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AMENDED AND RESTATED
PARTICIPATION AGREEMENT
[NW 1997 I]
Dated as of
February 3, 1998
Among
NORTHWEST AIRLINES, INC.,
Lessee,
NORTHWEST AIRLINES CORPORATION,
Guarantor,
FIRST AMERICAN NATIONAL BANK,
Owner Participant,
STATE STREET BANK AND TRUST COMPANY,
Pass Through Trustee under each of
the Pass Through Trust Agreements,
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its Individual Capacity, except as expressly provided
herein, but solely as Owner Trustee,
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
Subordination Agent,
and
STATE STREET BANK AND TRUST COMPANY,
in its Individual Capacity and as Indenture Trustee
---------------------
One British Aerospace Avro 146-RJ85A Aircraft
N509XJ
Leased to Northwest Airlines, Inc.
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INDEX TO AMENDED AND RESTATED PARTICIPATION AGREEMENT
Page
----
SECTION 1. Participations in Lessor's Cost of the Aircraft ........... 4
SECTION 2. Lessee's Notice of Delivery Date .......................... 7
SECTION 3. Instructions to the Owner Trustee ......................... 7
SECTION 4. [Intentionally Omitted.] .................................. 8
SECTION 5. Delivery Date Closing Conditions .......................... 8
(a) Conditions Precedent to the Delivery Date Closing .... 8
(b) Conditions Precedent to the Obligations of Lessee and
the Guarantor ........................................ 17
SECTION 6. Extent of Interest of Certificate Holders ................. 19
SECTION 7. Representations and Warranties of Lessee and the Guarantor;
Indemnities ............................................... 19
(a) Representations and Warranties ....................... 19
(b) General Tax Indemnity ................................ 22
(c) General Indemnity .................................... 22
(d) Income Tax ........................................... 22
SECTION 8. Representations, Warranties and Covenants ................. 22
SECTION 9. Reliance of Liquidity Provider ............................ 42
SECTION 10. Other Documents ........................................... 42
SECTION 11. Certain Covenants of Lessee ............................... 42
SECTION 12. Owner for Federal Tax Purposes ............................ 43
SECTION 13. Certain Definitions; Notices; Consent to Jurisdiction ..... 43
SECTION 14. Change of Situs of Owner Trust ............................ 44
SECTION 15. Miscellaneous ............................................. 45
SECTION 16. Expenses .................................................. 46
SECTION 17. Refinancings .............................................. 47
SECTION 18. Collateral Account ........................................ 49
(i)
APPENDICES
Appendix A - Definitions
SCHEDULES
SCHEDULE I - Names and Addresses
SCHEDULE II - Commitments
SCHEDULE III - Pass Through Trust Agreements
EXHIBITS
Exhibit A - Schedule of Countries Authorized for Reregistration
Exhibits B-H - [Intentionally Omitted]
Exhibit I-1 - Form of Delivery Date Opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, special counsel for Lessee and the Guarantor
Exhibit I-2 - Form of Delivery Date Opinion of Cadwalader, ▇▇▇▇▇▇▇▇▇▇ &
▇▇▇▇, special counsel for Lessee and the Guarantor
Exhibit I-3 - Form of Delivery Date Opinion of Lessee's Legal Department
Exhibit J-1 - Form of Delivery Date Opinion of Vedder, Price, ▇▇▇▇▇▇▇▇ &
Kammholz, special counsel for the Manufacturer
Exhibit J-2 - Form of Delivery Date Opinion of in-house counsel for the
Manufacturer
Exhibit K - Form of Delivery Date Opinion of Ray, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇,
special counsel for the Owner Trustee
Exhibit L-1 - Form of Delivery Date Opinion of Thelen, Marrin, ▇▇▇▇▇▇▇ &
Bridges LLP, special counsel for the Owner Participant
Exhibit L-2 - Form of Delivery Date Opinion of in-house counsel for the Owner
Participant
Exhibit M - Form of Delivery Date Opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇ P.C.
Exhibit N - Form of Delivery Date Opinion of ▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇ LLP,
special counsel for the Indenture Trustee
Exhibit O-1 - Form of Delivery Date Opinion of Powell, Goldstein, ▇▇▇▇▇▇ &
▇▇▇▇▇▇ LLP, special counsel for the Liquidity Provider
Exhibit O-2 - Form of Delivery Date Opinion of in-house counsel for the
Liquidity Provider
Exhibit P - Form of Delivery Date Opinion of Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇,
special counsel for Lessee, as to Section 1110 of the U.S.
Bankruptcy Code
(ii)
Exhibit Q - Form of Delivery Date Opinion of ▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇ LLP,
special counsel for the Pass Through Trustee
Exhibit R - Section 7(b) - General Tax Indemnity
Exhibit S - Section 7(c) - General Indemnity
(iii)
AMENDED AND RESTATED
PARTICIPATION AGREEMENT
[NW 1997 I]
THIS AMENDED AND RESTATED PARTICIPATION AGREEMENT [NW 1997 I] dated
as of February 3, 1998, among (i) NORTHWEST AIRLINES, INC., a Minnesota
corporation (the "Lessee"), (ii) NORTHWEST AIRLINES CORPORATION, a Delaware
corporation (the "Guarantor"), (iii) FIRST AMERICAN NATIONAL BANK, a national
banking association (the "Owner Participant"), (iv) STATE STREET BANK AND TRUST
COMPANY, not in its individual capacity except as otherwise provided herein, but
solely as trustee (in such capacity, the "Pass Through Trustee") under each of
three separate Pass Through Trust Agreements (as defined below), (v) FIRST
SECURITY BANK, NATIONAL ASSOCIATION, a national banking association, not in its
individual capacity, except as expressly provided herein, but solely as Owner
Trustee under the Trust Agreement (herein, in such latter capacity, together
with any successor owner trustee, called the "Owner Trustee"), (vi) STATE STREET
BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, not in its
individual capacity, but solely as subordination agent and trustee (in such
capacity, the "Subordination Agent") under the Intercreditor Agreement (defined
below), and (vii) STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust
company, in its individual capacity and as Indenture Trustee under the Trust
Indenture (as hereinafter defined) (herein, in such latter capacity together
with any successor indenture trustee, called the "Indenture Trustee"), does
hereby amend and restate in its entirety the Participation Agreement dated as of
September 25, 1997 among the Lessee, Northwest Airlines, Inc., as the Initial
Owner Participant (the "Initial Owner Participant"), the Guarantor, the Pass
Through Trustee, the Owner Trustee, the Subordination Agent and the Indenture
Trustee (the "Original Participation Agreement"; and as so amended and restated
hereby, the or this "Agreement");
W I T N E S S E T H:
WHEREAS, pursuant to the Purchase Agreement between Lessee and the
Manufacturer, the Manufacturer has agreed to sell to Lessee, among other things,
certain British Aerospace Avro 146-RJ85 aircraft, including the Aircraft which
has been delivered by the Manufacturer to Lessee and which is the subject of
this Agreement;
WHEREAS, the parties to the Original Participation Agreement entered
into such Original Participation Agreement on the Certificate Closing Date, and
pursuant to Section 1(c) of the Original Participation Agreement, the parties
thereto contemplated amending and restating such Original Participation
Agreement by entering into this Agreement;
WHEREAS, pursuant to the Pass Through Trust Agreement and each of
the Pass Through Trust Supplements set forth in Schedule III hereto
(collectively, the "Pass Through Trust Agreements"), on the Certificate Closing
Date, three separate grantor trusts (collectively, the "Pass Through Trusts"
and, individually, a "Pass Through Trust") were
created to facilitate certain of the transactions contemplated hereby and by the
Original Participation Agreement, including, without limitation, the issuance
and sale by each Pass Through Trust of pass through certificates pursuant
thereto (collectively, the "Certificates");
WHEREAS, the proceeds from the issuance and sale of the Certificates
by each Pass Through Trust were applied in part by the Pass Through Trustee on
the Certificate Closing Date to purchase from the Owner Trustee, on behalf of
each Pass Through Trust, all of the Secured Certificates bearing the same
interest rate as the Certificates issued by such Pass Through Trust;
WHEREAS, on the Certificate Closing Date, (i) the Royal Bank of
Canada (the "Liquidity Provider") entered into three revolving credit agreements
(each, a "Liquidity Facility"), one for the benefit of the holders of
Certificates of each Pass Through Trust, with the Subordination Agent, as agent
for the Pass Through Trustee on behalf of each such Pass Through Trust; and (ii)
the Pass Through Trustee, the Liquidity Provider and the Subordination Agent
entered into the Intercreditor Agreement, dated as of September 25, 1997 (the
"Intercreditor Agreement");
WHEREAS, the Secured Certificates are being held by the
Subordination Agent pursuant to the Intercreditor Agreement on behalf of the
Pass Through Trusts;
WHEREAS, in order to facilitate the transactions contemplated hereby
and by the Original Participation Agreement, Lessee and the Guarantor entered
into the Underwriting Agreement, dated as of September 16, 1997, among Lessee,
the Guarantor and the several underwriters named therein (the "Underwriting
Agreement");
WHEREAS, on the Certificate Closing Date, the Initial Owner
Participant entered into a Trust Agreement [NW 1997 I], dated as of September
25, 1997 (said Trust Agreement, prior to being amended and restated in its
entirety as of the date hereof, being herein called the "Original Trust
Agreement"), with the Owner Trustee, pursuant to which Original Trust Agreement
the Owner Trustee agreed, among other things, to hold the Trust Estate defined
in Section 1.01 thereof for the use and benefit of the Initial Owner
Participant;
WHEREAS, immediately prior to the execution and delivery of this
Agreement, the Initial Owner Participant and the Owner Participant entered into
an Assignment and Assumption Agreement [NW 1997 I], dated as of the date hereof
(the "Assignment and Assumption Agreement"), pursuant to which the Initial Owner
Participant transferred its Beneficial Interest and certain other rights to the
Owner Participant;
WHEREAS, concurrently with the execution and delivery of this
Agreement, to reflect the transactions contemplated by the Assignment and
Assumption, the Owner Participant and the Owner Trustee are amending and
restating the Original Trust Agreement in its entirety by entering into an
Amended and Restated Trust Agreement [NW 1997 I], dated as of the date hereof
(said Amended and Restated Trust Agreement [NW 1997 I], as the same may be
amended or supplemented from time to time, being herein called the "Trust
Agreement", such term to include, unless the context otherwise requires, any
Trust
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Supplement referred to below), pursuant to which Trust Agreement the Owner
Trustee agrees, among other things, to hold the Trust Estate defined in Section
1.01 thereof (herein called the "Trust Estate") for the use and benefit of the
Owner Participant;
WHEREAS, on the Certificate Closing Date, the Indenture Trustee and
the Owner Trustee entered into a Trust Indenture and Security Agreement [NW 1997
I] dated as of September 25, 1997 (said Trust Indenture and Security Agreement,
prior to being amended as of the date hereof, being herein called the "Original
Trust Indenture") pursuant to which the Owner Trustee issued secured
certificates substantially in the form set forth in Section 2.01 thereof in
three series, which Secured Certificates were secured by the Liquid Collateral
prior to the Delivery Date, and by mortgage and security interests created by
the Owner Trustee in favor of the Indenture Trustee thereafter;
WHEREAS, concurrently with the execution and delivery of this
Agreement, the Owner Trustee and the Indenture Trustee are entering into the
First Amendment to Trust Indenture and Security Agreement [NW 1997 I], dated as
of the date hereof (the Original Trust Indenture, as so amended by said First
Amendment to Trust Indenture and Security Agreement [NW 1997 I] and as the same
may be amended or supplemented from time to time, being herein called the "Trust
Indenture"), pursuant to which certain provisions of the Original Trust
Indenture are being amended to reflect the transactions contemplated by this
Agreement;
WHEREAS, on the Certificate Closing Date, the Guarantor entered into
the Guarantee [NW 1997 I] dated as of September 25, 1997, pursuant to which the
Guarantor guaranteed certain obligations of Lessee under the Operative Documents
as defined in the Original Participation Agreement (the "Original Guarantee");
WHEREAS, the parties hereto wish to have the Original Guarantee
amended and restated in its entirety, so that the Guarantor is entering into an
Amended and Restated Guarantee [NW 1997 I] dated as of the date hereof, pursuant
to which the Guarantor agrees to guarantee the obligations of Lessee under the
Operative Documents (the "Guarantee");
WHEREAS, concurrently with the execution and delivery of this
Agreement,
(i) Lessee and the Owner Trustee are entering into a Purchase
Agreement Assignment [NW 1997 I], dated as of the date hereof (herein
called the "Purchase Agreement Assignment"), whereby Lessee assigns to the
Owner Trustee certain rights and interests of Lessee under the Purchase
Agreement with respect to the Aircraft; and
(ii) the Manufacturer has executed the Consent and Agreement [NW
1997 I] (herein called the "Consent and Agreement"), substantially in the
form attached to the Purchase Agreement Assignment (herein called the
"Consent and Agreement");
(iii) the Owner Trustee will execute and deliver a Trust and
Indenture Supplement substantially in the form of Exhibit A to the Trust
Indenture (the "Trust Supplement") covering the Aircraft, supplementing
the Trust Agreement and the Trust Indenture;
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(iv) the Owner Trustee and Lessee will enter into the Lease
Agreement [NW 1997 I], dated as of the date hereof (such Lease Agreement,
as the same may be amended or supplemented from time to time to the extent
permitted by the terms thereof and this Agreement, herein called the
"Lease", such term to include, unless the context otherwise requires, the
Lease Supplement referred to below), whereby, subject to the terms and
conditions set forth therein, the Owner Trustee agrees to lease to Lessee,
and Lessee agrees to lease from the Owner Trustee, the Aircraft on the
date (the "Delivery Date") that the Aircraft is sold and delivered by
Lessee to the Owner Trustee under the ▇▇▇▇ of Sale, and accepted by the
Owner Trustee for all purposes of the Lease, such acceptance to be
evidenced by the execution of the Trust Supplement covering the Aircraft,
and such lease to be evidenced by the execution and delivery of a Lease
Supplement covering the Aircraft; and
(v) the Owner Participant and Lessee will enter into a Tax Indemnity
Agreement [NW 1997 I], dated as of the date hereof (the "Tax Indemnity
Agreement");
WHEREAS, on the Delivery Date, pursuant to and subject to the terms
and conditions of this Agreement, the Purchase Agreement Assignment and the ▇▇▇▇
of Sale, the Owner Trustee will purchase, and receive title to, the Aircraft
from Lessee and lease the Aircraft to Lessee pursuant to the Lease; and
WHEREAS, certain terms are used herein as defined in Section 13(a)
hereof;
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, the parties hereto hereby amend and restate the Original
Participation Agreement in its entirety and agree as follows:
SECTION 1. Participations in Lessor's Cost of the Aircraft. (a)
Participations Prior to the Delivery Date. Subject to the terms and conditions
of the Original Participation Agreement, the Pass Through Trustee for each Pass
Through Trust agreed to finance, in part, the Owner Trustee's payment of
Lessor's Cost for the Aircraft by paying to the Indenture Trustee on behalf of
the Owner Trustee on the Certificate Closing Date the aggregate purchase price
of the Secured Certificates being issued to such Pass Through Trustee as set
forth on Schedule II of the Original Participation Agreement opposite the name
of such Pass Through Trust. On the Certificate Closing Date, the Indenture
Trustee, on behalf of the Owner Trustee, deposited by wire transfer or
intra-bank transfer, the amounts received by it pursuant to the preceding
sentence, which amounts constitute the Debt Portion set forth on Schedule II
hereto (Schedule II hereto, as it relates to the Pass Through Trustee, being
identical to Schedule II to the Original Participation Agreement) in the
Collateral Account pursuant to the Original Trust Indenture.
Upon the occurrence of the above transfers by the Pass Through
Trustee for each Pass Through Trust to the Indenture Trustee for the benefit of
the Owner Trustee, the Owner Trustee, at the direction of the Initial Owner
Participant, issued, pursuant to Article II
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of the Original Trust Indenture, to the Subordination Agent on behalf of the
Pass Through Trustee for each of the Pass Through Trusts, Secured Certificates
of the maturity and aggregate principal amount, bearing the interest rate and
for the purchase price set forth on Schedule II to the Original Participation
Agreement opposite the name of such Pass Through Trust.
(b) Participation by Owner Participant. Subject to the terms and
conditions of this Agreement, the Owner Participant hereby agrees to participate
in the payment of Lessor's Cost for the Aircraft by making an equity investment
in the beneficial ownership of the Aircraft on the date to be designated
pursuant to Section 2 hereof, but in no event later than February 13, 1998, by
transferring to the account of the Owner Trustee at State Street Bank and Trust
Company, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ABA No. 011-00- 0028,
Account No. ▇▇▇▇-▇▇▇-▇, Reference: Northwest/NW 1997 I, not later than 9:30
a.m.. New York City time, on the Delivery Date in immediately available funds in
Dollars, the amount set forth opposite the Owner Participant's name in Schedule
II hereto.
(c) The schedule of principal payments on the Secured Certificates
set forth in Schedule I to the Original Trust Indenture and Schedule I to each
Secured Certificate on the Certificate Closing Date were calculated as of the
Certificate Closing Date based upon a hypothetical owner's economic return and
certain assumptions regarding the Delivery Date, Transaction Expenses, tax law,
Basic Term and certain other items (the "Assumptions"). On the Delivery Date
(the "Reoptimization Date"), the Owner Trustee, as a result of the parties
hereto entering into this Agreement, may elect to amend Schedule I to the
Original Trust Indenture and such Schedules to each Secured Certificate to
reflect the actual Net Economic Return and changes to the Assumptions. On the
Reoptimization Date the Owner Trustee shall deliver and the Subordination Agent
on behalf of the Pass Through Trustee of each Pass Through Trust shall accept
delivery of an amended Schedule I to each Secured Certificate containing such
changed principal installments.
The Owner Trustee will give not less than 10 days' notice of the
Reoptimization Date. Any amendments to the Trust Indenture and such Schedules
shall not vary the Mandatory Economic Terms and on the Reoptimization Date
Lessee shall deliver a certificate to the Pass Through Trustee and the Liquidity
Provider signed by the Vice President and Treasurer or any other authorized
officer of Lessee certifying to such effect.
(d) Commitments to Participate in Lessor's Cost. (i) Participation
in Lessor's Cost. Subject to the terms and conditions of this Agreement, on the
Delivery Date, (i) the Indenture Trustee agrees to release the Debt Portion or
such lesser amount as may then be held in the Collateral Account, if any, to the
Owner Trustee for application to Lessor's Cost of the Aircraft as provided
below, (ii) the Owner Participant shall participate in Lessor's Cost of the
Aircraft through an investment in the Trust Estate in the amount set forth
opposite the Owner Participant's name in Schedule II hereto, and (iii) Lessee
shall sell the Aircraft to the Owner Trustee and the Owner Trustee shall
immediately thereafter lease the Aircraft to Lessee pursuant to the Lease. In
consideration for the assignment to the Owner Trustee by Lessee under the
Purchase Agreement Assignment of any warranties thereunder, the transfer by the
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Initial Owner Participant to the Owner Participant of its Beneficial Interest
and the transfer of title to the Aircraft from Lessee to the Owner Trustee, the
following cash payment will be made by wire transfer of immediately available
funds on the Delivery Date: by the Owner Trustee to Lessee, an amount equal to
Lessor's Cost of the Aircraft. Upon receipt by Lessee of such payment and the
satisfaction of the conditions set forth in Section 5 hereof, Lessee shall
transfer title to and delivery the Aircraft to the Owner Trustee, and the Owner
Trustee shall purchase and take title to and accept delivery of the Aircraft.
(ii) No Obligation to Increase Commitments. (A) If the Indenture
Trustee shall default in its obligation to make the amount of its Debt Portion
available pursuant hereto, the Owner Participant shall have no obligation to
make any portion of such Debt Portion available or to increase the amount of its
Commitment, but the obligations of the Owner Participant shall nevertheless
remain subject to the terms and conditions of this Agreement.
(B) Subject to the provisions of Section 1(e) hereof, if the closing
of the transactions contemplated by the Operative Documents shall not have been
consummated by 3:00 p.m. (New York City time), or such earlier time as directed
by Lessee, on the Scheduled Delivery Date, the Owner Trustee shall, if
instructed in writing by Lessee, at the risk and expense of Lessee, use its
reasonable best efforts to cause the Owner Participant's Commitment to be
invested and reinvested to the extent practicable at the direction received by
it from Lessee (with a copy to the Owner Participant), at the risk of Lessee, in
Cash Equivalents consisting of either commercial paper or time deposits;
provided, however, that in the absence of instructions by 3:00 p.m. (New York
City time) the Owner Trustee shall use its reasonable best efforts to cause such
amount or the proceeds thereof to be invested and reinvested to the extent
practicable in overnight Eurodollar time deposits. Earnings on any such
investments shall be applied to Lessee's payment obligations, if any, to the
Owner Participant pursuant to the next succeeding paragraph, and the balance, if
any, of such earnings remaining after such application shall be paid in
accordance with Lessee's written instructions.
If for any reason (i) the Delivery Date shall not occur (whether by
reason of a failure to meet a condition precedent thereto set forth in Section 5
hereof or otherwise) on or before the third Business Day after the Scheduled
Delivery Date (or earlier if requested by the Owner Participant) or, if earlier,
February 13, 1998, or (ii) Lessee has notified the Owner Trustee (with a copy to
the Owner Participant) prior to 3:00 p.m. (New York City time) on any date after
the Scheduled Delivery Date that it does not intend to go forward to close the
transactions contemplated hereby for such Delivery Date, the Owner Participant
may cancel any funding arrangements made to fund its Commitment on the Scheduled
Delivery Date but the Owner Participant's Commitment hereunder with respect to
the Aircraft shall not be terminated thereby until 5:30 p.m. (New York City
time) on February 13, 1998, whereupon the Owner Participant's Commitment
hereunder shall terminate. On such third Business Day (or such earlier date) or
February 13, 1998, as the case may be, or the earliest practicable Business Day
thereafter, the Owner Trustee shall return the amounts held by it hereunder to
the Owner Participant, provided that the Owner Trustee shall have had a
reasonable time to liquidate any Cash Equivalents it has been authorized to
invest in pursuant to the preceding paragraph and to obtain the proceeds
therefrom in funds of the type originally received, and
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Lessee shall pay interest on such funds to the Owner Participant at an interest
rate equal to the weighted average (based on outstanding principal amount) rate
of interest on the Secured Certificates issued pursuant to the Trust Indenture,
such interest to be payable for the period from and including such Scheduled
Delivery Date to but excluding the date such funds are returned to the Owner
Participant in accordance with the terms hereof; provided that if any such funds
are returned to the Owner Participant after 3:00 p.m. (New York City time) on
any such date, such funds shall be deemed for purposes of this paragraph to have
been returned on the next succeeding Business Day and interest shall accrue for
such additional period.
Lessee shall reimburse the Owner Trustee on demand for any loss
incurred by the Owner Trustee as a result of the investment of funds by the
Owner Trustee in accordance with the terms of this Section 1(d). Further, Lessee
shall indemnify the Owner Trustee and hold it harmless from and against any cost
or expense the Owner Trustee may incur as a result of any investment of funds or
transfer of funds referred to herein in accordance with the terms hereof. The
Owner Trustee shall not be liable for failure to invest such funds except as
otherwise provided herein or for any losses incurred on such investments except
for any losses arising out of its own gross negligence or willful misconduct.
(e) Optional Postponement. Without limiting the provisions of
Section 1(d)(ii) hereof, the Scheduled Delivery Date may be postponed from time
to time (but in no
event shall the Delivery Date be later than February 13, 1998) for any reason,
if Lessee gives the Owner Participant, the Indenture Trustee, the Owner Trustee
and the Pass Through Trustee confirmed facsimile notice (or telephone notice
followed by written confirmation) of such postponement and notice of the date to
which the Delivery Date has been postponed, such notice of postponement to be
received by each party no later than 11:00 a.m. (New York City time) on the
Business Day preceding the Scheduled Delivery Date.
SECTION 2. Lessee's Notice of Delivery Date. Lessee agrees to give
each Participant, the Owner Trustee, the Pass Through Trustee and the Indenture
Trustee at least two Business Days' telecopy or other written notice of the date
the Delivery Date is scheduled for the Aircraft, which shall be a Business Day,
which notice shall specify the amount of Lessor's Cost, the Debt Portion, and
the amount of the Owner Participant's Commitment for the Aircraft. As to the
Owner Participant, the making of its Commitment for the Aircraft available in
the manner required by Section 1 shall constitute a waiver of such notice.
SECTION 3. Instructions to the Owner Trustee. The Owner Participant
agrees that its releasing the amount of its Commitment for the Aircraft to the
account of the Owner Trustee in accordance with the terms of Section 1 shall
constitute, subject to satisfaction or waiver of the conditions set forth in
Section 5(a), without further act, authorization and direction by the Owner
Participant to the Owner Trustee:
(i) to pay to Lessee the Lessor's Cost for the Aircraft;
(ii) to the extent not previously accomplished by a prior
authorization, to authorize a representative or representatives of the
Owner Trustee (who shall be an
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employee or employees, or an agent or agents, of Lessee designated by
Lessee) to accept delivery of the Aircraft on the Delivery Date pursuant
to the Acceptance Certificate;
(iii) to accept from Lessee the ▇▇▇▇ of Sale and the FAA ▇▇▇▇ of
Sale for the Aircraft referred to in Section 5(a)(v)(8) and 5(a)(v)(9);
(iv) to execute an Aircraft Registration Application, the Lease
Supplement and the Trust Supplement, in each case covering the Aircraft;
and
(v) to take such other action as may be required to be taken by the
Owner Trustee on the Delivery Date by the terms of any Operative Document.
SECTION 4. [Intentionally Omitted.]
SECTION 5. Delivery Date Closing Conditions. (a) Conditions
Precedent to the Delivery Date Closing. It is agreed that the obligations of
each of the Pass Through Trustee, the Owner Trustee, the Owner Participant, the
Indenture Trustee, and the Subordination Agent to enter into the transactions to
be consummated on the Delivery Date are subject to the satisfaction (or waiver
by such party) prior to or on the Delivery Date of the following conditions
precedent, except that paragraphs (iii), (v)(5) and (14), (x), (xxi), (xxii) and
(xxiv) shall not be a condition precedent to the obligations of the Pass Through
Trustee, and paragraphs (iv), (vii)(D), (xiv) and (xxvi) shall not be a
condition precedent to the obligation of the Owner Participant:
(i) The Pass Through Trustee and the Owner Participant shall have
received due notice with respect to such participation pursuant to Section
2 hereof (or shall have waived such notice either in writing or as
provided in Section 2).
(ii) No change shall have occurred after the date of the execution
and delivery of this Agreement in applicable law or regulations or
guidelines or interpretations thereof by appropriate regulatory
authorities which would make it a violation of law or regulations or
guidelines for the Pass Through Trustee to release the Debt Portion or the
Owner Participant to make its Commitment available in accordance with
Section 1 hereof or which would otherwise have an adverse impact on the
Owner Participant's interests under the Operative Documents.
(iii) In the case of the Owner Participant, the Indenture Trustee
shall have released the Debt Portion or such lesser amount as may be held
in the Collateral Account together with amounts payable by Lessee pursuant
to Section 18 of the Original Participation Agreement.
(iv) In the case of the Pass Through Trustees, the Owner Participant
shall have made available the amount of its Commitment for the Aircraft in
accordance with Section 1 hereof.
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(v) The following documents shall have been duly authorized,
executed and delivered by the respective party or parties thereto, shall
each be satisfactory in form and substance to the Pass Through Trustee and
the Owner Participant and shall be in full force and effect and executed
counterparts shall have been delivered to the Pass Through Trustee and the
Owner Participant, or their respective counsel, provided that an excerpted
copy of the Purchase Agreement shall only be delivered to and retained by
the Owner Trustee (but the Indenture Trustee shall also retain an
excerpted copy of the Purchase Agreement which may be inspected by the
Owner Participant and its counsel prior to the Delivery Date and
subsequent to the Delivery Date may be inspected and reviewed by the
Indenture Trustee if and only if there shall occur and be continuing an
Event of Default) and provided, further, that the chattel paper
counterpart of the Lease and the Lease Supplement covering the Aircraft
dated the Delivery Date shall be delivered to the Indenture Trustee, and
the Tax Indemnity Agreement and the Residual Agreement need only be
satisfactory to the Owner Participant and Lessee and shall only be
delivered to Lessee and the Owner Participant and their respective
counsel:
(1) this Agreement;
(2) the Purchase Agreement Assignment;
(3) the Lease;
(4) a Lease Supplement covering the Aircraft dated the
Delivery Date;
(5) the Tax Indemnity Agreement;
(6) the Trust Agreement;
(7) a Trust Supplement covering the Aircraft dated the
Delivery Date;
(8) the ▇▇▇▇ of Sale;
(9) the FAA ▇▇▇▇ of Sale;
(10) an acceptance certificate covering the Aircraft in the
form agreed to by the Owner Participant and Lessee (herein called the
"Acceptance Certificate") duly completed and executed by the Owner Trustee
or its agent, which may be a representative of Lessee, and by such
representative on behalf of Lessee;
(11) the Trust Indenture (the Original Trust Indenture, as
amended as of the Delivery Date by the First Amendment to Trust
Indenture);
(12) the Consent and Agreement;
(13) the Guarantee;
- 9 -
(14) the Residual Agreement;
(15) an excerpted copy of the Purchase Agreement (insofar as
it relates to the Aircraft); and
(16) the Assignment and Assumption Agreement.
All of the foregoing documents, together with the Secured Certificates, are
sometimes referred to herein, collectively, as the "Operative Documents" and,
individually, as an "Operative Document".
In addition, the Owner Participant shall have received executed
counterparts or conformed copies of the following documents:
(1) each of the Pass Through Trust Agreements;
(2) the Intercreditor Agreement; and
(3) the Liquidity Facility for each of the Class A, Class B and
Class C Trusts.
(vi) Uniform Commercial Code financing statements (A) to amend and
restate each financing statement referred to in Section 4(a)(iv) of the
Original Participation Agreement and Section 7(a)(vi) hereof and (B)
covering all the security interests created by or pursuant to the Granting
Clause of the Trust Indenture that are not covered by the recording system
established by the Federal Aviation Act, shall have been executed and
delivered by the Owner Trustee, and such financing statements shall have
been duly filed in all places necessary or advisable, and any additional
Uniform Commercial Code financing statements deemed advisable by the Owner
Participant or the Pass Through Trustee shall have been executed and
delivered by Lessee or the Owner Trustee and duly filed.
(vii) The Pass Through Trustee (to the extent not received on the
Certificate Closing Date) and the Owner Participant shall have received
the following:
(A)(1) an incumbency certificate of Lessee and the Guarantor
(as the case may be) as to the person or persons authorized to
execute and deliver this Agreement, the Lease, the Lease Supplement
covering the Aircraft, the ▇▇▇▇ of Sale, the FAA ▇▇▇▇ of Sale, the
Purchase Agreement Assignment, the Tax Indemnity Agreement, the Pass
Through Trust Agreements, the Guarantee and any other documents to
be executed on behalf of Lessee or the Guarantor (as the case may
be) in connection with the transactions contemplated hereby on the
Delivery Date and the signatures of such person or persons;
(2) a copy of the resolutions of the board of directors of
Lessee and the Guarantor or the executive committee thereof,
certified by the Secretary or
- 10 -
an Assistant Secretary of Lessee and the Guarantor (as the case may
be), duly authorizing the transactions contemplated hereby and the
execution and delivery of each of the documents required to be
executed and delivered on behalf of Lessee or the Guarantor (as the
case may be) in connection with the transactions contemplated hereby
to be consummated on the Delivery Date;
(3) a copy of the certificate of incorporation of Lessee and
the Guarantor, certified by the Secretary of State of the State of
Minnesota in the case of Lessee and certified by the Secretary of
State of the State of Delaware in the case of the Guarantor, a copy
of the bylaws of Lessee and the Guarantor, certified by the
Secretary or Assistant Secretary of Lessee and the Guarantor (as the
case may be), and a certificate or other evidence from the Secretary
of State of the State of Minnesota in the case of Lessee and from
the Secretary of State of the State of Delaware in the case of the
Guarantor, dated as of a date reasonably near the Delivery Date, as
to the due incorporation and good standing of Lessee or the
Guarantor (as the case may be) in such state; and
(4) a certificate signed by an authorized officer of Lessee
and the Guarantor, dated the Delivery Date, certifying that each of
the documents referred to in Section 4(a)(iii) of the Original
Participation Agreement to which Lessee or the Guarantor is a party
shall be in full force and effect, and there shall not have occurred
any default thereunder, or any event which, with the lapse of time
or the giving of notice or both, would be a default thereunder.
(B)(1) an incumbency certificate of the Indenture Trustee as
to the person or persons authorized to execute and deliver this
Agreement, the Trust Indenture, the Pass Through Trust Agreements
and any other documents to be executed on behalf of the Indenture
Trustee in connection with the transactions contemplated hereby on
the Delivery Date and the signatures of such person or persons;
(2) a copy of the resolutions of the board of directors of the
Indenture Trustee, certified by the Secretary or an Assistant
Secretary of the Indenture Trustee, duly authorizing the
transactions contemplated hereby and the execution and delivery of
each of the documents required to be executed and delivered on
behalf of the Indenture Trustee in connection with the transactions
contemplated hereby to be consummated on the Delivery Date;
(3) a copy of the articles of association and by-laws of the
Indenture Trustee, each certified by the Secretary or an Assistant
Secretary of the Indenture Trustee;
(4) a certificate signed by an authorized officer of the
Indenture Trustee, dated the Delivery Date, certifying that the
representations and warranties contained herein of the Indenture
Trustee are correct as though made on and as of the Delivery Date,
except to the extent that such representations
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and warranties relate solely to an earlier date (in which case such
representations and warranties are correct on and as of such earlier
date); and
(5) the Original Trust Indenture shall be in full force and
effect, and there shall not have occurred any default thereunder, or
any event which, with the lapse of time or the giving of notice or
both, would be a default thereunder.
(C)(1) an incumbency certificate of the Owner Trustee as to
the person or persons authorized to execute and deliver this
Agreement, the Lease, the Lease Supplement covering the Aircraft,
the Trust Agreement, the Trust Indenture, the Residual Agreement,
the Purchase Agreement Assignment and any other documents to be
executed on behalf of the Owner Trustee in connection with the
transactions contemplated hereby on the Delivery Date and the
signatures of such person or persons;
(2) a copy of the resolutions of the board of directors of the
Owner Trustee, certified by the Secretary or an Assistant Secretary
of the Owner Trustee, duly authorizing the transactions contemplated
hereby and the execution and delivery of each of the documents
required to be executed and delivered on behalf of the Owner Trustee
in connection with the transactions contemplated hereby to be
consummated on the Delivery Date;
(3) a copy of the articles of association and by-laws of the
Owner Trustee, each certified by the Secretary or an Assistant
Secretary of the Owner Trustee;
(4) a certificate signed by an authorized officer of the Owner
Trustee, dated the Delivery Date, certifying that the
representations and warranties contained herein of the Owner Trustee
(in its individual capacity and as trustee) are correct as though
made on and as of the Delivery Date, except to the extent that such
representations and warranties relate solely to an earlier date (in
which case such representations and warranties are correct on and as
of such earlier date); and
(5) the Original Trust Indenture, the Original Trust Agreement
and the Secured Certificates shall be in full force and effect, and
there shall not have occurred any default thereunder, or any event
which, with the lapse of time or the giving of notice or both, would
be a default thereunder.
(D)(1) an incumbency certificate of the Owner Participant as
to the person or persons authorized to execute and deliver this
Agreement, the Tax Indemnity Agreement, the Trust Agreement, the
Residual Agreement and any other documents to be executed on behalf
of the Owner Participant in connection with the transactions
contemplated hereby and the signatures of such person or persons;
- 12 -
(2) a copy of the general resolutions of the board of
directors of the Owner Participant, certified by the Secretary or an
Assistant Secretary of the Owner Participant, duly authorizing the
transactions contemplated hereby and the execution and delivery of
each of the documents required to be executed and delivered on
behalf of the Owner Participant in connection with the transactions
contemplated hereby;
(3) a copy of the articles of association and by-laws of the
Owner Participant, each certified by the Secretary or an Assistant
Secretary of the Owner Participant; and
(4) a certificate signed by an authorized officer of the Owner
Participant, dated the Delivery Date, certifying that the
representations and warranties contained herein of the Owner
Participant are correct as though made on and as of the Delivery
Date, except to the extent that such representations and warranties
relate solely to an earlier date (in which case such representations
and warranties are correct on and as of such earlier date).
(viii) All appropriate action required to have been taken prior to
the Delivery Date in connection with the transactions contemplated by this
Agreement shall have been taken by the Federal Aviation Administration, or
any governmental or political agency, subdivision or instrumentality of
the United States, and all orders, permits, waivers, authorizations,
exemptions and approvals of such entities required to be in effect on the
Delivery Date in connection with the transactions contemplated by this
Agreement shall have been issued, and all such orders, permits, waivers,
authorizations, exemptions and approvals shall be in full force and effect
on the Delivery Date.
(ix) On the Delivery Date the Pass Through Trustee and the Owner
Participant shall have received a certificate signed by an authorized
officer of Lessee (and with respect to the matters set forth in clauses
(4) and (5) below, the Guarantor) to the effect that:
(1) the Aircraft has been duly certified by the Federal
Aviation Administration as to type and has a current certificate of
airworthiness;
(2) the FAA ▇▇▇▇ of Sale, the Lease, the Lease Supplement, the
Trust Indenture and the Trust Supplement covering the Aircraft shall
have been duly filed for recordation (or shall be in the process of
being so duly filed for recordation) with the Federal Aviation
Administration, and the Trust Agreement shall have been filed (or
shall be in the process of being so filed) with the Federal Aviation
Administration;
(3) application for registration of the Aircraft in the name
of the Owner Trustee has been duly made with the Federal Aviation
Administration;
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(4) the representations and warranties contained herein of
Lessee and the Guarantor are correct as though made on and as of the
Delivery Date, except to the extent that such representations and
warranties (other than those contained in clause (F) of Section
7(a)(iv)) relate solely to an earlier date (in which case such
representations and warranties were correct on and as of such
earlier date); and
(5) there has been no material adverse change in the financial
condition of the Guarantor and its subsidiaries, taken as a whole,
since December 31, 1996.
(x) The Owner Participant shall have received an opinion, in form
and substance satisfactory to the Owner Participant, from BK Associates,
Inc., independent aircraft appraisers, or such other recognized aircraft
appraiser agreed upon by the Owner Participant and Lessee.
(xi) The Pass Through Trustee and the Owner Participant shall have
received, addressed to the Pass Through Trustee, the Indenture Trustee,
the Owner Participant and the Owner Trustee, and reasonably satisfactory
as to scope and substance to the Pass Through Trustee and the Owner
Participant, an opinion substantially in the form of Exhibit I-1 hereto
from ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, special counsel for Lessee and the
Guarantor, an opinion substantially in the form of Exhibit I- 2 hereto
from Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇, special counsel for Lessee and the
Guarantor, and an opinion substantially in the form of Exhibit I-3 hereto
from Lessee's legal department.
(xii) The Pass Through Trustee and the Owner Participant shall have
received, addressed to the Pass Through Trustee, the Indenture Trustee,
the Owner Participant, the Owner Trustee, the Guarantor and Lessee and
reasonably satisfactory as to scope and substance to the Pass Through
Trustee, the Owner Participant, the Guarantor and Lessee, an opinion
substantially in the form of Exhibit J-1 hereto from Vedder, Price,
▇▇▇▇▇▇▇ & Kammholz, special counsel to the Manufacturer, and an opinion
substantially in the form of Exhibit J-2 hereto from the Manufacturer's
in-house counsel, in each case with respect to the Manufacturer Documents.
(xiii) The Pass Through Trustee and the Owner Participant shall have
received, addressed to the Pass Through Trustee, the Indenture Trustee,
the Owner Participant, the Owner Trustee, the Guarantor and Lessee, and
reasonably satisfactory as to scope and substance to the Pass Through
Trustee, the Owner Participant, the Guarantor and Lessee, an opinion
substantially in the form of Exhibit K hereto from Ray, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇,
special counsel for the Owner Trustee.
(xiv) The Pass Through Trustee shall have received, addressed to the
Pass Through Trustee, the Indenture Trustee, the Owner Trustee, the
Guarantor and Lessee, and reasonably satisfactory as to scope and
substance to the Pass Through Trustee, the Guarantor and Lessee, an
opinion substantially in the form of Exhibit L-1 hereto from
- ▇▇ -
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇, special counsel for the Owner
Participant, and an opinion substantially in the form of Exhibit L-2
hereto from the Owner Participant's in-house counsel.
(xv) The Pass Through Trustee and the Owner Participant shall have
received, addressed to the Pass Through Trustee, the Indenture Trustee,
the Owner Participant, the Owner Trustee, the Guarantor and Lessee, and
reasonably satisfactory as to scope and substance to the Pass Through
Trustee, the Owner Participant, the Guarantor and Lessee, an opinion
substantially in the form of Exhibit M hereto from ▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.C.
(xvi) The Pass Through Trustee and the Owner Participant shall have
received, addressed to the Pass Through Trustee, the Owner Participant,
the Owner Trustee, the Guarantor and Lessee, and reasonably satisfactory
as to scope and substance to the Pass Through Trustee, the Owner
Participant, the Guarantor and Lessee, an opinion substantially in the
form of Exhibit N hereto from ▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇ LLP, special counsel
for the Indenture Trustee.
(xvii) The Pass Through Trustee and the Owner Participant shall have
received, addressed to the Pass Through Trustee, the Indenture Trustee,
the Owner Participant, the Owner Trustee, the Guarantor and Lessee, and
reasonably satisfactory as to scope and substance, to the Pass Through
Trustee, the Owner Participant, the Guarantor and Lessee, an opinion
substantially in the form of Exhibit O-1 hereto from Powell, Goldstein,
▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, special counsel for the Liquidity Provider, and an
opinion substantially in the form of Exhibit O-2 hereto from in-house
counsel for the Liquidity Provider.
(xviii) The Pass Through Trustee and Owner Participant shall have
received an independent insurance broker's report, in form and substance
satisfactory to the Pass Through Trustee and the Owner Participant, as to
the due compliance with the terms of Section 11 of the Lease relating to
insurance with respect to the Aircraft.
(xix) Lessor's Cost for the Aircraft shall be $21,000,000.
(xx) No action or proceeding shall have been instituted nor shall
governmental action be threatened before any court or governmental agency,
nor shall any order, judgment or decree have been issued or proposed to be
issued by any court or governmental agency at the time of the Delivery
Date to set aside, restrain, enjoin or prevent the completion and
consummation of this Agreement or the transactions contemplated hereby.
(xxi) The Owner Participant shall have received from Thelen, Marrin,
▇▇▇▇▇▇▇ & Bridges LLP, special tax counsel to the Owner Participant, an
opinion, in form and substance satisfactory to the Owner Participant, with
respect to certain Federal income tax aspects of the transaction
contemplated by the Operative Documents.
- 15 -
(xxii) In the opinion of the Owner Participant and its special tax
counsel, there shall have been, since the date of execution and delivery
of the Tax Indemnity Agreement, no amendment, modification, addition, or
change in or to the provisions of the Code and the regulations promulgated
under the Code (including temporary regulations), Internal Revenue Service
Revenue Procedures or Revenue Rulings, or other administrative
interpretations, applicable judicial precedents or Executive Orders of the
President of the United States, all as in effect on the date of execution
and delivery of the Tax Indemnity Agreement, the effect of which might
preclude the Owner Participant from obtaining any of the income tax
benefits and consequences assumed to be available to the Owner Participant
as set forth in Section 2 of the Tax Indemnity Agreement.
(xxiii) The Pass Through Trustee and the Owner Participant shall
have received a favorable opinion substantially in the form of Exhibit P
hereto addressed to the Pass Through Trustee and the Owner Participant,
and reasonably satisfactory as to scope and substance to the Pass Through
Trustee and the Owner Participant, from Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇,
special counsel for the Lessee, which opinion shall state (with customary
assumptions and qualifications) that the Owner Trustee, as lessor under
the Lease, and the Indenture Trustee, as assignee of the Owner Trustee's
rights under the Lease pursuant to the Trust Indenture, would be entitled
to the benefits of 11 U.S.C. ss.1110 with respect to the Aircraft.
(xxiv) The Owner Participant shall have received (A) a certificate
signed by an authorized officer of the Pass Through Trustee, dated the
Delivery Date, certifying that the representations and warranties
contained herein of the Pass Through Trustee are correct as though made on
and as of the Delivery Date, except to the extent that such
representations and warranties relate solely to an earlier date (in which
case such representations and warranties are correct on and as of such
earlier date), (B) an opinion substantially in the form of Exhibit Q
hereto addressed to the Owner Participant, the Guarantor and Lessee of
▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇ LLP, special counsel for the Pass Through Trustee,
and reasonably satisfactory as to scope and substance to the Owner
Participant, the Guarantor and Lessee, and (C) such other documents and
evidence with respect to the Pass Through Trustee as it may reasonably
request in order to establish the due consummation of the transactions
contemplated by this Agreement, the taking of all necessary corporate
action in connection therewith and compliance with the conditions herein
set forth.
(xxv) No Indenture Event of Default or Indenture Default shall have
occurred and be continuing.
(xxvi) On the Delivery Date, in connection with the execution and
delivery of this Agreement, Lessee shall have delivered a certificate to
the Pass Through Trustee and the Liquidity Provider signed by a duly
authorized officer of Lessee stating that (i) the Trust Agreement, the
Trust Indenture, the Guarantee, this Agreement and the Lease do not vary
the Mandatory Economic Terms and contain the Mandatory
- 16 -
Document Terms and (ii) any substantive modification of such documents
from the Original Trust Agreement, the Original Trust Indenture, the
Original Guarantee and the Original Participation Agreement as in effect
on the Certificate Closing Date and any change in the Lease from the form
set forth on Exhibit C to the Original Participation Agreement does not
materially and adversely affect the holders of Pass Through Certificates
and each Liquidity Provider and such certification shall be true and
correct.
Promptly upon the registration of the Aircraft and the recording of
the Trust Indenture, the Lease, the Lease Supplement covering the Aircraft and
the Trust Supplement covering the Aircraft pursuant to the Federal Aviation Act,
Lessee will cause ▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.C., special counsel in Oklahoma City,
Oklahoma, to deliver to the Pass Through Trustee, the Indenture Trustee, the
Owner Participant, the Owner Trustee and Lessee an opinion as to the due and
valid registration of the Aircraft in the name of the Owner Trustee, the due
recording of the FAA ▇▇▇▇ of Sale, the Trust Indenture, such Lease Supplement,
such Trust Supplement and the Lease and the filing of the Trust Agreement and
the lack of filing of any intervening documents with respect to the Aircraft.
(b) Conditions Precedent to the Obligations of Lessee and the
Guarantor. It is agreed that the obligations of Lessee to sell the Aircraft to
the Owner Trustee and to accept delivery of the Aircraft under the Lease, and
the obligations of Lessee and the Guarantor to enter into the other Operative
Documents on the Delivery Date, are all subject to the fulfillment to the
satisfaction of Lessee and the Guarantor prior to or on the Delivery Date of the
following conditions precedent:
(i) All appropriate action required to have been taken on or prior
to the Delivery Date in connection with the transactions contemplated by
this Agreement shall have been taken by the Federal Aviation
Administration, or any governmental or political agency, subdivision or
instrumentality of the United States, and all orders, permits, waivers,
exemptions, authorizations and approvals of such entities required to be
in effect on the Delivery Date in connection with the transactions
contemplated by this Agreement shall have been issued, and all such
orders, permits, waivers, exemptions, authorizations and approvals shall
be in full force and effect on the Delivery Date.
(ii) The conditions specified in Sections 5(a)(ii), 5(a)(iii) and
5(a)(iv) hereof shall have been satisfied.
(iii) Those documents described in Section 5(a)(v) shall have been
duly authorized, executed and delivered by the respective party or parties
thereto (other than Lessee and the Guarantor) in the manner specified in
Section 5(a)(v), shall each be satisfactory in form and substance to
Lessee and the Guarantor, shall be in full force and effect on the
Delivery Date, and an executed counterpart of each thereof shall have been
delivered to Lessee or its special counsel and the Guarantor or its
special counsel.
- 17 -
(iv) Lessee and the Guarantor shall have received (A) each
certificate referred to in Section 5(a)(vii) (other than the certificate
referred to in clause (A) thereof), (B) the certificate referred to in
Section 5(a)(xxiv)(A), and (C) such other documents and evidence with
respect to the Pass Through Trustee as Lessee or its special counsel and
the Guarantor or its special counsel may reasonably request in order to
establish the due consummation of the transactions contemplated by this
Agreement, the taking of all corporate proceedings in connection therewith
and compliance with the conditions herein set forth.
(v) Lessee and the Guarantor shall have received the opinions set
forth in Sections 5(a)(xii), 5(a)(xiii), 5(a)(xiv), 5(a)(xv), 5(a)(xvi),
5(a)(xvii) and 5(a)(xxiv)(B) in each case addressed to Lessee and the
Guarantor and dated the Delivery Date and in each case in scope and
substance reasonably satisfactory to Lessee and its special counsel and
the Guarantor and its special counsel.
(vi) No action or proceeding shall have been instituted nor shall
governmental action be threatened before any court or governmental agency,
nor shall any order, judgment or decree have been issued or proposed to be
issued by any court or governmental agency at the time of the Delivery
Date to set aside, restrain, enjoin or prevent the completion and
consummation of this Agreement or the transactions contemplated hereby.
(vii) No change shall have occurred after the date of the execution
and delivery of this Agreement in applicable law or regulations or
guidelines or interpretations by appropriate regulatory authorities which
would make it a violation of law or regulations or guidelines for Lessee
or the Guarantor to enter into any transaction contemplated by the
Operative Documents.
(viii) In the opinion of Lessee and its special counsel, there shall
have been, since the date hereof, no amendment, modification, addition or
change in or to the Code, the regulations promulgated under the Code
(including temporary regulations), Internal Revenue Service Revenue
Procedures or Revenue Rulings, or other administrative interpretations,
applicable judicial precedents or Executive Orders of the President of the
United States which has not been the subject of an adjustment to Basic
Rent, Stipulated Loss Value and Termination Value percentages, the Special
Purchase Price, the Initial Installment and the Remaining Installments
pursuant to Section 3(d)(i)(C) of the Lease or which might give rise to an
indemnity obligation of Lessee under any of the Operative Documents.
(ix) Lessee shall have been paid Lessor's Cost for the Aircraft.
(x) No adjustment to Basic Rent shall have been proposed or made
pursuant to Section 3(d) of the Lease as a result of a change in tax law
if such adjustment would result in an increase in the Net Present Value of
Rents of more than one hundred basis points.
- 18 -
SECTION 6. Extent of Interest of Certificate Holders. No Certificate
Holder shall have any further interest in, or other right with respect to, the
mortgage and security interests created by the Trust Indenture when and if the
principal of and interest on all Secured Certificates held by such holder and
all other sums payable to such holder hereunder, under the Trust Indenture and
under such Secured Certificates shall have been paid in full. Each Pass Through
Trustee and, by its acceptance of a Secured Certificate, each Certificate Holder
agrees that it will look solely to the income and proceeds from the Trust
Indenture Estate to the extent available for distribution to such Certificate
Holder as provided in Article III of the Trust Indenture and that neither the
Owner Participant nor the Owner Trustee shall be personally liable to the Pass
Through Trustees or any Certificate Holder for any amounts payable under the
Secured Certificates, the Trust Indenture or hereunder, except as expressly
provided in the Operative Documents.
SECTION 7. Representations and Warranties of Lessee and the
Guarantor; Indemnities. (a) Representations and Warranties. Lessee and the
Guarantor represent and warrant to the Pass Through Trustee, the Owner Trustee,
the Indenture Trustee, the Liquidity Provider, the Subordination Agent and the
Owner Participant that as of the Delivery Date:
(i) each of Lessee and the Guarantor is a corporation duly
organized, validly existing and in good standing under the laws of the
state of its incorporation, has the corporate power and authority to own
or hold under lease its properties, has, or had or will have on the
respective dates of execution thereof, the corporate power and authority
to enter into and perform its obligations under (i) in the case of Lessee,
the Lessee Documents, the Pass Through Trust Agreement, the Underwriting
Agreement and the other Operative Documents to which it is a party and
(ii) in the case of the Guarantor, this Agreement, the Pass Through Trust
Agreements, the Underwriting Agreement and the other Operative Documents
to which it is a party, and is duly qualified to do business as a foreign
corporation in each state in which its operations or the nature of its
business requires other than failures to so qualify which would not have a
material adverse effect on the condition (financial or otherwise),
consolidated business or properties of it and its subsidiaries considered
as one enterprise;
(ii) Lessee is a Certificated Air Carrier, and its chief executive
office (as such term is used in Article 9 of the Uniform Commercial Code
in effect in the State of Minnesota) is located at Eagan, Minnesota;
(iii) the execution and delivery by Lessee or the Guarantor (as the
case may be) of the Lessee Documents, the Pass Through Trust Agreements,
the Underwriting Agreement and each other Operative Document to which
Lessee or the Guarantor (as the case may be) is a party and the
performance of the obligations of Lessee or the Guarantor (as the case may
be) under the Lessee Documents, the Pass Through Trust Agreements, the
Underwriting Agreement and each other Operative Document to which Lessee
or the Guarantor (as the case may be) is a party, have been duly
authorized by all necessary corporate action on the part of Lessee or the
Guarantor, do not require any stockholder approval, or approval or consent
of any trustee or holder of any
- 19 -
material indebtedness or material obligations of Lessee or the Guarantor,
except such as have been duly obtained and are in full force and effect,
and do not contravene any law, governmental rule, regulation or order
binding on Lessee or the Guarantor (as the case may be) or the certificate
of incorporation or bylaws of Lessee or the Guarantor (as the case may
be), or contravene the provisions of, or constitute a default under, or
result in the creation of any Lien (other than Permitted Liens) upon the
property of Lessee or the Guarantor (as the case may be) under, any
indenture, mortgage, contract or other agreement to which Lessee or the
Guarantor (as the case may be) is a party or by which it may be bound or
affected which contravention, default or Lien, individually or in the
aggregate, would be reasonably likely to have a material adverse effect on
the condition (financial or otherwise), business or properties of the
Guarantor and its subsidiaries considered as one enterprise;
(iv) neither the execution and delivery by Lessee or the Guarantor
(as the case may be) of the Lessee Documents, the Pass Through Trust
Agreements, the Underwriting Agreement or any other Operative Document to
which Lessee or the Guarantor (as the case may be) is a party, nor the
performance of the obligations of Lessee or the Guarantor (as the case may
be) under the Lessee Documents, the Pass Through Trust Agreements, the
Underwriting Agreement or the other Operative Documents to which Lessee or
the Guarantor (as the case may be) is a party, requires the consent or
approval of, the giving of notice to, the registration with, or the taking
of any other action in respect of, the Department of Transportation, the
FAA, or any other federal, state or foreign governmental authority having
jurisdiction over Lessee or the Guarantor, other than (A) the registration
of the Certificates under the Securities Act of 1933, as amended, and
under the securities laws of any state in which the Certificates may be
offered for sale if the laws of such state require such action, (B) the
qualification of the Pass Through Trust Agreements under the Trust
Indenture Act of 1939, as amended, pursuant to an order of the Securities
and Exchange Commission, (C) the orders, permits, waivers, exemptions,
authorizations and approvals of the regulatory authorities having
jurisdiction over the operation of the Aircraft by Lessee or any Sublessee
required to be obtained on or prior to the Delivery Date, which orders,
permits, waivers, exemptions, authorizations and approvals have been duly
obtained and are, or on the Delivery Date will be, in full force and
effect (other than a flying time wire, all steps to obtain the issuance of
which will have been, on the Delivery Date, taken or caused to be taken by
Lessee), (D) on or prior to the Delivery Date, the registration of the
Aircraft referred to in Section 5(a)(ix)(3), (E) on or prior to the
Delivery Date, the registrations and filings referred to in Section
7(a)(vi), and (F) authorizations, consents, approvals, actions, notices
and filings required to be obtained, taken, given or made either only
after the date hereof or the failure of which to obtain, take, give or
make would not be reasonably likely to have a material adverse effect on
the condition (financial or otherwise), business or properties of the
Guarantor and its subsidiaries considered as one enterprise;
(v) this Agreement, each of the other Lessee Documents, the Pass
Through Trust Agreements and the Guarantee constitute the legal, valid and
binding obligations
- 20 -
of Lessee or the Guarantor (as the case may be) enforceable against Lessee
or the Guarantor (as the case may be) in accordance with their respective
terms, except as the same may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or similar
laws affecting the rights of creditors or lessors generally and by general
principles of equity, whether considered in a proceeding at law or in
equity, and except, in the case of the Lease (when entered into), as
limited by applicable laws which may affect the remedies provided in the
Lease, which laws, however, do not make the remedies provided in the Lease
inadequate for practical realization of the benefits intended to be
afforded thereby;
(vi) except for (A) the registration of the Aircraft pursuant to the
Federal Aviation Act, (B) the filing of the Trust Agreement with the FAA,
(C) the filing for recording pursuant to the Federal Aviation Act of the
Lease with the Lease Supplement covering the Aircraft, the Trust Indenture
and the Trust Supplement attached thereto and made a part thereof, the
Trust Indenture with the Trust Supplement attached thereto and made a part
thereof and the FAA ▇▇▇▇ of Sale, (D) the filing of financing statements
(and continuation statements at periodic intervals) with respect to the
security interests created by such documents under the Uniform Commercial
Code of Minnesota and Utah and such other states as may be specified in
the opinions furnished pursuant to Section 5(a)(xi) hereof, and (E) the
taking of possession by the Indenture Trustee of the original chattel
paper counterpart of each of the Lease and the Lease Supplement covering
the Aircraft, no further filing or recording of any document (including
any financing statement in respect thereof under Article 9 of the Uniform
Commercial Code of any applicable jurisdiction) is necessary under the
laws of the United States of America or any State thereof in order to
perfect the Owner Trustee's interest in the Aircraft as against Lessee and
any third parties, or to perfect the security interest in favor of the
Indenture Trustee in the Owner Trustee's interest in the Aircraft (with
respect to such portion of the Aircraft as is covered by the recording
system established by the FAA pursuant to 49 U.S.C. Section 44107) and in
the Lease in any applicable jurisdiction in the United States;
(vii) neither Lessee, the Guarantor nor any of their affiliates has
directly or indirectly offered the Certificates for sale to any Person
other than in a manner permitted by the Securities Act of 1933, as
amended, and by the rules and regulations thereunder;
(viii) neither Lessee nor the Guarantor is an "investment company"
within the meaning of the Investment Company Act of 1940, as amended;
(ix) no event has occurred and is continuing which constitutes an
Event of Default or would constitute an Event of Default but for the
requirement that notice be given or time lapse or both;
(x) no event has occurred and is continuing which constitutes an
Event of Loss or would constitute an Event of Loss with the lapse of time;
- 21 -
(xi) Lessee is solvent and will not be rendered insolvent by the
sale of the Aircraft; after the sale of the Aircraft the capital of Lessee
will not be unreasonably small for the conduct of the business in which
Lessee is engaged or is about to engage; Lessee has no intention or belief
that it is about to incur debts beyond its ability to pay as they mature;
and Lessee's sale of the Aircraft is made without any intent to hinder,
delay or defraud either present or future creditors;
(xii) none of the proceeds from the issuance of the Secured
Certificates or from the acquisition by the Owner Participant of its
beneficial interest in the Trust Estate will be used directly or
indirectly by Lessee to purchase or carry any "margin security" as such
term is defined in Regulation G of the Board of Governors of the Federal
Reserve System; and
(xiii) all sales or use tax then due and for which Lessee is
responsible pursuant to Section 7(b)(i) hereof shall have been paid, other
than such taxes which are being contested by Lessee in good faith and by
appropriate proceedings so long as such proceedings do not involve any
material risk of the sale, forfeiture or loss of the Aircraft.
(b) General Tax Indemnity. Exhibit R, which is a complete statement
of the provisions of Section 7(b), is incorporated herein in its entirety as if
fully set forth herein.
(c) General Indemnity. Exhibit S, which is a complete statement of
the provisions of Section 7(c), is incorporated herein as if fully set forth
herein.
(d) Income Tax. [Intentionally Omitted]
SECTION 8. Representations, Warranties and Covenants.
(a) [Intentionally Omitted.]
(b) [Intentionally Omitted.]
(c) Each of the Owner Participant and First Security Bank, National
Association, in its individual capacity, represents and warrants to the other
parties to this Agreement that it is, and on the Delivery Date will be, a
Citizen of the United States without making use of any voting trust, voting
powers agreement or similar arrangement. The Owner Participant agrees, solely
for the benefit of Lessee and the Loan Participants, that if (i) it shall cease
to be, or believes itself likely to cease to be, a Citizen of the United States
and (ii) the Aircraft shall or would therefore become ineligible for
registration in the name of the Owner Trustee under the Federal Aviation Act and
regulations then applicable thereunder, then the Owner Participant shall (at its
own expense and without any reimbursement or indemnification from Lessee)
promptly effect a voting trust, voting powers agreement or other similar
arrangement or take any other action as may be necessary to prevent any
deregistration and to maintain the United States registration of the Aircraft.
It is agreed that: (A) the Owner Participant shall be liable to pay on request
to each of the other parties hereto and to each
- 22 -
holder of a Secured Certificate for any damages suffered by any such other party
or holder as the result of the representation and warranty of the Owner
Participant in the first sentence of this Section 8(c) proving to be untrue as
of the Delivery Date; and (B) the Owner Participant shall be liable to pay on
request to Lessee, any Sublessee and the Loan Participants for any damages which
may be incurred by Lessee, any Sublessee or the Loan Participants as a result of
the Owner Participant's failure to comply with its obligations pursuant to the
second sentence of this Section 8(c). Each party hereto agrees, upon the request
and at the sole expense of the Owner Participant, to cooperate with the Owner
Participant in complying with its obligations under the provisions of the second
sentence of this Section 8(c). First Security Bank, National Association, in its
individual capacity, agrees that if at any time an officer or responsible
employee of the Corporate Trust Department of First Security Bank, National
Association, shall obtain Actual Knowledge that First Security Bank, National
Association, has ceased to be a Citizen of the United States without making use
of a voting trust, voting powers agreement or similar arrangement, it will
promptly resign as Owner Trustee (if and so long as such citizenship is
necessary under the Federal Aviation Act as in effect at such time or, if it is
not necessary, if and so long as the Owner Trustee's citizenship would have any
material adverse effect on the Loan Participants, Lessee or the Owner
Participant), effective upon the appointment of a successor Owner Trustee in
accordance with Section 9.01 of the Trust Agreement. If the Owner Participant or
First Security Bank, National Association, in its individual capacity, does not
comply with the requirements of this Section 8(c), the Owner Trustee, the
Indenture Trustee and the Participants hereby agree that an Event of Default (or
an event which would constitute an Event of Default but for lapse of time or the
giving of notice or both) shall not have occurred and be continuing under the
Lease due to non-compliance by Lessee with the registration requirements in the
Lease.
(d) First Security Bank, National Association, in its individual
capacity, represents and warrants that both the principal place of business of
the Owner Trustee and the place where its records concerning the Aircraft and
all of its interest in, to and under the Operative Documents to which it is a
party are kept is Salt Lake City, Utah. First Security Bank, National
Association, in its individual capacity, agrees that it will not change the
location of such office to a location outside of Salt Lake City, Utah, without
prior written notice to all parties. First Security Bank, National Association,
in its individual capacity, further represents and warrants that (A) on the
Delivery Date the Owner Trustee shall have received whatever title to the
Aircraft as was conveyed to it by Lessee, and (B) the Trust Agreement, and,
assuming due authorization, execution and delivery of the Trust Agreement by the
Owner Participant, the other Owner Trustee Documents, when executed and
delivered, shall have been duly executed and delivered by one of its officers
who is duly authorized to execute and deliver such instruments on behalf of the
Owner Trustee. First Security Bank, National Association, in its individual
capacity, represents that it has not offered any interest in the Trust Estate or
any Secured Certificates or any similar securities for sale to, or solicited any
offer to acquire the same from, anyone, and that no officer or responsible
employee of the Corporate Trust Department of First Security Bank, National
Association, has knowledge of any such offer or solicitation by anyone other
than Lessee.
- 23 -
(e) Each Loan Participant represents and warrants that neither it
nor anyone acting in its behalf has offered any Secured Certificates for sale
to, or solicited any offer to buy any Secured Certificate from, any person or
entity other than in a manner in compliance with, and which does not require
registration under, the Securities Act of 1933, as amended, or the rules and
regulations thereunder.
(f) The Owner Participant and the Indenture Trustee agree that, at
any time after the Depreciation Period, as long as no Event of Default or a
Default of the type referred to in Section 14(a), 14(b) or 14(e) of the Lease
shall have occurred and be continuing, Lessee may elect to effect a change in
registration of the Aircraft, at Lessee's cost and expense, so long as (a) the
country of registry of the Aircraft is a country listed on Exhibit A hereto (or
such other country as the Owner Trustee approves) and (b) the following
conditions are met: (i) unless the country of registry is Taiwan, the United
States maintains normal diplomatic relations with the country of registry of the
Aircraft, and if the country of registry is Taiwan, the United States maintains
diplomatic relations at least as good as those in effect on the Delivery Date;
and (ii) the Owner Trustee, the Owner Participant and the Indenture Trustee
shall have received favorable opinions (subject to customary exceptions)
addressed to each such party, from counsel of recognized reputation reasonably
acceptable to the Owner Participant qualified in the laws of the relevant
jurisdiction to the effect that:
(A) the Owner Trustee's ownership interest in the Aircraft shall be
recognized under the laws of such jurisdiction, (B) the obligations of
Lessee, and the rights and remedies of the Owner Trustee, under the Lease
shall remain valid, binding and (subject to customary bankruptcy and
equitable remedies exceptions and to other exceptions customary in foreign
opinions generally) enforceable under the laws of such jurisdiction (or
the laws of the jurisdiction to which the laws of such jurisdiction would
refer as the applicable governing law), (C) after giving effect to such
change in registration, the Lien of the Trust Indenture on the Owner
Trustee's right, title and interest in and to the Aircraft and the Lease
shall continue as a valid and duly perfected first priority security
interest and all filing, recording or other action necessary to protect
the same shall have been accomplished (or, if such opinion cannot be given
at the time of such proposed change in registration because such change in
registration is not yet effective, (1) the opinion shall detail what
filing, recording or other action is necessary and (2) the Owner Trustee
and the Indenture Trustee shall have received a certificate from Lessee
that all possible preparations to accomplish such filing, recording and
other action shall have been done, and such filing, recording and other
action shall be accomplished and a supplemental opinion to that effect
shall be delivered to the Owner Trustee, the Owner Participant and the
Indenture Trustee on or prior to the effective date of such change in
registration), (D) it is not necessary, solely as a consequence of such
change in registration and without giving effect to any other activity of
the Owner Trustee, the Owner Participant or the Indenture Trustee (or any
Affiliate thereof), as the case may be, for the Owner Trustee, the Owner
Participant or the Indenture Trustee to qualify to do business in such
jurisdiction, (E) there is no tort liability of the owner of an aircraft
not in possession thereof under the laws of such jurisdiction (it being
agreed that, in the event such latter opinion cannot be given in a
- 24 -
form satisfactory to the Owner Participant, such opinion shall be waived
if insurance reasonably satisfactory to the Owner Participant is provided
to cover such risk), (F) (unless Lessee shall have agreed to provide
insurance covering the risk of requisition of use of such Aircraft by the
government of such jurisdiction so long as such Aircraft is registered
under the laws of such jurisdiction) the laws of such jurisdiction require
fair compensation by the government of such jurisdiction payable in
currency freely convertible into Dollars for the loss of use of such
Aircraft in the event of the requisition by such government of such use,
and (G) as to such other matters that Lessee, in the majority of Lessee's
aircraft lease transactions entered into within one year of the proposed
change in registration of the Aircraft, is required to have covered by
counsel in the country of reregistration outside of the United States as a
precondition to reregistration of the aircraft which are the subject of
such lease transactions.
In addition, as a condition precedent to any such change in registration, (a)
Lessee shall furnish to the Owner Trustee and the Indenture Trustee an Officer's
Certificate to the effect that the insurance required by Section 11 of the Lease
shall be in full force and effect at the time of such change in registration
after giving effect to such change in registration and that the new country of
registry imposes aircraft maintenance standards not materially different from
those of the United States, France, Germany, Japan, the Netherlands or the
United Kingdom and (b) the Owner Participant shall have received assurances
satisfactory to it that such change will not result in the imposition of, or
increase the amount of, any Tax on the Owner Participant or the Owner Trustee
for which Lessee is not required to indemnify under the Operative Documents or
has not entered into a binding agreement to indemnify in a manner satisfactory
in form and substance to the Owner Participant. Lessee shall pay all costs,
expenses, fees, recording and registration taxes, including the reasonable fees
and expenses of counsel to the Owner Trustee, the Owner Participant and the
Indenture Trustee, and other charges in connection with any such change in
registration.
(g) The Owner Participant represents and warrants to Lessee, the
Guarantor, the Indenture Trustee, the Pass Through Trustee, the Subordination
Agent, the Liquidity Provider and the Owner Trustee, in its capacity as such and
in its individual capacity, as follows:
(i) it is duly incorporated, validly existing and in good standing
under the laws of United States and has the corporate power and authority
to carry on its present business and operations and to own or lease its
properties, and has the corporate power and authority to enter into and to
perform its obligations under the Owner Participant Documents; this
Agreement and the other Owner Participant Documents have been duly
authorized, executed and delivered by it; and this Agreement and each of
the other Owner Participant Documents constitute the legal, valid and
binding obligations of the Owner Participant enforceable against it in
accordance with its respective terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the rights of creditors generally and by
- 25 -
general principles of equity, whether considered in a proceeding at law or
in equity; and it has a tangible net worth (exclusive of goodwill) greater
than $75,000,000;
(ii) neither (A) the execution and delivery by the Owner Participant
of the Owner Participant Documents nor (B) compliance by it with all of
the provisions thereof, (x) will contravene any law or order of any court
or governmental authority or agency applicable to or binding on the Owner
Participant (it being understood that no representation or warranty is
made with respect to laws, rules or regulations relating to aviation or to
the nature of the equipment owned by the Owner Trustee other than such
laws, rules or regulations relating to the citizenship requirements of the
Owner Participant under applicable law), or (y) will contravene the
provisions of, or constitutes or has constituted or will constitute a
default under, or result in the creation of any Lien (other than Liens
provided for in the Operative Documents) upon any property of the Owner
Participant under, its certificate of incorporation or bylaws or any
indenture, mortgage, contract or other agreement or instrument to which
the Owner Participant is a party or by which it or any of its property may
be bound or affected;
(iii) no authorization or approval or other action by, and no notice
to or filing with, any governmental authority or regulatory body (other
than as required by the Federal Aviation Act or the regulations
promulgated thereunder) is required for the due execution, delivery or
performance by it of the Owner Participant Documents;
(iv) there are no pending or, to its knowledge, threatened actions
or proceedings before any court or administrative agency or arbitrator
which would materially adversely affect the Owner Participant's ability to
perform its obligations under this Agreement, the Assignment and
Assumption Agreement, the Tax Indemnity Agreement and the Trust Agreement;
(v) neither the Owner Participant nor anyone authorized by it to act
on its behalf (it being understood that in proposing, facilitating and
otherwise taking any action in connection with the financing contemplated
hereby and agreed to herein by the Owner Participant, Lessee has not acted
as agent of the Owner Participant) has directly or indirectly offered any
Secured Certificate or Certificate or any interest in and to the Trust
Estate, the Trust Agreement or any similar interest for sale to, or
solicited any offer to acquire any of the same from, any Person; and the
Owner Participant's interest in the Trust Estate and the Trust Agreement
is being acquired for its own account and is being purchased for
investment and not with a view to any resale or distribution thereof;
(vi) on the Delivery Date, the Trust Estate shall be free of Lessor
Liens (including for this purpose Liens which would be Lessor Liens but
for the proviso in the definition of Lessor Liens) attributable to the
Owner Participant; and
(vii) it is a Citizen of the United States (without making use of a
voting trust agreement, voting powers agreement or similar arrangement).
- 26 -
(h) Each of First Security Bank, National Association, in its
individual capacity, and the Owner Participant covenants and agrees that it
shall not cause or permit to exist a Lessor Lien attributable to it with respect
to the Aircraft or any other portion of the Trust Estate. Each of First Security
Bank, National Association, in its individual capacity, and the Owner
Participant agrees that it will promptly, at its own expense, take such action
as may be necessary duly to discharge such Lessor Lien attributable to it. Each
of First Security Bank, National Association, in its individual capacity, and
the Owner Participant agrees to make restitution to the Trust Estate for any
actual diminution of the assets of the Trust Estate resulting from Lessor Liens
(including for this purpose Liens which would be Lessor Liens but for the
proviso in the definition of Lessor Liens) attributable to it. The Owner
Participant agrees to make restitution to the Trust Estate for any actual
diminution of the assets of the Trust Estate resulting from any Taxes or
Expenses imposed on the Trust Estate against which Lessee is not required to
indemnify the Trust Estate pursuant to Section 7 hereof.
(i) State Street Bank and Trust Company, in its individual capacity,
covenants and agrees that it shall not cause or permit to exist any Lien,
arising as a result of (A) claims against the Indenture Trustee not related to
its interest in the Aircraft or the administration of the Trust Indenture Estate
pursuant to the Trust Indenture, (B) acts of the Indenture Trustee not permitted
by, or failure of the Indenture Trustee to take any action required by, the
Operative Documents to the extent such acts arise or such failure arises from or
constitutes gross negligence or willful misconduct, (C) claims against the
Indenture Trustee relating to Taxes or Expenses which are excluded from the
indemnification provided by Section 7 pursuant to said Section 7, or (D) claims
against the Indenture Trustee arising out of the transfer by the Indenture
Trustee of all or any portion of its interest in the Aircraft, the Trust Estate,
the Trust Indenture Estate or the Operative Documents other than a transfer of
the Aircraft pursuant to Section 9, 10 or 19 of the Lease or Article IV or V of
the Trust Indenture, any borrowing pursuant to Section 9 hereof or a transfer of
the Aircraft pursuant to Section 15 of the Lease while an Event of Default is
continuing and prior to the time that the Indenture Trustee has received all
amounts due pursuant to the Trust Indenture.
(j) [Intentionally Omitted.]
(k) Each Loan Participant represents and warrants that the Secured
Certificate issued to it pursuant to the Trust Indenture was acquired by it for
investment and not with a view to resale or distribution (it being understood
that such Loan Participant may pledge or assign as security its interest in each
Secured Certificate issued to it), provided that the disposition of its property
shall at all times be and remain within its control, except that the Loan
Participants may sell, transfer or otherwise dispose of any Secured Certificate
or any portion thereof, or grant participations therein, in a manner which in
itself does not require registration under the Securities Act of 1933, as
amended.
(l) The Indenture Trustee, and by acceptance of the Secured
Certificates the Certificate Holders, hereby (i) agree that for purposes of the
application of Section 1111(b) of Title 11 of the United States Code or any
successor provision or any comparable provisions that the "debtor" in any
bankruptcy proceeding involving the assets held or administered
- 27 -
pursuant to the Trust Agreement shall be strictly limited to the Trust Estate
(excluding the Excluded Payments) and (ii) make (and hereby agree to make), with
respect to the Trust Indenture Estate, the election provided for in Section
1111(b)(2) of Title 11 of the United States Code. It is hereby agreed by the
Indenture Trustee, and by the acceptance of the Secured Certificates the
Certificate Holders hereby agree, that if (i) all or any part of the Trust
Estate becomes the property of, or the Owner Participant becomes, a debtor
subject to the reorganization provisions of the Bankruptcy Reform Act of 1978 or
any successor provision or any comparable proceeding, (ii) pursuant to such
reorganization provisions the Owner Trustee (in its individual capacity) or the
Owner Participant is required, by reason of the Owner Trustee (in its individual
capacity) or the Owner Participant being held to have recourse liability to the
holder(s) of the Secured Certificates or to the Indenture Trustee, directly or
indirectly (other than the recourse liability of the Owner Participant under
this Participation Agreement), to make payment on account of any amount payable
as principal or interest on the Secured Certificates and (iii) any holder(s) of
the Secured Certificates or the Indenture Trustee actually receives any Excess
Payment (as hereinafter defined) which reflects any payment by the Owner Trustee
(in its individual capacity) or the Owner Participant on account of (ii) above,
then such holder(s) or the Indenture Trustee, as the case may be, shall promptly
refund to the Owner Trustee or the Owner Participant (whichever shall have made
such payment) such Excess Payment. For purposes of this Section 8(l), "Excess
Payment" means the amount by which such payment exceeds the amount which would
have been received by the holder(s) of the Secured Certificates or the Indenture
Trustee if the Owner Trustee (in its individual capacity) or the Owner
Participant had not become subject to the recourse liability referred to in (ii)
above. Nothing contained in this Section 8(l) shall prevent the holder of a
Secured Certificate or the Indenture Trustee from enforcing any personal
recourse obligation (and retaining the proceeds thereof) of the Owner Trustee
(in its individual capacity) or the Owner Participant under this Agreement or
the Trust Indenture (and any exhibits or annexes thereto).
(m) State Street Bank and Trust Company represents, warrants and
covenants, in its individual capacity, to Lessee, the Guarantor, the Owner
Trustee, the Pass Through Trustee, the Subordination Agent, the Liquidity
Provider and the Owner Participant as follows:
(i) the Indenture Trustee is a Massachusetts trust company duly
incorporated, validly existing and in good standing under the laws of
Massachusetts, is a Citizen of the United States (without making use of
any voting trust, voting powers agreement or similar arrangement), will
notify promptly all parties to this Agreement if in its reasonable opinion
its status as a Citizen of the United States (without making use of any
voting trust, voting powers agreement or similar arrangement) is likely to
change and will resign as Indenture Trustee as provided in Section 8.02 of
the Trust Indenture promptly after it obtains actual knowledge that it has
ceased to be such a Citizen of the United States (without making use of a
voting trust, voting powers agreement or similar arrangement), and has, or
had on the respective dates of execution thereof, the full corporate
power, authority and legal right under the laws of the Commonwealth of
Massachusetts and the United States pertaining to its banking, trust and
fiduciary powers to execute and deliver each of this Agreement, the Trust
Indenture
- 28 -
and each other Operative Document to which it is a party and to carry out
its obligations under this Agreement, the Trust Indenture, each other
Operative Document to which it is a party and to authenticate the Secured
Certificates;
(ii) the execution and delivery by the Indenture Trustee of the
Indenture Trustee Documents and the authentication of the Secured
Certificates and the performance by the Indenture Trustee of its
obligations under the Indenture Trustee Documents have been duly
authorized by the Indenture Trustee and will not violate its articles of
association or bylaws or the provisions of any indenture, mortgage,
contract or other agreement to which it is a party or by which it is
bound;
(iii) this Agreement and each of the other Indenture Trustee
Documents constitute the legal, valid and binding obligations of the
Indenture Trustee enforceable against it in accordance with their
respective terms, except as the same may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the rights of creditors generally and by general principles of
equity, whether considered in a proceeding at law or in equity;
(iv) there are no pending or, to its knowledge, threatened actions
or proceedings against the Indenture Trustee, either in its individual
capacity or as Indenture Trustee, before any court or administrative
agency which, if determined adversely to it, would materially adversely
affect the ability of the Indenture Trustee, in its individual capacity or
as Indenture Trustee as the case may be, to perform its obligations under
the Operative Documents to which it is a party; and
(v) there are no Indenture Trustee's Liens on the Aircraft or any
portion of the Trust Estate.
(n) The Owner Participant will not, directly or indirectly, sell,
assign, convey or otherwise transfer any of its right, title or interest in and
to this Agreement, the Trust Estate or the Trust Agreement or any proceeds
therefrom to any person or entity, unless (i) the proposed transferee is a
"Transferee" (as defined below), (ii) Lessee shall have (1) received an opinion
(in form and substance reasonably satisfactory to Lessee) of counsel to the
Owner Participant (who shall be reasonably satisfactory to Lessee) to the effect
that such transfer will not result in any sales, use, value added or similar tax
imposed on, or indemnified against by, Lessee and (2) received from the Owner
Participant so seeking to transfer such right, title or interest reasonably
satisfactory indemnification for any sales, use, value added or similar tax
imposed on, or indemnified against by, Lessee, and (iii) the Owner Participant
sells, assigns, conveys or otherwise transfers all of its right, title and
interest in and to this Agreement, the Trust Estate, the Trust Agreement and the
proceeds therefrom to a single entity. A "Transferee" shall mean either (A) a
bank or other financial institution with a combined capital, surplus and
undivided profits of at least $75,000,000 or a corporation whose tangible net
worth is at least $75,000,000, exclusive of goodwill, in either case as of the
proposed date of such transfer, as determined in accordance with generally
accepted accounting principles, or (B) any subsidiary of such a bank, financial
institution or corporation, provided
- 29 -
that such bank, financial institution or corporation furnishes to the Owner
Trustee, the Indenture Trustee and Lessee a guaranty with respect to the
Transferee's obligations, in the case of the Owner Trustee, under the Trust
Agreement and, in the case of the Indenture Trustee and Lessee, the Transferee's
obligations hereunder, including but not limited to, under Section 8(c) and
Section 8(h) hereof, in form and substance reasonably satisfactory to Lessee,
the Owner Trustee and the Indenture Trustee, or (C) any Affiliate of the Owner
Participant if the transferring Owner Participant remains liable for the
obligations of the Transferee under the Operative Documents; provided, however,
that any Transferee shall not be an airline, a commercial air carrier, an air
freight forwarder, an entity engaged in the business of parcel transport by air
or other similar person or a corporation or other entity controlling, controlled
by or under common control with such an airline, a commercial air carrier, an
air freight forwarder, an entity engaged in the business of parcel transport by
air or other similar person. Each such transfer to a Transferee shall be subject
to the conditions that (M) upon giving effect to such transfer, the Transferee
is a Citizen of the United States (or has effected a voting trust agreement,
voting powers agreement or other similar arrangement so as not to affect the
then continued (if applicable) United States registration of the Aircraft), and
has full power and authority to enter into the transactions contemplated hereby,
(N) the Transferee has the requisite power and authority to enter into and carry
out the transactions contemplated hereby and such Transferee shall have
delivered to Lessee, the Owner Trustee and the Indenture Trustee an opinion of
counsel in form and substance reasonably satisfactory to such persons as to the
due authorization, delivery, legal, valid and binding effect and enforceability
of the agreement or agreements referred to in the next clause with respect to
the Transferee and any guaranty provided pursuant to the provisions of this
Section 8(n) as to the guarantor, (O) the Transferee enters into an agreement or
agreements, in form and substance reasonably satisfactory to the Owner Trustee,
Lessee and the Indenture Trustee, whereby the Transferee confirms that it shall
be deemed a party to this Agreement and a party to the Trust Agreement and
agrees to be bound by all the terms of, and to undertake all of the obligations
of the transferor Owner Participant contained in, the Owner Participant
Documents (to the extent of the participation so transferred to it) and makes
representations and warranties equivalent to those made by the Owner Participant
thereunder and the representation required by Section 8(q) below, (P) such
transfer does not affect registration of the Aircraft under the Federal Aviation
Act, or any rules or regulations promulgated thereunder or create a relationship
which would be in violation thereof or violate any provision of the Securities
Act of 1933, as amended, or any other applicable Federal or state law, (Q) the
transferor Owner Participant assumes the risk of any loss of any sales, use,
value added or similar tax resulting from such transfer, (R) the transferor
Owner Participant pays all of the costs and expenses (including, without
limitation, fees and expenses of counsel) incurred in connection with such
transfer, including the reasonable costs and expenses of the Owner Trustee, the
Indenture Trustee, Lessee and the Loan Participants in connection therewith, and
(S) the terms of the Operative Documents and the Overall Transaction shall not
be altered. Upon any such transfer by the Owner Participant as above provided,
the Transferee shall be deemed the Owner Participant for all purposes hereof and
of the other Operative Documents and each reference herein to the transferor
Owner Participant shall thereafter be deemed for all purposes to be to the
Transferee and the transferor Owner Participant shall be relieved, released and
discharged of all
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obligations of the transferor Owner Participant under the Owner Participant
Documents arising after the date of such transfer except to the extent fully
attributable to or arising out of acts or events occurring prior thereto and not
assumed by the Transferee (in each case, to the extent of the participation so
transferred). If the Owner Participant intends to transfer any of its interests
hereunder, it shall give 30 days prior written notice thereof to the Indenture
Trustee, the Owner Trustee and Lessee, specifying the name and address of the
proposed Transferee.
(o) Notwithstanding the provisions of Section 8(x) hereof, unless
waived by the Loan Participants, Lessee shall not be entitled to assume the
Secured Certificates on the date for purchase of the Aircraft pursuant to
Section 19(d) of the Lease if on such date an Event of Default shall have
occurred and be continuing or any condition or event shall exist which, with the
passage of time or giving of notice or both, would become such an Event of
Default.
(p) First Security Bank, National Association, and State Street Bank
and Trust Company, each in its individual capacity, agrees for the benefit of
Lessee to comply with the terms of the Trust Indenture which it is required to
comply with in its individual capacity.
(q) The Owner Participant represents and warrants that it is not
acquiring its interest in the Trust Estate, any Secured Certificate or any
interests represented thereby with the assets of any "employee benefit plan" as
defined in Section 3(3) of ERISA or of any "plan" within the meaning of Section
4975(e)(1) of the Code. Each Loan Participant agrees that it will not transfer
any Secured Certificate (or any part thereof) to any entity (except pursuant to
Section 2.14 of the Trust Indenture) unless such entity makes (or is deemed to
have made) a representation and warranty as of the date of transfer that either
no part of the funds to be used by it for the purchase and holding of such
Secured Certificate (or any part thereof) constitutes assets of any "employee
benefit plan" or that such purchase and holding will not result in a "prohibited
transaction" (as defined in Section 4975 of the Code and ERISA). The Owner
Participant agrees that it will not transfer any of its right, title or interest
in and to this Agreement, the Trust Estate or the Trust Agreement or any
proceeds therefrom to any entity unless such entity makes (or is deemed to have
made) a representation and warranty as of the date of transfer that either no
part of the funds to be used by it for the purchase of such right, title and
interest (or any part thereof) constitutes assets of any "employee benefit plan"
or that such transfer will not result in a prohibited transaction (as defined in
Section 4975 of the Code and ERISA). The Pass Through Trustee agrees that it
will not agree to any amendment, modification or waiver of Section 1.01(e)(1) of
the initial supplement to each Pass Through Trust Agreement without the prior
written consent of the Owner Participant.
(r) Each Participant, the Owner Trustee and the Indenture Trustee
agrees for the benefit of the Manufacturer and Lessee that it will not disclose
or suffer to be disclosed the terms of the Purchase Agreement to any third party
except (A) as may be required by any applicable statute, court or administrative
order or decree or governmental ruling or regulation or to any regulatory
authorities having official jurisdiction over them, (B) in connection with the
financing of the Aircraft and the other transactions contemplated by the
Operative Documents (including any transfer of Secured Certificates (including
by way of participation or
- 31 -
assignment of an interest, provided such participant or assignee agrees to hold
such terms confidential to the same extent as herein provided) or the Owner
Participant's beneficial interest in the Trust Estate and any exercise of
remedies under the Lease and the Trust Indenture), (C) with the prior written
consent of the Manufacturer and Lessee, (D) to the Owner Trustee's, the
Indenture Trustee's and each Participant's counsel or special counsel,
accounting and financial advisors, independent insurance brokers or other agents
who agree to hold such information confidential, or (E) in the case of the Owner
Participant and/or the Owner Trustee, it may disclose so much of the Purchase
Agreement as has been assigned to the Owner Trustee under the Purchase Agreement
Assignment to bona fide potential purchasers of the Aircraft or Transferees
under Section 8(n) above who agree to hold such information confidential.
(s) The Owner Trustee and the Owner Participant severally, not
jointly, represent and warrant that none of the funds made available by the Pass
Through Trustee pursuant to Section 1 hereof will be used for the purpose of
purchasing or carrying any "margin security" as defined in Regulation G of the
Board of Governors of the Federal Reserve System or for the purpose of reducing
or retiring any indebtedness which was originally incurred to purchase or carry
such margin security or for any other purpose which might cause the transaction
contemplated by this Agreement to constitute a "purpose credit" within the
meaning of Regulation X of the Board of Governors of the Federal Reserve System,
assuming that the proceeds were and are applied as contemplated by the
provisions of this Agreement.
(t) Each Loan Participant covenants and agrees that it shall not
cause or permit to exist a Loan Participant Lien attributable to it with respect
to the Aircraft or any other portion of the Trust Estate. Each Loan Participant
agrees that it will promptly, at its own expense, take such other action as may
be necessary duly to discharge such Loan Participant Lien attributable to it.
Each Loan Participant agrees to make restitution to the Trust Estate for any
actual diminution of the assets of the Trust Estate resulting from such Loan
Participant Lien attributable to it.
(u) State Street Bank and Trust Company, in its individual capacity,
covenants and agrees that it shall not cause or permit to exist any Indenture
Trustee's Liens with respect to the Trust Indenture Estate or the Trust Estate.
State Street Bank and Trust Company, in its individual capacity, agrees that it
will promptly, at its own expense, take such action as may be necessary duly to
discharge such Indenture Trustee's Liens. State Street Bank and Trust Company,
in its individual capacity, agrees to make restitution to the Trust Estate for
any actual diminution of the assets of the Trust Indenture Estate or the Trust
Estate resulting from such Indenture Trustee's Liens.
(v) The Owner Trustee, in its individual capacity (except as
provided in clauses (iii) and (vii) below) and (but only as provided in clauses
(iii) and (vii) and, to the extent that it relates to the Owner Trustee, clauses
(ii), (ix) and (xi) below) as Owner Trustee, represents and warrants to Lessee,
the Guarantor, the Pass Through Trustee, the Subordination Agent, the Liquidity
Provider and the Owner Participant that:
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(i) the Owner Trustee, in its individual capacity, is a national
banking association duly organized and validly existing in good standing
under the laws of the United States, has full corporate power and
authority to carry on its business as now conducted, has the corporate
power and authority to execute and deliver the Trust Agreement, has the
corporate power and authority to carry out the terms of the Trust
Agreement, and has, or had on the respective dates of execution thereof
(assuming the authorization, execution and delivery of the Trust Agreement
by the Owner Participant), as Owner Trustee, and to the extent expressly
provided herein or therein, in its individual capacity, the corporate
power and authority to execute and deliver and to carry out the terms of
this Agreement, the Trust Indenture, the Secured Certificates, the Lease
and each other Operative Document (other than the Trust Agreement) to
which it is a party;
(ii) the Owner Trustee in its trust capacity and, to the extent
expressly provided herein, in its individual capacity, has duly
authorized, executed and delivered this Agreement, in its individual
capacity, has duly authorized, executed and delivered the Trust Agreement
and in its trust capacity, except as expressly provided therein, has duly
authorized, executed and delivered the other Owner Trustee Documents and
(assuming the due authorization, execution and delivery of the Trust
Agreement by the Owner Participant) this Agreement and each of the other
Owner Trustee Documents constitute, or will constitute when entered into
as contemplated hereby, the legal, valid and binding obligations of the
Owner Trustee, in its individual capacity or as Owner Trustee, as the case
may be, enforceable against it in its individual capacity or as Owner
Trustee, as the case may be, in accordance with its terms, except as the
same may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the rights of creditors generally and
by general principles of equity, whether considered in a proceeding at law
or in equity;
(iii) assuming the due authorization, execution and delivery of the
Original Trust Agreement by the Initial Owner Participant, the Owner
Trustee has duly authorized, and on the Certificate Closing Date duly
issued, executed and delivered to the Indenture Trustee for
authentication, the Secured Certificates pursuant to the terms and
provisions of the Original Participation Agreement and of the Original
Trust Indenture, and each Secured Certificate on the Delivery Date will
constitute the valid and binding obligation of the Owner Trustee and will
be entitled to the benefits and security afforded by the Trust Indenture
in accordance with the terms of such Secured Certificate and the Trust
Indenture;
(iv) neither the execution and delivery by the Owner Trustee, in its
individual capacity or as Owner Trustee, as the case may be, of any Owner
Trustee Document, nor the consummation by the Owner Trustee, in its
individual capacity or as Owner Trustee, as the case may be, of any of the
transactions contemplated thereby, nor the compliance by the Owner
Trustee, in its individual capacity or as Owner Trustee, as the case may
be, with any of the terms and provisions thereof, (A) requires or will
require any approval of its stockholders, or approval or consent of any
trustees or holders of
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any indebtedness or obligations of it, or (B) violates or will violate its
articles of association or bylaws, or contravenes or will contravene any
provision of, or constitutes or will constitute a default under, or
results or will result in any breach of, or results or will result in the
creation of any Lien (other than as permitted under the Operative
Documents) upon its property under, any indenture, mortgage, chattel
mortgage, deed of trust, conditional sale contract, bank loan or credit
agreement, license or other agreement or instrument to which it is a party
or by which it is bound, or contravenes or will contravene any law,
governmental rule or regulation of the United States of America or the
State of Utah governing the trust powers of the Owner Trustee, or any
judgment or order applicable to or binding on it;
(v) no consent, approval, order or authorization of, giving of
notice to, or registration with, or taking of any other action in respect
of, any Utah state or local governmental authority or agency or any United
States federal governmental authority or agency regulating the trust
powers of the Owner Trustee in its individual capacity is required for the
execution and delivery of, or the carrying out by, the Owner Trustee, in
its individual capacity or as Owner Trustee, as the case may be, of any of
the transactions contemplated hereby or by the Trust Agreement, the
Participation Agreement, the Trust Indenture, the Lease or the Secured
Certificates, or any other Operative Document to which it is a party or by
which it is bound, other than any such consent, approval, order,
authorization, registration, notice or action as has been duly obtained,
given or taken or which is described in Section 7(iv);
(vi) there exists no Lessor Lien (including for this purpose Liens
which would be Lessor Liens but for the proviso in the definition of
Lessor Liens) attributable to the Owner Trustee, in its individual
capacity;
(vii) there exists no Lessor Lien (including for this purpose Liens
which would be Lessor Liens but for the proviso in the definition of
Lessor Liens) attributable to the Owner Trustee, as lessor under the
Lease;
(viii) there are no Taxes payable by the Owner Trustee, either in
its individual capacity or as Owner Trustee, imposed by the State of Utah
or any political subdivision thereof in connection with the issuance of
the Secured Certificates, or the execution and delivery in its individual
capacity or as Owner Trustee, as the case may be, of any of the
instruments referred to in clauses (i), (ii), (iii) and (iv) above, that,
in each case, would not have been imposed if the Trust Estate were not
located in the State of Utah and First Security Bank, National Association
had not (a) had its principal place of business in, (b) performed (in its
individual capacity or as Owner Trustee) any or all of its duties under
the Operative Documents in, and (c) engaged in any activities unrelated to
the transactions contemplated by the Operative Documents in, the State of
Utah;
(ix) there are no pending or, to its knowledge, threatened actions
or proceedings against the Owner Trustee, either in its individual
capacity or as Owner Trustee, before any court or administrative agency
which, if determined adversely to it,
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would materially adversely affect the ability of the Owner Trustee, in its
individual capacity or as Owner Trustee, as the case may be, to perform
its obligations under any of the instruments referred to in clauses (i),
(ii), (iii) and (iv) above;
(x) both its chief executive office, and the place where its records
concerning the Aircraft and all its interests in, to and under all
documents relating to the Trust Estate, are located in Salt Lake City,
Utah;
(xi) the Owner Trustee has not, in its individual capacity or as
Owner Trustee, directly or indirectly offered any Secured Certificate or
Certificate or any interest in or to the Trust Estate, the Trust Agreement
or any similar interest for sale to, or solicited any offer to acquire any
of the same from, anyone other than the Pass Through Trustee and the Owner
Participant; and the Owner Trustee has not authorized anyone to act on its
behalf (it being understood that in arranging and proposing the
refinancing contemplated hereby and agreed to herein by the Owner Trustee,
the Lessee has not acted as agent of the Owner Trustee) to offer directly
or indirectly any Secured Certificate, any Certificate or any interest in
and to the Trust Estate, the Trust Agreement or any similar interest for
sale to, or to solicit any offer to acquire any of the same from, any
person;
(xii) it is a Citizen of the United States (without making use of a
voting trust agreement, voting powers agreement or similar arrangements);
and
(xiii) there has not occurred any event which constitutes (or, to
the best of its knowledge would, with the passing of time or the giving of
notice or both, constitute) an Event of Default as defined in the Trust
Indenture which has been caused by or relates to the Owner Trustee, in its
individual capacity, and which is presently continuing.
(w) The Owner Participant covenants and agrees that if (i) Lessee
has elected pursuant to Section 9(a)(2) of the Lease to terminate the Lease by
causing the Aircraft to be sold pursuant to Section 9(c) of the Lease and (ii)
the Owner Trustee has, pursuant to Section 9(c) of the Lease, given to Lessee
written notice of Lessor's election to retain title to the Aircraft and (iii)
the Owner Trustee has failed to make, on or before the Termination Date, any
payment required to be made by the Owner Trustee pursuant to Section 9(c) in
connection with its retention of title to the Aircraft, the Owner Participant
will indemnify Lessee for any losses, damages, costs or expenses of any kind
(including any additional rents paid by Lessee and any reasonable fees and
expenses of lawyers, appraisers, brokers or accountants) incurred as a
consequence of such failure by the Owner Trustee. The Owner Participant further
covenants and agrees to pay those costs and expenses specified to be paid by the
Owner Participant pursuant to Exhibit E to the Lease.
(x) Each of the Owner Participant, the Owner Trustee, the Indenture
Trustee and Lessee covenants and agrees that if Lessee elects (a) to purchase
the Aircraft pursuant to Section 19(b) of the Lease or (b) to terminate the
Lease and purchase the Aircraft pursuant to Section 19(d) of the Lease, then
each of the parties will execute and deliver appropriate
- 35 -
documentation transferring all right, title and interest in the Aircraft to
Lessee (including, without limitation, such bills of sale and other instruments
and documents as Lessee shall reasonably request to evidence (on the public
record or otherwise) such transfer and the vesting of all right, title and
interest in and to the Aircraft in Lessee), and if Lessee, in connection with
such purchase, elects to assume the obligations of the Owner Trustee pursuant to
the Trust Indenture and the Secured Certificates each of the parties will
execute and deliver appropriate documentation permitting Lessee to assume such
obligations on the basis of full recourse to Lessee, maintaining the security
interest in the Aircraft created by the Trust Indenture, releasing the Owner
Participant and the Owner Trustee from all future obligations and liabilities in
respect of the Secured Certificates, the Trust Indenture and all other Operative
Documents and all such other actions as are reasonably necessary to permit such
assumption by Lessee.
Notwithstanding the foregoing, Lessee shall not be entitled to
assume the obligations of the Owner Trustee in respect of the Secured
Certificates unless Lessee causes to be delivered to the Indenture Trustee an
opinion of counsel to the effect that (i) the Lien of the Trust Indenture
continues to be a valid and duly perfected first priority security interest in
and to the Aircraft and (ii) the Indenture Trustee should be entitled to the
benefits of 11 U.S.C. ss.1110; provided that the opinion required by subclause
(ii) need only be given if immediately prior to such assumption the Owner
Trustee should have been entitled to the benefits of 11 U.S.C. ss.1110.
(y) (A) Lessee will not consolidate with or merge into any other
corporation or convey, transfer or lease substantially all of its assets as an
entirety to any Person unless:
(i) the corporation formed by such consolidation or into which
Lessee is merged or the Person which acquires by conveyance, transfer or
lease substantially all of the assets of Lessee as an entirety shall be a
Certificated Air Carrier;
(ii) the corporation formed by such consolidation or into which
Lessee is merged or the Person which acquires by conveyance, transfer or
lease substantially all of the assets of Lessee as an entirety shall
execute and deliver to the Owner Trustee, the Indenture Trustee and the
Owner Participant an agreement in form and substance reasonably
satisfactory to the Indenture Trustee and the Owner Participant containing
an assumption by such successor corporation or Person of the due and
punctual performance and observance of each covenant and condition of this
Agreement, the Lease, the Purchase Agreement Assignment and the Tax
Indemnity Agreement to be performed or observed by Lessee;
(iii) immediately after giving effect to such transaction, no
Default or Event of Default under the Lease shall have occurred and be
continuing; and
(iv) Lessee shall have delivered to the Owner Trustee, the Indenture
Trustee and the Owner Participant a certificate signed by the President,
any Executive Vice
- 36 -
President, any Senior Vice President or any Vice President and by the
Secretary or an Assistant Secretary of Lessee, and an opinion of counsel
reasonably satisfactory to the Indenture Trustee and the Owner
Participant, each stating that such consolidation, merger, conveyance,
transfer or lease and the assumption agreement mentioned in clause (ii)
above comply with this subparagraph (A) of Section 8(y) and that all
conditions precedent herein provided for relating to such transaction have
been complied with.
Upon any such consolidation or merger or any such conveyance,
transfer or lease of substantially all of the assets of Lessee as an entirety in
accordance with this subparagraph (A) of Section 8(y), the successor corporation
or Person formed by such consolidation or into which Lessee is merged or to
which such conveyance, transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, Lessee under this
Agreement with the same effect as if such successor corporation or Person had
been named as Lessee herein. No such conveyance, transfer or lease of
substantially all of the assets of Lessee as an entirety shall have the effect
of releasing Lessee or any successor corporation or Person which shall
theretofore have become such in the manner prescribed in this subparagraph (A)
of Section 8(y) from its liability in respect of any Operative Document to which
it is a party.
(B) Lessee shall at all times maintain its corporate existence
except as permitted by subparagraph (A) of this Section 8(y).
(z) Lessee, at its expense, will take, or cause to be taken, such
action with respect to the recording, filing, re-recording and refiling of the
Lease, the Lease Supplement, the Trust Agreement, the Trust Indenture, the Trust
Supplement and any financing statements or other instruments as are necessary to
maintain, so long as the Trust Indenture or the Lease is in effect, the
perfection of the security interests created by the Trust Indenture and any
security interest that may be claimed to have been created by the Lease and the
interest of the Owner Trustee in the Aircraft or will furnish to the Owner
Trustee and the Indenture Trustee timely notice of the necessity of such action,
together with such instruments, in execution form, and such other information as
may be required to enable them to take such action. Lessee will notify the Owner
Trustee, the Owner Participant and the Indenture Trustee of any change in the
location of its chief executive office (as such term is used in Article 9 of the
Uniform Commercial Code) promptly after making such change or in any event
within the period of time necessary under applicable law to prevent the lapse of
perfection (absent refiling) of financing statements filed under the Operative
Documents.
(aa) Each Loan Participant hereby represents, warrants and agrees
that it shall not transfer any interest in any Secured Certificate unless and
until the transferee agrees in writing (copies of which shall be provided by the
Indenture Trustee to Lessee, the Owner Trustee and the Owner Participant) to
make the representations contemplated to be made by a Loan Participant in this
Agreement and to be bound by the terms of this Agreement and the Trust Indenture
(including, without limitation, the representations and covenants set forth in
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Sections 8(e), 8(k), 8(l), 8(q), and 8(t) hereof and this Section 8(aa) and
Sections 2.03, 2.14 and 4.03 of the Trust Indenture).
(bb) The Pass Through Trustee represents and warrants to Lessee, the
Guarantor, the Indenture Trustee, the Subordination Agent, the Liquidity
Provider, the Owner Participant and the Owner Trustee, in its capacity as such
and in its individual capacity, as follows:
(i) the Pass Through Trustee is duly incorporated, validly existing
and in good standing under the laws of the Commonwealth of Massachusetts,
and has, or had on the respective dates of execution thereof, the full
corporate power, authority and legal right under the laws of the
Commonwealth of Massachusetts and the United States pertaining to its
banking, trust and fiduciary powers to execute and deliver each of the
Pass Through Trust Agreements, the Intercreditor Agreement and this
Agreement and to perform its obligations under the Pass Through Trust
Agreements, the Intercreditor Agreement and this Agreement;
(ii) this Agreement, each of the Pass Through Trust Agreements and
the Intercreditor Agreement have been duly authorized, executed and
delivered by the Pass Through Trustee; this Agreement, each of the Pass
Through Trust Agreements and the Intercreditor Agreement constitute the
legal, valid and binding obligations of the Pass Through Trustee
enforceable against it in accordance with their respective terms, except
as the same may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of
creditors generally and by general principles of equity, whether
considered in a proceeding at law or in equity;
(iii) none of the execution, delivery and performance by the Pass
Through Trustee of any of the Pass Through Trust Agreements, the
Intercreditor Agreement or this Agreement, the purchase by the Pass
Through Trustee of the Secured Certificates pursuant to this Agreement, or
the issuance of the Certificates pursuant to the Pass Through Trust
Agreements, contravenes any law, rule or regulation of the Commonwealth of
Massachusetts or any United States governmental authority or agency
regulating the Pass Through Trustee's banking, trust or fiduciary powers
or any judgment or order applicable to or binding on the Pass Through
Trustee and does not contravene or result in any breach of, or constitute
a default under, the Pass Through Trustee's articles of association or
bylaws or any agreement or instrument to which the Pass Through Trustee is
a party or by which it or any of its properties may be bound;
(iv) neither the execution and delivery by the Pass Through Trustee
of any of the Pass Through Trust Agreements, the Intercreditor Agreement
or this Agreement, nor the consummation by the Pass Through Trustee of any
of the transactions contemplated hereby or thereby, requires the consent
or approval of, the giving of notice to, the registration with, or the
taking of any other action with respect to, any
- 38 -
Massachusetts governmental authority or agency or any federal governmental
authority or agency regulating the Pass Through Trustee's banking, trust
or fiduciary powers;
(v) there are no Taxes payable by the Pass Through Trustee imposed
by the Commonwealth of Massachusetts or any political subdivision or
taxing authority thereof in connection with the execution, delivery and
performance by the Pass Through Trustee of this Agreement, any of the Pass
Through Trust Agreements or the Intercreditor Agreement (other than
franchise or other taxes based on or measured by any fees or compensation
received by the Pass Through Trustee for services rendered in connection
with the transactions contemplated by any of the Pass Through Trust
Agreements), and there are no Taxes payable by the Pass Through Trustee
imposed by the Commonwealth of Massachusetts or any political subdivision
thereof in connection with the acquisition, possession or ownership by the
Pass Through Trustee of any of the Secured Certificates (other than
franchise or other taxes based on or measured by any fees or compensation
received by the Pass Through Trustee for services rendered in connection
with the transactions contemplated by any of the Pass Through Trust
Agreements), and, assuming that the trusts created by the Pass Through
Trust Agreements will not be taxable as corporations, but, rather, each
will be characterized either as a grantor trust under subpart E, Part I of
Subchapter J of the Code or as a partnership, such trusts will not be
subject to any Taxes imposed by the Commonwealth of Massachusetts or any
political subdivision thereof;
(vi) there are no pending or threatened actions or proceedings
against the Pass Through Trustee before any court or administrative agency
which individually or in the aggregate, if determined adversely to it,
would materially adversely affect the ability of the Pass Through Trustee
to perform its obligations under this Agreement, the Intercreditor
Agreement or any Pass Through Trust Agreement;
(vii) except for the issue and sale of the Certificates contemplated
by the Original Participation Agreement, the Pass Through Trustee has not
directly or indirectly offered any Secured Certificate for sale to any
Person or solicited any offer to acquire any Secured Certificates from any
Person, nor has the Pass Through Trustee authorized anyone to act on its
behalf to offer directly or indirectly any Secured Certificate for sale to
any Person, or to solicit any offer to acquire any Secured Certificate
from any Person; and the Pass Through Trustee is not in default under any
Pass Through Trust Agreement; and
(viii) the Pass Through Trustee is not directly or indirectly
controlling, controlled by or under common control with the Owner
Participant, the Owner Trustee, any Underwriter, Lessee or the Guarantor.
(cc) The Subordination Agent represents and warrants to Lessee, the
Guarantor, the Indenture Trustee, the Pass Through Trustee, the Liquidity
Provider, the Owner Participant and the Owner Trustee, in its capacity as such
and in its individual capacity, as follows:
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(i) the Subordination Agent is a duly organized national banking
association, validly existing and in good standing with the Comptroller of
the Currency under the laws of the United States and has, or had on the
respective dates of execution thereof, the full corporate power, authority
and legal right under the laws of the United States pertaining to its
banking, trust and fiduciary powers to execute and deliver each of the
Liquidity Facilities, the Intercreditor Agreement and this Agreement and
to perform its obligations under this Agreement, the Liquidity Facilities
and the Intercreditor Agreement;
(ii) this Agreement, each of the Liquidity Facilities and the
Intercreditor Agreement have been duly authorized, executed and delivered
by the Subordination Agent; this Agreement, each of the Liquidity
Facilities and the Intercreditor Agreement constitute the legal, valid and
binding obligations of the Subordination Agent enforceable against it in
accordance with their respective terms, except as the same may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the rights of creditors generally and by general
principles of equity, whether considered in a proceeding at law or in
equity;
(iii) none of the execution, delivery and performance by the
Subordination Agent of each of the Liquidity Facilities, the Intercreditor
Agreement or this Agreement contravenes any law, rule or regulation of the
State of Connecticut or any United States governmental authority or agency
regulating the Subordination Agent's banking, trust or fiduciary powers or
any judgment or order applicable to or binding on the Subordination Agent
and do not contravene or result in any breach of, or constitute a default
under, the Subordination Agent's articles of association or bylaws or any
agreement or instrument to which the Subordination Agent is a party or by
which it or any of its properties may be bound;
(iv) neither the execution and delivery by the Subordination Agent
of any of the Liquidity Facilities, the Intercreditor Agreement or this
Agreement nor the consummation by the Subordination Agent of any of the
transactions contemplated hereby or thereby requires the consent or
approval of, the giving of notice to, the registration with, or the taking
of any other action with respect to, any Connecticut governmental
authority or agency or any federal governmental authority or agency
regulating the Subordination Agent's banking, trust or fiduciary powers;
(v) there are no Taxes payable by the Subordination Agent imposed by
the State of Connecticut or any political subdivision or taxing authority
thereof in connection with the execution, delivery and performance by the
Subordination Agent of this Agreement, any of the Liquidity Facilities or
the Intercreditor Agreement (other than franchise or other taxes based on
or measured by any fees or compensation received by the Subordination
Agent for services rendered in connection with the transactions
contemplated by the Intercreditor Agreement or any of the Liquidity
Facilities), and there are no Taxes payable by the Subordination Agent
imposed by the State of Connecticut or any political subdivision thereof
in connection with the
- 40 -
acquisition, possession or ownership by the Subordination Agent of any of
the Secured Certificates (other than franchise or other taxes based on or
measured by any fees or compensation received by the Subordination Agent
for services rendered in connection with the transactions contemplated by
the Intercreditor Agreement or any of the Liquidity Facilities);
(vi) there are no pending or threatened actions or proceedings
against the Subordination Agent before any court or administrative agency
which individually or in the aggregate, if determined adversely to it,
would materially adversely affect the ability of the Subordination Agent
to perform its obligations under this Agreement, the Intercreditor
Agreement or any Liquidity Facility;
(vii) the Subordination Agent has not directly or indirectly offered
any Secured Certificate for sale to any Person or solicited any offer to
acquire any Secured Certificates from any Person, nor has the
Subordination Agent authorized anyone to act on its behalf to offer
directly or indirectly any Secured Certificate for sale to any Person, or
to solicit any offer to acquire any Secured Certificate from any Person;
and the Subordination Agent is not in default under any Liquidity
Facility; and
(viii) the Subordination Agent is not directly or indirectly
controlling, controlled by or under common control with the Owner
Participant, the Owner Trustee, any Underwriter, Lessee or the Guarantor.
(dd) Section 3 of the Lease contemplates that, under certain
circumstances, the Owner Participant will make certain recalculations of Basic
Rent, Stipulated Loss Value percentages, Termination Value percentages, Initial
Installment and Remaining Installments, and the Owner Participant hereby agrees
to make such recalculations as and when contemplated by the Lease and subject to
all the terms and conditions of the Lease and promptly to take such further
actions as may be necessary or desirable to give effect to and to cause the
Owner Trustee to give effect to the provisions of Section 3 of the Lease.
(ee) The Owner Participant hereby agrees with Lessee that it will
pay, or cause to be paid, all costs and expenses that are for the account of the
Owner Trustee pursuant to Sections 5(a) and 5(d) of the Lease. In addition, in
furtherance of the provisions of the last sentence of the first paragraph of
Section 5(a) of the Lease, the Owner Participant authorizes Lessee, with the
participation of the Owner Trustee, to negotiate the Half-Life Adjustment under
the Residual Agreement or any Successor Residual Agreement and any amount to be
deducted from the Agreed Residual Value (as such term is used in the Residual
Agreement or any comparable term is used in any Successor Residual Agreement)
directly with the Manufacturer or any Person who is the counterparty to any
Successor Residual Agreement.
SECTION 9. Reliance of Liquidity Provider. Each of the parties
hereto agrees and acknowledges that the Liquidity Provider shall be a third
party beneficiary of each of the representations and warranties made herein by
such party, and that the Liquidity Provider may rely on such representations and
warranties to the same extent as if such representations and
- 41 -
warranties were made to the Liquidity Provider directly. Lessee agrees and
acknowledges that the Liquidity Provider shall be a third party beneficiary of
the indemnities contained in Section 7(c) hereof, and may rely on such
indemnities to the same extent as if such indemnities were made to the Liquidity
Provider directly.
SECTION 10. Other Documents. Each of the Owner Participant and the
Owner Trustee hereby (A) agrees with Lessee and the Loan Participants to comply
with all of the terms of the Trust Agreement (as the same may hereafter be
amended or supplemented from time to time in accordance with the terms thereof)
applicable to it; (B) agrees with Lessee and the Indenture Trustee not to amend,
supplement or otherwise modify any provision of the Trust Agreement in a manner
adversely affecting such party without the prior written consent of such party;
and (C) agrees with Lessee and the Loan Participants not to revoke the Trust
Agreement without the prior written consent of Lessee (so long as the Lease
remains in effect) and the Indenture Trustee (so long as the Lien of the Trust
Indenture remains in effect or there are any Secured Certificates outstanding).
Notwithstanding the foregoing, so long as the Lease has not been terminated, the
Indenture Trustee and the Owner Trustee hereby agree for the benefit of Lessee
that without the consent of Lessee they will not (i) amend or modify Article III
or IX of the Trust Indenture, (ii) make any amendment which will affect the
stated principal amount or interest on the Secured Certificates or (iii) amend
or modify the provisions of Sections 2.05 or 10.14 of the Trust Indenture. The
Indenture Trustee and the Owner Trustee agree to promptly furnish to Lessee
copies of any supplement, amendment, waiver or modification of any of the
Operative Documents to which Lessee is not a party. Notwithstanding anything to
the contrary contained herein, in the Trust Agreement or in any other Operative
Document, the Owner Participant will not consent to or direct a change in the
situs of the Trust Estate without the prior written consent of Lessee. Each Loan
Participant agrees that it will not take any action in respect of the Trust
Indenture Estate except through the Indenture Trustee pursuant to the Trust
Indenture or as otherwise permitted by the Trust Indenture.
SECTION 11. Certain Covenants of Lessee. Lessee covenants and agrees
with each of the Loan Participants, the Owner Participant, the Indenture Trustee
and the Owner Trustee, in its capacity as such and in its individual capacity as
follows:
(a) Lessee will cause to be done, executed, acknowledged and
delivered all and every such further acts, conveyances and assurances as the
Owner Trustee, the Indenture Trustee or the Owner Participant shall reasonably
require for accomplishing the purposes of this Agreement and the other Operative
Documents; provided that any instrument or other document so executed by Lessee
will not expand any obligations or limit any rights of Lessee in respect of the
transactions contemplated by any Operative Documents. Lessee, forthwith upon
delivery of the Aircraft under the Lease, shall cause the Aircraft to be duly
registered, and at all times thereafter to remain duly registered, in the name
of the Owner Trustee, except as otherwise required or permitted hereunder or
under the Lease, under the Federal Aviation Act, or shall furnish to the Owner
Trustee such information as may be required to enable the Owner Trustee to make
application for such registration, and shall promptly furnish to the Owner
Trustee such information as may be required to enable the Owner Trustee to
timely file
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any reports required to be filed by it as the lessor under the Lease or as the
owner of the Aircraft with any governmental authority.
(b) Lessee will cause the Lease, all Lease Supplements, all
amendments to the Lease, the Trust Indenture, all supplements and amendments to
the Trust Indenture and this Agreement to be promptly filed and recorded, or
filed for recording, to the extent permitted under the Federal Aviation Act, or
required under any other applicable law. Upon the execution and delivery of the
FAA ▇▇▇▇ of Sale, the Lease, the Lease Supplement covering the Aircraft, the
Trust Supplement and the Trust Indenture shall be filed for recording with the
Federal Aviation Administration in the following order of priority; first, the
FAA ▇▇▇▇ of Sale, second, the Lease, with the Lease Supplement covering the
Aircraft, the Trust Indenture and the Trust Supplement attached, and third, the
Trust Indenture, with the Trust Supplement attached.
SECTION 12. Owner for Federal Tax Purposes. It is hereby agreed
among Lessee, the Owner Participant and the Owner Trustee that for Federal
income tax purposes the Owner Participant will be the owner of the Aircraft to
be delivered under the Lease and Lessee will be the lessee thereof, and each
party hereto agrees to characterize the Lease as a lease for Federal income tax
purposes.
SECTION 13. Certain Definitions; Notices; Consent to Jurisdiction. (a)
Except as otherwise defined in this Agreement, terms used herein in capitalized
form shall have the meanings set forth or referred to in Appendix A hereto. The
term "Trust Office" shall have the meaning set forth in the Trust Agreement.
Unless the context otherwise requires, any reference herein to any of the
Operative Documents refers to such document as it may be amended from time to
time.
(b) All notices, demands, instructions and other communications
required or permitted to be given to or made upon any party hereto or to the
Guarantor shall be in writing and shall be personally delivered or sent by
registered or certified mail, postage prepaid, or by telecopier, or by prepaid
courier service, and shall be deemed to be given for purposes of this Agreement
on the day that such writing is delivered or sent to the intended recipient
thereof in accordance with the provisions of this Section 13(b). Unless
otherwise specified in a notice sent or delivered in accordance with the
foregoing provisions of this Section 13(b), notices, demands, instructions and
other communications in writing shall be given to or made upon the respective
parties hereto at their respective addresses (or to their respective telecopier
numbers) as follows: (A) if to Lessee, the Guarantor, the Owner Trustee, the
Pass Through Trustee, the Subordination Agent, the Indenture Trustee or the
Owner Participant, to the respective addresses set forth below the signatures of
such parties at the foot of this Agreement, or (B) if to a subsequent Owner
Participant, addressed to such subsequent Owner Participant at such address as
such subsequent Owner Participant shall have furnished by notice to the parties
hereto, or (C) if to any subsequent Certificate Holder, addressed to such
Certificate Holder at its address set forth in the Secured Certificate register
maintained pursuant to Section 2.07 of the Trust Indenture.
- 43 -
(c) Each of the parties hereto (A) hereby irrevocably submits itself
to the non-exclusive jurisdiction of the United States District Court for the
Southern District of New York and to the non-exclusive jurisdiction of the
Supreme Court of the State of New York, New York County, for the purposes of any
suit, action or other proceeding arising out of this Agreement, the Lease, the
Tax Indemnity Agreement or any other Operative Document, the subject matter of
any thereof or any of the transactions contemplated hereby or thereby brought by
any party or parties thereto, or their successors or assigns, and (B) hereby
waives, and agrees not to assert, by way of motion, as a defense, or otherwise,
in any such suit, action or proceeding, to the extent permitted by applicable
law, that the suit, action or proceeding is brought in an inconvenient forum,
that the venue of the suit, action or proceeding is improper, or that this
Agreement, the Lease, the Tax Indemnity Agreement or any other Operative
Document or the subject matter of any thereof or any of the transactions
contemplated hereby or thereby may not be enforced in or by such courts. Lessee
hereby generally consents to service of process at Cadwalader, ▇▇▇▇▇▇▇▇▇▇ &
▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Managing Attorney,
or such office of Lessee in New York City as from time to time may be designated
by Lessee in writing to the Owner Participant, the Owner Trustee and the
Indenture Trustee.
SECTION 14. Change of Situs of Owner Trust. The Owner Participant
agrees that if, at any time, the Trust Estate becomes subject to any Taxes for
which it is indemnified pursuant to Section 7(b) hereof and if, as a consequence
thereof, Lessee should request that the situs of the trust be moved to another
state in the United States from the state in which it is then located, the situs
of the trust may be moved with the written consent of the Owner Participant
(which consent shall not be unreasonably withheld) and the Owner Participant
will take, at Lessee's expense, whatever action may be necessary to accomplish
such removal; provided that (A) Lessee shall provide such additional tax
indemnification as the Owner Participant and the Indenture Trustee may
reasonably request, (B) the rights and obligations under the Operative Documents
of the Owner Participant and the Indenture Trustee shall not be altered as a
result of the taking of such action, (C) the Lien of the Trust Indenture on the
Trust Indenture Estate shall not be adversely affected by such action, and (D)
the Owner Participant and the Indenture Trustee shall have received an opinion
or opinions of counsel (satisfactory to the Owner Participant and the Indenture
Trustee), in scope, form and substance satisfactory to the Owner Participant and
the Indenture Trustee to the effect that (I) the trust, as thus removed, shall
remain a validly established trust, (II) any amendments to the Trust Agreement
necessitated by such removal shall have been duly authorized, executed and
delivered by the parties thereto and shall constitute the valid and binding
obligations of such parties, enforceable in accordance with their terms, (III)
such removal will not result in the imposition of, or increase in the amount of,
any Tax for which Lessee is not required to indemnify the Owner Participant, the
Indenture Trustee, the Owner Trustee or the Trust Estate pursuant to Section
7(b) hereof (taking into account any additional indemnification provided by
Lessee pursuant to clause (A) of this sentence), (IV) such removal will not
result in any loss of Interest Deductions or MACRS Deductions or an Inclusion
Event (as each such term is defined in the Tax Indemnity Agreement) with respect
to which Lessee is not required to indemnify the Owner Participant pursuant to
Section 4 of the Tax Indemnity Agreement (taking into account any additional
indemnification provided by Lessee pursuant to clause (A) of this sentence) and
- 44 -
(V) if such removal involves the replacement of the Owner Trustee, an opinion of
counsel to such successor Owner Trustee in form and substance reasonably
satisfactory to the Indenture Trustee and to the Owner Participant covering the
matters described in the opinion delivered pursuant to Section 5(a)(xiii) hereof
and such other matters as the Indenture Trustee and the Owner Participant may
reasonably request, and (E) Lessee shall indemnify and hold harmless the Owner
Participant and the Indenture Trustee on a net after-tax basis against any and
all reasonable and actual costs and expenses including reasonable counsel fees
and disbursements, registration fees, recording or filing fees and taxes
incurred by the Owner Trustee, the Owner Participant and the Indenture Trustee
in connection with such change of situs.
SECTION 15. Miscellaneous. (a) The Owner Participant covenants and
agrees that it shall not unreasonably withhold its consent to any consent
requested of the Owner Trustee, as Lessor, under the terms of the Lease which by
its terms is not to be unreasonably withheld by the Owner Trustee, as Lessor.
(b) The representations, warranties, indemnities and agreements of
Lessee, the Guarantor, the Owner Trustee, the Indenture Trustee, the
Subordination Agent, the Pass Through Trustee and the Owner Participant provided
for in this Agreement, and Lessee's, the Guarantor's, the Owner Trustee's, the
Indenture Trustee's, the Subordination Agent's, the Pass Through Trustee's and
the Owner Participant's obligations under any and all thereof, shall survive the
release of the Debt Portion by the Pass Through Trustee, the making available of
the Commitment by the Owner Participant, the delivery or return of the Aircraft,
the transfer of any interest of the Owner Participant in the Trust Estate or the
Aircraft or any Engine or the transfer of any interest by any Loan Participant
in any Secured Certificate or the Trust Indenture Estate and the expiration or
other termination of this Agreement or any other Operative Document.
(c) This Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original,
but all such counterparts shall together constitute but one and the same
instrument. Neither this Agreement nor any of the terms hereof may be
terminated, amended, supplemented, waived or modified, except by an instrument
in writing signed by the party against which the enforcement of the termination,
amendment, supplement, waiver or modification is sought; and no such
termination, amendment, supplement, waiver or modification shall be effective
unless a signed copy thereof shall have been delivered to the Indenture Trustee
and the Owner Trustee. The terms of this Agreement shall be binding upon, and
inure to the benefit of, Lessee and, subject to the terms of this Agreement, its
successors and permitted assigns, the Guarantor, the Pass Through Trustee and
its successors as Pass Through Trustee (and any additional trustee appointed)
under any of the Pass Through Trust Agreements, the Owner Participant and,
subject to the terms of this Agreement, its successors and permitted assigns,
each Certificate Holder and its successors and registered assigns, the Indenture
Trustee and its successors as Indenture Trustee under the Trust Indenture and
the Owner Trustee and its successors as Owner Trustee under the Trust Agreement.
The terms of this Agreement shall inure to the benefit of the Liquidity
Provider, its successors and permitted assigns. THIS AGREEMENT SHALL IN ALL
RESPECTS BE GOVERNED BY, AND CONSTRUED IN
- 45 -
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE. THIS AGREEMENT IS BEING DELIVERED IN THE
STATE OF NEW YORK.
(d) The parties hereto agree that all of the statements,
representations, covenants and agreements made by the Owner Trustee (when made
in such capacity) contained in this Agreement and any agreement referred to
herein other than the Trust Agreement, unless expressly otherwise stated, are
made and intended only for the purpose of binding the Trust Estate and
establishing the existence of rights and remedies which can be exercised and
enforced against the Trust Estate. Therefore, anything contained in this
Agreement or such other agreements to the contrary notwithstanding (except for
any express provisions that the Owner Trustee is responsible for in its
individual capacity), no recourse shall be had with respect to this Agreement or
such other agreements against the Owner Trustee in its individual capacity or
against any institution or person which becomes a successor trustee or
co-trustee or any officer, director, trustee, servant or direct or indirect
parent or controlling person or persons of any of them; provided, however, that
this Section 15(d) shall not be construed to prohibit any action or proceeding
against any party hereto for its own willful misconduct or
grossly negligent conduct for which it would otherwise be liable; and provided,
further, that nothing contained in this Section 15(d) shall be construed to
limit the exercise and enforcement in accordance with the terms of this
Agreement or such other agreements of rights and remedies against the Trust
Estate. The foregoing provisions of this Section 15(d) shall survive the
termination of this Agreement and the other Operative Documents.
(e) It is the intention of the parties hereto that the Owner
Trustee, as Lessor under the Lease, and the Indenture Trustee, as assignee of
such Owner Trustee's rights under the Lease pursuant to the Trust Indenture,
will be entitled to the benefits of 11 U.S.C. ss. 1110 in the event of any
reorganization of Lessee under such Section.
SECTION 16. Expenses. (a) Invoices and Payment. Each of the parties
hereto shall promptly submit to the Owner Trustee and Lessee for their prompt
approval (which shall not be unreasonably withheld) copies of invoices in
reasonable detail of the Transaction Expenses for which it is responsible for
providing information as they are received (but in no event later than April 30,
1998). In the event that the transactions contemplated hereunder close on or
prior to February 13, 1998, the Owner Participant agrees to transfer to the
Owner Trustee promptly but in any event no later than May 15, 1998 such amount
as shall be necessary in order to enable the Owner Trustee to pay Transaction
Expenses. To the extent of funds received by it, the Owner Trustee agrees to pay
all invoices of Transaction Expenses that have been approved by it and Lessee
promptly upon receipt thereof. Notwithstanding the foregoing, Lessee at its sole
option shall have the right to pay directly any or all Transaction Expenses of
the type specified in clauses (8) and (12) of the definition of Transaction
Expenses.
(b) Payment of Other Expenses. In the event that the leasing
transaction contemplated by this Participation Agreement fails to close as a
result of the Owner Participant's failure to negotiate in good faith or to
satisfy on or prior to February 13, 1998
- 46 -
any of the conditions to closing specified in Section 5 which are required to be
satisfied by the Owner Participant on or prior to the Delivery Date, the Owner
Participant will be responsible for all of its fees and expenses, including but
not limited to the fees, expenses and disbursements of its special counsel. In
the event that the leasing transaction contemplated by this Participation
Agreement fails to close for any other reason Lessee will be responsible for
such fees and expenses.
SECTION 17. Refinancings.
(a) So long as no Event of Default shall have occurred and be
continuing, Lessee shall have the right to refinance all (but not less than all)
of the Secured Certificates no more than two times by giving written notice to
the Owner Participant and the Owner Trustee that there be effected a voluntary
redemption of the Secured Certificates by the Owner Trustee, whereupon the Owner
Participant agrees to negotiate promptly in good faith to conclude an agreement
with Lessee as to the terms of such refinancing operation (including the terms
of any debt to be issued in connection with such refinancing); provided that no
such refinancing shall require an increase in the amount of the Owner
Participant's investment in the beneficial ownership of the Aircraft or in the
principal amount of the Secured Certificates; provided further that no such
refinancing shall subject the Owner Participant to any unindemnified adverse tax
consequences unless Lessee agrees to indemnify the Owner Participant for such
unindemnified adverse tax consequences.
Upon such agreement:
(1) within ten Business Days after the reaching of such agreement,
the Owner Participant will deliver to Lessee a certificate of an authorized
representative of the Owner Participant (the "Refinancing Certificate") setting
forth (i) the proposed date on which the outstanding Secured Certificates will
be redeemed, any new debt will be issued and the other aspects of such
refinancing will be consummated (such date, the "Refinancing Date") and (ii) the
following information calculated pursuant to the provisions of paragraph (6) of
this Section 17(a): (A) the principal amount of debt to be issued by the Owner
Trustee on the Refinancing Date and (B) the proposed revised schedules of Basic
Rent percentages, debt amortization, Initial Installment, Remaining
Installments, Stipulated Loss Value percentages and Termination Value
percentages (calculated in accordance with Section 3(d) of the Lease). Within
fourteen days of its receipt of the Refinancing Certificate, Lessee may demand a
verification pursuant to Exhibit E to the Lease of the information set forth in
the Refinancing Certificate. Upon the acceptance by Lessee of the accuracy of
the information set forth in the Refinancing Certificate (or the determination
pursuant to such verification procedures), as to the principal amount of debt to
be issued by the Owner Trustee on the Refinancing Date and the revised Basic
Rent percentages, debt amortization, Initial Installment, Remaining
Installments, Stipulated Loss Value percentages and Termination Value
percentages (such information, whether as set forth or as so determined, the
"Refinancing Information") the appropriate parties will take the actions
specified in paragraphs (2) through (5) below;
- 47 -
(2) the appropriate parties will enter into appropriate
documentation (which may involve an underwriting agreement in connection with
such sale or the sale of the Owner Trustee's interest in the Trust Estate and/or
the Aircraft and its resale to the Owner Trustee) with the institution or
institutions to be named therein providing for the issuance and sale by the
Owner Trustee to such institution or institutions on the Refinancing Date of
debt securities in an aggregate principal amount specified in the Refinancing
Information which amount shall be equal to the aggregate principal amount of all
Secured Certificates outstanding on the Refinancing Date (such debt securities,
the "New Debt") provided that the maturity of the New Debt shall not extend
beyond January 2, 2016 and the weighted average life of the New Debt as of the
Refinancing Date shall not exceed by more than six (6) months the weighted
average life of the Secured Certificates as of the Refinancing Date;
(3) Lessee shall give the notice to the Indenture Trustee pursuant
to Section 2.11 of the Trust Indenture, and Lessee and the Owner Trustee will
amend the Lease to provide that (i) Basic Rent payable in respect of the period
from and after the Refinancing Date shall be as provided in the Refinancing
Information and (ii) amounts payable in respect of Stipulated Loss Value and
Termination Value from and after the Refinancing Date shall be as provided in
the Refinancing Information;
(4) the Owner Trustee will enter into an agreement to provide for
the securing thereunder of the New Debt in like manner as the Secured
Certificates and will enter into such amendments and supplements to the Trust
Indenture (or such new indenture or other security agreement) as may be
necessary to effect such refinancing;
(5) the Owner Participant shall pay all of the expenses (other than
those of Lessee) of the first refinancing (including, but not limited to, the
fees, expenses and disbursements of counsel and any placement or underwriting
fees) and such expenses shall be treated as Transaction Expenses (subject to a
cap of 5% of the principal amount of the Secured Certificates which are being
refinanced) and, unless otherwise agreed by the Owner Participant, Lessee shall
pay all other expenses of the first refinancing and all of the expenses of the
second refinancing; and
(6) when calculating any of the information required to be set forth
in a Refinancing Certificate, the Owner Participant shall make such calculations
in a manner which (A) maintains the Owner Participant's Net Economic Return
(except to the extent the assumptions referred to in the definition of "Net
Economic Return" have been altered since the Delivery Date in connection with an
adjustment to Rents pursuant to Section 3(d) of the Lease or such assumptions
are the subject of the recalculations being conducted by the Owner Participant),
and (B) minimizes the Net Present Value of Rents to Lessee to the extent
possible consistent with clause (A). All adjustments to Basic Rent shall also be
in compliance with the tests of ▇▇.▇▇. 4.02(5) and 4.07 of Rev. Proc. 75-28 and
no such adjustment shall cause the Lease to constitute a "disqualified leaseback
or long-term agreement" within the meaning of Section 467 of the Code.
- 48 -
(b) The Secured Certificates shall not be subject to voluntary
redemption by the Owner Trustee without the consent of Lessee except as set
forth in Section 2.14 of the Trust Indenture.
SECTION 18. Collateral Account.
(a) The Indenture Trustee shall notify the Owner Trustee and Lessee
of any losses incurred on the Cash Equivalents in the Collateral Account
promptly upon the realization thereof, as well as any fees, commissions and
other costs, Taxes (other than income taxes) and expenses, if any, incurred by
the Indenture Trustee in connection with its administration of the Collateral
Account (collectively, "Losses"). Promptly upon receipt of such notification
but, in any event, no later than the Delivery Date, Lessee shall pay to the
Indenture Trustee for deposit into the Collateral Account, an amount equal to
such Losses (net of any investment earnings).
(b) Lessee shall pay to the Indenture Trustee on the Delivery Date,
interest accrued on the Secured Certificates from and including the last Payment
Date (or, if none, the Certificate Closing Date), to, but excluding, the
Delivery Date. The Indenture Trustee shall deposit all payments made by Lessee
pursuant to this Section 18(b) in a non-interest bearing account for payment to
Certificate Holders on the first Payment Date. In addition, Lessee will pay to
the Indenture Trustee all amounts owed by the Owner Trustee pursuant to clause
(b) of the third paragraph of Section 2.02 of the Trust Indenture.
(c) [Intentionally Omitted.]
(d) [Intentionally Omitted.]
(e) [Intentionally Omitted.]
(f) On the Delivery Date immediately upon transfer of title to the
Aircraft to the Owner Trustee, the Indenture Trustee will transfer to Lessee by
wire transfer, in immediately available funds, cash equal to any amount then
remaining in the Collateral Account.
(g) Amounts payable by Lessee pursuant to this Section 18 shall be
paid to the Indenture Trustee at State Street Bank and Trust Company, ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ABA No. 011-00-0028, Account No.
▇▇▇▇-▇▇▇-▇, Attention: Corporate Trust Department, Reference: Northwest/NW 1997
I, not later than 10:30 a.m., New York City time, by wire transfer of
immediately available funds in Dollars on the due date of such payment. All
amounts payable to Lessee pursuant to this Section 18 shall be paid to Lessee in
accordance with Schedule I hereto, not later than 10:30 a.m., New York City
time, by wire transfer of immediately available funds in Dollars on the due date
of such payment.
(h) Each of the parties hereto agrees that, for Federal income tax
purposes, (A) Lessee shall be treated as the initial borrower with respect to
the Secured Certificates and shall report as income all interest and gains on
the Collateral Account and shall deduct as its
- 49 -
interest expense all interest paid or payable to each Pass Through Trustee for
this period in a manner consistent with a short-term loan to Lessee maturing on
the Delivery Date, and (B) the Owner Trustee shall be treated as the borrower
with respect to the Secured Certificates on and after the Delivery Date.
- 50 -
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective officers thereunto duly authorized as of
the day and year first above written.
NORTHWEST AIRLINES, INC.,
Lessee
By: s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President-Finance & Assistant
Treasurer
Address: U.S. Mail
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇)
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Overnight Courier
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ (▇▇▇▇▇)
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Senior Vice President-Finance
and Treasurer
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
NORTHWEST AIRLINES CORPORATION,
Guarantor
By: s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:
Address: U.S. Mail
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇)
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Overnight Courier
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ (▇▇▇▇▇)
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Senior Vice President-Finance
and Treasurer
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
- Signature Page -
FIRST AMERICAN NATIONAL BANK,
Owner Participant
By: s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Senior Vice President
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Equipment Finance Division
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇/1439
STATE STREET BANK AND
TRUST COMPANY,
Indenture Trustee
By: s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Corporate Trust Department
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity, except as
expressly provided herein, but solely as
Owner Trustee,
Owner Trustee
By: s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Address: ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: Corporate Trust Department
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
- Signature Page -
STATE STREET BANK AND TRUST COMPANY, not in
its individual capacity, except as otherwise
provided herein, but solely as Pass Through
Trustee,
Pass Through Trustee
By: s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Corporate Trust Department
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION, not in
its individual capacity, except as otherwise
provided herein, but solely as Subordination
Agent,
Subordination Agent
By: s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Address: ▇/▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ and
Trust Company
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Corporate Trust Department
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
- Signature Page -
SCHEDULE I
Names and Addresses
Lessee: Northwest Airlines, Inc.
U.S. Mail
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇)
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Overnight Courier
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ (▇▇▇▇▇)
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Senior Vice President-Finance and Treasurer
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Wire Transfer
First Bank, N.A., Minneapolis
ABA No. ▇▇▇▇▇▇▇▇▇
Acct. No. 150250099440
Owner Participant: First American National Bank
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Equipment Finance Division
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇/1439
Payments made to the Owner Participant as provided in
Section 3.06 of the Trust Indenture shall be made to:
First American National Bank
ABA No. ▇▇▇▇▇▇▇▇▇
For deposit to: First American Leasing
Account No. 1000848407
Indenture Trustee: State Street Bank and Trust Company
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Corporate Trust Department
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Wire Transfer
State Street Bank and Trust Company
ABA No. 011-00-0028
for credit to State Street Bank and Trust Company
Acct. No. ▇▇▇▇-▇▇▇-▇
Attn: Corporate Trust Department
Reference: Northwest/NW 1997 I
Owner Trustee: First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: Corporate Trust Department
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Payments made to the Owner Trustee as provided in
Section 3(f) of the Lease shall be made to:
First Security Bank, National Association
ABA No. ▇▇▇-▇▇▇▇-▇▇
Acct. No. 051-0922115
Attn: Corporate Trust Department
Credit: Northwest/NW 1997 I
Loan Participant: State Street Bank and Trust Company
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Corporate Trust Department
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
SCHEDULE I - PAGE 2
Subordination Agent: State Street Bank and Trust Company
of Connecticut, National Association
▇/▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ and Trust Company
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Corporate Trust Department
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
SCHEDULE I - PAGE 3
SCHEDULE II
Commitments
Interest Rate
Purchasers and Maturity Purchase Price
---------- ------------ --------------
Northwest Airlines
Pass Through Trust
1997-1A 7.068% Series A Secured Certificates due
January 2, 2016 $10,560,952.07
1997-1B 7.248% Series B Secured Certificates due
January 2, 2013 $3,538,462.47
1997-1C 7.039% Series C Secured Certificates due
January 2, 2007 $1,980,000.00
Debt Portion $16,079,414.54
Owner Participant Equity Investment
----------------- -----------------
First American National Bank $4,920,585.46
SCHEDULE III
Pass Through Trust Agreements
1. Pass Through Trust Agreement, dated as of June 3, 1996, among Northwest
Airlines Corporation, Northwest Airlines, Inc., and State Street Bank and
Trust Company, as supplemented by Trust Supplement No. 1997-1A, dated as
of September 25, 1997.
2. Pass Through Trust Agreement, dated as of June 3, 1996, among Northwest
Airlines Corporation, Northwest Airlines, Inc., and State Street Bank and
Trust Company, as supplemented by Trust Supplement No. 1997-1B, dated as
of September 25, 1997.
3. Pass Through Trust Agreement, dated as of June 3, 1996, among Northwest
Airlines Corporation, Northwest Airlines, Inc., and State Street Bank and
Trust Company, as supplemented by Trust Supplement No. 1997-1C, dated as
of September 25, 1997.
EXHIBIT A
TO PARTICIPATION
AGREEMENT
[NW 1997 I]
SCHEDULE OF COUNTRIES FOR REREGISTRATION
Argentina Malta
Australia Mexico
Austria Morocco
Bahamas Netherlands
Belgium New Zealand
Brazil Norway
Canada Paraguay
Chile People's Republic of China
Denmark Philippines
Egypt Portugal
Finland Republic of China (Taiwan)
France Singapore
Germany South Africa
Greece South Korea
Hungary Spain
Iceland Sweden
India Switzerland
Indonesia Thailand
Ireland Tobago
Italy Trinidad
Japan United Kingdom
Luxembourg Uruguay
Malaysia Venezuela
EXHIBIT A-1
ANNEX A [NW 1997 I]
DEFINITIONS
Unless the context otherwise requires, the following terms shall
have the following meanings and shall be equally applicable to both the singular
and the plural forms of the terms herein defined. In the case of any conflict
between the provisions of this Annex A and the provisions of any Operative
Document, the provisions of such Operative Document shall control the
construction of such Operative Document. References to any agreement are deemed
to include such agreement as amended, modified or supplemented from time to
time.
"Acceptance Certificate" has the meaning specified in Section
5(a)(v) of the Participation Agreement.
"Actual Knowledge" shall mean, (i) as it applies to the Owner
Trustee or Indenture Trustee, as the case may be, actual knowledge of a
Responsible Officer in the Trust Office of the Owner Trustee or in the Corporate
Trust Office of the Indenture Trustee, as the case may be, and (ii) as it
applies to the Owner Participant, actual knowledge of a vice president or other
higher officer of the Owner Participant having responsibility for the
transactions contemplated by the Operative Documents.
"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" (including
"controlled by" and "under common control with") shall mean 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.
"Aircraft" means the Airframe to be delivered and leased under the
Lease (or any airframe from time to time substituted for such Airframe pursuant
to Section 10(a) of the Lease) together with the four Engines initially leased
under the Lease (or any engine substituted for either of such Engines pursuant
to the terms of the Lease), whether or not any of such initial or substituted
Engines may from time to time be installed on such initial or substituted
Airframe or may be installed on any other airframe or on any other aircraft.
"Airframe" means: (i) the British Aerospace Avro 146-RJ85A aircraft
(except Engines or engines from time to time installed thereon) specified in the
initial Lease Supplement, which aircraft shall be leased by Lessor to Lessee
under the Lease and under such Lease Supplement, and any aircraft (except
Engines or engines from time to time installed thereon) which may from time to
time be substituted for such aircraft (except Engines or engines from time to
time installed thereon) pursuant to clause (ii) of the first paragraph of
Section 10(a) of the Lease; and (ii) any and all Parts (A) so long as the same
shall be incorporated or installed in or attached to such aircraft (except
Engines or engines from time to time installed thereon), or (B) so long as title
thereto shall remain vested in Lessor in accordance with the terms of Section 8
of the Lease after removal from such aircraft (except
Engines or engines from time to time installed thereon); provided, however, that
at such time as an aircraft (except Engines or engines from time to time
installed thereon) shall be deemed part of the property leased under the Lease
in substitution for the Airframe pursuant to the applicable provisions of the
Lease, the replaced Airframe shall cease to be an Airframe under the Lease.
"Amortization Amount" shall mean, with respect to any Principal
Amount Repayment Date, the amount set forth opposite such Date on the
Amortization Schedule.
"Amortization Schedule" shall mean the amortization schedule for the
Secured Certificates delivered pursuant to Section 2.02 of the Trust Indenture.
"Applicable Rate" means as of any date the weighted average of the
interest rates borne by the Secured Certificates then outstanding and, if no
Secured Certificates shall be outstanding, the Base Rate.
"Assignment and Assumption Agreement" means that certain Assignment
and Assumption Agreement [NW 1997 I], dated as of February 3, 1998, between the
Initial Owner Participant and the Owner Participant, as such Assignment and
Assumption Agreement may be amended or supplemented from time to time pursuant
to the applicable provisions thereof.
"Average Life Date" for each Secured Certificate to be redeemed
shall be the date which follows the redemption date by a period equal to the
Remaining Weighted Average Life at the redemption date of such Secured
Certificate. "Remaining Weighted Average Life" of such Secured Certificate, at
the redemption date of such Secured Certificate, shall be the number of days
equal to the quotient obtained by dividing (a) the sum of each of the products
obtained by multiplying (i) the amount of each then remaining installment of
principal, including the payment due on the maturity date of such Secured
Certificate, by (ii) the number of days from and including the redemption date
to but excluding the scheduled payment date of such principal installment; by
(b) the then unpaid principal amount of such Secured Certificate.
"Bankruptcy Code" means the Bankruptcy Reform Act of 1978, as
amended, or any subsequent legislation that amends, supplements or supersedes
such provisions.
"Base Rate" means the rate of interest announced publicly by
Citibank, N.A. in New York, New York from time to time as its base rate.
"Basic Rent" means, for the Basic Term, the rent payable for the
Aircraft pursuant to Section 3(c) of the Lease as adjusted as provided in
Section 3(d) of the Lease but subject always to the provisions of Section
3(d)(v) of the Lease and, for any Renewal Term, Basic Rent determined pursuant
to Section 19 of the Lease.
"Basic Term" has the meaning specified in the Lease.
"Beneficial Interest" means the interest of the Owner Participant
(or the Initial Owner Participant, as the case may be) under the Trust
Agreement.
ANNEX A-2
"▇▇▇▇ of Sale" means a full warranty ▇▇▇▇ of sale covering the
Aircraft, executed by Lessee in favor of the Owner Trustee, dated the Delivery
Date, specifically referring to the Airframe and each Engine, which ▇▇▇▇ of Sale
shall contain, among other things, a statement that such ▇▇▇▇ of Sale thereby
conveys to the Owner Trustee good title to the Airframe and each Engine
described in such ▇▇▇▇ of Sale, free and clear of all liens, encumbrances and
rights of others except Liens permitted by clause (v) of Section 6 of the Lease.
"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 the City of
New York, New York; Boston, Massachusetts; or Minneapolis, Minnesota.
"Cash Equivalents" (i) on or prior to the Delivery Date, shall mean
(a) direct obligations of the United States or obligations fully guaranteed by
the United States, (b) commercial paper rated A-1/P-1 by S&P and Moody's,
respectively, or, if such ratings are unavailable, rated by any nationally
recognized rating organization in the United States equal to the highest rating
assigned by such rating organization, (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 eight months following the
date of such investment, (d) overnight federal funds transactions with members
of the Federal Reserve System arranged by federal funds brokers, or (e)
overnight repurchase agreements with respect to the securities described in
clause (a) above entered into with an office of a bank or trust company which is
located in the United States or any bank or trust company which is organized
under the laws of the United States or any state thereof and has capital,
surplus and undivided profits aggregating at least $500 million, and (ii) after
the Delivery Date, shall mean the investments specified in Section 22(a) of the
Lease.
"Certificate Closing Date" means September 25, 1997.
"Certificate Holder" shall mean any holder from time to time of one
or more Secured Certificates.
"Certificated Air Carrier" means a Citizen of the United States
holding a carrier operating certificate issued by the Secretary of
Transportation pursuant to Chapter 447 of Title 49, United States Code, for
aircraft capable of carrying ten or more individuals or 6,000 pounds or more of
cargo or that otherwise is certified or registered to the extent required to
fall within the purview of 11 U.S.C. Section 1110 or any analogous successor
provision of the Bankruptcy Code.
"Citizen of the United States" has the meaning specified in Section
40102(a)(15) of Title 49 of the United States Code or any similar legislation of
the United States of America enacted in substitution or replacement therefor.
ANNEX A-3
"Civil Reserve Air Fleet Program" means the Civil Reserve Air Fleet
Program currently administered by the United States Air Force Air Mobility
Command pursuant to Executive Order No. 11490, as amended, or any substantially
similar program.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Collateral Account" means the deposit account established and
maintained pursuant to Section 2.16 of the Original Trust Indenture.
"Collateral Account Control Agreement" means that certain Collateral
Account Control Agreement [NW 1997 I], dated as of September 25, 1997, among
State Street Bank and Trust Company, the Indenture Trustee and the Owner
Trustee.
"Commitment" means the amount of the Owner Participant's
participation in Lessor's Cost for the Aircraft required to be made available or
paid as provided in Section 1(d) of the Participation Agreement.
"Consent and Agreement" means that certain Consent and Agreement [NW
1997 I], dated as of February 3, 1998, executed by the Manufacturer, as the same
may be amended, modified or supplemented from time to time in accordance with
the applicable provisions thereof.
"Continuous Stay Period" shall have the meaning specified in Section
4.04(a) of the Trust Indenture.
"Contract Rights" means all of Lessee's right, title and interest in
and to Part H and Part J of the Manufacturer Support Agreement, as and to the
extent that the same relate to the warranties with respect to the Aircraft,
including, without limitation, (a) all claims for damages in respect of the
Aircraft arising as a result of any default by the Manufacturer under Part H or
Part J of the Manufacturer Support Agreement, including, without limitation, all
warranty, service life policy and indemnity provisions in Part H and Part J of
the Manufacturer Support Agreement in respect of the Aircraft and all claims
thereunder and (b) any and all rights of Lessee to compel performance of the
terms of Part H and Part J of the Manufacturer Support Agreement in support
thereof.
"Corporate Trust Department" or "Trust Office" means the principal
corporate trust office of the Owner Trustee located at ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Department, or such other
office at which the Owner Trustee's corporate trust business shall be
administered which the Owner Trustee shall have specified by notice in writing
to Lessee, the Indenture Trustee, the Owner Participant and each Certificate
Holder.
"Corporate Trust Office" shall mean the principal office of the
Indenture Trustee located at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Department, or such other office
at which the Indenture Trustee's corporate
ANNEX A-4
trust business shall be administered which the Indenture Trustee shall have
specified by notice in writing to Lessee, the Owner Trustee, the Loan
Participants and each Certificate Holder.
"Debt" shall mean any liability for borrowed money, or any liability
for the payment of money in connection with any letter of credit transaction, or
other liabilities evidenced or to be evidenced by bonds, debentures, notes or
other similar instruments or for the deferred purchase price of property, goods
or services.
"Debt Portion" means the amount specified as such on Schedule II to
the Participation Agreement.
"Debt Rate" shall mean, with respect to any Series, the rate per
annum specified for such Series under the heading "Interest Rate" in Schedule I
to the Trust Indenture.
"Default" (a) for purposes of the Operative Documents other than the
Trust Indenture, means a Lease Default and (b) for purposes of the Trust
Indenture, means any condition or event that with the giving of notice or the
lapse of time or both would become an Event of Default pursuant to Section 4.02
of the Trust Indenture or Lease Event of Default (excluding Lease Events of
Default relating to Excluded Payments).
"Delivery Date" means the date of the initial Lease Supplement for
the Aircraft, which date shall be the date the Aircraft is leased by Lessor to
Lessee and accepted by Lessee under the Lease.
"Delivery Notice" means notice of the Aircraft's Delivery Date,
given by the Lessee as provided in Section 2 of the Participation Agreement and
including any notice with respect to a postponed Delivery Date given by Lessee
pursuant to Section 1(e) of the Participation Agreement.
"Depreciation Period" means the period commencing on the Delivery
Date and ending on December 31, 2005, or such earlier date as the Lease may be
terminated in accordance with the provisions thereof.
"Dollars" and "$" means the lawful currency of the United States of
America.
"Eligible Deposit Account" means either (a) a segregated account
with an Eligible Institution or (b) a segregated trust account with a corporate
trust department of a depository institution with corporate trust powers
organized under the laws United States or any state thereof or the District of
Columbia, and whose deposits are insured by the Federal Deposit Insurance
Corporation, provided that such institution also has a combined capital and
surplus of at least $100,000,000 and a rating of A or better from the Thomson
Bank Watch.
"Eligible Institution" means a depository institution organized
under the laws of the United States or any one of the states thereof, or the
District of Columbia, or any domestic branch of a foreign bank, which in any
case at all times (a) has either (x) a long-term unsecured debt rating of Aa2 by
Moody's or (y) a short-term certificate of deposit rating of P-1
ANNEX A-5
by Moody's, (b) has either (x) a long-term unsecured debt rating of at least AA
by S&P or (y) a short-term certificate of deposit rating of A-1+ by S&P and (c)
is a member of the Federal Deposit Insurance Corporation.
"Enforcement Date" shall have meaning specified in Section 4.03 of
the Trust Indenture.
"Engine" means (i) each of the four AlliedSignal LF507 type engines
listed by manufacturer's serial number in the initial Lease Supplement, whether
or not from time to time thereafter installed on the Airframe or installed on
any other airframe or on any other aircraft; and (ii) any engine which may from
time to time be substituted, pursuant to the terms of the Lease, for either of
such four engines, together in each case with any and all Parts incorporated or
installed in or attached thereto or any and all Parts removed therefrom so long
as title thereto shall remain vested in Lessor in accordance with the terms of
Section 8 of the Lease after removal from such Engine; provided, however, that
at such time as an engine shall be deemed part of the property leased under the
Lease in substitution for an Engine pursuant to the applicable provisions of the
Lease, the replaced Engine shall cease to be an Engine hereunder. The term
"Engines" means, as of any date of determination, all Engines then leased under
the Lease.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to ERISA are to ERISA, as in effect at the date
of the Participation Agreement and any subsequent provisions of ERISA,
amendatory thereof, supplemental thereto or substituted therefor.
"Event of Default" (a) for purposes of the Trust Indenture, has the
meaning specified in Section 4.02 of the Trust Indenture and (b) for purposes of
the Operative Documents other than the Trust Indenture, means a Lease Event of
Default.
"Event of Loss" with respect to the Aircraft, Airframe or any Engine
means any of the following events with respect to such property: (i) the loss of
such property or of the use thereof due to the destruction of or damage to such
property which renders repair uneconomic or which renders such property
permanently unfit for normal use by Lessee (or any Sublessee) for any reason
whatsoever; (ii) any damage to such property which results in an insurance
settlement with respect to such property on the basis of a total loss, or a
constructive or compromised total loss; (iii) the theft or disappearance of such
property, or the confiscation, condemnation, or seizure of, or requisition of
title to, or use of, such property (other than a requisition for use by the
United States Government or any other government of registry of the Aircraft, or
any agency or instrumentality of any thereof) which in the case of any event
referred to in this clause (iii) (other than a requisition of title) shall have
resulted in the loss of possession of such property by Lessee (or any Sublessee)
for a period in excess of 180 consecutive days or, if earlier, until the end of
the Term, or, in the case of a requisition of title, the requisition of title
shall not have been reversed within 90 days from the date of such requisition of
title or, if earlier, at the end of the Term; (iv) as a result of any law, rule,
ANNEX A-6
regulation, order or other action by the Federal Aviation Administration or
other governmental body of the government of registry of the Aircraft having
jurisdiction, the use of such property in the normal course of the business of
air transportation shall have been prohibited for a period of 180 consecutive
days, unless Lessee (or any Sublessee), prior to the expiration of such 180 day
period, shall have undertaken and shall be diligently carrying forward all steps
which are necessary or desirable to permit the normal use of such property by
Lessee (or such Sublessee), but in any event if such use shall have been
prohibited for a period of two consecutive years, provided that no Event of Loss
shall be deemed to have occurred if such prohibition has been applicable to the
entire U.S. registered fleet of British Aerospace Avro 146-RJ85A aircraft of
Lessee (or any Sublessee) and Lessee (or a Sublessee), prior to the expiration
of such two-year period, shall have conformed at least one such aircraft in its
fleet to the requirements of any such law, rule, regulation, order or other
action and commenced regular commercial use of the same in such jurisdiction and
shall be diligently carrying forward, in a manner which does not discriminate
against the Aircraft in so conforming the Aircraft, all steps which are
necessary or desirable to permit the normal use of the Aircraft by Lessee (or
such Sublessee), provided, further that, notwithstanding any of the foregoing,
such prohibition shall constitute an Event of Loss if such use shall have been
prohibited for a period of three consecutive years or such use shall be
prohibited at the expiration of the Term; (v) the requisition for use by the
United States Government or any other government of registry of the Aircraft or
any instrumentality or agency of any thereof, which shall have occurred during
the Basic Term (or any Renewal Term) and shall have continued for thirty (30)
days beyond the Term, provided, however, that no Event of Loss pursuant to this
clause (v) shall exist if Lessor shall have furnished to Lessee the written
notice specified in Section 10(d) of the Lease; and (vi) any divestiture of
title to or interest in an Engine treated as an Event of Loss pursuant to
Section 7(b) of the Lease. An Event of Loss with respect to the Aircraft shall
be deemed to have occurred if an Event of Loss occurs with respect to the
Airframe.
"Excess Amount" shall have the meaning specified in Section 2.03(b)
of the Trust Indenture.
"Excluded Payments" shall mean (i) indemnity payments paid or
payable by Lessee to or in respect of the Owner Participant or the Owner Trustee
in its individual capacity, their respective Affiliates, successors and
permitted assigns and their directors, officers, employees, servants and agents
(collectively, the "Owner Indemnitees") pursuant to Sections 7(b), 7(c), 16 and
17 of the Participation Agreement, (ii) proceeds of public liability insurance
in respect of the Aircraft payable as a result of insurance claims made, or
losses suffered, by the Owner Trustee or the Indenture Trustee in their
respective individual capacities or by any of the Owner Indemnitees, (iii)
proceeds of insurance maintained with respect to the Aircraft by the Owner
Participant (whether directly or through the Owner Trustee) or any other Owner
Indemnitee and permitted under Section 11(e) of the Lease, (iv) all payments
required to be made under the Tax Indemnity Agreement by Lessee and all payments
of Supplemental Rent by Lessee in respect of any amounts payable under the Tax
Indemnity Agreement, (v) fees payable to the Owner Trustee or the Indenture
Trustee pursuant to the last sentence of Section 7(c) of the Participation
Agreement, (vi) provided that the Secured Certificates shall have been duly
assumed by Lessee pursuant to Section 2.13 of the
ANNEX A-7
Trust Indenture, the amounts payable to the Owner Trustee pursuant to the third
sentence of Section 19(d) of the Lease plus all reasonable expenses incurred by
the Owner Trustee and the Owner Participant in connection with such assumption,
as applicable, (vii) any payment of the foregoing under the Guarantee, (viii)
interest accrued on any of the above, and (ix) any right to enforce the payment
of any amount described in clauses (i) through (viii) above and the right to
declare an Event of Default in respect of any of the foregoing amounts.
"Expenses" has the meaning specified in Section 7(c) of the
Participation Agreement.
"FAA ▇▇▇▇ of Sale" means a ▇▇▇▇ of sale for the Aircraft on AC Form
8050-2 or such other form as may be approved by the Federal Aviation
Administration on the Delivery Date for the Aircraft, executed by Lessee in
favor of the Owner Trustee and dated the Delivery Date.
"Federal Aviation Act" means that portion of the United States Code
comprising those provisions formerly referred to as the Federal Aviation Act of
1958, as amended, or any subsequent legislation that amends, supplements or
supersedes such provisions.
"Federal Aviation Administration" and "FAA" mean the United States
Federal Aviation Administration and any agency or instrumentality of the United
States government succeeding to their functions.
"First Amendment to Trust Indenture" means that certain First
Amendment to Trust Indenture and Security Agreement [NW 1997 I], dated as of
February 3, 1998, between Lessor and the Indenture Trustee, amending the
Original Trust Indenture.
"Foreign Air Carrier" means any air carrier which is not a U.S. Air
Carrier and which performs maintenance, preventative maintenance and inspections
for the Aircraft, Airframe and/or any Engine or engine to standards which are
approved by, or which are substantially equivalent to those required by, the
Federal Aviation Administration, the Civil Aviation Authority of the United
Kingdom, the Direction Generale de l'Aviation Civile of the French Republic, the
Luftfahrt Bundesamt of the Federal Republic of Germany, the Rijflauchtraatdienst
of the Kingdom of the Netherlands, the Ministry of Transportation of Japan or
the Federal Ministry of Transport of Canada (and any agency or instrumentality
of the applicable government succeeding to the functions of any of the foregoing
entities).
"Government Entity" means (a) any federal, state, provincial or
similar government, and any body, board, department, commission, court,
tribunal, authority, agency or other instrumentality of any such government or
otherwise exercising any executive, legislative, judicial, administrative or
regulatory functions of such government or (b) any other government entity
having jurisdiction over any matter contemplated by the Operative Documents or
relating to the observance or performance of the obligations of any of the
parties to the Operative Documents.
ANNEX A-8
"Guarantee" means that certain Amended and Restated Guarantee [NW
1997 I], dated as of February 3, 1998, made by the Guarantor, as such Guarantee
may be amended or supplemented from time to time pursuant to the applicable
provisions thereof, which Guarantee amended and restated in its entirety the
Original Guarantee.
"Guarantor" means Northwest Airlines Corporation, a Delaware
corporation.
"Indemnitee" means (i) the Owner Trustee, in its individual capacity
and as trustee under the Trust Agreement, (ii) the Indenture Trustee, (iii) the
Owner Participant, (iv) the Trust Estate, (v) the Loan Participants and each
other Certificate Holder, (vi) the Subordination Agent, (vii) the Liquidity
Provider, (viii) the Pass Through Trustees, (ix) each Affiliate of the Persons
described in clauses (i) through (iv), inclusive, (x) each Affiliate of the
Persons described in clauses (vi), (vii) and (viii) inclusive, (xi) the
respective directors, officers, employees, agents and servants of each of the
Persons described in clauses (i) through (viii), inclusive, (xii) the successors
and permitted assigns of the Persons described in clauses (i) through (iv),
inclusive, and (xiii) the successors and permitted assigns of the Persons
described in clauses (v), (vi), (vii) and (viii) inclusive.
"Indenture Agreements" means the Participation Agreement, the Lease,
the Purchase Agreement, the Purchase Agreement Assignment, the Consent and
Agreement, the Guarantee, the Bills of Sale and any other contract, agreement or
instrument from time to time assigned or pledged under the Trust Indenture.
"Indenture Default" means any event or condition that with the
giving of notice or the lapse of time or both would become an Indenture Event of
Default or Lease Event of Default (excluding Lease Events of Default related to
Excluded Payments).
"Indenture Event of Default" shall mean an "Event of Default" as
defined in clause (a) of the definition of "Event of Default".
"Indenture Trustee" means the Indenture Trustee under the Trust
Indenture, and any entity which may from time to time be acting as indenture
trustee under the Trust Indenture.
"Indenture Trustee Documents" means the Participation Agreement and
the Trust Indenture.
"Indenture Trustee Event" means either (i) the Secured Certificates
shall have become due and payable pursuant to Section 4.04(b) of the Trust
Indenture or (ii) the Indenture Trustee has taken action or notified Owner
Trustee that it intends to take action to foreclose the Lien of the Trust
Indenture or otherwise commence the exercise of any significant remedy under the
Trust Indenture or the Lease.
"Indenture Trustee's Liens" means any Lien which arises as a result
of (A) claims against the Indenture Trustee not related to its interest in the
Aircraft or the administration of the Trust Estate pursuant to the Trust
Indenture, (B) acts of the Indenture
ANNEX A-9
Trustee not permitted by, or failure of the Indenture Trustee to take any action
required by, the Operative Documents to the extent such acts arise or such
failure arises from or constitutes gross negligence or willful misconduct, (C)
claims against the Indenture Trustee relating to Taxes or Expenses which are
excluded from the indemnification provided by Section 7 of the Participation
Agreement pursuant to said Section 7, or (D) claims against the Indenture
Trustee arising out of the transfer by the Indenture Trustee of all or any
portion of its interest in the Aircraft, the Trust Estate, the Trust Indenture
Estate or the Operative Documents other than a transfer of the Aircraft pursuant
to Section 9, 10 or 19 of the Lease or Article IV or V of the Trust Indenture,
or a transfer of the Aircraft pursuant to Section 15 of the Lease while an Event
of Default is continuing and prior to the time that the Indenture Trustee has
received all amounts due pursuant to the Trust Indenture.
"Initial Installment" has the meaning set forth in Section 19(d) of
the Lease.
"Initial Owner Participant" means Northwest Airlines, Inc., a
Minnesota corporation.
"Intercreditor Agreement" means that certain Intercreditor Agreement
among the Pass Through Trustees, the Liquidity Provider and the Subordination
Agent.
"Law" shall mean (a) any constitution, treaty, statute, law,
regulation, order, rule or directive of any Government Entity, and (b) any
judicial or administrative interpretation or application of, or decision under,
any of the foregoing.
"Lease Agreement", "the Lease Agreement", "the Lease", or "the
Agreement", mean the Lease Agreement [NW 1997 I], dated as of February 3, 1998,
as originally executed or as modified, amended or supplemented pursuant to the
applicable provisions thereof and in accordance with the Trust Agreement and the
Trust Indenture, including, without limitation, supplementation thereof by one
or more Lease Supplements entered into pursuant to the applicable provisions
thereof.
"Lease Default" shall mean any event which with the giving of notice
or the lapse of time or both would become a Lease Event of Default.
"Lease Event of Default" has the meaning which the term "Event of
Default" has in the Lease.
"Lease Period Date" means July 2, 1998 and each succeeding January 2
and July 2 to and including January 2, 2017, January 29, 2017, and each
succeeding July 29 and January 29, to and including the last such date in the
Term.
"Lease Supplement" means a Lease Supplement, substantially in the
form of Exhibit A to the Lease, to be entered into between Lessor and Lessee on
the Delivery Date for the purpose of leasing the Aircraft under and pursuant to
the terms of the Lease Agreement, and any subsequent Lease Supplement entered
into in accordance with the terms thereof.
ANNEX A-10
"Lessee" shall mean Northwest Airlines, Inc., a Minnesota
corporation.
"Lessee Documents" means the Participation Agreement, the Lease, the
Lease Supplement covering the Aircraft, the Purchase Agreement (insofar as it
relates to the Aircraft), the FAA ▇▇▇▇ of Sale, the ▇▇▇▇ of Sale, the Purchase
Agreement Assignment, the Assignment and Assumption Agreement and the Tax
Indemnity Agreement.
"Lessee Person" means Lessee, any sublessee, or any other user or
Person in possession of the Aircraft, any Engine, or any Part, and any Affiliate
of any of the foregoing, but shall not include the Owner Participant, the Owner
Trustee or any of their successors or assigns or any other Person claiming from
or through the Owner Participant or the Owner Trustee (except pursuant to the
Lease).
"Lessor Liens" has the meaning specified in the Lease.
"Lessor's Cost" for the Aircraft means the amount denominated as
such in Exhibit B to the Lease.
"Lien" means any mortgage, pledge, lien, charge, claim, encumbrance,
lease, sublease, sub-sublease or security interest.
"Liquid Collateral" means all amounts and securities deposited from
time to time in the Collateral Account and all of the products, investments,
earnings and proceeds of the foregoing, including, but not limited to, all
proceeds of the investment or conversion thereof, voluntary or involuntary, into
cash, Cash Equivalents or other property, all rights to payment of any and every
kind, and other forms of obligations, and instruments and other property which
at any time constitute all or part or are included in the proceeds of any of the
foregoing.
"Liquidity Facilities" means the three Revolving Credit Agreements
between the Subordination Agent, as borrower, and the Liquidity Provider, and
any replacement thereof, in each case as the same may be amended, modified or
supplemented.
"Liquidity Provider" means Royal Bank of Canada, as Class A
Liquidity Provider, Class B Liquidity Provider and Class C Liquidity Provider
under the Liquidity Facilities, or any successor thereto.
"Loan Participant" means each Purchaser and its respective
successors and registered assigns, including any Certificate Holder.
"Loan Participant Liens" means any Lien which arises from acts or
claims against any Loan Participant not related to the transactions contemplated
by the Operative Documents.
"Loss Payment Date" has the meaning specified in Section 10(a) of
the Lease.
ANNEX A-11
"Losses" has the meaning specified in Section 18 of the
Participation Agreement.
"Majority in Interest of Certificate Holders" as of a particular
date of determination shall mean the holders of more than a majority in
aggregate unpaid Principal Amount of all Secured Certificates outstanding as of
such date (excluding any Secured Certificates held by the Owner Trustee or the
Owner Participant or any interests of the Owner Participant therein by reason of
subrogation pursuant to Section 4.03 of the Trust Indenture (unless all Secured
Certificates then outstanding shall be held by the Owner Trustee or the Owner
Participant) or Lessee or any affiliate of any thereof).
"Make-Whole Amount" means, with respect to any Secured Certificate,
the amount (as determined by an independent investment banker selected by Lessee
and reasonably acceptable to the Indenture Trustee and the Owner Participant) by
which (a) the present value of the remaining scheduled payments of principal and
interest from the redemption date to maturity of such Secured Certificate
computed by discounting each such payment on a semiannual basis from its
respective Payment Date (assuming a 360-day year of twelve 30-day months) using
a discount rate equal to the Treasury Yield exceeds (b) the outstanding
principal amount of such Secured Certificate plus accrued interest. For purposes
of determining the Make-Whole Amount, "Treasury Yield" at the time of
determination with respect to any Secured Certificate means the interest rate
(expressed as a semiannual equivalent and as a decimal and, in the case of
United States Treasury bills, converted to a bond equivalent yield) determined
to be the per annum rate equal to the semiannual yield to maturity for United
States Treasury securities maturing on the Average Life Date of such Secured
Certificate and trading in the public securities market either as determined by
interpolation between the most recent weekly average yield to maturity for two
series of United States Treasury securities, trading in the public securities
markets, (A) one maturing as close as possible to, but earlier than, the Average
Life Date of such Secured Certificate and (B) the other maturing as close as
possible to, but later than, the Average Life Date of such Secured Certificate,
in each case as published in the most recent H.15(519) or, if a weekly average
yield to maturity for United States Treasury securities maturing on the Average
Life Date of such Secured Certificate is reported on the most recent H.15(519),
such weekly average yield to maturity as published in such H.15(519).
"H.15(519)" means the weekly statistical release designated as such, or any
successor publication, published by the Board of Governors of the Federal
Reserve System. The date of determination of a Make-Whole Amount shall be the
third Business Day prior to the applicable redemption date and the "most recent
H.15(519)" means the H.15(519) published prior to the close of business on the
third Business Day prior to the applicable redemption date.
"Mandatory Document Terms" means the terms set forth on Schedule V
to the Original Participation Agreement.
"Mandatory Economic Terms" means the terms set forth on Schedule IV
to the Original Participation Agreement.
ANNEX A-12
"Make-Whole Termination Date" with respect to the Series A Secured
Certificates, means July 2, 2010; with respect to the Series B Secured
Certificates, means July 2, 2008; and with respect to the Series C Secured
Certificates, means October 2, 2003.
"Manufacturer" means British Aerospace (Operations) Limited, a
limited company incorporated under the laws of England and Wales, and its
successors and assigns.
"Manufacturer Delivery" means the date the Aircraft was delivered by
the Manufacturer to Lessee, and accepted by Lessee, pursuant to the Purchase
Agreement.
"Manufacturer Documents" means the Purchase Agreement, the Residual
Agreement and the Consent and Agreement.
"Manufacturer Support Agreement" means that certain Manufacturer
Support Agreement, dated February 5, 1997, between the Manufacturer and Lessee.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Mortgaged Property" shall have the meaning specified in Section
3.03 of the Trust Indenture.
"Net Economic Return" shall have the meaning ascribed to such term
in paragraph 2 of Exhibit E to the Lease.
"Net Present Value of Rents" shall have the meaning ascribed to such
term in the Lease.
"Operative Documents" and "Operative Document" means each of the
Participation Agreement, the Lease, the Trust Indenture, the Trust Agreement,
the Acceptance Certificate, the Tax Indemnity Agreement, the Lease Supplement
covering the Aircraft, the Trust Supplement covering the Aircraft, the Secured
Certificates, the ▇▇▇▇ of Sale, the FAA ▇▇▇▇ of Sale, the Purchase Agreement
(insofar as it relates to the Aircraft), the Guarantee, the Residual Agreement,
the Collateral Account Control Agreement, the Assignment and Assumption
Agreement, the Purchase Agreement Assignment and the Consent and Agreement.
"Original Guarantee" means that certain Guarantee [NW 1997 I], dated
as of the Certificate Closing Date, made by the Guarantor, as such Guarantee may
have been amended or supplemented from time to time pursuant to the applicable
provisions thereof prior to the Delivery Date.
"Original Participation Agreement" means that certain Participation
Agreement [NW 1997 I], dated as of the Certificate Closing Date, among Lessee,
the Guarantor, the Purchasers, the Indenture Trustee, the Subordination Agent,
the Initial Owner Participant and Owner Trustee, as such Participation Agreement
was amended or supplemented from time to time prior to the Delivery Date
pursuant to the applicable provisions thereof.
ANNEX A-13
"Original Trust Agreement" means that certain Trust Agreement [NW
1997 I], dated as of the Certificate Closing Date, between the Initial Owner
Participant and First Security Bank, National Association, in its individual
capacity, as originally executed or as modified, amended or supplemented prior
to the Delivery Date pursuant to the applicable provisions thereof.
"Original Trust Indenture" means that certain Trust Indenture and
Security Agreement [NW 1997 I], dated as of the Certificate Closing Date,
between Lessor and the Indenture Trustee, as originally executed or as modified,
amended or supplemented in accordance with its terms but prior to being amended
by the First Amendment to Trust Indenture.
"Overall Transaction" means all the transactions contemplated by the
Operative Documents.
"Owner Indemnitee" shall have the meaning specified in the
definition of Excluded Payments herein.
"Owner Participant" shall mean the corporation executing the
Participation Agreement as the Owner Participant, and thereafter any Person to
which such corporation transfers all of its right, title and interest in and to
the Trust Agreement, the Trust Estate and the Participation Agreement, to the
extent permitted by Section 8.01 of the Trust Agreement and Section 8 of the
Participation Agreement.
"Owner Participant Documents" means the Participation Agreement, the
Trust Agreement, the Assignment and Assumption Agreement, the Residual Agreement
and the Tax Indemnity Agreement.
"Owner Trustee" means the entity executing the Original
Participation Agreement as Owner Trustee and any entity appointed as successor
Owner Trustee pursuant to Section 9.01 of the Trust Agreement, and references to
a predecessor Owner Trustee in its individual capacity by name in the Operative
Documents shall include such successor Owner Trustee in its individual capacity
from and after such succession.
"Owner Trustee Documents" means the Participation Agreement, the
Trust Agreement, the Trust Supplement covering the Aircraft, the Lease, the
Lease Supplement covering the Aircraft, the Purchase Agreement Assignment, the
Residual Agreement, the Trust Indenture and the Secured Certificates.
"Participants" shall mean and include the Loan Participants and the
Owner Participant.
"Participation Agreement" means that certain Amended and Restated
Participation Agreement [NW 1997 I], dated as of February 3, 1998, among Lessee,
the Guarantor, the Owner Participant, the Purchasers, the Indenture Trustee, the
Subordination Agent and the Owner Trustee, as such Participation Agreement may
be amended or
ANNEX A-14
supplemented from time to time pursuant to the applicable provisions thereof,
which Participation Agreement amended and restated in its entirety the Original
Participation Agreement.
"Parties" means the Owner Trustee, the Indenture Trustee and the
Participants.
"Parts" means all appliances, parts, instruments, appurtenances,
accessories, furnishings and other equipment of whatever nature (other than (a)
complete Engines or engines, (b) any items leased by Lessee from a third party
(other than Lessor) and (c) cargo containers) which may from time to time be
incorporated or installed in or attached to the Airframe or any Engine or so
long as title thereto shall remain vested in Lessor in accordance with Section 8
of the Lease after removal therefrom.
"Pass Through Certificates" means the pass through certificates to
be issued by the Pass Through Trustee in connection with the Overall
Transaction.
"Pass Through Trust Agreement" means the pass through trust
agreement and each of the three separate pass through trust supplements referred
to on Schedule I to the Participation Agreement.
"Pass Through Trustee" means State Street Bank and Trust Company, a
Massachusetts trust company, in its capacity as trustee under each Pass Through
Trust Agreement, and each other person that may from time to time be acting as
successor trustee under any such Pass Through Trust Agreement.
"Past Due Rate" (A) with respect to the Secured Certificates, means
the rate per annum equal to 2% over the Debt Rate as in effect from time to time
and (B) for purposes of the Lease, means (i) with respect to the portion of any
payment of Rent that may be required by the Trust Indenture to be paid by the
Indenture Trustee to the Loan Participants, or the holders of any outstanding
Secured Certificates, the rate per annum equal to 2% over the Debt Rate as in
effect from time to time and (ii) with respect to the remaining portion of any
payment of Rent (and the entire amount of any payment of Rent after the
satisfaction and discharge of the Trust Indenture), a rate per annum equal to 1%
over the Base Rate.
"Payment Date" shall mean each January 2 and July 2, commencing on
January 2, 1998 (or, if any such day is not a Business Day, the immediately
succeeding Business Day) until the Secured Certificates have been paid in full.
"Permitted Lien" means any Lien referred to in clauses (i) through
(viii) of Section 6 of the Lease.
"Permitted Sublessee" means any entity domiciled in a country listed
in Exhibit F to the Lease.
ANNEX A-15
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Principal Amount" with respect to a Secured Certificate means the
stated original principal amount of such Secured Certificate and, with respect
to all Secured Certificates, means the aggregate stated original principal
amounts of all Secured Certificates.
"Principal Amount Repayment Date" shall mean each Payment Date on
which any portion of the Principal Amount is due and payable in accordance with
the Amortization Schedule.
"Purchase Agreement" means that certain Sale and Purchase Agreement,
dated as of February 5, 1997, between the Manufacturer and Lessee relating to
the purchase by Lessee of the Aircraft (including the Manufacturer Support
Agreement), as originally executed or as modified, amended or supplemented in
accordance with the terms thereof, but only insofar as the foregoing relates to
the Aircraft.
"Purchase Agreement Assignment" means that certain Purchase
Agreement Assignment [NW 1997 I], dated as of February 3, 1998, between Lessee
and Lessor, as the same may be amended, supplemented or modified from time to
time, with a form of Consent and Agreement to be executed by the Manufacturer
attached thereto.
"Purchasers" means the Pass Through Trustees under each Pass Through
Trust Agreement.
"QIB" shall have the meaning specified in Section 2.08 of the Trust
Indenture.
"Rating Agencies" means collectively, at any time, each nationally
recognized agency which shall have been requested to rate the Pass Through
Certificates and which shall then be rating the Pass Through Certificates. The
initial Rating Agencies shall be S&P and ▇▇▇▇▇'▇.
"Rating Agency Confirmation" means, with respect to any Operative
Document that is to be modified in any material respect on the Delivery Date, a
written confirmation from each of the Rating Agencies that the use of such
Operative Document with such modifications would not result in (i) a reduction
of the rating for any class of Pass Through Certificates below the then current
rating for such class of Pass Through Certificates or (ii) a withdrawal or
suspension of the rating of any class of Pass Through Certificates.
"Related Indemnitee Group" means, with respect to any Indemnitee,
any officer, director, servant, employee, agent or Affiliate thereof.
"Remaining Installments" has the meaning set forth in Section 19(d)
of the Lease.
ANNEX A-16
"Renewal Term" has the meaning specified in the Lease.
"Rent" means Basic Rent and Supplemental Rent, collectively.
"Replacement Airframe" shall mean any airframe substituted for the
Airframe pursuant to Section 5.06 of the Trust Indenture.
"Replacement Engine" shall mean any engine substituted for an Engine
pursuant to Section 5.06 of the Trust Indenture.
"Residual Agreement" means that certain Agreement (N509XJ), dated as
of February 3, 1998, among the Manufacturer, the Owner Participant and the Owner
Trustee.
"Responsible Officer" means with respect to the Owner Trustee, a
responsible officer in the Trust Office of the Owner Trustee (including, without
limitation, any authorized officer in the Trust Office of the Owner Trustee),
and with respect to the Indenture Trustee, a responsible officer in the
Corporate Trust Office of the Indenture Trustee.
"S&P" means Standard & Poor's Ratings Group.
"Scheduled Delivery Date" means the delivery date specified in the
Delivery Notice pursuant to Section 2 of the Participation Agreement.
"Section 1110 Period" shall have the meaning specified in Section
4.04(a) of the Trust Indenture.
"Secured Certificates" shall mean and include any Secured
Certificates issued under the Trust Indenture, and issued in exchange therefor
or replacement thereof.
"Secured Obligations" shall have the meaning specified in Section
2.06 of the Trust Indenture.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Senior Holder" shall have the meaning specified in Section 2.15(c)
of the Trust Indenture.
"Series A" or "Series A Secured Certificates" means Secured
Certificates issued and designated as "Series A" under the Trust Indenture, in
the Principal Amount and maturities and bearing interest as specified in
Schedule I to the Trust Indenture under the heading "Series A."
"Series B" or "Series B Secured Certificates" means Secured
Certificates issued and designated as "Series B" under the Trust Indenture, in
the Principal Amount and maturities and bearing interest as specified in
Schedule I to the Trust Indenture under the heading "Series B."
ANNEX A-17
"Series C" or "Series C Secured Certificates" means Secured
Certificates issued and designated as "Series C" under the Trust Indenture, in
the Principal Amount and maturities and bearing interest as specified in
Schedule I to the Trust Indenture under the heading "Series C."
"Special Purchase Price" means the amount denominated as such in
Exhibit B to the Lease.
"State Street" means State Street Bank and Trust Company, a
Massachusetts trust company, not in its capacity as Indenture Trustee under the
Trust Indenture, but in its individual capacity.
"Stipulated Loss Value" with respect to the Aircraft as of any date
through and including the last day of the Basic Term, shall mean, but subject
always to the provisions of Section 3(d)(v) of the Lease, the amount determined
by multiplying Lessor's Cost for the Aircraft by the percentage specified in
Exhibit C to the Lease opposite the Stipulated Loss Value Date with respect to
which the amount is determined (as such Exhibit C may be adjusted from time to
time as provided in Section 3(d) of the Lease and in Section 7 of the Tax
Indemnity Agreement). "Stipulated Loss Value" as of any date after the last day
of the Basic Term shall be the amount determined as provided in Section 19(a) of
the Lease.
"Sublease" means any sublease permitted by the terms of Section
7(b)(x) of the Lease.
"Sublessee" means any Person for so long, but only so long, as such
Person is in possession of the Airframe and/or any Engine pursuant to the terms
of a Sublease which is then in effect pursuant to Section 7(b)(x) of the Lease.
"Subordination Agent" means State Street Bank and Trust Company of
Connecticut, National Association, a national banking association, as
subordination agent under the Intercreditor Agreement, or any successor thereto.
"Successor Residual Agreement" has the meaning specified in the
Lease.
"Supplemental Rent" means, without duplication, (a) all amounts,
liabilities, indemnities and obligations (other than Basic Rent) which Lessee
assumes or agrees to pay under any Lessee Document to or on behalf of Lessor or
any other Person, (b) amounts payable by Lessor pursuant to clause (b) of the
third paragraph of Section 2.02 of the Trust Indenture, (c) Lessor's pro rata
share of all compensation and reimbursement of expenses, disbursements and
advances payable by Lessee under the Pass Through Trust Agreements, and (d)
Lessor's pro rata share of all compensation and reimbursement of expenses and
disbursements payable to the Subordination Agent under the Intercreditor
Agreement except with respect to any income or franchise taxes incurred by the
Subordination Agent in connection with the transactions contemplated by the
Intercreditor Agreement. As used herein, "Lessor's pro rata share" means as of
any time a fraction, the numerator of which is the principal balance then
outstanding of Secured Certificates and the denominator of which is the
ANNEX A-18
aggregate principal balance then outstanding of all "Equipment Notes" (as such
term is defined in the Intercreditor Agreement).
"Tax Indemnitee" means (i) the Owner Participant, the Owner Trustee,
in its individual capacity and as trustee under the Trust Agreement, the Trust
Estate, the Indenture Trustee, (ii) the respective Affiliates, successors and
permitted assigns of each of the entities described in the preceding clause (i),
and (iii) the Trust Indenture Estate.
"Tax Indemnity Agreement" means that certain Tax Indemnity Agreement
[NW 1997 I], dated as of February 3, 1998, between the Owner Participant and
Lessee, as originally executed or as modified, amended or supplemented pursuant
to the applicable provisions thereof.
"Taxes" means any and all fees (including, without limitation,
license, recording, documentation and registration fees), taxes (including,
without limitation, income, gross receipts, sales, rental, use, turnover, value
added, property (tangible and intangible), excise and stamp taxes), license,
levies, imposts, duties, charges, assessments or withholdings of any nature
whatsoever, together with any and all penalties, fines, additions to tax and
interest thereon (each, individually a "Tax").
"Term" means the Basic Term and, if actually entered into, any
Renewal Term.
"Termination Date" has the meaning set forth in Section 9(a) of the
Lease.
"Termination Value" with respect to the Aircraft as of any date
through and including the last day of the Basic Term, means, but subject always
to the provisions of Section 3(d)(v) of the Lease, the amount determined by
multiplying Lessor's Cost for the Aircraft by the percentage specified in
Exhibit D to the Lease opposite the Termination Date with respect to which the
amount is determined (as such Exhibit D may be adjusted from time to time as
provided in Section 3(d) of the Lease and in Section 7 of the Tax Indemnity
Agreement).
"Transaction Expenses" means: all of the reasonable out-of-pocket
costs, fees and expenses incurred by the Owner Trustee, the Owner Participant,
the Pass Through Trustee, the Subordination Agent and the Indenture Trustee in
connection with the transactions contemplated by the Participation Agreement,
the other Operative Documents, the Pass Through Trust Agreements, the
Intercreditor Agreement, the Liquidity Facilities and the Underwriting Agreement
(except, in each case, as otherwise provided therein) including, without
limitation:
(1) the reasonable and actual fees, expenses and disbursements
of (A) ▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇ LLP, special counsel for the Pass Through Trustee
and the Indenture Trustee, (B) Ray, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, special counsel for the
Owner Trustee, (C) Shearman & Sterling, special counsel for the Underwriters,
and (D) ▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.C., special counsel in Oklahoma City, Oklahoma;
ANNEX A-19
(2) the initial fees and reasonable and actual disbursements
of the Owner Trustee under the Trust Agreement;
(3) the initial fee and reasonable and actual disbursements of
the Indenture Trustee under the Trust Indenture;
(4) the initial fees and expenses of the Liquidity Provider,
the Pass Through Trustee and the Subordination Agent;
(5) underwriting fees and commissions;
(6) the fees and expenses with respect to the appraisals of
the Aircraft;
(7) the reasonable fees, expenses and disbursements of Thelen,
Marrin, ▇▇▇▇▇▇▇ & Bridges LLP, special counsel to the Owner Participant, such
fees not to exceed the amount previously agreed to by the Owner Participant and
Lessee;
(8) the reasonable fees, expenses and disbursements of ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇, special counsel for
Lessee;
(9) the costs of filing and recording documents with the FAA
and filing Uniform Commercial Code statements in the United States;
(10) the reasonable fees, expenses and disbursements of
Powell, Goldstein, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, special counsel to the Liquidity
Provider;
(11) the reasonable fees, expenses and disbursements of
Vedder, Price, ▇▇▇▇▇▇▇ & Kammholz, special counsel to the Manufacturer; and
(12) the equity placement fee and reasonable disbursements of
▇▇▇▇▇▇▇ and ▇▇▇▇▇ Financial Corporation.
"Transactions" means the transactions contemplated by the
Participation Agreement and the other Operative Documents.
"Trust Agreement" means that certain Amended and Restated Trust
Agreement [NW 1997 I], dated as of February 3, 1998, between the Owner
Participant and First Security Bank, National Association, in its individual
capacity, as originally executed or as modified, amended or supplemented
pursuant to the applicable provisions thereof, including, without limitation,
supplementation thereof by one or more Trust Supplements entered into pursuant
to the applicable provisions thereof, which Trust Agreement amended and restated
in its entirety the Original Trust Agreement and continued the trusts thereby
created.
"Trust Agreement and Indenture Supplement" or "Trust Supplement"
means a supplement to the Trust Agreement and to the Trust Indenture, in
substantially the form of Exhibit A to the Trust Indenture, which shall
particularly describe the Aircraft, and any
ANNEX A-20
Replacement Airframe and Replacement Engine included in the property of the
Owner Trustee covered by the Trust Agreement. The initial Trust Agreement and
Indenture Supplement shall be dated the Delivery Date.
"Trust Estate" means the Trust Estate as that term is defined in the
Trust Agreement.
"Trust Indenture", "the Trust Indenture", "Indenture", and "the
Indenture" shall mean the Original Trust Indenture, as originally executed or as
modified, amended or supplemented in accordance with its terms (including,
without limitation, by the First Amendment to Trust Indenture).
"Trust Indenture Estate" shall mean all estate, right, title and
interest of the Indenture Trustee in and to the properties referred to in the
Granting Clause of the Trust Indenture, excluding Excluded Payments.
"Underwriting Agreement" means that certain Underwriting Agreement,
dated as of September 16, 1997, among Lessee, the Guarantor and the underwriters
named therein.
"United States" or "U.S." means the United States of America.
"U.S. Air Carrier" means any Certificated Air Carrier as to which
there is in force an air carrier operating certificate issued pursuant to Part
121 of the regulations under the Federal Aviation Act, or which may operate as
an air carrier by certification or otherwise under any successor or substitute
provisions therefor or in the absence thereof.
"Wet Lease" means any arrangement whereby the Lessee (or any
Sublessee) agrees to furnish the Airframe and Engines or engines installed
thereon to a third party pursuant to which such Airframe and Engines or engines
(i) shall be operated solely by regular employees of Lessee (or any Sublessee)
possessing all current certificates and licenses that would be required under
the Federal Aviation Act or, if the Aircraft is not registered in the United
States, all certificates and licenses required by the laws of the jurisdiction
of registry, for the performance by such employees of similar functions within
the United States of America or such other jurisdiction of registry (it is
understood that cabin attendants need not be regular employees of Lessee (or any
Sublessee)) and (ii) shall be maintained by Lessee (or any Sublessee) in
accordance with its normal maintenance practices.
ANNEX A-21
EXHIBIT R
TO PARTICIPATION
AGREEMENT
[NW 1997 I]
Section 7(b) - General Tax Indemnity
[Intentionally Omitted]
EXHIBIT R-1
EXHIBIT S
TO PARTICIPATION
AGREEMENT
[NW 1997 I]
Section 7(c) - General Indemnity
[Intentionally Omitted]
EXHIBIT S-1