of the Owner
Participant, and the Trust Agreement creates for the benefit of the
Owner Participant the rights and interests in the Trust Estate which
the Trust Agreement by its terms purports to create; and assuming the
Trust Agreement was properly authorized, executed and delivered by the
Owner Participant and that the terms of the Trust Agreement are not in
violation of any laws, documents, judgments, regulations or other
provisions applicable to the Owner Participant, the Trust Agreement
constitutes, under the laws of the State of Utah, a legal, valid and
binding obligation of the Owner Participant enforceable against the
Owner Participant in accordance with its terms.
(3) The Trust Agreement, the Participation Agreement, and each
other Operative Document to which ▇▇▇▇▇ Fargo or the Owner Trustee, as
the case may be, is a party, and the Secured Certificates, have been
duly authorized, executed and delivered by ▇▇▇▇▇ Fargo, or the Owner
Trustee, as the case may be, and assuming due authorization, execution
and delivery by the other parties thereto is a legal, valid and binding
obligation of ▇▇▇▇▇ Fargo, or the Owner Trustee, as the case may be,
enforceable in accordance with their respective terms.
(4) The execution and delivery by ▇▇▇▇▇ Fargo of the Trust
Agreement and the Participation Agreement and the execution and
delivery by the Owner Trustee of the Operative Documents to which it is
a party is not, and the performance by ▇▇▇▇▇ Fargo, or the Owner
Trustee, as the case may be, of its respective obligations under each
such agreements will not be, inconsistent with the articles of
association or by-laws of ▇▇▇▇▇ Fargo, do not and will not contravene
any federal law or law of the State of Utah, or any rule or regulation
of the State of Utah or the federal governmental rule, or any judgment
or order of which we have knowledge and which is applicable to it and
do not and will not contravene any provision of, or result in the
creation of any lien upon any property of ▇▇▇▇▇ Fargo, or constitute a
default under, any indenture, mortgage, contract or other instrument of
which we have knowledge and to which ▇▇▇▇▇ Fargo or the Owner Trustee
is a party or by which either is bound or require the consent or
approval of, the giving of notice to, or the registration with, or the
taking of any action in respect of, or under federal law or the laws of
the State of Utah or any subdivision or agency thereof.
(5) There are no fees, taxes or other charges, except taxes
imposed on fees payable to ▇▇▇▇▇ Fargo, required to be paid under the
laws, ordinances or regulations of the State of Utah or any political
subdivision thereof, including, without limitation, Salt Lake City, in
connection with the execution, delivery or performance by the Lessee,
Owner Trustee, Indenture Trustee or any Participant of the Operative
Documents solely because ▇▇▇▇▇ Fargo, or the Owner Trustee as the case
may be, performs certain of its obligations under the Operative
Documents in the State of Utah.
(6) To our knowledge, there are no pending or threatened
actions or proceedings against or affecting ▇▇▇▇▇ Fargo or the Owner
Trustee, as the case may be,
TO THE ADDRESSES LISTED
ON SCHEDULE HERETO -3- [_________ __,____]
before any court, governmental authority or administrative agency
which, if adversely determined, could materially adversely affect the
right, power or ability, either in its individual capacity or as Owner
Trustee, or both, as the case may be, to enter into or perform its
obligations under the Operative Documents.
(7) The Trust Indenture (or financing statements or other
notices with respect thereto) has been filed for record or recorded
with the Division of Corporations and Commercial Code in the State of
Utah and such offices are all the places in the State of Utah wherein
such filing or recordation is necessary and no other actions or filings
are necessary in the State of Utah to perfect the lien and security
interest of the Indenture Trustee in the Trust Estate as against
creditors of or purchasers from the Owner Trustee or the Lessee, or
both.
(8) The Owner Trustee has received such right, title and
interest in and to the Aircraft as was conveyed to the Owner Trustee on
the date hereof, subject to (i) the rights of the Lessee under the
Lease and the Lease Supplement; (ii) the beneficial interest of the
Owner Participant in the Aircraft; and (iii) the Lien created pursuant
to the Trust Indenture and the Trust Indenture Supplement; and to our
knowledge there exist no Liens affecting the right, title or interest
of the Owner Trustee in and to the Trust Estate resulting from claims
against ▇▇▇▇▇ Fargo, not related to the ownership of the Trust Estate
or the administration of the Trust Estate or any other transaction
contemplated by the Operative Documents.
(9) Assuming that (i) the Aircraft is not physically located
in the State of Utah at the commencement or termination of the Term,
(ii) in connection with any sale of the Aircraft, such Aircraft will
not be physically delivered in the State of Utah to a buyer, (iii) the
Aircraft will be sold or leased for use in interstate commerce, and
(iv) the trust created by the Trust Agreement is treated as a grantor
trust under subpart E, Part 1 of Subchapter J of the Internal Revenue
Code of 1986, as amended, there are no fees, taxes or other charges
(except taxes imposed on fees payable to the Owner Trustee) payable to
the State of Utah or any political subdivision thereof in connection
with the execution, delivery or performance by the Owner Trustee, the
Indenture Trustee, the Lessee or any Participant of the Operative
Documents or in connection with the making by the Owner Participant of
its investment in the Aircraft or its acquisition of the beneficial
interest in the Trust Estate or in connection with the issuance and
acquisition of the Secured Certificates, and neither the Owner Trustee,
the Trust Estate nor the trust created by the Trust Agreement will be
subject to any fee, tax or other governmental charge (except taxes on
fees payable to the Owner Trustee) under the laws of the State of Utah
or any political subdivision thereof on, based on or measured by,
directly or indirectly, the gross receipts, net income or value of the
Trust Estate by reason of the creation or continued existence of the
trust under the terms of the Trust Agreement pursuant to the laws of
the State of Utah or the Owner Trustee's performance of its duties
under the Trust Agreement within such State.
(10) Neither a Utah court nor a federal court applying Utah
law or federal law, if properly presented with the issue and after
having properly considered such issue,
TO THE ADDRESSES LISTED
ON SCHEDULE HERETO -4- [_________ __,____]
would permit the Owner Participant to terminate the Trust Agreement,
except in accordance with its terms.
(11) Although there is no Utah case directly on point, under
the laws of the State of Utah, so long as the Trust Agreement has not
been terminated in accordance with its terms, creditors of any person
that is an Owner Participant, holders of a lien against the assets of
any such person that is an Owner Participant, such as trustees,
receivers or liquidators (whether or not an insolvency proceeding has
been commenced) (collectively, the "Creditors") may acquire valid
claims and liens, as to the Trust Estate, only against the rights of
such Owner Participant under the Trust Agreement or in the Trust
Estate, and do not have, and may not through the enforcement of such
Creditors' rights acquire, any greater rights than such Owner
Participant with respect to the Trust Agreement or the Trust Estate.
Your attention is directed to the Utah UCC, which provides, in
part, that a filed financing statement which does not state a maturity date or
which states a maturity date of more than five (5) years is effective only for a
period of five (5) years from the date of filing, unless within six (6) months
prior to the expiration of said period a continuation statement is filed in the
same office or offices in which the original statement was filed. The
continuation statement must be signed by the secured party, identify the
original statement by file number and state that the original statement is still
effective. Upon the timely filing of a continuation statement, the effectiveness
of the original financing statement is continued for five (5) years after the
last date to which the original statement was effective. Succeeding continuation
statements may be filed in the same manner to continue the effectiveness of the
original statement.
The foregoing opinions are subject to the following
assumptions, exception and qualifications:
A. The foregoing opinions are limited to the laws of the State of Utah
and the federal laws of the United States of America governing the
banking and trust powers of ▇▇▇▇▇ Fargo and Title II of the United
States Code entitled "Bankruptcy". In addition, we express no opinion
with respect to (i) federal securities laws, including the Securities
Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, and the Trust Indenture Act of 1939, as amended; (ii) Title 49
of the United States Code Annotated, sometimes referred to as the
Transportation Act, which was enacted in substitution of the Federal
Aviation Act of 1958 and the regulations promulgated pursuant thereto,
as amended from time to time and any similar law of the United States
enacted in substitution or replacement thereof (except with respect to
the opinion set forth in paragraph 1 above concerning the citizenship
of ▇▇▇▇▇ Fargo); or (iii) state securities or blue sky laws. Insofar as
the foregoing opinions relate to the legality, validity, binding effect
and enforceability of the documents involved in these transactions,
which by their terms are governed by the laws of a state other than
Utah, we have assumed that such documents constitute legal, valid,
binding and enforceable agreements under the laws of such state, as to
which we express no opinion.
TO THE ADDRESSES LISTED
ON SCHEDULE HERETO -5- [_________ __,____]
B. The foregoing opinions regarding enforceability of any document or
instrument are subject (i) except as otherwise set forth in the
opinions in paragraphs 10 and 11, to applicable bankruptcy, insolvency,
moratorium, reorganization, receivership and similar laws affecting the
rights and remedies of creditors generally, and (ii) general principles
of equity, regardless of whether such enforceability is considered in a
proceeding in equity or at law. We call to your attention that
bankruptcy courts are courts in equity with wide discretion in applying
the provisions of the Bankruptcy Code.
C. As to the documents involved in these transactions, we have assumed
that each is a legal, valid and binding obligation of each party
thereto, other than ▇▇▇▇▇ Fargo or the Owner Trustee, and is
enforceable against each such party in accordance with their respective
terms.
D. The opinion in paragraph 1 above concerning the citizenship of ▇▇▇▇▇
Fargo is based upon the facts contained in an affidavit of ▇▇▇▇▇ Fargo,
made by its authorized officer, which facts we have not independently
verified.
E. We have assumed that all signatures, other than those of the Owner
Trustee or ▇▇▇▇▇ Fargo, on documents and instruments involved in these
transactions are genuine, that all documents and instruments submitted
to us as originals are authentic, and that all documents and
instruments submitted to us conform with the originals, which facts we
have not independently verified.
F. We do not purport to be experts in respect of, or express any
opinion concerning laws, rules or regulations applicable to the
particular nature of the equipment involved in these transactions.
G. We have made no investigation of, and express no opinion concerning,
the nature of the title to any part of the equipment involved in these
transactions or the priority of any mortgage or security interest.
H. We have assumed that the Participation Agreement and the
transactions contemplated thereby are not within the prohibitions of
Section 406 of the Employee Retirement Income Security Act of 1974.
I. In addition to any other limitation by operation of law upon the
scope, meaning or purpose of this opinion, this opinion speaks only as
of the date hereof. We have no obligation to advise the recipients of
this opinion (or any third party) of changes of law or fact that may
occur after the date hereof, even though the change may affect the
legal analysis, a legal conclusion or any information contained herein.
J. The opinions expressed in this letter are solely for the use of the
parties to which it is addressed in matters directly related to the
Participation Agreement and the transactions contemplated thereunder
and these opinions may not be relied on by any other persons or for any
other purpose without our prior written approval. The opinions
TO THE ADDRESSES LISTED
ON SCHEDULE HERETO -6- [_________ __,____]
expressed in this letter are limited to the matters set forth in this
letter and no other opinions should be inferred beyond the matters
expressly stated.
Very truly yours,
RAY, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
[__________________________]
SCHEDULE A
▇▇▇▇▇ Fargo Bank Northwest, National Association, as Owner Trustee
Northwest Airlines, Inc., as Lessee
Northwest Airlines Corporation, as Guarantor
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 Services
▇▇▇▇▇'▇ Investors Service, Inc.
[______________________], as Owner Participant
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
▇.▇. ▇▇▇▇▇▇ Securities Inc.
Credit Suisse First Boston Corporation
Deutsche Banc Alex. ▇▇▇▇▇ Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc.
Landesbank Hessen-Thuringen Girozentrale
EXHIBIT E-1 TO PARTICIPATION AGREEMENT
[Form of Opinion of special counsel for the Owner Participant]
[___________ __, ____]
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO
Re: [Airbus A319-113/114] [Boeing 757-351] [Boeing 747-451]
aircraft with Registration ▇▇▇▇ N[ ]
-------------------------------------------------------
Ladies and Gentlemen:
We have acted as special counsel to [ _________________ ], a
[_______] corporation (the "Owner Participant"), in connection with the
transactions contemplated by the Participation Agreement [NW ____ __] dated as
of [____________] (the "Participation Agreement") among Northwest Airlines,
Inc., Northwest Airlines Corporation, the Owner Participant, ▇▇▇▇▇ Fargo Bank
Northwest, National Association, as Owner Trustee under the Trust Agreement
referred to therein, 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 but not
defined in this opinion letter shall have the meanings set forth in, or by
reference in, the Participation Agreement. This opinion is delivered pursuant to
Section 4(a)(xiv) of the Participation Agreement.
We have examined the Participation Agreement, the Lease, the
Trust Agreement, the Indenture, the Secured Certificates, the Tax Indemnity
Agreement and the Purchase Agreement Assignment (collectively, the "Documents").
In our examination, we have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as facsimile, certified or
photostatic copies and the authenticity of the originals of such copies.
The opinions contained in this opinion letter are subject to
the following assumptions, limitations and qualifications:
A. We have assumed (i) the due organization, existence and
good standing of all parties to the Documents (the "Parties"), (ii) the power
and full legal right of the Parties under all applicable laws and regulations,
without approvals, authorizations, consents or other orders of any public body
or board, to execute, deliver and perform under the Documents, (iii) the due
authorization, execution and delivery by the Parties of the Documents and the
due authentication
TO THE ADDRESSES LISTED
ON SCHEDULE HERETO -2- [_______ ___, ___]
of the Secured Certificates by the Indenture Trustee, (iv) that the Parties are
not subject to any judgment, order, writ, injunction or decree of any court,
arbitrator or governmental agency or instrumentality that prohibits or enjoins
the execution, delivery or performance of any of the Documents or any of the
transactions contemplated by the Documents and (v) with respect to factual
matters, the accuracy of the representations set forth in Section 8 of the
Participation Agreement.
B. The enforceability of the Documents against the Owner
Participant or against the Owner Trustee 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, in the case of indemnity provisions contained therein, as limited by public
policy considerations, and except that certain of the remedial provisions in the
Lease and the Indenture may be limited or rendered unenforceable by applicable
laws, which laws, however, do not in our opinion make the remedies provided in
such document inadequate for the practical realization of the benefits provided
thereby.
C. The execution, delivery and performance by the Owner
Trustee and by ▇▇▇▇▇ Fargo Bank Northwest, National Association, in its
individual capacity, or both, as the case may be, of the Participation
Agreement, the Trust Agreement, the Lease, the Purchase Agreement Assignment,
the Indenture and the Secured Certificates (the "Owner Trustee Documents") and
the consummation of the transactions by the Owner Trustee and by ▇▇▇▇▇ Fargo
Bank Northwest, National Association in its individual capacity contemplated
thereby are not and will not be in violation of the articles of association or
By-Laws of ▇▇▇▇▇ Fargo Bank Northwest, National Association or of any indenture,
mortgage, credit agreement, license or other agreement or instrument to which
▇▇▇▇▇ Fargo Bank Northwest, National Association, in its individual capacity or
as the Owner Trustee is a party or by which it is bound, or of any Federal or
state law, governmental rule or regulation applicable to ▇▇▇▇▇ Fargo Bank
Northwest, National Association, in its individual capacity or as the Owner
Trustee or any judgment or order applicable to it and known to such counsel
after due inquiry.
D. Neither the execution and delivery by the Owner Trustee
and, here appropriate, by ▇▇▇▇▇ Fargo Bank Northwest, National Association, in
its individual capacity, or both, as the case may be, of the Owner Trustee
Documents nor the consummation of any of the transactions by the Owner Trustee,
by ▇▇▇▇▇ Fargo Bank Northwest, National Association in its individual capacity,
or both, as the case may be, contemplated thereby requires the consent or
approval of, the giving of notice to, or the registration with, or the taking of
any other action with respect to, any governmental authority or agency under any
existing Federal laws governing the banking and trust powers of ▇▇▇▇▇ Fargo Bank
Northwest, National Association, or state law (except for filings pursuant to
the Uniform Commercial Code, and except for compliance with requirements of the
Federal Aviation Act).
E. We express no opinion as to the availability of specific
performance and/or injunctive relief or other equitable or provisional remedies
in relation to enforcement of the Documents.
TO THE ADDRESSES LISTED
ON SCHEDULE HERETO -2- [_______ ___, ___]
F. We express no opinion as to the priority of any security
interests or as to title to any part of the Trust Estate.
G. This opinion is given based on states of law, documentation
and fact as they exist on the date hereof and we do not undertake to advise you
of any changes which hereafter may be brought to our attention.
H. The enforcement of any rights of any party is subject to
any implied duty to act reasonably and in good faith.
I. We express no opinions as to matters governed by (i) any
Federal or state securities law, (ii) any Federal or state tax laws, or (iii)
the Federal Aviation Act.
Based on our examination described above, relying upon
statements of fact contained in the documents we have examined and subject to
the assumptions, limitations and qualifications expressed in this letter, we are
of the opinion that:
1. The Participation Agreement, the Trust Agreement and the
Tax Indemnity Agreement (the "Owner Participant Documents") constitute the
legal, valid and binding obligations of Owner Participant, enforceable against
Owner Participant in accordance with their respective terms.
2. Neither the execution of, delivery and performance by Owner
Participant of the Owner Participant Documents nor the consummation of any of
the transactions by Owner Participant contemplated thereby requires the consent
or approval of, the giving of notice to, the registration with, or the taking of
any other action in respect to any governmental authority or agency of the
United States, the State of [_________] or, assuming the law of [_________] is
identical to the law of New York, the State of [__________] (except for filings
pursuant to the Uniform Commercial Code, and except for compliance with the
requirements of the Federal Aviation Act, as to which we express no opinion).
3. The Owner Trustee Documents (other than the Trust
Agreement), including the Secured Certificates, constitute legal, valid and
binding obligations of the Owner Trustee, enforceable against the Owner Trustee
in accordance with their respective terms.
4. The Trust Indenture duly creates for the benefit of the
Indenture Trustee the security interests which the Trust Indenture purports to
create and the Indenture Trustee is entitled to the benefits and security
afforded by the Trust Indenture.
TO THE ADDRESSES LISTED
ON SCHEDULE HERETO -4- [_______ ___, ___]
We are licensed to practice law in the State of New York, and
the opinions set forth in this opinion letter are limited to the application of
the laws of the United States of America and the State of New York to the
matters expressly covered by such opinions. This letter is furnished by us to
you on the date hereof only in connection with the transactions contemplated by
the Participation Agreement and may not be relied upon by any other person or
entity.
Very truly yours,
SCHEDULE A
Northwest Airlines, Inc., as Lessee
Northwest Airlines Corporation, as Guarantor
▇▇▇▇▇ Fargo Bank Northwest, National Association, as Owner Trustee
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.
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
▇.▇. ▇▇▇▇▇▇ Securities Inc.
Credit Suisse First Boston Corporation
Deutsche Banc Alex. ▇▇▇▇▇ Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc.
Landesbank Hessen-Thuringen Girozentrale
EXHIBIT E-2 TO PARTICIPATION AGREEMENT
[Form of Opinion of Owner Participant's in-house counsel]
[__________ ___, ____]
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO
Re: [Airbus A319-113/114] [Boeing 757-351] [Boeing 747-451]
Aircraft with Registration ▇▇▇▇ N[ ]
--------------------------------------------------------
Dear Sirs:
I am in-house counsel of [________________], a [__________]
corporation (the "Owner Participant"), and have acted as counsel to Owner
Participant in connection with the transactions contemplated by that certain
Participation Agreement [NW ____ __] dated as of [_____________] (the
"Participation Agreement") among Northwest Airlines, Inc., Northwest Airlines
Corporation, the Owner Participant, ▇▇▇▇▇ Fargo Bank Northwest, National
Association, as Owner Trustee under the Trust Agreement referred to therein,
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 Trust Indenture
referred to therein. This opinion is delivered pursuant to Section 4(a)(xiv) of
the Participation Agreement.
Except as otherwise noted herein, all capitalized terms used
but not defined in this opinion letter shall have the meanings set forth in, or
by reference in, the Participation Agreement.
In connection with my opinion herein, I have examined executed
counterparts of the Participation Agreement, the Trust Agreement and the Tax
Indemnity Agreement (the "Owner Participant Documents") and the other documents
relating to the proposed transaction. With respect to factual matters, I have
relied upon the representations and warranties contained in each such Owner
Participant Document and upon originals or copies, certified or otherwise
identified to my satisfaction, of such other documents as I have deemed relevant
to the rendering of this opinion. In such examination I have assumed the
genuineness of all signatures (other than that of Owner Participant), the legal
capacity of all natural persons, 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 authenticity of the originals of such copies. In rendering
the opinions set forth below, I have assumed the due authorization, execution
and delivery of the Owner Participant Documents by each of the parties thereto
other than the Owner Participant.
TO THE ADDRESSES LISTED
ON SCHEDULE HERETO -2- [_______ ___, ___]
1. Owner Participant is a duly incorporated and validly
existing corporation in good standing under the laws of the State of
[__________] and has the corporate power and authority to execute, deliver and
carry out the terms of the Owner Participant Documents.
2. The Owner Participant Documents have been duly authorized,
executed and delivered by Owner Participant.
3. Neither the execution and delivery by the Owner Participant
of the Owner Participant Documents nor the consummation of any of the
transactions by the Owner Participant contemplated thereby, violates any law,
governmental rule or regulation of the United States, the State of [__________]
or the State of [__________] (or any governmental subdivision thereof).
4. The execution, delivery and performance of the Owner
Participant Documents by the Owner Participant have been duly authorized by all
necessary corporate action on the part of the Owner Participant, do not require
any approval of stockholders of the Owner Participant, or, to my knowledge, any
approval or consent of any trustee or holders of any indebtedness or obligations
of the Owner Participant (other than any such approval or consent as has been
obtained), and neither the execution and delivery of any thereof by the Owner
Participant nor the performance by the Owner Participant of its obligations
thereunder (A) contravenes any law, governmental rule or regulation or, to my
knowledge, judgment or order applicable to or binding on the Owner Participant
or (B) to my knowledge, contravenes or results in any breach of, or constitutes
any default under, or results in the creation of any lien (other than provided
for in the Operative Documents) upon any property of the Owner Participant
under, any indenture, mortgage, chattel mortgage, deed of trust, conditional
sales contract, bank loan or credit agreement, or any other agreement or
instrument, corporate charter, by-law or permit issued by any [__________] or
United States governmental authority to which the Owner Participant is a party
or by which the Owner Participant or its properties may be bound or affected.
5. To my knowledge, there are no pending or threatened
proceedings against or affecting the Owner Participant before any court or
administrative agency, individually or in the aggregate, which, if determined
adversely to it, would materially adversely affect the power or ability of the
Owner Participant to perform its obligations under the Owner Participant
Documents.
I am a member of the Bar of the State(s) of [___________] and
I do not express herein any opinion as to any matters governed by any law other
than the laws of the State(s) of [_______________], [the Delaware General
Corporation Law] and the Federal law of the United States. No opinion is
expressed herein as to matters governed by (i) any Federal or state securities
law, (ii) any Federal or state tax laws, or (iii) the Federal Aviation Act.
This opinion is furnished by me at your request for your sole
benefit, and no other person or entity shall be entitled to rely on this opinion
without my express written consent, except that [our special counsel] may rely
on this opinion for purposes of delivering its opinion.
Very truly yours,
SCHEDULE A
Northwest Airlines, Inc., as Lessee
Northwest Airlines Corporation, as Guarantor
▇▇▇▇▇ Fargo Bank, National Association, as Owner Trustee
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.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇.▇. ▇▇▇▇▇▇ Securities Inc.
Credit Suisse First Boston Corporation
Deutsche Banc Alex. ▇▇▇▇▇ Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc.
Landesbank Hessen-Thuringen Girozentrale
EXHIBIT F TO PARTICIPATION AGREEMENT
[Form of Opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.C.]
[_________ __, ____]
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO
Re: [Airbus A319-113/114] [Boeing 757-351] [Boeing 747-451]
aircraft with manufacturer's serial number [_____] and United
States nationality and REGISTRATION MARKS N [____] (the
"Aircraft")
--------------------------------------------------------------
Ladies and Gentlemen:
This letter confirms that we filed the following described
instruments with the Federal Aviation Administration (the "FAA") today at the
respective times noted below:
(a) [Mortgage and Security Agreement Release and
Termination Agreement dated [__________] between
[_________] and Northwest Airlines, Inc., which
released the Aircraft and the [CFM International,
Inc. model CFM565A4/5A5] [▇▇▇▇▇ & Whitney model
PW2040] [▇▇▇▇▇ & ▇▇▇▇▇▇▇ model PW4056] aircraft
engines with manufacturer's serial numbers [______]
and [______][, [__________], [__________]] (the
"Engines") from the terms of Conveyance No.
[_________] was filed at [____________]];
(b) AC Form 8050-2 Aircraft ▇▇▇▇ of Sale dated
[_____________] (the "FAA ▇▇▇▇ of Sale") by Northwest
Airlines, Inc. (the "Lessee") to ▇▇▇▇▇ Fargo Bank
Northwest, National Association, as Owner Trustee
(the "Owner Trustee") under Trust Agreement [NW ____]
dated as of [__________] (the "Trust Agreement")
between [______________], as Owner Participant, and
the Owner Trustee, covering the Aircraft was filed at
[____________];
(c) AC Form 80501 Aircraft Registration Application by
the Owner Trustee covering the Aircraft, to which
were attached the Affidavits required by Section
47.7(c)(2)(ii) of Part 47 of the Federal Aviation
Regulations, was filed at [_______________];
(d) the Trust Agreement was filed at [_______________];
TO THE ADDRESSES LISTED
ON SCHEDULE HERETO -2- [_______ ___, ___]
(e) Trust Indenture and Security Agreement [NW ____ __]
dated as of [__________] (the "Indenture") between
the Owner Trustee and State Street Bank and Trust
Company as Indenture Trustee (the "Indenture
Trustee"), to which were attached the Trust Agreement
and Indenture Supplement [NW ____ __] dated
[______________] (the "Indenture Supplement")
covering the Aircraft and the [CFM International,
Inc. model CFM565A4/5A5] [▇▇▇▇▇ & ▇▇▇▇▇▇▇ model
PW2040] [▇▇▇▇▇ & Whitney model PW4056] aircraft
engines with manufacturer's serial numbers [______][,
[__________], [__________]] and [______] (the
"Engines"), was filed at [__________]; and
(f) Lease Agreement [NW ____ __] dated as of
[____________] (the "Lease") between the Owner
Trustee as lessor and the Lessee, to which were
attached Lease Supplement No. 1 dated [_____________]
(the "Lease Supplement") covering the Aircraft and
the Engines, the Indenture and the Indenture
Supplement, was filed at [__________];
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 FAA ▇▇▇▇ of Sale, the Indenture
with the Indenture Supplement attached, the Lease
with the Lease Supplement, the Indenture and the
Indenture Supplement attached are in due form for
recordation by and have 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
Trustee and all instruments necessary to cause the
FAA in due course to issue to the Owner Trustee an AC
Form 80503 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;
(c) the Aircraft and the Engines are free and clear of
Liens (as such term is defined in the Lease) other
than such as are created by the Indenture, as
supplemented by the Indenture Supplement, and by the
Lease, as supplemented by the Lease 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 and
in all of the right, title and interest of the Owner
Trustee in and to the Lease, as supplemented by the
Lease Supplement (insofar as such security interest
TO THE ADDRESSES LISTED
ON SCHEDULE HERETO -3- [_______ ___, ___]
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 refiled 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 and in the Lease, as
supplemented by the Lease Supplement (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)
under the applicable laws of any jurisdiction within
the United States;
(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 Trustee'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; and
(g) no authorization, approval, consent, license or order
of, or registration with, or giving of notice to, the
FAA Aircraft Registry is required for the valid
authorization, delivery or performance of the Lease,
the Lease Supplement, the Trust Agreement, the
Indenture and the Indenture Supplement except for
such authorizations, approvals, consents, licenses,
orders, registrations and notices as have been
effected.
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, as 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
Northwest Airlines, Inc., as Lessee
Northwest Airlines Corporation, as Guarantor
▇▇▇▇▇ Fargo Bank Northwest, National Association, as Owner Trustee
State Street Bank and Trust Company of Connecticut, National Association, as
Pass Through Trustee
State Street Bank and Trust Company, as Indenture Trustee
[_________________], as Owner Participant
Standard & Poor's Ratings Services
▇▇▇▇▇'▇ Investors Service, Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
▇.▇. ▇▇▇▇▇▇ Securities Inc.
Credit Suisse First Boston Corporation
Deutsche Banc Alex. ▇▇▇▇▇ Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc.
Landesbank Hessen-Thuringen Girozentrale
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./Leveraged Lease Financing of One
[Airbus A319-113/114] [Boeing 757-351] [Boeing 747-451]
Aircraft [NW ____ __] (Indenture Trustee Opinion)
------------------------------------------------------------
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
▇▇▇▇▇ Fargo Bank Northwest, National Association, not in its individual
capacity, but solely as Owner Trustee (the "OWNER TRUSTEE"), 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., as Lessee (the "LESSEE"), Northwest Airlines Corporation (the
"GUARANTOR"), [__________________], as Owner Participant, State Street Bank and
Trust Company of Connecticut, National Association, as Pass Through Trustee (the
"PASS THROUGH TRUSTEE"), State Street, as Subordination Agent (the
"SUBORDINATION AGENT") and the Owner Trustee and the transactions contemplated
thereby. Capitalized terms not otherwise defined herein shall have the meanings
specified in the Lease and Section 13 of the Participation Agreement. This
opinion is being delivered pursuant to Section 4(a)(xvi) of the Participation
Agreement.
Our representation of State Street and the Indenture Trustee
has been as special counsel for the limited purposes stated above. As to all
matters of fact (including factual conclusions and characterizations and
descriptions of purpose, intention or other state of mind), we have relied, with
your permission, entirely upon (i) the representations and warranties of the
parties set forth in the Operative Documents and (ii) certificates delivered to
us by the management of State Street and have assumed, without independent
inquiry, the accuracy of those representations, warranties and certificates.
We have examined the Participation Agreement the Note Purchase
Agreement, the Indenture and the other documents to which State Street
individually or as Indenture Trustee, is a party (together, the "OPERATIVE
DOCUMENTS"), the Certificate of the Massachusetts Commissioner of Banks relating
to State Street and originals, or copies certified or otherwise identified to
our satisfaction, of such other records, documents, certificates, or other
instruments as we have deemed necessary or advisable for the purposes of this
opinion. For purposes of our
TO THE ADDRESSES LISTED
ON SCHEDULE HERETO -2- [_______ ___, ___]
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 lawyers in the firm who have participated directly and
substantively in the specific transactions to which this opinion relates, 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 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
TO THE ADDRESSES LISTED
ON SCHEDULE HERETO -3- [_______ ___, ___]
certificate of incorporation, partnership agreement, bylaws, and other
governing organizational documents, and the applicable corporate,
partnership, or other enterprise legislation and other applicable laws,
as the case may be (other than State Street and the Indenture Trustee
with respect to the laws of the United States of America and the
internal substantive laws of the Commonwealth of Massachusetts, but
only in each case to the limited extent the same may be applicable to
State Street or the Indenture Trustee, and relevant to our opinions
expressed below) to execute, and to perform its obligations under, the
Operative Documents, and (iii) each party to the Operative Documents
(other than State Street or the Indenture Trustee, as applicable) has
duly executed and delivered each of such agreements and instruments to
which it is a party and that (other than with respect to State Street
and the Indenture Trustee, as applicable) the execution and delivery of
such agreements and instruments and the transactions contemplated
thereby have been duly authorized by proper corporate or other
organizational proceedings as to such party.
(b) We have assumed without any independent investigation (i)
that each of the Operative Documents is a valid, binding and
enforceable obligation of each party thereto other than State Street or
the Indenture Trustee, as applicable, and (ii) that each of the
Operative Documents is a valid, binding and enforceable obligation of
State Street or the Indenture Trustee, as applicable, to the extent
that laws other than those of the Commonwealth of Massachusetts are
relevant thereto (other than the laws of the United States of America,
but only to the limited extent the same may be applicable to State
Street or the Indenture Trustee, as applicable, and relevant to our
opinions expressed below).
(c) The enforcement of any obligations of State Street or the
Indenture Trustee, as applicable, under any of the Operative Documents
may be limited by the receivership, conservatorship and supervisory
powers of bank regulatory agencies generally, as well as by bankruptcy,
insolvency, reorganization, moratorium, marshaling or other laws and
rules of law affecting the enforcement generally of creditors' rights
and remedies (including such as may deny giving effect to waivers of
debtors' or guarantors' rights); and we express no opinion as to the
status under any fraudulent conveyance laws or fraudulent transfer laws
of any of the obligations of State Street or the Indenture Trustee, as
applicable, under any of the Operative Documents.
(d) We express no opinion as to the availability of any
specific or equitable relief of any kind.
(e) The enforcement of any rights may in all cases be subject
to an implied duty of good faith and fair dealing and to general
principles of equity (regardless of whether such enforceability is
considered in a proceeding at law or in equity) and, as to any rights
to collateral security, will be subject to a duty to act in a
commercially reasonable manner.
(f) We express no opinion as to the enforceability of any
particular provision of any of the Operative Documents relating to (i)
waivers of rights to object to
TO THE ADDRESSES LISTED
ON SCHEDULE HERETO -4- [_______ ___, ___]
jurisdiction or venue, or consents to jurisdiction or venue, (ii)
waivers of rights to (or methods of) service of process, or rights to
trial by jury, or other rights or benefits bestowed by operation of
law, (iii) waivers of any applicable defenses, setoffs, recoupments, or
counterclaims, (iv) the grant of powers of attorney to any person or
entity, (v) exculpation or exoneration clauses, indemnity clauses, and
clauses relating to releases or waivers of unmatured claims or rights,
(vi) the imposition or collection of interest on overdue interest or
providing for a penalty rate of interest or late charges on overdue or
defaulted obligations, or the payment of any premium, liquidated
damages, or other amount which may be held by any court to be a
"penalty" or a "forfeiture," or (vii) so-called "usury savings clauses"
purporting to specify methods of (or otherwise assure) compliance with
usury laws or other similar laws of any jurisdiction.
(g) We express no opinion as to the effect of events
occurring, circumstances arising, or changes of law becoming effective
or occurring, after the date hereof on the matters addressed in this
opinion letter, and we assume no responsibility to inform you of
additional or changed facts, or changes in law, of which we may become
aware.
(h) No opinion is given herein as to the effect of usury laws
(or other similar laws) of any jurisdiction with respect to the
Operative Documents.
This opinion is rendered solely for the benefit of those
institutions listed on SCHEDULE A hereto and their successors and assigns in
connection with the transactions contemplated by the Operative Documents and may
not be used or relied upon by any other person or for any other purpose.
1. State Street is a Massachusetts trust company, validly
formed and authorized to operate as a state-chartered trust company under the
laws of the Commonwealth of Massachusetts and, in its individual capacity or as
Indenture Trustee, as the case may be, has the requisite corporate and trust
power and authority to execute, deliver and perform its obligations under the
Operative Documents and in its capacity as Indenture Trustee, to authenticate
the Secured Certificates to be delivered on the Delivery 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
Delivery 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
TO THE ADDRESSES LISTED
ON SCHEDULE HERETO -5- [_______ ___, ___]
thereof do not and will not result in the violation of the provisions of the
charter documents or by-laws of State Street and, to the best of our knowledge,
do not conflict with, or result in a breach of any terms or provisions of, or
constitute a default under, or result in the creation or the imposition of any
lien, charge or encumbrance upon any property or assets of State Street under
any indenture, mortgage or other agreement or instrument, in each case known to
us, to which State Street is a party or by which it is bound, or violates any
applicable Massachusetts or federal law, rule or regulation governing State
Street's banking or trust powers, or, to the best of our knowledge, of any
judgment, order or decree, in each case known to us, applicable to State Street
of any court, regulatory body, administrative agency, government or governmental
body having jurisdiction over State Street.
5. No authorization, approval, consent, license or order of,
giving of notice to, registration with, or taking of any other action in respect
of, any federal or state governmental authority or agency pursuant to any
federal or Massachusetts law governing the banking or trust powers of State
Street is required for the authorization, execution, delivery and performance by
State Street, in its individual capacity or as Indenture Trustee, as the case
may be, of the Operative Documents or the consummation of any of the
transactions by State Street, in its individual capacity or as Indenture
Trustee, as the case may be, contemplated thereby (except as shall have been
duly obtained, given or taken); and such authorization, execution, delivery,
performance, consummation and issuance do not conflict with or result in a
breach of the provisions of any such law.
6. There are no taxes, fees or other governmental charges
payable under the laws of the Commonwealth of Massachusetts or any political
subdivision of such State in connection with the execution and delivery by State
Street, in its individual capacity or as Indenture Trustee, as the case may be,
of the Operative Documents (except for taxes on any fees payable to State Street
in its individual capacity) which 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
▇▇▇▇▇ Fargo Bank Northwest, National Association, as Owner Trustee
[____________________], as Owner Participant
Northwest Airlines, Inc., as Lessee
Northwest Airlines Corporation, as Guarantor
Standard & Poor's Ratings Services
▇▇▇▇▇'▇ Investors Service, Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
▇.▇. ▇▇▇▇▇▇ Securities Inc.
Credit Suisse First Boston Corporation
Deutsche Banc Alex. ▇▇▇▇▇ Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc.
Landesbank Hessen-Thuringen Girozentrale
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 Lessee Concerning
Section 1110 of the Federal Bankruptcy Code
-------------------------------------------------
Gentlemen:
We have acted as special counsel for Northwest Airlines, Inc.,
a Minnesota corporation ("LESSEE"), in connection with the transactions
contemplated by the Participation Agreement [NW ____ ___], dated as of
[______________] (the "PARTICIPATION AGREEMENT"), among Lessee, Northwest
Airlines Corporation, as Guarantor, ▇▇▇▇▇ Fargo Bank Northwest, National
Association, as Owner Trustee under the Trust Agreement referred to therein,
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, the Owner Participant named 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 [Airbus
A319113/114] [Boeing 757351] [Boeing 747-451] Airframe bearing U.S. Registration
No. N[________] and Manufacturer's Serial No. [_____], the term "Engines" shall
mean the two [CFM International, Inc. model CFM565A4/5A5] [▇▇▇▇▇ & Whitney model
PW2040] [▇▇▇▇▇ & ▇▇▇▇▇▇▇ model PW4056] Engines bearing manufacturer's Serial
Nos. [______][, [__________], [__________]] and [______], and the term
"Aircraft" shall mean the Airframe and the Engines, collectively, but expressly
excludes any portion of the Aircraft that does not constitute an aircraft,
aircraft engine, appliance, or spare part as such terms are defined in section
40102 of title 49 of the United States Code. We are rendering this opinion
letter to you at the request of Lessee 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, Purchase Agreement Assignment, Trust Agreement, Trust
Indenture, Trust Supplement, Lease, Lease Supplement, ▇▇▇▇ of Sale, FAA ▇▇▇▇ of
Sale, Guarantee and Secured Certificates. As to any facts material to our
opinions expressed herein, we have, without independent investigation, relied
TO THE ADDRESSES LISTED
ON SCHEDULE HERETO -2- [_______ ___, ___]
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 Lessee including, without
limitation, the certificate of an officer of the Lessee delivered pursuant to
Section 4(a)(ix) of the Participation Agreement and the certificate of an
officer of the Lessee 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 Lessee. 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 Owner
Trustee, as Lessor under the Lease, and the Indenture Trustee, as assignee of
the Owner Trustee's rights under the Lease pursuant to the Trust Indenture,
would be entitled to the benefits of section 1110 ("Section 1110") of title 11
of the United States Code (the "Bankruptcy Code") if the Lessee 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 Trustee will continue to be the registered owner
of the Aircraft, subject to the security interest of the Indenture
Trustee;
(ii) the Lessee holds 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 Trustee in accordance with its terms,
except as enforcement thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws
TO THE ADDRESSES LISTED
ON SCHEDULE HERETO -3- [_______ ___, ___]
affecting the rights of creditors generally and general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law) and the Trust Indenture is effective to
create a valid security interest in favor of the Indenture Trustee for
the benefit of the Loan Participants in the Owner Trustee's right,
title and interest under the Lease and that the Indenture Trustee has
and will continue to hold a perfected security interest in the Owner
Trustee's interest under the Lease; 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
Trustee in the Aircraft and to perfect the security interest of the
Indenture Trustee in the Owner Trustee's interest in the Lease.
CONCLUSION
Based upon the foregoing, and subject to the assumptions and
qualifications contained herein, it is our opinion that if the Lessee were to
become a debtor under chapter 11 of the Bankruptcy Code, the Owner Trustee as
Lessor under the Lease, and the Indenture Trustee for the benefit of the Loan
Participants, as assignee of the Owner Trustee's rights under the Lease pursuant
to the Trust Indenture, 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, and
subsequently amended on April 5, 2000, by Section 744 of the ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Aviation Investment and Reform Act for the 21st Century, Pub. L. No. 106-181
(the "AVIATION INVESTMENT AND REFORM ACT"). Our opinion respecting Section 1110
is based 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 and the Aviation Investment and Reform Act, and a
review of the cases decided under the former versions of Section 1110. We are
not aware of any judicial decision interpreting the amendments to Section 1110
enacted in the Bankruptcy Reform Act of 1994 or the Aviation Investment and
Reform Act that is 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 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.
TO THE ADDRESSES LISTED
ON SCHEDULE HERETO -4- [_______ ___, ___]
We express no opinion as to the availability or effect of a
preliminary injunction, temporary restraining order or other such temporary
relief, nor do we express any opinion, either implicitly or otherwise, with
respect to any subject not addressed expressly in the Conclusion.
We express no opinion as to the availability of Section 1110
with respect to any bankruptcy proceedings of any possible sublessee of an
Aircraft which may be subleased by the Lessee. 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 Lessee
Northwest Airlines Corporation, as Guarantor
[___________________], as Owner Participant
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.
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
▇.▇. ▇▇▇▇▇▇ Securities Inc.
Credit Suisse First Boston Corporation
Deutsche Banc Alex. ▇▇▇▇▇ Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc.
Landesbank Hessen-Thuringen Girozentrale
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 [Airbus A319113/114] [Boeing 757351] airframe FAA Registration
No. N[_____] and MSN [_____], and [CFM International, Inc. model CFM565A4/5A5]
[▇▇▇▇▇ & ▇▇▇▇▇▇▇ model PW2040] [▇▇▇▇▇ & Whitney model PW4056] engine MSN
[______] [, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ model PW4056 engine MSN [______], ▇▇▇▇▇ & Whitney
model PW4056 engine MSN [_____]]and [CFM International, Inc. model CFM565A4/5A5]
[▇▇▇▇▇ & ▇▇▇▇▇▇▇ model PW2040] [▇▇▇▇▇ & Whitney model PW 4056] engine MSN
[______] (collectively, the "Aircraft"), to be delivered by Cadwalader,
▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇ ("CW&T") to the parties identified therein in connection with
the execution and delivery of certain of the Operative Documents (as defined in
the Participation Agreement as defined in the Opinion), I,
[____________________],[____________________] of Northwest Airlines, Inc., do
hereby certify that:
1. I understand that CW&T is relying on this Certificate in
connection with the execution and delivery of the Opinion.
2. To the best of my knowledge, information and belief, after
due inquiry, the assumptions contained in the section of the Opinion entitled
"Assumptions" are true and correct as of the date hereof.
3. I have no reason to believe that any statement, fact, or
opinion expressed in the Opinion is untrue, inaccurate or incomplete in any
respect.
4. To the best of my knowledge, information and belief, after
due inquiry, all of the statements, representations, warranties, agreements,
disclosures and other information furnished by Northwest, Airlines, Inc. and
contained in the Operative Documents and other documents delivered in connection
with this transaction are true, accurate and complete in all respects.
5. Northwest Airlines, Inc. intends that, as Lessee under the
Lease, the Owner Trustee, and as assignee of the Owner Trustee's rights under
the Lease, 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. Section 1110 with respect to the Aircraft.
6. The Aircraft was first placed in service after October 22,
1994.
7. I have been duly authorized by Northwest Airlines, Inc. to
execute and deliver this Certificate to CW&T.
Dated: [_________ __, ___]
NORTHWEST AIRLINES, INC.
By: ____________________________________
Name:
Title:
EXHIBIT J-1 TO PARTICIPATION AGREEMENT
[Form of Opinion of ▇▇▇▇▇▇▇ ▇▇▇▇ LLP,
special counsel for the Pass Through Trustee]
[______________________, ____]
TO THE PARTIES SET FORTH
IN SCHEDULE A HERETO
----------
Re: Northwest Airlines, Inc./Leveraged Lease Financing of [Airbus
A319-113/114] [Boeing 757-351] [Boeing 747-451] Aircraft
[NW _____ ___] (Pass Through Trustee Opinion)
--------------------------------------------------------------
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 ▇▇. ▇▇▇▇-▇▇-▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇-▇▇-▇, Trust
Supplement No. 2001-1B and Trust Supplement No. 2001-1C, each dated as of June
1, 2001 [and as supplemented by Trust Supplement No. 20011D, dated as of
[_________, ____] -- option for A319's and 757's] 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., as Lessee (the "LESSEE"), Northwest Airlines Corporation (the
"GUARANTOR"), [___________________], as Owner Participant, State Street, as Pass
Through Trustee, State Street Bank and Trust Company, as Subordination Agent
(the "SUBORDINATION AGENT") and ▇▇▇▇▇ Fargo Bank Northwest, National
Association, as Owner Trustee and the transactions contemplated thereby.
Capitalized terms not otherwise defined herein shall have the meanings specified
in the Lease and Section 13 of the Participation Agreement. This opinion is
being delivered pursuant to Section 4(a)(xxiv) of the Participation Agreement.
Our representation of State Street and the Pass Through
Trustee has been as special counsel for the limited purposes stated above. As to
all matters of fact (including factual conclusions and characterizations and
descriptions of purpose, intention or other state of mind), we have relied, with
your permission, entirely upon (i) the representations and warranties of the
parties set forth in the Operative Documents and (ii) certificates delivered to
us by the management of State Street and have assumed, without independent
inquiry, the accuracy of those representations, warranties and certificates.
TO THE ADDRESSES LISTED
ON SCHEDULE HERETO -2- [_______ ___, ___]
We have examined the Participation Agreement, the Liquidity
Facility for each of the Class A1, Class A2, Class B and Class C Trusts, the
Intercreditor Agreement, the Note Purchase Agreement, the Escrow and Paying
Agent Agreement for each of the Class A1, Class A2, Class B and Class C Trusts
each dated as of June 1, 2001 and each among ▇▇▇▇▇ Fargo Bank Northwest,
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 and each of the Pass Through Trusts (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 lawyers in the firm who have participated directly and
substantively in the specific transactions to which this opinion relates, 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
jurisdiction 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.
TO THE ADDRESSES LISTED
ON SCHEDULE HERETO -3- [_______ ___, ___]
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 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, bylaws, and other governmental organizational documents, and
the applicable corporate, partnership, or other enterprise legislation
and other applicable laws, as the case may be (other than State Street
and the Pass Through Trustee with respect to the laws of the United
States of America and the internal substantive laws of the 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.
(b) We have assumed without any independent investigation (i)
that each of the Operative Documents is a valid, binding and
enforceable obligation of each party thereto other than State Street or
the Pass Through Trustee, as applicable, and (ii) that each of the
Operative Documents is a valid, binding and enforceable obligation of
State Street or the Pass Through Trustee, as applicable, to the extent
that laws other than those of the 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).
(c) The enforcement of any obligations of State Street or the
Pass Through Trustee, as applicable, under any of the Operative
Documents may be limited by the receivership, conservatorship and
supervisory powers of bank regulatory agencies generally, as well as by
bankruptcy, insolvency, reorganization, moratorium, marshaling or other
laws and rules of law affecting the enforcement generally of 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
TO THE ADDRESSES LISTED
ON SCHEDULE HERETO -4- [_______ ___, ___]
(d) We express no opinion as the availability of any specific
or equitable relief of any kind.
(e) The enforcement of any rights may in all cases be subject
to an implied duty of good faith and fair dealing and to general
principles of equity (regardless of whether such enforceability is
considered in a proceeding at law or in equity) and, as to any rights
to collateral security, will be subject to a duty to act in a
commercially reasonable manner.
(f) We express no opinion as to the enforceability of any
particular provision of any of the Operative Documents relating to the
(i) waivers of rights to object to jurisdiction or venue, or consents
to jurisdiction or venue, (ii) waivers of rights to (or methods of)
service of process, or rights to trial by jury, or other rights or
benefits bestowed by operation of law, (iii) waivers of any applicable
defenses, setoffs, recoupments, or counterclaims, (iv) the grant of
powers of attorney to any person or entity, (v) exculpation or
exoneration clauses, indemnity clauses, and clauses relating to release
or waivers of unmatured claims or rights, (vi) the imposition or
collection of interest on overdue interest or providing for a penalty
rate of interest or late charges on overdue or defaulted obligations,
or the payment of any premium, liquidated damages, or other amount
which may be held by any court to be a "penalty" or a "forfeiture," or
(vii) so-called "usury savings clauses" purporting to specify methods
of (or otherwise assure) compliance with usury laws or other similar
laws of any jurisdiction.
(g) We express no opinion as to the effect of events
occurring, circumstances arising, or change of law becoming effective
or occurring, after the date hereof on the matters addressed in this
opinion letter, and we assume no responsibility to inform you of
additional or changed facts, or changes in law, of which we may become
aware.
(h) No opinion is given herein as to the effect of usury laws
(or other similar laws) of any jurisdiction with respect to the
Operative Documents.
In rendering the opinion set forth below in paragraph 6 as to
certain 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
TO THE ADDRESSES LISTED
ON SCHEDULE HERETO -5- [_______ ___, ___]
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
TO THE ADDRESSES LISTED
ON SCHEDULE HERETO -6- [_______ ___, ___]
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
▇▇▇▇▇ Fargo Bank Northwest, National Association, as Pass Through Trustee
[___________________], as Owner Participant
Northwest Airlines, Inc., as Lessee
Northwest Airlines Corporation, as Guarantor
Standard & Poor's Ratings Services
▇▇▇▇▇'▇ Investors Service, Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
▇.▇. ▇▇▇▇▇▇ Securities Inc.
Credit Suisse First Boston Corporation
Deutsche Banc Alex. ▇▇▇▇▇ Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc.
Landesbank Hessen-Thuringen Girozentrale
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./Leveraged Lease Financing of [Airbus
A319-113/114] [Boeing 757-351] [Boeing 747-451] Aircraft
[NW _____ ____] (Subordination Agent Opinion)
--------------------------------------------------------------
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
June 1, 2001[, as amended as of __________, ____] (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 ▇▇▇▇-▇▇-▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ Through Trust 2001-1B [and] Northwest Airlines Pass
Through Trust 2001-1C [and Northwest Airlines Pass Through Trust 20011D],
Landesbank Hessen-Thuringen Girozentrale, as Class A1 Liquidity Provider, Class
A2 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 Lessee (the "LESSEE"), Northwest
Airlines Corporation (the "GUARANTOR"), [__________________], as Owner
Participant, State Street Bank and Trust Company of Connecticut, National
Association, as Pass Through Trustee (the "PASS THROUGH TRUSTEE"), State Street,
as Subordination Agent and ▇▇▇▇▇ Fargo Bank Northwest, National Association, as
Owner Trustee and the transactions contemplated thereby. Capitalized terms not
otherwise defined herein shall have the meanings specified in the Lease and
Section 13 of the Participation Agreement. This opinion is being delivered
pursuant to Section 4(a)(xxv) of the Participation Agreement.
Our representation of State Street and the Subordination Agent
has been as special counsel for the limited purposes stated above. As to all
matters of fact (including factual conclusions and characterizations and
descriptions of purpose, intention or other state of mind), we have relied, with
your permission, entirely upon (i) the representations and warranties of the
parties set forth in the Operative Documents and (ii) certificates delivered to
us by the
TO THE ADDRESSES LISTED
ON SCHEDULE HERETO -3- [_______ ___, ___]
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 Liquidity Facilities and the Intercreditor Agreement
(together, the "OPERATIVE DOCUMENTS"), the Certificate of the Massachusetts
Commissioner of Banks relating to State Street and originals, or copies
certified or otherwise identified to our satisfaction, of such other records,
documents, certificates, or other instruments as we have deemed necessary or
advisable for the purposes of this opinion. For purposes of our opinion rendered
in paragraph 1 below, with respect to the authority of State Street to operate
as a state-chartered trust company and exercise trust powers, our opinion relies
upon and is limited by such Certificate of the Massachusetts Commissioner of
Banks.
We have assumed the genuineness of all signatures (other than
those on behalf of State Street and the Subordination Agent), the conformity to
the originals of all documents reviewed by us as copies, and the authenticity
and completeness of all original documents reviewed by us in original or copy
form and the legal competence of each individual executing any document (other
than on behalf of State Street and the Subordination Agent).
When an opinion set forth below is given to the best of our
knowledge, or to our knowledge, or with reference to matters of which we are
aware or which are known to us, or with another similar qualification, the
relevant knowledge or awareness is limited to the actual knowledge or awareness
of the individual lawyers in the firm who have participated directly and
substantively in the specific transactions to which this opinion relates, 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:
TO THE ADDRESSES LISTED
ON SCHEDULE HERETO -3- [_______ ___, ___]
(a) We have assumed without any independent investigation that
(i) each party to the Operative Documents, other than State Street, in
its individual capacity or as Subordination Agent, as applicable, at
all times relevant thereto, is validly existing 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, bylaws, and other governing organizational documents, and
the applicable corporate, partnership, or other enterprise legislation
and other applicable laws, as the case may be (other than State Street
and the Subordination Agent with respect to the laws of the United
States of America and the internal substantive laws of the Commonwealth
of Massachusetts, but only in each case to the limited extent the same
may be applicable to State Street or the Subordination Agent, and
relevant to our opinions expressed below) to execute, and to perform
its obligations under, the Operative Documents, and (iii) each party to
the Operative Documents (other than State Street or the Subordination
Agent, as applicable) has duly executed and delivered each of such
agreements and instruments to which it is a party and that (other than
with respect to State Street and the Subordination Agent, as
applicable) the execution and delivery of such agreements and
instruments and the transactions contemplated thereby have been duly
authorized by proper corporate or other organizational proceedings as
to such party.
(b) We have assumed without any independent investigation (i)
that each of the Operative Documents is a valid, binding and
enforceable obligation of each party thereto other than State Street or
the Subordination Agent, as applicable, and (ii) that each of the
Operative Documents is a valid, binding and enforceable obligation of
State Street or the Subordination Agent, as applicable, to the extent
that laws other than those of the Commonwealth of Massachusetts are
relevant thereto (other than the laws of the United States of America,
but only to the limited extent the same may be applicable to State
Street or the Subordination Agent, as applicable, and relevant to our
opinions expressed below).
(c) The enforcement of any obligations of State Street or the
Subordination Agent, as applicable, under any of the Operative
Documents may be limited by the receivership, conservatorship and
supervisory powers of bank regulatory agencies generally, as well as by
bankruptcy, insolvency, reorganization, moratorium, marshaling or other
laws and rules of law affecting the enforcement generally of creditors'
rights and remedies (including such as may deny giving effect to
waivers of debtors' or guarantors' rights); and we express no opinion
as to the status under any fraudulent conveyance laws or fraudulent
transfer laws of any of the obligations of State Street or the
Subordination Agent, as applicable, under any of the Operative
Documents.
(d) We express no opinion as the availability of any specific
or equitable relief of any kind.
TO THE ADDRESSES LISTED
ON SCHEDULE HERETO -4- [_______ ___, ___]
(e) The enforcement of any rights may in all cases be subject
to an implied duty of good faith and fair dealing and to general
principles of equity (regardless of whether such enforceability is
considered in a proceeding at law or in equity) and, as to any rights
to collateral security, will be subject to a duty to act in a
commercially reasonable manner.
(f) We express no opinion as to the enforceability of any
particular provision of any of the Operative Documents relating to (i)
waivers of rights to object to jurisdiction or venue, or consents to
jurisdiction or venue, (ii) waivers of rights to (or methods of)
service of process, or rights to trial by jury, or other rights or
benefits bestowed by operation of law, (iii) waivers of any applicable
defenses, setoffs, recoupments, or counterclaims, (iv) the grant of
power of attorney to any person or entity, (v) exculpation or
exoneration clauses, indemnity clauses, and clauses relating to
releases or waivers of unmatured claims or rights, (vi) the imposition
or collection of interest on overdue interest or providing for a
penalty rate of interest or late charges on overdue or defaulted
obligations, or the payment of any premium, liquidated damages, or
other amount which may be held by any court to be a "penalty" or a
"forfeiture," or (vii) so-called "usury savings clauses" purporting to
specify methods of (or otherwise assure) compliance with usury laws or
other similar laws of any jurisdiction.
(g) We express no opinion as to the effect of events
occurring, circumstances arising, or changes of law becoming effective
or occurring, after the date hereof on the matters addressed in this
opinion letter, and we assume no responsibility to inform you of
additional or changed facts, or changes in law, of which we may become
aware.
(h) No opinion is given herein as to the effect of usury laws
(or other similar laws) of any jurisdiction with respect to the
Operative Documents.
This opinion is rendered solely for the benefit of those
institutions listed on SCHEDULE A hereto and their successors and assigns in
connection with the transactions contemplated by the Operative Documents and may
not be used or relied upon by any other person or for any other purpose.
1. State Street is a Massachusetts trust company, validly
formed and authorized to operate as a state-chartered trust company under the
laws of the Commonwealth of Massachusetts and, in its individual capacity or as
Subordination Agent, as the case may be, has the requisite corporate and trust
power and authority to execute, deliver and perform its obligations under the
Operative Documents.
2. State Street, in its individual capacity or as
Subordination Agent, as the case may be, has duly authorized 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.
TO THE ADDRESSES LISTED
ON SCHEDULE HERETO -5- [_______ ___, ___]
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,
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.
TO THE ADDRESSES LISTED
ON SCHEDULE HERETO -6- [_______ ___, ___]
7. Assuming that the Subordination Agent holds each of the
Equipment Notes delivered to and registered in its name pursuant to and as
required by the Intercreditor Agreement, it holds such Equipment Notes in trust
as trustee for the related Trustee in the exercise of the fiduciary powers
conferred upon State Street by Massachusetts law.
Very truly yours,
▇▇▇▇▇▇▇ ▇▇▇▇ LLP
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
▇▇▇▇▇ Fargo Bank Northwest, National Association, as Owner Trustee
[_______________], as Owner Participant
Northwest Airlines, Inc., as Lessee
Northwest Airlines Corporation, as Guarantor
Standard & Poor's Ratings Services
▇▇▇▇▇'▇ Investors Service, Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
▇.▇. ▇▇▇▇▇▇ Securities Inc.
Credit Suisse First Boston Corporation
Deutsche Banc Alex. ▇▇▇▇▇ Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc.
Landesbank Hessen-Thuringen Girozentrale