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PARTICIPATION AGREEMENT
[NW 1999 _]
Dated as of
[_______________]
Among
NORTHWEST AIRLINES, INC.,
Lessee,
NORTHWEST AIRLINES CORPORATION,
Guarantor,
[_______________________________]
Owner Participant,
STATE STREET BANK AND TRUST COMPANY,
Pass Through Trustee under each
of the Pass Through Trust
Agreements,
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its Individual Capacity, except as expressly provided
herein, but solely as Owner Trustee,
STATE STREET BANK AND TRUST COMPANY,
Subordination Agent,
and
STATE STREET BANK AND TRUST COMPANY,
in its Individual Capacity and as Indenture Trustee
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One Boeing 747-451 Aircraft
N[_____]
Leased to Northwest Airlines, Inc.
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INDEX TO PARTICIPATION AGREEMENT
Page
SECTION 1. Participations in Lessor's Cost of the Aircraft ...................3
SECTION 2. Lessee's Notice of Delivery Date ..................................4
SECTION 3. Instructions to the Owner Trustee .................................4
SECTION 4. Conditions ........................................................5
(a) Conditions Precedent to the Participations in the
Aircraft ..................................................5
(b) Conditions Precedent to the Obligations of Lessee and
the Guarantor ............................................13
SECTION 5. [Intentionally Omitted] ..........................................15
SECTION 6. Extent of Interest of Certificate Holders ........................15
SECTION 7. Representations and Warranties of Lessee and the Guarantor;
Indemnities .....................................................15
(a) Representations and Warranties ............................15
(b) General Tax Indemnity .....................................18
(c) General Indemnity .........................................18
(d) Income Tax.................................................18
SECTION 8. Representations, Warranties and Covenants ........................18
SECTION 9. Reliance of Liquidity Provider ...................................37
SECTION 10. Other Documents .................................................37
SECTION 11. Certain Covenants of Lessee .....................................38
SECTION 12. Owner for Federal Tax Purposes ..................................39
SECTION 13. Certain Definitions; Notices; Consent to Jurisdiction ...........39
SECTION 14. Change of Situs of Owner Trust ..................................40
SECTION 15. Miscellaneous ...................................................41
SECTION 16. Expenses ........................................................42
SECTION 17. Refinancings ....................................................42
(i)
SCHEDULES
SCHEDULE I - Names and Addresses
SCHEDULE II - Commitments
SCHEDULE III - Pass Through Trust Agreements
EXHIBITS
Exhibit A - Schedule of Countries Authorized for Reregistration
Exhibit B-1 - Form of Opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, special
counsel for the Lessee and the Guarantor
Exhibit B-2 - Form of Opinion of Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇, special
counsel for the Lessee and the Guarantor
Exhibit B-3 - Form of Opinion of Lessee's Legal Department
Exhibit C - Form of Opinion of in-house counsel for the Manufacturer
Exhibit D - Form of Opinion of Ray, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, special counsel
for the Owner Trustee
Exhibit E-1 - Form of Opinion of [___________________], special counsel
for the Owner Participant
Exhibit E-2 - Form of Opinion of Owner Participant's in-house counsel
Exhibit F - Form of Opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.C.
Exhibit G - Form of Opinion of ▇▇▇▇▇▇▇ ▇▇▇▇ LLP, special counsel for
the Indenture Trustee
Exhibit H-1 - [Intentionally Omitted]
Exhibit H-2 - [Intentionally Omitted]
Exhibit I - Form of ss.1110 Opinion of Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇,
special counsel for the Lessee
Exhibit J-1 - Form of Opinion of ▇▇▇▇▇▇▇ ▇▇▇▇ LLP, special counsel for
the Pass Through Trustee
(ii)
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
(iii)
PARTICIPATION AGREEMENT
[NW 1999 _]
THIS PARTICIPATION AGREEMENT [NW 1999 _] dated as of
[_______________], among (i) NORTHWEST AIRLINES, INC., a Minnesota corporation
(the "Lessee"), (ii) NORTHWEST AIRLINES CORPORATION, a Delaware corporation (the
"Guarantor"), (iii) [_________________________], a [__________] corporation (the
"Owner Participant"), (iv) STATE STREET BANK AND TRUST COMPANY, not in its
individual capacity except as otherwise provided herein, but solely as trustee
(in such capacity, the "Pass Through Trustee") under each of [three] separate
Pass Through Trust Agreements (as defined below), (v) FIRST SECURITY BANK,
NATIONAL ASSOCIATION, a national banking association, not in its individual
capacity, except as expressly provided herein, but solely as Owner Trustee under
the Trust Agreement (herein, in such latter capacity, together with any
successor owner trustee, called the "Owner Trustee"), (vi) STATE STREET BANK AND
TRUST COMPANY, not in its individual capacity, but solely as subordination agent
and trustee (in such capacity, the "Subordination Agent") under the
Intercreditor Agreement (defined below), and (vii) STATE STREET BANK AND TRUST
COMPANY, a Massachusetts trust company, in its individual capacity and as
Indenture Trustee under the Trust Indenture (as hereinafter defined) (herein, in
such latter capacity together with any successor indenture trustee, called the
"Indenture Trustee");
W I T N E S S E T H:
WHEREAS, pursuant to the Purchase Agreement (as such term is defined
in the Lease hereinafter referred to) between Lessee and the Manufacturer, the
Manufacturer has agreed to sell to Lessee, among other things, certain Boeing
747-451 aircraft, including the Aircraft which has been delivered by the
Manufacturer to Lessee and is the subject of this Agreement;
WHEREAS, concurrently with the execution and delivery of this
Agreement,
(i) Lessee and the Owner Trustee are entering into a Purchase
Agreement Assignment [NW 1999 _], dated as of the date hereof (herein
called the "Purchase Agreement Assignment"), whereby Lessee assigns to the
Owner Trustee certain rights and interests of Lessee under the Purchase
Agreement with respect to the Aircraft; and
(ii) the Manufacturer has executed the Consent and Agreement [NW
1999 _] (herein called the "Consent and Agreement"), substantially in the
form attached to the Purchase Agreement Assignment (herein called the
"Consent and Agreement");
WHEREAS, concurrently with the execution and delivery of this
Agreement, the Owner Participant is entering into a Trust Agreement [NW 1999 _],
dated as of the date hereof (said Trust Agreement, as the same may be amended or
supplemented from time to time, being herein called the "Trust Agreement", such
term to include, unless the context
otherwise requires, any Trust Supplement referred to below), with the Owner
Trustee, pursuant to which Trust Agreement the Owner Trustee agrees, among other
things, to hold the Trust Estate defined in Section 1.01 thereof (herein called
the "Trust Estate") for the use and benefit of the Owner Participant;
WHEREAS, the Indenture Trustee and the Owner Trustee concurrently
with the execution and delivery of this Agreement are entering into the Trust
Indenture and Security Agreement [NW 1999 _], dated as of the date hereof (said
Trust Indenture and Security Agreement, as the same may be amended or
supplemented from time to time, being herein called the "Trust Indenture", such
term to include, unless the context otherwise requires, the Trust Supplement
referred to below) pursuant to which the Owner Trustee will issue secured
certificates substantially in the form set forth in Section 2.01 thereof (the
"Secured Certificates", and individually, a "Secured Certificate") in [three]
series, which Secured Certificates are to be secured by the mortgage and
security interests created by the Owner Trustee in favor of the Indenture
Trustee, and the Owner Trustee shall execute and deliver a Trust and Indenture
Supplement substantially in the form of Exhibit A to the Trust Indenture (the
"Trust Supplement") covering the Aircraft, supplementing the Trust Agreement and
the Trust Indenture;
WHEREAS, concurrently with the execution and delivery of this
Agreement, the Owner Trustee and Lessee have entered into the Lease Agreement
[NW 1999 _], dated as of the date hereof (such Lease Agreement, as the same may
be amended or supplemented from time to time to the extent permitted by the
terms thereof and this Agreement, herein called the "Lease", such term to
include, unless the context otherwise requires, the Lease Supplement referred to
below), whereby, subject to the terms and conditions set forth therein, the
Owner Trustee agrees to lease to Lessee, and Lessee agrees to lease from the
Owner Trustee the Aircraft on the date (the "Delivery Date") that the Aircraft
is sold and delivered by Lessee to the Owner Trustee under the ▇▇▇▇ of Sale, and
accepted by the Owner Trustee for all purposes of the Lease, such acceptance to
be evidenced by the execution of the Trust Supplement covering the Aircraft, and
such lease to be evidenced by the execution and delivery of a Lease Supplement
covering the Aircraft;
WHEREAS, concurrently with the execution and delivery of this
Agreement, the Owner Participant is entering into a Tax Indemnity Agreement [NW
1999 _], dated as of the date hereof, with Lessee (the "Tax Indemnity
Agreement");
WHEREAS, concurrently with the execution and delivery of this
Agreement; the Guarantor is entering into a Guarantee [NW 1999 _], dated as of
the date hereof, pursuant to which the Guarantor guarantees certain obligations
of Lessee under the Operative Documents (the "Guarantee");
WHEREAS, pursuant to the Pass Through Trust Agreement and each of
the Pass Through Trust Supplements set forth in Schedule III hereto
(collectively, the "Pass Through Trust Agreements"), on the Issuance Date
[three] separate trusts (collectively, the "Pass Through Trusts" and,
individually, a "Pass Through Trust") were created to facilitate
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the transactions contemplated hereby, including, without limitation, the
issuance and sale by each Pass Through Trust of pass through certificates
pursuant thereto (collectively, the "Certificates");
WHEREAS, the proceeds from the issuance and sale of the Certificates
by each Pass Through Trust will be applied in part by the Pass Through Trustee
on the Delivery Date to purchase from the Owner Trustee, on behalf of each Pass
Through Trust, all of the Secured Certificates bearing the same interest rate as
the Certificates issued by such Pass Through Trust;
WHEREAS, on the Issuance Date (i) Citibank, N.A. (the "Liquidity
Provider") entered into [three] revolving credit agreements (each, a "Liquidity
Facility"), one for the benefit of the holders of Certificates of each Pass
Through Trust, with the Subordination Agent, as agent for the Pass Through
Trustee on behalf of each such Pass Through Trust; and (ii) the Pass Through
Trustee, the Liquidity Provider and the Subordination Agent entered into the
Intercreditor Agreement, dated February 16, 1999 (the "Intercreditor
Agreement");
WHEREAS, the Secured Certificates will be held by the Subordination
Agent pursuant to the Intercreditor Agreement on behalf of the Pass Through
Trusts;
WHEREAS, in order to facilitate the transactions contemplated
hereby, Lessee and the Guarantor have entered into the Underwriting Agreement,
dated as of February 4, 1999, among Lessee, the Guarantor and the several
underwriters named therein (the "Underwriting Agreement"); and
WHEREAS, certain terms are used herein as defined in Section 13(a)
hereof;
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, the parties hereto agree as follows:
SECTION 1. Participations in Lessor's Cost of the Aircraft. (a)
Participation by Pass Through Trustees. Subject to the terms and conditions of
this Agreement, the Pass Through Trustee for each Pass Through Trust agrees to
finance, in part, the Owner Trustee's payment of Lessor's Cost for the Aircraft
by paying to the Owner Trustee the aggregate purchase price of the Secured
Certificates being issued to such Pass Through Trustee as set forth on Schedule
II opposite the name of such Pass Through Trust. The Pass Through Trustees shall
make such payments to the Owner Trustee on a date to be designated pursuant to
Section 2 hereof, but in no event later than [__________], by transferring to
the account of the Owner Trustee at State Street Bank and Trust Company, ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ABA No. ▇▇▇-▇▇▇-▇▇▇, Account No.
▇▇▇▇-▇▇▇-▇, Reference: Northwest/NW 1999 _, not later than 9:30 a.m., New York
City time, on the Delivery Date in immediately available funds in Dollars, the
amount set forth opposite the name of such Pass Through Trust on Schedule II
hereto.
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Upon the occurrence of the above transfers by the Pass Through
Trustee for each Pass Through Trust to the Owner Trustee, the Owner Trustee, at
the direction of the Owner Participant, shall issue, pursuant to Article II of
the Trust Indenture, to the Subordination Agent on behalf of the Pass Through
Trustee for each of the Pass Through Trusts, Secured Certificates of the
maturity and aggregate principal amount, bearing the interest rate and for the
purchase price set forth on Schedule II hereto opposite the name of such Pass
Through Trust.
(b) Participation by Owner Participant. Subject to the terms and
conditions of this Agreement, the Owner Participant hereby agrees to participate
in the payment of Lessor's Cost for the Aircraft by making an equity investment
in the beneficial ownership of the Aircraft on a date to be designated pursuant
to Section 2 hereof, but in no event later than [__________], by transferring to
the account of the Owner Trustee at State Street Bank and Trust Company, ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ABA No. ▇▇▇-▇▇▇-▇▇▇, Account No.
▇▇▇▇-▇▇▇-▇, Reference: Northwest/NW 1999 _, not later than 9:30 a.m., New York
City time, on the Delivery Date in immediately available funds in Dollars, the
amount set forth opposite the Owner Participant's name on Schedule II hereto.
(c) General Provisions. The amount of the participation of each of
the Pass Through Trustee and the Owner Participant to be made as provided above
in the payment of Lessor's Cost for the Aircraft is hereinafter called such
party's "Commitment" for the Aircraft. In case any of the Pass Through Trustee
or the Owner Participant shall default in its obligation under the provisions of
this Section 1, no other such party shall have any obligation to make any
portion of such defaulted amount available or to increase the amount of its
Commitment and the obligation of such nondefaulting party shall remain subject
to the terms and conditions set forth in this Agreement. Upon receipt by the
Owner Trustee of all amounts to be furnished to it on the Delivery Date pursuant
to this Section 1 and the satisfaction of the conditions set forth in Section 4
hereof, Lessee shall transfer title to and deliver the Aircraft to the Owner
Trustee, and the Owner Trustee shall purchase and take title to and accept
delivery of the Aircraft. In consideration of the transfer of title to and
delivery of the Aircraft to the Owner Trustee, the Owner Trustee shall,
simultaneously with such transfer of title and delivery, pay to Lessee (from the
amounts so furnished it by the Participants) Lessor's Cost for the Aircraft.
SECTION 2. Lessee's Notice of Delivery Date. Lessee agrees to give
each Participant, the Owner Trustee and the Indenture Trustee at least two
Business Days' telecopy or other written notice of the Delivery Date for the
Aircraft, which Delivery Date shall be a Business Day, which notice shall
specify the amount of Lessor's Cost and the amount of each Participant's
Commitment for the Aircraft. As to each Participant, the making of its
Commitment for the Aircraft available in the manner required by Section 1 shall
constitute a waiver of such notice.
SECTION 3. Instructions to the Owner Trustee. The Owner Participant
agrees that its releasing the amount of its Commitment for the Aircraft to the
account of the Owner Trustee in accordance with the terms of Section 1 shall
constitute, subject to
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satisfaction or waiver of the conditions set forth in Section 4(a), without
further act, authorization and direction by the Owner Participant to the Owner
Trustee:
(i) to pay to Lessee Lessor's Cost for the Aircraft;
(ii) to the extent not previously accomplished by a prior
authorization, to authorize a representative or representatives of the
Owner Trustee (who shall be an employee or employees, or an agent or
agents, of Lessee designated by Lessee) to accept delivery of the Aircraft
on the Delivery Date pursuant to the Acceptance Certificate;
(iii) to accept from Lessee the ▇▇▇▇ of Sale and the FAA ▇▇▇▇ of
Sale for the Aircraft referred to in Section 4(a)(v)(8) and 4(a)(v)(9);
(iv) to execute an Aircraft Registration Application, the Lease
Supplement and the Trust Supplement, in each case covering the Aircraft;
(v) to borrow from the Pass Through Trustee to finance a portion of
the Lessor's Cost for the Aircraft and to execute and deliver to the
Subordination Agent on behalf of the Pass Through Trustee for each of the
Pass Through Trusts a principal amount of Secured Certificates bearing the
interest rate set forth opposite the name of such Pass Through Trust on
Schedule II hereto, which Secured Certificates shall be in the principal
amounts set forth on Schedule II hereto, pursuant hereto and to the Trust
Indenture; and
(vi) to take such other action as may be required to be taken by the
Owner Trustee on the Delivery Date by the terms of any Operative Document.
SECTION 4. Conditions. (a) Conditions Precedent to the
Participations in the Aircraft. It is agreed that the obligations of each of the
Pass Through Trustee and the Owner Participant to participate in the payment of
Lessor's Cost and to make available the amount of its respective Commitment are
subject to the satisfaction prior to or on the Delivery Date of the following
conditions precedent, except that paragraphs (iii), (v)(5), (xxi), (xxii) and
(xxiv) shall not be a condition precedent to the obligations of the Pass Through
Trustee, and paragraphs (iv), (vii)(D) and (xiv) shall not be a condition
precedent to the obligation of the Owner Participant:
(i) The Pass Through Trustee and the Owner Participant shall have
received due notice with respect to such participation pursuant to Section
2 hereof (or shall have waived such notice either in writing or as
provided in Section 2).
(ii) No change shall have occurred after the date of the execution
and delivery of this Agreement in applicable law or regulations or
guidelines or interpretations thereof by appropriate regulatory
authorities which would make it a violation of law or regulations or
guidelines for the Pass Through Trustee or the Owner Participant to make
its Commitment available in accordance with Section 1 hereof.
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(iii) In the case of the Owner Participant, the Pass Through
Trustees shall have made available the amount of their Commitments for the
Aircraft in accordance with Section 1 hereof.
(iv) In the case of the Pass Through Trustees, the Owner Participant
shall have made available the amount of its Commitment for the Aircraft in
accordance with Section 1 hereof.
(v) The following documents shall have been duly authorized,
executed and delivered by the respective party or parties thereto, shall
each be satisfactory in form and substance to the Pass Through Trustee and
the Owner Participant and shall be in full force and effect and executed
counterparts shall have been delivered to the Pass Through Trustee and the
Owner Participant, or their respective counsel, provided that only the
Subordination Agent on behalf of each Pass Through Trustee shall receive
an executed original of such Pass Through Trustee's respective Secured
Certificate and provided, further, that an excerpted copy of the Purchase
Agreement shall only be delivered to and retained by the Owner Trustee
(but the Indenture Trustee shall also retain an excerpted copy of the
Purchase Agreement which may be inspected by the Owner Participant and its
counsel prior to the Delivery Date and subsequent to the Delivery Date may
be inspected and reviewed by the Indenture Trustee if and only if there
shall occur and be continuing an Event of Default), the chattel paper
counterpart of the Lease and the Lease Supplement covering the Aircraft
dated the Delivery Date shall be delivered to the Indenture Trustee, and
the Tax Indemnity Agreement need only be satisfactory to the Owner
Participant and Lessee and shall only be delivered to Lessee and the Owner
Participant and their respective counsel:
(1) an excerpted copy of the Purchase Agreement (insofar as it
relates to the Aircraft);
(2) the Purchase Agreement Assignment;
(3) the Lease;
(4) a Lease Supplement covering the Aircraft dated the
Delivery Date;
(5) the Tax Indemnity Agreement;
(6) the Trust Agreement;
(7) a Trust Supplement covering the Aircraft dated the
Delivery Date;
(8) the ▇▇▇▇ of Sale;
(9) the FAA ▇▇▇▇ of Sale;
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(10) an acceptance certificate covering the Aircraft in the
form agreed to by the Owner Participant and Lessee (herein called
the "Acceptance Certificate") duly completed and executed by the
Owner Trustee or its agent, which may be a representative of Lessee,
and by such representative on behalf of Lessee;
(11) the Trust Indenture;
(12) the Secured Certificates;
(13) the Consent and Agreement; and
(14) the Guarantee.
All of the foregoing documents, together with this Agreement, are
sometimes referred to herein, collectively, as the "Operative Documents"
and, individually, as an "Operative Document".
In addition, the Pass Through Trustee and the Owner Participant each
shall have received executed counterparts or conformed copies of the
following documents:
(1) each of the Pass Through Trust Agreements;
(2) the Intercreditor Agreement; and
(3) the Liquidity Facility for each of the Pass Through
Trusts.
(vi) A Uniform Commercial Code financing statement or statements
covering all the security interests created by or pursuant to the Granting
Clause of the Trust Indenture that are not covered by the recording system
established by the Federal Aviation Act, shall have been executed and
delivered by the Owner Trustee, and such financing statement or statements
shall have been duly filed in all places necessary or advisable, and any
additional Uniform Commercial Code financing statements deemed advisable
by the Owner Participant or the Pass Through Trustee shall have been
executed and delivered by Lessee or the Owner Trustee and duly filed.
(vii) The Pass Through Trustee and the Owner Participant shall have
received the following:
(A)(1) an incumbency certificate of Lessee and the Guarantor
(as the case may be) as to the person or persons authorized to
execute and deliver this Agreement, the Lease, the Lease Supplement
covering the Aircraft, the ▇▇▇▇ of Sale, the FAA ▇▇▇▇ of Sale, the
Purchase Agreement Assignment, the Tax Indemnity Agreement, the Pass
Through Trust Agreements, the Guarantee and any other documents to
be executed on behalf of Lessee or the Guarantor (as the
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case may be) in connection with the transactions contemplated hereby
and the signatures of such person or persons;
(2) a copy of the resolutions of the board of directors of
Lessee and the Guarantor or the executive committee thereof,
certified by the Secretary or an Assistant Secretary of Lessee and
the Guarantor (as the case may be), duly authorizing the
transactions contemplated hereby and the execution and delivery of
each of the documents required to be executed and delivered on
behalf of Lessee or the Guarantor (as the case may be) in connection
with the transactions contemplated hereby; and
(3) a copy of the certificate of incorporation of Lessee and
the Guarantor, certified by the Secretary of State of the State of
Minnesota in the case of Lessee and certified by the Secretary of
State of the State of Delaware in the case of the Guarantor, a copy
of the by-laws of Lessee and the Guarantor, certified by the
Secretary or Assistant Secretary of Lessee 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 Lessee and from
the Secretary of State of the State of Delaware in the case of the
Guarantor, dated as of a date reasonably near the Delivery Date, as
to the due incorporation and good standing of Lessee or the
Guarantor (as the case may be) in such state.
(B)(1) an incumbency certificate of the Indenture Trustee as
to the person or persons authorized to execute and deliver this
Agreement, the Trust Indenture, the Pass Through Trust Agreements
and any other documents to be executed on behalf of the Indenture
Trustee in connection with the transactions contemplated hereby and
the signatures of such person or persons;
(2) a copy of the resolutions of the board of directors of the
Indenture Trustee, certified by the Secretary or an Assistant
Secretary of the Indenture Trustee, duly authorizing the
transactions contemplated hereby and the execution and delivery of
each of the documents required to be executed and delivered on
behalf of the Indenture Trustee in connection with the transactions
contemplated hereby;
(3) a copy of the articles of association and by-laws of the
Indenture Trustee, each certified by the Secretary or an Assistant
Secretary of the Indenture Trustee; and
(4) a certificate signed by an authorized officer of the
Indenture Trustee, dated the Delivery Date, certifying that the
representations and warranties contained herein of the Indenture
Trustee are correct as though made on and as of the Delivery Date,
except to the extent that such representations and warranties relate
solely to an earlier date (in which case such representations and
warranties are correct on and as of such earlier date).
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(C)(1) an incumbency certificate of the Owner Trustee as to
the person or persons authorized to execute and deliver this
Agreement, the Lease, the Lease Supplement covering the Aircraft,
the Trust Agreement, the Trust Indenture, the Purchase Agreement
Assignment and any other documents to be executed on behalf of the
Owner Trustee in connection with the transactions contemplated
hereby and the signatures of such person or persons;
(2) a copy of the resolutions of the board of directors of the
Owner Trustee, certified by the Secretary or an Assistant Secretary
of the Owner Trustee, duly authorizing the transactions contemplated
hereby and the execution and delivery of each of the documents
required to be executed and delivered on behalf of the Owner Trustee
in connection with the transactions contemplated hereby;
(3) a copy of the articles of association and by-laws of the
Owner Trustee, each certified by the Secretary or an Assistant
Secretary of the Owner Trustee; and
(4) a certificate signed by an authorized officer of the Owner
Trustee, dated the Delivery Date, certifying that the
representations and warranties contained herein of the Owner Trustee
(in its individual capacity and as trustee) are correct as though
made on and as of the Delivery Date, except to the extent that such
representations and warranties relate solely to an earlier date (in
which case such representations and warranties are correct on and as
of such earlier date).
(D)(1) an incumbency certificate of the Owner Participant as
to the person or persons authorized to execute and deliver this
Agreement, the Tax Indemnity Agreement, the Trust Agreement and any
other documents to be executed on behalf of the Owner Participant in
connection with the transactions contemplated hereby and the
signatures of such person or persons;
(2) a certificate signed by the Secretary or an Assistant
Secretary of the Owner Participant, to the effect that the
transactions contemplated hereby and the execution and delivery of
each of the documents required to be executed and delivered on
behalf of the Owner Participant in connection with the transactions
contemplated hereby have been duly authorized;
(3) a copy of the articles of association and by-laws of the
Owner Participant, each certified by the Secretary or an Assistant
Secretary of the Owner Participant; and
(4) a certificate signed by an authorized officer of the Owner
Participant, dated the Delivery Date, certifying that the
representations and warranties contained herein of the Owner
Participant are correct as though made on and as of the Delivery
Date, except to the extent that such representations and warranties
relate solely to an earlier date (in which case such representations
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and warranties are correct on and as of such earlier date).
(viii) All appropriate action required to have been taken prior to
the Delivery Date in connection with the transactions contemplated by this
Agreement shall have been taken by the Federal Aviation Administration, or
any governmental or political agency, subdivision or instrumentality of
the United States, and all orders, permits, waivers, authorizations,
exemptions and approvals of such entities required to be in effect on the
Delivery Date in connection with the transactions contemplated by this
Agreement shall have been issued, and all such orders, permits, waivers,
authorizations, exemptions and approvals shall be in full force and effect
on the Delivery Date.
(ix) On the Delivery Date the Pass Through Trustee and the Owner
Participant shall have received a certificate signed by an authorized
officer of Lessee (and with respect to the matters set forth in clause (4)
below, the Guarantor) to the effect that:
(1) the Aircraft has been duly certified by the Federal
Aviation Administration as to type and has a current certificate of
airworthiness;
(2) the FAA ▇▇▇▇ of Sale, the Lease, the Lease Supplement, the
Trust Indenture and the Trust Supplement covering the Aircraft shall
have been duly filed for recordation (or shall be in the process of
being so duly filed for recordation) with the Federal Aviation
Administration, and the Trust Agreement shall have been filed (or
shall be in the process of being so filed) with the Federal Aviation
Administration;
(3) application for registration of the Aircraft in the name
of the Owner Trustee has been duly made with the Federal Aviation
Administration; and
(4) the representations and warranties contained herein of
Lessee and the Guarantor are correct as though made on and as of the
Delivery Date, except to the extent that such representations and
warranties (other than those contained in clause (F) of Section
7(a)(iv)) relate solely to an earlier date (in which case such
representations and warranties were correct on and as of such
earlier date).
(x) Lessee and the Guarantor shall have entered into the
Underwriting Agreement and each of the Pass Through Trust Agreements, the
Certificates shall have been issued and sold pursuant to the Underwriting
Agreement and the Pass Through Trust Agreements.
(xi) The Pass Through Trustee and the Owner Participant shall have
received, addressed to the Pass Through Trustee, the Indenture Trustee,
the Owner
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Participant and the Owner Trustee, and reasonably satisfactory as to scope
and substance to the Pass Through Trustee and the Owner Participant, an
opinion substantially in the form of Exhibit B-1 hereto from ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, special counsel for Lessee and the Guarantor, an
opinion substantially in the form of Exhibit B-2 hereto from Cadwalader,
▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇, special counsel for Lessee and the Guarantor, and an
opinion substantially in the form of Exhibit B-3 hereto from Lessee's
legal department.
(xii) The Pass Through Trustee and the Owner Participant shall have
received, addressed to the Pass Through Trustee, the Indenture Trustee,
the Owner Participant, the Owner Trustee, the Guarantor and Lessee and
reasonably satisfactory as to scope and substance to the Pass Through
Trustee, the Owner Participant, the Guarantor and Lessee, an opinion
substantially in the form of Exhibit C hereto from in-house counsel to the
Manufacturer, with respect to the Manufacturer Documents.
(xiii) The Pass Through Trustee and the Owner Participant shall have
received, addressed to the Pass Through Trustee, the Indenture Trustee,
the Owner Participant, the Owner Trustee, the Guarantor and Lessee, and
reasonably satisfactory as to scope and substance to the Pass Through
Trustee, the Owner Participant, the Guarantor and Lessee, an opinion
substantially in the form of Exhibit D hereto from Ray, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇,
special counsel for the Owner Trustee.
(xiv) The Pass Through Trustee shall have received, addressed to the
Pass Through Trustee, the Indenture Trustee, the Owner Trustee, the
Guarantor and Lessee, and reasonably satisfactory as to scope and
substance to the Pass Through Trustee, the Guarantor and Lessee, an
opinion substantially in the form of Exhibit E-1 hereto from
[________________], special counsel for the Owner Participant, and an
opinion substantially in the form of Exhibit E-2 hereto from the Owner
Participant's in-house counsel.
(xv) The Pass Through Trustee and the Owner Participant shall have
received, addressed to the Pass Through Trustee, the Indenture Trustee,
the Owner Participant, the Owner Trustee, the Guarantor and Lessee, and
reasonably satisfactory as to scope and substance to the Pass Through
Trustee, the Owner Participant, the Guarantor and Lessee, an opinion
substantially in the form of Exhibit F hereto from ▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.C.
(xvi) The Pass Through Trustee and the Owner Participant shall have
received, addressed to the Pass Through Trustee, the Owner Participant,
the Owner Trustee, the Guarantor and Lessee, and reasonably satisfactory
as to scope and substance to the Pass Through Trustee, the Owner
Participant, the Guarantor and Lessee, an opinion substantially in the
form of Exhibit G hereto from ▇▇▇▇▇▇▇ ▇▇▇▇ LLP, special counsel for the
Indenture Trustee.
(xvii) [Intentionally Omitted].
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(xviii) The Pass Through Trustee and Owner Participant shall have
received an independent insurance broker's report, in form and substance
satisfactory to the Pass Through Trustee and the Owner Participant, as to
the due compliance with the terms of Section 11 of the Lease relating to
insurance with respect to the Aircraft.
(xix) Lessor's Cost for the Aircraft shall be $[______________].
(xx) No action or proceeding shall have been instituted nor shall
governmental action be threatened before any court or governmental agency,
nor shall any order, judgment or decree have been issued or proposed to be
issued by any court or governmental agency at the time of the Delivery
Date to set aside, restrain, enjoin or prevent the completion and
consummation of this Agreement or the transactions contemplated hereby.
(xxi) The Owner Participant shall have received from
[___________________], special tax counsel to the Owner Participant, an
opinion, in form and substance satisfactory to the Owner Participant, with
respect to certain Federal income tax aspects of the transaction
contemplated by the Operative Documents.
(xxii) In the opinion of the Owner Participant and its special tax
counsel, there shall have been, since the date hereof, no amendment,
modification, addition, or change in or to the provisions of the Internal
Revenue Code of 1986, as amended through the date hereof, and the
regulations promulgated under the Code (including temporary regulations),
Internal Revenue Service Revenue Procedures or Revenue Rulings, or other
administrative interpretations, applicable judicial precedents or
Executive Orders of the President of the United States, all as in effect
on the date hereof, the effect of which might preclude the Owner
Participant from obtaining any of the income tax benefits and consequences
assumed to be available to the Owner Participant as set forth in Section 2
of the Tax Indemnity Agreement.
(xxiii) The Pass Through Trustee and the Owner Participant shall
have received a favorable opinion substantially in the form of Exhibit I
hereto addressed to the Pass Through Trustee and the Owner Participant,
and reasonably satisfactory as to scope and substance to the Pass Through
Trustee and the Owner Participant, from Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇,
special counsel for the Lessee, which opinion shall state (with customary
assumptions and qualifications) that the Owner Trustee, as lessor under
the Lease, and the Indenture Trustee, as assignee of the Owner Trustee's
rights under the Lease pursuant to the Trust Indenture, would be entitled
to the benefits of 11 U.S.C. ss.1110 with respect to the Aircraft.
(xxiv) The Owner Participant shall have received (A) a certificate
signed by an authorized officer of the Pass Through Trustee, dated the
Delivery Date, certifying that the representations and warranties
contained herein of the Pass Through Trustee are correct as though made on
and as of the Delivery Date, except to the extent that such
representations and warranties relate solely to an earlier date (in which
case such
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representations and warranties are correct on and as of such earlier
date), (B) an opinion substantially in the form of Exhibit J-1 hereto
addressed to the Owner Participant, the Guarantor and Lessee of ▇▇▇▇▇▇▇
▇▇▇▇ LLP, special counsel for the Pass Through Trustee, and reasonably
satisfactory as to scope and substance to the Owner Participant, the
Guarantor and Lessee, and (C) such other documents and evidence with
respect to the Pass Through Trustee as it may reasonably request in order
to establish the due consummation of the transactions contemplated by this
Agreement, the taking of all necessary corporate action in connection
therewith and compliance with the conditions herein set forth.
(xxv) The Pass Through Trustee and the Owner Participant shall have
received, addressed to the Pass Through Trustee, the Owner Participant,
the Owner Trustee, the Indenture Trustee, the Guarantor and Lessee, and
reasonably satisfactory as to scope and substance, to the Pass Through
Trustee, the Owner Participant, the Guarantor and Lessee, an opinion
substantially in the form of Exhibit J-2 hereto from ▇▇▇▇▇▇▇ ▇▇▇▇ LLP,
special counsel to the Subordination Agent.
Promptly upon the registration of the Aircraft and the recording of
the Trust Indenture, the Lease, the Lease Supplement covering the Aircraft and
the Trust Supplement covering the Aircraft pursuant to the Federal Aviation Act,
Lessee will cause ▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.C., special counsel in Oklahoma City,
Oklahoma, to deliver to the Pass Through Trustee, the Indenture Trustee, the
Owner Participant, the Owner Trustee and Lessee an opinion as to the due and
valid registration of the Aircraft in the name of the Owner Trustee, the due
recording of the FAA ▇▇▇▇ of Sale, the Trust Indenture, such Lease Supplement,
such Trust Supplement and the Lease and the filing of the Trust Agreement and
the lack of filing of any intervening documents with respect to the Aircraft.
(b) Conditions Precedent to the Obligations of Lessee and the
Guarantor. It is agreed that (A) the obligations of Lessee to sell the Aircraft
to the Owner Trustee and to accept delivery of the Aircraft under the Lease, and
(B) the obligations of Lessee and the Guarantor to enter into the other
Operative Documents, are all subject to the fulfillment to the satisfaction of
Lessee and the Guarantor prior to or on the Delivery Date of the following
conditions precedent:
(i) All appropriate action required to have been taken on or prior
to the Delivery Date in connection with the transactions contemplated by
this Agreement shall have been taken by the Federal Aviation
Administration, or any governmental or political agency, subdivision or
instrumentality of the United States, and all orders, permits, waivers,
exemptions, authorizations and approvals of such entities required to be
in effect on the Delivery Date in connection with the transactions
contemplated by this Agreement shall have been issued, and all such
orders, permits, waivers, exemptions, authorizations and approvals shall
be in full force and effect on the Delivery Date.
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(ii) The conditions specified in Sections 4(a)(ii), 4(a)(iii) and
4(a)(iv) hereof shall have been satisfied.
(iii) Those documents described in Section 4(a)(v) shall have been
duly authorized, executed and delivered by the respective party or parties
thereto (other than Lessee and the Guarantor) in the manner specified in
Section 4(a)(v), shall each be satisfactory in form and substance to
Lessee and the Guarantor, shall be in full force and effect on the
Delivery Date, and an executed counterpart of each thereof (other than the
Secured Certificates) shall have been delivered to Lessee or its special
counsel and the Guarantor or its special counsel.
(iv) Lessee and the Guarantor shall have received (A) each
certificate referred to in Section 4(a)(vii) (other than the certificate
referred to in clause (A) thereof), (B) the certificate referred to in
Section 4(a)(xxiv)(A), and (C) such other documents and evidence with
respect to the Pass Through Trustee as Lessee or its special counsel and
the Guarantor or its special counsel may reasonably request in order to
establish the due consummation of the transactions contemplated by this
Agreement, the taking of all corporate proceedings in connection therewith
and compliance with the conditions herein set forth.
(v) Lessee and the Guarantor shall have received the opinions set
forth in Sections 4(a)(xii), 4(a)(xiii), 4(a)(xiv), 4(a)(xv), 4(a)(xvi),
4(a)(xxiv)(B) and 4(a)(xxv) in each case addressed to Lessee and the
Guarantor and dated the Delivery Date and in each case in scope and
substance reasonably satisfactory to Lessee and its special counsel and
the Guarantor and its special counsel.
(vi) No action or proceeding shall have been instituted nor shall
governmental action be threatened before any court or governmental agency,
nor shall any order, judgment or decree have been issued or proposed to be
issued by any court or governmental agency at the time of the Delivery
Date to set aside, restrain, enjoin or prevent the completion and
consummation of this Agreement or the transactions contemplated hereby.
(vii) No change shall have occurred after the date of the execution
and delivery of this Agreement in applicable law or regulations or
guidelines or interpretations by appropriate regulatory authorities which
would make it a violation of law or regulations or guidelines for Lessee
or the Guarantor to enter into any transaction contemplated by the
Operative Documents.
(viii) In the opinion of Lessee and its special counsel, there shall
have been, since the date hereof, no amendment, modification, addition or
change in or to the Internal Revenue Code of 1986, as amended through the
date hereof, the regulations promulgated under the Code (including
temporary regulations), Internal Revenue Service Revenue Procedures or
Revenue Rulings, or other administrative interpretations, applicable
judicial precedents or Executive Orders of the President of
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the United States which might give rise to an indemnity obligation of
Lessee under any of the Operative Documents.
(ix) Lessee shall have been paid Lessor's Cost for the Aircraft.
SECTION 5. [Intentionally Omitted].
SECTION 6. Extent of Interest of Certificate Holders. No Certificate
Holder (as defined in the Trust Indenture) shall have any further interest in,
or other right with respect to, the mortgage and security interests created by
the Trust Indenture when and if the principal of and interest on all Secured
Certificates held by such holder and all other sums payable to such holder
hereunder, under the Trust Indenture and under such Secured Certificates shall
have been paid in full. Each Pass Through Trustee and, by its acceptance of a
Secured Certificate, each Certificate Holder agrees that it will look solely to
the income and proceeds from the Trust Indenture Estate to the extent available
for distribution to such Certificate Holder as provided in Article III of the
Trust Indenture and that neither the Owner Participant nor the Owner Trustee
shall be personally liable to the Pass Through Trustees or any Certificate
Holder for any amounts payable under the Secured Certificates, the Trust
Indenture or hereunder, except as expressly provided in the Operative Documents.
SECTION 7. Representations and Warranties of Lessee and the
Guarantor; Indemnities. (a) Representations and Warranties. Lessee and the
Guarantor represent and warrant to the Pass Through Trustee, the Owner Trustee,
the Indenture Trustee, the Liquidity Provider, the Subordination Agent and the
Owner Participant that as of the Delivery Date:
(i) each of Lessee and the Guarantor is a corporation duly
organized, validly existing and in good standing under the laws of the
state of its incorporation, has the corporate power and authority to own
or hold under lease its properties, has, or had on the respective dates of
execution thereof, the corporate power and authority to enter into and
perform its obligations under (i) in the case of Lessee, the Lessee
Documents, the Pass Through Trust Agreements, the Underwriting Agreement
and the other Operative Documents to which it is a party and (ii) in the
case of the Guarantor, this Agreement, the Pass Through Trust Agreements,
the Underwriting Agreement and the other Operative Documents to which it
is a party, and is duly qualified to do business as a foreign corporation
in each state in which its operations or the nature of its business
requires other than failures to so qualify which would not have a material
adverse effect on the condition (financial or otherwise), consolidated
business or properties of it and its subsidiaries considered as one
enterprise;
(ii) Lessee is a Certificated Air Carrier, and its chief executive
office (as such term is used in Article 9 of the Uniform Commercial Code
in effect in the State of Minnesota) is located at Eagan, Minnesota;
(iii) the execution and delivery by Lessee or the Guarantor (as the
case may be) of the Lessee Documents, the Pass Through Trust Agreements,
the Underwriting Agreement and each other Operative Document to which
Lessee or the Guarantor (as
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the case may be) is a party, and the performance of the obligations of
Lessee or the Guarantor (as the case may be) under the Lessee Documents,
the Pass Through Trust Agreements, the Underwriting Agreement and each
other Operative Document to which Lessee or the Guarantor (as the case may
be) is a party, have been duly authorized by all necessary corporate
action on the part of Lessee or the Guarantor, do not require any
stockholder approval, or approval or consent of any trustee or holder of
any material indebtedness or material obligations of Lessee or the
Guarantor, except such as have been duly obtained and are in full force
and effect, and do not contravene any law, governmental rule, regulation
or order binding on Lessee or the Guarantor (as the case may be) or the
certificate of incorporation or by-laws of Lessee or the Guarantor (as the
case may be), or contravene the provisions of, or constitute a default
under, or result in the creation of any Lien (other than Permitted Liens)
upon the property of Lessee or the Guarantor (as the case may be) under,
any indenture, mortgage, contract or other agreement to which Lessee or
the Guarantor (as the case may be) is a party or by which it may be bound
or affected which contravention, default or Lien, individually or in the
aggregate, would be reasonably likely to have a material adverse effect on
the condition (financial or otherwise), business or properties of the
Guarantor and its subsidiaries considered as one enterprise;
(iv) neither the execution and delivery by Lessee or the Guarantor
(as the case may be) of the Lessee Documents, the Pass Through Trust
Agreements, the Underwriting Agreement or any other Operative Document to
which Lessee or the Guarantor (as the case may be) is a party, nor the
performance of the obligations of Lessee or the Guarantor (as the case may
be) under the Lessee Documents, the Pass Through Trust Agreements, the
Underwriting Agreement or the other Operative Documents to which Lessee or
the Guarantor (as the case may be) is a party, requires the consent or
approval of, the giving of notice to, the registration with, or the taking
of any other action in respect of, the Department of Transportation, the
FAA, or any other federal, state or foreign governmental authority having
jurisdiction over Lessee or the Guarantor, other than (A) the registration
of the Certificates under the Securities Act of 1933, as amended, and
under the securities laws of any state in which the Certificates may be
offered for sale if the laws of such state require such action, (B) the
qualification of the Pass Through Trust Agreements under the Trust
Indenture Act of 1939, as amended, pursuant to an order of the Securities
and Exchange Commission, (C) the orders, permits, waivers, exemptions,
authorizations and approvals of the regulatory authorities having
jurisdiction over the operation of the Aircraft by Lessee or any Sublessee
required to be obtained on or prior to the Delivery Date, which orders,
permits, waivers, exemptions, authorizations and approvals have been duly
obtained and are, or on the Delivery Date will be, in full force and
effect (other than a flying time wire, all steps to obtain the issuance of
which will have been, on the Delivery Date, taken or caused to be taken by
Lessee), (D) the registration of the Aircraft referred to in Section
4(a)(ix)(3), (E) the registrations and filings referred to in Section
7(a)(vi), and (F) authorizations, consents, approvals, actions, notices
and filings required to be obtained, taken, given or made either only
after the date hereof or the failure of which to obtain, take, give or
make would not be reasonably likely to
-16-
have a material adverse effect on the condition (financial or otherwise),
business or properties of the Guarantor and its subsidiaries considered as
one enterprise;
(v) this Agreement, each of the other Lessee Documents, the Pass
Through Trust Agreements and the Guarantee constitute the legal, valid and
binding obligations of Lessee or the Guarantor (as the case may be)
enforceable against Lessee or the Guarantor (as the case may be) in
accordance with their respective terms, except as the same may be limited
by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or similar laws affecting the rights of
creditors or lessors generally and by general principles of equity,
whether considered in a proceeding at law or in equity, and except, in the
case of the Lease, as limited by applicable laws which may affect the
remedies provided in the Lease, which laws, however, do not make the
remedies provided in the Lease inadequate for practical realization of the
benefits intended to be afforded thereby;
(vi) except for (A) the filing of the Trust Agreement with the FAA,
(B) the registration of the Aircraft pursuant to the Federal Aviation Act,
(C) the filing for recording pursuant to the Federal Aviation Act of the
Lease with the Lease Supplement covering the Aircraft, the Trust Indenture
and the Trust Supplement attached thereto and made a part thereof, the
Trust Indenture with the Trust Supplement attached thereto and made a part
thereof and the FAA ▇▇▇▇ of Sale, (D) the filing of financing statements
(and continuation statements at periodic intervals) with respect to the
security interests created by such documents under the Uniform Commercial
Code of Minnesota and Utah and such other states as may be specified in
the opinions furnished pursuant to Section 4(a)(xi) hereof, and (E) the
taking of possession by the Indenture Trustee of the original chattel
paper counterpart of each of the Lease and the Lease Supplement covering
the Aircraft, no further filing or recording of any document (including
any financing statement in respect thereof under Article 9 of the Uniform
Commercial Code of any applicable jurisdiction) is necessary under the
laws of the United States of America or any State thereof in order to
perfect the Owner Trustee's interest in the Aircraft as against Lessee and
any third parties, or to perfect the security interest in favor of the
Indenture Trustee in the Owner Trustee's interest in the Aircraft (with
respect to such portion of the Aircraft as is covered by the recording
system established by the FAA pursuant to 49 U.S.C. Section 44107) and in
the Lease in any applicable jurisdiction in the United States;
(vii) neither Lessee, the Guarantor nor any of their affiliates has
directly or indirectly offered the Certificates for sale to any Person
other than in a manner permitted by the Securities Act of 1933, as
amended, and by the rules and regulations thereunder;
(viii) neither Lessee nor the Guarantor is an "investment company"
within the meaning of the Investment Company Act of 1940, as amended;
-17-
(ix) no event has occurred and is continuing which constitutes an
Event of Default or would constitute an Event of Default but for the
requirement that notice be given or time lapse or both;
(x) no event has occurred and is continuing which constitutes an
Event of Loss or would constitute an Event of Loss with the lapse of time;
(xi) Lessee is solvent and will not be rendered insolvent by the
sale of the Aircraft; after the sale of the Aircraft the capital of Lessee
will not be unreasonably small for the conduct of the business in which
Lessee is engaged or is about to engage; Lessee has no intention or belief
that it is about to incur debts beyond its ability to pay as they mature;
and Lessee's sale of the Aircraft is made without any intent to hinder,
delay or defraud either present or future creditors;
(xii) none of the proceeds from the issuance of the Secured
Certificates or from the acquisition by the Owner Participant of its
beneficial interest in the Trust Estate will be used directly or
indirectly by Lessee to purchase or carry any "margin security" as such
term is defined in Regulation U of the Board of Governors of the Federal
Reserve System; and
(xiii) On the Delivery Date, all sales or use tax then due and for
which Lessee is responsible pursuant to Section 7(b)(i) hereof shall have
been paid, other than such taxes which are being contested by Lessee in
good faith and by appropriate proceedings so long as such proceedings do
not involve any material risk of the sale, forfeiture or loss of the
Aircraft.
(b) General Tax Indemnity. Exhibit K, which is a complete statement
of the provisions of Section 7(b), is incorporated herein in its entirety as if
fully set forth herein.
(c) General Indemnity. Exhibit L, which is a complete statement of
the provisions of Section 7(c), is incorporated herein in its entirety as if
fully set forth herein.
(d) Income Tax. [Intentionally Omitted].
SECTION 8. Representations, Warranties and Covenants.
(a) [Intentionally Omitted].
(b) [Intentionally Omitted].
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(c) Each of the Owner Participant and First Security Bank, National
Association, in its individual capacity, represents and warrants to the other
parties to this Agreement that it is, and on the Delivery Date will be, a
Citizen of the United States without making use of any voting trust, voting
powers agreement or similar arrangement. The Owner Participant agrees, solely
for the benefit of Lessee and the Loan Participants, that if (i) it shall cease
to be, or believes itself likely to cease to be, a Citizen of the United States
and (ii) the Aircraft shall or would therefore become ineligible for
registration in the name of the Owner Trustee under the Federal Aviation Act and
regulations then applicable thereunder, then the Owner Participant shall (at its
own expense and without any reimbursement or indemnification from Lessee)
promptly effect a voting trust, voting powers agreement or other similar
arrangement or take any other action as may be necessary to prevent any
deregistration and to maintain the United States registration of the Aircraft.
It is agreed that: (A) the Owner Participant shall be liable to pay on request
to each of the other parties hereto and to each holder of a Secured Certificate
for any damages suffered by any such other party or holder as the result of the
representation and warranty of the Owner Participant in the first sentence of
this Section 8(c) proving to be untrue as of the Delivery Date; and (B) the
Owner Participant shall be liable to pay on request to Lessee, any Sublessee and
the Loan Participants for any damages which may be incurred by Lessee, any
Sublessee or the Loan Participants as a result of the Owner Participant's
failure to comply with its obligations pursuant to the second sentence of this
Section 8(c). Each party hereto agrees, upon the request and at the sole expense
of the Owner Participant, to cooperate with the Owner Participant in complying
with its obligations under the provisions of the second sentence of this Section
8(c). First Security Bank, National Association, in its individual capacity,
agrees that if at any time an officer or responsible employee of the Corporate
Trust Department of First Security Bank, National Association, shall obtain
actual knowledge that First Security Bank, National Association, has ceased to
be a Citizen of the United States without making use of a voting trust, voting
powers agreement or similar arrangement, it will promptly resign as Owner
Trustee (if and so long as such citizenship is necessary under the Federal
Aviation Act as in effect at such time or, if it is not necessary, if and so
long as the Owner Trustee's citizenship would have any material adverse effect
on the Loan Participants, Lessee or the Owner Participant), effective upon the
appointment of a successor Owner Trustee in accordance with Section 9.01 of the
Trust Agreement. If the Owner Participant or First Security Bank, National
Association, in its individual capacity, does not comply with the requirements
of this Section 8(c), the Owner Trustee, the Indenture Trustee and the
Participants hereby agree that an Event of Default (or an event which would
constitute an Event of Default but for lapse of time or the giving of notice or
both) shall not have occurred and be continuing under the Lease due to
non-compliance by Lessee with the registration requirements in the Lease.
(d) First Security Bank, National Association, in its individual
capacity, represents and warrants that both the principal place of business of
the Owner Trustee and the place where its records concerning the Aircraft and
all of its interest in, to and under the Operative Documents to which it is a
party are kept is Salt Lake City, Utah. First Security Bank, National
Association, in its individual capacity, agrees that it will not change the
location of such office to a location outside of Salt Lake City, Utah, without
prior written notice to all parties. First Security Bank, National Association,
in its individual capacity,
-19-
further represents and warrants that (A) on the Delivery Date the Owner Trustee
shall have received whatever title to the Aircraft as was conveyed to it by
Lessee, and (B) the Trust Agreement, and, assuming due authorization, execution
and delivery of the Trust Agreement by the Owner Participant, the other Owner
Trustee Documents, when executed and delivered, shall have been duly executed
and delivered by one of its officers who is duly authorized to execute and
deliver such instruments on behalf of the Owner Trustee. First Security Bank,
National Association, in its individual capacity, represents that it has not
offered any interest in the Trust Estate or any Secured Certificates or any
similar securities for sale to, or solicited any offer to acquire the same from,
anyone, and that no officer or responsible employee of the Corporate Trust
Department of First Security Bank, National Association, has knowledge of any
such offer or solicitation by anyone other than Lessee.
(e) Each Loan Participant represents and warrants that neither it
nor anyone acting in its behalf has offered any Secured Certificates for sale
to, or solicited any offer to buy any Secured Certificate from, any Person other
than in a manner in compliance with, and which does not require registration
under, the Securities Act of 1933, as amended, or the rules and regulations
thereunder.
(f) The Owner Participant and the Indenture Trustee agree that, at
any time after the Depreciation Period, Lessee may elect to effect a change in
registration of the Aircraft, at Lessee's cost and expense, so long as (a) the
country of registry of the Aircraft is a country listed on Exhibit A hereto (or
such other country as the Owner Trustee approves) and (b) the following
conditions are met: (i) unless the country of registry is Taiwan, the United
States maintains normal diplomatic relations with the country of registry of the
Aircraft, and if the country of registry is Taiwan, the United States maintains
diplomatic relations at least as good as those in effect on the Delivery Date;
and (ii) the Owner Trustee and the Indenture Trustee shall have received
favorable opinions (subject to customary exceptions) addressed to each such
party, from counsel of recognized reputation qualified in the laws of the
relevant jurisdiction to the effect that:
(A) the Owner Trustee's ownership interest in the Aircraft shall be
recognized under the laws of such jurisdiction, (B) the obligations of
Lessee, and the rights and remedies of the Owner Trustee, under the Lease
shall remain valid, binding and (subject to customary bankruptcy and
equitable remedies exceptions and to other exceptions customary in foreign
opinions generally) enforceable under the laws of such jurisdiction (or
the laws of the jurisdiction to which the laws of such jurisdiction would
refer as the applicable governing law), (C) after giving effect to such
change in registration, the Lien of the Trust Indenture on the Owner
Trustee's right, title and interest in and to the Aircraft and the Lease
shall continue as a valid and duly perfected first priority security
interest and all filing, recording or other action necessary to protect
the same shall have been accomplished (or, if such opinion cannot be given
at the time of such proposed change in registration because such change in
registration is not yet effective, (1) the opinion shall detail what
filing, recording or other action is necessary and (2) the Owner Trustee
and the Indenture Trustee shall have received a certificate from Lessee
that all possible preparations to accomplish such filing,
-20-
recording and other action shall have been done, and such filing,
recording and other action shall be accomplished and a supplemental
opinion to that effect shall be delivered to the Owner Trustee and the
Indenture Trustee on or prior to the effective date of such change in
registration), (D) it is not necessary, solely as a consequence of such
change in registration and without giving effect to any other activity of
the Owner Trustee, the Owner Participant or the Indenture Trustee (or any
Affiliate thereof), as the case may be, for the Owner Trustee, the Owner
Participant or the Indenture Trustee to qualify to do business in such
jurisdiction, (E) there is no tort liability of the owner of an aircraft
not in possession thereof under the laws of such jurisdiction (it being
agreed that, in the event such latter opinion cannot be given in a form
satisfactory to the Owner Participant, such opinion shall be waived if
insurance reasonably satisfactory to the Owner Participant is provided to
cover such risk), and (F) (unless Lessee shall have agreed to provide
insurance covering the risk of requisition of use of such Aircraft by the
government of such jurisdiction so long as such Aircraft is registered
under the laws of such jurisdiction) the laws of such jurisdiction require
fair compensation by the government of such jurisdiction payable in
currency freely convertible into Dollars for the loss of use of such
Aircraft in the event of the requisition by such government of such use.
In addition, as a condition precedent to any such change in registration, Lessee
shall furnish to the Owner Trustee and the Indenture Trustee an Officer's
Certificate to the effect that the insurance required by Section 11 of the Lease
shall be in full force and effect at the time of such change in registration
after giving effect to such change in registration and that the new country of
registry imposes aircraft maintenance standards not materially different from
those of the United States, France, Germany, Japan, the Netherlands or the
United Kingdom. Lessee shall pay all costs, expenses, fees, recording and
registration taxes, including the reasonable fees and expenses of counsel to the
Owner Trustee, the Owner Participant and the Indenture Trustee, and other
charges in connection with any such change in registration.
(g) The Owner Participant represents and warrants to Lessee, the
Guarantor, the Indenture Trustee, the Pass Through Trustee, the Subordination
Agent, the Liquidity Provider and the Owner Trustee, in its capacity as such and
in its individual capacity, as follows:
(i) it is duly incorporated, validly existing and in good standing
under the laws of [_______________] and has the corporate power and
authority to carry on its present business and operations and to own or
lease its properties, and has the corporate power and authority to enter
into and to perform its obligations under the Owner Participant Documents;
this Agreement and the other Owner Participant Documents have been duly
authorized, executed and delivered by it; and this Agreement and each of
the other Owner Participant Documents constitute the legal, valid and
binding obligations of the Owner Participant enforceable against it in
accordance with its respective terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the rights of creditors generally and by general
principles of equity, whether considered in
-21-
a proceeding at law or in equity; and it has a tangible net worth
(exclusive of goodwill) greater than $75,000,000;
(ii) neither (A) the execution and delivery by the Owner Participant
of the Owner Participant Documents nor (B) compliance by it with all of
the provisions thereof, (x) will contravene any law or order of any court
or governmental authority or agency applicable to or binding on the Owner
Participant (it being understood that no representation or warranty is
made with respect to laws, rules or regulations relating to aviation or to
the nature of the equipment owned by the Owner Trustee other than such
laws, rules or regulations relating to the citizenship requirements of the
Owner Participant under applicable law), or (y) will contravene the
provisions of, or constitutes or has constituted or will constitute a
default under, or result in the creation of any Lien (other than Liens
provided for in the Operative Documents) upon any property of the Owner
Participant under, its certificate of incorporation or by-laws or any
indenture, mortgage, contract or other agreement or instrument to which
the Owner Participant is a party or by which it or any of its property may
be bound or affected;
(iii) no authorization or approval or other action by, and no notice
to or filing with, any governmental authority or regulatory body (other
than as required by the Federal Aviation Act or the regulations
promulgated thereunder) is required for the due execution, delivery or
performance by it of the Owner Participant Documents;
(iv) there are no pending or, to its knowledge, threatened actions
or proceedings before any court or administrative agency or arbitrator
which would materially adversely affect the Owner Participant's ability to
perform its obligations under this Agreement, the Participation Agreement,
the Tax Indemnity Agreement and the Trust Agreement;
(v) neither the Owner Participant nor anyone authorized by it to act
on its behalf (it being understood that in proposing, facilitating and
otherwise taking any action in connection with the financing contemplated
hereby and agreed to herein by the Owner Participant, Lessee has not acted
as agent of the Owner Participant) has directly or indirectly offered any
Secured Certificate or Certificate or any interest in and to the Trust
Estate, the Trust Agreement or any similar interest for sale to, or
solicited any offer to acquire any of the same from, any Person; the Owner
Participant's interest in the Trust Estate and the Trust Agreement is
being acquired for its own account and is being purchased for investment
and not with a view to any resale or distribution thereof;
(vi) on the Delivery Date, the Trust Estate shall be free of Lessor
Liens (including for this purpose Liens which would be Lessor Liens but
for the proviso in the definition of Lessor Liens) attributable to the
Owner Participant; and
(vii) it is a Citizen of the United States (without making use of a
voting trust agreement, voting powers agreement or similar arrangement).
-22-
(h) Each of First Security Bank, National Association, in its
individual capacity, and the Owner Participant covenants and agrees that it
shall not cause or permit to exist a Lessor Lien attributable to it with respect
to the Aircraft or any other portion of the Trust Estate. Each of First Security
Bank, National Association, in its individual capacity, and the Owner
Participant agrees that it will promptly, at its own expense, take such action
as may be necessary duly to discharge such Lessor Lien attributable to it. Each
of First Security Bank, National Association, in its individual capacity, and
the Owner Participant agrees to make restitution to the Trust Estate for any
actual diminution of the assets of the Trust Estate resulting from Lessor Liens
(including for this purpose Liens which would be Lessor Liens but for the
proviso in the definition of Lessor Liens) attributable to it. The Owner
Participant agrees to make restitution to the Trust Estate for any actual
diminution of the assets of the Trust Estate resulting from any Taxes or
Expenses imposed on the Trust Estate against which Lessee is not required to
indemnify the Trust Estate pursuant to Section 7 hereof.
(i) State Street Bank and Trust Company, in its individual capacity,
covenants and agrees that it shall not cause or permit to exist any Lien,
arising as a result of (A) claims against the Indenture Trustee not related to
its interest in the Aircraft or the administration of the Trust Indenture Estate
pursuant to the Trust Indenture, (B) acts of the Indenture Trustee not permitted
by, or failure of the Indenture Trustee to take any action required by, the
Operative Documents to the extent such acts arise or such failure arises from or
constitutes gross negligence or willful misconduct, (C) claims against the
Indenture Trustee relating to Taxes or Expenses which are excluded from the
indemnification provided by Section 7 pursuant to said Section 7, or (D) claims
against the Indenture Trustee arising out of the transfer by the Indenture
Trustee of all or any portion of its interest in the Aircraft, the Trust Estate,
the Trust Indenture Estate or the Operative Documents other than a transfer of
the Aircraft pursuant to Section 9, 10 or 19 of the Lease or Article IV or V of
the Trust Indenture or a transfer of the Aircraft pursuant to Section 15 of the
Lease while an Event of Default is continuing and prior to the time that the
Indenture Trustee has received all amounts due pursuant to the Trust Indenture.
(j) [Intentionally Omitted].
(k) Each Loan Participant represents and warrants that the Secured
Certificate to be issued to it pursuant to the Trust Indenture is being acquired
by it for investment and not with a view to resale or distribution (it being
understood that such Loan Participant may pledge or assign as security its
interest in each Secured Certificate issued to it), provided that the
disposition of its property shall at all times be and remain within its control,
except that the Loan Participants may sell, transfer or otherwise dispose of any
Secured Certificate or any portion thereof, or grant participations therein, in
a manner which in itself does not require registration under the Securities Act
of 1933, as amended.
(l) The Indenture Trustee, and by acceptance of the Secured
Certificates the Certificate Holders, hereby (i) agree that for purposes of the
application of Section 1111(b) of Title 11 of the United States Code or any
successor provision or any comparable provisions that the "debtor" in any
bankruptcy proceeding involving the assets held or administered
-23-
pursuant to the Trust Agreement shall be strictly limited to the Trust Estate
(excluding the Excluded Payments) and (ii) make (and hereby agree to make), with
respect to the Trust Indenture Estate, the election provided for in Section
1111(b)(2) of Title 11 of the United States Code. It is hereby agreed by the
Indenture Trustee, and by the acceptance of the Secured Certificates the
Certificate Holders hereby agree, that if (i) all or any part of the Trust
Estate becomes the property of, or the Owner Participant becomes, a debtor
subject to the reorganization provisions of the Bankruptcy Reform Act of 1978 or
any successor provision or any comparable proceeding, (ii) pursuant to such
reorganization provisions the Owner Trustee (in its individual capacity) or the
Owner Participant is required, by reason of the Owner Trustee (in its individual
capacity) or the Owner Participant being held to have recourse liability to the
holder(s) of the Secured Certificates or to the Indenture Trustee, directly or
indirectly (other than the recourse liability of the Owner Participant under
this Participation Agreement), to make payment on account of any amount payable
as principal or interest on the Secured Certificates and (iii) any holder(s) of
the Secured Certificates or the Indenture Trustee actually receives any Excess
Payment (as hereinafter defined) which reflects any payment by the Owner Trustee
(in its individual capacity) or the Owner Participant on account of (ii) above,
then such holder(s) or the Indenture Trustee, as the case may be, shall promptly
refund to the Owner Trustee or the Owner Participant (whichever shall have made
such payment) such Excess Payment. For purposes of this Section 8(l), "Excess
Payment" means the amount by which such payment exceeds the amount which would
have been received by the holder(s) of the Secured Certificates or the Indenture
Trustee if the Owner Trustee (in its individual capacity) or the Owner
Participant had not become subject to the recourse liability referred to in (ii)
above. Nothing contained in this Section 8(l) shall prevent the holder of a
Secured Certificate or the Indenture Trustee from enforcing any personal
recourse obligation (and retaining the proceeds thereof) of the Owner Trustee
(in its individual capacity) or the Owner Participant under this Agreement or
the Trust Indenture (and any exhibits or annexes thereto).
(m) State Street Bank and Trust Company represents, warrants and
covenants, in its individual capacity, to Lessee, the Guarantor, the Owner
Trustee, the Pass Through Trustee, the Subordination Agent, the Liquidity
Provider and the Owner Participant as follows:
(i) the Indenture Trustee is a Massachusetts trust company duly
incorporated, validly existing and in good standing under the laws of
Massachusetts, is a Citizen of the United States (without making use of
any voting trust, voting powers agreement or similar arrangement), will
notify promptly all parties to this Agreement if in its reasonable opinion
its status as a Citizen of the United States (without making use of any
voting trust, voting powers agreement or similar arrangement) is likely to
change and will resign as Indenture Trustee as provided in Section 8.02 of
the Trust Indenture promptly after it obtains actual knowledge that it has
ceased to be such a Citizen of the United States (without making use of a
voting trust, voting powers agreement or similar arrangement), and has the
full corporate power, authority and legal right under the laws of the
Commonwealth of Massachusetts and the United States pertaining to its
banking, trust and fiduciary powers to execute and deliver each of this
Agreement, the Trust Indenture and each other Operative Document to which
it is a
-24-
party and to carry out its obligations under this Agreement, the Trust
Indenture, each other Operative Document to which it is a party and to
authenticate the Secured Certificates;
(ii) the execution and delivery by the Indenture Trustee of the
Indenture Trustee Documents and the authentication of the Secured
Certificates and the performance by the Indenture Trustee of its
obligations under the Indenture Trustee Documents have been duly
authorized by the Indenture Trustee and will not violate its articles of
association or by-laws or the provisions of any indenture, mortgage,
contract or other agreement to which it is a party or by which it is
bound;
(iii) this Agreement and each of the other Indenture Trustee
Documents constitute the legal, valid and binding obligations of the
Indenture Trustee enforceable against it in accordance with their
respective terms, except as the same may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the rights of creditors generally and by general principles of
equity, whether considered in a proceeding at law or in equity;
(iv) there are no pending or, to its knowledge, threatened actions
or proceedings against the Indenture Trustee, either in its individual
capacity or as Indenture Trustee, before any court or administrative
agency which, if determined adversely to it, would materially adversely
affect the ability of the Indenture Trustee, in its individual capacity or
as Indenture Trustee as the case may be, to perform its obligations under
the Operative Documents to which it is a party; and
(v) there are no Indenture Trustee's Liens on the Aircraft or any
portion of the Trust Estate.
(n) The Owner Participant will not, directly or indirectly, sell,
assign, convey or otherwise transfer any of its right, title or interest in and
to this Agreement, the Trust Estate or the Trust Agreement or any proceeds
therefrom to any person or entity, unless (i) the proposed transferee is a
"Transferee" (as defined below), (ii) Lessee shall have (1) received an opinion
(in form and substance reasonably satisfactory to Lessee) of counsel to the
Owner Participant (who shall be reasonably satisfactory to Lessee) to the effect
that such transfer will not result in any risk of loss of tax benefits to, or
any increase in the tax liability of, Lessee and (2) received from the Owner
Participant so seeking to transfer such right, title or interest reasonably
satisfactory indemnification for any loss of tax benefits to, and increase in
the tax liability of, Lessee, and (iii) the Owner Participant sells, assigns,
conveys or otherwise transfers all of its right, title and interest in and to
this Agreement, the Trust Estate, the Trust Agreement and the proceeds therefrom
to a single entity. A "Transferee" shall mean either (A) a bank or other
financial institution with a combined capital, surplus and undivided profits of
at least $75,000,000 or a corporation whose tangible net worth is at least
$75,000,000, exclusive of goodwill, in either case as of the proposed date of
such transfer, as determined in accordance with generally accepted accounting
principles, or (B) any subsidiary of such a bank, financial
-25-
institution or corporation, provided that such bank, financial institution or
corporation furnishes to the Owner Trustee, the Indenture Trustee and Lessee a
guaranty with respect to the Owner Participant's obligations, in the case of the
Owner Trustee, under the Trust Agreement and, in the case of the Indenture
Trustee and Lessee, the Owner Participant's obligations hereunder, including but
not limited to, under Section 8(c) and Section 8(h) hereof, in form and
substance reasonably satisfactory to Lessee, the Owner Trustee and the Indenture
Trustee; provided, however, that any Transferee shall not be an airline, a
commercial air carrier, an air freight forwarder, an entity engaged in the
business of parcel transport by air or other similar person or a corporation or
other entity controlling, controlled by or under common control with such an
airline, a commercial air carrier, an air freight forwarder, an entity engaged
in the business of parcel transport by air or other similar person. Each such
transfer to a Transferee shall be subject to the conditions that (M) upon giving
effect to such transfer, the Transferee is a Citizen of the United States
(without making use of a voting trust agreement, voting powers agreement or
other similar arrangement unless approved by Lessee), and has full power and
authority to enter into the transactions contemplated hereby, (N) the Transferee
has the requisite power and authority to enter into and carry out the
transactions contemplated hereby and such Transferee shall have delivered to
Lessee, the Owner Trustee and the Indenture Trustee an opinion of counsel in
form and substance reasonably satisfactory to such persons as to the due
authorization, delivery, legal, valid and binding effect and enforceability of
the agreement or agreements referred to in the next clause with respect to the
Transferee and any guaranty provided pursuant to the provisions of this Section
8(n) as to the guarantor, (O) the Transferee enters into an agreement or
agreements, in form and substance reasonably satisfactory to the Owner Trustee,
Lessee and the Indenture Trustee, whereby the Transferee confirms that it shall
be deemed a party to this Agreement and a party to the Trust Agreement and
agrees to be bound by all the terms of, and to undertake all of the obligations
of the transferor Owner Participant contained in, the Owner Participant
Documents (to the extent of the participation so transferred to it) and makes
the representations and warranties made by the Owner Participant thereunder, (P)
such transfer does not affect registration of the Aircraft under the Federal
Aviation Act, or any rules or regulations promulgated thereunder or create a
relationship which would be in violation thereof or violate any provision of the
Securities Act of 1933, as amended, or any other applicable Federal or state
law, (Q) the transferor Owner Participant assumes the risk of any loss of
Interest Deductions, Amortization Deductions and MACRS Deductions, the risk of
any Inclusion Event (each as defined in the Tax Indemnity Agreement), and the
risk of any sales, use, value added or similar tax resulting from such transfer,
(R) the transferor Owner Participant pays all of the costs and expenses
(including, without limitation, fees and expenses of counsel) incurred in
connection with such transfer, including the costs and expenses of the Owner
Trustee, the Indenture Trustee, Lessee and the Loan Participants in connection
therewith, and (S) the terms of the Operative Documents and the Overall
Transaction shall not be altered. Upon any such transfer by the Owner
Participant as above provided, the Transferee shall be deemed the Owner
Participant for all purposes hereof and of the other Operative Documents and
each reference herein to the transferor Owner Participant shall thereafter be
deemed for all purposes to be to the Transferee and the transferor Owner
Participant shall be relieved of all obligations of the transferor Owner
Participant under the Owner Participant Documents arising after the date of such
transfer except to the extent fully
-26-
attributable to or arising out of acts or events occurring prior thereto and not
assumed by the Transferee (in each case, to the extent of the participation so
transferred). If the Owner Participant intends to transfer any of its interests
hereunder, it shall give 30 days prior written notice thereof to the Indenture
Trustee, the Owner Trustee and Lessee, specifying the name and address of the
proposed Transferee.
(o) Notwithstanding the provisions of Section 8(x) hereof, unless
waived by the Loan Participants, Lessee shall not be entitled to assume the
Secured Certificates on the date for purchase of the Aircraft pursuant to
Section 19(d) of the Lease if on such date an Event of Default shall have
occurred and be continuing or any condition or event shall exist which, with the
passage of time or giving of notice or both, would become such an Event of
Default.
(p) First Security Bank, National Association, and State Street Bank
and Trust Company, each in its individual capacity, agrees for the benefit of
Lessee to comply with the terms of the Trust Indenture which it is required to
comply with in its individual capacity.
(q) The Owner Participant represents and warrants that it is not
acquiring its interest in the Trust Estate, any Secured Certificate or any
interests represented thereby with the assets of any "employee benefit plan" as
defined in Section 3(3) of ERISA or of any "plan" within the meaning of Section
4975(e)(1) of the Code. Each Loan Participant agrees that it will not transfer
any Secured Certificate (or any part thereof) to any entity (except pursuant to
Section 2.14 of the Trust Indenture) unless such entity makes (or is deemed to
have made) a representation and warranty as of the date of transfer that either
no part of the funds to be used by it for the purchase and holding of such
Secured Certificate (or any part thereof) constitutes assets of any "employee
benefit plan" or that such purchase and holding will not result in a non-exempt
prohibited transaction (under Section 4975 of the Code and Section 406 of
ERISA). The Owner Participant agrees that it will not transfer any of its right,
title or interest in and to this Agreement, the Trust Estate or the Trust
Agreement or any proceeds therefrom to any entity unless such entity makes (or
is deemed to have made) a representation and warranty as of the date of transfer
that either no part of the funds to be used by it for the purchase of such
right, title and interest (or any part thereof) constitutes assets of any
"employee benefit plan" or that such transfer will not result in a non-exempt
prohibited transaction (under Section 4975 of the Code and Section 406 of
ERISA). The Pass Through Trustee agrees that it will not agree to any amendment,
modification or waiver of Section 1.01(e)(i) of the Trust Supplement to each
Pass Through Trust Agreement specified in Schedule III hereto without the prior
written consent of the Owner Participant.
(r) Each Participant, the Owner Trustee and the Indenture Trustee
agrees for the benefit of the Manufacturer and Lessee that it will not disclose
or suffer to be disclosed the terms of the Purchase Agreement to any third party
except (A) as may be required by any applicable statute, court or administrative
order or decree or governmental ruling or regulation or to any regulatory
authorities having official jurisdiction over them, (B) in connection with the
financing of the Aircraft and the other transactions contemplated by the
Operative
-27-
Documents (including any transfer of Secured Certificates (including by way of
participation or assignment of an interest, provided such participant or
assignee agrees to hold such terms confidential to the same extent as herein
provided) or the Owner Participant's beneficial interest in the Trust Estate and
any exercise of remedies under the Lease and the Trust Indenture), (C) with the
prior written consent of the Manufacturer and Lessee, (D) to the Owner
Trustee's, the Indenture Trustee's and each Participant's counsel or special
counsel, independent insurance brokers or other agents who agree to hold such
information confidential, or (E) in the case of the Owner Participant and/or the
Owner Trustee, it may disclose so much of the Purchase Agreement as has been
assigned to the Owner Trustee under the Purchase Agreement Assignment to bona
fide potential purchasers of the Aircraft.
(s) The Owner Trustee and the Owner Participant severally, not
jointly, represent and warrant that none of the funds made available by the Pass
Through Trustee pursuant to Section 1 hereof will be used for the purpose of
purchasing or carrying any "margin security" as defined in Regulation U of the
Board of Governors of the Federal Reserve System or for the purpose of reducing
or retiring any indebtedness which was originally incurred to purchase or carry
such margin security or for any other purpose which might cause the transaction
contemplated by this Agreement to constitute a "purpose credit" within the
meaning of Regulation X of the Board of Governors of the Federal Reserve System,
assuming that the proceeds were and are applied as contemplated by the
provisions of this Agreement.
(t) Each Loan Participant covenants and agrees that it shall not
cause or permit to exist a Loan Participant Lien attributable to it with respect
to the Aircraft or any other portion of the Trust Estate. Each Loan Participant
agrees that it will promptly, at its own expense, take such other action as may
be necessary duly to discharge such Loan Participant Lien attributable to it.
Each Loan Participant agrees to make restitution to the Trust Estate for any
actual diminution of the assets of the Trust Estate resulting from such Loan
Participant Lien attributable to it.
(u) State Street Bank and Trust Company, in its individual capacity,
covenants and agrees that it shall not cause or permit to exist any Indenture
Trustee's Liens with respect to the Trust Indenture Estate or the Trust Estate.
State Street Bank and Trust Company, in its individual capacity, agrees that it
will promptly, at its own expense, take such action as may be necessary duly to
discharge such Indenture Trustee's Liens. State Street Bank and Trust Company,
in its individual capacity, agrees to make restitution to the Trust Estate for
any actual diminution of the assets of the Trust Indenture Estate or the Trust
Estate resulting from such Indenture Trustee's Liens.
(v) The Owner Trustee, in its individual capacity (except as
provided in clauses (iii) and (vii) below) and (but only as provided in clauses
(iii) and (vii) and, to the extent that it relates to the Owner Trustee, clauses
(ii), (ix) and (xi) below) as Owner Trustee, represents and warrants to Lessee,
the Guarantor, the Pass Through Trustee, the Subordination Agent, the Liquidity
Provider and the Owner Participant that:
-28-
(i) the Owner Trustee, in its individual capacity, is a national
banking association duly organized and validly existing in good standing
under the laws of the United States, has full corporate power and
authority to carry on its business as now conducted, has the corporate
power and authority to execute and deliver the Trust Agreement, has the
corporate power and authority to carry out the terms of the Trust
Agreement, and has (assuming the authorization, execution and delivery of
the Trust Agreement by the Owner Participant), as Owner Trustee, and to
the extent expressly provided herein or therein, in its individual
capacity, the corporate power and authority to execute and deliver and to
carry out the terms of this Agreement, the Trust Indenture, the Secured
Certificates, the Lease and each other Operative Document (other than the
Trust Agreement) to which it is a party;
(ii) the Owner Trustee in its trust capacity and, to the extent
expressly provided herein, in its individual capacity, has duly
authorized, executed and delivered this Agreement, in its individual
capacity, has duly authorized, executed and delivered the Trust Agreement
and in its trust capacity, except as expressly provided therein, has duly
authorized, executed and delivered the other Owner Trustee Documents and
(assuming the due authorization, execution and delivery of the Trust
Agreement by the Owner Participant) this Agreement and each of the other
Owner Trustee Documents constitute the legal, valid and binding
obligations of the Owner Trustee, in its individual capacity or as Owner
Trustee, as the case may be, enforceable against it in its individual
capacity or as Owner Trustee, as the case may be, in accordance with its
terms, except as the same may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
rights of creditors generally and by general principles of equity, whether
considered in a proceeding at law or in equity;
(iii) assuming the due authorization, execution and delivery of the
Trust Agreement by the Owner Participant, the Owner Trustee has duly
authorized, and on the Delivery Date shall have duly issued, executed and
delivered to the Indenture Trustee for authentication, the Secured
Certificates pursuant to the terms and provisions hereof and of the Trust
Indenture, and each Secured Certificate on the Delivery Date will
constitute the valid and binding obligation of the Owner Trustee and will
be entitled to the benefits and security afforded by the Trust Indenture
in accordance with the terms of such Secured Certificate and the Trust
Indenture;
(iv) neither the execution and delivery by the Owner Trustee, in its
individual capacity or as Owner Trustee, as the case may be, of any Owner
Trustee Document, nor the consummation by the Owner Trustee, in its
individual capacity or as Owner Trustee, as the case may be, of any of the
transactions contemplated thereby, nor the compliance by the Owner
Trustee, in its individual capacity or as Owner Trustee, as the case may
be, with any of the terms and provisions thereof, (A) requires or will
require any approval of its stockholders, or approval or consent of any
trustees or holders of any indebtedness or obligations of it, or (B)
violates or will violate its articles of association or by-laws, or
contravenes or will contravene any provision of,
-29-
or constitutes or will constitute a default under, or results or will
result in any breach of, or results or will result in the creation of any
Lien (other than as permitted under the Operative Documents) upon its
property under, any indenture, mortgage, chattel mortgage, deed of trust,
conditional sale contract, bank loan or credit agreement, license or other
agreement or instrument to which it is a party or by which it is bound, or
contravenes or will contravene any law, governmental rule or regulation of
the United States of America or the State of Utah governing the trust
powers of the Owner Trustee, or any judgment or order applicable to or
binding on it;
(v) no consent, approval, order or authorization of, giving of
notice to, or registration with, or taking of any other action in respect
of, any Utah state or local governmental authority or agency or any United
States federal governmental authority or agency regulating the trust
powers of the Owner Trustee in its individual capacity is required for the
execution and delivery of, or the carrying out by, the Owner Trustee, in
its individual capacity or as Owner Trustee, as the case may be, of any of
the transactions contemplated hereby or by the Trust Agreement, the
Participation Agreement, the Trust Indenture, the Lease or the Secured
Certificates, or any other Operative Document to which it is a party or by
which it is bound, other than any such consent, approval, order,
authorization, registration, notice or action as has been duly obtained,
given or taken or which is described in Section 7(iv);
(vi) there exists no Lessor Lien (including for this purpose Liens
which would be Lessor Liens but for the proviso in the definition of
Lessor Liens) attributable to the Owner Trustee, in its individual
capacity;
(vii) there exists no Lessor Lien (including for this purpose Liens
which would be Lessor Liens but for the proviso in the definition of
Lessor Liens) attributable to the Owner Trustee, as lessor under the
Lease;
(viii) there are no Taxes payable by the Owner Trustee, either in
its individual capacity or as Owner Trustee, imposed by the State of Utah
or any political subdivision thereof in connection with the issuance of
the Secured Certificates, or the execution and delivery in its individual
capacity or as Owner Trustee, as the case may be, of any of the
instruments referred to in clauses (i), (ii), (iii) and (iv) above, that,
in each case, would not have been imposed if the Trust Estate were not
located in the State of Utah and First Security Bank, National Association
had not (a) had its principal place of business in, (b) performed (in its
individual capacity or as Owner Trustee) any or all of its duties under
the Operative Documents in, and (c) engaged in any activities unrelated to
the transactions contemplated by the Operative Documents in, the State of
Utah;
(ix) there are no pending or, to its knowledge, threatened actions
or proceedings against the Owner Trustee, either in its individual
capacity or as Owner Trustee, before any court or administrative agency
which, if determined adversely to it, would materially adversely affect
the ability of the Owner Trustee, in its individual
-30-
capacity or as Owner Trustee, as the case may be, to perform its
obligations under any of the instruments referred to in clauses (i), (ii),
(iii) and (iv) above;
(x) both its chief executive office, and the place where its records
concerning the Aircraft and all its interests in, to and under all
documents relating to the Trust Estate, are located in Salt Lake City,
Utah;
(xi) the Owner Trustee has not, in its individual capacity or as
Owner Trustee, directly or indirectly offered any Secured Certificate or
Certificate or any interest in or to the Trust Estate, the Trust Agreement
or any similar interest for sale to, or solicited any offer to acquire any
of the same from, anyone other than the Pass Through Trustee and the Owner
Participant; and the Owner Trustee has not authorized anyone to act on its
behalf (it being understood that in arranging and proposing the
refinancing contemplated hereby and agreed to herein by the Owner Trustee,
the Lessee has not acted as agent of the Owner Trustee) to offer directly
or indirectly any Secured Certificate, any Certificate or any interest in
and to the Trust Estate, the Trust Agreement or any similar interest for
sale to, or to solicit any offer to acquire any of the same from, any
Person;
(xii) it is a Citizen of the United States (without making use of a
voting trust agreement, voting powers agreement or similar arrangements);
and
(xiii) there has not occurred any event which constitutes (or, to
the best of its knowledge would, with the passing of time or the giving of
notice or both, constitute) an Event of Default as defined in the Trust
Indenture which has been caused by or relates to the Owner Trustee, in its
individual capacity, and which is presently continuing.
(w) The Owner Participant covenants and agrees that if (i) Lessee
has elected pursuant to Section 9(a)(2) of the Lease to terminate the Lease by
causing the Aircraft to be sold pursuant to Section 9(c) of the Lease and (ii)
the Owner Trustee has, pursuant to Section 9(c) of the Lease, given to Lessee
written notice of Lessor's election to retain title to the Aircraft and (iii)
the Owner Trustee has failed to make, on or before the Termination Date, any
payment required to be made by the Owner Trustee pursuant to Section 9(c) in
connection with its retention of title to the Aircraft, the Owner Participant
will indemnify Lessee for any losses, damages, costs or expenses of any kind
(including any additional rents paid by Lessee and any fees and expenses of
lawyers, appraisers, brokers or accountants) incurred as a consequence of such
failure by the Owner Trustee. The Owner Participant further covenants and agrees
to pay those costs and expenses specified to be paid by the Owner Participant
pursuant to Exhibit E to the Lease.
(x) Each of the Owner Participant, the Owner Trustee, the Indenture
Trustee and Lessee covenants and agrees that if Lessee elects to terminate the
Lease and purchase the Aircraft pursuant to Section 19(d) of the Lease, then
each of the parties will execute and deliver appropriate documentation
transferring all right, title and interest in the Aircraft to Lessee (including,
without limitation, such bills of sale and other instruments and documents
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as Lessee shall reasonably request to evidence (on the public record or
otherwise) such transfer and the vesting of all right, title and interest in and
to the Aircraft in Lessee), and if Lessee, in connection with such purchase,
elects to assume the obligations of the Owner Trustee pursuant to the Trust
Indenture and the Secured Certificates each of the parties will execute and
deliver appropriate documentation permitting Lessee to assume such obligations
on the basis of full recourse to Lessee, maintaining the security interest in
the Aircraft created by the Trust Indenture, releasing the Owner Participant and
the Owner Trustee from all future obligations in respect of the Secured
Certificates, the Trust Indenture and all other Operative Documents and all such
other actions as are reasonably necessary to permit such assumption by Lessee.
Notwithstanding the foregoing, Lessee shall not be entitled to
assume the obligations of the Owner Trustee in respect of the Secured
Certificates unless Lessee causes to be delivered to the Indenture Trustee an
opinion of counsel to the effect that (i) the Lien of the Trust Indenture
continues to be a valid and duly perfected first priority security interest in
and to the Aircraft, (ii) the Indenture Trustee should be entitled to the
benefits of 11 U.S.C. ss.1110; provided that the opinion required by subclause
(ii) need only be given if immediately prior to such assumption the Owner
Trustee should have been entitled to the benefits of 11 U.S.C. ss.1110 and (iii)
the Pass Through Trusts will not be subject to Federal income taxation and the
Certificate Holders will not recognize income, gain or loss for Federal income
tax purposes as a result of such assumption and will be subject to Federal
income tax in the same amounts, in the same manner, and at the same time as
would have been the case if such assumption had not occurred.
(y) (A) Lessee will not consolidate with or merge into any other
corporation or convey, transfer or lease substantially all of its assets as an
entirety to any Person unless:
(i) the corporation formed by such consolidation or into which
Lessee is merged or the Person which acquires by conveyance, transfer or
lease substantially all of the assets of Lessee as an entirety shall be a
Certificated Air Carrier;
(ii) the corporation formed by such consolidation or into which
Lessee is merged or the Person which acquires by conveyance, transfer or
lease substantially all of the assets of Lessee as an entirety shall
execute and deliver to the Owner Trustee, the Indenture Trustee and the
Owner Participant an agreement in form and substance reasonably
satisfactory to the Indenture Trustee and the Owner Participant containing
an assumption by such successor corporation or Person of the due and
punctual performance and observance of each covenant and condition of this
Agreement, the Lease, the Purchase Agreement Assignment and the Tax
Indemnity Agreement to be performed or observed by Lessee;
(iii) immediately after giving effect to such transaction, no
Default or Event of Default under the Lease shall have occurred and be
continuing; and
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(iv) Lessee shall have delivered to the Owner Trustee, the Indenture
Trustee and the Owner Participant a certificate signed by the President,
any Executive Vice President, any Senior Vice President, the Treasurer or
any Vice President and by the Secretary or an Assistant Secretary of
Lessee, and an opinion of counsel reasonably satisfactory to the Indenture
Trustee and the Owner Participant, each stating that such consolidation,
merger, conveyance, transfer or lease and the assumption agreement
mentioned in clause (ii) above comply with this subparagraph (A) of
Section 8(y) and that all conditions precedent herein provided for
relating to such transaction have been complied with.
Upon any such consolidation or merger or any such conveyance,
transfer or lease of substantially all of the assets of Lessee as an entirety in
accordance with this subparagraph (A) of Section 8(y), the successor corporation
or Person formed by such consolidation or into which Lessee is merged or to
which such conveyance, transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, Lessee under this
Agreement with the same effect as if such successor corporation or Person had
been named as Lessee herein. No such conveyance, transfer or lease of
substantially all of the assets of Lessee as an entirety shall have the effect
of releasing Lessee or any successor corporation or Person which shall
theretofore have become such in the manner prescribed in this subparagraph (A)
of Section 8(y) from its liability in respect of any Operative Document to which
it is a party.
(B) Lessee shall at all times maintain its corporate existence
except as permitted by subparagraph (A) of this Section 8(y).
(z) Lessee, at its expense, will take, or cause to be taken, such
action with respect to the recording, filing, re-recording and refiling of the
Lease, the Lease Supplement, the Trust Agreement, the Trust Indenture, the Trust
Supplement and any financing statements or other instruments as are necessary to
maintain, so long as the Trust Indenture or the Lease is in effect, the
perfection of the security interests created by the Trust Indenture and any
security interest that may be claimed to have been created by the Lease and the
interest of the Owner Trustee in the Aircraft or will furnish to the Owner
Trustee and the Indenture Trustee timely notice of the necessity of such action,
together with such instruments, in execution form, and such other information as
may be required to enable them to take such action. Lessee will notify the Owner
Trustee, the Owner Participant and the Indenture Trustee of any change in the
location of its chief executive office (as such term is used in Article 9 of the
Uniform Commercial Code) promptly after making such change or in any event
within the period of time necessary under applicable law to prevent the lapse of
perfection (absent refiling) of financing statements filed under the Operative
Documents.
(aa) Section 3 of the Lease contemplates that, under certain
circumstances, the Owner Participant will make certain recalculations of Basic
Rent, the Special Purchase Price, [the Initial Installment, the Remaining
Installments,] Stipulated Loss Value percentages and Termination Value
percentages, and the Owner Participant hereby agrees to make such recalculations
as and when contemplated by the Lease and subject to all the terms and
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conditions of the Lease and promptly to take such further actions as may be
necessary or desirable to give effect to and to cause the Owner Trustee to give
effect to the provisions of Section 3 of the Lease.
(bb) The Owner Participant hereby agrees with Lessee that it will
pay, or cause to be paid, all costs and expenses that are for the account of the
Owner Trustee pursuant to Sections 5(a) and 5(d) of the Lease.
(cc) Each Loan Participant hereby represents, warrants and agrees
that it shall not transfer any interest in any Secured Certificate unless and
until the transferee agrees in writing (copies of which shall be provided by the
Indenture Trustee to Lessee, the Owner Trustee and the Owner Participant) to
make the representations contemplated to be made by a Loan Participant in this
Agreement and to be bound by the terms of this Agreement and the Trust Indenture
(including, without limitation, the representations and covenants set forth in
Sections 8(e), 8(k), 8(l), 8(q), and 8(t) hereof and this Section 8(cc) and
Sections 2.03, 2.14 and 4.03 of the Trust Indenture).
(dd) The Pass Through Trustee represents and warrants to Lessee, the
Guarantor, the Indenture Trustee, the Subordination Agent, the Liquidity
Provider, the Owner Participant and the Owner Trustee, in its capacity as such
and in its individual capacity, as follows:
(i) the Pass Through Trustee is duly incorporated, validly existing
and in good standing under the laws of the Commonwealth of Massachusetts,
and has the full corporate power, authority and legal right under the laws
of the Commonwealth of Massachusetts and the United States pertaining to
its banking, trust and fiduciary powers to execute and deliver each of the
Pass Through Trust Agreements, the Intercreditor Agreement and this
Agreement and to perform its obligations under the Pass Through Trust
Agreements, the Intercreditor Agreement and this Agreement;
(ii) this Agreement, each of the Pass Through Trust Agreements and
the Intercreditor Agreement have been duly authorized, executed and
delivered by the Pass Through Trustee; this Agreement, each of the Pass
Through Trust Agreements and the Intercreditor Agreement constitute the
legal, valid and binding obligations of the Pass Through Trustee
enforceable against it in accordance with their respective terms, except
as the same may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of
creditors generally and by general principles of equity, whether
considered in a proceeding at law or in equity;
(iii) none of the execution, delivery and performance by the Pass
Through Trustee of any of the Pass Through Trust Agreements, the
Intercreditor Agreement or this Agreement, the purchase by the Pass
Through Trustee of the Secured Certificates pursuant to this Agreement, or
the issuance of the Certificates pursuant to the Pass Through Trust
Agreements, contravenes any law, rule or regulation of the Commonwealth of
Massachusetts or any United States governmental authority or
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agency regulating the Pass Through Trustee's banking, trust or fiduciary
powers or any judgment or order applicable to or binding on the Pass
Through Trustee and does not contravene or result in any breach of, or
constitute a default under, the Pass Through Trustee's articles of
association or by-laws or any agreement or instrument to which the Pass
Through Trustee is a party or by which it or any of its properties may be
bound;
(iv) neither the execution and delivery by the Pass Through Trustee
of any of the Pass Through Trust Agreements, the Intercreditor Agreement
or this Agreement, nor the consummation by the Pass Through Trustee of any
of the transactions contemplated hereby or thereby, requires the consent
or approval of, the giving of notice to, the registration with, or the
taking of any other action with respect to, any Massachusetts governmental
authority or agency or any federal governmental authority or agency
regulating the Pass Through Trustee's banking, trust or fiduciary powers;
(v) there are no Taxes payable by the Pass Through Trustee imposed
by the Commonwealth of Massachusetts or any political subdivision or
taxing authority thereof in connection with the execution, delivery and
performance by the Pass Through Trustee of this Agreement, any of the Pass
Through Trust Agreements or the Intercreditor Agreement (other than
franchise or other taxes based on or measured by any fees or compensation
received by the Pass Through Trustee for services rendered in connection
with the transactions contemplated by any of the Pass Through Trust
Agreements), and there are no Taxes payable by the Pass Through Trustee
imposed by the Commonwealth of Massachusetts or any political subdivision
thereof in connection with the acquisition, possession or ownership by the
Pass Through Trustee of any of the Secured Certificates (other than
franchise or other taxes based on or measured by any fees or compensation
received by the Pass Through Trustee for services rendered in connection
with the transactions contemplated by any of the Pass Through Trust
Agreements), and, assuming that the trusts created by the Pass Through
Trust Agreements will not be taxable as corporations, but rather, each
will be characterized as a grantor trust under subpart E, Part I, of
Subchapter J of the Code such trusts will not be subject to any Taxes
imposed by the Commonwealth of Massachusetts or any political subdivision
thereof;
(vi) there are no pending or threatened actions or proceedings
against the Pass Through Trustee before any court or administrative agency
which individually or in the aggregate, if determined adversely to it,
would materially adversely affect the ability of the Pass Through Trustee
to perform its obligations under this Agreement, the Intercreditor
Agreement or any Pass Through Trust Agreement;
(vii) except for the issue and sale of the Certificates, the Pass
Through Trustee has not directly or indirectly offered any Secured
Certificate for sale to any 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
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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 the Owner
Participant, the Owner Trustee, any Underwriter, Lessee or the Guarantor.
(ee) The Subordination Agent represents and warrants to Lessee, the
Guarantor, the Indenture Trustee, the Pass Through Trustee, the Liquidity
Provider, the Owner Participant and the Owner Trustee, in its capacity as such
and in its individual capacity, as follows:
(i) the Subordination Agent is duly incorporated, validly existing
and in good standing under the laws of the Commonwealth of Massachusetts,
and has the full corporate power, authority and legal right under the laws
of the Commonwealth of Massachusetts and the United States pertaining to
its banking, trust and fiduciary powers to execute and deliver each of the
Liquidity Facilities, the Intercreditor Agreement and this Agreement and
to perform its obligations under this Agreement, the Liquidity Facilities
and the Intercreditor Agreement;
(ii) this Agreement, each of the Liquidity Facilities and the
Intercreditor Agreement have been duly authorized, executed and delivered
by the Subordination Agent; this Agreement, each of the Liquidity
Facilities and the Intercreditor Agreement constitute the legal, valid and
binding obligations of the Subordination Agent enforceable against it in
accordance with their respective terms, except as the same may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the rights of creditors generally and by general
principles of equity, whether considered in a proceeding at law or in
equity;
(iii) none of the execution, delivery and performance by the
Subordination Agent of each of the Liquidity Facilities, the Intercreditor
Agreement or this Agreement contravenes any law, rule or regulation of the
Commonwealth of Massachusetts or any United States governmental authority
or agency regulating the Subordination Agent's banking, trust or fiduciary
powers or any judgment or order applicable to or binding on the
Subordination Agent and do not contravene or result in any breach of, or
constitute a default under, the Subordination Agent's articles of
association or by-laws or any agreement or instrument to which the
Subordination Agent is a party or by which it or any of its properties may
be bound;
(iv) neither the execution and delivery by the Subordination Agent
of any of the Liquidity Facilities, the Intercreditor Agreement or this
Agreement nor the consummation by the Subordination Agent of any of the
transactions contemplated hereby or thereby requires the consent or
approval of, the giving of notice to, the registration with, or the taking
of any other action with respect to, any Massachusetts governmental
authority or agency or any federal governmental authority or agency
regulating the Subordination Agent's banking, trust or fiduciary powers;
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(v) there are no Taxes payable by the Subordination Agent imposed by
the Commonwealth of Massachusetts or any political subdivision or taxing
authority thereof in connection with the execution, delivery and
performance by the Subordination Agent of this Agreement, any of the
Liquidity Facilities or the Intercreditor Agreement (other than franchise
or other taxes based on or measured by any fees or compensation received
by the Subordination Agent for services rendered in connection with the
transactions contemplated by the Intercreditor Agreement or any of the
Liquidity Facilities), and there are no Taxes payable by the Subordination
Agent imposed by the Commonwealth of Massachusetts or any political
subdivision thereof in connection with the acquisition, possession or
ownership by the Subordination Agent of any of the Secured Certificates
(other than franchise or other taxes based on or measured by any fees or
compensation received by the Subordination Agent for services rendered in
connection with the transactions contemplated by the Intercreditor
Agreement or any of the Liquidity Facilities);
(vi) there are no pending or threatened actions or proceedings
against the Subordination Agent before any court or administrative agency
which individually or in the aggregate, if determined adversely to it,
would materially adversely affect the ability of the Subordination Agent
to perform its obligations under this Agreement, the Intercreditor
Agreement or any Liquidity Facility;
(vii) the Subordination Agent has not directly or indirectly offered
any Secured Certificate for sale to any Person or solicited any offer to
acquire any Secured Certificates from any Person, nor has the
Subordination Agent authorized anyone to act on its behalf to offer
directly or indirectly any Secured Certificate for sale to any Person, or
to solicit any offer to acquire any Secured Certificate from any Person;
and the Subordination Agent is not in default under any Liquidity
Facility; and
(viii) the Subordination Agent is not directly or indirectly
controlling, controlled by or under common control with the Owner
Participant, the Owner Trustee, any Underwriter, Lessee or the Guarantor.
SECTION 9. Reliance of Liquidity Provider. Each of the parties
hereto agrees and acknowledges that the Liquidity Provider shall be a third
party beneficiary of each of the representations and warranties made herein by
such party, and that the Liquidity Provider may rely on such representations and
warranties to the same extent as if such representations and warranties were
made to the Liquidity Provider directly. Lessee agrees and acknowledges that the
Liquidity Provider shall be a third party beneficiary of the indemnities
contained in Section 7(c) hereof, and may rely on such indemnities to the same
extent as if such indemnities were made to the Liquidity Provider directly.
SECTION 10. Other Documents. Each of the Owner Participant and the
Owner Trustee hereby (A) agrees with Lessee and the Loan Participants to comply
with all of the terms of the Trust Agreement (as the same may hereafter be
amended or supplemented from time to time in accordance with the terms thereof)
applicable to it; (B) agrees with Lessee
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and the Indenture Trustee not to amend, supplement or otherwise modify any
provision of the Trust Agreement in a manner adversely affecting such party
without the prior written consent of such party; and (C) agrees with Lessee and
the Loan Participants not to revoke the Trust Agreement without the prior
written consent of Lessee (so long as the Lease remains in effect) and the
Indenture Trustee (so long as the Lien of the Trust Indenture remains in effect
or there are any Secured Certificates outstanding). Notwithstanding the
foregoing, so long as the Lease has not been terminated, the Indenture Trustee
and the Owner Trustee hereby agree for the benefit of Lessee that without the
consent of Lessee they will not (i) amend or modify Article III or IX of the
Trust Indenture, (ii) make any amendment which will affect the stated principal
amount or interest on the Secured Certificates or (iii) amend or modify the
provisions of Sections 2.05 or 10.14 of the Trust Indenture. The Indenture
Trustee and the Owner Trustee agree to promptly furnish to Lessee copies of any
supplement, amendment, waiver or modification of any of the Operative Documents
to which Lessee is not a party. Notwithstanding anything to the contrary
contained herein, in the Trust Agreement or in any other Operative Document, the
Owner Participant will not consent to or direct a change in the situs of the
Trust Estate without the prior written consent of Lessee. Each Loan Participant
agrees that it will not take any action in respect of the Trust Indenture Estate
except through the Indenture Trustee pursuant to the Trust Indenture or as
otherwise permitted by the Trust Indenture.
SECTION 11. Certain Covenants of Lessee. Lessee covenants and agrees
with each of the Loan Participants, the Owner Participant, the Indenture Trustee
and the Owner Trustee, in its capacity as such and in its individual capacity as
follows:
(a) Lessee will cause to be done, executed, acknowledged and
delivered all and every such further acts, conveyances and assurances as the
Owner Trustee, the Indenture Trustee or the Owner Participant shall reasonably
require for accomplishing the purposes of this Agreement and the other Operative
Documents; provided that any instrument or other document so executed by Lessee
will not expand any obligations or limit any rights of Lessee in respect of the
transactions contemplated by any Operative Documents. Lessee, forthwith upon
delivery of the Aircraft under the Lease, shall cause the Aircraft to be duly
registered, and at all times thereafter to remain duly registered, in the name
of the Owner Trustee, except as otherwise required or permitted hereunder or
under the Lease, under the Federal Aviation Act, or shall furnish to the Owner
Trustee such information as may be required to enable the Owner Trustee to make
application for such registration, and shall promptly furnish to the Owner
Trustee such information as may be required to enable the Owner Trustee to
timely file any reports required to be filed by it as the lessor under the Lease
or as the owner of the Aircraft with any governmental authority.
(b) Lessee will cause the Lease, all Lease Supplements, all
amendments to the Lease, the Trust Indenture, all supplements and amendments to
the Trust Indenture and this Agreement to be promptly filed and recorded, or
filed for recording, to the extent permitted under the Federal Aviation Act, or
required under any other applicable law. Upon the execution and delivery of the
FAA ▇▇▇▇ of Sale, the Lease, the Lease Supplement covering the Aircraft, the
Trust Supplement and the Trust Indenture shall be filed for recording with the
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Federal Aviation Administration in the following order of priority; first, the
FAA ▇▇▇▇ of Sale, second, the Lease, with the Lease Supplement covering the
Aircraft, the Trust Indenture and the Trust Supplement attached, and third, the
Trust Indenture, with the Trust Supplement attached.
SECTION 12. Owner for Federal Tax Purposes. It is hereby agreed
among Lessee, the Owner Participant and the Owner Trustee that for Federal
income tax purposes the Owner Participant will be the owner of the Aircraft to
be delivered under the Lease and Lessee will be the lessee thereof, and each
party hereto agrees to characterize the Lease as a lease for Federal income tax
purposes.
SECTION 13. Certain Definitions; Notices; Consent to Jurisdiction.
(a) Except as otherwise defined in this Agreement, terms used herein in
capitalized form shall have the meanings attributed thereto in the Lease. The
term "Trust Office" shall have the meaning set forth in the Trust Agreement.
Unless the context otherwise requires, any reference herein to any of the
Operative Documents refers to such document as it may be amended from time to
time.
(b) All notices, demands, instructions and other communications
required or permitted to be given to or made upon any party hereto or to the
Guarantor shall be in writing and shall be personally delivered or sent by
registered or certified mail, postage prepaid, or by telecopier, or by prepaid
courier service, and shall be deemed to be given for purposes of this Agreement
on the day that such writing is delivered or sent to the intended recipient
thereof in accordance with the provisions of this Section 13(b). Unless
otherwise specified in a notice sent or delivered in accordance with the
foregoing provisions of this Section 13(b), notices, demands, instructions and
other communications in writing shall be given to or made upon the respective
parties hereto at their respective addresses (or to their respective telecopier
numbers) as follows: (A) if to Lessee, the Guarantor, the Owner Trustee, the
Pass Through Trustee, the Subordination Agent, the Indenture Trustee or the
Owner Participant, to the respective addresses set forth below the signatures of
such parties at the foot of this Agreement, or (B) if to a subsequent Owner
Participant, addressed to such subsequent Owner Participant at such address as
such subsequent Owner Participant shall have furnished by notice to the parties
hereto, or (C) if to any subsequent Certificate Holder, addressed to such
Certificate Holder at its address set forth in the Secured Certificate register
maintained pursuant to Section 2.07 of the Trust Indenture.
(c) Each of the parties hereto (A) hereby irrevocably submits itself
to the non-exclusive jurisdiction of the United States District Court for the
Southern District of New York and to the non-exclusive jurisdiction of the
Supreme Court of the State of New York, New York County, for the purposes of any
suit, action or other proceeding arising out of this Agreement, the Lease, the
Tax Indemnity Agreement or any other Operative Document, the subject matter of
any thereof or any of the transactions contemplated hereby or thereby brought by
any party or parties thereto, or their successors or assigns, and (B) hereby
waives, and agrees not to assert, by way of motion, as a defense, or otherwise,
in any such suit, action or proceeding, to the extent permitted by applicable
law, that the suit, action or proceeding is
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brought in an inconvenient forum, that the venue of the suit, action or
proceeding is improper, or that this Agreement, the Lease, the Tax Indemnity
Agreement or any other Operative Document or the subject matter of any thereof
or any of the transactions contemplated hereby or thereby may not be enforced in
or by such courts. Lessee hereby generally consents to service of process at
Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Managing Attorney, or such office of Lessee in New York City as from
time to time may be designated by Lessee in writing to the Owner Participant,
the Owner Trustee and the Indenture Trustee.
SECTION 14. Change of Situs of Owner Trust. The Owner Participant
agrees that if, at any time, the Trust Estate becomes subject to any Taxes for
which it is indemnified pursuant to Section 7(b) hereof and if, as a consequence
thereof, Lessee should request that the situs of the trust be moved to another
state in the United States from the state in which it is then located, the situs
of the trust may be moved with the written consent of the Owner Participant
(which consent shall not be unreasonably withheld) and the Owner Participant
will take whatever action may be reasonably necessary to accomplish such
removal; provided that (A) Lessee shall provide such additional tax
indemnification as the Owner Participant and the Indenture Trustee may
reasonably request, (B) the rights and obligations under the Operative Documents
of the Owner Participant and the Indenture Trustee shall not be altered as a
result of the taking of such action, (C) the lien of the Trust Indenture on the
Trust Indenture Estate shall not be adversely affected by such action, and (D)
the Owner Participant and the Indenture Trustee shall have received an opinion
or opinions of counsel (satisfactory to the Owner Participant and the Indenture
Trustee), in scope, form and substance satisfactory to the Owner Participant and
the Indenture Trustee to the effect that (I) the trust, as thus removed, shall
remain a validly established trust, (II) any amendments to the Trust Agreement
necessitated by such removal shall have been duly authorized, executed and
delivered by the parties thereto and shall constitute the valid and binding
obligations of such parties, enforceable in accordance with their terms, (III)
such removal will not result in the imposition of, or increase in the amount of,
any Tax for which Lessee is not required to indemnify the Owner Participant, the
Indenture Trustee, the Owner Trustee or the Trust Estate pursuant to Section
7(b) hereof (taking into account any additional indemnification provided by
Lessee pursuant to clause (A) of this sentence), (IV) such removal will not
result in any loss of Interest Deductions or MACRS Deductions or an Inclusion
Event (as defined in the Tax Indemnity Agreement) with respect to which Lessee
is not required to indemnify the Owner Participant pursuant to Section 4 of the
Tax Indemnity Agreement (taking into account any additional indemnification
provided by Lessee pursuant to clause (A) of this sentence) and (V) if such
removal involves the replacement of the Owner Trustee, an opinion of counsel to
such successor Owner Trustee in form and substance reasonably satisfactory to
the Indenture Trustee and to the Owner Participant covering the matters
described in the opinion delivered pursuant to Section 4(a)(xiii) hereof and
such other matters as the Indenture Trustee and the Owner Participant may
reasonably request, and (E) Lessee shall indemnify and hold harmless the Owner
Participant and the Indenture Trustee on a net after-tax basis against any and
all reasonable and actual costs and expenses including reasonable counsel fees
and disbursements, registration fees, recording or filing fees and taxes
incurred by the Owner Trustee, the Owner Participant and the Indenture Trustee
in connection with such change of situs.
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SECTION 15. Miscellaneous. (a) The Owner Participant covenants and
agrees that it shall not unreasonably withhold its consent to any consent
requested of the Owner Trustee, as Lessor, under the terms of the Lease which by
its terms is not to be unreasonably withheld by the Owner Trustee, as Lessor.
(b) The representations, warranties, indemnities and agreements of
Lessee, the Guarantor, the Owner Trustee, the Indenture Trustee, the
Subordination Agent, the Pass Through Trustee and the Owner Participant provided
for in this Agreement, and Lessee's, the Guarantor's, the Owner Trustee's, the
Indenture Trustee's, the Subordination Agent's, the Pass Through Trustee's and
the Owner Participant's obligations under any and all thereof, shall survive the
making available of the respective Commitments by the Pass Through Trustee and
the Owner Participant, the delivery or return of the Aircraft, the transfer of
any interest of the Owner Participant in the Trust Estate or the Aircraft or any
Engine or the transfer of any interest by any Loan Participant in any Secured
Certificate or the Trust Indenture Estate and the expiration or other
termination of this Agreement or any other Operative Document.
(c) This Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original,
but all such counterparts shall together constitute but one and the same
instrument. Neither this Agreement nor any of the terms hereof may be
terminated, amended, supplemented, waived or modified, except by an instrument
in writing signed by the party against which the enforcement of the termination,
amendment, supplement, waiver or modification is sought; and no such
termination, amendment, supplement, waiver or modification shall be effective
unless a signed copy thereof shall have been delivered to the Indenture Trustee
and the Owner Trustee. The terms of this Agreement shall be binding upon, and
inure to the benefit of, Lessee and, subject to the terms of this Agreement, its
successors and permitted assigns, the Guarantor, the Pass Through Trustee and
its successors as Pass Through Trustee (and any additional trustee appointed)
under any of the Pass Through Trust Agreements, the Owner Participant and,
subject to the terms of this Agreement, its successors and permitted assigns,
each Certificate Holder and its successors and registered assigns, the Indenture
Trustee and its successors as Indenture Trustee under the Trust Indenture and
the Owner Trustee and its successors as Owner Trustee under the Trust Agreement.
The terms of this Agreement shall inure to the benefit of the Liquidity
Provider, its successors and permitted assigns. THIS AGREEMENT SHALL IN ALL
RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
THIS AGREEMENT IS BEING DELIVERED IN THE STATE OF NEW YORK.
(d) The parties hereto agree that all of the statements,
representations, covenants and agreements made by the Owner Trustee (when made
in such capacity) contained in this Agreement and any agreement referred to
herein other than the Trust Agreement, unless expressly otherwise stated, are
made and intended only for the purpose of binding the Trust Estate and
establishing the existence of rights and remedies which can be exercised and
enforced against the Trust Estate. Therefore, anything contained in this
Agreement or such
-41-
other agreements to the contrary notwithstanding (except for any express
provisions that the Owner Trustee is responsible for in its individual
capacity), no recourse shall be had with respect to this Agreement or such other
agreements against the Owner Trustee in its individual capacity or against any
institution or person which becomes a successor trustee or co-trustee or any
officer, director, trustee, servant or direct or indirect parent or controlling
person or persons of any of them; provided, however, that this Section 15(d)
shall not be construed to prohibit any action or proceeding against any party
hereto for its own willful misconduct or grossly negligent conduct for which it
would otherwise be liable; and provided, further, that nothing contained in this
Section 15(d) shall be construed to limit the exercise and enforcement in
accordance with the terms of this Agreement or such other agreements of rights
and remedies against the Trust Estate. The foregoing provisions of this Section
15(d) shall survive the termination of this Agreement and the other Operative
Documents.
(e) It is the intention of the parties hereto that the Owner
Trustee, as Lessor under the Lease, and the Indenture Trustee, as assignee of
such Owner Trustee's rights under the Lease pursuant to the Trust Indenture,
will be entitled to the benefits of 11 U.S.C. ss. 1110 in the event of any
reorganization of Lessee under Chapter 11 of the Bankruptcy Code.
SECTION 16. Expenses. (a) Invoices and Payment. Each of the parties
hereto shall promptly submit to the Owner Trustee and Lessee for their prompt
approval (which shall not be unreasonably withheld) copies of invoices in
reasonable detail of the Transaction Expenses for which it is responsible for
providing information as they are received (but in no event later than
[________________]). The Owner Participant agrees to transfer to the Owner
Trustee promptly but in any event no later than [______________] such amount as
shall be necessary in order to enable the Owner Trustee to pay Transaction
Expenses. To the extent of funds received by it, the Owner Trustee agrees to pay
all invoices of Transaction Expenses that have been approved by it and Lessee
promptly upon receipt thereof. Notwithstanding the foregoing, to the extent that
Transaction Expenses exceed [___]% of Lessor's Cost, Lessee at its sole option
shall have the right to pay directly any or all Transaction Expenses which are
in excess of [____]% of Lessor's Cost.
(b) Payment of Other Expenses. In the event that the transaction
contemplated by this Participation Agreement fails to close as a result of the
Owner Participant's failure to negotiate in good faith or to comply with the
terms and conditions upon which its participation in the transaction was
predicated, the Owner Participant will be responsible for all of its fees and
expenses, including but not limited to the fees, expenses and disbursements of
its special counsel.
SECTION 17. Refinancings.
(a) So long as no Event of Default shall have occurred and be
continuing, Lessee shall have the right to refinance all (but not less than all)
of the Secured Certificates no more than three times by giving written notice to
the Owner Participant and the Owner Trustee that there be effected a voluntary
redemption of the Secured Certificates by the Owner Trustee, whereupon the Owner
Participant agrees to negotiate promptly in good faith to
-42-
conclude an agreement with Lessee as to the terms of such refinancing operation
(including the terms of any debt to be issued in connection with such
refinancing); provided that no such refinancing shall require an increase in the
amount of the Owner Participant's investment in the beneficial ownership of the
Aircraft.
Upon such agreement:
(1) within ten Business Days after the reaching of such agreement,
the Owner Participant will deliver to Lessee a certificate of an authorized
representative of the Owner Participant (the "Refinancing Certificate") setting
forth (i) the proposed date on which the outstanding Secured Certificates will
be redeemed, any new debt will be issued and the other aspects of such
refinancing will be consummated (such date, the "Refinancing Date") and (ii) the
following information calculated pursuant to the provisions of paragraph (6) of
this Section 17(a): (A) subject to the limitations set forth in this Section 17,
the proposed adjusted debt/equity ratio, (B) the principal amount of debt to be
issued by the Owner Trustee on the Refinancing Date, (C) the amount, if any, by
which the Owner Participant's aggregate investment in the beneficial interest in
the Aircraft is to be decreased and (D) the proposed revised schedules of Basic
Rent percentages, debt amortization, Special Purchase Price, [Initial
Installment, Remaining Installments,] Stipulated Loss Value percentages and
Termination Value percentages. The Refinancing Certificate shall not provide for
a debt/equity ratio of more than 4:1. Within fourteen days of its receipt of the
Refinancing Certificate, Lessee may demand a verification pursuant to Exhibit E
to the Lease of the information set forth in the Refinancing Certificate. Upon
the acceptance by Lessee of the accuracy of the information set forth in the
Refinancing Certificate (or the determination pursuant to such verification
procedures), as to the debt/equity ratio, the principal amount of debt to be
issued by the Owner Trustee on the Refinancing Date and the revised Basic Rent
percentages, debt amortization, Special Purchase Price, [Initial Installment,
Remaining Installments,] Stipulated Loss Value percentages and Termination Value
percentages (such information, whether as set forth or as so determined, the
"Refinancing Information") the appropriate parties will take the actions
specified in paragraphs (2) through (5) below;
(2) the appropriate parties will enter into appropriate
documentation (which may involve an underwriting agreement in connection with
such sale or the sale of the Owner Trustee's interest in the Trust Estate and/or
the Aircraft and its resale to the Owner Trustee) with the institution or
institutions to be named therein providing for (i) the issuance and sale by the
Owner Trustee to such institution or institutions on the Refinancing Date of
debt securities in an aggregate principal amount specified in the Refinancing
Information which amount shall be equal to the aggregate principal amount of all
Secured Certificates outstanding on the Refinancing Date (such debt securities,
the "New Debt") except that the principal amount of New Debt may exceed the
principal amount of all outstanding Secured Certificates in connection with the
first refinancing under this Section 17, (ii) the application of the proceeds of
the sale of the New Debt to the redemption of all such Secured Certificates on
the Refinancing Date and (iii) the payment of the excess, if any, of such
proceeds over the amounts necessary to effect such redemption to the Owner
Trustee;
-43-
(3) Lessee shall give the notice to the Indenture Trustee pursuant
to Section 2.11 of the Trust Indenture, and Lessee and the Owner Trustee will
amend the Lease to provide that (i) Basic Rent payable in respect of the period
from and after the Refinancing Date shall be as provided in the Refinancing
Information and (ii) amounts payable in respect of Stipulated Loss Value and
Termination Value from and after the Refinancing Date shall be as provided in
the Refinancing Information;
(4) the Owner Trustee will enter into an agreement to provide for
the securing thereunder of the New Debt in like manner as the Secured
Certificates and will enter into such amendments and supplements to the Trust
Indenture (or such new indenture or other security agreement) as may be
necessary to effect such refinancing;
(5) the Owner Participant shall pay all of the expenses (other than
those of Lessee) of such refinancing (including, but not limited to, the fees,
expenses and disbursements of counsel and any placement or underwriting fees)
and such expenses shall be treated as Transaction Expenses; and
(6) when calculating any of the information required to be set forth
in a Refinancing Certificate, the Owner Participant shall make such calculations
in a manner which (A) maintains the Owner Participant's Net Economic Return
(except to the extent the assumptions referred to in the definition of "Net
Economic Return" have been altered since the Delivery Date in connection with an
adjustment to Rents pursuant to Section 3(d) of the Lease or such assumptions
are the subject of the recalculations being conducted by the Owner Participant),
and (B) minimizes the Net Present Value of Rents to Lessee to the extent
possible consistent with clause (A).
(b) The Secured Certificates shall not be subject to voluntary
redemption by the Owner Trustee without the consent of Lessee except as set
forth in Section 2.14 of the Trust Indenture.
-44-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective officers thereunto duly authorized as of
the day and year first above written.
NORTHWEST AIRLINES, INC.,
Lessee
By:
----------------------------------------
Name:
Title:
Address: U.S. Mail
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇) ▇▇.
▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Overnight Courier
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ (▇▇▇▇▇)
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Treasurer
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
NORTHWEST AIRLINES CORPORATION,
Guarantor
By:
----------------------------------------
Name:
Title:
Address: U.S. Mail
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇) ▇▇.
▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Overnight Courier
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ (▇▇▇▇▇)
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Treasurer
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
-Signature Page-
[--------------------------],
Owner Participant
By:
----------------------------------------
Name:
Title:
Address:
Attn:
Telecopy No.:
STATE STREET BANK AND
TRUST COMPANY,
Indenture Trustee
By:
----------------------------------------
Name:
Title:
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Corporate Trust Department
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity, except as
expressly provided herein, but solely as
Owner Trustee,
Owner Trustee
By:
----------------------------------------
Name:
Title:
Address: ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: Corporate Trust Department
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
-Signature Page-
STATE STREET BANK AND TRUST COMPANY, not in
its individual capacity, except as otherwise
provided herein, but solely as Pass Through
Trustee,
Pass Through Trustee
By:
----------------------------------------
Name:
Title:
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Corporate Trust Department
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
STATE STREET BANK AND TRUST COMPANY, not in
its individual capacity, except as otherwise
provided herein, but solely as Subordination
Agent,
Subordination Agent
By:
----------------------------------------
Name:
Title:
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Corporate Trust Department
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
-Signature Page-
SCHEDULE I
Names and Addresses
Lessee: Northwest Airlines, Inc.
U.S. Mail
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇)
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Overnight Courier
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ (▇▇▇▇▇)
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Treasurer
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Wire Transfer
USBank, Minneapolis
ABA No. ▇▇▇▇▇▇▇▇▇
Acct. No. 150250099440
Owner Participant: [__________________________]
Attn:
Telecopy No.:
with a copy to:
[Address]
Attn: ________________
Telecopy No.: ________________
Payments made
to the Owner Participant as provided in
Section 3.06 of the Trust
Indenture shall be made to:
[Bank]
[Address] New York, New York
ABA No. _______________
Account No. ____________
Account Name: _________
Reference: ______________
Indenture Trustee: State Street Bank and Trust Company
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Corporate Trust Department
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Wire Transfer
State Street Bank and Trust Company
ABA No. ▇▇▇-▇▇▇-▇▇▇
for credit to State Street Bank and Trust Company
Acct. No. ▇▇▇▇-▇▇▇-▇
Attn: Corporate Trust Department
Reference: Northwest/NW 1999 _
Owner Trustee: First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: Corporate Trust Department
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Payments made to the Owner Trustee as provided in
Section 3(f) of the Lease shall be made to:
First Security Bank, National Association
ABA No. ▇▇▇-▇▇▇▇-▇▇
Acct. No. 051-0922115
Attn: Corporate Trust Department
Credit: Northwest/NW 1999 _
Loan Participant: State Street Bank and Trust Company
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Corporate Trust Department
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Subordination Agent: State Street Bank and Trust Company
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Corporate Trust Department
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
SCHEDULE I - PAGE 2
SCHEDULE II
Commitments
Interest Rate Percentage of
Purchasers and Maturity Purchase Price Lessor's Cost
---------- ------------ -------------- -------------
Northwest Airlines
Pass Through Trust
1999-1A 6.81% Series A Secured $[___________] [___________]%
Certificates due
[___________]
1999-1B 7.36% Series B Secured $[___________] [___________]%
Certificates due
[___________]
1999-1C 8.13% Series C Secured $[___________] [___________]%
Certificates due
[___________]
Owner Participant Equity Investment
----------------- -----------------
[___________] $[___________] [___________]%
Total Commitments $[___________] 100%
SCHEDULE III
Pass Through Trust Agreements
1. Pass Through Trust Agreement, dated as of June 3, 1996, among Northwest
Airlines Holdings Corporation (formerly known as Northwest Airlines
Corporation, "Holdings"), Northwest Airlines, Inc., and State Street Bank
and Trust Company, as amended by the Supplemental Agreement, dated as of
November 20, 1998, among Northwest Airlines, Inc., Northwest Airlines
Corporation, Holdings and State Street Bank and Trust Company, as
supplemented by Trust Supplement No. 1999-1A, dated as of February 16,
1999 among Northwest Airlines, Inc., Northwest Airlines Corporation,
Holdings and State Street Bank and Trust Company.
2. Pass Through Trust Agreement, dated as of June 3, 1996, among Northwest
Airlines Holdings Corporation (formerly known as Northwest Airlines
Corporation, "Holdings"), Northwest Airlines, Inc., and State Street Bank
and Trust Company, as amended by the Supplemental Agreement, dated as of
November 20, 1998, among Northwest Airlines, Inc., Northwest Airlines
Corporation, Holdings and State Street Bank and Trust Company, as
supplemented by Trust Supplement No. 1999-1B, dated as of February 16,
1999 among Northwest Airlines, Inc., Northwest Airlines Corporation,
Holdings and State Street Bank and Trust Company.
3. Pass Through Trust Agreement, dated as of June 3, 1996, among Northwest
Airlines Holdings Corporation (formerly known as Northwest Airlines
Corporation, "Holdings"), Northwest Airlines, Inc., and State Street Bank
and Trust Company, as amended by the Supplemental Agreement, dated as of
November 20, 1998, among Northwest Airlines, Inc., Northwest Airlines
Corporation, Holdings and State Street Bank and Trust Company, as
supplemented by Trust Supplement No. 1999-1C, dated as of February 16,
1999 among Northwest Airlines, Inc., Northwest Airlines Corporation,
Holdings and State Street Bank and Trust Company.
EXHIBIT A
TO PARTICIPATION
AGREEMENT
[NW 1999 _]
SCHEDULE OF COUNTRIES FOR REREGISTRATION
Argentina Malta
Australia Mexico
Austria Morocco
Bahamas Netherlands
Belgium New Zealand
Brazil Norway
Canada Paraguay
Chile People's Republic of China
Denmark Philippines
Egypt Portugal
Finland Republic of China (Taiwan)*
France Singapore
Germany South Africa
Greece South Korea
Hungary Spain
Iceland Sweden
India Switzerland
Indonesia Thailand
Ireland Trinidad and Tobago
Italy United Kingdom
Japan Uruguay
Luxembourg Venezuela
Malaysia
-----------
* So long as on the date of entering into the proposed sublease such country and
the United States have diplomatic relations at least as good as those in effect
on the Delivery Date.
Exhibit B-1 to Participation Agreement
[Form of Opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
special counsel for the Lessee and the Guarantor]
________ ___, 1999
The Persons Listed on
Annex A hereto
Ladies and Gentlemen:
We have acted as counsel to Northwest Airlines Corporation, a
Delaware corporation ("NWA Corp."), and Northwest Airlines, Inc., a Minnesota
corporation (the "Company"), in connection with the issuance and sale of (i)
$235,505,000 aggregate principal amount of 6.81% Pass Through Trust
Certificates, Series 1999-1A (the "Class A Certificates"), (ii) $111,555,000
aggregate principal amount of 7.36% Pass Through Trust Certificates, Series
1999-1B (the "Class B Certificates") and (iii) $74,140,000 aggregate principal
amount of 8.13% Pass Through Trust Certificates, Series 1999-1C (the "Class C
Certificates" and, together with the Class A Certificates and the Class B
Certificates, the "Certificates") pursuant to the Underwriting Agreement, dated
as of February 4, 1999 (the "Underwriting Agreement"), by and among ▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Co. Incorporated, Credit Suisse First Boston Corporation, ABN AMRO
Incorporated, Chase Securities Inc. and ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., as
underwriters, and the Company and NWA Corp. Capitalized terms used herein unless
otherwise defined herein have the respective meanings given them in the
Underwriting Agreement.
The Persons Listed on Annex A hereto ______ ___, 1999
In connection with this opinion we have examined the following:
(i) the Pass Through Trust Agreement dated as of June 3, 1996 by and
among Northwest Airlines Holdings Corporation (formerly known as Northwest
Airlines Corporation, "Holdings"), the Company and State Street Bank and
Trust Company ("State Street"), as trustee (the "Trustee"), as amended by
the Supplemental Agreement, dated as of November 20, 1998, among the
Company, NWA Corp. Holdings and the Trustee (the "Basic Agreement");
(ii) the Trust Supplement No. 1999-1A, dated as of February 16,
1999, to the Basic Agreement, by and among NWA Corp., the Company,
Holdings and the Trustee (the Basic Agreement as so supplemented, the
"1999-1A Pass Through Trust Agreement"); the Trust Supplement No. 1999-1
B, dated as of February 16, 1999, to the Basic Agreement, by and among NWA
Corp., the Company, Holdings and the Trustee (the Basic Agreement as so
supplemented, the "1999-1B Pass Through Trust Agreement"); and the Trust
Supplement No. 1999-1C, dated as of February 16, 1999, to the Basic
Agreement, by and among NWA Corp., the Company, Holdings and the Trustee
(the Basic Agreement as so supplemented, the "1999-1C Pass Through Trust
Agreement" and, together with the 1999-1A Pass Through Trust Agreement and
the 1999-1B Pass Through Trust Agreement, the "Pass Through Trust
Agreements"; the Pass Through Trust Agreement related to a Certificate
being referred to as the "Applicable Pass Through Trust Agreement");
(iii) the Intercreditor Agreement dated as of February 16, 1999 (the
"Intercreditor Agreement"), by and among the Trustee, Citibank, N.A. (the
"Liquidity Provider"), and State Street Bank and Trust Company, not in its
individual capacity, except as set forth therein, but solely as
subordination agent (the "Subordination Agent");
(iv) the Revolving Credit Agreement, Class A Certificates, the
Irrevocable Revolving Credit Agreement, Class B Certificates and the
Irrevocable Revolving Credit Agreement, Class C Certificates
(collectively, the "Liquidity Facilities"), each dated as of February 16,
1999, by and between the Subordination Agent and the Liquidity Provider;
(v) the Indemnity Agreement, dated as of February 16, 1999, between
ABN AMRO Bank, N.Y., acting through its Chicago Branch, and the Company;
and
(vi) the form of each of the other agreements listed on Schedule I
to this opinion (such agreements being collectively referred to as the
"Operative Sale-Leaseback Documents").
-2-
The Persons Listed on Annex A hereto ______ ___, 1999
In addition, we have examined, and have relied as to matters of fact
upon, the documents delivered to you at the closing, and upon originals or
copies, certified or otherwise identified to our satisfaction, of such corporate
records, agreements, documents and other instruments and such certificates or
comparable documents of public officials and of officers and representatives of
the Company and NWA Corp., and have made such other and further investigations,
as we have deemed relevant and necessary as a basis for the opinions hereinafter
set forth. Our opinion set forth in paragraph 4 is based on oral advice from the
staff of the Commission that the Registration Statement has been declared
effective under the Securities Act.
In such examination, we have assumed the genuineness of all
signatures, the legal capacity of natural persons, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified or photostatic copies, and the
authenticity of originals of such latter documents.
Based upon the foregoing, and subject to the qualifications and
limitations stated herein, we are of the opinion that:
1. The Basic Agreement and each Pass Through Trust Agreement
have been duly authorized, executed and delivered by Holdings and NWA
Corp. and, assuming due authorization, execution and delivery thereof by
the Company and the Trustee, constitute valid and legally binding
obligations of NWA Corp., the Company, Holdings and the Trustee in
accordance with their terms.
2. The Basic Agreement has been duly qualified under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act").
3. Assuming the Certificates have been duly authorized,
executed, authenticated and issued by the Trustee, upon payment and
delivery therefor in accordance with the Underwriting Agreement, the
Certificates will constitute valid and
-3-
The Persons Listed on Annex A hereto ______ ___, 1999
legally binding obligations of the Trustee enforceable against the Trustee
in accordance with their terms and entitled to the benefits of the
Applicable Pass Through Trust Agreement.
4. No consent, approval, authorization, order, registration or
qualification of or with any Federal or New York governmental agency or
body or any Delaware governmental agency or body acting pursuant to the
Delaware General Corporation Law or, to our knowledge, any Federal or New
York court or any Delaware court acting pursuant to the Delaware General
Corporation Law is required for the valid authorization, issuance and
delivery of the Certificates, the valid authorization, execution and
delivery by the Company, Holdings or NWA Corp. of, and the performance by
the Company, Holdings and NWA Corp. of their respective obligations under,
the Basic Agreement, the Pass Through Trust Agreements and the
Underwriting Agreement, except such as have been obtained and made under
the Securities Act and the Trust Indenture Act and such as may be required
under state securities laws or the Federal Aviation Act of 1958, as
amended (the "Federal Aviation Act").
Our opinions set forth in paragraphs 1 and 3 above are subject to
the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law), an implied covenant of good faith and fair dealing and, in
the case of indemnification and contribution provisions therein, considerations
of public policy.
Our opinion is subject to the following additional qualifications:
(a) We express no opinion with respect to the creation, perfection
or priority of any security interest, mortgage, pledge or other lien
purported to be created by the Operative Sale-Leaseback Documents.
(b) We express no opinion with respect to the enforceability of
provisions of the Operative Sale-Leaseback Documents providing for default
interest rates to the extent that such rates would be deemed to be the
imposition of a penalty.
(c) We express no opinion with respect to the rights of any party to
collect or enforce, any insurance maintained by the Company, any proceeds
thereof or payments or refunds of any premiums in respect thereof.
-4-
The Persons Listed on Annex A hereto ______ ___, 1999
(d) We express no opinion with respect to the right, title or
interest of any Owner Trustee in or to any of the Trust Indenture Estates
(as defined in the Operative Sale-Leaseback Documents).
(e) We express no opinion with respect to matters governed by the
Federal Aviation Act and the rules and regulations promulgated thereunder.
We are members of the Bar of the State of New York and we do not
express any opinion herein concerning any law other than the law of the State of
New York, the federal law of the United States and the Delaware General
Corporation Law.
This opinion letter is rendered to you in connection with the above
described transactions. This opinion letter may not be relied upon by you for
any other purpose, or relied upon by, or furnished to, any other person, firm or
corporation without our prior written consent.
Very truly yours,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
-5-
Annex A
[_____________], as Owner Participant
First Security Bank, National Association, as Owner Trustee
State Street Bank and Trust Company, as Pass Through Trustee
and Indenture Trustee
Standard & Poor's Ratings Services
▇▇▇▇▇'▇ Investors Service, Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Credit Suisse First Boston Corporation
ABN AMRO Incorporated
Chase Securities Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
Schedule 1
OPERATIVE SALE-LEASEBACK DOCUMENTS
Exhibit B-2 to Participation Agreement
[Form of Opinion of Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇,
Special Counsel for the Lessee and the Guarantor]
[Date]
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO
Re: Northwest Airlines, Inc. [NW 1999__]
Opinion of Special Counsel to Lessee and Guarantor
Gentlemen:
We have acted as special counsel for Northwest Airlines, Inc., a
Minnesota corporation ("Lessee") and Northwest Airlines Corporation, a Delaware
corporation ("Guarantor"), in connection with the transactions contemplated by
the Participation Agreement [NW 1999 __]. dated as of [___________ ___, ___]
(the "Participation Agreement"), among Lessee, Guarantor, First Security Bank,
National Association, as Owner Trustee under the Trust Agreement referred to
therein, State Street Bank and Trust Company, as Pass Through Trustee under each
of the Pass Through Trust Agreements referred to therein, the Owner Participant
named therein, State Street Bank and Trust Company, as Subordination Agent, and
State Street Bank and Trust Company, as Indenture Trustee under the Indenture
referred to therein. Capitalized terms used herein without definition shall have
the respective meanings ascribed to them in or by reference to the Participation
Agreement, unless the context otherwise requires. This opinion is delivered
pursuant to Section 4(a)(xi) of the Participation Agreement.
In rendering this opinion, we have examined, among other things,
executed counterparts of the Participation Agreement, the Lease, the Lease
Supplement covering the Aircraft, the Trust Agreement, the Trust Supplement, the
Trust Indenture, the Secured Certificates, the Tax Indemnity Agreement, the
Purchase Agreement Assignment, the ▇▇▇▇ of Sale, the FAA ▇▇▇▇ of Sale and the
Guarantee. As to any facts material to our opinions expressed herein, we have,
without independent investigation, relied upon the representations and
warranties contained in the Participation Agreement and the other Operative
Documents (including, without limitation, in Sections 7 and 8 of the
Participation Agreement) and upon originals or copies (certified or otherwise
identified to our satisfaction) of such corporate records, documents and other
instruments as, in our judgment, are necessary or appropriate to enable us to
render this opinion. We have assumed that all documents executed and delivered
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -2- ______________ ___, ____
by Lessee and Guarantor and referred to herein have been duly authorized,
executed and delivered pursuant to adequate corporate power and authority. We
have also assumed that Lessee is an air carrier within the meaning of the
Federal Aviation Act. We have also assumed, and have not independently verified,
the genuineness of all signatures, the authenticity of all documents submitted
to us as originals, the conformity with the originals of all documents submitted
to us as copies, and the accuracy of all factual statements of parties made on
or before the date hereof (and have relied thereon as we have deemed
appropriate). Based upon and subject to the foregoing, and subject further to
the assumptions, limitations and qualifications set forth below, it is our
opinion that:
1. The execution, delivery and performance of the Participation
Agreement, the Lease, the Lease Supplement covering the Aircraft, the ▇▇▇▇ of
Sale, the FAA ▇▇▇▇ of Sale, the Tax Indemnity Agreement and the Purchase
Agreement Assignment (collectively, the "Lessee Documents") by Lessee do not
contravene any New York law, governmental rule or regulation applicable to or
binding on Lessee, and the execution, delivery and performance of the Guarantee
by Guarantor does not contravene any New York law, governmental rule or
regulation applicable to or binding on Guarantor.
2. Neither the execution and delivery by Lessee of any of the Lessee
Documents or the execution and delivery by Guarantor of the Guarantee, nor the
performance by Lessee or Guarantor of their respective obligations thereunder,
requires the consent or approval of, or the giving of notice to, or the
registration with, or the taking of any other action in respect of, any New York
governmental authority, except for such consents, approvals, notices,
registrations and other actions required by the terms of the Operative Documents
after the Delivery Date.
3. The Lessee Documents constitute the legal, valid and binding
obligations of Lessee enforceable against Lessee in accordance with their
respective terms and the Guarantee constitutes the legal, valid and binding
obligation of Guarantor enforceable against Guarantor in accordance with its
terms, except as enforceability may be limited by (A) general principles of
equity, (B) applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or similar laws affecting the rights of creditors or
lessors generally, (C) applicable laws which may affect the remedies provided in
the Lease, which laws, however, do not, in our opinion, make the remedies
provided in the Lease inadequate for the practical realization of the benefits
provided thereby, except that no opinion is expressed as to the amount or
priority of any recovery under any particular circumstances and, in particular,
no opinion is expressed as to the effect on such remedies of Section 1-201(37)
of the Uniform Commercial Code, as in effect in any jurisdiction, and (D) in the
case of indemnity provisions contained in such documents, public policy
considerations.
4. Subject to the registration of the Aircraft with the Federal
Aviation Administration in the name of the Owner Trustee, and assuming the due
and timely filing or filing for recordation in accordance with the provisions of
the Federal Aviation Act of (A) the FAA ▇▇▇▇ of Sale, (B) the Lease, with the
Lease Supplement covering the Aircraft, the Trust
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -3- ______________ ___, ____
Indenture and the Trust Supplement attached thereto and made a part thereof, (C)
the Trust Indenture, with the Trust Supplement attached thereto and made a part
thereof, (D) the Trust Agreement, and (E) the termination of the Mortgage and
the Predecessor Lease, with respect to such portion of the Aircraft as is
covered by the recording system established by the Federal Aviation
Administration pursuant to Section 44107 of Title 49 of the United States Code
by virtue of the same constituting an "aircraft" or an "aircraft engine" as
defined in the Federal Aviation Act, no further filing or recording of any
document (including any financing statement with respect to the Lease under
Article 9 of the Uniform Commercial Code of Minnesota or Utah) is necessary in
any applicable jurisdiction within the United States in order (x) to establish
the Owner Trustee's title to such portion of the Aircraft as against Lessee or
any third parties or (y) to create and perfect the Indenture Trustee's security
interest in such portion of the Aircraft as against the Owner Trustee or any
third parties. With respect to such portion of the Aircraft, if any, as may not
be deemed to constitute an "aircraft" or "aircraft engine" as defined in the
Federal Aviation Act, except for the filing of financing statements in the
appropriate filing offices in the State of Utah and the State of Minnesota (as
to the filing of which we refer you to the opinion of corporate counsel of
Lessee, delivered to you on the date hereof) and the filing of periodic
continuation statements with respect to such filings, as and when required, (x)
under the federal laws of the United States and the laws of the State of New
York, no filing or recording of any document (including any financing statement)
is necessary under Article 9 of the Uniform Commercial Code in order to
establish the Owner Trustee's title in such portion of the Aircraft as against
Lessee and any third parties in any applicable jurisdiction within the United
States, and (y) under the federal laws of the United States and the laws of the
State of New York, no filing or recording of any document (including any
financing statement) is necessary or advisable under Article 9 of the Uniform
Commercial Code in order to create or perfect the Indenture Trustee's security
interest in such portion of the Aircraft as against the Owner Trustee and any
third parties in any applicable jurisdiction within the United States.
In rendering the opinions expressed herein, we have relied
exclusively, and without independent investigation, on the following opinions of
counsel (being furnished to you today) as to all matters stated in such opinions
(including the qualifications and exceptions therein): (i) the opinion of ▇▇▇▇▇
& ▇▇▇▇▇▇▇, P.C., referred to in Section 4(a)(xv) of the Participation Agreement,
and (ii) with respect to the opinions in paragraphs 4 above, the opinion of Ray,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, referred to in Section 4(a)(xiii) of the Participation
Agreement.
In addition, in rendering our opinions expressed herein, we have
assumed that each agreement referred to herein constitutes the legal, valid and
binding obligation of each party thereto, other than Lessee and Guarantor,
enforceable against each such party in accordance with its terms. We have also
assumed that, except for the filings and recordations contemplated or referred
to herein, there are no filings or recordations with respect to the Aircraft
(other than the previous recordation of title in the name of Lessee [and the
Mortgage, and a UCC-l financing statement filed in the Office of the Secretary
of State of the State of Minnesota on ___________, filing number _________,
naming Lessee as Debtor and [
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -4- ______________ ___, ____
______________], as Secured Party (as to which a UCC-3 termination statement is
being filed on the date hereof))], the Lease, the Lease Supplement covering the
Aircraft, the Trust Agreement, the Trust Supplement or the Trust Indenture with
the Federal Aviation Administration, or of Uniform Commercial Code financing
statements naming the Owner Trustee as a debtor in the filing offices of the
Secretary of State of the State of Utah or in any other filing office in the
State of Utah or in the filing offices of the Secretary of State of the State of
Minnesota or in any other filing office in the State of Minnesota. We have
further assumed that each of the documents and Uniform Commercial Code financing
statements referred to in Paragraph 4 above to be recorded with the Federal
Aviation Administration or filed with the appropriate filing office in the State
of Minnesota and the State of Utah was in due form for such recording or filing
and that each of the above-mentioned documents has been duly and timely recorded
or filed, as the case may be, under the Federal Aviation Act and under the laws
of the State of Minnesota and the State of Utah. Except as expressly set forth
in paragraph 4 above, we express no opinion as to the right, title or interest
in or to the Trust Estate or the Trust Indenture Estate on the part of any
Person. Moreover, the opinions expressed herein relating to the enforceability
of any agreement or instrument are subject to the further qualification that no
opinion is expressed as to the specific remedy or remedies that any court,
governmental authority, board of arbitration or arbitrator may grant, impose or
render under particular circumstances. In particular, no opinion is expressed
concerning the availability of equitable remedies, as such, for the enforcement
of any provision of any such agreement or instrument.
Finally, we call to your attention that, in connection with our
opinions expressed above, we do not purport to be experts with respect to, or
express any opinion concerning, aviation law or other laws, rules or regulations
applicable to the particular nature of the equipment acquired by the Owner
Trustee, as contemplated in the Participation Agreement, and which may require
the consent or approval of, the giving of notice to, the registration with or
the taking of any other action in respect of, any federal or state governmental
authority in connection with the operation or maintenance of such equipment on
an ongoing basis, in accordance with the Owner Trustee's, Lessee's or
Guarantor's undertakings in the Operative Documents. We are qualified to
practice law in the State of New York, and we do not purport to be experts on,
or to express any opinion concerning, any laws except the laws of the State of
New York and the federal laws of the United States. Further, we do not purport
to give any opinion regarding the securities laws in any jurisdiction or with
respect to the Employee Retirement Income Security Act of 1974, as amended. All
references in this opinion to federal laws are to the federal laws of the United
States of America. We express no opinions except as expressly set forth herein,
and no opinion is implied or may be inferred beyond the opinions expressly
stated herein. We assume no obligation to supplement the opinions expressed
herein if any applicable laws change after the date hereof or if we become aware
of any facts that might change such opinions after the date hereof.
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -5- ______________ ___, ____
This opinion is being delivered for your sole benefit, and no other
person or entity shall be entitled to rely upon this opinion without our express
written consent.
Very truly yours,
Annex A
[ ], as Owner Participant
First Security Bank, National Association, as Owner Trustee
State Street Bank and Trust Company, as Pass Through Trustee and Indenture
Trustee
Standard & Poor's Ratings Services
▇▇▇▇▇'▇ Investors Service, Inc.
Exhibit B-3 to Participation Agreement
[Form of Opinion of Northwest]
[Date]
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO
Re: Northwest Airlines, Inc. [NW 1999 __]
Opinion of Counsel to Lessee and Guarantor
Gentlemen:
I act as legal counsel for Northwest Airlines, Inc., a Minnesota
corporation ("Lessee"), and Northwest Airlines Corporation, a Delaware
corporation ("Guarantor"), and in such capacity am familiar with the
transactions contemplated by the Participation Agreement [NW 1999 __], dated as
of [_______ __, ____], (the "Participation Agreement"), among Lessee, Guarantor,
First Security Bank, National Association, as Owner Trustee under the Trust
Agreement referred to therein, State Street Bank and Trust Company, as Pass
Through Trustee under each of the Pass Through Trust Agreements referred to
therein, the Owner Participant named therein, State Street Bank and Trust
Company, as Subordination Agent, and State Street Bank and Trust Company, as
Indenture Trustee under the Indenture referred to therein. Capitalized terms
used herein without definition shall have the respective meanings ascribed to
them in or by reference to the Participation Agreement, unless the context
otherwise requires. This opinion is delivered pursuant to Section 4(a)(xi) of
the Participation Agreement.
In rendering this opinion, I, or lawyers under my direction, have
examined, among other things, executed counterparts of the Participation
Agreement, the Lease, the Lease Supplement covering the Aircraft, the Trust
Agreement, the Trust Supplement, the Trust Indenture, the Secured Certificates,
the Tax Indemnity Agreement, the Purchase Agreement Assignment, the ▇▇▇▇ of
Sale, the FAA ▇▇▇▇ of Sale and the Guarantee. As to any facts material to my
opinions expressed herein, I have relied upon the representations and warranties
contained in the Operative Documents (including, without limitation, in Sections
7 and 8 of the Participation Agreement) and upon originals or copies (certified
or otherwise identified to my satisfaction) of such corporate records, documents
and other instruments as, in my judgment, are necessary or appropriate to enable
me to render this opinion. I have assumed, and have not independently verified,
the genuineness of all signatures, the authenticity of all documents submitted
to me as originals, the conformity with the originals of
To the Addressees listed in
Schedule A hereto
_____________ ___,___
Page 2
all documents submitted to me as copies, and the accuracy of all factual
statements of parties made on or before the date hereof (and have relied thereon
as I have deemed appropriate).
Based upon and subject to the foregoing, and subject further to the
assumptions, limitations and qualifications set forth below, it is my opinion
that:
1. Lessee is a corporation duly organized and validly existing
pursuant to the laws of the State of Minnesota, has the corporate power and
authority to carry on its business as now conducted and to enter into and
perform its obligations under the Participation Agreement, the Lease, the Lease
Supplement covering the Aircraft, the ▇▇▇▇ of Sale, the FAA ▇▇▇▇ of Sale, the
Tax Indemnity Agreement and the Purchase Agreement Assignment (collectively, the
"Lessee Documents"), and is duly qualified to transaction business in each
jurisdiction in which the conduct of its business requires such qualification,
except to the extent that the failure to be so qualified would not have a
material adverse effect on Lessee and its subsidiaries, taken as a whole. Lessee
is a Certificated Air Carrier. Guarantor is a corporation duly organized and
validly existing pursuant to the laws of the State of Delaware and has the
corporate power and authority to enter into and perform its obligations under
the Guarantee.
2. The execution, delivery and performance of the Lessee Documents
by Lessee and of the Guarantee by Guarantor have been duly authorized by all
necessary corporate action on the part of Lessee and Guarantor, as the case may
be, do not require any approval of stockholders of Lessee or Guarantor, as the
case may be, or, to my knowledge after due inquiry and investigation, any
approval or consent of any trustee of holders of any indebtedness or obligations
of Lessee or Guarantor, as the case may be (other than any such approval or
consent as has been obtained), and the execution and delivery of any thereof by
Lessee or Guarantor, as the case may be, nor the performance by Lessee or
Guarantor, as the case may be, of its obligations thereunder does not (A)
contravene any law, governmental rule or regulation or, to my knowledge after
due inquiry and investigation, judgment or order applicable to or binding on
Lessee or Guarantor, as the case may be, or (B) to my knowledge after due
inquiry and investigation, contravene or result in any breach of, or constitute
any default under or result in the creation of any Lien (other than Permitted
Liens) upon any property of Lessee or Guarantor, as the case may be, under, (i)
Lessee's or Guarantor's corporate charter or by-laws or (ii) any indenture,
mortgage, chattel mortgage, deed of trust, conditional sales contract, bank loan
or credit agreement, or any other agreement or instrument, or permit issued by
any Minnesota or United States governmental authority to which Lessee or
Guarantor, as the case may be, is a party or by which Lessee or Guarantor, as
the case may be, or its properties may be bound or affected.
3. Neither the execution and delivery by Lessee of any of the Lessee
Documents or by Guarantor of the Guarantee, nor the performance by Lessee or
Guarantor of their respective obligations thereunder, requires the consent or
approval of, or the giving of
To the Addressees listed in
Schedule A hereto
_____________ ___,___
Page 3
notice to, or the registration with, or the taking of any other action in
respect of, any federal or state governmental authority in the United States,
except for (A) the registration of the Aircraft (including the placement on
board of the owner's copy of the application for registration of the Aircraft
and, if necessary, a flying time wire), recordations, and other actions referred
to in Paragraph 5 below, and (B) such consents, approvals, notices,
registrations and other actions required by the terms of the Lessee Documents or
the Guarantee after the Delivery Date.
4. The Guarantee has been duly entered into and delivered by
Guarantor, and each of the Lessee Documents has been duly entered into and
delivered by Lessee.
5. Subject to the registration of the Aircraft with the Federal
Aviation Administration in the name of the Owner Trustee, and assuming the due
and timely filing for recordation in accordance with the provisions of the
Federal Aviation Act of (A) the FAA ▇▇▇▇ of Sale, (B) the Lease, with the Lease
Supplement covering the Aircraft, the Trust Indenture and the Trust Supplement
attached thereto and made a part thereof, (C) the Trust Indenture, with the
Trust Supplement attached thereto and made a part thereof, and (D) the Trust
Agreement, with respect to such portion of the Aircraft as is covered by the
recording system established by the Federal Aviation Administration pursuant to
Section 44107 of Title 49 of the United States Code by virtue of the same
constituting an "aircraft" or an "aircraft engine" as defined in the Federal
Aviation Act, no further filing or recording of any document (including any
financing statement with respect to the Lease under Article 9 of the Uniform
Commercial Code of Minnesota or Utah) is necessary in any applicable
jurisdiction within the United States in order (x) to establish the Owner
Trustee's title to such portion of the Aircraft as against Lessee or any third
parties or (y) to create and perfect the Indenture Trustee's security interest
in such portion of the Aircraft as against the Owner Trustee or any third
parties. With respect to such portion of the Aircraft, if any, as may not be
deemed to constitute an "aircraft" or "aircraft engine," as defined in the
Federal Aviation Act, except for the filing of financing statements in the
appropriate filing offices in the State of Utah and the State of Minnesota,
which filing has been made, and the filing of periodic continuation statements
with respect to such filings, as and when required, (x) under Minnesota law no
filing or recording of any document (including any financing statement) is
necessary under Article 9 of the Uniform Commercial Code in order to establish
the Owner Trustee's title in such portion of the Aircraft as against Lessee and
any third parties in any applicable jurisdiction within the United States, and
(y) under Minnesota law no filing or recording of any document (including any
financing statement) is necessary under Article 9 of the Uniform Commercial Code
in order to create or perfect the Indenture Trustee's security interest in such
portion of the Aircraft as against the Owner Trustee and any third parties in
any applicable jurisdiction within the United States.
6. Under Minnesota law the transfer to the Owner Trustee of title to
the Aircraft and the contemporaneous lease of the Aircraft to Lessee under
circumstances
To the Addressees listed in
Schedule A hereto
_____________ ___,___
Page 4
involving fair consideration but not involving an ostensible surrender of
possession of the Aircraft by Lessee is not void against or voidable by present
or subsequent creditors of Lessee by reason thereof.
7. There are no legal or governmental proceedings pending or, to the
best of my knowledge, threatened to which Lessee or Guarantor or any of their
respective subsidiaries is a party or to which any of the properties of Lessee
or Guarantor or any of their respective subsidiaries is subject other than those
proceedings summarized in the Guarantor's publicly filed annual, quarterly and
other reports filed with the Securities and Exchange Commission, and proceedings
which I believe would not reasonably be expected to have a material adverse
effect on Lessee and its subsidiaries, taken as a whole, or on the power or
ability of Lessee to perform its obligations under the Lessee Documents.
In rendering the opinions expressed herein, I have relied
exclusively, and without independent investigation, on the opinion (being
furnished to you today) of (i) ▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.C., referred to in Section
4(a)(xv) of the Participation Agreement and (ii) with respect to the opinion in
paragraph 5 above, Ray, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, referred to in Section 4(a)(xiii) of
the Participation Agreement, as to all matters stated in such opinions,
including the qualifications and exceptions therein.
In addition, in rendering the opinions expressed herein, I have
assumed that each agreement referred to herein constitutes the legal, valid and
binding obligation of each party thereto, other than Lessee and Guarantor,
enforceable against each such party in accordance with its terms. I have also
assumed that, except for the filings and recordations contemplated or referred
to herein, there are no filings or recordations with respect to the Aircraft
(other than the previous recordation of title in the name of Lessee) [and the
Mortgage, and a UCC-l financing statement filed in the Office of the Secretary
of the State of Minnesota on ___________, filing number _________,naming Lessee
as Debtor and [_______________], as Secured Party (as to which a UCC-3
termination statement is being filed on the date hereof))], the Lease, the Lease
Supplement covering the Aircraft, the Trust Agreement, the Trust Supplement or
the Trust Indenture with the Federal Aviation Administration not shown on the
indices of filed but unrecorded documents maintained by the Federal Aviation
Administration and made available to ▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.C., for purposes of
their aforesaid opinion, or of Uniform Commercial Code financing statements
naming the Owner Trustee as a debtor in the filing offices of the Secretary of
State of the State of Utah or in any other filing office in the State of Utah or
in the filing offices of the Secretary of State of the State of Minnesota or in
any other filing office in the State of Minnesota. I have further assumed that
each of the documents and Uniform Commercial Code financing statements referred
to in Paragraph 5 above to be recorded with the Federal Aviation Administration
or filed with the appropriate filing office in the State of Utah was in due form
for such recording or filing and that each of such documents has been duly and
timely recorded or filed, as the case may be, under the Federal Aviation Act and
under the laws of the State of Utah.
To the Addressees listed in
Schedule A hereto
_____________ ___,___
Page 5
I am qualified to practice law in the State of Minnesota, and I do
not purport to be an expert on, or to express any opinion concerning, any laws
except the laws of the State of Minnesota, the Delaware General Corporation Law
and the federal laws of the United States. Further, I do not purport to give any
opinion regarding the securities laws in any jurisdiction or with respect to the
Employee Retirement Income Security Act of 1974, as amended. All references in
this opinion to federal laws are to the Federal laws of the United States.
I assume no obligations to supplement the opinions expressed herein
if any applicable laws change after the date hereof or if I become aware of any
facts that might change such opinions after the date hereof.
I express no opinions except as expressly set forth herein, and no
opinion is implied or may be inferred beyond the opinions expressly stated
herein. This opinion is being delivered for your sole benefits and no other
person or entity shall be entitled to rely upon this opinion without my express
written consent.
Very truly yours,
NORTHWEST AIRLINES, INC.
_________________________________
_________________________________
Associate General Counsel
SCHEDULE A
Citibank, N.A.
[_________________], as Owner Participant
First Security Bank, National Association, as Owner Trustee
State Street Bank and Trust Company, as Pass Through Trustee and Indenture
Trustee
Standard & Poor's Ratings Services
▇▇▇▇▇'▇ Investors Service, Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Credit Suisse First Boston Corporation
ABN AMRO Incorporated
Chase Securities Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
Exhibit C to Participation Agreement
[Form of opinion of in-house counsel to the Manufacturer]
_______________, 1999
To the Addressees Listed
in the Attached Schedule
Subject: One Boeing Model 747-451 Aircraft
Bearing Manufacturer's Serial No. ______
Ladies and Gentlemen:
I am an attorney employed by The Boeing Company ("Boeing") and I am licensed to
practice law in the State of Washington. As such, I have represented Boeing in
connection with the sale of the Boeing Model 747-451 aircraft bearing
Manufacturer's Serial No. ________ (including the engines installed thereon but
excluding equipment furnished by Northwest Airlines Inc. ("Northwest") (the
"Aircraft")), pursuant to Purchase Agreement No. 1630 between Boeing and
Northwest, dated December 1, 1989, as subsequently amended (the "Purchase
Agreement") and as assigned by the Purchase Agreement Assignment [NW 1999],
dated as of [_____] between Northwest, as Assignor, and First Security Bank,
National Association, not in its individual capacity but solely as Owner
Trustee, as Assignee (the "Purchase Agreement Assignment").
For the purpose of this opinion, I have examined and relied upon originals, or
copies certified to my satisfaction, of the Purchase Agreement and of the
Consent and Agreement [NW 1999], dated as of [_____] to the Purchase Agreement
Assignment executed by Boeing (the "Consent and Agreement").
I have also examined such other documents and records as I have deemed relevant
or necessary for the purpose of giving this opinion. Based upon such
examination, I am of the opinion that:
(a) Boeing is a corporation duly incorporated, validly existing, and in
good standing under the laws of the State of Delaware.
(b) The Purchase Agreement and the Consent and Agreement have been duly
authorized, executed and delivered by, and constitute the legal, valid, and
binding obligations of Boeing enforceable against it in accordance with the
respective terms thereof, except as may
be limited by bankruptcy, insolvency, reorganization, moratorium, or other
similar laws affecting the enforcement of creditors' rights in general and
except as the enforceability of such obligations may be subject to general
principles of equity.
(c) Boeing has the full power, authority, and legal right to enter into
and perform its obligations under the Purchase Agreement and the Consent and
Agreement and Boeing's execution, performance, and delivery of such documents
have been duly authorized by all necessary corporate action, and do not
contravene the Restated Certificate of Incorporation or By-Laws of Boeing, or
any indenture, mortgage, contract, instrument, or other agreement, in each case
known to me, to which Boeing is a party or by which it or any of its properties
is bound.
With respect to the conclusions set forth herein, I express no opinion as to any
laws other than the laws of the State of Washington, the corporate laws of the
State of Delaware, and the federal laws of the United States.
Very truly yours,
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Counsel
-3-
SCHEDULE
Northwest Airlines, Inc.
Northwest Airlines Corporation
First Security Bank, National Association,
not in its individual capacity but solely as Owner Trustee
State Street Bank and Trust Company,
not in its individual capacity but solely as Indenture Trustee
State Street Bank and Trust Company,
as Pass Through Trustee
[__________], as Owner Participant
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Credit Suisse First Boston Corporation
ABN AMRO Incorporated
Chase Securities Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
Exhibit D to Participation Agreement
[Form of Opinion of Ray, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇]
__________ ___, 1999
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO:
Re: Northwest Airlines, Inc. [NW 1999__]
Dear Sir or Madam:
We have acted as special counsel for First Security Bank, National
Association, a national banking association, in its individual capacity ("First
Security") and in its capacity as trustee (the "Owner Trustee") under the Trust
Agreement [NW 1999 __] dated as of [________] (the "Trust Agreement") between
First Security and [_______], as beneficiary (the "Owner Participant"), in
connection with the transactions contemplated by the Participation Agreement (as
defined below). Except as otherwise defined herein, the terms used herein shall
have the meanings specified in, or by reference in, Section 13 of the
Participation Agreement [NW 1999 __], dated as of [________] among the Owner
Participant, First Security, not in its individual capacity except as provided
therein, but as Owner Trustee, Northwest Airlines, Inc., as Lessee, Northwest
Airline Corporation, as Guarantor, State Street Bank and Trust Company, as
Subordination Agent and State Street Bank and Trust Company, not in its
individual capacity except as expressly provided therein, but solely as
Indenture Trustee and as Pass Through Trustee under each of the Pass Through
Agreements (the "Participation Agreement"). This opinion is furnished pursuant
to Section 4(a)(xii) of the Participation Agreement.
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records and other
instruments as we have deemed necessary or advisable for the purpose of
rendering this opinion.
Based upon the foregoing, we are of the opinion that:
(1) First Security is a national banking association duly organized,
validly existing and in good standing under the laws of the United States,
is a "citizen of the United States" within the meaning of Section
40102(a)(15) of the Act and has the full power and authority to enter into
and perform its obligations under the Trust
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -2- ______________ ___, ____
Agreement and each other Operative Document to which it, in its individual
capacity or as Owner Trustee, as the case may be, is a party and, as Owner
Trustee, to issue, execute, and deliver and perform the Secured
Certificates.
(2) The Owner Trustee is the duly appointed trustee under the Trust
Agreement and the Trust Agreement creates a legal and valid trust under
the laws of the State of Utah; the trust created by the Trust Agreement
has been duly created and exists for the benefit of the Owner Participant,
and the Trust Agreement creates for the benefit of the Owner Participant
the rights and interests in the Trust Estate which the Trust Agreement by
its terms purports to create; and assuming the Trust Agreement was
properly authorized, executed and delivered by the Owner Participant and
that the terms of the Trust Agreement are not in violation of any laws,
documents, judgments, regulations or other provisions applicable to the
Owner Participant, the Trust Agreement constitutes, under the laws of the
State of Utah, a legal, valid and binding obligation of the Owner
Participant enforceable against the Owner Participant in accordance with
its terms.
(3) The Trust Agreement, the Participation Agreement, and each other
Operative Document to which First Security or the Owner Trustee, as the
case may be, is a party, and the Secured Certificates, have been duly
authorized, executed and delivered by First Security, or the Owner
Trustee, as the case may be, and assuming due authorization, execution and
delivery by the other parties thereto is a legal, valid and binding
obligation of First Security, or the Owner Trustee, as the case may be,
enforceable in accordance with their respective terms.
(4) The execution and delivery by First Security of the Trust
Agreement and the Participation Agreement and the execution and delivery
by the Owner Trustee of the Operative Documents to which it is a party is
not, and the performance by First Security, or the Owner Trustee, as the
case may be, of its respective obligations under each such agreements will
not be, inconsistent with the articles of association or bylaws of First
Security, do not and will not contravene any federal law or law of the
State of Utah, or any rule or regulation of the State of Utah or the
federal governmental rule, or any judgment or order of which we have
knowledge and which is applicable to it and do not and will not contravene
any provision of, or result in the creation of any lien upon any property
of First Security, or constitute a default under, any indenture, mortgage,
contract or other instrument of which we have knowledge and to which First
Security or the Owner Trustee is a party or by which either is bound or
require the consent or approval of, the giving of notice to, or the
registration with, or the taking of any action in respect of, or under
federal law or the laws of the State of Utah or any subdivision or agency
thereof.
(5) There are no fees, taxes or other charges, except taxes imposed
on fees payable to First Security, required to be paid under the laws,
ordinances or regulations of the State of Utah or any political
subdivision thereof, including, without limitation,
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -3- ______________ ___, ____
Salt Lake City, in connection with the execution, delivery or performance
by the Lessee, Owner Trustee, Indenture Trustee or any Participant of the
Operative Documents solely because First Security, or the Owner Trustee as
the case may be, performs certain of its obligations under the Operative
Documents in the State of Utah.
(6) There are no pending or threatened actions or proceedings
against or affecting First Security or the Owner Trustee, as the case may
be, before any court, governmental authority or administrative agency
which, if adversely determined, could materially adversely affect the
right, power or ability, either in its individual capacity or as Owner
Trustee, or both, as the case may be, to enter into or perform its
obligations under the Operative Documents.
(7) The Trust Indenture (or financing statements or other notices
with respect thereto) has been filed for record or recorded with the
Division of Corporations and Commercial Code in the State of Utah and such
offices are all the places in the State of Utah wherein such filing or
recordation is necessary and no other actions or filings are necessary in
the State of Utah to perfect the lien and security interest of the
Indenture Trustee in the Trust Estate as against creditors of or
purchasers from the Owner Trustee or the Lessee, or both.
(8) The Owner Trustee has received such right, title and interest in
and to the Aircraft as was conveyed to the Owner Trustee on the date
hereof, subject to (i) the right of the Lessee under the Lease and the
Lease Supplement; (ii) the beneficial interest of the Owner Participant in
the Aircraft; and (iii) the Lien created pursuant to the Trust Indenture
and the Trust Indenture Supplement; and to our knowledge there exist no
Liens affecting the right, title or interest of the Owner Trustee in and
to the Trust Estate resulting from claims against First Security, not
related to the ownership of the Trust Estate or the administration of the
Trust Estate or any other transaction contemplated by the Operative
Documents.
(9) Assuming that (i) the Aircraft is not physically located in the
State of Utah at the commencement or termination of the Term, (ii) in
connection with any sale of the Aircraft, such Aircraft will not be
physically delivered in the State of Utah to a buyer, and (iii) the trust
created by the Trust Agreement is treated as a grantor trust under subpart
E, Part 1 of Subchapter J of the Internal Revenue Code of 1986, as
amended, there are no fees, taxes or other charges (except taxes imposed
on fees payable to the Owner Trustee) payable to the State of Utah or any
political subdivision thereof in connection with the execution, delivery
or performance by the Owner Trustee, the Indenture Trustee, the Lessee or
any Participant of the Operative Documents or in connection with the
making by the Owner Participant of its investment in the Aircraft or its
acquisition of the beneficial interest in the Trust Estate or in
connection with the issuance and acquisition of the Secured Certificates,
and neither the Owner Trustee, the Trust Estate nor the trust created by
the Trust Agreement will be subject to any fee, tax or other governmental
charge (except taxes on fees payable to
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO 4- ______________ ___, ____
the Owner Trustee) under the laws of the State of Utah or any political
subdivision thereof on, based on or measured by, directly or indirectly,
the gross receipts, net income or value of the Trust Estate by reason of
the creation or continued existence of the trust under the terms of the
Trust Agreement pursuant to the laws of the State of Utah or the Owner
Trustee's performance of its duties under the Trust Agreement within such
State.
(10) Neither a Utah court nor a federal court applying Utah law or
federal law, if properly presented with the issue and after having
properly considered such issue, would permit the Owner Participant to
terminate the Trust Agreement, except in accordance with its terms.
(11) Although there is no Utah case directly on point, under the
laws of the State of Utah, so long as the Trust Agreement has not been
terminated in accordance with its terms, creditors of any person that is
an Owner Participant, holders of a lien against the assets of any such
person that is an Owner Participant, such as trustees, receivers or
liquidators (whether or not an insolvency proceeding has been commenced)
(collectively, the "Creditors") may acquire valid claims and liens, as to
the Trust Estate, only against the rights of such Owner Participant under
the Trust Agreement or in the Trust Estate, and do not have, and may not
through the enforcement of such Creditors' rights acquire, any greater
rights than such Owner Participant with respect to the Trust Agreement or
the Trust Estate.
The foregoing opinions are subject to the following assumptions,
exception and qualifications:
A. The foregoing opinions are limited to the laws of the State of Utah and
the federal laws of the United States of America governing the banking and
trust powers of First Security and Title II of the United States Code
entitled "Bankruptcy". In addition, we express no opinion with respect to
(i) federal securities laws, including the Securities Act of 1933, as
amended, the Securities Exchange Act of 1934, as amended, and the Trust
Indenture Act of 1939, as amended; (ii) the Federal Aviation Act of 1958,
as amended (except with respect to the opinion set forth in paragraph 1
above concerning the citizenship of First Security); or (iii) state
securities or blue sky laws. Insofar as the foregoing opinions relate to
the legality, validity, binding effect and enforceability of the documents
involved in these transactions, which by their terms are governed by the
laws of a state other than Utah, we have assumed that such documents
constitute legal, valid, binding and enforceable agreements under the laws
of such state, as to which we express no opinion.
B. The foregoing opinions regarding enforceability of any document or
instrument are subject (i) except as otherwise set forth in the opinions
in paragraphs 10 and 11, to applicable bankruptcy, insolvency, moratorium,
reorganization, receivership and similar laws affecting the rights and
remedies of creditors generally, and (ii) general
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -5- ______________ ___, ____
principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law. We call to your attention
that bankruptcy courts are courts in equity with wide discretion in
applying the provisions of the Bankruptcy Code.
C. As to the documents involved in these transactions, we have assumed
that each is a legal, valid and binding obligation of each party thereto,
other than First Security or the Owner Trustee, and is enforceable against
each such party in accordance with their respective terms.
D. The opinion in paragraph 1 above concerning the citizenship of First
Security is based upon the facts contained in an affidavit of First
Security, made by its authorized officer, which facts we have not
independently verified.
E. We have assumed that all signatures, other than those of the Owner
Trustee or First Security, on documents and instruments involved in these
transactions are genuine, that all documents and instruments submitted to
us as originals are authentic, and that all documents and instruments
submitted to us conform with the originals, which facts we have not
independently verified.
F. We do not purport to be experts in respect of, or express any opinion
concerning laws, rules or regulations applicable to the particular nature
of the equipment involved in these transactions.
G. We have made no investigation of, and express no opinion concerning,
the nature of the title to any part of the equipment involved in these
transactions or the priority of any mortgage or security interest.
H. We have assumed that the Participation Agreement and the transactions
contemplated thereby are not within the prohibitions of Section 406 of the
Employee Retirement Income Security Act of 1974.
I. In addition to any other limitation by operation of law upon the scope,
meaning or purpose of this opinion, this opinion speaks only as of the
date hereof. We have no obligation to advise the recipients of this
opinion (or any third party) of changes of law or fact that may occur
after the date hereof, even though the change may affect the legal
analysis, a legal conclusion or any information contained herein.
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -6- ______________ ___, ____
J. The opinions expressed in this letter are solely for the use of the
parties to which it is addressed in matters directly related to the
Participation Agreement and the transactions contemplated thereunder and
these opinions may not be relied on by any other persons or for any other
purpose without our prior written approval. The opinions expressed in this
letter are limited to the matters set forth in this letter and no other
opinions should be inferred beyond the matters expressly stated.
Very truly yours,
RAY, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
[_____________________]
SCHEDULE A
First Security Bank, National Association
Northwest Airlines, Inc.
State Street Bank and Trust Company
Northwest Airlines Corporation
Standard & Poor's Ratings Services
▇▇▇▇▇'▇ Investors Service, Inc.
[ ], as Owner Participant
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Credit Suisse First Boston Corporation
ABN AMRO Incorporated
Chase Securities Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
Exhibit E-1 to Participation Agreement
[Form of Opinion of special counsel for the Owner Participant]
___________ __, 1999
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO
Re: Boeing 747-451 with Registration ▇▇▇▇ N[ ]
Ladies and Gentlemen:
We have acted as special counsel to [__________________], a
[________] corporation (the "Owner Participant"), in connection with the
transactions contemplated by the Participation Agreement [NW 1999 __] dated as
of [______________] (the "Participation Agreement") among Northwest Airlines,
Inc., Northwest Airlines Corporation, the Owner Participant, First Security
Bank, National Association, as Owner Trustee under the Trust Agreement referred
to therein, State Street Bank and Trust Company, as Pass Through Trustee under
each of the Pass Through Trust Agreements referred to therein, State Street Bank
and Trust Company, as Subordination Agent, and State Street Bank and Trust
Company, as Indenture Trustee under the Indenture referred to therein.
Capitalized terms used but not defined in this opinion letter shall have the
meanings set forth in, or by reference in, the Participation Agreement. This
opinion is delivered pursuant to Section 4(a)(xiv) of the Participation
Agreement.
We have examined the Participation Agreement, the Lease, the Trust
Agreement, the Indenture, the Secured Certificates, the Tax Indemnity Agreement
and the Purchase Agreement Assignment (collectively, the "Documents"). In our
examination, we have assumed the genuineness of all signatures, the authenticity
of all documents submitted to us as originals, the conformity to original
documents of all documents submitted to us as facsimile, certified or
photostatic copies and the authenticity of the originals of such copies. The
opinions contained in this opinion letter are subject to the following
assumptions, limitations and qualifications:
A. We have assumed (i) the due organization, existence and good
standing of all parties to the Documents (the "Parties"), (ii) the power and
full legal right of the Parties under all applicable laws and regulations,
without approvals, authorizations, consents or other orders of any public body
or board, to execute, deliver and perform under the Documents,
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -2- ___________ __,___
(iii) the due authorization, execution and delivery by the Parties of the
Documents and the due authentication of the Secured Certificates by the
Indenture Trustee, (iv) that the Parties are not subject to any judgment, order,
writ, injunction or decree of any court, arbitrator or governmental agency or
instrumentality that prohibits or enjoins the execution, delivery or performance
of any of the Documents or any of the transactions contemplated by the Documents
and (v) with respect to factual matters, the accuracy of the representations set
forth in Section 8 of the Participation Agreement.
B. The enforceability of the Documents against the Owner Participant
or against the Owner Trustee may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the rights of
creditors generally and general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and, in the
case of indemnity provisions contained therein, as limited by public policy
considerations, and except that certain of the remedial provisions in the Lease
and the Indenture may be limited or rendered unenforceable by applicable laws,
which laws, however, do not in our opinion make the remedies provided in such
document inadequate for the practical realization of the benefits provided
thereby.
C. The execution, delivery and performance by the Owner Trustee and
by First Security Bank, National Association, in its individual capacity, or
both, as the case may be, of the Participation Agreement, the Trust Agreement,
the Lease, the Purchase Agreement Assignment, the Indenture and the Secured
Certificates (the "Owner Trustee Documents") and the consummation of the
transactions by the Owner Trustee and by First Security Bank, National
Association in its individual capacity contemplated thereby are not and will not
be in violation of the articles of association or By-Laws of First Security
Bank, National Association or of any indenture, mortgage, credit agreement,
license or other agreement or instrument to which First Security Bank, National
Association, in its individual capacity or as the Owner Trustee is a party or by
which it is bound, or of any Federal or state law, governmental rule or
regulation applicable to First Security Bank, National Association, in its
individual capacity or as the Owner Trustee or any judgment or order applicable
to it and known to such counsel after due inquiry.
D. Neither the execution and delivery by the Owner Trustee and,
where appropriate, by First Security Bank, National Association, in its
individual capacity, or both, as the case may be, of the Owner Trustee Documents
nor the consummation of any of the transactions by the Owner Trustee, by First
Security Bank, National Association in its individual capacity, or both, as the
case may be, contemplated thereby requires the consent or approval of, the
giving of notice to, or the registration with, or the taking of any other action
with respect to, any governmental authority or agency under any existing Federal
laws governing the banking and trust powers of First Security Bank, National
Association, or state law (except for filings pursuant to the Uniform Commercial
Code, and except for compliance with requirements of the Federal Aviation Act).
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -3- ___________ __,___
E. We express no opinion as to the availability of specific
performance and/or injunctive relief or other equitable or provisional remedies
in relation to enforcement of the Documents.
F. We express no opinion as to the priority of any security
interests or as to title to any part of the Trust Estate.
G. This opinion is given based on states of law, documentation and
fact as they exist on the date hereof and we do not undertake to advise you of
any changes which hereafter may be brought to our attention.
H. The enforcement of any rights of any party is subject to any
implied duty to act reasonably and in good faith.
I. We express no opinions as to matters governed by (i) any Federal
or state securities law, (ii) any Federal or state tax laws, or (iii) the
Federal Aviation Act.
Based on our examination described above, relying upon statements of
fact contained in the documents we have examined and subject to the assumptions,
limitations and qualifications expressed in this letter, we are of the opinion
that:
1. The Participation Agreement, the Trust Agreement and the Tax
Indemnity Agreement (the "Owner Participant Documents") constitute the legal,
valid and binding obligations of Owner Participant, enforceable against Owner
Participant in accordance with their respective terms.
2. Neither the execution of, delivery and performance by Owner
Participant of the Owner Participant Documents nor the consummation of any of
the transactions by Owner Participant contemplated thereby requires the consent
or approval of, the giving of notice to, the registration with, or the taking of
any other action in respect to any governmental authority or agency of the
United States, the State of [_____________] or, assuming the law of
[_____________] is identical to the law of New York, the State of [________]
(except for filings pursuant to the Uniform Commercial Code, and except for
compliance with the requirements of the Federal Aviation Act, as to which we
express no opinion).
3. The Owner Trustee Documents (other than the Trust Agreement),
including the Secured Certificates, constitute legal, valid and binding
obligations of the Owner Trustee, enforceable against the Owner Trustee in
accordance with their respective terms.
4. The Indenture duly creates for the benefit of the Indenture
Trustee the security interests which the Indenture purports to create and the
Indenture Trustee is entitled to the benefits and security afforded by the
Indenture.
We are licensed to practice law in the State of New York, and the
opinions set forth in this opinion letter are limited to the application of the
laws of the United States of
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -4- ___________ __,___
America and the State of New York to the matters expressly covered by such
opinions. This letter is furnished by us to you on the date hereof only in
connection with the transactions contemplated by the Participation Agreement and
may not be relied upon by any other person or entity.
Very truly yours,
SCHEDULE A
Northwest Airlines, Inc.
Northwest Airlines Corporation
First Security Bank, National Association, as Owner Trustee
State Street Bank and Trust Company, as Pass Through Trustee
State Street Bank and Trust Company, as Indenture Trustee
Standard & Poor's Ratings Services
▇▇▇▇▇'▇ Investors Service, Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Credit Suisse First Boston Corporation
ABN AMRO Incorporated
Chase Securities Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
Exhibit E-2 to Participation Agreement
[Form of Opinion of Owner Participant's in-house counsel]
__________ ___, 1999
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO
Re: Boeing 747-451 with Registration ▇▇▇▇ N[___]
Dear Sirs:
I am in-house counsel of [_________], a [_________] corporation (the
"Owner Participant"), and have acted as counsel to Owner Participant in
connection with the transactions contemplated by that certain Participation
Agreement [NW 1999 __] dated as of [_____] (the "Participation Agreement") among
Northwest Airlines, Inc., Northwest Airlines Corporation, the Owner Participant,
First Security Bank, National Association, as Owner Trustee under the Trust
Agreement referred to therein, State Street Bank and Trust Company, as Pass
Through Trustee under each of the Pass Through Trust Agreements referred to
therein, State Street Bank and Trust Company, as Subordination Agent, and State
Street Bank and Trust Company, as Indenture Trustee under the Trust Indenture
referred to therein. This opinion is delivered pursuant to Section 4(a)(xiv) of
the Participation Agreement.
Except as otherwise noted herein, all capitalized terms used but not
defined in this opinion letter shall have the meanings set forth in, or by
reference in, the Participation Agreement.
In connection with my opinion herein, I have examined executed
counterparts of the Participation Agreement, the Trust Agreement and the Tax
Indemnity Agreement (the "Owner Participant Documents") and the other documents
relating to the proposed transaction. With respect to factual matters, I have
relied upon the representations and warranties contained in each such Owner
Participant Document and upon originals or copies, certified or otherwise
identified to my satisfaction, of such other documents as I have deemed relevant
to the rendering of this opinion. In such examination I have assumed the
genuineness of all signatures (other than that of Owner Participant), the legal
capacity of all natural persons, the authenticity of all documents submitted to
me as originals, the conformity with the originals of all documents submitted to
me as copies and the authenticity of the originals of such copies. In rendering
the opinions set forth below, I have assumed the due authorization, execution
and
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -2- ___________ __,___
delivery of the Owner Participant Documents by each of the parties thereto other
than the Owner Participant.
1. Owner Participant is a duly incorporated and validly existing
corporation in good standing under the laws of the State of [____] and has the
corporate power and authority to execute, deliver and carry out the terms of the
Owner Participant Documents.
2. The Owner Participant Documents have been duly authorized,
executed and delivered by Owner Participant.
3. Neither the execution and delivery by the Owner Participant of
the Owner Participant Documents nor the consummation of any of the transactions
by the Owner Participant contemplated thereby, violates any law, governmental
rule or regulation of the United States, the State of [____] or the State of
[____] (or any governmental subdivision thereof).
4. The execution, delivery and performance of the Owner Participant
Documents by the Owner Participant have been duly authorized by all necessary
corporate action on the part of the Owner Participant, do not require any
approval of stockholders of the Owner Participant, or, to my knowledge, any
approval or consent of any trustee or holders of any indebtedness or obligations
of the Owner Participant (other than any such approval or consent as has been
obtained), and neither the execution and delivery of any thereof by the Owner
Participant nor the performance by the Owner Participant of its obligations
thereunder (A) contravenes any law, governmental rule or regulation or, to my
knowledge, judgment or order applicable to or binding on the Owner Participant
or (B) to my knowledge, contravenes or results in any breach of, or constitutes
any default under, or results in the creation of any lien (other than provided
for in the Operative Documents) upon any property of the Owner Participant
under, any indenture, mortgage, chattel mortgage, deed of trust, conditional
sales contract, bank loan or credit agreement, or any other agreement or
instrument, corporate charter, by-law or permit issued by any [_______] or
United States governmental authority to which the Owner Participant is a party
or by which the Owner Participant or its properties may be bound or affected.
5. To my knowledge, there are no pending or threatened proceedings
against or affecting the Owner Participant before any court or administrative
agency, individually or in the aggregate, which, if determined adversely to it,
would materially adversely affect the power or ability of the Owner Participant
to perform its obligations under the Owner Participant Documents.
I am a member of the Bar of the State(s) of [_______] and I do not
express herein any opinion as to any matters governed by any law other than the
laws of the State(s) of [_______], the Delaware General Corporation Law and the
Federal law of the United States. No opinion is expressed herein as to matters
governed by (i) any Federal or state securities law, (ii) any Federal or state
tax laws, or (iii) the Federal Aviation Act.
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -3- ___________ __,___
This opinion is furnished by me at your request for your sole
benefit, and no other person or entity shall be entitled to rely on this opinion
without my express written consent, except that [our special counsel] may rely
on this opinion for purposes of delivering its opinion.
Very truly yours,
______________________
SCHEDULE A
Northwest Airlines, Inc.
Northwest Airlines Corporation
First Security Bank, National Association, as Owner Trustee
State Street Bank and Trust Company, as Pass Through Trustee
State Street Bank and Trust Company, as Indenture Trustee
Standard & Poor's Ratings Services
▇▇▇▇▇'▇ Investors Service, Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Credit Suisse First Boston Corporation
ABN AMRO Incorporated
Chase Securities Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
Exhibit F to Participation Agreement
[Form of Opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.C.]
_________ __,1999
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO
Re: Boeing model 747-451 aircraft with manufacturer's serial number _____
and United States nationality and registration marks N [ ] (the
Aircraft")
Ladies and Gentlemen:
This letter confirms that we filed the following described
instruments with the Federal Aviation Administration (the "FAA") today at the
respective times noted below:
(a) AC Form 8050-2 Aircraft ▇▇▇▇ of Sale dated [_____________]
(the "FAA ▇▇▇▇ of Sale") by Northwest Airlines, Inc. (the
"Lessee") to First Security Bank, National Association, as
Owner Trustee (the "Owner Trustee") under Trust Agreement [NW
1999 __] dated as of [_________] (the "Trust Agreement")
between [_____________] as Owner Participant and the Owner
Trustee, covering the Aircraft was filed at[__________]
(b) AC Form 8050-1 Aircraft Registration Application by the Owner
Trustee covering the Aircraft, to which were attached the
Affidavits required by Section 47.7(c)(2)(ii) of Part 47 of
the Federal Aviation Regulations, was filed at
[_________________]
(c) the Trust Agreement was filed at [________________]
(d) Trust Indenture and Security Agreement [NW 1999 __] dated as
of [________] (the "Indenture") between the Owner Trustee and
State Street Bank and Trust Company as Indenture Trustee (the
"Indenture Trustee"), to which were attached the Trust
Agreement and Indenture Supplement [NW 1999 __] dated
[_____________] (the "Indenture Supplement") covering the
Aircraft and the ▇▇▇▇▇ & Whitney model PW 4056 aircraft
engines with manufacturer's serial numbers [_______], [
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -2- ___________ __,___
________], [_________] and [________] (the "Engines"), was
filed at [_______]; and
(e) Lease Agreement [NW 1999 __] dated as of [_____________] (the
"Lease") between the Owner Trustee as lessor and the Lessee,
to which were attached Lease Supplement No. 1 dated [
_____________] (the "Lease Supplement") covering the Aircraft
and the Engines, the Indenture and the Indenture Supplement,
was filed at [__________
Based upon our examination of the above described instruments and of
such records of the FAA as we deemed necessary to render this opinion and as
were made available to us by the FAA, it is our opinion that:
(a) the FAA ▇▇▇▇ of Sale, the Indenture with the Indenture
Supplement attached, the Lease with the Lease Supplement, the
Indenture and the Indenture Supplement attached are in due
form for recordation by and have been duly filed for
recordation with the FAA pursuant to and in accordance with
the provisions of Section 44107 of Title 49 of the United
States Code;
(b) legal title to the Aircraft is vested in the Owner Trustee and
all instruments necessary to cause the FAA in due course to
issue to the Owner Trustee an AC Form 8050-3 Certificate of
Aircraft Registration covering the Aircraft have been duly
filed with the FAA pursuant to and in accordance with the
provisions of Sections 44102 and 44103 of Title 49 of the
United States Code;
(c) the Aircraft and the Engines are free and clear of Liens (as
such term is defined in the Lease) other than such as are
created by the Indenture, as supplemented by the Indenture
Supplement, and by the Lease, as supplemented by the Lease
Supplement;
(d) the Indenture, as supplemented by the Indenture Supplement
creates a duly and validly perfected first priority security
interest in favor of the Indenture Trustee in the Aircraft and
the Engines and in all of the right, title and interest of the
Owner Trustee in and to the Lease, as supplemented by the
Lease Supplement (insofar as such security interest affects an
interest covered by the recording system established by the
FAA pursuant to Section 44107 of Title 49 of the United States
Code);
(e) the Indenture, as supplemented by the Indenture Supplement, is
not required to be refilled with the FAA or filed or recorded
in any other place within the United States in order to
perfect or maintain the perfection of the security interest
created thereby in the Aircraft and the
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -3- ___________ __,___
Engines under the applicable laws of any jurisdiction within
the United States; and
(f) no other registration of the Aircraft and no filings or
recordings (other than the filings and recordings with the FAA
which have been effected) are necessary to perfect in any
jurisdiction within the United States the Owner Trustee's
title to the Aircraft or the security interest created by the
Indenture, as supplemented by the Indenture Supplement in the
Aircraft and the Engines under the applicable laws of any
jurisdiction within the United States.
No opinion is herein expressed as to: (i) laws other than the
federal laws of the United States; (ii) the validity or enforceability under
local law of the Indenture, as supplemented by the Indenture Supplement; and
(iii) the recognition of the perfection of the security interest created by the
Indenture, as supplemented by the Indenture Supplement against third parties in
any legal proceedings outside the United States. Since our examination was
limited to records maintained by the FAA Aircraft Registry, our opinion does not
cover liens which are perfected without the filing of notice thereof with the
FAA, such as federal tax liens, liens arising under Section 1368(a) of Title 29
of the United States Code and possessory artisans' liens, and was subject to the
accuracy of FAA personnel in the filing, indexing and recording of instruments
filed with the FAA and in the search for encumbrance cross-reference index cards
for the Engines. This opinion is rendered in reliance upon the opinion of the
Aeronautical Center Counsel dated [_______________] (a copy of which is attached
hereto) and upon the past practice of the FAA which is consistent with said
opinion.
Very truly yours,
SCHEDULE A
First Security Bank, National Association, as Owner Trustee
State Street Bank and Trust Company, as Indenture Trustee
Northwest Airlines, Inc.
Citibank, N.A.
[_________________], as Owner Participant
Standard & Poor's Ratings Services
▇▇▇▇▇'▇ Investors Service, Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Credit Suisse First Boston Corporation
ABN AMRO Incorporated
Chase Securities Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
Exhibit G to Participation Agreement
[Form of Opinion of ▇▇▇▇▇▇▇ ▇▇▇▇ LLP,
special counsel for the Indenture Trustee]
_________, 1999
TO THE PARTIES SET FORTH
IN SCHEDULE A HERETO
RE: Northwest Airlines, Inc./Leveraged Lease Financing of One
Boeing 747-451 Aircraft [NW 1999__]
Ladies and Gentlemen:
We have acted as special counsel for State Street Bank and Trust
Company in its individual capacity ("State Street") and as Indenture Trustee
(the "Indenture Trustee") under the Trust Indenture and Security Agreement [NW
1999 __] dated as of [____] (the "Indenture") between First Security Bank.
National Association, not in its individual capacity, but solely as Owner
Trustee (the "Owner Trustee"), and State Street, as Indenture Trustee, in
connection with the execution and delivery of the Participation Agreement [NW
1999 ___] dated as of [____] (the "Participation Agreement") by and among the
Indenture Trustee, Northwest Airlines, Inc., as Lessee (the "Lessee"), Northwest
Airlines Corporation (the "Guarantor"), [_______]. as Owner Participant, State
Street, as Pass Through Trustee (the "Pass Through Trustee"), State Street, as
Subordination Agent (the "Subordination Agent") and the Owner Trustee and the
transactions contemplated thereby. Capitalized terms not otherwise defined
herein shall have the meanings specified in the Lease and Section 13 of the
Participation Agreement. This opinion is being delivered pursuant to Section
4(a)(xvi) of the Participation Agreement.
Our representation of State Street and the Indenture Trustee has
been as special counsel for the limited purposes stated above. As to all matters
of fact (including factual conclusions and characterizations and descriptions of
purpose, intention or other state of mind), we have relied, with your
permission, entirely upon (i) the representations and warranties of the parties
set forth in the Operative Documents and (ii) certificates delivered to us by
the management of State Street and have assumed, without independent inquiry,
the accuracy of those representations, warranties and certificates.
We have examined the Participation Agreement, the Note Purchase
Agreement, the Indenture and the other documents to which State Street,
individually or as Indenture Trustee, is a party (together, the "Operative
Documents"), the Certificate of the Massachusetts Commissioner of Banks relating
to State Street and originals, or copies certified or otherwise identified to
our satisfaction, of such other records, documents, certificates, or other
instruments as we have deemed necessary or advisable for the purposes of this
opinion.
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -2- ___________ __,___
For purposes of our opinion rendered in paragraph 1 below, with respect to the
authority of State Street to operate as a state-chartered trust company and
exercise trust powers, our opinion relies upon and is limited by such
Certificate of the Massachusetts Commissioner of Banks.
We have assumed the genuineness of all signatures (other than those
on behalf of State Street and the Indenture Trustee), the conformity to the
originals of all documents reviewed by us as copies, and the authenticity and
completeness of all original documents reviewed by us in original or copy form
and the legal competence of each individual executing any document (other than
on behalf of State Street and the Indenture Trustee).
When an opinion set forth below is given to the best of our
knowledge, or to our knowledge, or with reference to matters of which we are
aware or which are known to us, or with another similar qualification, the
relevant knowledge or awareness is limited to the actual knowledge or awareness
of the individual lawyer in the firm that signed this opinion, the individual
lawyers in the firm who have participated directly in the specific transactions
to which this opinion relates and the partner of the firm responsible for State
Street corporate trust matters, and without any special or additional
investigation undertaken for the purposes of this opinion.
Subject to the limitation set forth below, we have made such
examination of law as we have deemed necessary for the purposes of this opinion.
The opinions set forth below are limited solely to the internal substantive laws
of the Commonwealth of Massachusetts as applied by courts located in
Massachusetts and the federal laws of the United States. No opinion is given
herein as to the choice of law or internal substantive rules of law that any
court or other tribunal may apply to the transactions contemplated by the
Operative Documents. No opinion is expressed herein as to the application or
effect of federal securities laws or as to the securities or so-called "Blue
Sky" laws of any state or other jurisdiction. In addition, no opinion is
expressed as to matters governed by any law, statute, rule or regulation of the
United States relating to the acquisition, ownership, registration, use,
operation, maintenance, repair, replacement or sale of or the nature of the
Aircraft.
To the extent to which this opinion deals with matters governed by
or relating to the laws of the State of New York, or other jurisdiction other
than the Commonwealth of Massachusetts, by which the Operative Documents are
stated to be governed, we have assumed, with your permission that the Operative
Documents are governed by the internal substantive laws of the Commonwealth of
Massachusetts.
Our opinion is further subject to the following exceptions,
qualifications and assumptions:
(a) We have assumed without any independent investigation that (i)
each party to the Operative Documents, other than State Street, in its
individual capacity or as Indenture Trustee, as applicable, at all times
relevant thereto, is validly existing and
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -3- ___________ __,___
in good standing under the laws of the jurisdiction in which it is
organized, and is qualified to do business and in good standing under the
laws of each jurisdiction where such qualification is required generally
or necessary in order for such party to enforce its rights under such
Operative Documents, and (ii) each party to the Operative Documents, at
all times relevant thereto, had and has the full power, authority and
legal right under its certificate of incorporation, partnership agreement,
by-laws, and other governing organizational documents, and the applicable
corporate, partnership, or other enterprise legislation and other
applicable laws, as the case may be (other than State Street and the
Indenture Trustee with respect to the laws of the United States of America
and the internal substantive laws of the Commonwealth of Massachusetts,
but only in each case to the limited extent the same may be applicable to
State Street or the Indenture Trustee, and relevant to our opinions
expressed below) to execute, and to perform its obligations under, the
Operative Documents, and (iii) each party to the Operative Documents
(other than State Street or the Indenture Trustee, as applicable) has duly
executed and delivered each of such agreements and instruments to which it
is a party and that (other than with respect to State Street and the
Indenture Trustee, as applicable) the execution and delivery of such
agreements and instruments and the transactions contemplated thereby have
been duly authorized by proper corporate or other organizational
proceedings as to such party.
(b) We have assumed without any independent investigation (i) that
each of the Operative Documents is a valid, binding and enforceable
obligation of each party thereto other than State Street or the Indenture
Trustee, as applicable, and (ii) that each of the Operative Documents is a
valid, binding and enforceable obligation of State Street or the Indenture
Trustee, as applicable, to the extent that laws other than those of the
Commonwealth of Massachusetts are relevant thereto (other than the laws of
the United States of America, but only to the limited extent the same may
be applicable to State Street or the Indenture Trustee, as applicable, and
relevant to our opinions expressed below).
(c) The enforcement of any obligations of State Street or the
Indenture Trustee, as applicable, under any of the Operative Documents may
be limited by the receivership, conservatorship and supervisory powers of
bank regulatory agencies generally, as well as by bankruptcy, insolvency,
reorganization, moratorium, marshaling or other laws and rules of law
affecting the enforcement generally of creditors' rights and remedies
(including such as may deny giving effect to waivers of debtors' or
guarantors' rights); and we express no opinion as to the status under any
fraudulent conveyance laws or fraudulent transfer laws of any of the
obligations of State Street or the Indenture Trustee, as applicable, under
any of the Operative Documents.
(d) We express no opinion as to the availability of any specific or
equitable relief of any kind.
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -4- ___________ __,___
(e) The enforcement of any rights may in all cases be subject to an
implied duty of good faith and fair dealing and to general principles of
equity (regardless of whether such enforceability is considered in a
proceeding at law or in equity) and, as to any rights to collateral
security, will be subject to a duty to act in a commercially reasonable
manner.
(f) We express no opinion as to the enforceability of any particular
provision of any of the Operative Documents relating to (i) waivers of
rights to object to jurisdiction or venue, or consents to jurisdiction or
venue, (ii) waivers of rights to (or methods of) service of process, or
rights to trial by jury, or other rights or benefits bestowed by operation
of law, (iii) waivers of any applicable defenses, setoffs, recoupments, or
counterclaims, (iv) the grant of powers of attorney to any person or
entity, (v) exculpation or exoneration clauses, indemnity clauses, and
clauses relating to releases or waivers of unmatured claims or rights,
(vi) the imposition or collection of interest on overdue interest or
providing for a penalty rate of interest or late charges on overdue or
defaulted obligations, or the payment of any premium, liquidated damages,
or other amount which may be held by any court to be a "penalty" or a
"forfeiture," or (vii) so-called "usury savings clauses" purporting to
specify methods of (or otherwise assure) compliance with usury laws or
other similar laws of any jurisdiction.
(g) We express no opinion as to the effect of events occurring,
circumstances arising, or changes of law becoming effective or occurring,
after the date hereof on the matters addressed in this opinion letter, and
we assume no responsibility to inform you of additional or changed facts,
or changes in law, of which we may become aware.
(h) No opinion is given herein as to the effect of usury laws (or
other similar laws) of any jurisdiction with respect to the Operative
Documents.
This opinion is rendered solely for the benefit of those
institutions listed on Schdule A hereto and their successors and assigns in
connection with the transactions contemplated by the Operative Documents and may
not be used or relied upon by any other person or for any other purpose.
1. State Street is a Massachusetts trust company, validly formed and
authorized to operate as a state-chartered trust company under the laws of the
Commonwealth of Massachusetts and, in its individual capacity or as Indenture
Trustee, as the case may be, has the requisite corporate and trust power and
authority to execute, deliver and perform its obligations under the Operative
Documents and in its capacity as Indenture Trustee, to authenticate the Secured
Certificates to be delivered on the Delivery Date.
2. State Street, in its individual capacity or as Indenture Trustee,
as the case may be, has duly authorized by all necessary corporate action the
Operative Documents
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -5- ___________ __,___
and has duly executed and delivered the Operative Documents, and the Operative
Documents constitute valid and binding obligations of State Street, in its
individual capacity or as Indenture Trustee, as the case may be, enforceable
against State Street, in its individual capacity or as Indenture Trustee, as the
case may be, in accordance with their respective terms.
3. The Secured Certificates to be issued and dated the Delivery Date
have been duly authenticated and delivered by State Street as Indenture Trustee
pursuant to the terms of the Indenture.
4. The authorization, execution, delivery and performance by State
Street, in its individual capacity or as Indenture Trustee, as the case may be,
of the Operative Documents and the consummation of the transactions therein
contemplated and compliance with the terms thereof do not and will not result in
the violation of the provisions of the charter documents or by-laws of State
Street and, to the best of our knowledge, do not conflict with, or result in a
breach of any terms or provisions of, or constitute a default under, or result
in the creation or the imposition of any lien, charge or encumbrance upon any
property or assets of State Street under any indenture, mortgage or other
agreement or instrument, in each case known to us, to which State Street is a
party or by which it is bound, or violates any applicable Massachusetts or
federal law, rule or regulation governing State Street's banking or trust
powers, or, to the best of our knowledge, of any judgment, order or decree, in
each case known to us, applicable to State Street of any court, regulatory body,
administrative agency, government or governmental body having jurisdiction over
State Street.
5. No authorization, approval, consent, license or order of, giving
of notice to, registration with, or taking of any other action in respect of,
any federal or state governmental authority or agency pursuant to any federal or
Massachusetts law governing the banking or trust powers of State Street is
required for the authorization, execution, delivery and performance by State
Street, in its individual capacity or as Indenture Trustee, as the case may be,
of the Operative Documents or the consummation of any of the transactions by
State Street, in its individual capacity or as Indenture Trustee, as the case
may be, contemplated thereby (except as shall have been duly obtained, given or
taken); and such authorization, execution, delivery, performance, consummation
and issuance do not conflict with or result in a breach of the provisions of any
such law.
6. There are no taxes, fees or other governmental charges payable
under the laws of the Commonwealth of Massachusetts or any political subdivision
of such State in connection with the execution and delivery by State Street, in
its individual capacity or as Indenture Trustee, as the case may be, of the
Operative Documents (except for taxes on any fees payable to State Street in its
individual capacity) which would not have been imposed if State Street did not
have its principal place of business in Massachusetts or did not perform its
administrative duties under the Operative Documents in Massachusetts, and there
are no Taxes under the laws of the Commonwealth of Massachusetts or any
political subdivision thereof (except for Taxes on any fees payable to State
Street in its individual capacity) upon or with
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -6- ___________ __,___
respect to the Aircraft or any Engine or any part of any interest therein, or
the purchase, ownership, delivery, lease, sublease, possession, presence, use,
operation, condition, storage, maintenance, modification, alteration, repair,
sale, return, transfer or other disposition of the Aircraft or any Engine which
would not have been imposed if State Street did not have its principal place of
business in Massachusetts or did not perform its administrative duties under the
Operative Documents in Massachusetts.
7. To our knowledge, but without having investigated any
governmental records or court dockets, and without having made any other
independent investigation, there are no proceedings pending or overtly
threatened in writing against or affecting State Street in any court or before
any governmental authority, agency, arbitration board or tribunal which, if
adversely determined, individually or in the aggregate, could reasonably be
expected to affect materially and adversely the trust related to the Indenture
or affect the right, power and authority of State Street, in its individual
capacity or as Indenture Trustee, as the case may be, to enter into or perform
its obligations under the Operative Documents.
Very truly yours,
▇▇▇▇▇▇▇ ▇▇▇▇ LLP
SCHEDULE A
State Street Bank and Trust Company
First Security Bank, National Association
[__________], as Owner Participant
Northwest Airlines, Inc.
Northwest Airlines Corporation
Standard & Poor's Ratings Services
▇▇▇▇▇'▇ Investors Service, Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Credit Suisse First Boston Corporation
ABN AMRO Incorporated
Chase Securities Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
Exhibit I to Participation Agreement
[Form of CW&T 1110 Opinion]
[Date]
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO
Re: Northwest Airlines, Inc.
Opinion of Special Counsel to Lessee Concerning
Section 1110 of the Federal Bankruptcy Code
Gentlemen:
We have acted as special counsel for Northwest Airlines, Inc., a
Minnesota corporation ("Lessee"), in connection with the transactions
contemplated by the Participation Agreement [NW 1999 ___], dated as of
[____________] (the "Participation Agreement"), among Lessee, Northwest Airlines
Corporation, as Guarantor, First Security Bank, National Association, as Owner
Trustee under the Trust Agreement referred to therein, State Street Bank and
Trust Company, as Pass Through Trustee under each of the Pass Through Trust
Agreements referred to therein, the Owner Participant named therein, State
Street Bank and Trust Company, as Subordination Agent, and State Street Bank and
Trust Company, as Indenture Trustee under the Indenture referred to therein.
Capitalized terms used herein without definitions shall have the respective
meanings ascribed to them in or by reference to the Participation Agreement,
unless the context otherwise requires. This opinion is delivered pursuant to
Section 4(a)(xxiii) of the Participation Agreement. As used herein, the term
"Airframe" shall mean the Boeing 747-451 Airframe bearing U.S. Registration No.
N[________] and Manufacturer's Serial No. [______], the term "Engines" shall
mean the four ▇▇▇▇▇ & Whitney Model PW4056 Engines bearing manufacturer's Serial
Nos. [____], [____], [____] and [____], and the term "Aircraft" shall mean the
Airframe and the Engines, collectively, but expressly excludes any portion of
the Aircraft that does not constitute an aircraft, aircraft engine, appliance,
or spare part as such terms are defined in section 40102 of title 49 of the
United States Code.
In acting as such special counsel, we have examined, among other
things, with respect to the Aircraft, executed counterparts of the Participation
Agreement, Purchase Agreement Assignment, Trust Agreement, Trust Indenture,
Trust Supplement, Lease, Lease Supplement, ▇▇▇▇ of Sale, FAA ▇▇▇▇ of Sale,
Guarantee and Secured Certificates. As to any facts material to our opinions
expressed herein, we have, without independent investigation,
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -2- ___________ __,___
relied upon the representations and warranties contained in the Operative
Documents (including, without limitation, in Sections 7 and 8 of the
Participation Agreement and certificates of officers of the Lessee including,
without limitation, the certificate of an officer of the Lessee delivered
pursuant to Section 4(a)(ix) of the Participation Agreement and the certificate
of an officer of the Lessee in the form attached as Exhibit A hereto) and upon
originals or copies (certified or otherwise identified to our satisfaction) of
such corporate records, documents and other instruments as, in our judgment, are
necessary or appropriate to enable us to render this opinion. We have also
assumed, and have not independently verified, the genuineness of all signatures,
the authenticity of all documents submitted to us as originals, the conformity
with the originals of all documents submitted to us as copies, and the accuracy
of all factual statements of parties made on or before the date hereof (and have
relied thereon as we have deemed appropriate). We have delivered to you today
our opinion of even date herewith as to, among other things, the enforceability
of certain of the Operative Documents against the Lessee. This Opinion is
subject to the same assumptions, exceptions, limitations and qualifications set
forth therein and is given in reliance on the same matters, including opinion
letters, as are stated to be relied on therein.
You have requested our opinion as to whether the Owner Trustee, as
Lessor under the Lease, and the Indenture Trustee, as assignee of the Owner
Trustee's rights under the Lease pursuant to the Trust Indenture, would be
entitled to the benefits of section 1110 ("Section 1110") of title 11 of the
United States Code (the "Bankruptcy Code") if the Lessee were to become a debtor
in a case under chapter 11 of the Bankruptcy Code.
ASSUMPTIONS
The opinions expressed herein are based upon and subject to the
assumed compliance by the relevant parties, at all relevant times, with the
assumptions set forth herein and the assumption that all matters relied on
herein continue to be true and that there are no and will not be any amendments
to the Operative Documents or additional facts of which we are not aware which
would be material to a court's decision on this issue.
We have assumed, in addition to the assumptions set forth above,
that:
(i) the Owner Trustee will continue to be the registered owner of
the Aircraft, subject to the security interest of the Indenture Trustee;
(ii) the Lessee is and will continue to be a citizen of the United
States (as defined in section 40102 of title 49 of the United States Code)
holding an air carrier operating certificate issued by the Secretary of
Transportation pursuant to chapter 447 of title 49 of the United States
Code for aircraft capable of carrying 10 or more individuals or 6,000
pounds or more of cargo;
(iii) the Trust Indenture constitutes the legal, valid and binding
obligation of the Owner Trustee in accordance with its terms, except as
enforcement thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -3- ___________ __,___
laws affecting the rights of creditors generally and general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law) and the Trust Indenture is effective to
create a valid security interest in favor of the Indenture Trustee for the
benefit of the Loan Participants in the Owner Trustee's right, title and
interest under the Lease and that the Indenture Trustee has and will
continue to hold a perfected security interest in the Owner Trustee's
interest under the Lease; and
(iv) all Uniform Commercial Code financing statements and all
filings necessary under the recording system of the Federal Aviation Act
have been properly filed and duly recorded in all necessary places to
properly record the ownership interest of the Owner Trustee in the
Aircraft and to perfect the security interest of the Indenture Trustee in
the Owner Trustee's interest in the Lease.
DISCUSSION
The Aircraft was first placed in service after October 22, 1994.
Therefore the Aircraft is within the scope of the provisions of Section 1110.
CONCLUSION
Based upon the foregoing, and subject to the assumptions and
qualifications contained herein, it is our opinion that if the Lessee were to
become a debtor under chapter 11 of the Bankruptcy Code, the Owner Trustee as
Lessor under the Lease, and the Indenture Trustee for the benefit of the Loan
Participants, as assignee of the Owner Trustee's rights under the Lease pursuant
to the Trust Indenture, would be entitled to the benefits of Section 1110 with
respect to the Airframe and the Engines but may not be entitled to such benefits
with respect to any replacement of the Aircraft after an Event of Loss in the
future.
QUALIFICATIONS
Section 1110 was amended effective October 22, 1994. Our opinion
respecting Section 1110 is based solely on the assumptions set forth herein, our
review of the language of Section 1110 as currently in effect, a review of the
legislative history of the Bankruptcy Reform Act of 1994(1) and a review of the
cases decided under the former version of Section 1110. We are not aware of any
judicial decisions interpreting the amendments to Section 1110 enacted in the
Bankruptcy Reform Act of 1994 that are directly applicable to the facts and
circumstances present in this transaction. Accordingly, our opinion is not based
on directly applicable judicial precedent, but rather on what we believe to be a
sound analysis of such authorities as exist. We call to your attention, however,
the decision of the United States District Court for the District of Colorado in
Western Pacific Airlines, Inc. v. GATX Capital
----------
(1) Pub. L. 103-394.
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -4- ___________ __,___
(In re Western Pacific Airlines, Inc.), 219 B.R. 305, on rehearing, 221 B.R. 1
(D. Colo. 1998) where the District Court concluded that the relief provided by
Section 1110 is relevant only if the debtor does not satisfy the conditions set
forth in Section 1110(a)(l)(A) and (B) during the first 60 days of the
bankruptcy case. Thus, in the District Court's view, once the debtor satisfies
those conditions, all rights and obligations in connection with subsequent
defaults are governed by the more general provisions of the Bankruptcy Code. We
believe that this decision construes Section 1110 in a manner that is
inconsistent with both the language of Section 1110 and the legislative history
explaining the purpose and operation of Section 1110. Accordingly, we believe
that the decision is an incorrect interpretation of Section 1110.
We express no opinion concerning whether any collateral consisting
of proceeds or any substitute or replacement airframe, engine or part would have
the benefits of Section 1110.
We express no opinion as to the availability or effect of a
preliminary injunction, temporary restraining order or other such temporary
relief, nor do we express any opinion, either implicitly or otherwise, with
respect to any subject not addressed expressly in the Conclusion.
We express no opinion as to the availability of Section 1110 with
respect to any bankruptcy proceedings of any possible sublessee of an Aircraft
which may be subleased by the Lessee. We are admitted to practice in the State
of New York, and we do not purport to be experts on, or to express any opinion
concerning, the laws of any jurisdiction other than the Federal laws of the
United States of America and the State of New York.
We express no opinions except as expressly set forth herein, and no
opinion is implied or may be inferred beyond the opinions expressly stated
herein. We assume no obligation to supplement the opinions expressed herein if
any applicable laws change after the date hereof or if we become aware of any
facts that might change such opinions after the date hereof.
This opinion is being delivered for your sole benefit, and no other
person or entity shall be entitled to rely upon this opinion without our express
written consent.
Very truly yours,
SCHEDULE A
[Owner Participant]
State Street Bank and Trust Company, as Pass Through Trustee
Northwest Airlines, Inc.
Standard & Poor's Ratings Services
▇▇▇▇▇'▇ Investors Service, Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Credit Suisse First Boston Corporation
ABN AMRO Incorporated
Chase Securities Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
EXHIBIT A
NORTHWEST AIRLINES, INC.
OFFICER'S CERTIFICATE
In connection with the opinion dated [______________ ___, ___I (the
"Opinion"), a copy of which is attached hereto as Exhibit A and which relates to
one Boeing 74-451 airframe FAA Registration No. N[______] and MSN [______], and
▇▇▇▇▇ & Whitney Model PW4056 engine MSN [______], and ▇▇▇▇▇ & ▇▇▇▇▇▇▇ Model
PW4056 engine MSN [______], ▇▇▇▇▇ & Whitney Model PW4056 engine MSN [______],
and ▇▇▇▇▇ & ▇▇▇▇▇▇▇ Model PW4056 engine MSN [______] (collectively, the
"Aircraft"), to be delivered by Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇ ("CW&T") to the
parties identified therein in connection with the execution and delivery of
certain of the Operative Documents (as defined in the Participation Agreement as
defined in the Opinion), I, [____________], [____________] of Northwest
Airlines, Inc., do hereby certify that:
1. I understand that CW&T is relying on this Certificate in
connection with the execution and delivery of the Opinion.
2. To the best of my knowledge, information and belief, after due
inquiry, the assumptions contained in the section of the Opinion entitled
"Assumptions" are true and correct as of the date hereof.
3. I have no reason to believe that any statement, fact, or opinion
expressed in the Opinion is untrue, inaccurate or incomplete in any respect.
4. To the best of my knowledge, information and belief, after due
inquiry, all of the statements, representations, warranties, agreements,
disclosures and other information furnished by Northwest, Airlines, Inc. and
contained in the Operative Documents and other documents delivered in connection
with this transaction are true, accurate and complete in all respects.
5. Northwest Airlines, Inc. intends that, as Lessee under the Lease,
the Owner Trustee, and as assignee of the Owner Trustee's rights under the
Lease, the Indenture Trustee, for the benefit of the Loan Participants (as such
terms are defined in the Participation Agreement), be entitled to the benefits
of 11 U.S.C. ss. 1110 with respect to the Aircraft.
6. The Aircraft was first placed in service after October 22, 1994.
7. I have been duly authorized by Northwest Airlines, Inc. to
execute and deliver this Certificate to CW&T.
Dated:[__________ __, __]
NORTHWEST AIRLINES, INC.
By:
--------------------------------
Name:
Title:
Exhibit ▇-▇ to Participation Agreement
[Form of Opinion of ▇▇▇▇▇▇▇ ▇▇▇▇ LLP,
special counsel for the Pass Through Trustee]
_____________________, 1999
TO THE PARTIES SET FORTH
IN SCHEDULE A HERETO
RE: Northwest Airlines, Inc./Leveraged Lease Financing of One Boeing
747-451 Aircraft [NW 1999____]
Ladies and Gentlemen:
We have acted as special counsel for State Street Bank and Trust
Company in its individual capacity ("State Street") and as Pass Through Trustee
(the "Pass Through Trustee") under the Pass Through Trust Agreement dated as of
June 3, 1996, among Northwest Airlines Holdings Corporation (formerly known as
Northwest Airlines Corporation, "Holdings"), Northwest Airlines, Inc. and State
Street, as amended by the Supplemental Agreement, dated as of November 20, 1998,
among Northwest Airlines, Inc., Northwest Airlines Corporation, Holdings and
State Street, as supplemented by Trust Supplement ▇▇. ▇▇▇▇-▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇. ▇▇▇▇-▇▇ and Trust Supplement No. 1999-1C, each dated as of February 16, 1999
and each among Northwest Airlines, Inc., Northwest Airlines Corporation,
Holdings and State Street (collectively, the "Pass Through Trusts" and,
individually a "Pass Through Trust") in connection with the execution and
delivery of the Participation Agreement [NW 1999__] dated as of [______] (the
"Participation Agreement") by and among State Street, as Indenture Trustee,
Northwest Airlines, Inc., as Lessee (the "Lessee"), Northwest Airlines
Corporation (the "Guarantor"), [_______], as Owner Participant, State Street, as
Pass Through Trustee, State Street, as Subordination Agent (the "Subordination
Agent") and First Security Bank, National Association, as Owner Trustee and the
transactions contemplated thereby. Capitalized terms not otherwise defined
herein shall have the meanings specified in the Lease and Section 13 of the
Participation Agreement. This opinion is being delivered pursuant to Section
4(a)(xxiv) of the Participation Agreement.
Our representation of State Street and the Pass Through Trustee has
been as special counsel for the limited purposes stated above. As to all matters
of fact (including factual conclusions and characterizations and descriptions of
purpose, intention or other state of mind), we have relied, with your
permission, entirely upon (i) the representations and warranties of the parties
set forth in the Operative Documents and (ii) certificates delivered to us by
the management of State Street and have assumed, without independent inquiry,
the accuracy of those representations, warranties and certificates.
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -2- ___________ __,___
We have examined the Participation Agreement, the Liquidity Facility
for each of the Class A, Class B, and Class C Trusts, the Intercreditor
Agreement, the Note Purchase Agreement, the Escrow and Paying Agent Agreements
each dated as of February 16, 1999 and each among First Security Bank, National
Association, as Escrow Agent, the underwriters named therein, State Street, as
Pass Through Trustee and State Street, as Paying Agent and each of the Pass
Through Trusts (together, the "Operative Documents"), the Certificate of the
Massachusetts Commissioner of Banks relating to State Street and originals, or
copies certified or otherwise identified to our satisfaction, of such other
records, documents, certificates, or other instruments as we have deemed
necessary or advisable for the purposes of this opinion. For purposes of our
opinion rendered in paragraph 1 below, with respect to the authority of State
Street to operate as a state-chartered trust company and exercise trust powers,
our opinion relies upon and is limited by such Certificate of the Massachusetts
Commissioner of Banks.
We have assumed the genuineness of all signatures (other than those
on behalf of State Street and the Pass Through Trustee), the conformity to the
originals of all documents reviewed by us as copies, and the authenticity and
completeness of all original documents reviewed by us in original or copy form
and the legal competence of each individual executing any document (other than
on behalf of State Street and the Pass Through Trustee).
When an opinion set forth below is given to the best of our
knowledge, or to our knowledge, or with reference to matters of which we are
aware or which are known to us, or with another similar qualification, the
relevant knowledge or awareness is limited to the actual knowledge or awareness
of the individual lawyer in the firm that signed this opinion, the individual
lawyers in the firm who have participated directly in the specific transactions
to which this opinion relates and the partner of the firm responsible for State
Street corporate trust matters, and without any special or additional
investigation undertaken for the purposes of this opinion.
Subject to the limitation set forth below, we have made such
examinations of law as we have deemed necessary for the purposes of this
opinion. The opinions set forth below are limited solely to the internal
substantive laws of the Commonwealth of Massachusetts as applied by courts
located in Massachusetts and the federal laws of the United States. No opinion
is given herein as to the choice of law or internal substantive rules of law
that any court or other tribunal may apply to the transactions contemplated by
the Operative Documents. No opinion is expressed herein as to the application or
effect of federal securities laws or as to the securities or so-called "Blue
Sky" laws of any state or other jurisdiction. In addition, no opinion is
expressed as to matters governed by any law, statute, rule or regulation of the
United States relating to the acquisition, ownership, registration, use,
operation, maintenance, repair, replacement or sale of or the nature of the
Aircraft.
To the extent to which this opinion deals with matters governed by
or relating to the laws of the State of New York, or other jurisdictions other
than the Commonwealth of Massachusetts, by which the Operative Documents are
stated to be governed, we have
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -3- ___________ __,___
assumed, with your permissions that the Operative Documents are governed by the
internal substantive laws of the Commonwealth of Massachusetts.
Our opinion is further subject to the following exceptions,
qualifications and assumptions:
(a) We have assumed without independent investigation that (i) each
party to the Operative Documents, other than State Street, in its
individual capacity or as Pass Through Trustee, as applicable, at all
times relevant thereto, is validly existing and in good standing under the
laws of the jurisdiction in which it is organized, and is qualified to do
business and in good standing under the laws of each jurisdiction where
such qualification is required generally or necessary in order for such
party to enforce its rights under such Operative Documents, and (ii) each
party to the Operative Documents, at all times relevant thereto, had and
has the full power, authority and legal right under its certificate of
incorporation, partnership agreement, by-laws, and other governmental
organizational documents, and the applicable corporate, partnership, or
other enterprise legislation and other applicable laws, as the case may be
(other than State Street and the Pass Through Trustee with respect to the
laws of the United States of America and the internal substantive laws of
the Commonwealth of Massachusetts, but only in each case to the limited
extent the same may be applicable to State Street or the Pass Through
Trustee, and relevant to our opinions expressed below) to execute, and to
perform its obligations under, the Operative Documents, and (iii) each
party to the Operative Documents (other than State Street or the Pass
Through Trustee, as applicable) has duly executed and delivered each of
such agreements and instruments to which it is a party and that (other
than with respect to State Street and the Pass Through Trustee, as
applicable) the execution and delivery of such agreements and instruments
and the transactions contemplated thereby have been duly authorized by
proper corporate or other organizational proceedings as to such party.
(b) We have assumed without any independent investigation (i) that
each of the Operative Documents is a valid, binding and enforceable
obligation of each party thereto other than State Street or the Pass
Through Trustee, as applicable, and (ii) that each of the Operative
Documents is a valid, binding and enforceable obligation of State Street
or the Pass Through Trustee, as applicable, to the extent that laws other
than those of the Commonwealth of Massachusetts are relevant thereto
(other than the laws of the United States of America, but only to the
limited extent the same may be applicable to State Street or the Pass
Through Trustee, as applicable, and relevant to our opinions expressed
below).
(c) The enforcement of any obligations of State Street or the Pass
Through Trustee, as applicable, under any of the Operative Documents may
be limited by the receivership, conservatorship and supervisory powers of
bank regulatory agencies generally, as well as by bankruptcy, insolvency,
reorganization, moratorium, marshaling or other laws and rules of law
affecting the enforcement generally of
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -4- ___________ __,___
creditors' rights and remedies (including such as may deny giving effect
to waivers of debtors' or guarantors' rights); and we express no opinion
as to the status under any fraudulent conveyances laws or fraudulent
transfer laws of any of the obligations of State Street or the Pass
Through Trustee, as applicable, under any of the Operative Documents.
(d) We express no opinion as the availability of any specific or
equitable relief of any kind.
(e) The enforcement of any rights may in all cases be subject to an
implied duty of good faith and fair dealing and to general principles of
equity (regardless of whether such enforceability is considered in a
proceeding at law or in equity) and, as to any rights to collateral
security, will be subject to a duty to act in a commercially reasonable
manner.
(f) We express no opinion as to the enforceability of any particular
provision of any of the Operative Documents relating to the (i) waivers of
rights to object to jurisdiction or venue, or consents to jurisdiction or
venue, (ii) waivers of rights to (or methods of) service of process, or
rights to trial by jury, or other rights or benefits bestowed by operation
of law, (iii) waivers of any applicable defenses, setoffs, recoupments, or
counterclaims, (iv) the grant of powers of attorney to any person or
entity, (v) exculpation or exoneration clauses, indemnity clauses, and
clauses relating to release or waivers of unmatured claims or rights, (vi)
the imposition or collection of interest on overdue interest or providing
for penalty rate of interest or late charges on overdue or defaulted
obligations, or the payment of any premium, liquidated damages, or other
amount which maybe held by any court to be a "penalty" or a "forfeiture"
or (vii) so-called "usury savings clauses" purporting to specify methods
of (or otherwise assure) compliance with usury laws or other similar laws
of any jurisdiction.
(g) We express no opinion as to the effect of events occurring,
circumstances arising, or change of law becoming effective or occurring,
after the date hereof on the matters addressed in this opinion letter, and
we assume no responsibility to inform you of additional or changed facts,
or changes in law, of which we may become aware.
(h) No opinion is given herein as to the effect of usury laws (or
other similar laws) of any jurisdiction with respect to the Operative
Documents.
In rendering the opinion set forth below in paragraph 6 as to
certain Massachusetts tax matters, we have assumed that, for federal income tax
purposes, the trust created by the Trust Agreement will not be taxable as a
corporation, but rather, will be classified as a grantor trust under subpart E,
Part I of Subchapter J of Chapter 1 of Subtitle A of the Internal Revenue Code
of 1986, as amended.
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -5- ___________ __,___
This opinion is rendered solely for the benefit of those
institutions listed on Schedule A hereto and their successors and assigns in
connection with the transactions contemplated by the Operative Documents and may
not be used or relied upon by any other person or for any other purpose.
1. State Street is a Massachusetts trust company, validly formed and
authorized to operate as a state-chartered trust company under the laws of the
Commonwealth of Massachusetts and, in its individual capacity or as Pass Through
Trustee, as the case may be, has or had, as the case may be, the requisite
corporate and trust power and authority to execute, deliver and perform its
obligations under the Operative Documents and in its capacity as Pass Through
Trustee, to issue and execute the Certificates delivered on the Issuance Date.
2. State Street, in its individual capacity or as Pass Through
Trustee, as the case may be, has duly authorized by all necessary corporate
action the Operative Documents and has duly executed and delivered the Operative
Documents, and the Operative Documents constitute valid and binding obligations
of State Street, in its individual capacity or as Pass Through Trustee, as the
case may be, enforceable against State Street, in its individual capacity or as
Pass Through Trustee, as the case may be, in accordance with their respective
terms.
3. The Certificates issued and dated the Issuance Date have been
duly issued, authenticated and delivered by State Street as Pass Through Trustee
pursuant to the terms of the Operative Documents and are enforceable against the
Pass Through Trustee and are entitled to the benefits of the applicable Pass
Through Trust.
4. The authorization, execution, delivery and performance by State
Street, it its individual capacity or as Pass Through Trustee, as the case may
be, of the Operative Documents and the consummation of the transactions therein
contemplated and compliance with the terms thereof do not and will not result in
the violation of the provisions of the charter documents or by-laws of State
Street and, to the best of our knowledge, do not conflict with, or result in a
breach of any terms or provisions of, or constitute a default under, or result
in the creation or the imposition of any lien, charge or encumbrance upon any
property or assets of State Street under any indenture, mortgage or other
agreement or instrument, in each case known to us, to which State Street is a
party or by which it is bound, or violates any applicable Massachusetts or
federal law, rule or regulation governing State Street's banking or trust
powers, or, to the best of our knowledge, of any judgment, order or decree, in
each case known to us, applicable to State Street of any court, regulatory body,
administrative agency, government or governmental body having jurisdiction over
State Street.
5. No authorization, approval, consent, license or order of, giving
of notice to, registration with, or taking of any other action in respect of,
any federal or state governmental authority or agency pursuant to any federal or
Massachusetts law governing the banking or trust powers of State Street is
required for the authorization, execution, delivery and performance by State
Street, in its individual capacity or as Pass Through Trustee, as the
TO THE ADDRESSEES LISTED
ON SCHEDULE A HERETO -6- ___________ __,___
case may be, of the Operative Documents or the consummation of any of the
transactions by State Street, in its individual capacity or as Pass Through
Trustee, as the case may be, contemplated thereby (except as shall have been
duly obtained, given or taken); and such authorization, execution, delivery,
performance, consummation and issuance do not conflict with or result in a
breach of the provisions of any such law.
6. There are no taxes, fees or other governmental charges payable
under the laws of the Commonwealth of Massachusetts or any political subdivision
of such State in connection with the execution and delivery by State Street, it
its individual capacity or as Pass Through Trustee, as the case may be, of the
Operative Document (except for taxes on any fees payable to State Street in its
individual capacity) or in connection with the issuance, execution and delivery
of the Certificates by State Street, as Pass Through Trustee, pursuant to the
Pass Through Trusts which would not have been imposed if State Street did not
have its principal place of business in Massachusetts or did not perform its
administrative duties under the Operative Documents in Massachusetts. Neither
State Street, in its individual capacity or as the Indenture Trustee, as the
case may be, the Owner Participant, the Owner Trustee, nor the trust created by
the Trust Agreement will, as a result of the transactions contemplated thereby,
be subject to any Taxes under the laws of the Commonwealth of Massachusetts or
any political subdivision thereof (except for Taxes on any fees payable to State
Street in its individual capacity) which would have not been imposed if State
Street did not have its principal place of business in Massachusetts or did not
perform its administrative duties under the Operative Documents in
Massachusetts, and there are no Taxes under the laws of the Commonwealth of
Massachusetts or any political subdivision thereof (except for Taxes on any fees
payable to State Street in its individual capacity) upon or with respect to the
Aircraft or any Engine or any part of any interest therein, or the purchase,
ownership, delivery, lease, sublease, possession, presence, use, operation,
condition, storage, maintenance, modification, alteration, repair, sale, return,
transfer or other disposition of the Aircraft or any Engine which would not have
been imposed if State Street did not have its principal place of business in
Massachusetts or did not perform its administrative duties under the Operative
Documents in Massachusetts.
7. To our knowledge, but without having investigated any
governmental records or court dockets, and without having made any other
independent investigation, there are no proceedings pending or overtly
threatened in writing against or affecting State Street in any court or before
any governmental authority, agency, arbitration board or tribunal which, if
adversely determined, individually or in the aggregate, could reasonably be
expected to affect materially and adversely the trust related to the Indenture
or affect the right, power and authority of State Street, in its individual
capacity or as Pass Through Trustee, as the case may be, to enter into or
perform its obligations under the Operative Documents.
Very truly yours,
▇▇▇▇▇▇▇ ▇▇▇▇ LLP
SCHEDULE A
State Street Bank and Trust Company
First Security Bank, National Association
[__________________], as Owner Participant
Northwest Airlines, Inc.
Northwest Airlines Corporation
Standard & Poor's Ratings Services
▇▇▇▇▇'▇ Investors Service, Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Credit Suisse First Boston Corporation
ABN AMRO Incorporated
Chase Securities Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
Exhibit J-2 to Participation Agreement
[Form of Opinion of ▇▇▇▇▇▇▇, ▇▇▇▇ LLP,
special counsel for the Subordination Agent]
____________, 1999
TO THE PARTIES SET FORTH
IN SCHEDULE A HERETO
Re: Northwest Airlines, Inc./Leveraged Lease Financing of One Boeing
747-451 Aircraft [NW 1999____]
Ladies and Gentlemen:
We have acted as special counsel for State Street Bank and Trust
Company in its individual capacity ("State Street") and as Subordination Agent
(the "Subordination Agent") under the Intercreditor Agreement dated as of
February 16, 1999 (the "Intercreditor Agreement") among State Street in its
capacity as Trustee under the Northwest Airlines Pass Through Trust ▇▇▇▇-▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ Through Trust 1999-lB and Northwest Airlines Pass
Through Trust 1999-1C, Citibank, N.A., as Class A Liquidity Provider, Class B
Liquidity Provider and Class C Liquidity Provider, and State Street, as
Subordination Agent in connection with the execution and delivery of the
Participation Agreement [NW 1999 ____] dated as of [__________] (the
"Participation Agreement") by and among State Street, as Subordination Agent,
Northwest Airlines, Inc., as Lessee (the "Lessee"), Northwest Airlines
Corporation (the "Guarantor"), [_________], as Owner Participant, State Street,
as Pass Through Trustee (the "Pass Through Trustee"), State Street, as
Subordination Agent and First Security Bank, National Association, as Owner
Trustee and the transactions contemplated thereby. Capitalized terms not
otherwise defined herein shall have the meanings specified in the Lease and
Section 13 of the Participation Agreement. This opinion is being delivered
pursuant to Section 4(a)(xxv) of the Participation Agreement.
Our representation of State Street and the Subordination Agent has
been as special counsel for the limited purposes stated above. As to all matters
of fact (including factual conclusions and characterizations and descriptions of
purpose, intention or other state of mind), we have relied, with your
permission, entirely upon (i) the representations and warranties of the parties
set forth in the Operative Documents and (ii) certificates delivered to us by
the management of State Street and have assumed, without independent inquiry,
the accuracy of those representations, warranties and certificates.
We have examined the Participation Agreement, the Note Purchase
Agreement and the Intercreditor Agreement (together, the "Operative Documents"),
the Certificate of the
Page 2
Massachusetts Commissioner of Banks relating to State Street and originals, or
copies certified or otherwise identified to our satisfaction, of such other
records, documents, certificates, or other instruments as we have deemed
necessary or advisable for the purposes of this opinion. For purposes of our
opinion rendered in paragraph 1 below, with respect to the authority of State
Street to operate as a state-chartered trust company and exercise trust powers,
our opinion relies upon and is limited by such Certificate of the Massachusetts
Commissioner of Banks.
We have assumed the genuineness of all signatures (other than those
on behalf of State Street and the Subordination Agent), the conformity to the
originals of all documents reviewed by us as copies, and the authenticity and
completeness of all original documents reviewed by us in original or copy form
and the legal competence of each individual executing any document (other than
on behalf of State Street and the Subordination Agent).
When an opinion set forth below is given to the best of our
knowledge, or to our knowledge, or with reference to matters of which we are
aware or which are known to us, or with another similar qualification, the
relevant knowledge or awareness is limited to the actual knowledge or awareness
of the individual lawyer in the firm that signed this opinion, the individual
lawyers in the firm who have participated directly in the specific transactions
to which this opinion relates and the partner of the firm responsible for State
Street corporate trust matters, and without any special or additional
investigation undertaken for the purposes of this opinion.
Subject to the limitation set forth below, we have made such
examination of law as we have deemed necessary for the purposes of this opinion.
The opinions set forth below are limited solely to the internal substantive laws
of the Commonwealth of Massachusetts as applied by courts located in
Massachusetts and the federal laws of the United States. No opinion is given
herein as to the choice of law or internal substantive rules of law that any
court or other tribunal may apply to the transactions contemplated by the
Operative Documents. No opinion is expressed herein as to the application or
effect of federal securities laws or as to the securities so-called "Blue Sky"
laws of any state or other jurisdiction. In addition, no opinion is expressed as
to matters governed by any law, statute, rule or regulation of the United States
relating to the acquisition, ownership, registration, use, operation,
maintenance, repair, replacement or sale of or the nature of the Aircraft.
To the extent to which this opinion deals with matters governed by
or relating to the laws of the State of New York, or other jurisdiction other
than the Commonwealth of Massachusetts, by which the Operative Documents are
stated to be governed, we have assumed, with your permission that the Operative
Documents are governed by the internal substantive laws of the Commonwealth of
Massachusetts.
Our opinion is further subject to the following exceptions,
qualifications and assumptions:
(a) We have assumed without any independent investigation that (i)
each party to the Operative Documents, other than State Street, in its
individual capacity or
Page 3
as Subordination Agent, as applicable, at all times relevant thereto, is
validly existing and in good standing under the laws of the jurisdiction
in which it is organized, and is qualified to do business and in good
standing under the laws of each jurisdiction where such qualification is
required generally or necessary in order for such party to enforce its
rights under such Operative Documents, and (ii) each party to the
Operative Documents, at all times relevant thereto, had and has the full
power, authority and legal right under its certificate of incorporation,
partnership agreement, by-laws, and other governing organizational
documents, and the applicable corporate, partnership, or other enterprise
legislation and other applicable laws, as the case may be (other than
State Street and the Subordination Agent with respect to the laws of the
United States of America and the internal substantive laws of the
Commonwealth of Massachusetts, but only in each case to the limited extent
the same may be applicable to State Street or the Subordination Agent, and
relevant to our opinions expressed below) to execute, and to perform its
obligations under, the Operative Documents, and (iii) each party to the
Operative Documents (other than State Street or the Subordination Agent,
as applicable) has duly executed and delivered each of such agreements and
instruments to which it is a party and that (other than with respect to
State Street and the Subordination Agent, as applicable) the execution and
delivery of such agreements and instruments and the transactions
contemplated thereby have been duly authorized by proper corporate or
other organizational proceedings as to such party.
(b) We have assumed without any independent investigation (i) that
each of the Operative Documents is a valid, binding and enforceable
obligation of each party thereto other than State Street or the
Subordination Agent, as applicable, and (ii) that each of the Operative
Documents is a valid, binding and enforceable obligation of State Street
or the Subordination Agent, as applicable, to the extent that laws other
than those of the Commonwealth of Massachusetts are relevant thereto
(other than the laws of the United States of America, but only to the
limited extent the same may be applicable to State Street or the
Subordination Agent, as applicable, and relevant to our opinions expressed
below).
(c) The enforcement of any obligations of State Street or the
Subordination Agent, as applicable, under any of the Operative Documents
may be limited by the receivership, conservatorship and supervisory powers
of bank regulatory agencies generally, as well as by bankruptcy,
insolvency, reorganization, moratorium, marshaling or other laws and rules
of law affecting the enforcement generally of creditors' rights and
remedies (including such as may deny giving effect to waivers of debtors'
or guarantors' rights); and we express no opinion as to the status under
any fraudulent conveyance laws or fraudulent transfer laws of any of the
obligations of State Street or the Subordination Agent, as applicable,
under any of the Operative Documents.
(d) We express no opinion as the availability of any specific or
equitable relief of any kind.
Page 4
(e) The enforcement of any rights may in all cases be subject to an
implied duty of good faith and fair dealing and to general principles of
equity (regardless of whether such enforceability is considered in a
proceeding at law or in equity) and, as to any rights to collateral
security, will be subject to a duty to act in a commercially reasonable
manner.
(f) We express no opinion as to the enforceability of any particular
provision of any of the Operative Documents relating to (i) waivers of
rights to object to jurisdiction or venue, or consents to jurisdiction or
venue, (ii) waivers of rights to (or methods of) service of process, or
rights to trial by jury, or other rights or benefits bestowed by operation
of law, (iii) waivers of any applicable defenses, setoffs, recoupments, or
counterclaims, (iv) the grant of power of attorney to any person or
entity, (v) exculpation or exoneration clauses, indemnity clauses, and
clauses relating to releases or waivers of unmatured claims or rights,
(vi) the imposition or collection of interest on overdue interest or
providing for a penalty rate of interest or late charges on overdue or
defaulted obligations, or the payment of any premium, liquidated damages,
or other amount which may be held by any court to be a "penalty" or a
"forfeiture," or (vii) so-called "usury savings clauses" purporting to
specify methods of (or otherwise assure) compliance with usury laws or
other similar laws of any jurisdiction.
(g) We express no opinion as to the effect of events occurring,
circumstances arising, or changes of law becoming effective or occurring,
after the date hereof on the matters addressed in this opinion letter, and
we assume no responsibility to inform you of additional or changed facts,
or changes in law, of which we may become aware.
(h) No opinion is given herein as to the effect of usury laws (or
other similar laws) of any jurisdiction with respect to the Operative
Documents.
This opinion is rendered solely for the benefit of those
institutions listed on Schedule A hereto and their successors and assigns in
connection with the transactions contemplated by the Operative Documents and may
not be used or relied upon by any other person or for any other purpose.
1. State Street is a Massachusetts trust company, validly formed and
authorized to operate as a state-chartered trust company under the laws of the
Commonwealth of Massachusetts and, in its individual capacity or as
Subordination Agent, as the case may be, has the requisite corporate and trust
power and authority to execute, deliver and perform its obligations under the
Operative Documents.
2. State Street, in its individual capacity or as Subordination
Agent, as the case may be, has duly authorized by all necessary corporate action
the Operative Documents and has duly executed and delivered the Operative
Documents, and the Operative Documents constitute valid and binding obligations
of State Street, in its individual capacity or as Subordination Agent, as the
case may be, enforceable against State Street, in its individual
Page 5
capacity or as Subordination Agent, as the case may be, in accordance with their
respective terms.
3. The authorization, execution, delivery and performance by State
Street, in its individual capacity or as Subordination Agent, as the case may
be, of the Operative Documents and the consummation of the transactions therein
contemplated and compliance with the terms thereof do not and will not result in
the violation of the provisions of the charter documents or by-laws of State
Street and, to the best of our knowledge, do not conflict with, or result in a
breach of any terms or provisions of, or constitute a default under, or result
in the creation or the imposition of any lien, charge or encumbrance upon any
property or assets of State Street under any indenture, mortgage or other
agreement or instrument, in each case known to us, to which State Street is a
party or by which it is bound, or violates any applicable Massachusetts or
federal law, rule or regulation governing State Street's banking or trust
powers, or, to the best of our knowledge, of any judgment, order or decree, in
each case known to us, applicable to State Street of any court, regulatory body,
administrative agency, government or governmental body having jurisdiction over
State Street.
4. No authorization, approval, consent, license or order of, giving
of notice to, registration with, or taking of any other action in respect of,
any federal or state governmental authority or agency pursuant to any federal or
Massachusetts law governing the banking or trust powers of State Street is
required for the authorization, execution, delivery and performance by State
Street, in its individual capacity or as Subordination Agent, as the case may
be, of the Operative Documents or the consummation of any of the transactions by
State Street, in its individual capacity or as Subordination Agent, as the case
may be, contemplated thereby (except as shall have been duty obtained, given or
taken); and such authorization, execution, delivery, performance, consummation
and issuance do not conflict with or result in a breach of the provisions of any
such law.
5. There are no taxes, fees or other governmental charges payable
under the laws of the Commonwealth of Massachusetts or any political subdivision
of such State in connection with the execution and delivery by State Street, in
its individual capacity or as Subordination Agent, as the case may be, of the
Operative Documents (except for taxes on any fees payable to State Street in its
individual capacity) which would not have been imposed if State Street did not
have its principal place of business in Massachusetts or did not perform its
administrative duties under the Operative documents in Massachusetts.
6. To our knowledge, but without having investigated any
governmental records or court dockets, and without having made any other
independent investigation, there are no proceedings pending or overtly
threatened in writing against or affecting State Street in any court or before
any governmental authority, agency, arbitration board of tribunal which, if
adversely determined, individually or in the aggregate, could reasonably be
expected to affect materially and adversely the trust related to the Indenture
or affect the right, power and authority of State Street, in its individual
capacity or as Subordination Agent, as the case may be, to enter into or perform
its obligations under the Operative Documents.
Page 6
7. Assuming that the Subordination Agent holds each of the Equipment
Notes delivered to and registered in its name pursuant to and as required by the
Intercreditor Agreement, it holds such Equipment Notes in trust as trustee for
the related Trustee in the exercise of the fiduciary powers conferred upon State
Street by Massachusetts law.
Very truly yours,
▇▇▇▇▇▇▇ ▇▇▇▇ LLP
Page 7
SCHEDULE A
State Street Bank and Trust Company
First Security Bank, National Association
[________________], as Owner Participant
Northwest Airlines, Inc.
Northwest Airlines Corporation
Standard & Poor's Ratings Services
▇▇▇▇▇'▇ Investors Service, Inc.
Citibank, ▇.▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Credit Suisse First Boston Corporation
ABN AMRO Incorporated
Chase Securities Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
EXHIBIT K
TO PARTICIPATION
AGREEMENT
[NW 1999___]
Section 7(b) - General Tax Indemnity
(b) General Tax Indemnity.
(i) Indemnity. Except as provided in Section 7(b)(ii) hereof, Lessee
shall pay, protect, save and on written demand shall indemnify and hold
harmless any Tax Indemnitee from and against any and all Taxes howsoever
imposed against any Tax Indemnitee, Lessee or the Aircraft, the Airframe,
any Engine or any Part thereof or interest therein by any Federal, state
or local government or other taxing authority in the United States or by
any foreign government or any political subdivision or taxing authority
thereof or by any territory or possession of the United States or by any
international authority ("Taxing Authority") upon or in connection with or
relating to (A) the construction, financing, refinancing, purchase,
acquisition, acceptance, rejection, delivery, nondelivery, transport,
ownership, registration, reregistration, insuring, assembly, possession,
repossession, operation, location, use, control, condition, maintenance,
repair, sale, return, abandonment, installation, storage, redelivery,
replacement, manufacture, leasing, subleasing, modification, rebuilding,
importation, transfer of title, transfer of registration, exportation or
other application or disposition of the Aircraft, the Airframe, any Engine
or any Part thereof or interest therein, (B) the rentals, receipts or
earnings from the Aircraft, the Airframe, any Engine or any Part, (C) any
amount paid or payable pursuant to any Operative Document or any document
related thereto or the property or the income or other proceeds with
respect to any of the property held in the Trust Estate or the Trust
Indenture Estate, (D) the Aircraft, the Airframe, any Engine or any Part,
(E) any or all of the Operative Documents, or the issuance of the Secured
Certificates (or the refinancing thereof) and any other documents
contemplated hereby or thereby and amendments and supplements hereto and
thereto or the execution, delivery or performance of any thereof or the
issuance, acquisition, modification, holding or subsequent transfer
thereof, (F) the payment of the principal of, or interest or Make-Whole
Amount or other premium on, or other amounts payable with respect to, the
Secured Certificates or the Pass Through Certificates, or (G) otherwise
with respect to or in connection with the transactions contemplated by the
Operative Documents.
(ii) Exclusions from General Tax Indemnity. The provisions of
Section 7(b)(i) shall not apply:
(1) with respect to any Tax Indemnitee to any Income Tax (as defined
in Section 7(d) hereof) imposed by (A) the United States Federal
government or (B) any U.S. state or local taxing jurisdiction;
(2) with respect to any Tax Indemnitee, to any Income Taxes imposed
by any foreign or international government, jurisdiction or taxing
authority or territory or possession of the United States except to the
extent that such Tax Indemnitee would be subject to such Income Tax if the
sole connection between such Tax Indemnitee and the Taxing Authority had
been the location and operation of the Aircraft or the activities of
Lessee or any sublessee within such Taxing Authority;
(3) to any capital gains taxes, excess profits taxes, value added
taxes, accumulated earnings taxes, personal holding company taxes,
succession taxes or estate or similar taxes;
(4) to any Tax imposed as a result of a transfer or disposition by a
Tax Indemnitee including, without limitation, the revocation of the trust
created by the Trust Agreement or a transfer or disposition of all or any
portion of its respective equitable or legal ownership interest in the
Aircraft, the Trust Estate, a Secured Certificate (including sales of
participations therein), the Trust Indenture Estate (as defined in the
Trust Indenture) or any Operative Document or any interest in such Tax
Indemnitee, unless such transfer or disposition shall occur (A) pursuant
to the exercise of remedies pursuant to Section 15 of the Lease or (B) in
connection with the termination of the Lease or the action or direction of
Lessee pursuant to Sections 9, 10 or 19 thereof;
(5) to any Tax based on or measured by any fees received by the
Owner Trustee, the Pass Through Trustee, the Indenture Trustee or any
Agent in connection with any transaction contemplated by the Operative
Documents;
(6) to any Tax imposed with respect to events occurring or matters
arising after the earlier of (x) the expiration of the Term or the earlier
termination of the Lease pursuant to Section 9 or 19 thereof, (y) the
return of possession of the Aircraft to the Owner Trustee or its designee
pursuant to the terms of the Lease or (z) the commencement of storage
pursuant to Section 5(d) of the Lease provided that this exclusion shall
not apply to Taxes to the extent such Taxes are imposed on or with respect
to any events or matters occurring or arising prior to such expiration,
termination, return of possession of the Aircraft or storage;
(7) to any Tax in the nature of an intangible or similar tax upon or
with respect to the value or principal amount of the interest of any Tax
Indemnitee in any of the Secured Certificates or in the Owner Trust;
EXHIBIT K - PAGE 2
(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 on (A) the Owner
Trustee, the Trust Estate or the Owner Participant but for, a Lessor Lien
(including, for this purpose, Liens which would be a Lessor Lien but for
the proviso in the definition of Lessor Liens) or (B) the Indenture
Trustee but for an Indenture Trustee's Lien, in each case with respect to
the Tax Indemnitee to whom such Lien is attributable;
(10) to any Tax to the extent such Tax would not have been imposed
but for a present or future connection between the Tax Indemnitee or any
Affiliate thereof and the jurisdiction imposing such Taxes (including,
without limitation, the Tax Indemnitee or an Affiliate thereof being or
having been a citizen or resident thereof, or being or having been
organized, present or engaged in a trade or business therein, or having or
having had, a permanent establishment or fixed place of business therein,
or engaging, or having engaged, in one or more transactions or activities
therein unrelated to the transactions contemplated by the Operative
Documents), other than a connection arising solely by reason of the
transactions contemplated by the Operative Documents;
(11) to any Tax imposed on a Tax Indemnitee to the extent imposed as
a result of such Tax Indemnitee's failure to comply with any
certification, information, documentation, reporting or similar procedure
that is required by law, treaty or regulation as a condition to the
allowance of any reduction in the rate of such Tax or any exemption or
other relief from such Tax;
(12) to any Tax on a Tax Indemnitee to the extent arising out of, or
caused by, or to the extent such Tax would not have been incurred but for,
(A) the willful misconduct or gross negligence of such Tax Indemnitee or
any of its Affiliates or (B) the inaccuracy or breach of any
representation, warranty, covenant or agreement by such Tax Indemnitee or
any of its Affiliates in any Operative Document;
(13) to any Tax on a Tax Indemnitee to the extent consisting of
interest, penalties, fines or additions to Tax resulting from the
negligence or willful misconduct of such Tax Indemnitee or any of its
Affiliates in connection with the filing of, or failure to file, any tax
return, the payment of, or failure to pay any Tax, or the conduct of any
proceeding in respect thereof unless resulting from the failure by Lessee
to perform its obligations under Section 7(b)(v) hereof; or
EXHIBIT K - PAGE 3
(14) to any excise tax imposed on any Tax Indemnitee under Section
4975 of the Internal Revenue Code as a result of the use by such Tax
Indemnitee or any of its Affiliates of the assets of an "employee benefit
plan" (as defined in Section 3(3) of ERISA) to purchase a Secured
Certificate, make an equity investment or otherwise acquire any interest
in the Trust Estate or any Secured Certificate.
(iii) Calculation of General Tax Indemnity Payments. Any payment which
Lessee shall be required to make to or for the account of any Tax Indemnitee
with respect to any Tax which is subject to indemnification under this Section
7(b) shall be in an amount which, after reduction by the amount of all Taxes
required to be paid by such Tax Indemnitee in respect of the receipt or accrual
of such amount and after consideration of any current savings of such Tax
Indemnitee resulting by way of any deduction, credit or other tax benefit
attributable to such indemnified Tax that actually reduces any Taxes for which
Lessee is not required to indemnify such Tax Indemnitee pursuant to this Section
7(b) or the Tax Indemnity Agreement, shall be equal to the payment otherwise
required hereunder.
If, by reason of any Tax payment made to or for the account of a Tax
Indemnitee by Lessee pursuant to this Section 7(b), such Tax Indemnitee or any
of its Affiliates subsequently realizes a tax deduction or credit (including a
foreign tax credit) not previously taken into account in computing such payment,
such Tax Indemnitee shall promptly pay to Lessee an amount equal to the sum of
(I) the actual reduction in Taxes, if any, realized by such Tax Indemnitee which
is attributable to such deduction or credit and (II) the actual reduction in
Taxes realized by such Tax Indemnitee as a result of any payment made by such
Tax Indemnitee pursuant to this sentence. For purposes of this Section
7(b)(iii), items of foreign Tax of any Tax Indemnitee shall be deemed to be
utilized by such Tax Indemnitee as credits or deductions for any taxable year in
accordance with the following priorities:
First, all available foreign Taxes for which such Tax
Indemnitee was not indemnified or held harmless by anyone;
Second, all available foreign Taxes for which such Tax
Indemnitee was indemnified or held harmless by Lessee, 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 Lessee is
deemed to be utilized pursuant to the ordering rules contained in this
paragraph, it shall
EXHIBIT K - PAGE 4
not subsequently be recharacterized as not having been utilized as a result of a
foreign tax liability arising in a subsequent year.
Any Taxes that are imposed on any Tax Indemnitee as a result of the
disallowance or reduction of any tax benefit referred to in this subsection as
to which such Tax Indemnitee has made in full the payment to Lessee required
hereby (or as to which such Tax Indemnitee would have made its payment but for
Section 7(b)(viii) or which tax benefit was otherwise taken into account in
computing Lessee's indemnity obligation pursuant to this Section 7) in a taxable
year subsequent to the utilization by such Tax Indemnitee shall be treated as a
Tax for which Lessee is obligated to indemnify such Tax Indemnitee pursuant to
the provisions of this Section 7(b), without regard to the exclusions set forth
in Section 7(b)(ii) hereof (other than clauses (12) or (13) thereto).
Each Tax Indemnitee shall in good faith use reasonable efforts in filing
its tax returns and in dealing with Taxing Authorities to seek and claim any tax
savings which would result in payments to Lessee under this Section 7(b).
(iv) General Tax Indemnity -- Contests. At Lessee's request Lessee shall
be entitled at its sole cost and expense (A) in the case of a contest involving
only Taxes indemnified hereunder ("Indemnified Taxes") or (B) in any proceeding
involving a claim for one or more Indemnified Taxes as well as a claim for other
Taxes, where the contest of the claim for Indemnified Taxes can be severed from
the contest of other Taxes, to assume responsibility for and control of the
contest ("Lessee Controlled Contest"). Unless otherwise required by law, any
such contest shall be conducted by and in the name of Lessee. If a written claim
shall be made against and received by any Tax Indemnitee for any Tax for which
Lessee is obligated pursuant to this Section 7(b), such Tax Indemnitee shall
notify Lessee promptly of such claim (it being understood and agreed that
failure to provide such notice shall not adversely affect or otherwise prejudice
any Tax Indemnitee's right to indemnity under this Section 7(b) except to the
extent such failure has a materially adverse effect on the ability to contest
such claim). If the Tax cannot be contested in a Lessee Controlled Contest, upon
request from Lessee within thirty (30) days after receipt of such notice, such
Tax Indemnitee shall in good faith at Lessee's sole cost and expense contest the
imposition of such Tax (a "Tax Indemnitee Controlled Contest"). After consulting
with Lessee and Lessee's counsel concerning the forum in which the adjustment is
most likely to be favorably resolved, such Tax Indemnitee may select in its sole
discretion after considering in good faith Lessee's and Lessee's counsel
recommendation the forum for such contest and determine whether any such contest
shall be by (A) resisting payment of such Tax, (B) paying such Tax under protest
or (C) paying such Tax and seeking a refund or other repayment thereof. Except
as otherwise provided in clause (Z) below, during the pendency of a contest
pursuant to this Section 7(b)(iv) Lessee may withhold payment of any Tax to the
extent provided by applicable law. In no event shall such Tax Indemnitee be
required, or Lessee be permitted, to contest the imposition of any Tax for which
Lessee is obligated pursuant to this Section 7(b) unless (W) no Event of
EXHIBIT K - PAGE 5
Default shall have occurred and be continuing (unless Lessee shall have provided
security reasonably satisfactory to such Tax Indemnitee securing Lessee's
performance of its obligations under this Section 7(b)), (X) Lessee shall have
agreed to pay to such Tax Indemnitee on demand all reasonable costs and expenses
on an after-tax basis that such Tax Indemnitee may incur in connection with
contesting such claim (including, without limitation, all reasonable legal and
accounting fees), (Y) such action to be taken will not result in a material risk
of sale, forfeiture or loss of, or the creation of any Lien on, the Aircraft,
the Engines or any Part, other than Permitted Liens, unless Lessee shall have
provided such Tax Indemnitee security against such risk in form and amount
reasonably acceptable to such Tax Indemnitee, and (Z) if such contest shall be
conducted in a manner requiring the payment of the claim, Lessee shall have paid
the amount required directly to the appropriate authority or made an advance of
the amount thereof to such Tax Indemnitee on an interest-free basis and agreed
to indemnify such Tax Indemnitee on an after-tax basis against any Taxes payable
by such Tax Indemnitee with respect to such advance.
Notwithstanding anything to the contrary in this Section 7(b), in any Tax
Indemnitee Controlled Contest the Tax Indemnitee may not settle or agree to any
claim without the prior written consent of Lessee, and the Tax Indemnitee shall
conduct any such administrative proceedings and judicial contest in good faith
in an attempt to minimize the amount payable by Lessee under this Section 7(b).
The term "after-tax basis" for purposes of this Section 7(b) shall mean an
amount which, after deduction of all Taxes required to be paid by or on behalf
of the Tax Indemnitee in respect of the receipt or accrual of such amount, is
equal to the payment required under the provisions of this Section 7(b) which
require payments to be made on an after-tax basis.
If any Tax Indemnitee shall obtain a refund of all or any part of any Tax
paid by Lessee, such Tax Indemnitee shall pay Lessee an amount equal to the
amount of such refund, including interest received attributable thereto, plus
any net tax benefit (or minus any net tax detriment) realized by such Tax
Indemnitee as a result of any refund received and payment by such Tax Indemnitee
made pursuant to this sentence.
Nothing contained in this Section 7(b)(iv) shall require any Tax
Indemnitee to contest, or permit Lessee to contest, a claim which such Tax
Indemnitee would otherwise be required to contest pursuant to this Section
7(b)(iv), if such Tax Indemnitee shall waive payment by Lessee of any amount
that might otherwise be payable by Lessee under this Section 7(b) in respect of
such claim and any other claim, the contest of which would be adversely
affected.
(v) General Tax Indemnity -- Reports. If any report, return or statement
is required to be filed with respect to any Tax which is subject to
indemnification under this Section 7(b), Lessee shall timely file the same at
its sole expense (except for any such report, return or statement which the Tax
Indemnitee has notified Lessee that the Tax Indemnitee intends to file or which
the Tax Indemnitee is required by law to file in
EXHIBIT K - PAGE 6
its own name). Lessee shall have no obligation under the preceding sentence if
such Tax Indemnitee, after receipt of Lessee's written request, shall have
failed to furnish Lessee with such information in a timely fashion as is in such
Tax Indemnitee's control and is not otherwise reasonably available to Lessee and
is necessary to file such returns. Lessee shall either file such report, return
or statement so as to show the ownership of the Aircraft in the Owner Trustee
and send a copy of such report, return or statement to the Tax Indemnitee and
Owner Trustee or, where Lessee is not so permitted to file such report, return
or statement, it shall notify the Tax Indemnitee of such requirement and prepare
and deliver such report, return or statement to the Tax Indemnitee in a manner
satisfactory to such Tax Indemnitee within a reasonable time prior to the time
such report, return or statement is to be filed. Lessee shall provide to the
Owner Participant upon request (or shall cause to be provided to the Owner
Participant upon request) such information maintained in the regular course of
Lessee's business and shall make available for inspection and copying by the
Owner Participant, at Lessee's expense, such records as Lessee retains in the
regular course of its business, or is required under applicable law to retain,
as shall be reasonably necessary for the Owner Participant to prepare or support
any required Federal, state, local or foreign tax returns or other filings, or
to comply with audit or litigation requirements. The Owner Participant shall
provide to Lessee upon request (or shall cause to be provided to Lessee on
request) such information related to the Overall Transaction maintained in the
regular course of the Owner Participant's business, and shall make available (or
shall cause to be made available) for inspection and copying by Lessee, at the
Owner Participant's expense, such records related to the Overall Transaction as
the Owner Participant or the Owner Trustee retain in the regular course of their
business or are required by law to retain, as shall be necessary for Lessee to
prepare or support any required Federal, state, local or foreign returns or
other filings or to comply with audit or litigation requirements.
(vi) Verification. At Lessee's written request after Lessee receives a Tax
Indemnitee's computations showing the amount of any indemnity payable by Lessee
to such Tax Indemnitee pursuant to this Section 7(b) or any amount payable by
any Tax Indemnitee to Lessee pursuant to this Section 7(b), such computations
shall be subject to confidential verification in writing by any nationally
recognized firm of certified public accountants selected by Lessee and
reasonably acceptable to such Tax Indemnitee. The accounting firm shall complete
its review within thirty (30) days of Lessee's receipt of such Tax Indemnitee`s
computations. The computations of such accounting firm shall (i) be delivered
simultaneously to Lessee and such Tax Indemnitee and (ii) absent manifest error,
be final, binding and conclusive upon Lessee and such Tax Indemnitee. If Lessee
pays such indemnity in whole or in part before completion of the verification
procedure, appropriate adjustments will be made promptly after completion of the
verification procedure (and nothing in this Section 7(b)(vi) shall be construed
as changing the time when any such indemnity is payable under this Section 7(b))
to take into account any redetermination of the indemnity by the accounting
firm. The fee and disbursements of such firm shall be paid by Lessee unless such
verification shall disclose an error made by such Tax Indemnitee in favor
EXHIBIT K - PAGE 7
of such Tax Indemnitee exceeding the lesser of five percent (5%) of the original
claim or $10,000, in which case such fee and disbursements shall be paid by such
Tax Indemnitee. Such Tax Indemnitee shall cooperate with such accounting firm
and (subject to such accounting firm's execution of a confidentiality agreement
satisfactory to such Tax Indemnitee) shall supply such accounting firm with all
information reasonably necessary to permit accomplishment of such review and
determination. The sole responsibility of such accounting firm shall be to
verify the computations of the amount payable hereunder and the interpretation
of this Agreement shall not be within the scope of such accounting firm's
responsibilities.
(vii) General Tax Indemnity -- Payment. Except as provided in Section
7(b)(iv) hereof, Lessee shall pay any Tax for which it is liable pursuant to
this Section 7(b) directly to the appropriate taxing authority if legally
permissible or upon demand of a Tax Indemnitee shall pay such Tax and any other
amounts due hereunder to such Tax Indemnitee within fifteen (15) Business Days
of such demand, but in no event shall any such payments be required to be made
by Lessee more than five (5) Business Days prior to the date the Tax to which
any such payment hereunder relates is due in immediately available funds. Any
such demand for payment from a Tax Indemnitee shall specify in reasonable detail
the payment and the facts upon which the right to payment is based. Each Tax
Indemnitee shall promptly forward to Lessee any notice, ▇▇▇▇ or advice received
by it concerning any Tax, provided, however, that the failure of any Tax
Indemnitee to forward any such notice, ▇▇▇▇ or advice shall not adversely affect
or otherwise prejudice such Tax Indemnitee's rights to indemnification under
this Section 7(b) unless such failure materially adversely affects the ability
to contest any claim reflected therein. Within thirty (30) days after the date
of each payment by Lessee of any Tax indemnified against hereunder, Lessee shall
furnish the appropriate Tax Indemnitee the original or a certified copy of a
receipt for Lessee's payment of such Tax or such other evidence of payment of
such Tax as is reasonably acceptable to such Tax Indemnitee.
(viii) Application of Payments During Existence of Event of Default. Any
amount payable to Lessee pursuant to the terms of this Section 7(b) shall not be
paid to or retained by Lessee if at the time of such payment or retention an
Event of Default shall have occurred and be continuing under the Lease. At such
time as there shall not be continuing any such Event of Default, such amount
shall be paid to the Lessee to the extent not previously applied against
Lessee's obligations hereunder as and when due after the Owner Trustee shall
have declared the Lease in default pursuant to Section 15 thereof.
(ix) Reimbursements by Tax Indemnitees Generally. If, for any reason,
Lessee is required to make any payment with respect to any Taxes imposed on any
Tax Indemnitee, any Pass Through Trustee, any Loan Participant or the
Subordination Agent in respect of the transactions contemplated by the Operative
Documents or on the Aircraft, the Airframe, the Engines or any Part, which Taxes
are not the responsibility of Lessee under this Section 7(b), then such Tax
Indemnitee, Pass
EXHIBIT K - PAGE 8
Through Trustee, Loan Participant or the Subordination Agent, as the case may
be, shall pay to Lessee an amount which equals the amount paid by Lessee with
respect to such Taxes plus interest thereon computed at an annual interest rate
equal to the Base Rate plus one percent from the date of payment by Lessee.
(x) Forms, etc. Each Tax Indemnitee agrees to furnish to Lessee from time
to time such duly executed and properly completed forms that are requested by
Lessee 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 Lessee
pursuant to the Operative Documents, which reduction or exemption may be
available to such Tax Indemnitee.
(xi) Non-Parties. If a Tax Indemnitee is not a party to this Agreement,
Lessee may require the Tax Indemnitee to agree to the terms of this Section 7(b)
prior to making any payment to such Tax Indemnitee under this Section 7(b).
EXHIBIT K - PAGE 9
EXHIBIT L
TO PARTICIPATION
AGREEMENT
[NW 1999__]
Section 7(c) - General Indemnity
(c) General Indemnity. Lessee hereby agrees to indemnify each
Indemnitee against, and agrees to protect, defend, save and keep harmless each
thereof from (whether or not the transactions contemplated herein or in any of
the other Operative Documents are consummated), any and all liabilities,
obligations, losses, damages, penalties, claims, actions, suits, out-of-pocket
costs, expenses and disbursements (including reasonable legal fees and expenses
and Transaction Expenses to the extent not required to be paid by the Owner
Trustee or the Owner Participant pursuant to Section 16 hereof but excluding
internal costs and expenses such as salaries and overhead), of whatsoever kind
and nature (collectively called "Expenses") imposed on, incurred by or asserted
against any Indemnitee, in any way relating to or arising out of (A) any of the
Operative Documents or any sublease or sub-sublease of the Aircraft or the
enforcement of any of the terms thereof or any amendment, modification or waiver
in respect thereof and, only in the case of the Indemnitee who is the
Subordination Agent or the Liquidity Provider, the Intercreditor Agreement and
the Liquidity Facilities, (B) the manufacture, purchase, acceptance or rejection
of the Airframe or any Engine, (C) the Aircraft (or any portion thereof or any
Engine or engine affixed to the Airframe) whether or not arising out of the
finance, refinance, ownership, delivery, nondelivery, storage, lease, sublease,
sub-sublease, possession, use, non-use, operation, maintenance, registration,
reregistration, condition, modification, alteration, replacement, repair,
substitution, sale, return or other disposition of the Aircraft (or any portion
thereof or any Engine or engine affixed to the Airframe) including, without
limitation, latent or other defects, whether or not discoverable, strict tort
liability and any claim for patent, trademark or copyright infringement, (D) the
offer, sale or delivery of the Secured Certificates (the indemnity in this
clause (D) to extend also to any person who controls an Indemnitee within the
meaning of Section 15 of the Securities Act of 1933, as amended) or (E) the
offer or sale of any interest in the Trust Estate or the Trust Agreement or any
similar interest with respect to the Aircraft on or prior to the Delivery Date;
provided that the foregoing indemnity as to any Indemnitee shall not extend to
any Expense resulting from or arising out of or which would not have occurred
but for one or more of the following: (A) any representation or warranty by such
Indemnitee (or any member of the Related Indemnitee Group) in the Operative
Documents, the Intercreditor Agreement, the Liquidity Facilities or the Pass
Through Trust Agreements or in connection therewith being incorrect in any
material respect, or (B) the failure by such Indemnitee (or any member of the
Related Indemnitee Group) to perform or observe any agreement, covenant or
condition in any of the Operative Documents, the Intercreditor Agreement, the
Liquidity Facilities or the Pass Through Trust Agreements applicable to it
including, without limitation, the creation or existence of a Lessor Lien
(including for this purpose Liens which would be Lessor Liens but for the
proviso in the definition of Lessor Liens), a Loan Participant Lien or an
Indenture Trustee's Lien (except to the extent such failure was caused directly
by the failure of Lessee to perform any obligation under a Lessee Document), or
(C) the willful misconduct or the gross negligence of such Indemnitee (or any
member of the Related Indemnitee Group) (other than gross negligence imputed to
such Indemnitee (or any member of the Related Indemnitee Group) solely by reason
of its interest in the Aircraft), or (D) with respect to the Owner Trustee, a
disposition (voluntary or involuntary) by the Owner Trustee of all or any part
of its interest in the Airframe or any Engine (other than as contemplated by the
Lease or the Trust Indenture) or with respect to any Indemnitee, by such
Indemnitee of all or any part of such Indemnitee's interest in the Airframe, any
Engine or in the Operative Documents other than during the continuance of an
Event of Default under the Lease, or (E) any Tax whether or not Lessee is
required to indemnify for such Tax pursuant to Section 7(b) hereof (it being
understood that Section 7(b) hereof and the Tax Indemnity Agreement provide for
Lessee's liability with respect to Taxes), or (F) in the case of an Indemnitee
which is the Owner Participant or the Owner Trustee (in its individual or trust
capacity) (other than in connection with an Event of Default) or, in connection
with an exercise of remedies under the Trust Indenture upon a default thereunder
(other than a default under Section 4.02(a) of the Trust Indenture), the
Indenture Trustee or a Loan Participant, the offer or sale of any interest in
the Trust Estate or the Trust Agreement or any similar interest, or (G) in the
case of an Indemnitee which is the Owner Participant or the Owner Trustee (in
its individual or trust capacity) and the affiliates, successors and assigns
thereof, a failure on the part of the Owner Trustee to use ordinary care to
distribute in accordance with the Trust Agreement any amounts received and
distributable by it thereunder, and in the case of an Indemnitee which is a Loan
Participant, a Certificate Holder or the Indenture Trustee (in its individual or
trust capacity) and the affiliates, successors and assigns thereof, a failure on
the part of the Indenture Trustee to use ordinary care to distribute in
accordance with the Trust Indenture any amounts received and distributable by it
thereunder, or (H) the authorization or giving or withholding of any future
amendments, supplements, waivers or consents with respect to any of the
Operative Documents other than such as have been consented to, approved,
authorized or requested by Lessee, or (I) subject to the next succeeding
paragraph, any loss of tax benefits or increase in tax liability under any tax
law whether or not Lessee is required to indemnify therefor pursuant to this
Agreement or the Tax Indemnity Agreement, or (J) except to the extent fairly
attributable to acts, omissions or events occurring prior thereto, acts or
events which occur with respect to the Airframe, any Engine or any Part after
the earliest of: (I) the return of possession of the Airframe or such Engine or
Part to the Owner Trustee or its designee pursuant to the terms of the Lease,
(II) the termination of the Lease in accordance with Section 9 or Section 19
thereof or (Ill) the commencement of storage pursuant to Section 5(d) of the
Lease, or (K) any Expense which is specified to be for the account of an
Indemnitee pursuant to any Operative Document without express right of
reimbursement under any Operative Document, or (L) as to any Indemnitee the
funding of such Indemnitee's participation in the transaction contemplated by
the Operative Documents giving rise to a "prohibited transaction" within the
meaning of the provisions of the Code or the Regulations of the United States
Department of Labor implementing ERISA or any other violation of the fiduciary
responsibility provisions of ERISA. The foregoing
EXHIBIT L - PAGE 2
indemnity shall not extend to any Expense to the extent that such Expense is not
caused by, or does not arise out of, an act, omission or event which occurs
prior to the termination of the Lease and the payment of all other payments
required to be paid by Lessee under the Operative Documents.
Lessee further agrees that any payment or indemnity pursuant to this
Section 7(c) in respect of any Expenses shall be in an amount which, after
deduction of all Taxes required to be paid by such recipient with respect to
such payment or indemnity under the laws of any Federal, state or local
government or taxing authority in the United States, or under the laws of any
taxing authority or governmental subdivision of a foreign country, or any
territory or possession of the United States or any international authority,
shall be equal to the excess, if any, of (A) the amount of such Expense over (B)
the net reduction in Taxes required to be paid by such recipient resulting from
the accrual or payment of such Expense.
If, by reason of any Expense payment made to or for the account of
an Indemnitee by Lessee pursuant to this Section 7(c), such Indemnitee
subsequently realizes a tax deduction or credit (including foreign tax credit
and any reduction in Taxes) not previously taken into account in computing such
payment, such Indemnitee shall promptly pay to Lessee, but only if Lessee shall
have made all payments then due and owing to such Indemnitee under the Operative
Documents, an amount equal to the sum of (I) the actual reduction in Taxes
realized by such Indemnitee which is attributable to such deduction or credit,
and (II) the actual reduction in Taxes realized by such Indemnitee as a result
of any payment made by such Indemnitee pursuant to this sentence.
Nothing in this Section 7(c) shall be construed as a guaranty by
Lessee of payments due pursuant to the Secured Certificates or of the residual
value of the Aircraft.
If a claim is made against an Indemnitee involving one or more
Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly,
upon receiving such notice, give notice of such claim to Lessee; provided that
the failure to provide such notice shall not release Lessee from any of its
obligations to indemnify hereunder, and no payment by Lessee to an Indemnitee
pursuant to this Section 7(c) shall be deemed to constitute a waiver or release
of any right or remedy which the Lessee may have against such Indemnitee for any
actual damages as a result of the failure by such Indemnitee to give Lessee such
notice. Lessee shall be entitled, at its sole cost and expense, acting through
counsel acceptable to the respective Indemnitee, (A) so long as Lessee has
agreed in a writing acceptable to such Indemnitee that Lessee is liable to such
Indemnitee for such Expense hereunder (unless such Expense is covered by the
proviso to the first paragraph of this Section 7(c)), in any judicial or
administrative proceeding that involves solely a claim for one or more Expenses,
to assume responsibility for and control thereof, (B) so long as Lessee has
agreed in a writing acceptable to such Indemnitee that Lessee is liable to such
Indemnitee for such Expense hereunder (unless such Expense is covered by the
proviso to the first paragraph of this Section 7(c)), in any judicial or
administrative proceeding involving a claim for one or more Expenses and other
claims related or unrelated to the transactions contemplated by the Operative
Documents, to assume responsibility for and control of such claim for Expenses
to the extent that the same
EXHIBIT L - PAGE 3
may be and is severed from such other claims (and such Indemnitee shall use its
best efforts to obtain such severance), and (C) in any other case, to be
consulted by such Indemnitee with respect to judicial proceedings subject to the
control of such Indemnitee. Notwithstanding any of the foregoing to the
contrary, Lessee shall not be entitled to assume responsibility for and control
of any such judicial or administrative proceedings (M) while an Event of Default
shall have occurred and be continuing, (N) if such proceedings will involve a
material risk of the sale, forfeiture or loss of, or the creation of any Lien
(other than a Permitted Lien) on the Aircraft, the Trust Indenture Estate or the
Trust Estate or any part thereof, or (0) 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 Lessee pursuant to the preceding
provisions.
The affected Indemnitee shall supply Lessee with such information
reasonably requested by Lessee as is necessary or advisable for Lessee to
control or participate in any proceeding to the extent permitted by this Section
7(c). Such Indemnitee shall not enter into a settlement or other compromise with
respect to any Expense without the prior written consent of Lessee, which
consent shall not be unreasonably withheld or delayed, unless such Indemnitee
waives its right to be indemnified with respect to such Expense under this
Section 7(c).
Lessee shall supply the affected Indemnitee with such information
reasonably requested by such Indemnitee as is necessary or advisable for such
Indemnitee to control or participate in any proceeding to the extent permitted
by this Section 7(c).
When Lessee or the insurers under a policy of insurance maintained
by Lessee (or any Sublessee) undertakes the defense of an Indemnitee with
respect to an Expense, no additional legal fees or expenses of such Indemnitee
in connection with the defense of such Indemnitee shall be indemnified hereunder
unless such fees or expenses were incurred at the written request of Lessee or
such insurers, provided that no such defense shall be compromised or settled on
a basis that admits any gross negligence or willful misconduct on the part of
such Indemnitee without such Indemnitee's prior consent.
In the case of any Expense indemnified by Lessee hereunder which is
covered by a policy of insurance maintained by Lessee (or any Sublessee)
pursuant to Section 11 of the Lease or otherwise, it shall be a condition of
such indemnity with respect to any particular Indemnitee that such Indemnitee
shall cooperate with the insurers in the exercise of their rights to
investigate, defend or compromise such Expense as may be required to retain the
benefits of such insurance with respect to such Expense. Notwithstanding any of
the foregoing to the contrary, with respect to any Expense which is covered
under policies of insurance maintained by Lessee (or any Sublessee) pursuant to
Section 11 of the Lease or otherwise, the rights of an Indemnitee to control or
participate in any proceeding shall be modified to the extent necessary to
comply with the requirements of such policies and the rights of the insurers
thereunder.
EXHIBIT L - PAGE 4
Upon payment of any Expense or Tax pursuant to this Section 7,
Lessee or, if any Expense or Tax has been paid by insurers, the insurers,
without any further action, shall be subrogated to any claims the affected
Indemnitee may have relating thereto other than claims under Section 5.03 or
7.01 of the Trust Indenture or Section 5.03 or 7.01 of the Trust Agreement. Such
Indemnitee agrees to give such further assurances or agreements and to cooperate
with Lessee or the insurers to permit Lessee or the insurers to pursue such
claims, if any, to the extent reasonably requested by Lessee or the insurers.
In the event that Lessee shall have paid an amount to an Indemnitee
pursuant to this Section 7(c), and such Indemnitee subsequently shall be
reimbursed in respect of such indemnified amount from any other Person, such
Indemnitee shall promptly pay to Lessee an amount equal to the amount of such
reimbursement (but in no event more than such payment from Lessee) plus any net
tax benefit (or minus any net tax detriment) realized by such Indemnitee as a
result of any reimbursement received and payment made by such Indemnitee
pursuant to this sentence, provided that (i) no Event of Default has occurred
and is continuing and (ii) such Indemnitee shall have no obligation to reimburse
Lessee if Lessee has not paid such Indemnitee all amounts required pursuant to
this Section 7(c) and any other amounts then due to such Indemnitee from Lessee
under any of the Operative Documents.
Lessee's obligations under the indemnities provided for in this
Agreement shall be those of a primary obligor, whether or not the Person
indemnified shall also be indemnified with respect to the same matter under the
terms of any other document or instrument, and the Person seeking
indemnification from Lessee pursuant to any provision of this Agreement may
proceed directly against Lessee without first seeking to enforce any other right
of indemnification.
Lessee agrees to pay the reasonable fees and expenses of the
Indenture Trustee and the Owner Trustee for acting as such, other than such fees
and expenses which constitute Transaction Expenses.
EXHIBIT L - PAGE 5