Exhibit 4(d)
EXECUTION COPY
INTERCREDITOR AGREEMENT
Dated as of
June 1, 2001
BY AND AMONG
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
not in its individual capacity
but solely as Trustee under the
Northwest Airlines Pass Through Trust 0000-0X-0,
Xxxxxxxxx Xxxxxxxx Xxxx Through Trust 0000-0X-0,
Xxxxxxxxx Xxxxxxxx Xxxx Through Trust 2001-1B and
Northwest Airlines Pass Through Trust 2001-1C
LANDESBANK HESSEN-THURINGEN GIROZENTRALE
as Class A-1 Liquidity Provider
Class A-2 Liquidity Provider
Class B Liquidity Provider
and
Class C Liquidity Provider,
AND
STATE STREET BANK AND TRUST COMPANY
not in its individual capacity except
as expressly set forth herein but
solely as Subordination Agent and trustee hereunder
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS.........................................................2
Section 1.1. DEFINITIONS............................................2
ARTICLE II TRUST ACCOUNTS; CONTROLLING PARTY.................................23
Section 2.1. AGREEMENT TO TERMS OF SUBORDINATION;
PAYMENTS FROM MONIES RECEIVED ONLY....................23
Section 2.2. TRUST ACCOUNTS........................................23
Section 2.3. DEPOSITS TO THE COLLECTION ACCOUNT AND SPECIAL
PAYMENTS ACCOUNT......................................24
Section 2.4. DISTRIBUTIONS OF SPECIAL PAYMENTS.....................25
Section 2.5. DESIGNATED REPRESENTATIVES............................27
Section 2.6. CONTROLLING PARTY.....................................28
ARTICLE III RECEIPT, DISTRIBUTION AND APPLICATION OF AMOUNTS RECEIVED........29
Section 3.1. WRITTEN NOTICE OF DISTRIBUTION........................29
Section 3.2. DISTRIBUTION OF AMOUNTS ON DEPOSIT IN THE
COLLECTION ACCOUNT....................................31
Section 3.3. DISTRIBUTION OF AMOUNTS ON DEPOSIT FOLLOWING
A TRIGGERING EVENT....................................33
Section 3.4. OTHER PAYMENTS........................................35
Section 3.5. PAYMENTS TO THE TRUSTEES AND THE LIQUIDITY PROVIDERS..35
Section 3.6. LIQUIDITY FACILITIES..................................36
ARTICLE IV EXERCISE OF REMEDIES..............................................42
Section 4.1. DIRECTIONS FROM THE CONTROLLING PARTY.................42
Section 4.2. REMEDIES CUMULATIVE...................................44
Section 4.3. DISCONTINUANCE OF PROCEEDINGS.........................44
Section 4.4. RIGHT OF CERTIFICATEHOLDERS TO RECEIVE PAYMENTS
NOT TO BE IMPAIRED....................................44
Section 4.5. UNDERTAKING FOR COSTS.................................44
ARTICLE V DUTIES OF THE SUBORDINATION AGENT; AGREEMENTS OF TRUSTEES, ETC.....45
Page
Section 5.1. NOTICE OF INDENTURE DEFAULT OR TRIGGERING EVENT.......45
Section 5.2. INDEMNIFICATION.......................................45
Section 5.3. NO DUTIES EXCEPT AS SPECIFIED IN INTERCREDITOR
AGREEMENT.............................................45
Section 5.4. NOTICE FROM THE LIQUIDITY PROVIDERS AND TRUSTEES......46
ARTICLE VI THE SUBORDINATION AGENT...........................................46
Section 6.1. AUTHORIZATION; ACCEPTANCE OF TRUSTS AND DUTIES........46
Section 6.2. ABSENCE OF DUTIES.....................................46
Section 6.3. NO REPRESENTATIONS OR WARRANTIES AS TO DOCUMENTS......46
Section 6.4. NO SEGREGATION OF MONIES; NO INTEREST.................47
Section 6.5. RELIANCE; AGENTS; ADVICE OF COUNSEL...................47
Section 6.6. CAPACITY IN WHICH ACTING..............................47
Section 6.7. COMPENSATION..........................................47
Section 6.8. MAY BECOME CERTIFICATEHOLDER..........................48
Section 6.9. SUBORDINATION AGENT REQUIRED; ELIGIBILITY.............48
Section 6.10. MONEY TO BE HELD IN TRUST.............................48
ARTICLE VII INDEMNIFICATION OF SUBORDINATION AGENT...........................48
Section 7.1. SCOPE OF INDEMNIFICATION..............................48
ARTICLE VIII SUCCESSOR SUBORDINATION AGENT...................................49
Section 8.1. REPLACEMENT OF SUBORDINATION AGENT;
APPOINTMENT OF SUCCESSOR..............................49
ARTICLE IX SUPPLEMENTS AND AMENDMENTS........................................50
Section 9.1. AMENDMENTS, WAIVERS, ETC..............................50
Section 9.2. SUBORDINATION AGENT PROTECTED.........................51
Section 9.3. EFFECT OF SUPPLEMENTAL AGREEMENTS.....................51
Section 9.4. NOTICE TO RATING AGENCIES.............................52
Section 9.5. ADDITION OF CLASS D TRUSTEE...........................52
ARTICLE X MISCELLANEOUS......................................................52
Section 10.1. TERMINATION OF INTERCREDITOR AGREEMENT................52
ii
Page
Section 10.2. INTERCREDITOR AGREEMENT FOR BENEFIT OF TRUSTEES,
LIQUIDITY PROVIDERS AND SUBORDINATION AGENT...........52
Section 10.3. NOTICES...............................................52
Section 10.4. SEVERABILITY..........................................53
Section 10.5. NO ORAL MODIFICATIONS OR CONTINUING WAIVERS...........54
Section 10.6. SUCCESSORS AND ASSIGNS................................54
Section 10.7. HEADINGS..............................................54
Section 10.8. COUNTERPART FORM......................................54
Section 10.9. SUBORDINATION.........................................54
Section 10.10.GOVERNING LAW.........................................55
Section 10.11.SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL;
WAIVER OF IMMUNITY....................................55
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INTERCREDITOR AGREEMENT
INTERCREDITOR AGREEMENT dated as of June 1, 2001, by and among
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, a
national banking association ("STATE STREET OF CONNECTICUT"), not in its
individual capacity but solely as Trustee of each Trust (each as defined below),
LANDESBANK HESSEN-THURINGEN GIROZENTRALE, a public law banking institution
organized under the laws of Germany ("HELABA"), as Class A-1 Liquidity Provider,
Class A-2 Liquidity Provider, Class B Liquidity Provider and Class C Liquidity
Provider, and STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust
company, not in its individual capacity except as expressly set forth herein,
but solely as Subordination Agent and trustee hereunder (in such capacity,
together with any successor appointed pursuant to Article VIII hereof, the
"SUBORDINATION AGENT").
WHEREAS, all capitalized terms used herein shall have the
respective meanings referred to in Article I hereof;
WHEREAS, pursuant to each Indenture (i) in the case of each
Airbus A319-100 or Boeing 759-300 Aircraft that is owned by Northwest at the
time such Indenture is entered into (the "OWNED AIRCRAFT"), Northwest will issue
on a recourse basis up to five series of Equipment Notes to finance the purchase
of such Aircraft, (ii) in the case of each Airbus A319-100 or Boeing 759-300
Aircraft that is leased to Northwest pursuant to a related Lease at the time
such Indenture is entered into (the "LEASED AIRCRAFT"), the related Owner
Trustee will issue on a nonrecourse basis up to five series of Equipment Notes
to finance the purchase of such Aircraft and (iii) in the case of each Boeing
747-400 Aircraft, Northwest will issue four series of Equipment Notes to finance
the purchase of such Aircraft;
WHEREAS, pursuant to the Financing Agreements, each Trust will
acquire Equipment Notes having an interest rate equal to the interest rate
applicable to the Certificates to be issued by such Trust;
WHEREAS, pursuant to each Trust Agreement, the Trust created
thereby proposes to issue a single class of Certificates (a "CLASS") bearing the
interest rate and having the final distribution date described in such Trust
Agreement on the terms and subject to the conditions set forth therein;
WHEREAS, pursuant to the Underwriting Agreement (as defined
below), the Underwriters propose to purchase the Class A-1 Certificates, Class
A-2 Certificates, Class B Certificates and Class C Certificates issued by each
of the Class A-1 Trust, Class A-2 Trust, Class B Trust and Class C Trust,
respectively, in the aggregate face amount set forth opposite the name of each
such Trust on Schedule I thereto on the terms and subject to the conditions set
forth therein;
WHEREAS, pursuant to the Note Purchase Agreement, Class D
Certificates, if any, may be issued by the Class D Trust upon its formation on
the terms and subject to the conditions set forth therein;
WHEREAS, each Liquidity Provider proposes to enter into a
revolving credit agreement (each, a "LIQUIDITY FACILITY") with the Subordination
Agent, as agent for the Class A-1 Trustee, Class A-2 Trustee, Class B Trustee
and Class C Trustee of each of the Class A-1 Trust, Class A-2 Trust, Class B
Trust and Class C Trust, respectively, for the benefit of the Certificateholders
of each such Trust;
WHEREAS, it is a condition precedent to the obligations of the
Underwriters under the Underwriting Agreement that the Subordination Agent, the
Trustees and the Liquidity Providers agree to the terms of subordination set
forth in this Agreement in respect of each Class of Certificates, and the
Subordination Agent, the Trustees and the Liquidity Providers, by entering into
this Agreement, hereby acknowledge and agree to such terms of subordination and
the other provisions of this Agreement; and
NOW, THEREFORE, in consideration of the mutual agreements
herein contained, and of other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. DEFINITIONS. For all purposes of this Agreement,
except as otherwise expressly provided or unless the context otherwise requires:
(1) the terms used herein that are defined in this Article
have the meanings assigned to them in this Article, and include the
plural as well as the singular;
(2) all references in this Agreement to designated "Articles",
"Sections" and other subdivisions are to the designated Articles,
Sections and other subdivisions of this Agreement;
(3) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Agreement as a whole and not
to any particular Article, Section or other subdivision; and
(4) the term "including" shall mean "including without
limitation".
"ACCELERATION" means, with respect to the amounts payable in
respect of the Equipment Notes issued under any Indenture, the
declaration or deemed declaration of such amounts to be immediately
due and payable. "ACCELERATE" and "ACCELERATED" have meanings
correlative to the foregoing.
"ADJUSTED EXPECTED DISTRIBUTIONS" means with respect to the
Certificates of any Class on any Current Distribution Date the sum
of (x) the amount of accrued and unpaid interest on such
Certificates (excluding interest, if any, payable with respect to
the Deposits related to such Trust) plus (y) the greater of:
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(A) the difference between (x) the Pool Balance of such
Certificates as of the immediately preceding Distribution Date
(or if the Current Distribution Date is the first Distribution
Date, the original aggregate face amount of the Certificates
of such Trust) and (y) the Pool Balance of such Certificates
as of the Current Distribution Date calculated on the basis
that (i) the principal of the Non-Performing Equipment Notes
held in such Trust has been paid in full and such payments
have been distributed to the holders of such Certificates,
(ii) the principal of the Performing Equipment Notes has been
paid when due (but without giving effect to any Acceleration
of Performing Equipment Notes except to the extent monies are
received as a result of such Acceleration) and has been
distributed to the holders of such Certificates and (iii) the
principal of any Equipment Notes formerly held in such Trust
which have been sold pursuant to the terms hereof have been
paid in full and such payments have been distributed to the
holders of such Certificates but without giving effect to any
reduction in the Pool Balance as a result of any distribution
attributable to Deposits occurring after the immediately
preceding Distribution Date (or, if the Current Distribution
Date is the first Distribution Date, occurring after the
initial issuance of the Certificates of such Trust) and
(B) the amount of the excess, if any, by which (i) the
Pool Balance of such Class of Certificates as of the
immediately preceding Distribution Date (or, if the Current
Distribution Date is the first Distribution Date, the original
aggregate face amount of the Certificates of such Trust) less
the amount of the Deposits for such Class of Certificates as
of such preceding Distribution Date (or, if the Current
Distribution Date is the first Distribution Date, the original
aggregate amount of the Deposits for such Class of
Certificates) other than any portion of such Deposits
thereafter used to acquire Equipment Notes pursuant to the
Note Purchase Agreement, over (ii) the Aggregate LTV
Collateral Amount for such Class of Certificates for the
Current Distribution Date;
PROVIDED that, (x) until the date of the initial LTV
Appraisals for all of the Aircraft, clause (B) above shall not be
applicable and (y) in the case of the Class D Certificates, clause
(B) above shall not be applicable.
For purposes of calculating Adjusted Expected Distributions,
any premium paid on the Equipment Notes held in any Trust which has
not been distributed to the Certificateholders of such Trust (other
than such premium or a portion thereof applied to the payment of
interest on the Certificates of such Trust or the reduction of the
Pool Balance of such Trust) shall be added to the amount of such
Adjusted Expected Distributions.
"AFFILIATE" means, with respect to any Person, any other
Person directly or indirectly controlling, controlled by or under
common control with such Person. For the purposes of this
definition, "control" means the power, directly or indirectly, to
direct or cause the direction of the management and policies of such
Person whether through the ownership of voting securities or by
contract or otherwise; and the terms "controlling" and "controlled"
have meanings correlative to the foregoing.
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"AGGREGATE LTV COLLATERAL AMOUNT" for any Class of
Certificates (other than the Class D Certificates) for any
Distribution Date means an amount, not less than zero, equal to the
product of (i) the sum of the applicable LTV Collateral Amounts for
each Aircraft, minus the Pool Balance for each Class of
Certificates, if any, senior to such Class, after giving effect to
any distribution of principal on such Distribution Date with respect
to such senior Class or Classes and (ii) (a) in the case of Class
A-1 Certificates or Class A-2 Certificates, as the case may be, a
fraction the numerator of which equals the Pool Balance for the
Class A-1 Certificates or Class A-2 Certificates, as the case may
be, and the denominator of which equals the aggregate Pool Balances
for the Class A-1 Certificates and the Class A-2 Certificates, in
each case prior to giving effect to any distribution of principal on
such Distribution Date with respect to either such Class of
Certificates, and (b) in the case of the Class B, Class C and Class
D Certificates, 1.0.
"AIRCRAFT" means, with respect to any Indenture, the
"Aircraft" referred to therein.
"APPRAISED CURRENT MARKET VALUE" of any Leased Aircraft or
Owned Aircraft means the lower of the average and the median of the
most recent three LTV Appraisals of such Aircraft.
"APPRAISERS" means Aircraft Information Systems, Inc.,
AvSolutions and Xxxxxx Xxxxx and Xxxxx, Inc.
"AVAILABLE AMOUNT" means, with respect to any Liquidity
Facility on any drawing date, subject to the proviso in the first
sentence in Section 3.6(g), an amount equal to (a) the Stated Amount
of such Liquidity Facility, LESS (b) the aggregate amount of the
Interest Drawings honored by the Liquidity Provider under such
Liquidity Facility on or prior to such date which have not been
reimbursed or reinstated as provided in Section 3.6(g) hereof as of
such date; PROVIDED that, following a Downgrade Drawing, a
Non-Extension Drawing or a Final Drawing under such Liquidity
Facility, the Available Amount of such Liquidity Facility shall be
zero.
"BUSINESS DAY" means any day other than a Saturday or Sunday
or a day on which commercial banks are required or authorized to
close in Minneapolis, Minnesota, New York, New York, or the city and
state in which any Trustee, the Subordination Agent or any Loan
Trustee maintains its Corporate Trust Office or receives and
disburses funds. Solely with respect to draws under any Liquidity
Facility, Business Day shall also include a "Business Day" as
defined in such Liquidity Facility.
"CASH COLLATERAL ACCOUNT" means the Class A-1 Cash Collateral
Account, the Class A-2 Cash Collateral Account, the Class B Cash
Collateral Account or the Class C Cash Collateral Account, as
applicable.
"CERTIFICATE" means a Class A-1 Certificate, a Class A-2
Certificate, a Class B Certificate, a Class C Certificate or, upon
their issuance, a Class D Certificate, as applicable.
"CERTIFICATEHOLDER" means any holder of one or more
Certificates.
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"CLASS" has the meaning assigned to such term in the
preliminary statements to this Agreement.
"CLASS A-1 CASH COLLATERAL ACCOUNT" means an Eligible Deposit
Account in the name of the Subordination Agent maintained at an
Eligible Institution, which shall be the Subordination Agent if it
shall so qualify, into which all amounts drawn under the Class A
Liquidity Facility pursuant to Section 3.6(c), 3.6(d) or 3.6(i)
shall be deposited.
"CLASS A-1 CERTIFICATEHOLDER" means, at any time, any holder
of one or more Class A-1 Certificates.
"CLASS A-1 CERTIFICATES" means the certificates issued by the
Class A-1 Trust, substantially in the form of Exhibit A to the Class
A-1 Trust Agreement, and authenticated by the Class A-1 Trustee,
representing fractional undivided interests in the Class A-1 Trust,
and any certificates issued in exchange therefor or replacement
thereof pursuant to the terms of the Class A-1 Trust Agreement.
"CLASS A-1 LIQUIDITY FACILITY" means, initially, the Revolving
Credit Agreement dated as of June 1, 2001, by and between the
Subordination Agent, as agent and trustee of the Class A-1 Trustee,
and the Class A-1 Liquidity Provider, and, from and after the
replacement of such Agreement pursuant hereto, the Replacement
Liquidity Facility therefor, if any, in each case as amended,
supplemented or otherwise modified from time to time in accordance
with its terms.
"CLASS A-1 LIQUIDITY PROVIDER" means Helaba, together with any
Replacement Liquidity Provider which has issued a Replacement
Liquidity Facility to replace the Class A-1 Liquidity Facility
pursuant to Section 3.6(e).
"CLASS A-1 TRUST" means Northwest Airlines 2001-1A-1 Pass
Through Trust created and administered pursuant to the Class A-1
Trust Agreement.
"CLASS A-1 TRUST AGREEMENT" means the Pass Through Trust
Agreement, as supplemented by Trust Supplement No. 2001-1A-1 thereto
dated as of June 1, 2001, by and among Northwest, the Guarantor and
the Trustee, governing the creation and administration of the Class
A-1 Trust and the issuance of the Class A-1 Certificates, as the
same may be amended, supplemented or otherwise modified from time to
time in accordance with its terms.
"CLASS A-1 TRUSTEE" means State Street of Connecticut, not in
its individual capacity except as expressly set forth in the Class
A-1 Trust Agreement, but solely as trustee under the Class A-1 Trust
Agreement, together with any successor trustee appointed pursuant
thereto.
"CLASS A-2 CASH COLLATERAL ACCOUNT" means an Eligible Deposit
Account in the name of the Subordination Agent maintained at an
Eligible Institution, which shall be the Subordination Agent if it
shall so qualify, into which all amounts drawn under the Class A
Liquidity Facility pursuant to Section 3.6(c), 3.6(d) or 3.6(i)
shall be deposited.
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"CLASS A-2 CERTIFICATEHOLDER" means, at any time, any holder
of one or more Class A-2 Certificates.
"CLASS A-2 CERTIFICATES" means the certificates issued by the
Class A-2 Trust, substantially in the form of Exhibit A to the Class
A-2 Trust Agreement, and authenticated by the Class A-2 Trustee,
representing fractional undivided interests in the Class A-2 Trust,
and any certificates issued in exchange therefor or replacement
thereof pursuant to the terms of the Class A-2 Trust Agreement.
"CLASS A-2 LIQUIDITY FACILITY" means, initially, the Revolving
Credit Agreement dated as of June 1, 2001, by and between the
Subordination Agent, as agent and trustee of the Class A-2 Trustee,
and the Class A-2 Liquidity Provider, and, from and after the
replacement of such Agreement pursuant hereto, the Replacement
Liquidity Facility therefor, if any, in each case as amended,
supplemented or otherwise modified from time to time in accordance
with its terms.
"CLASS A-2 LIQUIDITY PROVIDER" means Helaba, together with any
Replacement Liquidity Provider which has issued a Replacement
Liquidity Facility to replace the Class A-2 Liquidity Facility
pursuant to Section 3.6(e).
"CLASS A-2 TRUST" means Northwest Airlines 2001-1A-2 Pass
Through Trust created and administered pursuant to the Class A-2
Trust Agreement.
"CLASS A-2 TRUST AGREEMENT" means the Pass Through Trust
Agreement, as supplemented by Trust Supplement No. 2001-1A-2 thereto
dated as of June 1, 2001, by and among Northwest, the Guarantor and
the Trustee, governing the creation and administration of the Class
A-2 Trust and the issuance of the Class A-2 Certificates, as the
same may be amended, supplemented or otherwise modified from time to
time in accordance with its terms.
"CLASS A-2 TRUSTEE" means State Street of Connecticut, not in
its individual capacity except as expressly set forth in the Class
A-2 Trust Agreement, but solely as trustee under the Class A-2 Trust
Agreement, together with any successor trustee appointed pursuant
thereto.
"CLASS B CASH COLLATERAL ACCOUNT" means an Eligible Deposit
Account in the name of the Subordination Agent maintained at an
Eligible Institution, which shall be the Subordination Agent if it
shall so qualify, into which all amounts drawn under the Class B
Liquidity Facility pursuant to Section 3.6(c), 3.6(d) or 3.6(i)
shall be deposited.
"CLASS B CERTIFICATEHOLDER" means, at any time, any holder of
one or more Class B Certificates.
"CLASS B CERTIFICATES" means the certificates issued by the
Class B Trust, substantially in the form of Exhibit A to the Class B
Trust Agreement, and authenticated by the Class B Trustee,
representing fractional undivided interests in the Class B Trust,
and any certificates issued in exchange therefor or replacement
thereof pursuant to the terms of the Class B Trust Agreement.
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"CLASS B LIQUIDITY FACILITY" means, initially, the Revolving
Credit Agreement dated as of June 1, 2001, by and between the
Subordination Agent, as agent and trustee of the Class B Trustee,
and the Class B Liquidity Provider, and, from and after the
replacement of such Agreement pursuant hereto, the Replacement
Liquidity Facility therefor, if any, in each case as amended,
supplemented or otherwise modified from time to time in accordance
with its terms.
"CLASS B LIQUIDITY PROVIDER" means Helaba, together with any
Replacement Liquidity Provider which has issued a Replacement
Liquidity Facility to replace the Class B Liquidity Facility
pursuant to Section 3.6(e).
"CLASS B TRUST" means Northwest Airlines 2001-1B Pass Through
Trust created and administered pursuant to the Class B Trust
Agreement.
"CLASS B TRUST AGREEMENT" means the Pass Through Trust
Agreement, as supplemented by Trust Supplement No. 2001-1B thereto
dated as of June 1, 2001, by and among Northwest, the Guarantor and
the Trustee, governing the creation and administration of the Class
B Trust and the issuance of the Class B Certificates, as the same
may be amended, supplemented or otherwise modified from time to time
in accordance with its terms.
"CLASS B TRUSTEE" means State Street of Connecticut, not in
its individual capacity except as expressly set forth in the Class B
Trust Agreement, but solely as trustee under the Class B Trust
Agreement, together with any successor trustee appointed pursuant
thereto.
"CLASS C CASH COLLATERAL ACCOUNT" means an Eligible Deposit
Account in the name of the Subordination Agent and maintained at an
Eligible Institution, which shall be the Subordination Agent if it
shall so qualify, into which all amounts drawn under the Class C
Liquidity Facility pursuant to Section 3.6(c), 3.6(d) or 3.6(i)
shall be deposited.
"CLASS C CERTIFICATEHOLDER" means, at any time, any holder of
one or more Class C Certificates.
"CLASS C CERTIFICATES" means the certificates issued by the
Class C Trust, substantially in the form of Exhibit A to the Class C
Trust Agreement, and authenticated by the Class C Trustee,
representing fractional undivided interests in the Class C Trust,
and any certificates issued in exchange therefor or in replacement
thereof pursuant to the terms of the Class C Trust Agreement.
"CLASS C LIQUIDITY FACILITY" means, initially, the Revolving
Credit Agreement dated as of June 1, 2001, by and between the
Subordination Agent, as agent and trustee of the Class C Trustee,
and the Class C Liquidity Provider and, from and after the
replacement of such Agreement pursuant hereto, the Replacement
Liquidity Facility therefor, if any, in each case as amended,
supplemented or otherwise modified from time to time in accordance
with its terms.
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"CLASS C LIQUIDITY PROVIDER" means Helaba, together with any
Replacement Liquidity Provider which has issued a Replacement
Liquidity Facility to replace the Class C Liquidity Facility
pursuant to Section 3.6(e).
"CLASS C TRUST" means Northwest Airlines 2001-1C Pass Through
Trust created and administered pursuant to the Class C Trust
Agreement.
"CLASS C TRUST AGREEMENT" means the Pass Through Trust
Agreement, as supplemented by Trust Supplement No. 2001-1C thereto
dated as of June 1, 2001, by and among Northwest, the Guarantor and
the Trustee, governing the creation and administration of the Class
C Trust and the issuance of the Class C Certificates, as the same
may be amended, supplemented or otherwise modified from time to time
in accordance with its terms.
"CLASS C TRUSTEE" means State Street of Connecticut, not in
its individual capacity except as expressly set forth in the Class C
Trust Agreement, but solely as trustee under the Class C Trust
Agreement, together with any successor trustee appointed pursuant
thereto.
"CLASS D CERTIFICATEHOLDER" means, at any time, any holder of
one or more Class D Certificates.
"CLASS D CERTIFICATES" means the certificates, if any, issued
by the Class D Trust, substantially in the form of Exhibit A to the
Class D Trust Agreement, and authenticated by the Class D Trustee,
representing fractional undivided interests in the Class D Trust,
and any certificates issued in exchange therefor or in replacement
thereof pursuant to the terms of the Class D Trust Agreement.
"CLASS D TRUST" means Northwest Airlines 2001-1D Pass Through
Trust created and administered pursuant to the Class D Trust
Agreement.
"CLASS D TRUST AGREEMENT" means, upon execution of the Class D
Trust Supplement (as defined in the Note Purchase Agreement), the
Pass Through Trust Agreement, as supplemented by the Class D Trust
Supplement, governing the creation and administration of the Class D
Trust and the issuance of the Class D Certificates, as the same may
be amended, supplemented or otherwise modified from time to time in
accordance with its terms.
"CLASS D TRUSTEE" means, upon execution of the Class D Trust
Agreement, State Street of Connecticut, not in its individual
capacity except as expressly set forth in the Class D Trust
Agreement, but solely as trustee under the Class D Trust Agreement,
together with any successor trustee appointed pursuant thereto.
"CLOSING DATE" means June 1, 2001.
"CODE" means the Internal Revenue Code of 1986, as amended
from time to time, and Treasury Regulations promulgated thereunder.
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"COLLECTION ACCOUNT" means the Eligible Deposit Account
established by the Subordination Agent pursuant to Section 2.2 which
the Subordination Agent shall make deposits in and withdrawals from
in accordance with this Agreement.
"CONSENT PERIOD" has the meaning ascribed to such term in
Section 3.6(d).
"CONTROLLING PARTY" means the Person entitled to act as such
pursuant to the terms of Section 2.6.
"CORPORATE TRUST OFFICE" means, with respect to any Trustee,
the Subordination Agent or any Loan Trustee, the office of such
Person in the city at which, at any particular time, its corporate
trust business shall be principally administered.
"CURRENT DISTRIBUTION DATE" means a Distribution Date
specified as a reference date for calculating the Adjusted Expected
Distributions or Expected Distributions with respect to the
Certificates of any Trust as of such Distribution Date.
"DELIVERY PERIOD EXPIRY DATE" means March 31, 2003.
"DEPOSIT AGREEMENT" shall mean, with respect to any Class of
Certificates (other than Class D Certificates), the Deposit
Agreement pertaining to such Class dated the date hereof between the
Escrow Agent, and the Depositary, as the same may be amended,
modified or supplemented from time to time in accordance with the
terms thereof.
"DEPOSITARY" means ABN AMRO Bank N.V., acting through a United
States branch, as depositary under the Deposit Agreement relating to
Class A-1, Class A-2, Class B and Class C Certificates.
"DEPOSITS" with respect to any Class of Certificates (other
than Class D Certificates), shall have the meaning set forth in the
Deposit Agreement pertaining to such Class.
"DESIGNATED REPRESENTATIVES" means the Subordination Agent
Representatives, Trustee Representatives and the LP Representatives
identified under Section 2.5.
"DISTRIBUTION DATE" means a Regular Distribution Date or a
Special Distribution Date.
"DOLLARS" or "$" means United States dollars.
"DOWNGRADE DRAWING" has the meaning assigned to such term in
Section 3.6(c).
"DOWNGRADE EVENT" has the meaning assigned to such term in
each Liquidity Facility.
"DOWNGRADED FACILITY" has the meaning assigned to such term in
Section 3.6(c).
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"DRAWING" means an Interest Drawing, a Non-Extension Drawing,
a Final Drawing or a Downgrade Drawing, as the case may be.
"ELIGIBLE DEPOSIT ACCOUNT" means either (a) a segregated
account with an Eligible Institution or (b) a segregated trust
account with the corporate trust department of a depository
institution organized under the laws of the United States of America
or any one of the states thereof or the District of Columbia (or any
U.S. branch of a foreign bank), having corporate trust powers and
acting as trustee for funds deposited in such account, so long as
any of the securities of such depository institution has a long-term
unsecured debt rating from each Rating Agency of at least A-3 or its
equivalent. An Eligible Deposit Account may be maintained with a
Liquidity Provider so long as such Liquidity Provider is an Eligible
Institution (as defined below); PROVIDED that such Liquidity
Provider shall have waived all rights of set-off and counterclaim
with respect to such account.
"ELIGIBLE INSTITUTION" means, subject to the last sentence of
subsection 2.2(c), (a) the corporate trust department of the
Subordination Agent or any Trustee, as applicable, or (b) a
depository institution organized under the laws of the United States
of America or any one of the states thereof or the District of
Columbia (or any U.S. branch of a foreign bank), which has a
long-term unsecured debt rating from each Rating Agency of at least
A-3 or its equivalent.
"ELIGIBLE INVESTMENTS" means (a) investments in obligations
of, or guaranteed by, the United States Government having maturities
no later than 90 days following the date of such investment, (b)
investments in open market commercial paper of any corporation
incorporated under the laws of the United States of America or any
state thereof with a short-term unsecured debt rating issued by
Moody's and Standard & Poor's of at least A-1 and P-1, respectively,
and, if rated by Fitch, F-1, having maturities no later than 90 days
following the date of such investment or (c) investments in
negotiable certificates of deposit, time deposits, banker's
acceptances, commercial paper or other direct obligations of, or
obligations guaranteed by, commercial banks organized under the laws
of the United States or of any political subdivision thereof (or any
U.S. branch of a foreign bank) with issuer ratings of at least B/C
by Thomson Bankwatch, having maturities no later than 90 days
following the date of such investment; PROVIDED, HOWEVER, that (x)
all Eligible Investments that are bank obligations shall be
denominated in U.S. dollars; and (y) the aggregate amount of
Eligible Investments at any one time that are bank obligations
issued by any one bank shall not be in excess of 5% of such bank's
capital surplus; PROVIDED FURTHER that (1) any investment of the
types described in clauses (a), (b) and (c) above may be made
through a repurchase agreement in commercially reasonable form with
a bank or other financial institution qualifying as an Eligible
Institution so long as such investment is held by a third party
custodian also qualifying as an Eligible Institution, and (2) all
such investments set forth in (a), (b) and (c) above mature no later
than the Business Day immediately preceding the next Regular
Distribution Date; PROVIDED FURTHER, HOWEVER, that in the case of
any Eligible Investment issued by a domestic branch of a foreign
bank, the income from such investment shall be from sources within
the United States for purposes of the Code. Notwithstanding the
foregoing, no investment of the types described in clause (b) or (c)
above which is issued
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or guaranteed by a Liquidity Provider or Northwest or any of their
respective Affiliates shall be an Eligible Investment.
"EQUIPMENT NOTES" means, at any time, the Series A-1 Equipment
Notes, the Series A-2 Equipment Notes, the Series B Equipment Notes,
the Series C Equipment Notes and, upon their issuance, the Series D
Equipment Notes, collectively, and in each case, any Equipment Notes
issued in exchange therefor or replacement thereof pursuant to the
terms of the Indentures.
"ESCROW AGENT" means Xxxxx Fargo Bank Northwest, National
Association, as escrow agent under each Escrow and Paying Agent
Agreement, together with its successors in such capacity.
"ESCROW AND PAYING AGENT AGREEMENT" shall mean, with respect
to any Class of Certificates (other than Class D Certificates), the
Escrow and Paying Agent Agreement pertaining to such Class, dated
the date hereof, among the Escrow Agent, the Underwriters, the
Trustee for such Class and the Paying Agent, as the same may be
amended, modified or supplemented from time to time in accordance
with the terms thereof.
"ESCROW RECEIPTS" has the meaning assigned to such term in the
Escrow and Paying Agent Agreements for the Trusts (other than the
Class D Trust).
"EXPECTED DISTRIBUTIONS" means, with respect to the
Certificates of any Trust on any Current Distribution Date, the sum
of (x) accrued and unpaid interest on such Certificates (excluding
interest, if any, payable with respect to the Deposits related to
such Trust) and (y) the difference between (A) the Pool Balance of
such Certificates as of the immediately preceding Distribution Date
(or if the Current Distribution Date is the first Distribution Date,
the original aggregate face amount of the Certificates of such
Trust) and (B) the Pool Balance of such Certificates as of the
Current Distribution Date, calculated on the basis that (1) the
principal of the Equipment Notes held in such Trust has been paid
when due (whether at stated maturity or upon redemption, prepayment,
purchase or acceleration or otherwise) and such payments have been
distributed to the holders of such Certificates and (2) the
principal of any Equipment Notes formerly held in such Trust that
have been sold pursuant to this Agreement has been paid in full and
such payments have been distributed to the Certificateholders, but
without giving effect to any reduction in the Pool Balance as a
result of any distribution attributable to Deposits occurring after
the immediately preceding Distribution Date (or, if the Current
Distribution Date is the first Distribution Date, occurring after
the initial issuance of the Certificates of such Trust). For
purposes of calculating Expected Distributions, any premium paid on
the Equipment Notes held in any Trust which has not been distributed
to the Certificateholders of such Trust (other than such premium or
a portion thereof applied to the payment of interest on the
Certificates of such Trust or the reduction of the Pool Balance of
such Trust) shall be added to the amount of such Expected
Distributions.
"EXPIRY DATE" with respect to any Liquidity Facility, shall
have the meaning set forth in such Liquidity Facility.
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"FEE LETTERS" with respect to any Liquidity Facility, shall
have the meaning set forth in such Liquidity Facility.
"FINAL DISTRIBUTIONS" means, with respect to the Certificates
of any Trust on any Distribution Date, the sum of (a) the aggregate
amount of all accrued and unpaid interest on such Certificates
(excluding interest, if any, payable with respect to the Deposits
relating to such Trust) and (b) the Pool Balance of such
Certificates as of the immediately preceding Distribution Date (less
the amount of the Deposits for such Class of Certificates as of such
preceding Distribution Date other than any portion of such Deposits
thereafter used to acquire Equipment Notes pursuant to the Note
Purchase Agreement). For purposes of calculating Final Distributions
with respect to the Certificates of any Trust, any premium paid on
the Equipment Notes held in such Trust which has not been
distributed to the Certificateholders of such Trust (other than such
premium or a portion thereof applied to the payment of interest on
the Certificates of such Trust or the reduction of the Pool Balance
of such Trust) shall be added to the amount of such Final
Distributions.
"FINAL DRAWING" means, in respect of a Liquidity Facility, a
borrowing or drawing, other than an Interest Drawing, a Downgrade
Drawing or a Non-Extension Drawing, of all available and undrawn
amounts under such Liquidity Facility in accordance with the
provisions thereof.
"FINAL LEGAL DISTRIBUTION DATE" means, for the Class A-1
Certificates, October 1, 2023, for the Class A-2 Certificates,
October 1, 2012, for the Class B Certificates, October 1, 2018, for
the Class C Certificates, October 1, 2011 and for the Class D
Certificates, upon issuance thereof, October 1, 2013.
"FINANCING AGREEMENT" means each of the Participation
Agreements and the Note Purchase Agreement.
"FITCH" means Fitch, Inc.
"GUARANTOR" means Northwest Airlines Corporation, a Delaware
corporation and its successors and assigns.
"HELABA" has the meaning assigned to such term in the recital
of the parties to this Agreement.
"INDENTURE" means each of the Trust Indentures entered into by
the Loan Trustee, and the Owner Trustee or Northwest, pursuant to
the Note Purchase Agreement, in each case as the same may be
amended, supplemented or otherwise modified from time to time in
accordance with its terms.
"INDENTURE DEFAULT" means, with respect to any Indenture, any
Event of Default (as such term is defined in such Indenture)
thereunder.
"INTEREST DRAWING" has the meaning assigned to such term in
Section 3.6(a).
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"INTEREST PAYMENT DATE" means, with respect to any Liquidity
Facility, each date on which interest is due and payable under such
Liquidity Facility on a Downgrade Drawing, Non-Extension Drawing or
Final Drawing thereunder.
"INVESTMENT EARNINGS" means investment earnings on funds on
deposit in the Trust Accounts net of losses and investment expenses
of the Subordination Agent in making such investments.
"LEASE" means, with respect to any Indenture relating to a
Leased Aircraft, the "Lease" referred to therein.
"LEASED AIRCRAFT" has the meaning assigned to such term in the
preliminary statements of this Agreement.
"LEASED AIRCRAFT INDENTURE" means, with respect to each Leased
Aircraft, the Indenture pertaining to such Aircraft.
"LIEN" means any mortgage, pledge, lien, charge, claim,
disposition of title, encumbrance, lease, sublease, sub-sublease or
security interest of any kind, including, without limitation, any
thereof arising under any conditional sales or other title retention
agreement.
"LIQUIDITY EVENT OF DEFAULT" with respect to any Liquidity
Facility, has the meaning assigned to such term in such Liquidity
Facility.
"LIQUIDITY EXPENSES" means all Liquidity Obligations other
than (i) the principal amount of any Drawings under the Liquidity
Facilities and (ii) any interest accrued on any Liquidity
Obligations.
"LIQUIDITY FACILITY" means, at any time, the Class A-1
Liquidity Facility, the Class A-2 Liquidity Facility, the Class B
Liquidity Facility or the Class C Liquidity Facility, as applicable.
"LIQUIDITY OBLIGATIONS" means all principal, interest, fees
and other amounts owing to the Liquidity Providers under the
Liquidity Facilities, the Fee Letters, the Tax Letter and Section 7
of the Participation Agreements.
"LIQUIDITY PROVIDER" means, at any time, the Class A-1
Liquidity Provider, the Class A-2 Liquidity Provider, the Class B
Liquidity Provider or the Class C Liquidity Provider, as applicable.
"LOAN TRUSTEE" means, with respect to any Indenture, the
indenture trustee thereunder.
"LP INCUMBENCY CERTIFICATE" has the meaning assigned to such
term in Section 2.5(c).
"LP REPRESENTATIVES" has the meaning assigned to such term in
Section 2.5(c).
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"LTV APPRAISAL" means a current fair market appraisal (which
may be a "desktop" appraisal) performed by any Appraiser or any
other nationally recognized appraiser on the basis of an
arm's-length transaction between an informed and willing purchaser
under no compulsion to buy and an informed and willing seller under
no compulsion to sell and both having knowledge of all relevant
facts.
"LTV COLLATERAL AMOUNT" of any Leased Aircraft or Owned
Aircraft for any Class of Certificates (other than the Class D
Certificates) on any Distribution Date means the lesser of (i) the
LTV Ratio for such Class of Certificates multiplied by the Appraised
Current Market Value of such Aircraft (or with respect to any such
Aircraft which has suffered an Event of Loss under and as defined in
the relevant Lease (in the case of a Leased Aircraft) or Indenture
(in the case of an Owned Aircraft), the amount of the insurance
proceeds paid to the related Loan Trustee in respect thereof to the
extent then held by such Loan Trustee (and/or on deposit in the
Special Payments Account) or payable to such Loan Trustee in respect
thereof) and (ii) the outstanding principal amount of the Equipment
Notes secured by such Aircraft after giving effect to any principal
payments of such Equipment Notes on or before such Distribution
Date.
"LTV RATIO" means, for the Class A-1 Certificates, 42.0%, for
the Class A-2 Certificates, 42.0%, for the Class B Certificates,
54.0%, for the Class C Certificates, 66.0% and for the Class D
Certificates, upon their issuance, 75.0%.
"MINIMUM SALE PRICE" means, with respect to any Aircraft or
the Equipment Notes issued in respect of such Aircraft, at any time,
the lesser of (a) 75% of the Appraised Current Market Value of such
Aircraft and (b) the aggregate outstanding principal amount of such
Equipment Notes, plus accrued and unpaid interest thereon.
"MOODY'S" means Xxxxx'x Investors Service, Inc.
"NEW AIRCRAFT" shall have the meaning set forth in the Note
Purchase Agreement.
"NON-CONTROLLING PARTY" means, at any time, any Trustee or
Liquidity Provider which is not the Controlling Party at such time.
"NON-EXTENDED FACILITY" has the meaning provided in Section
3.6(d).
"NON-EXTENSION DRAWING" has the meaning provided in Section
3.6(d).
"NON-PERFORMING EQUIPMENT NOTE" means an Equipment Note issued
pursuant to an Indenture that is not a Performing Equipment Note.
"NORTHWEST" means Northwest Airlines, Inc., a Minnesota
corporation, and its successors and assigns.
"NORTHWEST BANKRUPTCY EVENT" means the occurrence and
continuation of any of the following:
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(a) the commencement of an involuntary case or other
proceeding in respect of Northwest in an involuntary case
under the federal bankruptcy laws, as now or hereafter
constituted, or any other applicable federal or state
bankruptcy, insolvency or other similar law in the United
States or seeking the appointment of a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar
official) of Northwest or for all or substantially all of its
property, or seeking the winding-up or liquidation of its
affairs and the continuation of any such case or other
proceeding undismissed and unstayed for a period of ninety
(90) consecutive days or an order, judgment or decree shall be
entered in any proceeding by any court of competent
jurisdiction appointing, without the consent of Northwest, a
receiver, trustee or liquidator of Northwest, or of any
substantial part of its property, or sequestering any
substantial part of the property of Northwest and any such
order, judgment or decree or appointment or sequestration
shall be final or shall remain in force undismissed, unstayed
or unvacated for a period of ninety (90) days after the date
of entry thereof; or
(b) the commencement by Northwest of a voluntary case
under the federal bankruptcy laws, as now constituted or
hereafter amended, or any other applicable federal or state
bankruptcy, insolvency or other similar law in the United
States, or the consent by Northwest to the appointment of or
taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator (or other similar official)
of Northwest or for all or substantially all of its property,
or the making by Northwest of any assignment for the benefit
of creditors or the taking by Northwest of any corporate
action to authorize any of the foregoing.
"NORTHWEST PROVISIONS" has the meaning provided in Section
9.1(a).
"NOTE PURCHASE AGREEMENT" means the Note Purchase Agreement
dated as of June 1, 2001 among Northwest, each Trustee, the Escrow
Agent, the Subordination Agent and the Paying Agent.
"NWA CORP." means Northwest Airlines Corporation (formerly
known as Newbridge Parent Corporation), a Delaware corporation, and
its successors and assigns.
"OFFICER'S CERTIFICATE" of any Person means a certification
signed by a Responsible Officer of such Person.
"OPERATIVE AGREEMENTS" means this Agreement, the Liquidity
Facilities, the Fee Letter, the Tax Letter, the Indentures, the
Trust Agreements, the Underwriting Agreement, the Purchase
Agreement, the Financing Agreements, the Leases, the Equipment Notes
and the Certificates, together with all exhibits and schedules
included with any of the foregoing and each of the other documents
and instruments referred to in the definitions of "Operative
Documents" contained in the Leases or any Owned Aircraft Indenture.
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"OUTSTANDING" means, when used with respect to each Class of
Certificates, as of the date of determination, all Certificates of
such Class theretofore authenticated and delivered under the related
Trust Agreement, except:
(i) Certificates of such Class theretofore cancelled by
the Registrar (as defined in such Trust Agreement) or
delivered to the Trustee thereunder or such Registrar for
cancellation;
(ii) Certificates of such Class for which money in the
full amount required to make the final distribution with
respect to such Certificates pursuant to Section 11.01 of such
Trust Agreement has been theretofore deposited with the
related Trustee in trust for the holders of such Certificates
as provided in Section 4.01 of such Trust Agreement pending
distribution of such money to such Certificateholders pursuant
to such final distribution payment; and
(iii) Certificates of such Class in exchange for or in
lieu of which other Certificates have been authenticated and
delivered pursuant to such Trust Agreement;
PROVIDED, HOWEVER, that in determining whether the holders of the
requisite Outstanding amount of such Certificates have given any
request, demand, authorization, direction, notice, consent or waiver
hereunder, any Certificates owned by Northwest or any of its
Affiliates shall be disregarded and deemed not to be Outstanding,
except that, in determining whether such Trustee shall be protected
in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Certificates that such Trustee knows
to be so owned shall be so disregarded. Certificates so owned that
have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to the satisfaction of the applicable
Trustee the pledgee's right so to act with respect to such
Certificates and that the pledgee is not Northwest or any of its
Affiliates.
"OVERDUE SCHEDULED PAYMENT" means any Scheduled Payment which
is not in fact received by the Subordination Agent within five days
of the Scheduled Payment Date relating thereto.
"OWNED AIRCRAFT" has the meaning assigned to such term in the
preliminary statements of this Agreement.
"OWNED AIRCRAFT INDENTURE" means, with respect to each Owned
Aircraft, the Indenture pertaining to such Aircraft.
"OWNER PARTICIPANT" means, with respect to any Indenture
pertaining to a Leased Aircraft, the Owner Participant (as defined
therein) and any permitted successor or assign of such Owner
Participant.
"OWNER TRUSTEE" means, with respect to any Indenture
pertaining to a Leased Aircraft, the Owner Trustee (as defined
therein) not in its individual capacity but solely as trustee under
the related owner trust agreement, together with any successor
trustee appointed pursuant to such owner trust agreement.
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"PARTICIPATION AGREEMENTS" means, with respect to each
Indenture, each of the Participation Agreements referred to therein,
as the same may be amended, supplemented or otherwise modified from
time to time in accordance with its terms.
"PASS THROUGH TRUST AGREEMENT" means the Pass Through Trust
Agreement, dated as of June 3, 1999 by and among the Guarantor,
Northwest and the State Street Bank and Trust Company of
Connecticut, National Association, not in its individual capacity
except as expressly provided therein, but solely as trustee (in such
capacity, together with its successors in such capacity, the "Pass
Through Trustee").
"PAYEE" has the meaning assigned to such term in Section
2.4(e).
"PAYING AGENT" means State Street Bank and Trust Company, as
paying agent under each Escrow and Paying Agent Agreement, together
with its successors in such capacity.
"PERFORMING EQUIPMENT NOTE" means an Equipment Note issued
pursuant to an Indenture with respect to which no payment default
has occurred and is continuing (without giving effect to any
Acceleration thereof); PROVIDED that in the event of a bankruptcy
proceeding involving Northwest under Title 11 of the United States
Code (the "Bankruptcy Code"), (i) any payment default existing
during the 60-day period under Section 1110(a)(2)(A) of the
Bankruptcy Code (or such longer period as may apply under Section
1110(b) of the Bankruptcy Code) (the "Section 1110 Period") shall
not be taken into consideration, unless during the Section 1110
Period the trustee in such proceeding or Northwest refuses to assume
or agree to perform its obligations under the Lease related to such
Equipment Notes (in the case of a Leased Aircraft) or under the
Owned Aircraft Indenture related to such Equipment Note (in the case
of an Owned Aircraft), (ii) any payment default occurring after the
date of the order of relief in such proceeding but during the
Section 1110 Period shall not be taken into consideration if such
payment default is cured under Section 1110(a)(2)(B) of the
Bankruptcy Code before the later of 30 days after the date of such
default or the expiration of the Section 1110 Period and (iii) any
payment default occurring after the Section 1110 Period will not be
taken into consideration if such payment default is cured before the
end of the grace period, if any, set forth in the related Lease (in
the case of a Leased Aircraft) or Owned Aircraft Indenture (in the
case of an Owned Aircraft).
"PERFORMING NOTE DEFICIENCY" means any time that less than 65%
of the then aggregate outstanding principal amount of all Equipment
Notes are Performing Equipment Notes.
"PERSON" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock
company, trust, trustee, unincorporated organization or government
or any agency or political subdivision thereof.
"POOL BALANCE" means, with respect to each Trust (other than
the Class D Trust) or the Certificates issued by any Trust (other
than the Class D Trust), as of any date, (i) the original aggregate
face amount of the Certificates of such Trust which, in the case
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of the Class A-1 Trust, is $201,112,000, in the case of the Class
A-2 Trust, $156,613,000, in the case of the Class B Trust,
$116,500,000, and, in the case of the Class C Trust, $106,820,000
LESS (ii) the aggregate amount of all payments made in respect of
the Certificates of such Trust or in respect of Deposits relating to
such Trust other than payments made in respect of interest or
premium thereon or reimbursement of any costs and expenses in
connection therewith. The Pool Balance for the Class D Trust or the
Class D Certificates, means, as of any date, (x) the original
aggregate amount of all of the Series D Equipment Notes acquired by
the Class D Trustee LESS (y) the aggregate amount of all payments
made in respect of the Class D Certificates other than payments made
in respect of interest or premium thereon or reimbursement of any
costs and expenses in connection therewith. The Pool Balance for
each Trust or the Certificates issued by any Trust as of any
Distribution Date shall be computed after giving effect to any
special distribution with respect to unused Deposits, any payment of
principal, if any, on the Equipment Notes or other Trust Property
held in such Trust and the distribution thereof to be made on such
date.
"PROCEEDING" means any suit in equity, action at law or other
judicial or administrative proceeding.
"PTC EVENT OF DEFAULT" means, with respect to each Trust
Agreement, the failure to pay within 10 Business Days of the due
date thereof: (i) the outstanding Pool Balance of the applicable
Class of Certificates on the Final Legal Distribution Date for such
Class or (ii) interest due on such Certificates on any Distribution
Date (unless, in the case of the Class A-1, Class A-2, Class B or
Class C Certificates, the Subordination Agent shall have made an
Interest Drawing or a withdrawal from the Cash Collateral Account
with respect thereto in an amount sufficient to pay such interest
and shall have distributed such amount to the Trustee entitled
thereto).
"RATING AGENCIES" means, collectively, at any time, each
nationally recognized rating agency which shall have been requested
to rate the Certificates (other than the Class D Certificates) and
which shall then be rating the Certificates (other than the Class D
Certificates). Initially, the Rating Agencies shall consist of
Moody's and Standard & Poor's.
"RATINGS CONFIRMATION" means, with respect to any action
proposed to be taken, a written confirmation from each of the Rating
Agencies that such action would not result in (i) a reduction of the
rating for any Class of Certificates (other than the Class D
Certificates) below the then current rating for such Class of
Certificates or (ii) a withdrawal or suspension of the rating of any
Class of Certificates (other than the Class D Certificates).
"REGULAR DISTRIBUTION DATES" means each April 1 and October 1,
commencing on October 1, 2001; PROVIDED, HOWEVER, that, if any such
day shall not be a Business Day, the related distribution shall be
made on the next succeeding Business Day without additional
interest.
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"REPLACEMENT LIQUIDITY FACILITY" means, for any Trust (other
than the Class D Trust), an irrevocable revolving credit agreement
in substantially the form of the Liquidity Facility for such Trust
that is being replaced, including reinstatement provisions or in
such other form (which may include a letter of credit) as shall
permit the Rating Agencies to confirm in writing their respective
ratings then in effect for the related Certificates (other than the
Class D Certificates) (before downgrading of such ratings, if any,
as a result of the downgrading of the Liquidity Provider), in a face
amount equal to the Required Amount for such Liquidity Facility and
issued by a Replacement Liquidity Provider, PROVIDED that, if a form
of Liquidity Facility that is not substantially in the form of the
replaced Liquidity Facility is to be used, Northwest shall have
received a satisfactory opinion of tax counsel satisfactory to
Northwest with respect to such form of Replacement Liquidity
Facility (and a copy of such opinion shall be furnished to the
Subordination Agent).
"REPLACEMENT LIQUIDITY PROVIDER" means a Person having
unsecured debt ratings which are equal to or higher than the
Threshold Rating.
"REQUIRED AMOUNT" means, with respect to each Liquidity
Facility and each Cash Collateral Account related thereto, for any
day, the sum of the aggregate amount of interest, calculated at the
rate per annum equal to the Stated Interest Rate for the related
Class of Certificates, that would be payable on such Class of
Certificates on each of the three successive Regular Distribution
Dates immediately following such day or, if such day is a Regular
Distribution Date, on such day and the succeeding two Regular
Distribution Dates, in each case calculated on the basis of the Pool
Balance of such Class of Certificates on such date and without
regard to expected future payments of principal on such Class of
Certificates.
"RESPONSIBLE OFFICER" means (i) with respect to the
Subordination Agent and each of the Trustees, any officer in the
corporate trust administration department of the Subordination Agent
or such Trustee or any other officer customarily performing
functions similar to those performed by the Persons who at the time
shall be such officers, respectively, or to whom any corporate trust
matter is referred because of his knowledge of and familiarity with
a particular subject and (ii) with respect to each Liquidity
Provider, any authorized officer or agent of such Liquidity
Provider.
"SCHEDULED PAYMENT" means, with respect to any Equipment Note,
(i) any payment of principal and interest on such Equipment Note
(other than an Overdue Scheduled Payment) due from the obligor
thereon or (ii) any payment of interest on the corresponding Class
of Certificates with funds drawn under any Liquidity Facility, which
payment represents the installment of principal at the stated
maturity of such installment of principal on such Equipment Note,
the payment of regularly scheduled interest accrued on the unpaid
principal amount of such Equipment Note, or both; PROVIDED that any
payment of principal of, premium, if any, or interest resulting from
the redemption or purchase of any Equipment Note shall not
constitute a Scheduled Payment.
"SCHEDULED PAYMENT DATE" means, with respect to any Scheduled
Payment, the date on which such Scheduled Payment is scheduled to be
made.
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"SECTION 2.4(B) FRACTION" has the meaning assigned to such
term in Section 2.4(b)(i).
"SERIES A-1 EQUIPMENT NOTES" means the 7.041% Series A-1
Equipment Notes issued pursuant to each Indenture by the related
Owner Trustee or Northwest, as the case may be and authenticated by
the Loan Trustee thereunder, and any such Equipment Notes issued in
exchange therefor or replacement thereof pursuant to the terms of
such Indenture.
"SERIES A-2 EQUIPMENT NOTES" means the 6.841% Series A-2
Equipment Notes issued pursuant to each Indenture by the related
Owner Trustee or Northwest, as the case may be and authenticated by
the Loan Trustee thereunder, and any such Equipment Notes issued in
exchange therefor or replacement thereof pursuant to the terms of
such Indenture.
"SERIES B EQUIPMENT NOTES" means the 7.691% Series B Equipment
Notes issued pursuant to each Indenture by the related Owner Trustee
or Northwest, as the case may be, and authenticated by the Loan
Trustee thereunder, and any such Equipment Notes issued in exchange
therefor or replacement thereof pursuant to the terms of such
Indenture.
"SERIES C EQUIPMENT NOTES" means the 7.626% Series C Equipment
Notes issued pursuant to each Indenture by the related Owner Trustee
or Northwest, as the case may be, and authenticated by the Loan
Trustee thereunder, and any such Equipment Notes issued in exchange
therefor or replacement thereof pursuant to the terms of such
Indenture.
"SERIES D EQUIPMENT NOTES" means the equipment notes, if any,
issued pursuant to any Indenture with respect to an Airbus A319-100
or Boeing 759-300 Aircraft by the related Owner Trustee or
Northwest, as the case may be, and authenticated by the Loan Trustee
thereunder, and designated as "Series D" thereunder, and any such
equipment notes issued in exchange therefor or replacement thereof
pursuant to the terms of such Indenture..
"SPECIAL DISTRIBUTION DATE" means, with respect to any Special
Payment, the date chosen by the Subordination Agent pursuant to
Section 2.4(a) for the distribution of such Special Payment in
accordance with this Agreement; PROVIDED, HOWEVER, that, if any such
day shall not be a Business Day, the related distribution shall be
made on the next succeeding Business Day without additional
interest.
"SPECIAL PAYMENT" means any payment (other than a Scheduled
Payment) in respect of, or any proceeds of, any Equipment Note,
Trust Indenture Estate or Collateral (as defined in each Indenture),
including Overdue Scheduled Payments, payments in respect of the
redemption or repurchase of any Equipment Note and payments in
respect of the sale of any Equipment Note to the related Owner
Trustee, Owner Participant or any other Person.
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"SPECIAL PAYMENTS ACCOUNT" means the Eligible Deposit Account
created pursuant to Section 2.2 as a sub-account to the Collection
Account.
"SPECIFIED INVESTMENTS" has the meaning assigned to such term
in the Pass Through Trust Agreement.
"STANDARD & POOR'S" means Standard & Poor's Ratings Services,
a division of The XxXxxx-Xxxx Companies, Inc.
"STATE STREET OF CONNECTICUT" has the meaning assigned to it
in the preamble to this Agreement.
"STATED AMOUNT" with respect to any Liquidity Facility, means
the Maximum Commitment (as defined in such Liquidity Facility) of
the applicable Liquidity Provider thereunder.
"STATED EXPIRATION DATE" has the meaning specified in Section
3.6(d).
"STATED INTEREST RATE" means (i) with respect to the Class A-1
Certificates, 7.041% per annum; (ii) with respect to the Class A-2
Certificates, 6.841% per annum; (iii) with respect to the Class B
Certificates, 7.691% per annum, (iv) with respect to the Class C
Certificates, 7.626% per annum and (v) with respect to the Class D
Certificates, the interest rate specified in the Class D Trust
Agreement.
"SUBORDINATION AGENT" has the meaning assigned to it in the
preamble to this Agreement.
"SUBORDINATION AGENT INCUMBENCY CERTIFICATE" has the meaning
assigned to such term in Section 2.5(a).
"SUBORDINATION AGENT REPRESENTATIVE" has the meaning assigned
to such term in Section 2.5(a).
"TAX" and "TAXES" mean any and all taxes, fees, levies,
duties, tariffs, imposts, and other charges of any kind (together
with any and all interest, penalties, loss, damage, liability,
expense, additions to tax and additional amounts or costs incurred
or imposed with respect thereto) imposed or otherwise assessed by
the United States or by any state, local or foreign government (or
any subdivision or agency thereof) or other taxing authority,
including, without limitation: taxes or other charges on or with
respect to income, franchises, windfall or other profits, gross
receipts, property, sales, use, capital stock, payroll, employment,
social security, workers' compensation, unemployment compensation,
or net worth and similar charges; taxes or other charges in the
nature of excise, withholding, ad valorem, stamp, transfer, value
added, taxes on goods and services, gains taxes, license,
registration and documentation fees, customs duties, tariffs, and
similar charges.
"TAX LETTER" means the tax letter dated as of June 1, 2001
between Northwest and the Liquidity Provider.
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"THRESHOLD RATING" means the short-term unsecured debt rating
of P-1 by Moody's and A-1+ by Standard & Poor's, in the case of the
Class A-1 or Class A-2 Liquidity Provider, and the short-term
unsecured debt rating of P-1 by Moody's and A-1 by Standard &
Poor's, in the case of the Class B Liquidity Provider and the Class
C Liquidity Provider.
"TREASURY REGULATIONS" means regulations, including proposed
or temporary regulations, promulgated under the Code. References
herein to specific provisions of proposed or temporary regulations
shall include analogous provisions of final Treasury Regulations or
other successor Treasury Regulations.
"TRIGGERING EVENT" means (x) the occurrence of an Indenture
Default under all of the Indentures resulting in a PTC Event of
Default with respect to the most senior Class of Certificates then
Outstanding, (y) the Acceleration of all of the outstanding
Equipment Notes (PROVIDED that, with respect to the period prior to
the Delivery Period Expiry Date, such Equipment Notes have an
aggregate principal balance in excess of $300,000,000) or (z) the
occurrence of a Northwest Bankruptcy Event.
"TRUST" means any of the Class A-1 Trust, the Class A-2 Trust,
the Class B Trust, the Class C Trust or, upon its formation, the
Class D Trust.
"TRUST ACCOUNTS" has the meaning assigned to such term in
Section 2.2(a).
"TRUST AGREEMENT" means any of the Class A-1 Trust Agreement,
the Class A-2 Trust Agreement, Class B Trust Agreement, Class C
Trust Agreement or, upon the execution thereof, the Class D Trust
Agreement.
"TRUSTEE" means any of the Class A-1 Trustee, the Class A-2
Trustee, the Class B Trustee, the Class C Trustee or upon the
execution of the Class D Trust Agreement, the Class D Trustee.
"TRUSTEE INCUMBENCY CERTIFICATE" has the meaning assigned to
such term in Section 2.5(b).
"TRUSTEE REPRESENTATIVES" has the meaning assigned to such
term in Section 2.5(b).
"UNDERWRITERS" means Xxxxxxx Xxxxx Xxxxxx Inc., X.X. Xxxxxx
Securities Inc., Credit Suisse First Boston Corporation, Deutsche
Banc Alex. Xxxxx Inc., Xxxxxx Xxxxxxx & Co. Incorporated and U.S.
Bancorp Xxxxx Xxxxxxx Inc.
"UNDERWRITING AGREEMENT" means the Underwriting Agreement
dated May 22, 2001, by and among the Underwriters, Northwest and the
Guarantor, relating to the purchase of the Class A-1 Certificates,
the Class A-2 Certificates, the Class B Certificates and the Class C
Certificates by the Underwriters, as the same may be amended,
supplemented or otherwise modified from time to time in accordance
with its terms.
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"WRITTEN NOTICE" means, from (i) any Trustee or Liquidity
Provider, a written instrument executed by the Designated
Representative of such Person, and (ii) the Subordination Agent, a
written instrument executed by a Person designated in the Officer's
Certificate of the Subordination Agent delivered on the Closing
Date. An invoice delivered by a Liquidity Provider pursuant to
Section 3.1 in accordance with its normal invoicing procedures shall
constitute Written Notice under such Section.
ARTICLE II
TRUST ACCOUNTS; CONTROLLING PARTY
Section 2.1. AGREEMENT TO TERMS OF SUBORDINATION; PAYMENTS
FROM MONIES RECEIVED ONLY. (a) Each Trustee hereby acknowledges and agrees to
the terms of subordination set forth in this Agreement in respect of each Class
of Certificates and agrees to enforce such provisions and cause all payments in
respect of the Equipment Notes and the Liquidity Facilities to be applied in
accordance with the terms of this Agreement. In addition, each Trustee hereby
agrees to cause the Equipment Notes purchased by the related Trust to be
registered in the name of the Subordination Agent, as agent and trustee for such
Trustee, to be held in trust by the Subordination Agent solely for the purpose
of facilitating the enforcement of the subordination and other provisions of
this Agreement.
(b) Each of the Trustees and the Subordination Agent hereby
agrees and, as provided in each Trust Agreement, each Certificateholder, by its
acceptance of a Certificate, and each Liquidity Provider, by entering into the
Liquidity Facility to which it is a party, has agreed to look solely to such
amounts to the extent available for distribution to it as provided in this
Agreement and to the relevant Deposits and that none of the Trustees, Owner
Trustees, Loan Trustees, Owner Participants nor the Subordination Agent is
personally liable to any of them for any amounts payable or any liability under
this Agreement, any Trust Agreement, any Liquidity Facility or such Certificate,
except (in the case of the Subordination Agent) as expressly provided herein or
(in the case of the Trustees) as expressly provided in each Trust Agreement or
(in the case of the Owner Trustees and the Loan Trustees) as expressly provided
in any Operative Agreement.
Section 2.2. TRUST ACCOUNTS. (a) Upon the execution of this
Agreement, the Subordination Agent shall establish and maintain in its name (i)
the Collection Account as an Eligible Deposit Account, bearing a designation
clearly indicating that the funds deposited therein are held in trust for the
benefit of the Trustees, the Certificateholders and the Liquidity Providers and
(ii) as a sub-account in the Collection Account, the Special Payments Account as
an Eligible Deposit Account, bearing a designation clearly indicating that the
funds deposited therein are held in trust for the benefit of the Trustees, the
Certificateholders and the Liquidity Providers. The Subordination Agent shall
establish and maintain the Cash Collateral Accounts pursuant to and under the
circumstances set forth in Section 3.6(f) hereof. Upon such establishment and
maintenance under Section 3.6(f) hereof, the Cash Collateral Accounts shall,
together with the Collection Account, constitute the "TRUST ACCOUNTS" hereunder.
(b) Funds on deposit in the Trust Accounts shall be invested
and reinvested by the Subordination Agent in Eligible Investments selected by
the Subordination Agent if such
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investments are reasonably available and have maturities no later than the
earlier of (i) 90 days following the date of such investment and (ii) the
Business Day immediately preceding the Regular Distribution Date or the date of
the related distribution pursuant to Section 2.4 hereof, as the case may be,
next following the date of such investment; PROVIDED, HOWEVER, that following
the making of a Non-Extension Drawing, the Subordination Agent shall invest and
reinvest such amounts in Eligible Investments at the direction of the Liquidity
Provider; PROVIDED FURTHER, however, that upon the occurrence and during the
continuation of a Triggering Event, the Subordination Agents shall invest and
reinvest such amounts (other than amounts in the Cash Collateral Accounts as a
result of a Non-Extension Drawing, which shall be governed by the foregoing
proviso) in Eligible Investments in accordance with the written instructions of
the Controlling Party. Unless otherwise expressly provided in this Agreement
(including, without limitation, with respect to Investment Earnings on deposit
in the Cash Collateral Accounts, Section 3.6(f) hereof), any Investment Earnings
shall be deposited in the Collection Account when received by the Subordination
Agent and shall be applied by the Subordination Agent in the same manner as the
principal amount of such investment is to be applied and any losses shall be
charged against the principal amount invested, in each case net of the
Subordination Agent's reasonable fees and expenses in making such investments.
The Subordination Agent shall not be liable for any loss resulting from any
investment, reinvestment or liquidation required to be made under this Agreement
other than by reason of its willful misconduct or gross negligence or, with
respect to the handling or transfer of funds, ordinary negligence. Eligible
Investments and any other investment required to be made hereunder shall be held
to their maturities except that any such investment may be sold (without regard
to its maturity) by the Subordination Agent without instructions whenever such
sale is necessary to make a distribution required under this Agreement.
Uninvested funds held hereunder shall not earn or accrue interest.
(c) The Subordination Agent shall possess all right, title and
interest in all funds on deposit from time to time in the Trust Accounts and in
all proceeds thereof (including all income thereon, except as otherwise provided
herein with respect to Investment Earnings). The Trust Accounts shall be held in
trust by the Subordination Agent under the sole dominion and control of the
Subordination Agent for the benefit of the Trustees, the Certificateholders and
the Liquidity Providers, as the case may be. If, at any time, any of the Trust
Accounts ceases to be an Eligible Deposit Account, the Subordination Agent shall
within 10 Business Days (or such longer period, not to exceed 30 calendar days,
to which each Rating Agency may consent) establish a new Collection Account,
Special Payments Account or Cash Collateral Account, as the case may be, as an
Eligible Deposit Account and shall transfer any cash and/or any investments to
such new Collection Account, Special Payments Account or Cash Collateral
Account, as the case may be. So long as the Subordination Agent is an Eligible
Institution, the Trust Accounts shall be maintained with it as Eligible Deposit
Accounts.
Section 2.3. DEPOSITS TO THE COLLECTION ACCOUNT AND SPECIAL
PAYMENTS ACCOUNT. (a) The Subordination Agent shall, upon receipt thereof,
deposit in the Collection Account all Scheduled Payments received by it.
(b) The Subordination Agent shall, on each date when one or
more Special Payments are made to the Subordination Agent as holder of the
Equipment Notes, deposit in the Special Payments Account the aggregate amount of
such Special Payments.
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Section 2.4. DISTRIBUTIONS OF SPECIAL PAYMENTS. (a) NOTICE OF
SPECIAL PAYMENT. Except as provided in Section 2.4(e), upon receipt by the
Subordination Agent, as registered holder of the Equipment Notes, of any notice
of a Special Payment (or, in the absence of any such notice, upon receipt by the
Subordination Agent of a Special Payment), the Subordination Agent shall
promptly give notice thereof to each Trustee and the Liquidity Providers. The
Subordination Agent shall promptly calculate the amount of the redemption or
purchase of Equipment Notes or the amount of any Overdue Scheduled Payment, as
the case may be, comprising such Special Payment under the applicable Indenture
or Indentures and shall promptly send to each Trustee and the Liquidity Provider
a Written Notice of such amount and the amount allocable to each Trust. Such
Written Notice shall also set the distribution date for such Special Payment (a
"SPECIAL DISTRIBUTION DATE"), which shall be a Business Day which follows the
later to occur of (x) the 15th day after the date of such Written Notice or (y)
the date the Subordination Agent has received or expects to receive such Special
Payment. Amounts on deposit in the Special Payments Account shall be distributed
in accordance with Sections 2.4(b) and 2.4(c) hereof, as applicable.
(b) (i) REDEMPTIONS AND PURCHASES OF EQUIPMENT NOTES. So long
as no Triggering Event shall have occurred (whether or not continuing), the
Subordination Agent shall make distributions pursuant to this Section 2.4(b) of
amounts on deposit in the Special Payments Account on account of the redemption
or purchase (including, without limitation, a purchase resulting from the sale
of the Equipment Notes permitted by Article IV hereof) of all of the Equipment
Notes issued pursuant to an Indenture on the Special Distribution Date for such
Special Payment in the following order of priority:
FIRST, such amount as shall be required to pay (A) all accrued
and unpaid Liquidity Expenses then in arrears PLUS (B) the product
of (x) the aggregate amount of all accrued and unpaid Liquidity
Expenses not in arrears to such Special Distribution Date MULTIPLIED
BY (y) a fraction, the numerator of which is the aggregate
outstanding principal amount of Equipment Notes (other than Series D
Equipment Notes) being redeemed, purchased or prepaid on such
Special Distribution Date and the denominator of which is the
aggregate outstanding principal amount of all Equipment Notes (other
than Series D Equipment Notes) (the "SECTION 2.4(b) FRACTION")
("ACCRUED AMOUNTS"), shall be distributed to the applicable
Liquidity Providers PRO RATA on the basis of the amount of Liquidity
Expenses owed to each Liquidity Provider;
SECOND, such amount as shall be required to pay (A) all
accrued and unpaid interest then in arrears on all Liquidity
Obligations PLUS (B) the product of (x) the aggregate amount of all
accrued and unpaid interest on all Liquidity Obligations not in
arrears to such Special Distribution Date (at the rate provided in
the applicable Liquidity Facility) MULTIPLIED BY (y) the Section
2.4(b) Fraction, shall be distributed to the Liquidity Providers PRO
RATA on the basis of the amount of such accrued and unpaid interest
owed to each Liquidity Provider;
THIRD, such amount as shall be required (A) if any Cash
Collateral Account had been previously funded as provided in Section
3.6(f), to fund such Cash Collateral Account up to its Required
Amount shall be deposited in such Account, (B) if any Liquidity
Facility shall become a Downgraded Facility or a Non-Extended
Facility at a
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time when unreimbursed Interest Drawings under such Liquidity
Facility have reduced the Available Amount thereunder to zero, to
deposit into the related Cash Collateral Account an amount equal to
such Account's Required Amount shall be deposited in such Account,
and (C) if with respect to any particular Liquidity Facility neither
subclause (A) nor subclause (B) of this clause "third" is
applicable, to pay or reimburse the Liquidity Provider in respect of
such Liquidity Facility in an amount equal to the amount of any
unreimbursed Interest Drawings under such Liquidity Facility shall
be distributed to such Liquidity Provider, PRO RATA on the basis of
the amounts of all such deficiencies and/or unreimbursed Interest
Drawings;
FOURTH, if, with respect to any particular Liquidity Facility,
any amounts are to be distributed pursuant to either subclause (A)
or (B) of clause "THIRD" above, then the Liquidity Provider with
respect to such Liquidity Facility shall be paid the excess of (x)
the aggregate outstanding amount of unreimbursed Advances (whether
or not then due) under such Liquidity Facility over (y) the Required
Amount for the relevant Class, PRO RATA on the basis of such amounts
in respect of each Liquidity Provider;
FIFTH, such amount as shall be required to pay in full
Expected Distributions to the holders of Class A-1 and Class A-2
Certificates on such Special Distribution Date shall be distributed
to the Class A-1 and Class A-2 Trustees; PROVIDED that if available
funds are insufficient to pay an Expected Distribution to each such
Class in full, available funds will be distributed to each of the
Class A-1 Trustee and Class A-2 Trustee in the same proportion as
such Trustee's proportionate share of the aggregate amount of such
Expected Distributions;
SIXTH, such amount as shall be required to pay in full
Expected Distributions to the holders of Class B Certificates on
such Special Distribution Date shall be distributed to the Class B
Trustee;
SEVENTH, such amount as shall be required to pay in full
Expected Distributions to the holders of Class C Certificates on
such Special Distribution Date shall be distributed to the Class C
Trustee;
EIGHTH, such amount as shall be required to pay in full
Expected Distributions to the holders of Class D Certificates, if
any, on such Special Distribution Date shall be distributed to the
Class D Trustee; and
NINTH, the balance, if any, of such Special Payment shall be
transferred to the Collection Account for distribution in accordance
with Section 3.2 hereof.
For the purpose of this Section 2.4(b)(i), clause (x) of the definition of
"Expected Distributions" shall be deemed to read as follows: "(x) accrued, due
and unpaid interest on such Certificates excluding interest, if any, payable
with respect to the Deposits related to such Trust".
(ii) Upon the occurrence of a Triggering Event (whether or not
continuing), the Subordination Agent shall make distributions
pursuant to this Section 2.4(b) of amounts on deposit in the Special
Payments Account on account of the redemption or
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purchase of all of the Equipment Notes issued pursuant to an
Indenture on the Special Distribution Date for such Special Payment
in accordance with Section 3.3 hereof.
(c) OTHER SPECIAL PAYMENTS. Except as provided in clause (e)
below, any amounts on deposit in the Special Payments Account other than in
respect of amounts to be distributed pursuant to Section 2.4(b) shall be
distributed on the Special Distribution Date therefor in accordance with Article
III hereof.
(d) INVESTMENT OF AMOUNTS IN SPECIAL PAYMENTS ACCOUNT. Any
amounts on deposit in the Special Payments Account prior to the distribution
thereof pursuant to Section 2.4(b) or (c) shall be invested in accordance with
Section 2.2(b). Investment Earnings on such investments shall be distributed in
accordance with Section 2.4(b) or (c), as the case may be.
(e) CERTAIN PAYMENTS. The Subordination Agent will distribute
promptly upon receipt thereof (i) any indemnity payment received by it from the
Owner Participant, the Owner Trustee or Northwest in respect of any Trustee, any
Liquidity Provider, Paying Agent, Depositary or any Escrow Agent (collectively,
the "PAYEES") and (ii) any compensation (including, without limitation, any fees
payable to any Liquidity Provider under the Fee Letters) received by it from the
Owner Participant, the Owner Trustee or Northwest under any Operative Agreement
in respect of any Payee, directly to the Payee entitled thereto.
Section 2.5. DESIGNATED REPRESENTATIVES. (a) With the delivery
of this Agreement, the Subordination Agent shall furnish to each Liquidity
Provider and each Trustee, and from time to time thereafter may furnish to each
Liquidity Provider and each Trustee, at the Subordination Agent's discretion, or
upon any Liquidity Provider's or Trustee's request (which request shall not be
made more than one time in any 12-month period), a certificate (a "SUBORDINATION
AGENT INCUMBENCY CERTIFICATE") of a Responsible Officer of the Subordination
Agent certifying as to the incumbency and specimen signatures of the officers of
the Subordination Agent and the attorney-in-fact and agents of the Subordination
Agent (the "SUBORDINATION AGENT REPRESENTATIVES") authorized to give Written
Notices on behalf of the Subordination Agent hereunder. Until each Liquidity
Provider and Trustee receives a subsequent Subordination Agent Incumbency
Certificate, it shall be entitled to rely on the last Subordination Agent
Incumbency Certificate delivered to it hereunder.
(b) With the delivery of this Agreement, each Trustee shall
furnish to the Subordination Agent, and from time to time thereafter may furnish
to the Subordination Agent, at such Trustee's discretion, or upon the
Subordination Agent's request (which request shall not be made more than one
time in any 12-month period), a certificate (a "TRUSTEE INCUMBENCY CERTIFICATE")
of a Responsible Officer of such Trustee certifying as to the incumbency and
specimen signatures of the officers of such Trustee and the attorney-in-fact and
agents of such Trustee (the "TRUSTEE REPRESENTATIVES") authorized to give
Written Notices on behalf of such Trustee hereunder. Until the Subordination
Agent receives a subsequent Trustee Incumbency Certificate, it shall be entitled
to rely on the last Trustee Incumbency Certificate delivered to it hereunder.
(c) With the delivery of this Agreement, each Liquidity
Provider shall furnish to the Subordination
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Agent, and from time to time thereafter may furnish to the Subordination Agent,
at such Liquidity Provider's discretion, or upon the Subordination Agent's
request (which request shall not be made more than one time in any 12-month
period), a certificate (an "LP INCUMBENCY CERTIFICATE") of any authorized
signatory of such Liquidity Provider certifying as to the incumbency and
specimen signatures of any officer, attorney-in-fact, agent or other designated
representative of such Liquidity Provider (the "LP REPRESENTATIVES" and,
together with the Trustee Representatives, the "DESIGNATED REPRESENTATIVES")
authorized to give Written Notices on behalf of such Liquidity Provider
hereunder. Until the Subordination Agent receives a subsequent LP Incumbency
Certificate, it shall be entitled to rely on the last LP Incumbency Certificate
delivered to it hereunder.
Section 2.6. CONTROLLING PARTY. (a) The Trustees and the
Liquidity Providers hereby agree that, with respect to any Indenture at any
given time, the Loan Trustee thereunder will be directed (i) in taking, or
refraining from taking, any action with respect to such Indenture or the
Equipment Notes issued thereunder, so long as no Indenture Default has occurred
and is continuing thereunder, by the holders of at least a majority of the
outstanding principal amount of such Equipment Notes (PROVIDED that, for so long
as the Subordination Agent is the registered holder of the Equipment Notes, the
Subordination Agent shall act with respect to this clause (i) in accordance with
the directions of the Trustees of Trusts for which the related Trust Properties
include, in the aggregate, such a majority of outstanding principal amount of
Equipment Notes), and (ii) after the occurrence and during the continuance of an
Indenture Default thereunder (which, in the case of an Indenture pertaining to a
Leased Aircraft, has not been cured by the applicable Owner Trustee or the
applicable Owner Participant, if applicable, pursuant to Section 4.03 of such
Indenture), in taking, or refraining from taking, any action with respect to
such Indenture or such Equipment Notes, including exercising remedies thereunder
(including accelerating the Equipment Notes issued thereunder or foreclosing the
Lien on the Aircraft securing such Equipment Notes), by the Controlling Party.
(b) Subject to subparagraph (c) below, the Person who shall be
the "CONTROLLING PARTY" with respect to any Indenture shall be: (w) the Class
A-1 or Class A-2 Trustee, whichever represents the Class with the larger
principal amount of Certificates outstanding at the time that the Indenture
Default occurs, until payment of final distributions to the holders of such
larger Class, and thereafter the other of the Class A-1 Trustee or Class A-2
Trustee, until payment of final distributions to the holders of such other
Class; (x) upon payment of Final Distributions to the holders of Class A-1 and
Class A-2 Certificates, the Class B Trustee; (y) upon payment of Final
Distributions to the holders of Class B Certificates, the Class C Trustee; and
(z) upon payment of Final Distributions to the holders of Class C Certificates,
the Class D Trustee, if there be one. For purposes of giving effect to the
foregoing, the Trustees (other than the Controlling Party) irrevocably agree
(and the Certificateholders (other than the Certificateholders represented by
the Controlling Party) shall be deemed to agree by virtue of their purchase of
Certificates) that the Subordination Agent, as record holder of the Equipment
Notes, shall exercise its voting rights in respect of the Equipment Notes as
directed by the Controlling Party and any vote so exercised shall be binding
upon the Trustees and all Certificateholders.
The Subordination Agent shall give Written Notice to all of
the other parties to this Agreement promptly upon a change in the identity of
the Controlling Party. Each of the parties hereto agrees that it shall not
exercise any of the rights of the Controlling Party at such time as it is not
the Controlling Party hereunder; PROVIDED, however, that nothing herein
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contained shall prevent or prohibit any Non-Controlling Party from exercising
such rights as shall be specifically granted to such Non-Controlling Party
hereunder and under the other Operative Agreements.
(c) Notwithstanding the foregoing, at any time after 18 months
from the earliest to occur of (i) the date on which the entire Available Amount
under any Liquidity Facility shall have been drawn (for any reason other than a
Downgrade Drawing or a Non-Extension Drawing) and any amount remains
unreimbursed, (ii) the date on which the entire amount of any Downgrade Drawing
or Non-Extension Drawing has been withdrawn from a Cash Collateral Account to
pay interest on the related Class of Certificates and remains unreimbursed and
(iii) the date on which all Equipment Notes shall have been Accelerated
(provided that with respect to the period prior to the Delivery Period Expiry
Date, such Equipment Notes have an aggregate outstanding principal balance in
excess of $300,000,000), the Liquidity Provider with the highest outstanding
amount of unreimbursed Liquidity Obligations (so long as such Liquidity Provider
has not defaulted in its obligation to make any advance under any Liquidity
Facility) shall have the right to elect, by Written Notice to the Subordination
Agent and each of the Trustees, to become the Controlling Party hereunder with
respect to any Indenture at any time from and including the last day of such
18-month period.
(d) The exercise of remedies by the Controlling Party under
this Agreement shall be expressly limited by Section 4.1(a)(ii) hereof.
(e) The Controlling Party shall not be entitled to require or
obligate any Non-Controlling Party to provide funds necessary to exercise any
right or remedy hereunder.
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF
AMOUNTS RECEIVED
Section 3.1. WRITTEN NOTICE OF DISTRIBUTION. (a) No later than
3:00 P.M. (New York City time) on the Business Day immediately preceding each
Distribution Date (or Special Distribution Date for purposes of Section 2.4(b)
hereof, as the case may be), each of the following Persons shall deliver to the
Subordination Agent a Written Notice setting forth the following information as
at the close of business on such Business Day:
(i) With respect to the Class A-1 and Class A-2 Certificates,
the Class A-1 and Class A-2 Trustees, respectively, shall separately
set forth the amounts to be paid in accordance with clause "FIFTH"
of Section 3.2 or Section 2.4(b), as the case may be, hereof;
(ii) With respect to the Class B Certificates, the Class B
Trustee shall separately set forth the amounts to be paid in
accordance with clause "SIXTH" of Section 3.2 or Section 2.4(b), as
the case may be, hereof;
(iii) With respect to the Class C Certificates, the Class C
Trustee shall separately set forth the amounts to be paid in
accordance with clause "SEVENTH" of Section 3.2 or Section 2.4(b),
as the case may be, hereof;
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(iv) With respect to the Class D Certificates, the Class D
Trustee shall separately set forth the amounts to be paid in
accordance with clause "EIGHTH" of Section 3.2 or Section 2.4(b),
as the case may be, hereof;
(v) With respect to each Liquidity Facility, the Liquidity
Provider thereunder shall separately set forth the amounts to be
paid in accordance with clauses "FIRST", "SECOND", "THIRD" and
"FOURTH" of Section 3.2 or Section 2.4(b), as the case may be,
hereof; and
(vi) Each Trustee shall set forth the amounts to be paid in
accordance with clause "NINTH" of Section 3.2 hereof.
The notices required under this Section 3.1(a) shall be provided to the
Subordination Agent by the parties referenced therein or by any one of them
pursuant to an agreement between the parties referred to therein, and may state
that, unless there has been a prepayment of the Certificates, such notice is to
remain in effect until any substitute notice or amendment shall be given to the
Subordination Agent by the party providing such notice.
(b) Following the occurrence of a Triggering Event, the
Subordination Agent shall request the following information from the following
Persons, and each of the following Persons shall, upon the request of the
Subordination Agent, deliver a Written Notice to the Subordination Agent setting
forth for such Person the following information:
(i) With respect to the Class A-1 and Class A-2 Certificates,
the Class A-1 and Class A-2 Trustees, respectively, shall separately
set forth the amounts to be paid in accordance with clauses "FIRST"
(relating to reimbursement of payments made by such Trustee or the
Class A-1 and Class A-2 Certificateholders), "SIXTH" and "SEVENTH"
of Section 3.3 hereof;
(ii) With respect to the Class B Certificates, the Class B
Trustee shall separately set forth the amounts to be paid in
accordance with clauses "FIRST" (relating to reimbursement of
payments made by such Trustee or the Class B Certificateholders),
"SIXTH" and "EIGHTH" of Section 3.3 hereof;
(iii) With respect to the Class C Certificates, the Class C
Trustee shall separately set forth the amounts to be paid in
accordance with clauses "FIRST" (relating to reimbursement of
payments made by such Trustee or the Class C Certificateholders),
"SIXTH" and "NINTH" of Section 3.3 hereof;
(iv) With respect to the Class D Certificates, the Class D
Trustee shall separately set forth the amounts to be paid in
accordance with clauses "FIRST" (relating to reimbursement of
payments made by such Trustee or the Class D Certificateholders),
"SIXTH" and "TENTH" of Section 3.3 hereof;
(v) With respect to each Liquidity Facility, the Liquidity
Provider thereunder shall separately set forth the amounts to be
paid in accordance with clauses "FIRST", "SECOND," "THIRD", "FOURTH"
and "FIFTH" of Section 3.3 hereof; and
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(vi) Each Trustee shall set forth the amounts to be paid in
accordance with clause "SIXTH" of Section 3.3 hereof. -----
(c) At such time as a Trustee or a Liquidity Provider shall
have received all amounts owing to it (and, in the case of a Trustee, the
Certificateholders for which it is acting) pursuant to Section 2.4, 3.2 or 3.3
hereof, as applicable, and, in the case of a Liquidity Provider, its commitment
under the related Liquidity Facility shall have terminated or expired, such
Person shall, by a Written Notice, so inform the Subordination Agent and each
other party to this Agreement.
(d) As provided in Section 6.5 hereof, the Subordination Agent
shall be fully protected in relying on any of the information set forth in a
Written Notice provided by any Trustee or any Liquidity Provider pursuant to
paragraphs (a) through (c) above and shall have no independent obligation to
verify, calculate or recalculate any amount set forth in any Written Notice
delivered in accordance with such paragraphs.
(e) Any Written Notice delivered by a Trustee or a Liquidity
Provider, as applicable, pursuant to Section 3.1(a), 3.1(b) or 3.1(c) hereof, if
made prior to 10:00 A.M. (New York City time) shall be effective on the date
delivered (or if delivered later shall be effective as of the next Business
Day). Subject to the terms of this Agreement, the Subordination Agent shall as
promptly as practicable comply with any such instructions; PROVIDED, HOWEVER,
that any transfer of funds pursuant to any instruction received after 10:00 A.M.
(New York City time) on any Business Day may be made on the next succeeding
Business Day.
(f) In the event the Subordination Agent shall not receive
from any Person any information set forth in paragraphs (a) or (b) above which
is required to enable the Subordination Agent to make a distribution to such
Person pursuant to Section 2.4, 3.2 or 3.3 hereof, the Subordination Agent shall
request such information in writing and, failing to receive any such
information, the Subordination Agent shall, after written notice to such person,
not make such distribution(s) to such Person. In such event, the Subordination
Agent shall make distributions pursuant to clauses "FIRST" through "NINTH" of
Section 2.4, clauses "FIRST" through "TENTH" of Section 3.2 and clauses "FIRST"
through "TWELFTH" of Section 3.3 to the extent it shall have sufficient
information to enable it to make such distributions, and shall continue to hold
any funds remaining, after making such distributions, until the Subordination
Agent shall receive all necessary information to enable it to distribute any
funds so withheld.
(g) On such dates (but not more frequently than monthly) as
any Liquidity Provider or any Trustee shall request, the Subordination Agent
shall send to such party a written statement reflecting all amounts on deposit
with the Subordination Agent pursuant to Section 3.1(f) hereof.
Section 3.2. DISTRIBUTION OF AMOUNTS ON DEPOSIT IN THE
COLLECTION ACCOUNT. Except as otherwise provided in Sections 2.4, 3.1(f), 3.3,
3.4 and 3.6(b), amounts on deposit in the Collection Account (or, in the case of
any amount described in Section 2.4(c), on deposit in the Special Payments
Account) shall be promptly distributed on each Distribution Date (or, in the
case of any amount described in Section 2.4(c), on the Special Distribution Date
therefor) in
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the following order of priority and in accordance with the information provided
to the Subordination Agent pursuant to Section 3.1(a) hereof:
FIRST, such amount as shall be required to pay all accrued and
unpaid Liquidity Expenses owed to each Liquidity Provider shall be
distributed to the Liquidity Providers PRO RATA on the basis of the
amount of Liquidity Expenses owed to each Liquidity Provider;
SECOND, such amount as shall be required to pay in full the
aggregate amount of interest accrued on all Liquidity Obligations
(at the rate provided in the applicable Liquidity Facility) and
unpaid shall be distributed to the Liquidity Providers PRO RATA on
the basis of the amount of Liquidity Obligations owed to each
Liquidity Provider;
THIRD, such amount as shall be required (A) if any Cash
Collateral Account had been previously funded as provided in Section
3.6(f), to fund such Account up to its Required Amount shall be
deposited in such Account, (B) if any Liquidity Facility shall
become a Downgraded Facility or a Non-Extended Facility at a time
when unreimbursed Interest Drawings under such Liquidity Facility
have reduced the Available Amount thereunder to zero, to deposit
into the related Cash Collateral Account an amount equal to such
Account's Required Amount shall be deposited in such Cash Collateral
Account, and (C) if, with respect to any particular Liquidity
Facility, neither subclause (A) nor subclause (B) of this clause
"THIRD" is applicable, to pay or reimburse the Liquidity Provider in
respect of such Liquidity Facility in an amount equal to the amount
of all Liquidity Obligations then due under such Liquidity Facility
(other than amounts payable pursuant to clause "FIRST" or "SECOND"
of this Section 3.2) shall be distributed to such Liquidity
Provider, PRO RATA on the basis of the amounts of all such
deficiencies and/or unreimbursed Liquidity Obligations owed to each
Liquidity Provider;
FOURTH, if, with respect to any particular Liquidity Facility,
any amounts are to be distributed pursuant to either subclause (A)
or (B) of clause "THIRD" above, then the Liquidity Provider with
respect to such Liquidity Facility shall be paid the excess of (x)
the aggregate outstanding amount of unreimbursed Advances (whether
or not then due) under such Liquidity Facility over (y) the Required
Amount for the relevant Class, PRO RATA on the basis of such amounts
in respect of each Liquidity Provider;
FIFTH, such amount as shall be required to pay in full
Expected Distributions to the holders of Class A-1 and Class A-2
Certificates on such Distribution Date shall be distributed to the
Class A-1 and Class A-2 Trustees; PROVIDED that if available funds
are insufficient to pay an Expected Distribution to each such Class
in full, available funds will be distributed to each of the Class
A-1 Trustee and Class A-2 Trustee in the same proportion as such
Trustee's proportionate share of the aggregate amount of such
Expected Distributions;
SIXTH, such amount as shall be required to pay in full
Expected Distributions to the holders of the Class B Certificates on
such Distribution Date shall be distributed to the Class B Trustee;
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SEVENTH, such amount as shall be required to pay in full
Expected Distributions to the holders of the Class C Certificates on
such Distribution Date shall be distributed to the Class C Trustee;
EIGHTH, such amount as shall be required to pay in full
Expected Distributions to the holders of the Class D Certificates on
such Distribution Date shall be distributed to the Class D Trustee;
NINTH, such amount as shall be required to pay in full the
aggregate unpaid amount of fees and expenses payable as of such
Distribution Date to the Subordination Agent and each Trustee
pursuant to the terms of this Agreement and the Trust Agreements, as
the case may be, shall be distributed to the Subordination Agent and
such Trustee; and
TENTH, the balance, if any, of any such payment remaining
thereafter shall be held in the Collection Account for later
distribution in accordance with this Article III (including the
priorities set forth therein).
Section 3.3. DISTRIBUTION OF AMOUNTS ON DEPOSIT FOLLOWING A
TRIGGERING EVENT. (a) Except as otherwise provided in Sections 3.1(f) and 3.6(b)
hereof, upon the occurrence of a Triggering Event and at all times thereafter,
all funds in the Collection Account or the Special Payments Account shall be
promptly distributed by the Subordination Agent in the following order of
priority:
FIRST, such amount as shall be required to reimburse (i) the
Subordination Agent for any out-of-pocket costs and expenses
actually incurred by it (to the extent not previously reimbursed) in
the protection of, or the realization of the value of, the Equipment
Notes or any Trust Indenture Estate (as defined in the relevant
Indenture), shall be applied by the Subordination Agent in
reimbursement of such costs and expenses, (ii) each Trustee for any
amounts of the nature described in clause (i) above actually
incurred by it under the applicable Trust Agreement (to the extent
not previously reimbursed), shall be distributed to such Trustee and
(iii) any Liquidity Provider or Certificateholder for payments, if
any, made by it to the Subordination Agent or any Trustee in respect
of amounts described in clause (i) above, shall be distributed to
such Liquidity Provider or to the applicable Trustee for the account
of such Certificateholder, in each such case, PRO RATA on the basis
of all amounts described in clauses (i) through (iii) above;
SECOND, such amount remaining as shall be required to pay all
accrued and unpaid Liquidity Expenses shall be distributed to each
Liquidity Provider PRO RATA on the basis of the amount of Liquidity
Expenses owed to each Liquidity Provider;
THIRD, such amount remaining as shall be required to pay
accrued and unpaid interest on the Liquidity Obligations as provided
in the Liquidity Facilities shall be distributed to each Liquidity
Provider PRO RATA on the basis of the amount of such accrued and
unpaid interest owed to each Liquidity Provider;
FOURTH, such amount remaining as shall be required (A) if any
Cash Collateral Account had been previously funded as provided in
Section 3.6(f), unless (i) a
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Performing Note Deficiency exists and a Liquidity Event of Default
shall have occurred and be continuing with respect to the relevant
Liquidity Facility or (ii) a Final Drawing shall have occurred with
respect to such Liquidity Facility, to fund such Account up to its
Required Amount (less the amount of any repayments of Interest
Drawings under such Liquidity Facility while subclause (A)(i) above
is applicable) shall be deposited in such Cash Collateral Account,
(B) if any Liquidity Facility shall become a Downgraded Facility or
a Non-Extended Facility at a time when unreimbursed Interest
Drawings under such Liquidity Facility have reduced the Available
Amount thereunder to zero, unless (i) a Performing Note Deficiency
exists and a Liquidity Event of Default shall have occurred and be
continuing with respect to the relevant Liquidity Facility or (ii) a
Final Drawing shall have occurred with respect to such Liquidity
Facility, to deposit into the related Cash Collateral Account an
amount equal to such Cash Collateral Account's Required Amount (less
the amount of any repayments of Interest Drawings under such
Liquidity Facility while subclause (B)(i) above is applicable) shall
be deposited in such Cash Collateral Account, and (C) if, with
respect to any particular Liquidity Facility, neither subclause (A)
nor subclause (B) of this clause "fourth" are applicable, to pay in
full the outstanding amount of all Liquidity Obligations then due
under such Liquidity Facility (other than amounts payable pursuant
to clause "SECOND" or "THIRD" of this Section 3.3) shall be
distributed to such Liquidity Provider, PRO RATA on the basis of the
amounts of all such required deposits and/or unreimbursed Liquidity
Obligations in respect of each Liquidity Provider;
FIFTH, if, with respect to any particular Liquidity Facility,
any amounts are to be distributed pursuant to either subclause (A)
or (B) of clause "FOURTH" above, then the Liquidity Provider with
respect to such Liquidity Facility shall be paid the excess of (x)
the aggregate outstanding amount of unreimbursed advances (whether
or not then due) under such Liquidity Facility over (y) the Required
Amount for the relevant Class (less the amount of any repayments of
Interest Drawings under such Liquidity Facility while subclause
(A)(i) or (B)(i), as the case may be, of clause "FOURTH" above is
applicable), PRO RATA on the basis of such amounts in respect of
each Liquidity Provider;
SIXTH, such amount as shall be required to reimburse or pay
(i) the Subordination Agent for any Tax (other than Taxes imposed on
compensation paid hereunder), expense, fee, charge or other loss
incurred by or any other amount payable to the Subordination Agent
in connection with the transactions contemplated hereby (to the
extent not previously reimbursed), shall be applied by the
Subordination Agent in reimbursement of such amount, (ii) each
Trustee for any Tax (other than Taxes imposed on compensation paid
under the applicable Trust Agreement), expense, fee, charge, loss or
any other amount payable to such Trustee under the applicable Trust
Agreements (to the extent not previously reimbursed), shall be
distributed to such Trustee and (iii) each Certificateholder for
payments, if any, made by it pursuant to Section 5.2 hereof in
respect of amounts described in clause (i) above, shall be
distributed to the applicable Trustee for the account of such
Certificateholder, in each such case, PARI PASSU on the basis of all
amounts described in clauses (i) through (iii) above;
SEVENTH, such amount as shall be required to pay in full
Adjusted Expected Distributions to the holders of Class A-1 and
Class A-2 Certificates on such Distribution
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Date shall be distributed to the Class A-1 and Class A-2 Trustees;
PROVIDED that if available funds are insufficient to pay an Adjusted
Expected Distribution to each such Class in full, available funds
will be distributed to each of the Class A-1 Trustee and Class A-2
Trustee in the same proportion as such Trustee's proportionate share
of the aggregate amount of such Adjusted Expected Distributions;
EIGHTH, such amount remaining as shall be required to pay in
full Adjusted Expected Distributions on the Class B Certificates
shall be distributed to the Class B Trustee;
NINTH, such amount remaining as shall be required to pay in
full Adjusted Expected Distributions on the Class C Certificates
shall be distributed to the Class C Trustee;
TENTH, such amount remaining as shall be required to pay in
full Adjusted Expected Distributions on the Class D Certificates
shall be distributed to the Class D Trustee;
ELEVENTH, such amount remaining shall be retained in the
Collection Account until the immediately succeeding Distribution
Date or, if all Classes of Certificates shall have been paid in
full, shall be distributed to the Owner Trustee to the extent that
the amount received from the Loan Trustees and deposited in the
Collection Account exceed the amounts described in clauses "FIRST"
through "TENTH" above; and
TWELFTH, amount remaining shall be distributed to the
Certificateholders of the related Trust.
Section 3.4. OTHER PAYMENTS. (a) Any payments received by the
Subordination Agent for which no provision as to the application thereof is made
in this Agreement shall be distributed by the Subordination Agent in the order
of priority specified in Section 3.3 hereof.
(b) On any Interest Payment Date under each Liquidity Facility
which is not a Distribution Date, the Subordination Agent shall pay to the
Liquidity Provider under such Liquidity Facility from, and to the extent of,
amounts on deposit in the Collection Account, an amount equal to the amount of
interest then due and payable to such Liquidity Provider under such Liquidity
Facility.
Section 3.5. PAYMENTS TO THE TRUSTEES AND THE LIQUIDITY
PROVIDERS. Any amounts distributed hereunder to any Liquidity Provider shall be
paid to such Liquidity Provider by wire transfer of funds to the address such
Liquidity Provider shall provide to the Subordination Agent. The Subordination
Agent shall provide a Written Notice of any such transfer to the applicable
Liquidity Provider, as the case may be, at the time of such transfer. Any
amounts distributed hereunder by the Subordination Agent to any Trustee which
shall not be the same institution as the Subordination Agent shall be paid to
such Trustee by wire transfer of funds to the address such Trustee shall provide
to the Subordination Agent.
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Section 3.6. LIQUIDITY FACILITIES. (a) INTEREST DRAWINGS. If
on any Distribution Date, after giving effect to the subordination provisions of
this Agreement, the Subordination Agent shall not have sufficient funds for the
payment of any amounts due and owing in respect of accrued interest on the Class
A-1 Certificates, the Class A-2 Certificates, the Class B Certificates or the
Class C Certificates (at the Stated Interest Rate for such Class of
Certificates), then, prior to 1:00 p.m. (New York City time) on such
Distribution Date, the Subordination Agent shall request a drawing (each such
drawing, an "INTEREST DRAWING") under the Liquidity Facility with respect to
such Class of Certificates in an amount equal to the lesser of (i) an amount
sufficient to pay the amount of such accrued interest (at the Stated Interest
Rate for such Class of Certificates) or (ii) the Available Amount under such
Liquidity Facility, and shall pay such amount to the Trustee with respect to
such Class of Certificates in payment of such accrued interest.
(b) APPLICATION OF INTEREST DRAWINGS. Notwithstanding anything
to the contrary contained in this Agreement, (i) all payments received by the
Subordination Agent in respect of an Interest Drawing under the Class A-1
Liquidity Facility and all amounts withdrawn by the Subordination Agent from the
Class A-1 Cash Collateral Account, and payable in each case to the Class A-1
Certificateholders, shall be promptly distributed to the Class A-1 Trustee and
(ii) all payments received by the Subordination Agent in respect of an Interest
Drawing under the Class A-2 Liquidity Facility and all amounts withdrawn by the
Subordination Agent from the Class A-2 Cash Collateral Account, and payable in
each case to the Class A-2 Certificateholders, shall be promptly distributed to
the Class A-2 Trustee and (iii) all payments received by the Subordination Agent
in respect of an Interest Drawing under the Class B Liquidity Facility and all
amounts withdrawn by the Subordination Agent from the Class B Cash Collateral
Account, and payable in each case to the Class B Certificateholders, shall be
promptly distributed to the Class B Trustee and (iv) all payments received by
the Subordination Agent in respect of an Interest Drawing under the Class C
Liquidity Facility and all amounts withdrawn by the Subordination Agent from the
Class C Cash Collateral Account, and payable in each case to the Class C
Certificateholders, shall be promptly distributed to the Class C Trustee.
(c) DOWNGRADE DRAWINGS. If at any time a Downgrade Event
occurs with respect to any Liquidity Provider, within ten (10) days (or
forty-five (45) days in the event that such Liquidity Provider's short-term
unsecured debt rating by Standard & Poor's is downgraded from A-1+ to A-1 and
the applicable Threshold Rating is A-1+ for Standard & Poor's) after receiving
notice of such Downgrade Event (but no later than the expiration date of the
Liquidity Facility issued by the Liquidity Provider (the "DOWNGRADED FACILITY")
in respect of which the Downgrade Event occurs), such Liquidity Provider may
arrange, or the Subordination Agent (in consultation with Northwest), may
arrange for a Replacement Liquidity Provider to issue and deliver a Replacement
Liquidity Facility to the Subordination Agent. If a Downgraded Facility has not
been replaced in accordance with the terms of this paragraph, the Subordination
Agent shall, on such 10th day or 45th day, as the case may be (or if such 10th
day or 45th day is not a Business Day, on the next succeeding Business Day) (or,
if earlier, the expiration date of such Downgraded Facility), request a drawing
in accordance with and to the extent permitted by such Downgraded Facility (such
drawing, a "DOWNGRADE DRAWING") of all available and undrawn amounts thereunder.
Amounts drawn pursuant to a Downgrade Drawing shall be maintained and invested
as provided in Section 3.6(f) hereof. The Liquidity Provider may also arrange
for a Replacement Liquidity Provider to issue and deliver a Replacement
Liquidity Facility at any
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time after such Downgrade Drawing so long as such Downgrade Drawing has not been
reimbursed in full to the Liquidity Provider.
(d) NON-EXTENSION DRAWINGS. If any Liquidity Facility with
respect to any Class of Certificates is scheduled to expire on a date (the
"STATED EXPIRATION DATE") prior to the date that is 15 days after the Final
Legal Distribution Date for such Class of Certificates, then, no earlier than
the 60th day and no later than the 40th day prior to the then Stated Expiration
Date, the Subordination Agent shall request that such Liquidity Provider extend
the Stated Expiration Date to the earlier of (i) the date which is 15 days after
the Final Legal Distribution Date for such Class of Certificates and (ii) the
date that is the day immediately preceding the 364th day occurring after the
last day of the Consent Period (as hereinafter defined) (unless the obligations
of such Liquidity Provider thereunder are earlier terminated in accordance with
such Liquidity Facility); PROVIDED HOWEVER, that at its option a Liquidity
Provider may elect to extend the Stated Expiration Date for its Liquidity
Facility for any Class of Certificates to the date that is 15 days after the
Final Legal Distribution Date for the relevant Class of Certificates in
accordance with Section 2.11 of such Liquidity Facility. Whether or not the
Liquidity Provider has received a request from the Subordination Agent, the
Liquidity Provider may, but shall not be obligated to, advise the Subordination
Agent, no earlier than the 40th day (or, if earlier, the date of such Liquidity
Provider's receipt of such request, if any, from the Subordination Agent) and no
later than the 25th day prior to the Stated Expiration Date then in effect for
the Liquidity Facility of such Liquidity Provider (such period, with respect to
such Liquidity Facility, the "CONSENT PERIOD"), whether, in its sole and
absolute discretion, it agrees to so extend the Stated Expiration Date. If, on
or before the date on which such Consent Period ends, such Liquidity Facility
shall not have been so extended or replaced in accordance with Section 3.6(e),
or if the Liquidity Provider fails irrevocably and unconditionally to advise the
Subordination Agent on or before the date on which such Consent Period ends that
such Stated Expiration Date shall be so extended, the Subordination Agent shall,
on the date on which such Consent Period ends (or as soon as possible
thereafter), in accordance with and to the extent permitted by the terms of the
expiring Liquidity Facility (a "NON-EXTENDED FACILITY"), request a drawing under
such expiring Liquidity Facility (such drawing, a "NON-EXTENSION DRAWING") of
all available and undrawn amounts thereunder. Amounts drawn pursuant to any
Non-Extension Drawing shall be maintained and invested in accordance with
Section 3.6(f) hereof.
(e) ISSUANCE OF REPLACEMENT LIQUIDITY FACILITY. At any time,
the Subordination Agent may, at its option, in consultation with Northwest,
arrange for a Replacement Liquidity Facility to replace the Liquidity Facility
for any applicable Class of Certificates; PROVIDED HOWEVER, that, the initial
Liquidity Provider may not be replaced by Northwest as a Liquidity Provider with
respect to such Liquidity Facility prior to the third anniversary of the Closing
Date, unless there shall have become due to the initial Liquidity Provider
amounts pursuant to Section 3.01, 3.02 or 3.03 of the Liquidity Facilities and
the replacement of the initial Liquidity Provider would reduce or eliminate the
obligation to pay such amounts, any Liquidity Facility of such initial Liquidity
Provider shall have become a Downgraded Facility or a Non-Extended Facility or a
Downgrade Drawing or a Non-Extension Drawing shall have occurred under any
Liquidity Facility of such initial Liquidity Provider or such initial Liquidity
Provider shall have breached any of its payment (including, without limitation,
funding) obligations under any Liquidity Facility in respect of which it is the
Liquidity Provider; PROVIDED FURTHER that, the Liquidity Provider may arrange,
or the Subordination Agent (in consultation with Northwest) may arrange,
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for a Replacement Liquidity Provider pursuant to paragraphs (c) and (d) of this
Section 3.6. In any such consultation, the Subordination Agent shall accept the
recommendations of Northwest in the absence of a good faith reason not to do so.
In addition, so long as Helaba is the Liquidity Provider for any Liquidity
Facility, at any time after a Non-Extension Drawing has been made under any
Liquidity Facility or at any time after Helaba has extended the Stated
Expiration Date under any such Liquidity Facility to the date that is 15 days
after the applicable Final Legal Distribution Date in accordance with the
provisions of such Liquidity Facility, the Liquidity Provider thereunder may, at
its option, arrange for a Replacement Liquidity Facility to replace the
Liquidity Facility under which such Non-Extension Drawing has been made or under
which the Stated Expiration Date has been so extended. No such Replacement
Liquidity Facility executed in connection therewith shall become effective and
no such Replacement Liquidity Facility shall be deemed a "Liquidity Facility"
under the Operative Agreements, unless and until (i) the conditions referred to
in the immediately following paragraph shall have been satisfied and (ii) if
such Replacement Liquidity Facility shall materially adversely affect the
rights, remedies, interests or obligations of the Class A-1 Certificateholders,
the Class A-2 Certificateholders, the Class B Certificateholders or the Class C
Certificateholders under any of the Operative Agreements, the applicable Trustee
shall have consented, in writing, to the execution and issuance of such
Replacement Liquidity Facility.
In connection with the issuance of each Replacement Liquidity
Facility, the Subordination Agent shall (x) prior to the issuance of such
Replacement Liquidity Facility, obtain written confirmation from each Rating
Agency that such Replacement Liquidity Facility will not cause a reduction of
the rating then in effect for any Class of Certificates by such Rating Agency
(without regard to any downgrading of the ratings of any Liquidity Provider
being replaced pursuant to Section 3.6(c) hereof), (y) pay all Liquidity
Obligations then owing to the replaced Liquidity Provider (which payment shall
be made first from available funds in the Cash Collateral Account as described
in clause (ix) of Section 3.6(f) hereof and thereafter from any other available
source, including, without limitation, a drawing under the Replacement Liquidity
Facility, it being understood that no Replacement Liquidity Facility shall
become effective (other than insofar as necessary to permit the repayment of
amounts owed to the replaced Liquidity Provider) until all amounts owed to the
replaced Liquidity Provider have been paid) and (z) cause the issuer of the
Replacement Liquidity Facility to deliver the Replacement Liquidity Facility to
the Subordination Agent, together with a legal opinion opining that such
Replacement Liquidity Facility is an enforceable obligation of such Replacement
Liquidity Provider. Upon satisfaction of the conditions set forth in this
Section 3.6(e), (i) the replaced Liquidity Facility shall terminate and (ii)
such Replacement Liquidity Provider shall be deemed to be a Liquidity Provider
with the rights and obligations of a Liquidity Provider hereunder and under the
other Operative Agreements and such Replacement Liquidity Facility shall be
deemed to be a Liquidity Facility hereunder and under the other Operative
Agreements.
(f) CASH COLLATERAL ACCOUNTS; WITHDRAWALS; INVESTMENTS. In the
event the Subordination Agent shall draw all available amounts under the Class
A-1 Liquidity Facility, the Class A-2 Liquidity Facility, the Class B Liquidity
Facility or the Class C Liquidity Facility pursuant to Section 3.6(c), 3.6(d) or
3.6(i), amounts so drawn shall be deposited by the Subordination Agent in the
Class A-1 Cash Collateral Account, the Class A-2 Cash Collateral Account, the
Class B Cash Collateral Account or the Class C Cash Collateral Account,
respectively. Amounts so deposited shall be invested in Eligible Investments in
accordance with
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Section 2.2(b) hereof. On each Interest Payment Date (or, in the case of any
Special Distribution Date occurring prior to the occurrence of a Triggering
Event, on such Special Distribution Date), Investment Earnings on amounts on
deposit in each Cash Collateral Account (or in the case of any Special
Distribution Date occurring prior to the occurrence of a Triggering Event, an
amount of such Investment Earnings on amounts of deposits in each Cash
Collateral Account equal to the product of such Investment Earnings multiplied
by a fraction, the numerator of which is the aggregate outstanding principal
amount of Equipment Notes being redeemed, purchased or prepaid on such Special
Distribution Date and the denominator of which is the aggregate outstanding
principal amount of all Equipment Notes) shall be deposited in the Collection
Account (or, in the case of any Special Distribution Date occurring prior to the
occurrence of a Triggering Event, the Special Payments Account) and applied on
such Interest Payment Date (or Special Distribution Date, as the case may be) in
accordance with Section 2.4(b), 3.2, 3.3 or 3.4(b) (as applicable). The
Subordination Agent shall deliver a written statement to the respective
Liquidity Provider one day prior to each Interest Payment Date and Special
Distribution Date setting forth the aggregate amount of Investment Earnings held
in the applicable Cash Collateral Accounts as of such date. In addition, from
and after the date funds are so deposited, the Subordination Agent shall make
withdrawals from such account as follows:
(i) on each Distribution Date, the Subordination Agent shall,
to the extent it shall not have received funds to pay accrued and
unpaid interest on the Class A-1 Certificates (at the Stated
Interest Rate for the Class A-1 Certificates) from any other source,
withdraw from the Class A-1 Cash Collateral Account, and pay to the
Class A-1 Trustee an amount equal to the lesser of (x) an amount
necessary to pay accrued and unpaid interest (at the Stated Interest
Rate for the Class A-1 Certificates) on such Class A-1 Certificates
and (y) the amount on deposit in the Class A-1 Cash Collateral
Account;
(ii) on each Distribution Date, the Subordination Agent shall,
to the extent it shall not have received funds to pay accrued and
unpaid interest on the Class A-2 Certificates (at the Stated
Interest Rate for the Class A-2 Certificates) from any other source,
withdraw from the Class A-2 Cash Collateral Account, and pay to the
Class A-2 Trustee an amount equal to the lesser of (x) an amount
necessary to pay accrued and unpaid interest (at the Stated Interest
Rate for the Class A-2 Certificates) on such Class A-2 Certificates
and (y) the amount on deposit in the Class A-2 Cash Collateral
Account;
(iii) on each Distribution Date, the Subordination Agent
shall, to the extent it shall not have received funds to pay accrued
and unpaid interest on the Class B Certificates (at the Stated
Interest Rate for the Class B Certificates) from any other source,
withdraw from the Class B Cash Collateral Account, and pay to the
Class B Trustee an amount equal to the lesser of (x) an amount
necessary to pay accrued and unpaid interest (at the Stated Interest
Rate for the Class B Certificates) on such Class B Certificates and
(y) the amount on deposit in the Class B Cash Collateral Account;
(iv) on each Distribution Date, the Subordination Agent shall,
to the extent it shall not have received funds to pay accrued and
unpaid interest on the Class C Certificates (at the Stated Interest
Rate for the Class C Certificates) from any other
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source, withdraw from the Class C Cash Collateral Account, and pay
to the Class C Trustee an amount equal to the lesser of (x) an
amount necessary to pay accrued and unpaid interest (at the Stated
Interest Rate for the Class C Certificates) on such Class C
Certificates and (y) the amount on deposit in the Class C Cash
Collateral Account;
(v) on each date on which the Pool Balance of the Class A-1
Trust shall have been reduced by payments made to the Class A-1
Certificateholders pursuant to Section 2.4, 3.2 or 3.3 hereof or
pursuant to Section 2.03 of the Escrow and Paying Agent Agreement
for such Class, the Subordination Agent shall withdraw from the
Class A-1 Cash Collateral Account such amount as is necessary so
that, after giving effect to the reduction of the Pool Balance on
such date (including any such reduction resulting from a prior
withdrawal of amounts on deposit in the Class A-1 Cash Collateral
Account on such date) and any transfer of Investment Earnings from
such Cash Collateral Account to the Collection Account or the
Special Payments Account on such date, an amount equal to the sum of
the Required Amount (with respect to the Class A-1 Liquidity
Facility) PLUS the remaining Investment Earnings on deposit in such
Cash Collateral Account (if any) will be on deposit in the Class A-1
Cash Collateral Account and shall FIRST, pay such amount to the
Class A-1 Liquidity Provider until the Liquidity Obligations (with
respect to the Class A-1 Certificates) shall have been paid in full,
and SECOND, deposit any remaining amount in the Collection Account;
(vi) on each date on which the Pool Balance of the Class A-2
Trust shall have been reduced by payments made to the Class A-2
Certificateholders pursuant to Section 2.4, 3.2 or 3.3 hereof or
pursuant to Section 2.03 of the Escrow and Paying Agent Agreement
for such Class, the Subordination Agent shall withdraw from the
Class A-2 Cash Collateral Account such amount as is necessary so
that, after giving effect to the reduction of the Pool Balance on
such date (including any such reduction resulting from a prior
withdrawal of amounts on deposit in the Class A-2 Cash Collateral
Account on such date) and any transfer of Investment Earnings from
such Cash Collateral Account to the Collection Account or the
Special Payments Account on such date, an amount equal to the sum of
the Required Amount (with respect to the Class A-2 Liquidity
Facility) PLUS the remaining Investment Earnings on deposit in such
Cash Collateral Account (if any) will be on deposit in the Class A-2
Cash Collateral Account and shall FIRST, pay such amount to the
Class A-2 Liquidity Provider until the Liquidity Obligations (with
respect to the Class A-2 Certificates) shall have been paid in full,
and SECOND, deposit any remaining amount in the Collection Account;
(vii) on each date on which the Pool Balance of the Class B
Trust shall have been reduced by payments made to the Class B
Certificateholders pursuant to Section 2.4, 3.2 or 3.3 hereof or
pursuant to Section 2.03 of the Escrow and Paying Agent Agreement
for such Class, the Subordination Agent shall withdraw from the
Class B Cash Collateral Account such amount as is necessary so that,
after giving effect to the reduction of the Pool Balance on such
date (including any such reduction resulting from a prior withdrawal
of amounts on deposit in the Class B Cash Collateral Account on such
date), and any transfer of Investment Earnings from such Cash
Collateral Account to the Collection Account or the Special Payments
Account on such date, an amount equal to the sum of the Required
Amount (with respect to the Class B Liquidity Facility) PLUS the
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remaining Investment Earnings on deposit in such Cash Collateral
Account (if any) will be on deposit in the Class B Cash Collateral
Account and shall FIRST, pay such amount to the Class B Liquidity
Provider until the Liquidity Obligations (with respect to the Class
B Certificates) shall have been paid in full, and SECOND, deposit
any remaining amount in the Collection Account;
(viii) on each date on which the Pool Balance of the Class C
Trust shall have been reduced by payments made of the Class C
Certificateholders pursuant to Section 2.4, 3.2 or 3.3 hereof or
pursuant to Section 2.03 of the Escrow and Paying Agent Agreement
for such Class, the Subordination Agent shall withdraw from the
Class C Cash Collateral Account such amount as is necessary so that,
after giving effect to the reduction of the Pool Balance on such
date (including any such reduction resulting from a prior withdrawal
of amounts on deposit in the Class C Cash Collateral Account on such
date), and any transfer of Investment Earnings from such Cash
Collateral Account to the Collection Account or the Special Payments
Account on such date, an amount equal to the sum of the Required
Amount (with respect to the Class C Liquidity Facility) plus the
remaining Investment Earnings on deposit in such Cash Collateral
Account (if any) will be on deposit in the Class C Cash Collateral
Account and shall FIRST, pay such amount to the Class C Liquidity
Provider until the Liquidity Obligations (with respect to the Class
C Certificates) shall have been paid in full, and SECOND, deposit
any remaining amount in the Collection Account;
(ix) if a Replacement Liquidity Facility for any Class of
Certificates shall be delivered to the Subordination Agent following
the date on which funds have been deposited into the Cash Collateral
Account for such Class of Certificates, the Subordination Agent
shall withdraw all amounts on deposit in such Cash Collateral
Account and shall pay such amounts to each replaced Liquidity
Provider PARI PASSU until all Liquidity Obligations owed to such
Person shall have been paid in full, and shall deposit any remaining
amount in the Collection Account; and
(x) following the payment of Final Distributions with respect
to any Class of Certificates, on the date on which the Subordination
Agent shall have been notified by the Liquidity Provider for such
Class of Certificates that the Liquidity Obligations owed to such
Liquidity Provider have been paid in full, the Subordination Agent
shall withdraw all amounts on deposit in the Cash Collateral Account
in respect of such Class of Certificates and shall deposit such
amount in the Collection Account.
(g) REINSTATEMENT. With respect to any Interest Drawing under
the Liquidity Facility for any applicable Trust, upon the reimbursement of the
applicable Liquidity Provider for all or any part of the amount of such Interest
Drawing, together with any accrued interest thereon, the Available Amount of
such Liquidity Facility shall be reinstated by an amount equal to the amount so
reimbursed to the applicable Liquidity Provider, but not to exceed the Required
Amount for such Liquidity Facility; PROVIDED, HOWEVER, that such Liquidity
Facility shall not be so reinstated in part or in full at any time if (x) both a
Performing Note Deficiency exists and a Liquidity Event of Default shall have
occurred and be continuing with respect to the relevant Liquidity Facility or
(y) a Final Drawing shall have occurred with respect to such Liquidity Facility.
In the event that, with respect to any particular Liquidity Facility, (i) funds
are
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withdrawn from any Cash Collateral Account pursuant to clause (i), (ii), (iii)
or (iv) of Section 3.6(f) or (ii)such Liquidity Facility shall become a
Downgraded Facility or a Non-Extended Facility at a time when unreimbursed
Interest Drawings under such Liquidity Facility have reduced the Available
Amount thereunder to zero, then funds received by the Subordination Agent at any
time, other than (x) any time when both a Performing Note Deficiency exists and
a Liquidity Event of Default shall have occurred and be continuing with respect
to such Liquidity Facility or (y) any time after a Final Drawing shall have
occurred with respect to such Liquidity Facility, shall be deposited in such
Cash Collateral Account as and to the extent provided in clause "THIRD" of
Section 2.4(b), clause "THIRD" of Section 3.2 or clause "FOURTH" of Section 3.3,
as applicable, and applied in accordance with Section 3.6(f).
(h) REIMBURSEMENT. The amount of each drawing under the
Liquidity Facilities shall be due and payable, together with interest thereon,
on the dates and at the rates, respectively, provided in the Liquidity
Facilities.
(i) FINAL DRAWING. If any action is required under a Liquidity
Facility to be taken by the Subordination Agent in order to make a Final Drawing
thereunder, the Subordination Agent shall not fail to take such action. Upon
receipt of the proceeds of a Final Drawing under the related Liquidity Facility,
the Subordination Agent shall maintain and invest such proceeds in accordance
with Section 3.6(f) hereof.
(j) REDUCTION OF STATED AMOUNT. Promptly following each date
on which the Required Amount of the Liquidity Facility for a Class of
Certificates is reduced as a result of a distribution to the Certificateholders
of such Class of Certificates, the Subordination Agent shall, if such Liquidity
Facility provides for reductions of the Stated Amount of such Liquidity Facility
and if such reductions are not automatic, request the Liquidity Provider for
such Class of Certificates to reduce such Stated Amount to an amount equal to
the Required Amount with respect to such Liquidity Facility (as calculated by
the Subordination Agent after giving effect to such payment). Each such request
shall be made in accordance with the provisions of the applicable Liquidity
Facility.
(k) RELATION TO SUBORDINATION PROVISIONS. Interest Drawings
under the Liquidity Facilities and withdrawals from the Cash Collateral
Accounts, in each case, in respect of interest on the Certificates of any
applicable Class, will be distributed to the Trustee for such Class of
Certificates, notwithstanding Sections 2.4(b), 3.2, 3.3 and 3.6(h) hereof.
ARTICLE IV
EXERCISE OF REMEDIES
Section 4.1. DIRECTIONS FROM THE CONTROLLING PARTY. (a) (i)
Following the occurrence and during the continuation of an Indenture Default
under any Indenture, the Controlling Party shall direct the Loan Trustee under
such Indenture in the exercise of remedies available to the holders of the
Equipment Notes issued pursuant to such Indenture, including, without
limitation, the ability to vote all such Equipment Notes in favor of declaring
all of the unpaid principal amount of such Equipment Notes and accrued and
unpaid interest thereon to be due and payable under, and in accordance with, the
provisions of such Indenture. Subject to the
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Owner Trustees' and the Owner Participants' rights, if any, set forth in the
Indentures with respect to Leased Aircraft to purchase the Equipment Notes, if
the Equipment Notes issued pursuant to any Indenture have been Accelerated
following an Indenture Default with respect thereto, the Controlling Party may
sell, assign, contract to sell or otherwise dispose of and deliver all (but not
less than all) of such Equipment Notes to any Person at public or private sale,
at any location at the option of the Controlling Party, all upon such terms and
conditions as it may reasonably deem advisable in accordance with applicable
law.
(ii) Subject to the Owner Trustees' and the Owner
Participants' rights set forth in the Indentures with respect to Leased Aircraft
to purchase the Equipment Notes, and notwithstanding the foregoing, so long as
any Certificates remain Outstanding, during the period ending on the date which
is nine months after the earlier of (x) the Acceleration of the Equipment Notes
issued pursuant to any Indenture or (y) the occurrence of a Northwest Bankruptcy
Event, without the consent of each Trustee (other than the Trustee of any Trust
all of the Certificates of which are held or beneficially owned by Northwest
and/or its Affiliates), (A) no Aircraft subject to the Lien of such Indenture or
such Equipment Notes may be sold if the net proceeds from such sale would be
less than the Minimum Sale Price for such Aircraft or such Equipment Notes, and
(B) with respect to any Leased Aircraft, the amount and payment dates of rentals
payable by Northwest under the Lease for such Aircraft may not be adjusted, if,
as a result of such adjustment, the discounted present value of all such rentals
would be less than 75% of the discounted present value of the rentals payable by
Northwest under such Lease before giving effect to such adjustment, in each
case, using the weighted average interest rate of the Equipment Notes issued
pursuant to such Indenture as the discount rate.
(iii) At the request of the Controlling Party, the
Subordination Agent may from time to time during the continuance of an Indenture
Default (and before the occurrence of a Triggering Event) commission LTV
Appraisals with respect to the related Aircraft.
(iv) After a Triggering Event occurs and any Equipment Note
becomes a Non-Performing Equipment Note, the Subordination Agent shall obtain
LTV Appraisals for all of the Aircraft as soon as practicable and additional LTV
Appraisals on or prior to each anniversary of the date of such initial LTV
Appraisals; PROVIDED that, if the Controlling Party reasonably objects to the
appraised value of the Aircraft shown in any such LTV Appraisals, the
Controlling Party shall have the right to obtain or cause to be obtained at its
expense substitute LTV Appraisals (including any LTV Appraisals based upon
physical inspection of the Aircraft).
(b) The Controlling Party shall take such actions as it may
reasonably deem most effectual to complete the sale or other disposition of such
Aircraft or Equipment Notes. In addition, in lieu of any sale, assignment,
contract to sell or other disposition, the Subordination Agent, on behalf of the
Controlling Party, may maintain possession of such Equipment Notes and continue
to apply monies received in respect of such Equipment Notes in accordance with
Article III hereof. In addition, in lieu of such sale, assignment, contract to
sell or other disposition, or in lieu of such maintenance of possession, the
Controlling Party may instruct the Loan Trustee under such Indenture to
foreclose on the Lien on the related Aircraft or to take any other remedial
action permitted under such Indenture or applicable law.
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Section 4.2. REMEDIES CUMULATIVE. Each and every right, power
and remedy given to the Trustees, the Liquidity Providers, the Controlling Party
or the Subordination Agent specifically or otherwise in this Agreement shall be
cumulative and shall be in addition to every other right, power and remedy
herein specifically given or now or hereafter existing at law, in equity or by
statute, and each and every right, power and remedy whether specifically herein
given or otherwise existing may, subject always to the terms and conditions
hereof, be exercised from time to time and as often and in such order as may be
deemed expedient by any Trustee, any Liquidity Provider, the Controlling Party
or the Subordination Agent, as appropriate, and the exercise or the beginning of
the exercise of any power or remedy shall not be construed to be a waiver of the
right to exercise at the same time or thereafter any other right, power or
remedy. No delay or omission by any Trustee, any Liquidity Provider, the
Controlling Party or the Subordination Agent in the exercise of any right,
remedy or power or in the pursuit of any remedy shall impair any such right,
power or remedy or be construed to be a waiver of any default or to be an
acquiescence therein.
Section 4.3. DISCONTINUANCE OF PROCEEDINGS. In case any party
to this Agreement (including the Controlling Party in such capacity) shall have
instituted any Proceeding to enforce any right, power or remedy under this
Agreement by foreclosure, entry or otherwise, and such Proceeding shall have
been discontinued or abandoned for any reason or shall have been determined
adversely to the Person instituting such Proceeding, then and in every such case
each such party shall, subject to any determination in such Proceeding, be
restored to its former position and rights hereunder, and all rights, remedies
and powers of such party shall continue as if no such Proceeding had been
instituted.
Section 4.4. RIGHT OF CERTIFICATEHOLDERS TO RECEIVE PAYMENTS
NOT TO BE IMPAIRED. Anything in this Agreement to the contrary notwithstanding
but subject to each Trust Agreement, the right of any Certificateholder or any
Liquidity Provider, respectively, to receive payments hereunder (including,
without limitation, pursuant to Section 2.4, 3.2 or 3.3 hereof) when due, or to
institute suit for the enforcement of any such payment on or after the
applicable Distribution Date, shall not be impaired or affected without the
consent of such Certificateholder or such Liquidity Provider, respectively.
Section 4.5. UNDERTAKING FOR COSTS. In any suit for the
enforcement of any right or remedy under this Agreement or in any suit against
any Controlling Party or the Subordination Agent for any action taken or omitted
by it as Controlling Party or Subordination Agent, as the case may be, a court
in its discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees and expenses,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. The provisions of
this Section do not apply to a suit instituted by the Subordination Agent, a
Liquidity Provider or a Trustee or a suit by Certificateholders holding more
than 10% of the original principal amount of any Class of Certificates.
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ARTICLE V
DUTIES OF THE SUBORDINATION AGENT;
AGREEMENTS OF TRUSTEES, ETC.
Section 5.1. NOTICE OF INDENTURE DEFAULT OR TRIGGERING EVENT.
(a) In the event the Subordination Agent shall have actual knowledge of the
occurrence of an Indenture Default or a Triggering Event, as promptly as
practicable, and in any event within 10 days after obtaining knowledge thereof,
the Subordination Agent shall transmit by mail or courier to the Rating
Agencies, the Liquidity Providers and the Trustees notice of such Indenture
Default or Triggering Event, unless such Indenture Default or Triggering Event
shall have been cured or waived. For all purposes of this Agreement, in the
absence of actual knowledge on the part of a Responsible Officer, the
Subordination Agent shall not be deemed to have knowledge of any Indenture
Default or Triggering Event unless notified in writing by one or more Trustees,
one or more Liquidity Providers or one or more Certificateholders.
(b) OTHER NOTICES. The Subordination Agent will furnish to
each Liquidity Provider and Trustee, promptly upon receipt thereof, duplicates
or copies of all reports, notices, requests, demands, certificates, financial
statements and other instruments furnished to the Subordination Agent as
registered holder of the Equipment Notes or otherwise in its capacity as
Subordination Agent to the extent the same shall not have been otherwise
directly distributed to such Liquidity Provider or Trustee, as applicable,
pursuant to the express provision of any other Operative Agreement.
Section 5.2. INDEMNIFICATION. The Subordination Agent shall
not be required to take any action or refrain from taking any action under
Section 5.1 (other than the first sentence thereof) or Article IV hereof unless
the Subordination Agent shall have been indemnified (to the extent and in the
manner reasonably satisfactory to the Subordination Agent) against any
liability, cost or expense (including counsel fees and expenses) which may be
incurred in connection therewith. The Subordination Agent shall not be under any
obligation to take any action under this Agreement and nothing contained in this
Agreement shall require the Subordination Agent to expend or risk its own funds
or otherwise incur any financial liability in the performance of any of its
duties hereunder or in the exercise of any of its rights or powers if it shall
have reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it. The
Subordination Agent shall not be required to take any action under Section 5.1
(other than the first sentence thereof) or Article IV hereof, nor shall any
other provision of this Agreement be deemed to impose a duty on the
Subordination Agent to take any action, if the Subordination Agent shall have
been advised by counsel that such action is contrary to the terms hereof or is
otherwise contrary to law.
Section 5.3. NO DUTIES EXCEPT AS SPECIFIED IN INTERCREDITOR
AGREEMENT. The Subordination Agent shall not have any duty or obligation to take
or refrain from taking any action under, or in connection with, this Agreement,
except as expressly provided by the terms of this Agreement; and no implied
duties or obligations shall be read into this Agreement against the
Subordination Agent. The Subordination Agent agrees that it will, in its
individual capacity and at its own cost and expense (but without any right of
indemnity in respect of any such cost or
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expense under Section 5.2 or 7.1 hereof) promptly take such action as may be
necessary to duly discharge all Liens on any of the Trust Accounts or any monies
deposited therein which result from claims against it in its individual capacity
not related to its activities hereunder or from a breach of its obligations that
constitute willful misconduct or gross negligence hereunder or any other
Operative Agreement.
Section 5.4. NOTICE FROM THE LIQUIDITY PROVIDERS AND TRUSTEES.
If a Responsible Officer of any Liquidity Provider or Trustee has actual notice
of an Indenture Default or a Triggering Event, such Person shall promptly use
its best efforts to give notice thereof to all other Liquidity Providers and
Trustees and to the Subordination Agent, PROVIDED, HOWEVER, that no such Person
shall have any liability hereunder as a result of its failure to deliver any
such notice.
ARTICLE VI
THE SUBORDINATION AGENT
Section 6.1. AUTHORIZATION; ACCEPTANCE OF TRUSTS AND DUTIES.
Each of the Class A-1 Trustee, Class A-2 Trustee, Class B Trustee and Class C
Trustee hereby designates and appoints the Subordination Agent as the agent and
trustee of such Trustee under the applicable Liquidity Facility and authorizes
the Subordination Agent to enter into the applicable Liquidity Facility as agent
and trustee for such Trustee. Each of the Liquidity Providers and the Trustees
hereby designates and appoints the Subordination Agent as the Subordination
Agent under this Agreement.
The Subordination Agent hereby accepts the duties hereby
created and applicable to it as the Subordination Agent and agrees to perform
the same but only upon the terms of this Agreement and agrees to receive and
disburse all monies received by it in accordance with the terms hereof. The
Subordination Agent shall not be answerable or accountable under any
circumstances, except (a) for its own willful misconduct or gross negligence or,
with respect to the handling or transfer of funds, ordinary negligence, (b) as
provided in Section 2.2 or 5.3 hereof and (c) for liabilities that may result
from the material inaccuracy of any representation or warranty of the
Subordination Agent made in its individual capacity in any Operative Agreement.
The Subordination Agent shall not be liable for any error of judgment made in
good faith by a Responsible Officer of the Subordination Agent, unless it is
proved that the Subordination Agent was negligent in ascertaining the pertinent
facts.
Section 6.2. ABSENCE OF DUTIES. The Subordination Agent shall
have no duty to see to any recording or filing of this Agreement or any other
document, or to see to the maintenance of any such recording or filing.
Section 6.3. NO REPRESENTATIONS OR WARRANTIES AS TO DOCUMENTS.
The Subordination Agent in its individual capacity does not make nor shall be
deemed to have made any representation or warranty as to the validity, legality
or enforceability of this Agreement or any other Operative Agreement or as to
the correctness of any statement contained in any thereof, except for the
representations and warranties of the Subordination Agent, made in its
individual capacity, under any Operative Agreement to which it is a party. The
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Certificateholders, the Trustees and the Liquidity Providers make no
representation or warranty hereunder whatsoever.
Section 6.4. NO SEGREGATION OF MONIES; NO INTEREST. Any monies
paid to or retained by the Subordination Agent pursuant to any provision hereof
and not then required to be distributed to any Trustee or any Liquidity Provider
as provided in Articles II and III hereof need not be segregated in any manner
except to the extent required by such Articles II and III and by law, and the
Subordination Agent shall not (except as otherwise provided in Section 2.2
hereof) be liable for any interest thereon; PROVIDED, HOWEVER, that any payments
received or applied hereunder by the Subordination Agent shall be accounted for
by the Subordination Agent so that any portion thereof paid or applied pursuant
hereto shall be identifiable as to the source thereof.
Section 6.5. RELIANCE; AGENTS; ADVICE OF COUNSEL. The
Subordination Agent shall not incur liability to anyone in acting upon any
signature, instrument, notice, resolution, request, consent, order, certificate,
report, opinion, bond or other document or paper believed by it to be genuine
and believed by it to be signed by the proper party or parties. As to the Pool
Balance of any Trust as of any date, the Subordination Agent may for all
purposes hereof rely on a certificate signed by any Responsible Officer of the
applicable Trustee, and such certificate shall constitute full protection to the
Subordination Agent for any action taken or omitted to be taken by it in good
faith in reliance thereon. As to any fact or matter relating to the Liquidity
Providers or the Trustees the manner of ascertainment of which is not
specifically described herein, the Subordination Agent may for all purposes
hereof rely on a certificate, signed by any Responsible Officer of the
applicable Liquidity Provider or Trustee, as the case may be, as to such fact or
matter, and such certificate shall constitute full protection to the
Subordination Agent for any action taken or omitted to be taken by it in good
faith in reliance thereon. The Subordination Agent shall assume, and shall be
fully protected in assuming, that each of the Liquidity Providers and each of
the Trustees are authorized to enter into this Agreement and to take all action
to be taken by them pursuant to the provisions hereof, and shall not inquire
into the authorization of each of the Liquidity Providers and each of the
Trustees with respect thereto. In the administration of the trusts hereunder,
the Subordination Agent may execute any of the trusts or powers hereof and
perform its powers and duties hereunder directly or through agents or attorneys
and may consult with counsel, accountants and other skilled persons to be
selected and retained by it, and the Subordination Agent shall not be liable for
the acts or omissions of any agent appointed with due care or for anything done,
suffered or omitted in good faith by it in accordance with the advice or written
opinion of any such counsel, accountants or other skilled persons.
Section 6.6. CAPACITY IN WHICH ACTING. The Subordination Agent
acts hereunder solely as agent and trustee herein and not in its individual
capacity, except as otherwise expressly provided in the Operative Agreements.
Section 6.7. COMPENSATION. The Subordination Agent shall be
entitled to reasonable compensation, including expenses and disbursements, for
all services rendered hereunder and shall have a priority claim to the extent
set forth in Article III hereof on all monies collected hereunder for the
payment of such compensation, to the extent that such compensation shall not be
paid by others. The Subordination Agent agrees that it shall have no right
against
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any Trustee or Liquidity Provider for any fee as compensation for its services
as agent under this Agreement. The provisions of this Section 6.7 shall survive
the termination of this Agreement.
Section 6.8. MAY BECOME CERTIFICATEHOLDER. The institution
acting as Subordination Agent hereunder may become a Certificateholder and have
all rights and benefits of a Certificateholder to the same extent as if it were
not the institution acting as the Subordination Agent.
Section 6.9. SUBORDINATION AGENT REQUIRED; ELIGIBILITY. There
shall at all times be a Subordination Agent hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America or of any State or the District of Columbia having a combined capital
and surplus of at least $100,000,000 (or the obligations of which, whether now
in existence or hereafter incurred, are fully and unconditionally guaranteed by
a corporation organized and doing business under the laws of the United States,
any State thereof or of the District of Columbia and having a combined capital
and surplus of at least $100,000,000), if there is such an institution willing
and able to perform the duties of the Subordination Agent hereunder upon
reasonable or customary terms. Such corporation shall be a citizen of the United
States and shall be authorized under the laws of the United States or any State
thereof or of the District of Columbia to exercise corporate trust powers and
shall be subject to supervision or examination by federal, state or District of
Columbia authorities. If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of any of the aforesaid
supervising or examining authorities, then, for the purposes of this Section
6.9, the combined capital and surplus of such corporation shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published.
In case at any time the Subordination Agent shall cease to be
eligible in accordance with the provisions of this Section, the Subordination
Agent shall resign immediately in the manner and with the effect specified in
Section 8.1.
Section 6.10. MONEY TO BE HELD IN TRUST. All Equipment Notes,
monies and other property deposited with or held by the Subordination Agent
pursuant to this Agreement shall be held in trust for the benefit of the parties
entitled to such Equipment Notes, monies and other property. All such Equipment
Notes, monies or other property shall be held in the Trust Department of the
institution acting as Subordination Agent hereunder.
ARTICLE VII
INDEMNIFICATION OF SUBORDINATION AGENT
Section 7.1. SCOPE OF INDEMNIFICATION. The Subordination Agent
shall be indemnified hereunder to the extent and in the manner described in
Section 6(c) of the Participation Agreements and Section 7 of the Note Purchase
Agreement. The indemnities contained in such Sections of such agreements shall
survive the termination of this Agreement.
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ARTICLE VIII
SUCCESSOR SUBORDINATION AGENT
Section 8.1. REPLACEMENT OF SUBORDINATION AGENT; APPOINTMENT
OF SUCCESSOR. The Subordination Agent may resign at any time by so notifying the
Trustees and the Liquidity Providers. The Liquidity Provider or the Controlling
Party may remove the Subordination Agent for cause by so notifying the
Subordination Agent and may appoint a successor Subordination Agent. The
Controlling Party shall remove the Subordination Agent if:
(1) the Subordination Agent fails to comply with Section 6.9
hereof;
(2) the Subordination Agent is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the
Subordination Agent or its property; or
(4) the Subordination Agent otherwise becomes incapable of
acting.
If the Subordination Agent resigns or is removed or if a
vacancy exists in the office of Subordination Agent for any reason (the
Subordination Agent in such event being referred to herein as the retiring
Subordination Agent), the Controlling Party in consultation with Northwest shall
promptly appoint a successor Subordination Agent.
Any corporation into which the Subordination Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the
Subordination Agent shall be a party, or any corporation to which substantially
all the corporate trust business of the Subordination Agent may be transferred,
shall, subject to the terms of Section 6.9 hereof, be the Subordination Agent
hereunder and under the other Operative Agreements to which the Subordination
Agent is a party without further act, except that such Person shall give prompt
subsequent notice of such transaction to the Liquidity Provider and each
Trustee.
A successor Subordination Agent shall deliver (x) a written
acceptance of its appointment as Subordination Agent hereunder to the retiring
Subordination Agent and (y) a written assumption of its obligations hereunder
and under each Liquidity Facility, to each party hereto upon which the
resignation or removal of the retiring Subordination Agent shall become
effective, and the successor Subordination Agent shall have all the rights,
powers and duties of the Subordination Agent under this Agreement. The successor
Subordination Agent shall send a written notice of its succession to the
Liquidity Providers and the Trustees. The retiring Subordination Agent shall
promptly transfer its rights under each of the Liquidity Facilities and all of
the property held by it as Subordination Agent to the successor Subordination
Agent.
If a successor Subordination Agent does not take office within
60 days after the retiring Subordination Agent resigns or is removed, the
retiring Subordination Agent or one or more of the Trustees may petition any
court of competent jurisdiction for the appointment of a successor Subordination
Agent.
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If the Subordination Agent fails to comply with Section 6.9
hereof (to the extent applicable), one or more of the Trustees or one or more of
the Liquidity Providers or Northwest may petition any court of competent
jurisdiction for the removal of the Subordination Agent and the appointment of a
successor Subordination Agent.
Notwithstanding the foregoing, no resignation or removal of
the Subordination Agent shall be effective unless and until a successor has been
appointed. No appointment of a successor Subordination Agent shall be effective
unless and until the Rating Agencies shall have delivered a Ratings
Confirmation.
ARTICLE IX
SUPPLEMENTS AND AMENDMENTS
Section 9.1. AMENDMENTS, WAIVERS, ETC. (a) This Agreement may
not be supplemented, amended or modified without the consent of each Trustee
(acting, except in the case of any amendment pursuant to Section 9.5 hereof,
with the consent of holders of Certificates of the related Class evidencing
interests in the related Trust aggregating not less than a majority in interest
in such Trust or as otherwise authorized pursuant to the relevant Trust
Agreement), the Subordination Agent and each Liquidity Provider; PROVIDED,
HOWEVER, that this Agreement may be supplemented, amended or modified without
the consent of any Trustee if such supplement, amendment or modification (i) is
in accordance with Section 9.5 or (ii) cures an ambiguity or inconsistency or
does not materially adversely affect such Trustee or the holders of the related
Class of Certificates; PROVIDED FURTHER, HOWEVER, that, if such supplement,
amendment or modification would (x) directly or indirectly modify or supersede,
or otherwise conflict with, Section 2.2(b), Section 3.6(e), Section 3.6(f)(other
than the last sentence thereof) (collectively, together with this proviso and
Section 9.1, the "NORTHWEST PROVISIONS") or (y) otherwise adversely affect the
interests of a potential Replacement Liquidity Provider or of Northwest with
respect to its ability to replace any Liquidity Facility or with respect to its
payment obligations under any Financing Agreement, Leased Aircraft Indenture or
Owned Aircraft Indenture, then such supplement, amendment or modification shall
not be effective without the additional written consent of Northwest.
Notwithstanding the foregoing, without the consent of each Certificateholder and
each Liquidity Provider, no supplement, amendment or modification of this
Agreement may (i) reduce the percentage of the interest in any Trust evidenced
by the Certificates issued by such Trust necessary to consent to modify or amend
any provision of this Agreement or to waive compliance therewith or (ii) modify
Section 2.4, 3.2 or 3.3 hereof, relating to the distribution of monies received
by the Subordination Agent hereunder from the Equipment Notes or pursuant to the
Liquidity Facilities. Nothing contained in this Section shall require the
consent of a Trustee at any time following the payment of Final Distributions
with respect to the related Class of Certificates.
(b) In the event that the Subordination Agent, as the
registered holder of any Equipment Notes, receives a request for its consent to
any amendment, modification, consent or waiver under such Equipment Notes, the
Indenture pursuant to which such Equipment Notes were issued, or the related
Lease, Participation Agreement or other related document, (i) if no Indenture
Default shall have occurred and be continuing with respect to such Indenture,
the Subordination Agent shall request directions with respect to each Series of
such Equipment
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Notes from the Trustee of the Trust which holds such Equipment Notes and shall
vote or consent in accordance with the directions of such Trustee and (ii) if
any Indenture Default (which, in the case of any Indenture pertaining to a
Leased Aircraft, has not been cured by the applicable Owner Trustee or the
applicable Owner Participant, if applicable, pursuant to Section 4.03 of such
Indenture) shall have occurred and be continuing with respect to such Indenture,
the Subordination Agent will exercise its voting rights as directed by the
Controlling Party, subject to Sections 4.1 and 4.4 hereof; provided that no such
amendment, modification or waiver shall, without the consent of each Liquidity
Provider, reduce the amount of rent, supplemental rent or stipulated loss values
payable by Northwest under any Lease or reduce the amount of principal or
interest payable by Northwest under any Equipment Note issued under any
Indenture in respect of an Owned Aircraft.
(c) Notwithstanding any provision to the contrary contained
herein, so long as Northwest and/or its Affiliates holds or beneficially owns a
majority of the Class D Certificates or otherwise controls the actions of the
Class D Trustee, any consent or approval of the Class D Trustee or any Class D
Certificateholder otherwise required in accordance with the foregoing provisions
shall not be required.
(d) If any additional series of equipment notes are issued
under any Indenture for a Boeing 747-400 Aircraft ("ADDITIONAL EQUIPMENT
NOTES"), this Agreement shall be amended by written agreement of the indenture
trustees of the Additional Equipment Notes, the Trustees and the Subordination
Agent to (i) provide for each holder of an Additional Equipment Note to be bound
by the provisions of Section 2.6(a) so that the Controlling Party, among other
things, shall be entitled to direct the Loan Trustee under the applicable
Indenture as provided in such Section 2.6(a) (and such Additional Equipment
Notes shall make effective provision therefor so as to bind each holder thereof
to such provisions of Section 2.6(a)) and (ii) to revise the definitions of
"CONTROLLING PARTY" and "EQUIPMENT NOTES", as appropriate, to reflect the
issuance of the Additional Equipment Notes (and the prior rights, as against the
holders of such Additional Equipment Notes, of the Class A-1 Trustee, the Class
A-2 Trustee, the Class B Trustee, the Class C Trustee and the Class D Trustee to
be such "Controlling Party"). No such amendment shall materially adversely
affect any Trustee.
Section 9.2. SUBORDINATION AGENT PROTECTED. If, in the
reasonable opinion of the institution acting as the Subordination Agent
hereunder, any document required to be executed pursuant to the terms of Section
9.1 affects any right, duty, immunity or indemnity with respect to it under this
Agreement or any Liquidity Facility, the Subordination Agent may in its
discretion decline to execute such document.
Section 9.3. EFFECT OF SUPPLEMENTAL AGREEMENTS. Upon the
execution of any amendment or supplement hereto pursuant to the provisions
hereof, this Agreement shall be and be deemed to be modified and amended in
accordance therewith and the respective rights, limitations of rights,
obligations, duties and immunities under this Agreement of the parties hereto
and beneficiaries hereof shall thereafter be determined, exercised and enforced
hereunder subject in all respects to such modifications and amendments, and all
the terms and conditions of any such supplemental agreement shall be and be
deemed to be part of the terms and conditions of this Agreement for any and all
purposes. In executing or accepting any supplemental agreement permitted by this
Article IX, the Subordination Agent shall be entitled to receive, and
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shall be fully protected in relying upon, an opinion of counsel stating that the
execution of such supplemental agreement is authorized or permitted by this
Agreement.
Section 9.4. NOTICE TO RATING AGENCIES. Promptly following its
receipt of each amendment, consent, modification, supplement or waiver
contemplated by this Article IX, the Subordination Agent shall send a copy
thereof to each Rating Agency.
Section 9.5. ADDITION OF CLASS D TRUSTEE. If any Class D
Certificates are issued, this Agreement shall be amended by written agreement of
Northwest and the Subordination Agent to give effect to the issuance of any
Class D Certificates, which amendment shall include, without limitation,
provision for the Class D Trust Trustee to be added as a party to this Agreement
and for the definition of "Stated Interest Rate" to be revised, as appropriate,
to reflect the issuance of the Class D Certificates (and the subordination
thereof).
ARTICLE X
MISCELLANEOUS
Section 10.1. TERMINATION OF INTERCREDITOR AGREEMENT.
Following payment of Final Distributions with respect to each Class of
Certificates and the payment in full of all Liquidity Obligations to the
Liquidity Providers and PROVIDED that there shall then be no other amounts due
to the Certificateholders, the Trustees, the Liquidity Providers and the
Subordination Agent hereunder or under the Trust Agreements, and that the
commitment of the Liquidity Providers under the Liquidity Facilities shall have
expired or been terminated, this Agreement and the trusts created hereby shall
terminate and this Agreement shall be of no further force or effect. Except as
aforesaid or otherwise provided, this Agreement and the trusts created hereby
shall continue in full force and effect in accordance with the terms hereof.
Section 10.2. INTERCREDITOR AGREEMENT FOR BENEFIT OF TRUSTEES,
LIQUIDITY PROVIDERS AND SUBORDINATION AGENT. Nothing in this Agreement, whether
express or implied, shall be construed to give to any Person other than the
Trustees, the Liquidity Providers and the Subordination Agent any legal or
equitable right, remedy or claim under or in respect of this Agreement.
Section 10.3. NOTICES. Unless otherwise expressly specified or
permitted by the terms hereof, all notices, requests, demands, authorizations,
directions, consents, waivers or documents provided or permitted by this
Agreement to be made, given, furnished or filed shall be in writing, mailed by
certified mail, postage prepaid, or by confirmed telecopy and
(i) if to the Subordination Agent, addressed
to it at its office at:
x/x Xxxxx Xxxxxx Xxxx and Trust Company
0 Xxxxxx xx Xxxxxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Corporate Trust Department
Fax: (000) 000-0000
(ii) if to the Trustee, addressed to it at its office
at:
State Street Bank and Trust Company of Connecticut,
National
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Association
000 Xxxxxx Xxxxxx, Xxxxxxx Square
Hartford, Connecticut 06103
Attention: Corporate/Muni Department
Fax: (000) 000-0000
(iii) if to any Liquidity Provider, addressed to it at
its office at:
Landesbank Hessen-Thuringen Girozentrale
Main Tower
Xxxx Xxxxxxx Xxx. 00-00
00000 Xxxxxxxxx xx Xxxx
Xxxxxxx
Attention: Asset Finance
Fax: 00-00-0000-0000
Telephone: 00-00-0000-0000
With a copy to:
Landesbank Hessen-Thuringen
New York Branch
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Project Finance/Xxxxxxx Xxxxxx
Fax: (000) 000-0000
Telephone: (000) 000-0000
Whenever any notice in writing is required to be given by any Trustee or
Liquidity Provider or the Subordination Agent to any of the other of them, such
notice shall be deemed given and such requirement satisfied when such notice is
received, if such notice is mailed by certified mail, postage prepaid or by
courier service or if such notice is sent by confirmed telecopy addressed as
provided above. Any party hereto may change the address to which notices to such
party will be sent by giving notice of such change to the other parties to this
Agreement.
Section 10.4. SEVERABILITY. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Section 10.5. NO ORAL MODIFICATIONS OR CONTINUING WAIVERS. No
terms or provisions of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party or
other Person against whom enforcement of the change, waiver, discharge or
termination is sought and any other party or other Person whose consent is
required pursuant to this Agreement and any waiver of the terms hereof shall be
effective only in the specific instance and for the specific purpose given.
Section 10.6. SUCCESSORS AND ASSIGNS. All covenants and
agreements contained herein shall be binding upon, and inure to the benefit of,
each of the parties hereto and the successors and assigns of each, all as herein
provided.
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Section 10.7. HEADINGS. The headings of the various Articles
and Sections herein and in the table of contents hereto are for convenience of
reference only and shall not define or limit any of the terms or provisions
hereof.
Section 10.8. COUNTERPART FORM. 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 agreement.
Section 10.9. SUBORDINATION. (a) As between the Liquidity
Providers, on the one hand, and the Trustees and the Certificateholders, on the
other hand, and as between and among the Certificateholders of all Classes of
Certificates, this Agreement shall be a subordination agreement for purposes of
Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Bankruptcy Code, as amended from time to time.
(b) Notwithstanding the provisions of this Agreement, if prior
to the payment in full to the Liquidity Providers of all Liquidity Obligations
then due and payable, any party hereto shall have received any payment or
distribution in respect of Equipment Notes or any other amount under the
Indentures or other Operative Agreements which, had the subordination provisions
of this Agreement been properly applied to such payment, distribution or other
amount, would not have been distributed to such Person, then such payment,
distribution or other amount shall be received and held in trust by such Person
and paid over or delivered to the Subordination Agent for application as
provided herein.
(c) If any Trustee, any Liquidity Provider or the
Subordination Agent receives any payment in respect of any obligations owing
hereunder (or, in the case of the Liquidity Providers, in respect of the
Liquidity Obligations), which is subsequently invalidated, declared
preferential, set aside and/or required to be repaid to a trustee, receiver or
other party, then, to the extent of such payment, such obligations (or, in the
case of the Liquidity Providers, such Liquidity Obligations) intended to be
satisfied shall be revived and continue in full force and effect as if such
payment had not been received.
(d) The Trustees (on behalf of themselves and the holders of
Certificates), the Liquidity Providers and the Subordination Agent confirm that
the payment priorities specified in Sections 2.4, 3.2 and 3.3 shall apply in all
circumstances, notwithstanding the fact that the obligations owed to the
Trustees and the holders of Certificates are secured by certain assets and the
Liquidity Obligations are not so secured. The Trustees expressly agree (on
behalf of themselves and the holders of Certificates) not to assert priority
over the holders of Liquidity Obligations due to their status as secured
creditors in any bankruptcy, insolvency or other legal proceeding.
(e) Each of the Trustees (on behalf of themselves and the
holders of Certificates), the Liquidity Providers and the Subordination Agent
may take any of the following actions without impairing its rights under this
Agreement:
(i) obtain a lien on any property to secure any amounts owing
to it hereunder, including, in the case of the Liquidity Providers,
the Liquidity Obligations,
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(ii) obtain the primary or secondary obligation of any other
obligor with respect to any amounts owing to it hereunder,
including, in the case of the Liquidity Providers, any of the
Liquidity Obligations,
(iii) renew, extend, increase, alter or exchange any amounts
owing to it hereunder, including, in the case of the Liquidity
Providers, any of the Liquidity Obligations, or release or
compromise any obligation of any obligor with respect thereto,
(iv) refrain from exercising any right or remedy, or delay in
exercising such right or remedy, which it may have, or
(v) take any other action which might discharge a subordinated
party or a surety under applicable law;
PROVIDED, HOWEVER, that the taking of any such actions by any of the Trustees,
the Liquidity Providers or the Subordination Agent shall not prejudice the
rights or adversely affect the obligations of any other party under this
Agreement.
Section 10.10. GOVERNING LAW. THIS AGREEMENT SHALL IN ALL
RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE
OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
Section 10.11. SUBMISSION TO JURISDICTION; WAIVER OF JURY
TRIAL; WAIVER OF IMMUNITY. (a) Each of the parties hereto hereby irrevocably and
unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Agreement or any other Operative
Agreement, or for recognition and enforcement of any judgment in
respect hereof or thereof, to the nonexclusive general jurisdiction
of the courts of the State of New York, the courts of the United
States of America for the Southern District of New York, and the
appellate courts from any thereof;
(ii) consents that any such action or proceeding may be
brought in such courts, and waives any objection that it may now or
hereafter have that the venue of any such action or proceeding was
brought in an inconvenient court and agrees not to plead or claim
the same;
(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered
or certified mail (or any substantially similar form and mail),
postage prepaid, to each party hereto at its address set forth in
Section 10.3 hereof, or at such other address of which the other
parties shall have been notified pursuant thereto; and
(iv) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or
shall limit the right to xxx in any other jurisdiction.
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(b) EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE
SUBJECT MATTER OF THIS AGREEMENT AND THE RELATIONSHIP THAT IS BEING ESTABLISHED,
INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH OF THE PARTIES
WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL,
AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH SUCH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, AND CANNOT BE
MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
(c) Each Liquidity Provider hereby waives any immunity it may
have from the jurisdiction of the courts of the United States or of any state
thereof and waives any immunity any of its properties located in the United
States may have from attachment or execution upon a judgment entered by any such
court under the United States Foreign Sovereign Immunities Act of 1976 or any
similar successor legislation.
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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, and acknowledge that
this Agreement has been made and delivered in the City of New York, and this
Agreement has become effective only upon such execution and delivery.
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Trustee for each of the
Trusts
By:
-------------------------------------
Name:
Title:
Landesbank Hessen-Thuringen
Girozentrale, as Class A-1 Liquidity
Provider, Class A-2 Liquidity Provider,
Class B Liquidity Provider and Class C
Liquidity Provider
By:
-------------------------------------
Name:
Title:
STATE STREET BANK AND TRUST COMPANY, not
in its individual capacity except
as expressly set forth herein but
solely as Subordination Agent and
trustee
By:
-------------------------------------
Name:
Title:
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