Exhibit 99(h)
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PARTICIPATION AGREEMENT
[NW ____ _]
Dated as of
[_________________]
Among
NORTHWEST AIRLINES, INC.,
Owner,
NORTHWEST AIRLINES CORPORATION,
Guarantor,
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
Pass Through Trustee under each of
the Pass Through Trust Agreements,
STATE STREET BANK AND TRUST COMPANY,
Subordination Agent,
and
STATE STREET BANK AND TRUST COMPANY,
in its Individual Capacity and as
Indenture Trustee
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One [Airbus A330-323] [Boeing 757-351] Aircraft
N[_____]
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TABLE OF CONTENTS
Page
----
SECTION 1. Purchase of Secured Certificates by Pass Through Trustees........2
SECTION 2. Owner's Notice of Closing Date...................................3
SECTION 3. [Intentionally Omitted]..........................................3
SECTION 4. Conditions.......................................................3
(a) Conditions Precedent to Purchase of Secured
Certificates............................................3
(b) Conditions Precedent to the Obligations of the Owner
and the Guarantor.......................................8
SECTION 5. [Intentionally Omitted]..........................................9
SECTION 6. Extent of Interest of Certificate Holders........................9
SECTION 7. Representations and Warranties of the Owner and the Guarantor;
Indemnities...................................................10
(a) Representations and Warranties...........................10
(b) General Tax Indemnity....................................12
(c) General Indemnity........................................12
(d) Income Tax...............................................13
SECTION 8. Representations, Warranties and Covenants.......................13
SECTION 9. Reliance of Primary Liquidity Provider and Policy Provider......22
SECTION 10. Other Documents.................................................22
SECTION 11. Certain Covenants of the Owner..................................22
SECTION 12. [Intentionally Omitted].........................................23
SECTION 13. Certain Definitions; Notices; Consent to Jurisdiction...........23
SECTION 14. [Intentionally Omitted].........................................23
SECTION 15. Miscellaneous...................................................23
SECTION 16. Sale/leaseback Transaction......................................24
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SCHEDULES
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SCHEDULE I - Names and Addresses
SCHEDULE II - Commitments
SCHEDULE III - Pass Through Trust Agreements
EXHIBITS
--------
Exhibit A - Schedule of Countries Authorized for Reregistration
Exhibit B-1 - Form of Opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, special counsel
for the Owner and the Guarantor
Exhibit B-2 - Form of Opinion of Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇, special
counsel for the Owner and the Guarantor
Exhibit B-3 - Form of Opinion of the Owner's Legal Department
Exhibit C - Form of Opinion of counsel for the Manufacturer
[and the Supplier-- A330]
Exhibit D - [Intentionally Omitted]
Exhibit E-1 - [Intentionally Omitted]
Exhibit E-2 - [Intentionally Omitted]
Exhibit F - Form of Opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.C.
Exhibit G - Form of Opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ LLP, special counsel for
the Indenture Trustee
Exhibit H-1 - [Intentionally Omitted]
Exhibit H-2 - [Intentionally Omitted]
Exhibit I - Form of Section 1110 Opinion of Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇,
special counsel for the Owner
Exhibit J-1 - Form of Opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ LLP, special counsel for
the Pass Through Trustee
Exhibit J-2 - Form of Opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ LLP, special counsel for
the Subordination Agent
Exhibit K - Section 7(b) - General Tax Indemnity
Exhibit L - Section 7(c) - General Indemnity
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PARTICIPATION AGREEMENT
[NW ____ _]
THIS PARTICIPATION AGREEMENT [NW ____ _] dated as of
[_______________], among (i) NORTHWEST AIRLINES, INC., a Minnesota corporation
(the "Owner"), (ii) NORTHWEST AIRLINES CORPORATION, a Delaware corporation
(the "Guarantor"), (iii) STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION, not in its individual capacity except as otherwise
provided herein, but solely as trustee (in such capacity, the "Pass Through
Trustee") under each of two separate Pass Through Trust Agreements (as defined
below), (iv) STATE STREET BANK AND TRUST COMPANY, not in its individual
capacity, but solely as subordination agent and trustee (in such capacity, the
"Subordination Agent") under the Intercreditor Agreement (defined below), and
(v) STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust company, in its
individual capacity and as Indenture Trustee under the Trust Indenture (as
hereinafter defined) (herein, in such latter capacity together with any
successor indenture trustee, called the "Indenture Trustee") (this
"Agreement");
W I T N E S S E T H:
WHEREAS, pursuant to the Purchase Agreement between the Owner and
the [Supplier] [Manufacturer], the [Supplier] [Manufacturer] has agreed to
sell to the Owner, among other things, certain [Airbus A330-323] [Boeing
757-351] aircraft, including the Aircraft which has been [or is being]
delivered by the [Supplier] [Manufacturer] to the Owner and is the subject of
this Agreement;
[WHEREAS, concurrently with the execution and delivery of this
Agreement, 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"); -- A330]
[WHEREAS, concurrently with the execution and delivery of this
Agreement, the Manufacturer has executed the Consent and Agreement [NW ____ _]
(herein called the "Consent and Agreement"); -- 757]
WHEREAS, the Indenture Trustee and the Owner concurrently with the
execution and delivery of this Agreement are entering into the Trust Indenture
and Security Agreement [NW ____ _], dated as of the date hereof (said Trust
Indenture and Security Agreement, as the same may be amended or supplemented
from time to time, being herein called the "Trust Indenture", such term to
include, unless the context otherwise requires, the Trust Indenture Supplement
referred to below) pursuant to which the Owner will issue secured certificates
substantially in the form set forth in Section 2.01 thereof (the "Secured
Certificates", and individually, a "Secured Certificate") in two series, which
Secured Certificates are to be secured by the mortgage and security interests
created by the Owner in favor of the Indenture Trustee, and the Owner shall
execute and deliver a Trust Indenture Supplement substantially in
the form of Exhibit A to the Trust Indenture (the "Trust Indenture Supplement")
covering the Aircraft, supplementing the Trust Indenture;
WHEREAS, concurrently with the execution and delivery of this
Agreement; the Guarantor is entering into a Guarantee [NW ____ _], dated as of
the date hereof, pursuant to which the Guarantor guarantees certain
obligations of the Owner under the Operative Documents (the "Guarantee");
WHEREAS, pursuant to the Pass Through Trust Agreement and each of
the Pass Through Trust Supplements set forth in Schedule III hereto
(collectively, the "Pass Through Trust Agreements"), on the Issuance Date two
separate trusts (collectively, the "Pass Through Trusts" and, individually, a
"Pass Through Trust") were created to facilitate the transactions contemplated
hereby, including, without limitation, the issuance and sale by each Pass
Through Trust of pass through certificates pursuant thereto (collectively, the
"Certificates");
WHEREAS, the proceeds from the issuance and sale of the Certificates
by each Pass Through Trust will be applied in part by the Pass Through Trustee
on the Closing Date to purchase from the Owner, on behalf of each Pass Through
Trust, all of the Secured Certificates bearing the same interest rate as the
Certificates issued by such Pass Through Trust;
WHEREAS, on the Issuance Date (i) Westdeutsche Landesbank
Girozentrale, acting through its New York branch (the "Primary Liquidity
Provider"), entered into two revolving credit agreements (a "Primary Liquidity
Facility"), one for the benefit of the holders of Certificates of each Pass
Through Trust, with the Subordination Agent, as agent for the Pass Through
Trustee on behalf of each such Pass Through Trust; and (ii) the Pass Through
Trustee, the Primary Liquidity Provider, the Policy Provider, the
Subordination Agent and other parties thereto entered into the Intercreditor
Agreement;
WHEREAS, the Secured Certificates will be held by the Subordination
Agent pursuant to the Intercreditor Agreement on behalf of the Pass Through
Trusts;
WHEREAS, in order to facilitate the transactions contemplated
hereby, the Owner and the Guarantor have entered into the Underwriting
Agreement, dated as of July 29, 2002, among the Owner, the Guarantor and the
several underwriters named therein (the "Underwriting Agreement"); and
WHEREAS, certain terms are used herein as defined in Section 13(a)
hereof;
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, the parties hereto agree as follows:
SECTION 1. Purchase of Secured Certificates by Pass Through
Trustees. (a) Purchase of Secured Certificates by Pass Through Trustees.
Subject to the terms and conditions of this Agreement, the Pass Through
Trustee for each Pass Through Trust agrees to
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purchase the Secured Certificates set forth on Schedule II opposite the name
of such Pass Through Trust by paying to the Owner the aggregate purchase price
of the Secured Certificates being issued to such Pass Through Trustee as set
forth on Schedule II opposite the name of such Pass Through Trust. The Pass
Through Trustees shall make such payments to the Owner on a date to be
designated pursuant to Section 2 hereof, but in no event later than
[__________], by transferring to the account of the Owner at USBank,
Minneapolis, ABA No. ▇▇▇-▇▇▇-▇▇▇, Account No. 1502-5009-9440, Reference:
Northwest/NW [____ __], not later than 9:30 a.m., New York City time, on the
Closing Date in immediately available funds in Dollars, the amount set forth
opposite the name of such Pass Through Trust on Schedule II hereto.
Upon the occurrence of the above transfers by the Pass Through
Trustee for each Pass Through Trust to the Owner, the Owner shall issue,
pursuant to Article II of the Trust Indenture, to the Subordination Agent on
behalf of the Pass Through Trustee for each of the Pass Through Trusts,
Secured Certificates of the maturity and aggregate principal amount, bearing
the interest rate and for the purchase price set forth on Schedule II hereto
opposite the name of such Pass Through Trust.
(b) [Intentionally Omitted].
(c) General Provisions. The amount of the payment of each Pass
Through Trustee to be made as provided above is hereinafter called such
party's "Commitment" for the Aircraft.
SECTION 2. Owner's Notice of Closing Date. The Owner agrees to give
each Pass Through Trustee and the Indenture Trustee at least two Business Days'
telecopy or other written notice of the Closing Date, which Closing Date shall
be a Business Day, which notice shall specify the amount of each Pass Through
Trustee's Commitment for the Aircraft. As to each Pass Through Trustee, the
making of its Commitment for the Aircraft available in the manner required by
Section 1 shall constitute a waiver of such notice.
SECTION 3. [Intentionally Omitted].
SECTION 4. Conditions. (a) Conditions Precedent to Purchase of
Secured Certificates. It is agreed that the obligations of each Pass Through
Trustee to purchase Secured Certificates and to make available the amount of
its Commitment is subject to the satisfaction prior to or on the Closing Date
of the following conditions precedent:
(i) The Pass Through Trustee shall have received due
notice with respect to such participation pursuant to Section 2
hereof (or shall have waived such notice either in writing or as
provided in Section 2).
(ii) No change shall have occurred after the date of the
execution and delivery of this Agreement in applicable law or
regulations or guidelines or interpretations thereof by appropriate
regulatory authorities which would make it a violation of law or
regulations or guidelines for the Pass Through Trustee to make its
Commitment available in accordance with Section 1 hereof.
(iii) [Intentionally Omitted].
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(iv) [Intentionally Omitted].
(v) The following documents shall have been duly
authorized, executed and delivered by the respective party or
parties thereto, shall each be satisfactory in form and substance to
the Pass Through Trustee and shall be in full force and effect and
executed counterparts shall have been delivered to the Pass Through
Trustee or its counsel, provided that only the Subordination Agent
on behalf of each Pass Through Trustee shall receive an executed
original of such Pass Through Trustee's respective Secured
Certificate and provided, further, that an excerpted copy of the
Purchase Agreement shall only be delivered to and retained by the
Indenture Trustee, which copy may be inspected and reviewed by the
Indenture Trustee if and only if there shall occur and be continuing
an Event of Default:
(1) an excerpted copy of the Purchase Agreement
(insofar as it relates to the Aircraft) [and the
Guaranty-- A330];
(2) the Trust Indenture;
(3) the Trust Indenture Supplement covering the
Aircraft dated the Closing Date;
(4) the Secured Certificates;
(5) the Consent and Agreement;
(6) the Guarantee; and
[(7) the French Pledge Agreement.-- A330]
In addition, the Pass Through Trustee shall have received executed
counterparts or conformed copies of the following documents:
(1) each of the Pass Through Trust Agreements;
(2) the Intercreditor Agreement; and
(3) the Primary Liquidity Facility for each of
the Pass Through Trusts.
(vi) A Uniform Commercial Code financing statement or
statements covering all the security interests created by or
pursuant to the Granting Clause of the Trust Indenture that are not
covered by the recording system established by the Federal Aviation
Act shall have been executed and delivered by the Owner, and such
financing statement or statements shall have been duly filed in all
places necessary or advisable, and any additional Uniform Commercial
Code financing statements deemed advisable by the Pass Through
Trustee shall have been executed and delivered by the Owner and duly
filed.
(vii) The Pass Through Trustee shall have received the
following:
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(A)(1) an incumbency certificate of the Owner
and the Guarantor (as the case may be) as to the person or
persons authorized to execute and deliver this Agreement,
the Pass Through Trust Agreements, the Guarantee and any
other documents to be executed on behalf of the Owner or
the Guarantor (as the case may be) in connection with the
transactions contemplated hereby and the signatures of
such person or persons;
(2) a copy of the resolutions of the board of
directors of the Owner and the Guarantor or the executive
committee thereof, certified by the Secretary or an
Assistant Secretary of the Owner and the Guarantor (as the
case may be), duly authorizing the transactions
contemplated hereby and the execution and delivery of each
of the documents required to be executed and delivered on
behalf of the Owner or the Guarantor (as the case may be)
in connection with the transactions contemplated hereby;
and
(3) a copy of the certificate of incorporation
of the Owner and the Guarantor, certified by the Secretary
of State of the State of Minnesota in the case of the
Owner and certified by the Secretary of State of the State
of Delaware in the case of the Guarantor, a copy of the
by-laws of the Owner and the Guarantor, certified by the
Secretary or Assistant Secretary of the Owner and the
Guarantor (as the case may be), and a certificate or other
evidence from the Secretary of State of the State of
Minnesota in the case of the Owner and from the Secretary
of State of the State of Delaware in the case of the
Guarantor, dated as of a date reasonably near the Closing
Date, as to the due incorporation and good standing of the
Owner or the Guarantor (as the case may be) in such state.
(B)(1) an incumbency certificate of the
Indenture Trustee as to the person or persons authorized
to execute and deliver this Agreement, the Trust Indenture
and any other documents to be executed on behalf of the
Indenture Trustee in connection with the transactions
contemplated hereby and the signatures of such person or
persons;
(2) a copy of the resolutions of the board of
directors of the Indenture Trustee, certified by the
Secretary or an Assistant Secretary of the Indenture
Trustee, duly authorizing the transactions contemplated
hereby and the execution and delivery of each of the
documents required to be executed and delivered on behalf
of the Indenture Trustee in connection with the
transactions contemplated hereby;
(3) a copy of the articles of association and
by-laws of the Indenture Trustee, each certified by the
Secretary or an Assistant Secretary of the Indenture
Trustee; and
(4) a certificate signed by an authorized
officer of the Indenture Trustee, dated the Closing Date,
certifying that the representations and warranties
contained herein of the Indenture Trustee are correct as
though made on and as of the Closing Date, except to the
extent that such representations and warranties
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relate solely to an earlier date (in which case such
representations and warranties are correct on and as of
such earlier date).
(viii) All appropriate action required to have been taken
prior to the Closing Date in connection with the transactions
contemplated by this Agreement shall have been taken by the Federal
Aviation Administration, or any governmental or political agency,
subdivision or instrumentality of the United States, and all orders,
permits, waivers, authorizations, exemptions and approvals of such
entities required to be in effect on the Closing Date in connection
with the transactions contemplated by this Agreement shall have been
issued, and all such orders, permits, waivers, authorizations,
exemptions and approvals shall be in full force and effect on the
Closing Date.
(ix) On the Closing Date the Pass Through Trustee shall
have received a certificate signed by an authorized officer of the
Owner (and with respect to the matters set forth in clause (4)
below, the Guarantor) to the effect that:
(1) the Aircraft has been duly certified by the
Federal Aviation Administration as to type and has a
current certificate of airworthiness, and the Owner has
good title to the Aircraft free and clear of Liens other
than Permitted Liens;
(2) the Trust Indenture and the Trust Indenture
Supplement covering the Aircraft shall have been duly
filed for recordation (or shall be in the process of being
so duly filed for recordation) with the Federal Aviation
Administration;
(3) application for registration of the Aircraft
in the name of the Owner has been duly made with the
Federal Aviation Administration; and
(4) the representations and warranties contained
herein of the Owner and the Guarantor are correct as
though made on and as of the Closing Date, except to the
extent that such representations and warranties (other
than those contained in clause (F) of Section 7(a)(iv))
relate solely to an earlier date (in which case such
representations and warranties were correct on and as of
such earlier date).
(x) The Owner and the Guarantor shall have entered into
the Underwriting Agreement and each of the Pass Through Trust
Agreements, the Certificates shall have been issued and sold
pursuant to the Underwriting Agreement and the Pass Through Trust
Agreements.
(xi) The Pass Through Trustee shall have received,
addressed to the Pass Through Trustee and the Indenture Trustee, and
reasonably satisfactory as to scope and substance to the Pass
Through Trustee, an opinion substantially in the form of Exhibit B-1
hereto from ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, special counsel for the
Owner and the Guarantor, an opinion substantially in the form of
Exhibit B-2 hereto from Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇, special
counsel for the Owner and the Guarantor, and an opinion
substantially in the form of Exhibit B-3 hereto from the Owner's
legal department.
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(xii) The Pass Through Trustee shall have received,
addressed to the Pass Through Trustee, the Indenture Trustee, the
Guarantor and the Owner and reasonably satisfactory as to scope and
substance to the Pass Through Trustee, the Guarantor and the Owner,
an opinion substantially in the form of Exhibit C hereto from
[counsel to the Supplier and the Manufacturer. -- A330] [counsel to
the Manufacturer. -- 757]
(xiii) [Intentionally Omitted].
(xiv) [Intentionally Omitted].
(xv) The Pass Through Trustee shall have received,
addressed to the Pass Through Trustee, the Indenture Trustee, the
Guarantor and the Owner, and reasonably satisfactory as to scope and
substance to the Pass Through Trustee, the Guarantor and the Owner,
an opinion substantially in the form of Exhibit F hereto from ▇▇▇▇▇
& ▇▇▇▇▇▇▇, P.C.
(xvi) The Pass Through Trustee shall have received,
addressed to the Pass Through Trustee, the Guarantor and the Owner,
and reasonably satisfactory as to scope and substance to the Pass
Through Trustee, the Guarantor and the Owner, an opinion
substantially in the form of Exhibit G hereto from ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
LLP, special counsel for the Indenture Trustee.
(xvii) [Intentionally Omitted].
(xviii) The Pass Through Trustee shall have received an
independent insurance broker's report, in form and substance
satisfactory to the Pass Through Trustee, as to the due compliance
with the terms of Section 7.04 of the Trust Indenture relating to
insurance with respect to the Aircraft.
(xix) [Intentionally Omitted].
(xx) No action or proceeding shall have been instituted
nor shall governmental action be threatened before any court or
governmental agency, nor shall any order, judgment or decree have
been issued or proposed to be issued by any court or governmental
agency at the time of the Closing Date to set aside, restrain,
enjoin or prevent the completion and consummation of this Agreement
or the transactions contemplated hereby.
(xxi) [Intentionally Omitted].
(xxii) [Intentionally Omitted].
(xxiii) The Pass Through Trustee shall have received a
favorable opinion substantially in the form of Exhibit I hereto
addressed to the Pass Through Trustee, and reasonably satisfactory
as to scope and substance to the Pass Through Trustee, from
Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇, special counsel for the Owner, which
opinion shall state (with customary assumptions and qualifications)
that the Indenture Trustee would be entitled to the benefits of 11
U.S.C. ss.1110 with respect to the Aircraft.
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(xxiv) [Intentionally Omitted].
(xxv) The Pass Through Trustee shall have received,
addressed to the Pass Through Trustee, the Indenture Trustee, the
Guarantor and the Owner, and reasonably satisfactory as to scope and
substance, to the Pass Through Trustee, the Guarantor and the Owner,
an opinion substantially in the form of Exhibit J-2 hereto from
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ LLP, special counsel to the Subordination Agent.
Promptly upon the recording of the Trust Indenture and the Trust
Indenture Supplement covering the Aircraft pursuant to the Federal Aviation
Act, the Owner will cause ▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.C., special counsel in Oklahoma
City, Oklahoma, to deliver to the Pass Through Trustee, the Indenture Trustee
and the Owner an opinion as to the due and valid registration of the Aircraft
in the name of the Owner, the due recording of the Trust Indenture and such
Trust Indenture Supplement and the lack of filing of any intervening documents
with respect to the Aircraft.
(b) Conditions Precedent to the Obligations of the Owner and the
Guarantor. It is agreed that the obligations of the Owner and the Guarantor to
enter into the other Operative Documents are all subject to the fulfillment to
the satisfaction of the Owner and the Guarantor prior to or on the Closing
Date of the following conditions precedent:
(i) All appropriate action required to have been taken on
or prior to the Closing Date in connection with the transactions
contemplated by this Agreement shall have been taken by the Federal
Aviation Administration, or any governmental or political agency,
subdivision or instrumentality of the United States, and all orders,
permits, waivers, exemptions, authorizations and approvals of such
entities required to be in effect on the Closing Date in connection
with the transactions contemplated by this Agreement shall have been
issued, and all such orders, permits, waivers, exemptions,
authorizations and approvals shall be in full force and effect on
the Closing Date.
(ii) The condition specified in Section 4(a)(ii) hereof
shall have been satisfied.
(iii) Those documents described in Section 4(a)(v) shall
have been duly authorized, executed and delivered by the respective
party or parties thereto (other than the Owner and the Guarantor) in
the manner specified in Section 4(a)(v), shall each be satisfactory
in form and substance to the Owner and the Guarantor, shall be in
full force and effect on the Closing Date, and an executed
counterpart of each thereof (other than the Secured Certificates)
shall have been delivered to the Owner or its special counsel and
the Guarantor or its special counsel.
(iv) The Owner and the Guarantor shall have received (A)
each certificate referred to in Section 4(a)(vii) (other than the
certificate referred to in clause (A) thereof), (B) a certificate
signed by an authorized officer of the Pass Through Trustee, dated
the Closing Date, certifying that the representations and warranties
contained herein of the Pass Through Trustee are correct as though
made on and as of the Closing Date, except to the extent that such
representations and warranties relate solely to an earlier date (in
which case such representations and warranties are correct on and as
of such earlier date),
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and (C)(1) an incumbency certificate of the Pass Through Trustee as
to the person or persons authorized to execute and deliver this
Agreement and any other documents to be executed on behalf of the
Pass Through Trustee in connection with the transactions
contemplated hereby and the signatures of such person or persons;
(2) a copy of the articles of association and by-laws of the Pass
Through Trustee, each certified by the Secretary of an Assistant
Secretary of the Pass Through Trustee; and (3) such other documents
and evidence with respect to the Pass Through Trustee as the Owner
or its special counsel and the Guarantor or its special counsel may
reasonably request in order to establish the due consummation of the
transactions contemplated by this Agreement, the taking of all
necessary action in connection therewith and compliance with the
conditions herein set forth.
(v) The Owner and the Guarantor shall have received (A) an
opinion substantially in the form of Exhibit J-1 hereto addressed to
the Guarantor and the Owner of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ LLP, special
counsel for the Pass Through Trustee, and reasonably satisfactory as
to scope and substance to the Guarantor and the Owner, and (B) the
opinions set forth in Sections 4(a)(xii), 4(a)(xv), 4(a)(xvi) and
4(a)(xxv) in each case addressed to the Owner and the Guarantor and
dated the Closing Date and in each case in scope and substance
reasonably satisfactory to the Owner and its special counsel and the
Guarantor and its special counsel.
(vi) No action or proceeding shall have been instituted
nor shall governmental action be threatened before any court or
governmental agency, nor shall any order, judgment or decree have
been issued or proposed to be issued by any court or governmental
agency at the time of the Closing Date to set aside, restrain,
enjoin or prevent the completion and consummation of this Agreement
or the transactions contemplated hereby.
(vii) No change shall have occurred after the date of the
execution and delivery of this Agreement in applicable law or
regulations or guidelines or interpretations by appropriate
regulatory authorities which would make it a violation of law or
regulations or guidelines for the Owner or the Guarantor to enter
into any transaction contemplated by the Operative Documents.
(viii) [Intentionally Omitted].
(ix) The Owner shall have been paid by the Pass Through
Trustee for each Pass Through Trust the aggregate purchase price set
forth on Schedule II opposite the name of such Pass Through Trust.
SECTION 5. [Intentionally Omitted].
SECTION 6. Extent of Interest of Certificate Holders. No Certificate
Holder (as defined in the Trust Indenture) shall have any further interest in,
or other right with respect to, the mortgage and security interests created by
the Trust Indenture when and if the principal of and interest on all Secured
Certificates held by such holder and all other sums payable to such
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holder hereunder, under the Trust Indenture and under such Secured
Certificates shall have been paid in full.
SECTION 7. Representations and Warranties of the Owner and the
Guarantor; Indemnities. (a) Representations and Warranties. The Owner and the
Guarantor represent and warrant to the Pass Through Trustee, the Indenture
Trustee, the Primary Liquidity Provider and the Subordination Agent that as of
the Closing Date:
(i) each of the Owner and the Guarantor is a corporation
duly organized, validly existing and in good standing under the laws
of the state of its incorporation, has the corporate power and
authority to own or hold under lease its properties, has, or had on
the respective dates of execution thereof, the corporate power and
authority to enter into and perform its obligations under (i) in the
case of the Owner, the Owner Documents, the Pass Through Trust
Agreements, the Underwriting Agreement and the other Operative
Documents to which it is a party and (ii) in the case of the
Guarantor, this Agreement, the Pass Through Trust Agreements, the
Underwriting Agreement and the other Operative Documents to which it
is a party, and is duly qualified to do business as a foreign
corporation in each state in which its operations or the nature of
its business requires other than failures to so qualify which would
not have a material adverse effect on the condition (financial or
otherwise), consolidated business or properties of it and its
subsidiaries considered as one enterprise;
(ii) The Owner is a Certificated Air Carrier, and its
chief executive office (as such term is used in Article 9 of the
Uniform Commercial Code in effect in the State of Minnesota) is
located at Eagan, Minnesota;
(iii) the execution and delivery by the Owner or the
Guarantor (as the case may be) of the Owner Documents, the Pass
Through Trust Agreements, the Underwriting Agreement and each other
Operative Document to which the Owner or the Guarantor (as the case
may be) is a party, and the performance of the obligations of the
Owner or the Guarantor (as the case may be) under the Owner
Documents, the Pass Through Trust Agreements, the Underwriting
Agreement and each other Operative Document to which the Owner or
the Guarantor (as the case may be) is a party, have been duly
authorized by all necessary corporate action on the part of the
Owner or the Guarantor, do not require any stockholder approval, or
approval or consent of any trustee or holder of any material
indebtedness or material obligations of the Owner or the Guarantor,
except such as have been duly obtained and are in full force and
effect, and do not contravene any law, governmental rule, regulation
or order binding on the Owner or the Guarantor (as the case may be)
or the certificate of incorporation or by-laws of the Owner or the
Guarantor (as the case may be), or contravene the provisions of, or
constitute a default under, or result in the creation of any Lien
(other than Permitted Liens) upon the property of the Owner or the
Guarantor (as the case may be) under, any indenture, mortgage,
contract or other agreement to which the Owner or the Guarantor (as
the case may be) is a party or by which it may be bound or affected
which contravention, default or Lien, individually or in the
aggregate, would be reasonably likely to have a material adverse
effect on the condition (financial or otherwise), business or
properties of the Guarantor and its subsidiaries considered as one
enterprise;
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(iv) neither the execution and delivery by the Owner or
the Guarantor (as the case may be) of the Owner Documents, the Pass
Through Trust Agreements, the Underwriting Agreement or any other
Operative Document to which the Owner or the Guarantor (as the case
may be) is a party, nor the performance of the obligations of the
Owner or the Guarantor (as the case may be) under the Owner
Documents, the Pass Through Trust Agreements, the Underwriting
Agreement or the other Operative Documents to which the Owner or the
Guarantor (as the case may be) is a party, requires the consent or
approval of, the giving of notice to, the registration with, or the
taking of any other action in respect of, the Department of
Transportation, the FAA, or any other federal, state or foreign
governmental authority having jurisdiction over the Owner or the
Guarantor, other than (A) the registration of the Certificates under
the Securities Act of 1933, as amended, and under the securities
laws of any state in which the Certificates may be offered for sale
if the laws of such state require such action, (B) the qualification
of the Pass Through Trust Agreements under the Trust Indenture Act
of 1939, as amended, pursuant to an order of the Securities and
Exchange Commission, (C) the orders, permits, waivers, exemptions,
authorizations and approvals of the regulatory authorities having
jurisdiction over the operation of the Aircraft by the Owner or any
Lessee required to be obtained on or prior to the Closing Date,
which orders, permits, waivers, exemptions, authorizations and
approvals have been duly obtained and are, or on the Closing Date
will be, in full force and effect (other than a flying time wire,
all steps to obtain the issuance of which will have been, on the
Closing Date, taken or caused to be taken by the Owner), (D) the
registration of the Aircraft referred to in Section 4(a)(ix)(3), (E)
the registrations and filings referred to in Section 7(a)(vi), and
(F) authorizations, consents, approvals, actions, notices and
filings required to be obtained, taken, given or made either only
after the date hereof or the failure of which to obtain, take, give
or make would not be reasonably likely to have a material adverse
effect on the condition (financial or otherwise), business or
properties of the Guarantor and its subsidiaries considered as one
enterprise;
(v) this Agreement, each of the other the Owner Documents,
the Pass Through Trust Agreements and the Guarantee constitute the
legal, valid and binding obligations of the Owner or the Guarantor
(as the case may be) enforceable against the Owner or the Guarantor
(as the case may be) in accordance with their respective terms,
except as the same may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or
similar laws affecting the rights of creditors or lessors generally
and by general principles of equity, whether considered in a
proceeding at law or in equity, and except, in the case of the Trust
Indenture, as limited by applicable laws which may affect the
remedies provided in the Trust Indenture, which laws, however, do
not make the remedies provided in the Trust Indenture inadequate for
practical realization of the benefits intended to be afforded
thereby;
(vi) except for (A) the filing for recording pursuant to
the Federal Aviation Act of a ▇▇▇▇ of sale on AC form 8050-2 (or
such other form as may be approved by the FAA) relating to the
Aircraft from the [Supplier] [Manufacturer] to the Owner, (B) the
registration of the Aircraft pursuant to the Federal Aviation Act,
(C) the filing for recording pursuant to the Federal Aviation Act of
[(x) the termination of the Mortgage and (y)] the Trust Indenture
and the Trust Indenture Supplement covering the Aircraft
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attached thereto and made a part thereof, (D) the filing of
financing statements (and continuation statements at periodic
intervals) with respect to the security interests created by such
documents under the Uniform Commercial Code of Minnesota and such
other states as may be specified in the opinions furnished pursuant
to Section 4(a)(xi) hereof [and the filing of a UCC-3 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 counterparts of the Trust
Indenture and the Trust Indenture Supplement covering the Aircraft,
no further filing or recording of any document (including any
financing statement in respect thereof under Article 9 of the
Uniform Commercial Code of any applicable jurisdiction) is necessary
under the laws of the United States of America or any State thereof
in order to perfect the security interest in favor of the Indenture
Trustee in the Aircraft as against the Owner and any third parties
in any applicable jurisdiction in the United States;
(vii) neither the Owner, the Guarantor nor any of their
affiliates has directly or indirectly offered the Certificates for
sale to any Person other than in a manner permitted by the
Securities Act of 1933, as amended, and by the rules and regulations
thereunder;
(viii) neither the Owner nor the Guarantor is an
"investment company" within the meaning of the Investment Company
Act of 1940, as amended;
(ix) no event has occurred and is continuing which
constitutes an Event of Default or would constitute an Event of
Default but for the requirement that notice be given or time lapse
or both;
(x) no event has occurred and is continuing which
constitutes an Event of Loss or would constitute an Event of Loss
with the lapse of time;
(xi) the Owner is solvent and has no intention or belief
that it is about to incur debts beyond its ability to pay as they
mature;
(xii) none of the proceeds from the issuance of the
Secured Certificates will be used directly or indirectly by the
Owner to purchase or carry any "margin security" as such term is
defined in Regulation U of the Board of Governors of the Federal
Reserve System; and
(xiii) On the Closing Date, all sales or use tax then due
and for which the Owner is responsible pursuant to Section 7(b)(i)
hereof shall have been paid, other than such taxes which are being
contested by the Owner in good faith and by appropriate proceedings
so long as such proceedings do not involve any material risk of the
sale, forfeiture or loss of the Aircraft.
(b) General Tax Indemnity. Exhibit K, which is a complete statement
of the provisions of Section 7(b), is incorporated herein in its entirety as
if fully set forth herein.
(c) General Indemnity. Exhibit L, which is a complete statement of
the provisions of Section 7(c), is incorporated herein in its entirety as if
fully set forth herein.
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(d) Income Tax. For purposes of this Section 7, the term "Income
Tax" means any Tax based on or measured by gross or net income or receipts
(other than sales, use, license or property Taxes or Taxes in the nature
thereof) (including, without limitation, capital gains taxes, minimum taxes,
income taxes collected by withholding and taxes on tax preference items), and
Taxes which are capital, doing business, excess profits or net worth taxes and
interest, additions to tax, penalties, or other charges in respect thereof.
SECTION 8. Representations, Warranties and Covenants.
(a) [Intentionally Omitted].
(b) [Intentionally Omitted].
(c) [Intentionally Omitted].
(d) [Intentionally Omitted].
(e) Each Loan Participant represents and warrants that neither it
nor anyone acting in its behalf has offered any Secured Certificates for sale
to, or solicited any offer to buy any Secured Certificate from, any Person
other than in a manner in compliance with, and which does not require
registration under, the Securities Act of 1933, as amended, or the rules and
regulations thereunder.
(f) The Indenture Trustee agrees that the Owner may elect to effect
a change in registration of the Aircraft, at the Owner's cost and expense, so
long as (a) the country of registry of the Aircraft is a country listed on
Exhibit A hereto and (b) the following conditions are met: (i) unless the
country of registry is Taiwan, the United States maintains normal diplomatic
relations with the country of registry of the Aircraft, and if the country of
registry is Taiwan, the United States maintains diplomatic relations at least
as good as those in effect on the Closing Date; and (ii) the Indenture Trustee
shall have received a favorable opinion (subject to customary exceptions)
addressed to the Indenture Trustee, from counsel of recognized reputation
qualified in the laws of the relevant jurisdiction to the effect that:
(A) the Owner's ownership interest in the Aircraft shall
be recognized under the laws of such jurisdiction, (B) the
obligations of the Owner, and the rights and remedies of the
Indenture Trustee, under the Trust Indenture shall remain valid,
binding and (subject to customary bankruptcy and equitable remedies
exceptions and to other exceptions customary in foreign opinions
generally) enforceable under the laws of such jurisdiction (or the
laws of the jurisdiction to which the laws of such jurisdiction
would refer as the applicable governing law), (C) after giving
effect to such change in registration, the Lien of the Trust
Indenture on the Owner's right, title and interest in and to the
Aircraft shall continue as a valid and duly perfected first priority
security interest and all filing, recording or other action
necessary to protect the same shall have been accomplished (or, if
such opinion cannot be given at the time of such proposed change in
registration because such change in registration is not yet
effective, (1) the opinion shall detail what filing, recording or
other action is necessary and (2) the Indenture Trustee shall have
received a certificate from the Owner that all possible preparations
to accomplish such filing, recording and other action shall have
been done, and such filing,
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recording and other action shall be accomplished and a supplemental
opinion to that effect shall be delivered to the Indenture Trustee
on or prior to the effective date of such change in registration),
(D) it is not necessary, solely as a consequence of such change in
registration and without giving effect to any other activity of the
Indenture Trustee (or any Affiliate thereof) for the Indenture
Trustee to qualify to do business in such jurisdiction, (E) there is
no tort liability of the owner of an aircraft not in possession
thereof under the laws of such jurisdiction (it being agreed that,
in the event such latter opinion cannot be given in a form
satisfactory to the Indenture Trustee, such opinion shall be waived
if insurance reasonably satisfactory to the Indenture Trustee is
provided to cover such risk), and (F) (unless the Owner shall have
agreed to provide insurance covering the risk of requisition of use
of such Aircraft by the government of such jurisdiction so long as
such Aircraft is registered under the laws of such jurisdiction) the
laws of such jurisdiction require fair compensation by the
government of such jurisdiction payable in currency freely
convertible into Dollars for the loss of use of such Aircraft in the
event of the requisition by such government of such use.
In addition, as a condition precedent to any such change in registration, the
Owner shall furnish to the Indenture Trustee an Officer's Certificate to the
effect that the insurance required by Section 7.04 of the Trust Indenture
shall be in full force and effect at the time of such change in registration
after giving effect to such change in registration and that the new country of
registry imposes aircraft maintenance standards not materially different from
those of the United States, France, Germany, Japan, the Netherlands or the
United Kingdom. The Owner shall pay all costs, expenses, fees, recording and
registration taxes, including the reasonable fees and expenses of counsel to
the Indenture Trustee, and other charges in connection with any such change in
registration.
(g) Each Loan Participant and each of the Indenture Trustee, the
Subordination Agent and each Pass Through Trustee covenants and agrees that,
so long as no Event of Default shall have occurred and be continuing and the
Owner has not been duly declared in default and, notwithstanding default by
any Loan Participant, the Indenture Trustee, any Pass Through Trustee or the
Subordination Agent, that such Person shall not (and shall not permit any
Affiliate or other Person claiming by, through or under it to) interfere with
the Owner's continued possession, use and operation of, and quiet enjoyment
of, the Aircraft.
(h) [Intentionally Omitted].
(i) State Street Bank and Trust Company, in its individual capacity,
covenants and agrees that it shall not cause or permit to exist any Lien,
arising as a result of (A) claims against the Indenture Trustee not related to
its interest in the Aircraft or the administration of the Collateral pursuant
to the Trust Indenture, (B) acts of the Indenture Trustee not permitted by, or
failure of the Indenture Trustee to take any action required by, the Operative
Documents to the extent such acts arise or such failure arises from or
constitutes gross negligence or willful misconduct, (C) claims against the
Indenture Trustee relating to Taxes or Expenses which are excluded from the
indemnification provided by Section 7 pursuant to said Section 7, or (D)
claims against the Indenture Trustee arising out of the transfer by the
Indenture Trustee of all or any portion of its interest in the Aircraft, the
Collateral or the Operative Documents other than a transfer of the Aircraft
pursuant to Article IV of the Trust Indenture while an Event of Default is
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continuing and prior to the time that the Indenture Trustee has received all
amounts due pursuant to the Trust Indenture.
(j) [Intentionally Omitted].
(k) Each Loan Participant represents and warrants that the Secured
Certificate to be issued to it pursuant to the Trust Indenture is being
acquired by it for investment and not with a view to resale or distribution
(it being understood that such Loan Participant may pledge or assign as
security its interest in each Secured Certificate issued to it), provided that
the disposition of its property shall at all times be and remain within its
control, except that the Loan Participants may sell, transfer or otherwise
dispose of any Secured Certificate or any portion thereof, or grant
participations therein, in a manner which in itself does not require
registration under the Securities Act of 1933, as amended.
(l) [Intentionally Omitted].
(m) State Street Bank and Trust Company represents, warrants and
covenants, in its individual capacity, to the Owner, the Guarantor, the Pass
Through Trustee, the Subordination Agent and the Primary Liquidity Provider as
follows:
(i) it is a Massachusetts trust company duly incorporated,
validly existing and in good standing under the laws of
Massachusetts, is a Citizen of the United States (without making use
of any voting trust, voting powers agreement or similar
arrangement), will notify promptly all parties to this Agreement if
in its reasonable opinion its status as a Citizen of the United
States (without making use of any voting trust, voting powers
agreement or similar arrangement) is likely to change and will
resign as Indenture Trustee as provided in Section 9.01 of the Trust
Indenture promptly after it obtains actual knowledge that it has
ceased to be such a Citizen of the United States (without making use
of a voting trust, voting powers agreement or similar arrangement),
and has the full corporate power, authority and legal right under
the laws of the Commonwealth of Massachusetts and the United States
pertaining to its banking, trust and fiduciary powers to execute and
deliver each of this Agreement, the Trust Indenture and each other
Operative Document to which it is a party and to carry out its
obligations under this Agreement, the Trust Indenture, each other
Operative Document to which it is a party and to authenticate the
Secured Certificates;
(ii) the execution and delivery by the Indenture Trustee
of the Indenture Trustee Documents and the authentication of the
Secured Certificates and the performance by the Indenture Trustee of
its obligations under the Indenture Trustee Documents have been duly
authorized by the Indenture Trustee and will not violate its
articles of association or by-laws or the provisions of any
indenture, mortgage, contract or other agreement to which it is a
party or by which it is bound;
(iii) this Agreement and each of the other Indenture
Trustee Documents constitute the legal, valid and binding
obligations of the Indenture Trustee enforceable against it in
accordance with their respective terms, except as the same may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting
-15-
the rights of creditors generally and by general principles of
equity, whether considered in a proceeding at law or in equity;
(iv) there are no pending or, to its knowledge, threatened
actions or proceedings against the Indenture Trustee, either in its
individual capacity or as Indenture Trustee, before any court or
administrative agency which, if determined adversely to it, would
materially adversely affect the ability of the Indenture Trustee, in
its individual capacity or as Indenture Trustee as the case may be,
to perform its obligations under the Operative Documents to which it
is a party; and
(v) there are no Indenture Trustee's Liens on the Aircraft
or any other portion of the Collateral.
(n) [Intentionally Omitted].
(o) [Intentionally Omitted].
(p) State Street Bank and Trust Company, in its individual capacity,
agrees for the benefit of the Owner to comply with the terms of the Trust
Indenture which it is required to comply with in its individual capacity.
(q) Each Loan Participant agrees that it will not transfer any
Secured Certificate (or any part thereof) to any entity unless such entity
makes (or is deemed to have made) a representation and warranty as of the date
of transfer that either no part of the funds to be used by it for the purchase
and holding of such Secured Certificate (or any part thereof) constitutes
assets of any "employee benefit plan" or that such purchase and holding will
not result in a non-exempt prohibited transaction (under Section 4975 of the
Code and Section 406 of ERISA).
(r) Each Loan Participant and the Indenture Trustee agrees for the
benefit of the Manufacturer and the Owner that it will not disclose or suffer
to be disclosed the terms of the Purchase Agreement to any third party except
(A) as may be required by any applicable statute, court or administrative
order or decree or governmental ruling or regulation or to any regulatory
authorities having official jurisdiction over them, (B) in connection with the
financing of the Aircraft and the other transactions contemplated by the
Operative Documents (including any transfer of Secured Certificates (including
by way of participation or assignment of an interest, provided such
participant or assignee agrees to hold such terms confidential to the same
extent as herein provided) and any exercise of remedies under the Trust
Indenture), (C) with the prior written consent of the Manufacturer and the
Owner, or (D) to the Indenture Trustee's and each Loan Participant's counsel
or special counsel, independent insurance brokers or other agents who agree to
hold such information confidential.
(s) [Intentionally Omitted].
(t) Each Loan Participant covenants and agrees that it shall not
cause or permit to exist a Loan Participant Lien attributable to it with
respect to the Aircraft or any other portion of the Collateral. Each Loan
Participant agrees that it will promptly, at its own expense, take such other
action as may be necessary duly to discharge such Loan Participant Lien
-16-
attributable to it. Each Loan Participant agrees to make restitution to the
Owner for any damages or expenses of the Owner resulting from such Loan
Participant Lien attributable to it.
(u) State Street Bank and Trust Company, in its individual capacity,
covenants and agrees that it shall not cause or permit to exist any Indenture
Trustee's Liens with respect to the Collateral. State Street Bank and Trust
Company, in its individual capacity, agrees that it will promptly, at its own
expense, take such action as may be necessary duly to discharge such Indenture
Trustee's Liens. State Street Bank and Trust Company, in its individual
capacity, agrees to make restitution to the Owner for any actual diminution of
the assets of the Collateral resulting from such Indenture Trustee's Liens.
(v) [Intentionally Omitted].
(w) [Intentionally Omitted].
(x) [Intentionally Omitted].
(y) (A) The Owner will not consolidate with or merge into any other
corporation or convey, transfer or lease substantially all of its assets as an
entirety to any Person unless:
(i) the corporation formed by such consolidation or into
which the Owner is merged or the Person which acquires by
conveyance, transfer or lease substantially all of the assets of the
Owner as an entirety shall be a Certificated Air Carrier;
(ii) the corporation formed by such consolidation or into
which the Owner is merged or the Person which acquires by
conveyance, transfer or lease substantially all of the assets of the
Owner as an entirety shall execute and deliver to the Indenture
Trustee an agreement in form and substance reasonably satisfactory
to the Indenture Trustee containing an assumption by such successor
corporation or Person of the due and punctual performance and
observance of each covenant and condition of this Agreement, the
Trust Indenture and the Secured Certificates to be performed or
observed by the Owner;
(iii) immediately after giving effect to such transaction,
no Default or Event of Default under the Trust Indenture shall have
occurred and be continuing; and
(iv) The Owner shall have delivered to the Indenture
Trustee a certificate signed by the President, any Executive Vice
President, any Senior Vice President, the Treasurer or any Vice
President and by the Secretary or an Assistant Secretary of the
Owner, and an opinion of counsel reasonably satisfactory to the
Indenture Trustee, each stating that such consolidation, merger,
conveyance, transfer or lease and the assumption agreement mentioned
in clause (ii) above comply with this subparagraph (A) of Section
8(y) and that all conditions precedent herein provided for relating
to such transaction have been complied with.
Upon any such consolidation or merger or any such conveyance,
transfer or lease of substantially all of the assets of the Owner as an
entirety in accordance with this subparagraph
-17-
(A) of Section 8(y), the successor corporation or Person formed by such
consolidation or into which the Owner is merged or to which such conveyance,
transfer or lease is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Owner under this Agreement with the
same effect as if such successor corporation or Person had been named as the
Owner herein. No such conveyance, transfer or lease of substantially all of
the assets of the Owner as an entirety shall have the effect of releasing the
Owner or any successor corporation or Person which shall theretofore have
become such in the manner prescribed in this subparagraph (A) of Section 8(y)
from its liability in respect of any Operative Document to which it is a
party.
(B) The Owner shall at all times maintain its corporate
existence except as permitted by subparagraph (A) of this Section 8(y).
(z) The Owner, at its expense, will take, or cause to be taken, such
action with respect to the recording, filing, re-recording and refiling of the
Trust Indenture, the Trust Indenture Supplement and any financing statements
or other instruments as are necessary to maintain, so long as the Trust
Indenture is in effect, the perfection of the security interests created by
the Trust Indenture or will furnish to the Indenture Trustee timely notice of
the necessity of such action, together with such instruments, in execution
form, and such other information as may be required to enable it to take such
action. The Owner will notify the Indenture Trustee of any change in the
location of its chief executive office (as such term is used in Article 9 of
the Uniform Commercial Code) 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) [Intentionally Omitted].
(bb) [Intentionally Omitted].
(cc) Each Loan Participant hereby represents, warrants and agrees
that it shall not transfer any interest in any Secured Certificate unless and
until the transferee agrees in writing (copies of which shall be provided by
the Indenture Trustee to the Owner) to make the representations contemplated
to be made by a Loan Participant in this Agreement and to be bound by the
terms of this Agreement and the Trust Indenture (including, without
limitation, the representations and covenants set forth in Sections 8(e),
8(k), 8(l), 8(q), and 8(t) hereof and this Section 8(cc) and Section 2.03 of
the Trust Indenture).
(dd) The Pass Through Trustee represents and warrants to the Owner,
the Guarantor, the Indenture Trustee, the Subordination Agent and the Primary
Liquidity Provider, in its capacity as such and in its individual capacity, as
follows:
(i) the Pass Through Trustee is a duly organized national
banking association, validly existing and in good standing with the
Comptroller of the Currency under the laws of the United States, has
the full power, authority and legal right under the laws of the
United States pertaining to its banking, trust and fiduciary powers
to execute and deliver each of the Pass Through Trust Agreements,
the Intercreditor Agreement and this Agreement and to perform its
obligations under the Pass Through Trust Agreements, the
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Intercreditor Agreement and this Agreement, and has its chief
executive office located in Hartford, Connecticut;
(ii) this Agreement, each of the Pass Through Trust
Agreements and the Intercreditor Agreement have been duly
authorized, executed and delivered by the Pass Through Trustee; this
Agreement, each of the Pass Through Trust Agreements and the
Intercreditor Agreement constitute the legal, valid and binding
obligations of the Pass Through Trustee enforceable against it in
accordance with their respective terms, except as the same may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the rights of creditors
generally and by general principles of equity, whether considered in
a proceeding at law or in equity;
(iii) none of the execution, delivery and performance by
the Pass Through Trustee of any of the Pass Through Trust
Agreements, the Intercreditor Agreement or this Agreement, the
purchase by the Pass Through Trustee of the Secured Certificates
pursuant to this Agreement, or the issuance of the Certificates
pursuant to the Pass Through Trust Agreements, contravenes any law,
rule or regulation of the State of Connecticut or any United States
governmental authority or agency regulating the Pass Through
Trustee's banking, trust or fiduciary powers or any judgment or
order applicable to or binding on the Pass Through Trustee and does
not contravene or result in any breach of, or constitute a default
under, the Pass Through Trustee's articles of association or by-laws
or any agreement or instrument to which the Pass Through Trustee is
a party or by which it or any of its properties may be bound;
(iv) neither the execution and delivery by the Pass
Through Trustee of any of the Pass Through Trust Agreements, the
Intercreditor Agreement or this Agreement, nor the consummation by
the Pass Through Trustee of any of the transactions contemplated
hereby or thereby, requires the consent or approval of, the giving
of notice to, the registration with, or the taking of any other
action with respect to, any Connecticut governmental authority or
agency or any federal governmental authority or agency regulating
the Pass Through Trustee's banking, trust or fiduciary powers;
(v) there are no Taxes payable by the Pass Through Trustee
imposed by the State of Connecticut or any political subdivision or
taxing authority thereof in connection with the execution, delivery
and performance by the Pass Through Trustee of this Agreement, any
of the Pass Through Trust Agreements or the Intercreditor Agreement
(other than franchise or other taxes based on or measured by any
fees or compensation received by the Pass Through Trustee for
services rendered in connection with the transactions contemplated
by any of the Pass Through Trust Agreements), and there are no Taxes
payable by the Pass Through Trustee imposed by the State of
Connecticut or any political subdivision thereof in connection with
the acquisition, possession or ownership by the Pass Through Trustee
of any of the Secured Certificates (other than franchise or other
taxes based on or measured by any fees or compensation received by
the Pass Through Trustee for services rendered in connection with
the transactions contemplated by any of the Pass Through Trust
Agreements), and, assuming that for federal income tax purposes the
trusts created by the Pass-Through Trust Agreements will not be
taxable as corporations, but rather, each will be characterized as a
grantor trust
-19-
under subpart E, Part I, of Subchapter J of the Code or as a
partnership, such trusts will not be subject to any Taxes imposed by
the State of Connecticut or any political subdivision thereof;
(vi) there are no pending or threatened actions or
proceedings against the Pass Through Trustee before any court or
administrative agency which individually or in the aggregate, if
determined adversely to it, would materially adversely affect the
ability of the Pass Through Trustee to perform its obligations under
this Agreement, the Intercreditor Agreement or any Pass Through
Trust Agreement;
(vii) except for the issue and sale of the Certificates,
the Pass Through Trustee has not directly or indirectly offered any
Secured Certificate for sale to any Person or solicited any offer to
acquire any Secured Certificates from any Person, nor has the Pass
Through Trustee authorized anyone to act on its behalf to offer
directly or indirectly any Secured Certificate for sale to any
Person, or to solicit any offer to acquire any Secured Certificate
from any Person; and the Pass Through Trustee is not in default
under any Pass Through Trust Agreement; and
(viii) the Pass Through Trustee is not directly or
indirectly controlling, controlled by or under common control with
any Underwriter, the Owner or the Guarantor.
(ee) The Subordination Agent represents and warrants to the Owner,
the Guarantor, the Indenture Trustee, the Pass Through Trustee and the Primary
Liquidity Provider in its capacity as such and in its individual capacity, as
follows:
(i) the Subordination Agent is duly incorporated, validly
existing and in good standing under the laws of the Commonwealth of
Massachusetts, and has the full corporate power, authority and legal
right under the laws of the Commonwealth of Massachusetts and the
United States pertaining to its banking, trust and fiduciary powers
to execute and deliver each of the Primary Liquidity Facilities, the
Intercreditor Agreement and this Agreement and to perform its
obligations under this Agreement, the Primary Liquidity Facilities
and the Intercreditor Agreement;
(ii) this Agreement, each of the Primary Liquidity
Facilities and the Intercreditor Agreement have been duly
authorized, executed and delivered by the Subordination Agent; this
Agreement, each of the Primary Liquidity Facilities and the
Intercreditor Agreement constitute the legal, valid and binding
obligations of the Subordination Agent enforceable against it in
accordance with their respective terms, except as the same may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the rights of creditors
generally and by general principles of equity, whether considered in
a proceeding at law or in equity;
(iii) none of the execution, delivery and performance by
the Subordination Agent of each of the Primary 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
-20-
Subordination Agent's banking, trust or fiduciary powers or any
judgment or order applicable to or binding on the Subordination
Agent and do not contravene or result in any breach of, or
constitute a default under, the Subordination Agent's articles of
association or by-laws or any agreement or instrument to which the
Subordination Agent is a party or by which it or any of its
properties may be bound;
(iv) neither the execution and delivery by the
Subordination Agent of any of the Primary 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 Primary 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 Primary 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 Primary 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 Primary Liquidity
Facility;
(vii) the Subordination Agent has not directly or
indirectly offered any Secured Certificate for sale to any Person or
solicited any offer to acquire any Secured Certificates from any
Person, nor has the Subordination Agent authorized anyone to act on
its behalf to offer directly or indirectly any Secured Certificate
for sale to any Person, or to solicit any offer to acquire any
Secured Certificate from any Person; and the Subordination Agent is
not in default under any Primary Liquidity Facility; and
(viii) the Subordination Agent is not directly or
indirectly controlling, controlled by or under common control with
any Underwriter, the Owner or the Guarantor.
(ff) Each of the Owner, the Indenture Trustee, each Pass Through
Trustee and the Subordination Agent covenants that (i) until one year and one
day after the Series G-2
-21-
Secured Certificates have been paid in full, it shall not acquiesce, petition
or otherwise invoke or cause or join in invoking or causing the Class G-2 Pass
Through Trust or any other Person to invoke the process of any governmental
authority for the purpose of commencing or sustaining a case (whether
voluntary or not) against the Class G-2 Pass Through Trust under any
bankruptcy, insolvency or similar law or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of the
Class G-2 Pass Through Trust or any substantial part of its property or
ordering the winding-up or liquidation of the affairs of the Class G-2 Pass
Through Trust and (ii) until one year and one day after the Series C-2 Secured
Certificates have been paid in full, it shall not acquiesce, petition or
otherwise invoke or cause or join in invoking or causing the Class C-2 Pass
Through Trust or any other Person to invoke the process of any governmental
authority for the purpose of commencing or sustaining a case (whether
voluntary or not) against the Class C-2 Pass Through Trust under any
bankruptcy, insolvency or similar law or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of the
Class C-2 Pass Through Trust or any substantial part of its property or
ordering the winding-up or liquidation of the affairs of the Class C-2 Pass
Through Trust.
SECTION 9. Reliance of Primary Liquidity Provider and Policy
Provider. Each of the parties hereto agrees and acknowledges that the Primary
Liquidity Provider and the Policy Provider shall be a third party beneficiary
of each of the representations and warranties made herein by such party, and
that the Primary Liquidity Provider and the Policy Provider may rely on such
representations and warranties to the same extent as if such representations
and warranties were made to the Primary Liquidity Provider and the Policy
Provider directly. The Owner agrees and acknowledges that the Primary
Liquidity Provider and the Policy Provider shall each be a third party
beneficiary of the indemnities contained in Section 7(c) hereof and that the
Policy Provider shall be a third party beneficiary of the indemnities
contained in Section 7(b) hereof, and may rely on such indemnities to the same
extent as if such indemnities were made to the Primary Liquidity Provider and
the Policy Provider directly.
SECTION 10. Other Documents. The Indenture Trustee agrees to
promptly furnish to the Owner copies of any supplement, amendment or waiver or
modification of any of the Operative Documents to which the Owner is not a
party. Each Loan Participant agrees that it will not take any action in
respect of the Collateral except through the Indenture Trustee pursuant to the
Trust Indenture or as otherwise permitted by the Trust Indenture.
SECTION 11. Certain Covenants of the Owner. The Owner covenants and
agrees with each of the Loan Participants and the Indenture Trustee:
(a) The Owner will cause to be done, executed, acknowledged and
delivered all and every such further acts, conveyances and assurances as the
Indenture Trustee shall reasonably require for accomplishing the purposes of
this Agreement and the other Operative Documents; provided that any instrument
or other document so executed by the Owner will not expand any obligations or
limit any rights of the Owner in respect of the transactions contemplated by
any Operative Documents.
(b) The Owner will cause the Trust Indenture, all supplements and
amendments to the Trust Indenture and this Agreement to be promptly filed and
recorded, or filed for recording, to the extent permitted under the Federal
Aviation Act, or required under any
-22-
other applicable law. Upon the execution and delivery of the Trust Indenture,
the Trust Indenture and the Trust Indenture Supplement covering the Aircraft
shall be filed for recording with the Federal Aviation Administration.
SECTION 12. [Intentionally Omitted].
SECTION 13. Certain Definitions; Notices; Consent to Jurisdiction.
(a) Except as otherwise defined in this Agreement, terms used herein in
capitalized form shall have the meanings attributed thereto in the Annex A to
the Trust Indenture. Unless the context otherwise requires, any reference
herein to any of the Operative Documents refers to such document as it may be
amended from time to time.
(b) All notices, demands, instructions and other communications
required or permitted to be given to or made upon any party hereto or to the
Guarantor shall be in writing and shall be personally delivered or sent by
registered or certified mail, postage prepaid, or by telecopier, or by prepaid
courier service, and shall be deemed to be given for purposes of this
Agreement on the day that such writing is delivered or sent to the intended
recipient thereof in accordance with the provisions of this Section 13(b).
Unless otherwise specified in a notice sent or delivered in accordance with
the foregoing provisions of this Section 13(b), notices, demands, instructions
and other communications in writing shall be given to or made upon the
respective parties hereto at their respective addresses (or to their
respective telecopier numbers) as follows: (A) if to the Owner, the Guarantor,
the Pass Through Trustee, the Subordination Agent or the Indenture Trustee, to
the respective addresses set forth below the signatures of such parties at the
foot of this Agreement, or (B) if to any subsequent Certificate Holder,
addressed to such Certificate Holder at its address set forth in the Secured
Certificate register maintained pursuant to Section 2.07 of the Trust
Indenture.
(c) Each of the parties hereto (A) hereby irrevocably submits itself
to the non-exclusive jurisdiction of the United States District Court for the
Southern District of New York and to the non-exclusive jurisdiction of the
Supreme Court of the State of New York, New York County, for the purposes of
any suit, action or other proceeding arising out of this Agreement or any
other Operative Document, the subject matter of any thereof or any of the
transactions contemplated hereby or thereby brought by any party or parties
thereto, or their successors or assigns, and (B) hereby waives, and agrees not
to assert, by way of motion, as a defense, or otherwise, in any such suit,
action or proceeding, to the extent permitted by applicable law, that the
suit, action or proceeding is brought in an inconvenient forum, that the venue
of the suit, action or proceeding is improper, or that this Agreement or any
other Operative Document or the subject matter of any thereof or any of the
transactions contemplated hereby or thereby may not be enforced in or by such
courts. The Owner hereby generally consents to service of process at
Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Managing Attorney, or such office of the Owner in New York City as
from time to time may be designated by the Owner in writing to the Indenture
Trustee.
SECTION 14. [Intentionally Omitted].
SECTION 15. Miscellaneous.
-23-
(a) [Intentionally Omitted].
(b) The representations, warranties, indemnities and agreements of
the Owner, the Guarantor, the Indenture Trustee, the Subordination Agent and
the Pass Through Trustee provided for in this Agreement, and the Owner's, the
Guarantor's, the Indenture Trustee's, the Subordination Agent's and the Pass
Through Trustee's obligations under any and all thereof, shall survive the
making available of the Commitments by each Pass Through Trustee, the transfer
of any interest by any Loan Participant in any Secured Certificate or the
Collateral and the expiration or other termination of this Agreement or any
other Operative Document.
(c) This Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute but one and the
same instrument. Neither this Agreement nor any of the terms hereof may be
terminated, amended, supplemented, waived or modified, except by an instrument
in writing signed by the party against which the enforcement of the
termination, amendment, supplement, waiver or modification is sought; and no
such termination, amendment, supplement, waiver or modification shall be
effective unless a signed copy thereof shall have been delivered to the
Indenture Trustee. The terms of this Agreement shall be binding upon, and
inure to the benefit of, the Owner and, subject to the terms of this
Agreement, its successors and permitted assigns, the Guarantor, the Pass
Through Trustee and its successors as Pass Through Trustee (and any additional
trustee appointed) under any of the Pass Through Trust Agreements, each
Certificate Holder and its successors and registered assigns and the Indenture
Trustee and its successors as Indenture Trustee under the Trust Indenture. The
terms of this Agreement shall inure to the benefit of the Primary Liquidity
Provider, its successors and permitted assigns and to the Policy Provider, its
successors and permitted assigns. THIS AGREEMENT SHALL IN ALL RESPECTS BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE. THIS
AGREEMENT IS BEING DELIVERED IN THE STATE OF NEW YORK.
(d) [Intentionally Omitted].
(e) It is the intention of the parties hereto that the Indenture
Trustee will be entitled to the benefits of 11 U.S.C. Section 1110 in the event
of any reorganization of the Owner under Chapter 11 of the Bankruptcy Code.
SECTION 16. Sale/leaseback Transaction. Notwithstanding anything to
the contrary contained herein or any other Operative Document, upon not less
than __ days prior written notice to the parties hereto, the Owner shall have
the right to sell the Aircraft and transfer title to the Aircraft to an owner
trustee for the benefit of an owner participant (which shall be a "Transferee"
(as defined in the form of Leased Aircraft Participation Agreement (as such
term is defined in the Note Purchase Agreement)) in a transaction in which
such owner trustee assumes all of the obligations of the Owner under the
Secured Certificates and the Trust Indenture on a non-recourse basis (with the
Owner being released from such obligations, except to the extent accrued prior
thereto), leases the Aircraft to the Owner and assigns such lease to the
Indenture Trustee pursuant to an amended and restated trust indenture (a
"Sale/Leaseback Transaction"). In connection with such Sale/Leaseback
Transaction, each of the parties hereto and each
-24-
Certificate Holder will execute and deliver appropriate documentation
permitting the owner trustee to assume the obligations of the Owner under the
Secured Certificates and the Trust Indenture on a non-recourse basis,
releasing the Owner from all obligations in respect of the Secured
Certificates and the Trust Indenture (except to the extent accrued prior
thereto), and take all other actions as are reasonably necessary to permit
such assumption by the owner trustee. In connection with any such
Sale/Leaseback Transaction, the parties agree that (a) the documents to be
utilized shall be (i) an amended and restated participation agreement [NW ____
__] amending and restating the Participation Agreement, such amended and
restated participation agreement to be substantially in the form of the Leased
Aircraft Participation Agreement (as such term is defined in the Note Purchase
Agreement), among the parties hereto, any Certificate Holder which is not a
party hereto and the owner trustee and owner participant, with (x) such
changes to such form to reflect the assumption of the Secured Certificates by
the owner trustee on a non-recourse basis rather than the issuance thereof by
the owner trustee and purchase thereof by the Purchasers and also to reflect
the release of the Owner from all obligations under the Secured Certificates
and the Trust Indenture (except to the extent accrued prior thereto) and (y)
such other changes as may be permitted in accordance with the Note Purchase
Agreement applicable to the revision of the Leased Aircraft Participation
Agreement in connection with a leveraged lease transaction, (ii) a lease
agreement [NW ____ __], such lease agreement to be substantially in the form
of the Lease (as such term is defined in the Note Purchase Agreement), between
the Owner and the owner trustee with such changes as may be permitted in
accordance with the provisions of the Note Purchase Agreement applicable to
the revision of the Lease in connection with a leveraged lease transaction,
(iii) an amended and restated trust indenture [NW ____ __] amending and
restating the Trust Indenture, such amended and restated trust indenture to be
substantially in the form of the Leased Aircraft Indenture (as such term is
defined in the Note Purchase Agreement), between the owner trustee and the
Indenture Trustee, with (x) such changes to such form to reflect the
assumption of all of the obligations of the Owner under the Secured
Certificates and the Trust Indenture on a non-recourse basis and a release of
the Contract Rights from the Granting Clause of the Trust Indenture and (y)
such other changes as may be permitted in accordance with the Note Purchase
Agreement applicable to the revision of the Leased Aircraft Indenture in
connection with a leveraged lease transaction, (iv) a purchase agreement
assignment [NW ____ ___], such purchase agreement assignment to be
substantially in the form of the Aircraft Purchase Agreement Assignment (as
such term is defined in the Note Purchase Agreement) between the Owner and the
owner trustee with such changes as may be permitted in accordance with the
provisions of the Note Purchase Agreement applicable to the Aircraft Purchase
Agreement Assignment in connection with a leveraged lease transaction, (v) a
trust agreement [NW ____ __], such trust agreement to be substantially in the
form of the Leased Aircraft Trust Agreement (as such term is defined in the
Note Purchase Agreement), between the owner trustee and the owner participant
with such changes as may be permitted in accordance with the provisions of the
Note Purchase Agreement applicable to the Leased Aircraft Trust Agreement in
connection with a leveraged lease transaction, and (vi) an amended and
restated guarantee [NW ____ __] amending and restating the Guarantee, such
amended and restated guarantee to be substantially in the form of the Leased
Aircraft Guarantee (as such term is defined in the Note Purchase Agreement)
with such changes as may be permitted in accordance with the Note Purchase
Agreement applicable to the Leased Aircraft Guarantee in connection with a
leveraged lease transaction and (b) the Secured Certificates shall be
delivered to the Indenture Trustee for cancellation in exchange for new
secured certificates to be issued to the
-25-
Certificate Holders by the owner trustee, such new secured certificate to be
substantially in the form contained in Section 2.01 of the Leased Aircraft
Indenture (as such term is defined in the Note Purchase Agreement). Such new
secured certificates will have the same payment terms as the Secured
Certificates except that in the event that the Owner enters into a
Sale/Leaseback Transaction prior to March 31, 2004, the Owner shall have the
right to reoptimize the new secured certificates to be issued to the
Certificate Holders by the owner trustee in compliance with the Mandatory
Economic Terms (as such term is defined in the Note Purchase Agreement).
Notwithstanding the foregoing, the Owner shall not have the right to enter
into a Sale/Leaseback Transaction unless the Owner causes to be delivered to
the Indenture Trustee (a) an opinion of counsel to the effect that the holders
of the Pass Through Certificates will not recognize income, gain or loss for
federal income tax purposes as a result of such assumption and release and
will be subject to federal income tax in the same amounts, in the same manner
and at the same time as would have been the case if such assumption and
release had not occurred (other than such change in amount, manner and timing
of interest that results from any reoptimization of the new secured
certificates permitted pursuant to this Section 16) and that the Pass Through
Trusts (and the Class G-1 pass through trust and the Class C-1 pass through
trust created simultaneously with the creation of the Pass Through Trusts)
will not be subject to federal income taxation as a result of such assumption
and release and (b) written confirmation from ▇▇▇▇▇'▇ Investors Services,
Inc., Standard & Poor's Ratings Services, a division of the ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc., and Fitch Ratings, that the Sale/Leaseback Transaction and/or
reoptimization of the new secured certificates in connection therewith will
not result in a withdrawal, suspension or downgrading of the ratings of either
class of Pass Through Certificates or the Class G-1 or Class C-1 pass through
certificates issued simultaneously with the Pass Through Certificates without
regard to the Policy (as defined in the Policy Provider Agreement) or the
"policy" issued simultaneously with respect to the Policy in respect of the
Class G-1 pass through certificates issued simultaneously with the Pass
Through Certificates or the Class D pass through certificates issued in
connection with the Pass Through Certificates and such Class G-1 and Class C-1
pass through certificates.
-26-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective officers thereunto duly authorized as of
the day and year first above written.
NORTHWEST AIRLINES, INC.,
Owner
By: ______________________________________
Name:
Title:
Address: U.S. Mail
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ (▇▇▇▇▇)
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Overnight Courier
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ (A4010)
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Treasurer
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
NORTHWEST AIRLINES CORPORATION,
Guarantor
By: ______________________________________
Name:
Title:
Address: U.S. Mail
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ (▇▇▇▇▇)
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Overnight Courier
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ (A4010)
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Treasurer
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
-▇▇-
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ AND
TRUST COMPANY,
Indenture Trustee
By: ______________________________________
Name:
Title:
Address: U.S. Mail
Corporate Trust Department
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Overnight Courier
Corporate Trust Department
▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION, not in its
individual capacity, except as otherwise
provided herein, but solely as Pass Through
Trustee,
Pass Through Trustee
By: _________________________________________
Name:
Title:
Address: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Square
Hartford, CT 06103
Attn: Corporate/Muni Department
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
-▇▇-
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ 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.: (▇▇▇) ▇▇▇-▇▇▇▇
-29-
SCHEDULE I
Names and Addresses
-------------------
Owner: Northwest Airlines, Inc.
U.S. Mail
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ (A4010)
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Overnight Courier
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ (A4010)
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Treasurer
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Wire Transfer
USBank, Minneapolis
ABA No. ▇▇▇▇▇▇▇▇▇
Acct. No. 150250099440
Indenture Trustee: State Street Bank and Trust Company
U.S. Mail
Corporate Trust Department
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Overnight Courier
Corporate Trust Department
▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Wire Transfer
State Street Bank and Trust Company
ABA No. ▇▇▇-▇▇▇-▇▇▇
for credit to State Street Bank and Trust Company
Acct. No. ▇▇▇▇-▇▇▇-▇
Attn: Corporate Trust Department
Reference: Northwest/NW [____ _]
SCHEDULE I-1
Loan Participant: State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Square
Hartford, CT 06103
Attn: Corporate/Muni Department
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Subordination Agent: State Street Bank and Trust Company
U.S. Mail
Corporate Trust Department
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Overnight Courier
Corporate Trust Department
▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
SCHEDULE I-2
SCHEDULE II
Commitments
-----------
Interest Rate
Purchasers and Maturity Purchase Price
---------- ------------ --------------
Northwest Airlines
Pass Through Trust
2002-1G-2 6.264% Series G-2 Secured $[___________]
Certificates due [___________]
2002-1C-2 9.055% Series C Secured $[___________]
Certificates due [___________]
SCHEDULE II-1
SCHEDULE III
Pass Through Trust Agreements
-----------------------------
1. Pass Through Trust Agreement, dated as of June 3, 1999, among
Northwest Airlines Corporation, Northwest Airlines, Inc., and State
Street Bank and Trust Company of Connecticut, National Association,
as supplemented by Trust Supplement No. 2002-1G-2, dated as of the
Issuance Date 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. 2002-1C-2, dated as of the
Issuance Date among Northwest Airlines, Inc., Northwest Airlines
Corporation and State Street Bank and Trust Company of Connecticut,
National Association.
SCHEDULE III-1
EXHIBIT A
TO PARTICIPATION
AGREEMENT
[NW ____ _]
SCHEDULE OF COUNTRIES FOR REREGISTRATION
----------------------------------------
Argentina Malta
Australia Mexico
Austria Morocco
Bahamas Netherlands
Belgium New Zealand
Brazil Norway
Canada Paraguay
Chile People's Republic of China
Denmark Philippines
Egypt Portugal
Finland Republic of China (Taiwan)
France Singapore
Germany South Africa
Greece South Korea
Hungary Spain
Iceland Sweden
India Switzerland
Indonesia Thailand
Ireland Trinidad and Tobago
Italy United Kingdom
Japan Uruguay
Luxembourg Venezuela
Malaysia
EXHIBIT A-1
EXHIBIT K
TO PARTICIPATION
AGREEMENT
[NW ____ _]
Section 7(b) - General Tax Indemnity
------------------------------------
(b) General Tax Indemnity.
(i) Indemnity. Except as provided in Section 7(b)(ii)
hereof, the Owner shall pay, protect, save and on written demand
shall indemnify and hold harmless any Tax Indemnitee from and
against any and all Taxes howsoever imposed against any Tax
Indemnitee, the Owner or the Aircraft, the Airframe, any Engine or
any Part thereof or interest therein by any Federal, state or local
government or other taxing authority in the United States or by any
foreign government or any political subdivision or taxing authority
thereof or by any territory or possession of the United States or by
any international authority ("Taxing Authority") upon or in
connection with or relating to (A) the construction, financing,
refinancing, purchase, acquisition, acceptance, rejection, delivery,
nondelivery, transport, ownership, registration, reregistration,
insuring, assembly, possession, repossession, operation, location,
use, control, condition, maintenance, repair, sale, return,
abandonment, installation, storage, redelivery, replacement,
manufacture, leasing, subleasing, modification, rebuilding,
importation, transfer of title, transfer of registration,
exportation or other application or disposition of the Aircraft, the
Airframe, any Engine or any Part thereof or interest therein, (B)
the rentals, receipts or earnings from the Aircraft, the Airframe,
any Engine or any Part, (C) any amount paid or payable pursuant to
any Operative Document or any document related thereto or the
property or the income or other proceeds with respect to the
Collateral, (D) the Aircraft, the Airframe, any Engine or any Part,
(E) any or all of the Operative Documents, or the issuance of the
Secured Certificates and any other documents contemplated hereby or
thereby and amendments and supplements hereto and thereto or the
execution, delivery or performance of any thereof or the issuance,
acquisition, modification, holding or subsequent transfer thereof,
(F) the payment of the principal of, or interest or Make-Whole
Amount or other premium on, or other amounts payable with respect
to, the Secured Certificates or the Pass Through Certificates, or
(G) otherwise with respect to or in connection with the transactions
contemplated by the Operative Documents.
(ii) Exclusions from General Tax Indemnity. The provisions
of Section 7(b)(i) shall not apply:
(1) with respect to any Tax Indemnitee to any
Income Tax (as defined in Section 7(d) hereof) imposed by
(A) the United States Federal government or (B) any U.S.
state or local taxing jurisdiction;
(2) with respect to any Tax Indemnitee, to any
Income Taxes imposed by any foreign or international
government, jurisdiction or taxing authority or territory
or possession of the United States except to the extent
that such Tax
EXHIBIT K-1
Indemnitee would be subject to such Income Tax if the sole
connection between such Tax Indemnitee and the Taxing
Authority had been the location and operation of the
Aircraft or the activities of the Owner or any lessee
within such Taxing Authority;
(3) to any capital gains taxes, excess profits
taxes, value added taxes, 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, a transfer or disposition of all or any
portion of its respective equitable or legal ownership
interest in a Secured Certificate (including sales of
participations therein), the Collateral (as defined in the
Trust Indenture) or any Operative Document or any interest
in such Tax Indemnitee;
(5) to any Tax based on or measured by any fees
received by any Pass Through Trustee, the Indenture
Trustee, the Policy Provider or the Subordination Agent in
connection with any transaction contemplated by the
Operative Documents;
(6) [Intentionally Omitted]
(7) to any Tax in the nature of an intangible or
similar tax upon or with respect to the value or principal
amount of the interest of any Tax Indemnitee in any of the
Secured Certificates or the Pass Through Certificates;
(8) with respect to any Tax Indemnitee to any
Tax imposed on or with respect to a transferee (or
subsequent transferee) of an original Tax Indemnitee to
the extent such Taxes would not have been required to be
withheld or imposed on or with respect to such original
Tax Indemnitee;
(9) to any Tax which would not have been imposed
but for an Indenture Trustee's Lien;
(10) to any Tax to the extent such Tax would not
have been imposed but for a present or future connection
between the Tax Indemnitee or any Affiliate thereof and
the jurisdiction imposing such Taxes (including, without
limitation, the Tax Indemnitee or an Affiliate thereof
being or having been a citizen or resident thereof, or
being or having been organized, present or engaged in a
trade or business therein, or having or having had, a
permanent establishment or fixed place of business
therein, or engaging, or having engaged, in one or more
transactions or activities therein unrelated to the
transactions contemplated by the Operative Documents),
other than a connection arising solely by reason of the
transactions contemplated by the Operative Documents;
(11) to any Tax imposed on a Tax Indemnitee to
the extent imposed as a result of such Tax Indemnitee's
failure to comply with any certification,
EXHIBIT K-2
information, documentation, reporting or similar procedure
that is required by law, treaty or regulation as a
condition to the allowance of any reduction in the rate of
such Tax or any exemption or other relief from such Tax;
(12) to any Tax on a Tax Indemnitee to the
extent arising out of, or caused by, or to the extent such
Tax would not have been incurred but for, (A) the willful
misconduct or gross negligence of such Tax Indemnitee or
any of its Affiliates or (B) the inaccuracy or breach of
any representation, warranty, covenant or agreement by
such Tax Indemnitee or any of its Affiliates in any
Operative Document;
(13) to any Tax on a Tax Indemnitee to the
extent consisting of interest, penalties, fines or
additions to Tax resulting from the negligence or willful
misconduct of such Tax Indemnitee or any of its Affiliates
in connection with the filing of, or failure to file, any
tax return, the payment of, or failure to pay any Tax, or
the conduct of any proceeding in respect thereof unless
resulting from the failure by the Owner to perform its
obligations under Section 7(b)(v) hereof;
(14) to any Tax imposed on any Tax Indemnitee
under Section 4975 of the Internal Revenue Code or under
subtitle B of ERISA or equivalent state law as a result of
the use by such Tax Indemnitee or any of its Affiliates of
the assets of an "employee benefit plan" (as defined in
Section 3(3) of ERISA) to purchase a Secured Certificate
or otherwise acquire any interest in any Secured
Certificate;
(15) to any Tax that would not have been imposed
but for an amendment to any Operative Document to which
the Owner is not a party, which amendment was not
requested or consented to by the Owner in writing;
(16) in the case of the Policy Provider, to any
premium or similar Tax.
(iii) Calculation of General Tax Indemnity Payments. Any
payment which the Owner shall be required to make to or for the
account of any Tax Indemnitee with respect to any Tax which is
subject to indemnification under this Section 7(b) shall be in an
amount which, after reduction by the amount of all Taxes required to
be paid by such Tax Indemnitee in respect of the receipt or accrual
of such amount and after consideration of any current savings of
such Tax Indemnitee resulting by way of any deduction, credit or
other tax benefit attributable to such indemnified Tax that actually
reduces any Taxes for which the Owner is not required to indemnify
such Tax Indemnitee pursuant to this Section 7(b) or the Tax
Indemnity Agreement, shall be equal to the payment otherwise
required hereunder.
If, by reason of any Tax payment made to or for the
account of a Tax Indemnitee by the Owner pursuant to this Section
7(b), such Tax Indemnitee or any of its Affiliates subsequently
realizes a tax benefit (whether by deduction, allocation,
apportionment or credit (including a foreign tax credit)) not
previously taken into account in computing such payment, such Tax
Indemnitee shall promptly pay to the Owner an amount equal to the
sum of (I) the actual reduction in Taxes, if any, realized by such
Tax Indemnitee
EXHIBIT K-3
which is attributable to such tax benefit and (II) the actual
reduction in Taxes realized by such Tax Indemnitee as a result of
any payment made by such Tax Indemnitee pursuant to this sentence.
For purposes of this Section 7(b)(iii), items of foreign Tax of any
Tax Indemnitee shall be deemed to be utilized by such Tax Indemnitee
as credits or deductions for any taxable year in accordance with the
following priorities:
First, all available foreign Taxes for which such Tax
Indemnitee was not indemnified or held harmless by anyone;
Second, all available foreign Taxes for which such Tax
Indemnitee was indemnified or held harmless by the Owner,
and all available foreign taxes indemnified under any
other transaction (except any described in Clause Third),
on a pari passu basis; and
Third, any remaining foreign Taxes arising from any
transaction in which there is an express agreement that
such Taxes shall be utilized after foreign taxes from
other transactions.
Once the foreign Tax for which such Tax Indemnitee was indemnified
by the Owner is deemed to be utilized pursuant to the ordering rules
contained in this paragraph, it shall not subsequently be
recharacterized as not having been utilized as a result of a foreign
tax liability arising in a subsequent year.
Any Taxes that are imposed on any Tax Indemnitee as a
result of the disallowance or reduction of any tax benefit referred
to in this subsection as to which such Tax Indemnitee has made in
full the payment to the Owner required hereby (or as to which such
Tax Indemnitee would have made its payment but for Section
7(b)(viii) or which tax benefit was otherwise taken into account in
computing the Owner's indemnity obligation pursuant to this Section
7) in a taxable year subsequent to the utilization by such Tax
Indemnitee shall be treated as a Tax for which the Owner is
obligated to indemnify such Tax Indemnitee pursuant to the
provisions of this Section 7(b), without regard to the exclusions
set forth in Section 7(b)(ii) hereof (other than clauses (12) or
(13) thereto).
Each Tax Indemnitee shall in good faith use reasonable
efforts in filing its tax returns and in dealing with Taxing
Authorities to seek and claim any tax savings which would result in
payments to the Owner under this Section 7(b).
(iv) General Tax Indemnity -- Contests. At the Owner's
request, the Owner shall be entitled at its sole cost and expense
(A) in the case of a contest involving only Taxes indemnified
hereunder ("Indemnified Taxes") or (B) in any proceeding involving a
claim for one or more Indemnified Taxes as well as a claim for other
Taxes, where the contest of the claim for Indemnified Taxes can be
severed from the contest of other Taxes, to assume responsibility
for and control of the contest ("Owner Controlled Contest"). Unless
otherwise required by law, any such contest shall be conducted by
and in the name of the Owner. If a written claim shall be made
against and received by any Tax Indemnitee for any Tax for which the
Owner is obligated pursuant to this Section 7(b), such Tax
Indemnitee shall notify the Owner promptly of such claim (it being
EXHIBIT K-4
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 Owner Controlled
Contest, upon request from the Owner within thirty (30) days after
receipt of such notice, such Tax Indemnitee shall in good faith at
the Owner's sole cost and expense contest the imposition of such Tax
(a "Tax Indemnitee Controlled Contest"). After consulting with the
Owner and the Owner's counsel concerning the forum in which the
adjustment is most likely to be favorably resolved, such Tax
Indemnitee may select in its sole discretion after considering in
good faith the Owner's and the Owner's counsel recommendation the
forum for such contest and determine whether any such contest shall
be by (A) resisting payment of such Tax, (B) paying such Tax under
protest or (C) paying such Tax and seeking a refund or other
repayment thereof. Except as otherwise provided in clause (Z) below,
during the pendency of a contest pursuant to this Section 7(b)(iv)
the Owner may withhold payment of any Tax to the extent provided by
applicable law. In no event shall such Tax Indemnitee be required,
or the Owner be permitted, to contest the imposition of any Tax for
which the Owner is obligated pursuant to this Section 7(b) unless
(W) no Event of Default shall have occurred and be continuing
(unless the Owner shall have provided security reasonably
satisfactory to such Tax Indemnitee securing the Owner's performance
of its obligations under this Section 7(b)), (X) the Owner shall
have agreed to pay to such Tax Indemnitee on demand all reasonable
costs and expenses on an after-tax basis that such Tax Indemnitee
may incur in connection with contesting such claim (including,
without limitation, all reasonable legal and accounting fees), (Y)
such action to be taken will not result in a material risk of sale,
forfeiture or loss of, or the creation of any Lien on, the Aircraft,
the Engines or any Part, other than Permitted Liens, unless the
Owner shall have provided such Tax Indemnitee security against such
risk in form and amount reasonably acceptable to such Tax
Indemnitee, and (Z) if such contest shall be conducted in a manner
requiring the payment of the claim, the Owner shall have paid the
amount required directly to the appropriate authority or made an
advance of the amount thereof to such Tax Indemnitee on an
interest-free basis and agreed to indemnify such Tax Indemnitee on
an after-tax basis against any Taxes payable by such Tax Indemnitee
with respect to such advance.
Notwithstanding anything to the contrary in this Section
7(b), in any Tax Indemnitee Controlled Contest the Tax Indemnitee
may not settle or agree to any claim without the prior written
consent of the Owner, and the Tax Indemnitee shall conduct any such
administrative proceedings and judicial contest in good faith in an
attempt to minimize the amount payable by the Owner under this
Section 7(b). The term "after-tax basis" for purposes of this
Section 7(b) shall mean an amount which, after deduction of all
Taxes required to be paid by or on behalf of the Tax Indemnitee in
respect of the receipt or accrual of such amount, is equal to the
payment required under the provisions of this Section 7(b) which
require payments to be made on an after-tax basis.
If any Tax Indemnitee shall obtain a refund of all or any
part of any Tax paid by the Owner, such Tax Indemnitee shall pay the
Owner an amount equal to the amount of such refund, including
interest received attributable thereto, plus any net tax benefit (or
EXHIBIT K-5
minus any net tax detriment) realized by such Tax Indemnitee as a
result of any refund received and payment by such Tax Indemnitee
made pursuant to this sentence.
Nothing contained in this Section 7(b)(iv) shall require
any Tax Indemnitee to contest, or permit the Owner to contest, a
claim which such Tax Indemnitee would otherwise be required to
contest pursuant to this Section 7(b)(iv), if such Tax Indemnitee
shall waive payment by the Owner of any amount that might otherwise
be payable by the Owner under this Section 7(b) in respect of such
claim and any other claim, the contest of which would be adversely
affected.
(v) General Tax Indemnity -- Reports. If any report,
return or statement is required to be filed with respect to any Tax
which is subject to indemnification under this Section 7(b), the
Owner shall timely file the same at its sole expense (except for any
such report, return or statement which the Tax Indemnitee is
required by law to file in its own name). The Owner shall have no
obligation under the preceding sentence if such Tax Indemnitee,
after receipt of the Owner's written request, shall have failed to
furnish the Owner with such information in a timely fashion as is in
such Tax Indemnitee's control and is not otherwise reasonably
available to the Owner and is necessary to file such returns.
(vi) Verification. At the Owner's written request after
the Owner receives a Tax Indemnitee's computations showing the
amount of any indemnity payable by the Owner to such Tax Indemnitee
pursuant to this Section 7(b) or any amount payable by any Tax
Indemnitee to the Owner pursuant to this Section 7(b), such
computations shall be subject to confidential verification in
writing by any nationally recognized firm of certified public
accountants selected by the Owner and reasonably acceptable to such
Tax Indemnitee. The accounting firm shall complete its review within
thirty (30) days of the Owner's receipt of such Tax Indemnitee's
computations. The computations of such accounting firm shall (i) be
delivered simultaneously to the Owner and such Tax Indemnitee and
(ii) absent manifest error, be final, binding and conclusive upon
the Owner and such Tax Indemnitee. If the Owner pays such indemnity
in whole or in part before completion of the verification procedure,
appropriate adjustments will be made promptly after completion of
the verification procedure (and nothing in this Section 7(b)(vi)
shall be construed as changing the time when any such indemnity is
payable under this Section 7(b)) to take into account any
redetermination of the indemnity by the accounting firm. The fee and
disbursements of such firm shall be paid by the Owner unless such
verification shall disclose an error made by such Tax Indemnitee in
favor of such Tax Indemnitee exceeding the lesser of five percent
(5%) of the original claim or $10,000, in which case such fee and
disbursements shall be paid by such Tax Indemnitee. Such Tax
Indemnitee shall cooperate with such accounting firm and (subject to
such accounting firm's execution of a confidentiality agreement
satisfactory to such Tax Indemnitee) shall supply such accounting
firm with all information reasonably necessary to permit
accomplishment of such review and determination. The sole
responsibility of such accounting firm shall be to verify the
computations of the amount payable hereunder and the interpretation
of this Agreement shall not be within the scope of such accounting
firm's responsibilities.
EXHIBIT K-6
(vii) General Tax Indemnity -- Payment. Except as provided
in Section 7(b)(iv) hereof, the Owner shall pay any Tax for which it
is liable pursuant to this Section 7(b) directly to the appropriate
taxing authority if legally permissible or upon demand of a Tax
Indemnitee shall pay such Tax and any other amounts due hereunder to
such Tax Indemnitee within fifteen (15) Business Days of such
demand, but in no event shall any such payments be required to be
made by the Owner more than five (5) Business Days prior to the date
the Tax to which any such payment hereunder relates is due in
immediately available funds. Any such demand for payment from a Tax
Indemnitee shall specify in reasonable detail the payment and the
facts upon which the right to payment is based. Each Tax Indemnitee
shall promptly forward to the Owner any notice, ▇▇▇▇ or advice
received by it concerning any Tax, provided, however, that the
failure of any Tax Indemnitee to forward any such notice, ▇▇▇▇ or
advice shall not adversely affect or otherwise prejudice such Tax
Indemnitee's rights to indemnification under this Section 7(b)
unless such failure materially adversely affects the ability to
contest any claim reflected therein. Within thirty (30) days after
the date of each payment by the Owner of any Tax indemnified against
hereunder, the Owner shall furnish the appropriate Tax Indemnitee
the original or a certified copy of a receipt for the Owner's
payment of such Tax or such other evidence of payment of such Tax as
is reasonably acceptable to such Tax Indemnitee.
(viii) Application of Payments During Existence of Event
of Default. Any amount payable to the Owner pursuant to the terms of
this Section 7(b) shall not be paid to or retained by the Owner if
at the time of such payment or retention an Event of Default shall
have occurred and be continuing under the Trust Indenture. At such
time as there shall not be continuing any such Event of Default,
such amount shall be paid to the Owner to the extent not previously
applied against the Owner's obligations hereunder as and when due
after the Indenture Trustee shall have declared the Trust Indenture
in default pursuant to Section 4 thereof.
(ix) Reimbursements by Tax Indemnitees Generally. If, for
any reason, the Owner is required to make any payment with respect
to any Taxes imposed on any Tax Indemnitee, any Pass Through
Trustee, any Loan Participant or the Subordination Agent in respect
of the transactions contemplated by the Operative Documents or on
the Aircraft, the Airframe, the Engines or any Part, which Taxes are
not the responsibility of the Owner under this Section 7(b), then
such Tax Indemnitee, Pass Through Trustee, Loan Participant or the
Subordination Agent, as the case may be, shall pay to the Owner an
amount which equals the amount paid by the Owner with respect to
such Taxes plus interest thereon computed at an annual interest rate
equal to the Base Rate plus one percent from the date of payment by
the Owner.
(x) Forms, etc. Each Tax Indemnitee agrees to furnish to
the Owner from time to time such duly executed and properly
completed forms that are requested by the Owner or that the Tax
Indemnitee knows, or has reason to know in the ordinary course of
its business, may be necessary or appropriate in order to claim any
reduction of or exemption from any withholding tax imposed by any
taxing authority in respect of any payments otherwise required to be
made by the Owner pursuant to the Operative Documents, which
reduction or exemption may be available to such Tax Indemnitee.
EXHIBIT K-7
(xi) Non-Parties. If a Tax Indemnitee is not a party to
this Agreement, the Owner may require the Tax Indemnitee to agree to
the terms of this Section 7(b) prior to making any payment to such
Tax Indemnitee under this Section 7(b).
EXHIBIT K-8
EXHIBIT L
TO PARTICIPATION
AGREEMENT
[NW ______]
Section 7(c) - General Indemnity
--------------------------------
(c) General Indemnity. The Owner hereby agrees to indemnify
each Indemnitee against, and agrees to protect, defend, save and keep harmless
each thereof from (whether or not the transactions contemplated herein or in
any of the other Operative Documents are consummated), any and all
liabilities, obligations, losses, damages, penalties, claims, actions, suits,
out-of-pocket costs, expenses and disbursements, of whatsoever kind and nature
(collectively called "Expenses") imposed on, incurred by or asserted against
any Indemnitee, in any way relating to or arising out of (A) any of the
Operative Documents or any lease or sublease of the Aircraft or the
enforcement of any of the terms thereof or any amendment, modification or
waiver in respect thereof and, only in the case of the Indemnitee who is the
Subordination Agent or the Primary Liquidity Provider, the Intercreditor
Agreement and the Primary Liquidity Facilities, (B) the manufacture, purchase,
acceptance or rejection of the Airframe or any Engine, (C) the Aircraft (or
any portion thereof or any Engine or engine affixed to the Airframe) whether
or not arising out of the finance, refinance, ownership, delivery,
nondelivery, storage, lease, sublease, sub-sublease, possession, use, non-use,
operation, maintenance, registration, reregistration, condition, modification,
alteration, replacement, repair, substitution, sale, return or other
disposition of the Aircraft (or any portion thereof or any Engine or engine
affixed to the Airframe) including, without limitation, latent or other
defects, whether or not discoverable, strict tort liability and any claim for
patent, trademark or copyright infringement or (D) the offer, sale or delivery
of the Secured Certificates (the indemnity in this clause (D) to extend also
to any person who controls an Indemnitee within the meaning of Section 15 of
the Securities Act of 1933, as amended); provided that the foregoing indemnity
as to any Indemnitee shall not extend to any Expense resulting from or arising
out of or which would not have occurred but for one or more of the following:
(A) any representation or warranty by such Indemnitee (or any member of the
Related Indemnitee Group) in the Operative Documents, the Intercreditor
Agreement, the Primary Liquidity Facilities, the Policy Provider Agreement 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
Primary Liquidity Facilities, the Policy Provider Agreement or any Pass
Through Trust Agreement applicable to it including, without limitation, the
creation or existence of a Loan Participant Lien or an Indenture Trustee's
Lien (except to the extent such failure was caused directly by the failure of
the Owner to perform any obligation under an Owner Document), or (C) the
willful misconduct or the gross negligence of such Indemnitee (or any member
of the Related Indemnitee Group) (other than gross negligence imputed to such
Indemnitee (or any member of the Related Indemnitee Group) solely by reason of
its interest in the Aircraft), or (D) with respect to any Indemnitee, a
disposition (voluntary or involuntary) by such Indemnitee of all or any part
of such Indemnitee's interest in the Airframe, any Engine or in the Operative
Documents other than during the continuance of an Event of Default under the
Trust Indenture, or (E) any Tax whether or not the Owner is required to
indemnify for such Tax pursuant to Section 7(b) hereof (it being understood
that Section 7(b) hereof provides for the
EXHIBIT L-1
Owner's liability with respect to Taxes), or (F) in the case of an Indemnitee
which is a Loan Participant, a Certificate Holder or the Indenture Trustee (in
its individual or trust capacity) and the affiliates, successors and assigns
thereof, a failure on the part of the Indenture Trustee to use ordinary care
to distribute in accordance with the Trust Indenture any amounts received and
distributable by it thereunder, or (G) the authorization or giving or
withholding of any future amendments, supplements, waivers or consents with
respect to any of the Operative Documents, the Intercreditor Agreement, either
of the Primary Liquidity Facilities or any Pass Through Trust Agreement other
than such as have been consented to, approved, authorized or requested by the
Owner, or (H) subject to the next succeeding paragraph, any loss of tax
benefits or increase in tax liability under any tax law whether or not the
Owner is required to indemnify therefor pursuant to this Agreement, or (I) any
Expense which is specified to be for the account of an Indemnitee pursuant to
any Operative Document without express right of reimbursement under any
Operative Document, (J) as to any Indemnitee the funding of such Indemnitee's
participation in the transaction contemplated by the Operative Documents
giving rise to a "prohibited transaction" within the meaning of the provisions
of the Code or the Regulations of the United States Department of Labor
implementing ERISA or any other violation of the fiduciary responsibility
provisions of ERISA of (K) to the extent attributable to the offer or sale by
such Indemnitee (or any member of the Related Indemnitee Group) of any
interest in the Aircraft, the Secured Certificates, the Pass Through
Certificates, or any similar interest, in violation of the Securities Act of
1933, as amended, or other applicable federal, state or foreign securities
Laws (other than any thereof caused by acts or omissions of the Owner or any
of its Affiliates). The foregoing indemnity shall not extend to any Expense to
the extent that such Expense is not caused by, or does not arise out of, an
act, omission or event which occurs prior to the termination of the Lien of
the Trust Indenture and the payment of all other payments required to be paid
by the Owner under the Operative Documents.
The Owner further agrees that any payment or indemnity pursuant to
this Section 7(c) in respect of any Expenses shall be in an amount which,
after deduction of all Taxes required to be paid by such recipient with
respect to such payment or indemnity under the laws of any Federal, state or
local government or taxing authority in the United States, or under the laws
of any taxing authority or governmental subdivision of a foreign country, or
any territory or possession of the United States or any international
authority, shall be equal to the excess, if any, of (A) the amount of such
Expense over (B) the net reduction in Taxes required to be paid by such
recipient resulting from the accrual or payment of such Expense.
If, by reason of any Expense payment made to or for the account of
an Indemnitee by the Owner pursuant to this Section 7(c), such Indemnitee
subsequently realizes a tax deduction or credit (including foreign tax credit
and any reduction in Taxes) not previously taken into account in computing
such payment, such Indemnitee shall promptly pay to the Owner, but only if the
Owner shall have made all payments then due and owing to such Indemnitee under
the Operative Documents, an amount equal to the sum of (I) the actual
reduction in Taxes realized by such Indemnitee which is attributable to such
deduction or credit, and (II) the actual reduction in Taxes realized by such
Indemnitee as a result of any payment made by such Indemnitee pursuant to this
sentence.
If a claim is made against an Indemnitee involving one or more
Expenses and such Indemnitee has notice thereof, such Indemnitee shall
promptly, upon receiving such notice,
EXHIBIT L-2
give notice of such claim to the Owner; provided that the failure to provide
such notice shall not release the Owner from any of its obligations to
indemnify hereunder, and no payment by the Owner to an Indemnitee pursuant to
this Section 7(c) shall be deemed to constitute a waiver or release of any
right or remedy which the Owner may have against such Indemnitee for any
actual damages as a result of the failure by such Indemnitee to give the Owner
such notice. The Owner shall be entitled, at its sole cost and expense, acting
through counsel acceptable to the respective Indemnitee, (A) so long as the
Owner has agreed in a writing acceptable to such Indemnitee that the Owner is
liable to such Indemnitee for such Expense hereunder (unless such Expense is
covered by the proviso to the first paragraph of this Section 7(c)), in any
judicial or administrative proceeding that involves solely a claim for one or
more Expenses, to assume responsibility for and control thereof, (B) so long
as the Owner has agreed in a writing acceptable to such Indemnitee that the
Owner is liable to such Indemnitee for such Expense hereunder (unless such
Expense is covered by the proviso to the first paragraph of this Section
7(c)), in any judicial or administrative proceeding involving a claim for one
or more Expenses and other claims related or unrelated to the transactions
contemplated by the Operative Documents, to assume responsibility for and
control of such claim for Expenses to the extent that the same may be and is
severed from such other claims (and such Indemnitee shall use its best efforts
to obtain such severance), and (C) in any other case, to be consulted by such
Indemnitee with respect to judicial proceedings subject to the control of such
Indemnitee. Notwithstanding any of the foregoing to the contrary, the Owner
shall not be entitled to assume responsibility for and control of any such
judicial or administrative proceedings (M) while an Event of Default shall
have occurred and be continuing, (N) if such proceedings will involve a
material risk of the sale, forfeiture or loss of, or the creation of any Lien
(other than a Permitted Lien) on the Aircraft, the Collateral or any part
thereof, or (O) if such proceeding could in the good faith opinion of such
Indemnitee entail any material risk of criminal liability or present a
conflict of interest making separate representation necessary. The affected
Indemnitee may participate at its own expense and with its own counsel in any
judicial proceeding controlled by the Owner pursuant to the preceding
provisions.
The affected Indemnitee shall supply the Owner with such information
reasonably requested by the Owner as is necessary or advisable for the Owner
to control or participate in any proceeding to the extent permitted by this
Section 7(c). Such Indemnitee shall not enter into a settlement or other
compromise with respect to any Expense without the prior written consent of
the Owner, which consent shall not be unreasonably withheld or delayed, unless
such Indemnitee waives its right to be indemnified with respect to such
Expense under this Section 7(c).
The Owner shall supply the affected Indemnitee with such information
reasonably requested by such Indemnitee as is necessary or advisable for such
Indemnitee to control or participate in any proceeding to the extent permitted
by this Section 7(c).
When the Owner or the insurers under a policy of insurance
maintained by the Owner (or any Lessee) undertakes the defense of an
Indemnitee with respect to an Expense, no additional legal fees or expenses of
such Indemnitee in connection with the defense of such Indemnitee shall be
indemnified hereunder unless such fees or expenses were incurred at the
written request of the Owner or such insurers, provided that no such defense
shall be
EXHIBIT L-3
compromised or settled on a basis that admits any gross negligence or willful
misconduct on the part of such Indemnitee without such Indemnitee's prior
consent.
In the case of any Expense indemnified by the Owner hereunder which
is covered by a policy of insurance maintained by the Owner (or any Lessee)
pursuant to Section 7.04 of the Trust Indenture or otherwise, it shall be a
condition of such indemnity with respect to any particular Indemnitee that
such Indemnitee shall cooperate with the insurers in the exercise of their
rights to investigate, defend or compromise such Expense as may be required to
retain the benefits of such insurance with respect to such Expense.
Notwithstanding any of the foregoing to the contrary, with respect to any
Expense which is covered under policies of insurance maintained by the Owner
(or any Lessee) pursuant to Section 7.04 of the Trust Indenture or otherwise,
the rights of an Indemnitee to control or participate in any proceeding shall
be modified to the extent necessary to comply with the requirements of such
policies and the rights of the insurers thereunder.
Upon payment of any Expense or Tax pursuant to this Section 7, the
Owner or, if any Expense or Tax has been paid by insurers, the insurers,
without any further action, shall be subrogated to any claims the affected
Indemnitee may have relating thereto other than claims under Section 5.03 of
the Trust Indenture. Such Indemnitee agrees to give such further assurances or
agreements and to cooperate with the Owner or the insurers to permit the Owner
or the insurers to pursue such claims, if any, to the extent reasonably
requested by the Owner or the insurers.
In the event that the Owner shall have paid an amount to an
Indemnitee pursuant to this Section 7(c), and such Indemnitee subsequently
shall be reimbursed in respect of such indemnified amount from any other
Person, such Indemnitee shall promptly pay to the Owner an amount equal to the
amount of such reimbursement (but in no event more than such payment from the
Owner) plus any net tax benefit (or minus any net tax detriment) realized by
such Indemnitee as a result of any reimbursement received and payment made by
such Indemnitee pursuant to this sentence, provided that (i) no Event of
Default has occurred and is continuing and (ii) such Indemnitee shall have no
obligation to reimburse the Owner if the Owner has not paid such Indemnitee
all amounts required pursuant to this Section 7(c) and any other amounts then
due to such Indemnitee from the Owner under any of the Operative Documents.
The Owner's obligations under the indemnities provided for in this
Agreement shall be those of a primary obligor, whether or not the Person
indemnified shall also be indemnified with respect to the same matter under
the terms of any other document or instrument, and the Person seeking
indemnification from the Owner pursuant to any provision of this Agreement may
proceed directly against the Owner without first seeking to enforce any other
right of indemnification.
EXHIBIT L-4