EX-4(F)
EXHIBIT 4(F)
CONFORMED COPY
INTERCREDITOR AGREEMENT
Dated as of
June 28, 2000
BY AND AMONG
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
not in its individual capacity
but solely as Trustee under the
Northwest Airlines Pass Through Trust 2000-1G
and
Northwest Airlines Pass Through Trust 2000-1C
CREDIT SUISSE FIRST BOSTON, NEW YORK BRANCH
as Class G Liquidity Provider
and
as Class C Liquidity Provider,
STATE STREET BANK AND TRUST COMPANY
not in its individual capacity except
as expressly set forth herein but
solely as Subordination Agent and trustee hereunder
AND
MBIA INSURANCE CORPORATION
as Policy Provider
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . -2-
ARTICLE II
TRUST ACCOUNTS; CONTROLLING PARTY
SECTION 2.1 Agreement to Terms of Subordination; Payments from
Monies Received Only . . . . . . . . . . . . . . . . . -28-
SECTION 2.2 Trust Accounts . . . . . . . . . . . . . . . . . . . . . -29-
SECTION 2.3 Deposits to the Collection Account and Special Payments
Account. . . . . . . . . . . . . . . . . . . . . . . . -30-
SECTION 2.4 Distributions of Special Payments . . . . . . . . . . . -31-
SECTION 2.5 Designated Representatives . . . . . . . . . . . . . . . -35-
SECTION 2.6 Controlling Party . . . . . . . . . . . . . . . . . . . -36-
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF
AMOUNTS RECEIVED
SECTION 3.1 Written Notice of Distribution . . . . . . . . . . . . . -38-
SECTION 3.2 Distribution of Amounts on Deposit in the Collection
Account. . . . . . . . . . . . . . . . . . . . . . . . -41-
SECTION 3.3 Distribution of Amounts on Deposit Following a
Triggering Event. . . . . . . . . . . . . . . . . . . -43-
SECTION 3.4 Other Payments . . . . . . . . . . . . . . . . . . . . . -47-
SECTION 3.5 Payments to the Trustees, the Liquidity Providers and
the Policy Provider . . . . . . . . . . . . . . . . . -47-
SECTION 3.6 Liquidity Facilities . . . . . . . . . . . . . . . . . . -47-
SECTION 3.7 The Policy . . . . . . . . . . . . . . . . . . . . . . . -54-
ARTICLE IV
EXERCISE OF REMEDIES
SECTION 4.1 Directions from the Controlling Party . . . . . . . . . -59-
SECTION 4.2 Remedies Cumulative . . . . . . . . . . . . . . . . . . -61-
SECTION 4.3 Discontinuance of Proceedings . . . . . . . . . . . . . -61-
SECTION 4.4 Right of Certificateholders to Receive Payments Not to
Be Impaired. . . . . . . . . . . . . . . . . . . . . . -62-
SECTION 4.5 Undertaking for Costs . . . . . . . . . . . . . . . . . -62-
ARTICLE V
DUTIES OF THE SUBORDINATION AGENT;
AGREEMENTS OF TRUSTEES, ETC.
SECTION 5.1 Notice of Indenture Default or Triggering Event . . . . -62-
SECTION 5.2 Indemnification . . . . . . . . . . . . . . . . . . . . -63-
SECTION 5.3 No Duties Except as Specified in Intercreditor Agreement -63-
SECTION 5.4 Notice from the Liquidity Providers and Trustees . . . . -64-
ARTICLE VI
THE SUBORDINATION AGENT
SECTION 6.1 Authorization; Acceptance of Trusts and Duties . . . . . -64-
SECTION 6.2 Absence of Duties . . . . . . . . . . . . . . . . . . . -65-
SECTION 6.3 No Representations or Warranties as to Documents . . . . -65-
SECTION 6.4 No Segregation of Monies; No Interest . . . . . . . . . -65-
SECTION 6.5 Reliance; Agents; Advice of Counsel . . . . . . . . . . -65-
SECTION 6.6 Capacity in Which Acting . . . . . . . . . . . . . . . . -66-
SECTION 6.7 Compensation . . . . . . . . . . . . . . . . . . . . . . -66-
SECTION 6.8 May Become Certificateholder . . . . . . . . . . . . . . -66-
SECTION 6.9 Subordination Agent Required; Eligibility . . . . . . . -66-
SECTION 6.10 Money to Be Held in Trust. . . . . . . . . . . . . . . . -67-
ARTICLE VII
INDEMNIFICATION OF SUBORDINATION AGENT
SECTION 7.1 Scope of Indemnification . . . . . . . . . . . . . . . . -67-
ARTICLE VIII
SUCCESSOR SUBORDINATION AGENT
SECTION 8.1 Replacement of Subordination Agent; Appointment of
Successor . . . . . . . . . . . . . . . . . . . . . . -68-
ARTICLE IX
SUPPLEMENTS AND AMENDMENTS
SECTION 9.1 Amendments, Waivers, Etc. . . . . . . . . . . . . . . . -69-
SECTION 9.2 Subordination Agent Protected . . . . . . . . . . . . -71-
SECTION 9.3 Effect of Supplemental Agreements . . . . . . . . . . -71-
SECTION 9.4 Notice to Rating Agencies and the Policy Provider . . -71-
SECTION 9.5 Addition of Class D Trustee . . . . . . . . . . . . . -71-
ARTICLE X
MISCELLANEOUS
SECTION 10.1 Termination of Intercreditor Agreement . . . . . . . -72-
SECTION 10.2 Intercreditor Agreement for Benefit of
Trustees, Liquidity Providers, Policy Provider
and Subordination Agent . . . . . . . . . . . . . . -73-
SECTION 10.3 Notices . . . . . . . . . . . . . . . . . . . . . . . -73-
SECTION 10.4 Severability . . . . . . . . . . . . . . . . . . . . -74-
SECTION 10.5 No Oral Modifications or Continuing Waivers . . . . . -74-
SECTION 10.6 Successors and Assigns . . . . . . . . . . . . . . . -75-
SECTION 10.7 Headings . . . . . . . . . . . . . . . . . . . . . . -75-
SECTION 10.8 Counterpart Form . . . . . . . . . . . . . . . . . . -75-
SECTION 10.9 Subordination . . . . . . . . . . . . . . . . . . . . -75-
SECTION 10.10 Governing Law . . . . . . . . . . . . . . . . . . . . -77-
SECTION 10.11 Submission to Jurisdiction; Waiver of Jury
Trial; Waiver of Immunity . . . . . . . . . . . . . -77-
INTERCREDITOR AGREEMENT
INTERCREDITOR AGREEMENT dated as of June 28, 2000, by and
among STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL
ASSOCIATION, a national banking association ("State Street of Connecticut"),
not in its individual capacity but solely as Trustee of each Trust (each as
defined below), CREDIT SUISSE FIRST BOSTON, acting through its New York
branch, a banking institution organized under the laws of Switzerland
("CSFB"), as initial Liquidity Provider, STATE STREET BANK AND TRUST COMPANY,
a Massachusetts trust company, not in its individual capacity except as
expressly set forth herein, but solely as Subordination Agent and trustee
hereunder (in such capacity, together with any successor appointed pursuant
to Article VIII hereof, the "Subordination Agent") and MBIA INSURANCE
CORPORATION, a New York stock insurance company ("MBIA"), as the Policy
Provider.
WHEREAS, all capitalized terms used herein shall have the
respective meanings referred to in Article I hereof;
WHEREAS, pursuant to each Indenture (i) in the case of each
Aircraft that is owned by Northwest at the time such Indenture is entered
into (the "Owned Aircraft"), Northwest will issue on a recourse basis three
series of Equipment Notes to finance the purchase of such Aircraft, and (ii)
in the case of each Aircraft that is leased to Northwest pursuant to a
related Lease at the time such Indenture is entered into (the "Leased
Aircraft"), the related Owner Trustee will issue on a nonrecourse basis three
series of Equipment Notes to finance the purchase of such Aircraft;
WHEREAS, pursuant to the Financing Agreements, each Trust
will acquire Equipment Notes having an interest rate equal to the interest
rate applicable to the Certificates to be issued by such Trust;
WHEREAS, pursuant to each Trust Agreement, the Trust created
thereby proposes to issue a single class of Certificates (a "Class") bearing
the interest rate and having the final distribution date described in such
Trust Agreement on the terms and subject to the conditions set forth therein;
WHEREAS, pursuant to the Underwriting Agreement (as defined
below), the Underwriters propose to purchase the Certificates issued by each
Trust in the aggregate face amount set forth opposite the name of such Trust
on Schedule I thereto on the terms and subject to the conditions set forth
therein;
WHEREAS, each Liquidity Provider proposes to enter into a
revolving credit agreement (each, a "Liquidity Facility") with the
Subordination Agent, as agent for the Trustee of each Trust, for the benefit
of the Certificateholders of such Trust; and
WHEREAS, the Policy Provider proposes to enter into the
Policy Provider Agreement providing for the issuance by the Policy Provider
of the Policy for the benefit of the Class G Trustee and Class G
Certificateholders; and
WHEREAS, it is a condition precedent to the obligations of
the Underwriters under the Underwriting Agreement that the Subordination
Agent, the Trustees, the Liquidity Providers and the Policy Provider agree to
the terms of subordination set forth in this Agreement in respect of each
Class of Certificates, and the Subordination Agent, the Trustees, the
Liquidity Providers and the Policy Provider, by entering into this Agreement,
hereby acknowledge and agree to such terms of subordination and the other
provisions of this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements
herein contained, and of other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions. For all purposes of this
Agreement, except as otherwise expressly provided or unless the context
otherwise requires:
(1) the terms used herein that are defined in this
Article have the meanings assigned to them in this Article, and
include the plural as well as the singular;
(2) all references in this Agreement to designated
"Articles", "Sections" and other subdivisions are to the designated
Articles, Sections and other subdivisions of this Agreement;
(3) the words "herein", "hereof" and "hereunder" and
other words of similar import refer to this Agreement as a whole and
not to any particular Article, Section or other subdivision; and
(4) the term "including" shall mean "including without
limitation".
"Acceleration" means, with respect to the amounts payable in respect
of the Equipment Notes issued under any Indenture, the declaration or deemed
declaration of such amounts to be immediately due and payable. "Accelerate"
and "Accelerated" have meanings correlative to the foregoing.
"Accrued Class G Interest" has the meaning assigned to such term in
Section 3.7(a).
"Adjusted Expected Distributions" means with respect to the
Certificates of any Class on any Current Distribution Date the sum of (x) the
amount of accrued and unpaid interest on such Certificates (excluding
interest, if any, payable with respect to the Deposits related to such Trust)
plus (y) the greater of:
(A) the difference between (x) the Pool Balance of such
Certificates as of the immediately preceding Distribution Date (or if
the Current Distribution Date is the first Distribution Date, the
original aggregate face amount of the Certificates of such Trust) and
(y) the Pool Balance of such Certificates as of the Current
Distribution Date calculated on the basis that (i) the principal of
the Non-Performing Equipment Notes held in such Trust has been paid
in full and such payments have been distributed to the holders of
such Certificates, (ii) the principal of the Performing Equipment
Notes has been paid when due (but without giving effect to any
Acceleration of Performing Equipment Notes) and has been distributed
to the holders of such Certificates and (iii) the principal of any
Equipment Notes formerly held in such Trust which have been sold
pursuant to the terms hereof have been paid in full and such payments
have been distributed to the holders of such Certificates but without
giving effect to any reduction in the Pool Balance as a result of any
distribution attributable to Deposits occurring after the immediately
preceding Distribution Date (or, if the Current Distribution Date is
the first Distribution Date, occurring after the initial issuance of
the Certificates of such Trust) and
(B) the amount of the excess, if any, by which (i) the Pool
Balance of such Class of Certificates as of the immediately preceding
Distribution Date (or if the Current Distribution Date is the first
Distribution Date, the original aggregate face amount of the
Certificates of such Trust) less the amount of the Deposits for such
Class of Certificates as of such preceding Distribution Date (or, if
the Current Distribution Date is the first Distribution Date, the
original aggregate amount of the Deposits for such Class of
Certificates) other than any portion of such Deposits thereafter used
to acquire Equipment Notes pursuant to the Note Purchase Agreement,
over (ii) the Aggregate LTV Collateral Amount for such Class of
Certificates for the Current Distribution Date;
provided that, until the date of the initial LTV Appraisals for all of the
Aircraft, clause (B) above shall not be applicable.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under common control
with such Person. For the purposes of this definition, "control" means the
power, directly or indirectly, to direct or cause the direction of the
management and policies of such Person whether through the ownership of
voting securities or by contract or otherwise; and the terms "controlling"
and "controlled" have meanings correlative to the foregoing.
"Aggregate LTV Collateral Amount" means for any Class of Certificates
for any Distribution Date the sum of the applicable LTV Collateral Amounts
for each Leased Aircraft and Owned Aircraft minus the Pool Balance for each
Class of Certificates, if any, senior to such Class after giving effect to
any distribution of principal on such Distribution Date with respect to such
senior Class or Classes.
"Aircraft" means, with respect to any Indenture, the "Aircraft"
referred to therein.
"Appraised Current Market Value" of any Leased Aircraft or Owned
Aircraft means the lower of the average and the median of the most recent
three LTV Appraisals of such Aircraft.
"Appraisers" means Aircraft Information Systems, Inc., AvSOLUTIONS
Inc. and Xxxxxx Xxxxx and Xxxxx, Inc.
"Available Amount" means, with respect to any Liquidity Facility on
any drawing date, an amount equal to (a) the Stated Amount of such Liquidity
Facility, less (b) the amount of each Interest Drawing honored by the
Liquidity Provider under such Liquidity Facility on or prior to such date
which has not been reimbursed or reinstated as provided in Section 3.6(g)
hereof as of such date; provided that, following a Downgrade Drawing, a Non-
Extension Drawing or a Final Drawing under such Liquidity Facility, the
Available Amount of such Liquidity Facility shall be zero.
"Avoided Payment" has the meaning assigned to such term in the
Policy.
"Business Day" means any day other than a Saturday or Sunday or a day
on which, (i) for purposes the Policy and the Policy Provider, the fiscal
agent under the Policy, at its office specified in the Policy, the Policy
Provider at its office specified in the Policy and insurance companies in New
York, New York are required or authorized by law or executive order to close
and (ii), for all such and all other purposes hereunder, commercial banks are
required or authorized to close in Minneapolis, Minnesota, New York, New
York, or the city and state in which any Trustee, the Subordination Agent or
any Loan Trustee maintains its Corporate Trust Office or receives and
disburses funds. Solely with respect to draws under any Liquidity Facility,
Business Day shall also include a "Business Day" as defined in such Liquidity
Facility.
"Cash Collateral Account" means the Class G Cash Collateral Account
or the Class C Cash Collateral Account as applicable.
"Certificate" means a Class G Certificate or a Class C Certificate,
as applicable.
"Certificateholder" means any holder of one or more Certificates.
"Class" has the meaning assigned to such term in the preliminary
statements to this Agreement.
"Class C Cash Collateral Account" means an Eligible Deposit Account
in the name of the Subordination Agent and maintained at an Eligible
Institution, which shall be the Subordination Agent if it shall so qualify,
into which all amounts drawn under the Class C Liquidity Facility pursuant to
Section 3.6(c), 3.6(d) or 3.6(i) shall be deposited.
"Class C Certificateholder" means, at any time, any holder of one or
more Class C Certificates.
"Class C Certificates" means the certificates issued by the Class C
Trust, substantially in the form of Exhibit A to the Class C Trust Agreement,
and authenticated by the Class C Trustee, representing fractional undivided
interests in the Class C Trust, and any certificates issued in exchange
therefor or in replacement thereof pursuant to the terms of the Class C Trust
Agreement.
"Class C Liquidity Facility" means, initially, the Revolving Credit
Agreement dated as of June 28, 2000, by and between the Subordination Agent,
as agent and trustee of the Class C Trustee, and the Class C Liquidity
Provider and, from and after the replacement of such Agreement pursuant
hereto, the Replacement Liquidity Facility therefor, if any, in each case as
amended, supplemented or otherwise modified from time to time in accordance
with its terms.
"Class C Liquidity Provider" means CSFB, together with any
Replacement Liquidity Provider which has issued a Replacement Liquidity
Facility to replace the Class C Liquidity Facility pursuant to Section
3.6(e).
"Class C Trust" means Northwest Airlines 2000-1C Pass Through Trust
created and administered pursuant to the Class C Trust Agreement.
"Class C Trust Agreement" means the Pass Through Trust Agreement, as
supplemented by Trust Supplement No. 2000-1C thereto dated as of June 28,
2000, by and among Northwest, the Guarantor and the Trustee, governing the
creation and administration of the Class C Trust and the issuance of the
Class C Certificates, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"Class C Trustee" means State Street of Connecticut, not in its
individual capacity except as expressly set forth in the Class C Trust
Agreement, but solely as trustee under the Class C Trust Agreement, together
with any successor trustee appointed pursuant thereto.
"Class D Certificates" means the pass through certificates, if any,
issued by Northwest Airlines, Inc. and designated Series 2000-1D, in
connection with a secured financing of an Owned Aircraft or a Leased
Aircraft.
"Class D Trustee" means the trustee of the trust relating to the
Class D Certificates.
"Class G Cash Collateral Account" means an Eligible Deposit Account
in the name of the Subordination Agent maintained at an Eligible Institution,
which shall be the Subordination Agent if it shall so qualify, into which all
amounts drawn under the Class G Liquidity Facility pursuant to Section
3.6(c), 3.6(d) or 3.6(i) shall be deposited.
"Class G Certificateholder" means, at any time, any holder of one or
more Class G Certificates.
"Class G Certificates" means the certificates issued by the Class G
Trust, substantially in the form of Exhibit A to the Class G Trust Agreement,
and authenticated by the Class G Trustee, representing fractional undivided
interests in the Class G Trust, and any certificates issued in exchange
therefor or replacement thereof pursuant to the terms of the Class G Trust
Agreement.
"Class G Deposits" means the Deposits with respect to the Class G
Certificates.
"Class G Liquidity Facility" means, initially, the Revolving Credit
Agreement dated as of June 28, 2000, by and between the Subordination Agent,
as agent and trustee of the Class G Trustee, and the Class G Liquidity
Provider, and, from and after the replacement of such Agreement pursuant
hereto, the Replacement Liquidity Facility therefor, if any, in each case as
amended, supplemented or otherwise modified from time to time in accordance
with its terms.
"Class G Liquidity Provider" means CSFB, together with any
Replacement Liquidity Provider which has issued a Replacement Liquidity
Facility to replace the Class G Liquidity Facility pursuant to Section
3.6(e).
"Class G Paying Agent Account" means the Paying Agent Account as
defined in the Escrow and Paying Agent Agreement relating to the Class G
Certificates.
"Class G Trust" means Northwest Airlines 2000-1G Pass Through Trust
created and administered pursuant to the Class G Trust Agreement.
"Class G Trust Agreement" means the Pass Through Trust Agreement, as
supplemented by Trust Supplement No. 2000-1G thereto dated as of June 28,
2000, by and among Northwest, the Guarantor and the Trustee, governing the
creation and administration of the Class G Trust and the issuance of the
Class G Certificates, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"Class G Trustee" means State Street of Connecticut, not in its
individual capacity except as expressly set forth in the Class G Trust
Agreement, but solely as trustee under the Class G Trust Agreement, together
with any successor trustee appointed pursuant thereto.
"Closing Date" means June 28, 2000.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, and Treasury Regulations promulgated thereunder.
"Collateral" has the meaning assigned to such term in the Owned
Aircraft Indentures.
"Collection Account" means the Eligible Deposit Account established
by the Subordination Agent pursuant to Section 2.2 which the Subordination
Agent shall make deposits in and withdrawals from in accordance with this
Agreement.
"Consent Notice" has the meaning assigned to such term in Section
3.6(d).
"Consent Period" has the meaning assigned to such term in Section
3.6(d).
"Controlling Party" means the Person entitled to act as such pursuant
to the terms of Section 2.6.
"Corporate Trust Office" means, with respect to any Trustee, the
Subordination Agent or any Loan Trustee, the office of such Person in the
city at which, at any particular time, its corporate trust business shall be
principally administered.
"Current Distribution Date" means a Distribution Date specified as a
reference date for calculating the Adjusted Expected Distributions or
Expected Distributions with respect to the Certificates of any Trust as of
such Distribution Date.
"Defaulted Series G Equipment Note" has the meaning assigned to such
term in Section 3.7(c).
"Delivery Period Expiry Date" means September 30, 2001.
"Deposit Agreement" shall mean, with respect to any Class, the
Deposit Agreement pertaining to such Class dated the date hereof between the
Escrow Agent, and the Depositary, as the same may be amended, modified or
supplemented from time to time in accordance with the terms thereof.
"Depositary" means ABN AMRO Bank N.V., acting through a United States
branch, as depositary under the Deposit Agreement relating to Class G and
Class C Certificates.
"Deposits" with respect to any Class, shall have the meaning set
forth in the Deposit Agreement pertaining to such Class.
"Designated Representatives" means the Subordination Agent
Representatives, Trustee Representatives and the Provider Representatives
identified under Section 2.5.
"Disposition Payment" has the meaning assigned to such term in
Section 3.7(b).
"Distribution Date" means a Regular Distribution Date or a Special
Distribution Date.
"Dollars" or "$" means United States dollars.
"Downgrade Drawing" has the meaning assigned to such term in Section
3.6(c).
"Downgraded Facility" has the meaning assigned to such term in
Section 3.6(c).
"Drawing" means an Interest Drawing, a Non-Extension Drawing, a Final
Drawing or a Downgrade Drawing, as the case may be.
"Election Distribution Date" has the meaning assigned to such term in
Section 3.7(c).
"Eligible Deposit Account" means either (a) a segregated account with
an Eligible Institution or (b) a segregated trust account with the corporate
trust department of a depository institution organized under the laws of the
United States of America or any one of the states thereof or the District of
Columbia (or any U.S. branch of a foreign bank), having corporate trust
powers and acting as trustee for funds deposited in such account, so long as
any of the securities of such depository institution has a long-term
unsecured debt rating from each Rating Agency of at least A-3 or its
equivalent. An Eligible Deposit Account may be maintained with a Liquidity
Provider so long as such Liquidity Provider is an Eligible Institution (as
defined below); provided that such Liquidity Provider shall have waived all
rights of set-off and counterclaim with respect to such account.
"Eligible Institution" means, subject to the last sentence of
subsection 2.2(c), (a) the corporate trust department of the Subordination
Agent or any Trustee, as applicable, or (b) a depository institution
organized under the laws of the United States of America or any one of the
states thereof or the District of Columbia (or any U.S. branch of a foreign
bank), which has a long-term unsecured debt rating from each Rating Agency of
at least A-3 or its equivalent.
"Eligible Investments" means (a) investments in obligations of, or
guaranteed by, the United States Government having maturities no later than
90 days following the date of such investment, (b) investments in open market
commercial paper of any corporation incorporated under the laws of the United
States of America or any state thereof with a short-term unsecured debt
rating issued by Xxxxx'x and Standard & Poor's of at least A-1 and P-1,
respectively, and, if rated by Fitch, F-1, having maturities no later than 90
days following the date of such investment or (c) investments in negotiable
certificates of deposit, time deposits, banker's acceptances, commercial
paper or other direct obligations of, or obligations guaranteed by,
commercial banks organized under the laws of the United States or of any
political subdivision thereof (or any U.S. branch of a foreign bank) with
issuer ratings of at least B/C by Thomson Bankwatch, having maturities no
later than 90 days following the date of such investment; provided, however,
that (x) all Eligible Investments that are bank obligations shall be
denominated in U.S. dollars; and (y) the aggregate amount of Eligible
Investments at any one time that are bank obligations issued by any one bank
shall not be in excess of 5% of such bank's capital surplus; provided further
that (1) any investment of the types described in clauses (a), (b) and (c)
above may be made through a repurchase agreement in commercially reasonable
form with a bank or other financial institution qualifying as an Eligible
Institution so long as such investment is held by a third party custodian
also qualifying as an Eligible Institution, and (2) all such investments set
forth in (a), (b) and (c) above mature no later than the Business Day
immediately preceding the next Regular Distribution Date; provided further,
however, that in the case of any Eligible Investment issued by a domestic
branch of a foreign bank, the income from such investment shall be from
sources within the United States for purposes of the Code. Notwithstanding
the foregoing, no investment of the types described in clause (b) or (c)
above which is issued or guaranteed by a Liquidity Provider or Northwest or
any of their respective Affiliates shall be an Eligible Investment.
"Eligible Provider" has the meaning assigned to such term in
Section 2.6(c).
"Equipment Notes" means, at any time, the Series G Equipment Notes
and the Series C Equipment Notes, collectively, and in each case, any
Equipment Notes issued in exchange therefor or replacement thereof pursuant
to the terms of the Indentures.
"Escrow Agent" means First Security Bank, National Association, as
escrow agent under each Escrow and Paying Agent Agreement, together with its
successors in such capacity.
"Escrow and Paying Agent Agreement" shall mean, with respect to any
Class, the Escrow and Paying Agent Agreement pertaining to such Class, dated
the date hereof, among the Escrow Agent, the Underwriters, the Trustee for
such Class and the Paying Agent, as the same may be amended, modified or
supplemented from time to time in accordance with the terms thereof.
"Escrow Receipts" has the meaning assigned to such term in the Escrow
and Paying Agent Agreement for the Class G Trust.
"Excess Reimbursement Obligations" means, (a) in the event of any
Policy Provider Election, the portion of the Policy Provider Obligations that
represents interest on the Series G Equipment Note in respect of which the
Policy Provider Election has been made in excess of 18 months of interest at
the interest rate applicable to such Series G Equipment Note and (b) any
interest on the Liquidity Obligations in respect of the Liquidity Facilities
paid by the Policy Provider to the Liquidity Providers from and after the end
of the 18-month period referred to in Section 3.7(c) hereof.
"Expected Distributions" means, with respect to the Certificates of
any Trust on any Current Distribution Date, the sum of (x) accrued and unpaid
interest on such Certificates (excluding interest, if any, payable with
respect to the Deposits related to such Trust) and (y) the difference between
(A) the Pool Balance of such Certificates as of the immediately preceding
Distribution Date (or if the Current Distribution Date is the first
Distribution Date, the original aggregate face amount of the Certificates of
such Trust) and (B) the Pool Balance of such Certificates as of the Current
Distribution Date, calculated on the basis that (1) the principal of the
Equipment Notes held in such Trust has been paid when due (whether at stated
maturity or upon redemption, prepayment, purchase or acceleration or
otherwise) and such payments have been distributed to the holders of such
Certificates and (2) the principal of any Equipment Notes formerly held in
such Trust that have been sold pursuant to this Agreement has been paid in
full and such payments distributed to the Certificateholders, but without
giving effect to any reduction in the Pool Balance as a result of any
distribution attributable to Deposits occurring after the immediately
preceding Distribution Date (or, if the Current Distribution Date is the
first Distribution Date, occurring after the initial issuance of the
Certificates of such Trust). For purposes of calculating Expected
Distributions, any premium paid on the Equipment Notes held in any Trust
which has not been distributed to the Certificateholders of such Trust (other
than such premium or a portion thereof applied to the payment of interest on
the Certificates of such Trust or the reduction of the Pool Balance of such
Trust) shall be added to the amount of such Expected Distributions.
"Expiry Date" with respect to any Liquidity Facility, shall have the
meaning set forth in such Liquidity Facility.
"Fee Letter" with respect to any Liquidity Facility, shall have the
meaning set forth in such Liquidity Facility.
"Final Distributions" means, with respect to the Certificates of any
Trust on any Distribution Date, the sum of (a) the aggregate amount of all
accrued and unpaid interest on such Certificates (excluding interest, if any,
payable with respect to the Deposits relating to such Trust) and (b) the Pool
Balance of such Certificates as of the immediately preceding Distribution
Date (less the amount of the Deposits for such Class of Certificates as of
such preceding Distribution Date other than any portion of such Deposits
thereafter used to acquire Equipment Notes pursuant to the Note Purchase
Agreement). For purposes of calculating Final Distributions with respect to
the Certificates of any Trust, any premium paid on the Equipment Notes held
in such Trust which has not been distributed to the Certificateholders of
such Trust (other than such premium or a portion thereof applied to the
payment of interest on the Certificates of such Trust or the reduction of the
Pool Balance of such Trust) shall be added to the amount of such Final
Distributions.
"Final Drawing" means, in respect of a Liquidity Facility, a
borrowing or drawing, other than an Interest Drawing, a Downgrade Drawing or
a Non-Extension Drawing, of all available and undrawn amounts under such
Liquidity Facility in accordance with the provisions thereof.
"Final Legal Distribution Date" means, for the Class G Certificates,
April 1, 2021 and, for the Class C Certificates, October 1, 2011.
"Financing Agreement" means each of the Participation Agreements and
the Note Purchase Agreement.
"Final Order" has the meaning assigned to such term in the Policy.
"Fitch" means Fitch Investors Service, L.P.
"Guarantor" means Northwest Airlines Corporation, a Delaware
corporation and its successors and assigns.
"Indemnification Agreement" means the Indemnification Agreement dated
as of June 21, 2000, among Northwest, the Underwriters and the Policy
Provider, as the same may be amended, supplemented or otherwise modified from
time to time in accordance with its terms.
"Indenture" means each of the Trust Indentures entered into by the
Loan Trustee, and the Owner Trustee or Northwest, pursuant to the Note
Purchase Agreement, in each case as the same may be amended, supplemented or
otherwise modified from time to time in accordance with its terms.
"Indenture Default" means, with respect to any Indenture, any Event
of Default (as such term is defined in such Indenture) thereunder.
"Interest Drawing" has the meaning assigned to such term in Section
3.6(a).
"Investment Earnings" means investment earnings on funds on deposit
in the Trust Accounts net of losses and investment expenses of the
Subordination Agent in making such investments.
"Lease" means, with respect to any Indenture relating to a Leased
Aircraft, the "Lease" referred to therein.
"Leased Aircraft" has the meaning assigned to such term in the
preliminary statements of this Agreement.
"Leased Aircraft Indenture" means, with respect to each Leased
Aircraft, the Indenture pertaining to such Aircraft.
"Lien" means any mortgage, pledge, lien, charge, claim, disposition
of title, encumbrance, lease, sublease, sub-sublease or security interest of
any kind, including, without limitation, any thereof arising under any
conditional sales or other title retention agreement.
"Liquidity Event of Default" with respect to any Liquidity Facility,
has the meaning assigned to such term in such Liquidity Facility.
"Liquidity Expenses" means all Liquidity Obligations other than
(i) the principal amount of any Drawings under the Liquidity Facilities and
(ii) any interest accrued on any Liquidity Obligations.
"Liquidity Facility" means, at any time, the Class G Liquidity
Facility or the Class C Liquidity Facility, as applicable.
"Liquidity Obligations" means all principal, interest, fees and other
amounts owing to the Liquidity Providers under the Liquidity Facilities, the
Fee Letter, the Tax Letter and Section 7 of the Participation Agreements.
"Liquidity Provider" means, at any time, the Class G Liquidity
Provider or the Class C Liquidity Provider, as applicable.
"Loan Trustee" means, with respect to any Indenture, the indenture
trustee thereunder.
"LTV Appraisal" means a current fair market appraisal (which may be a
"desktop" appraisal) performed by any Appraiser or any other nationally
recognized appraiser on the basis of an arm's-length transaction between an
informed and willing purchaser under no compulsion to buy and an informed and
willing seller under no compulsion to sell and both having knowledge of all
relevant facts.
"LTV Collateral Amount" of any Leased Aircraft or Owned Aircraft for
any Class of Certificates on any Distribution Date means the lesser of (i)
the LTV Ratio for such Class of Certificates multiplied by the Appraised
Current Market Value of such Aircraft (or with respect to any such Aircraft
which has suffered an Event of Loss under and as defined in the relevant
Lease (in the case of a Leased Aircraft) or Indenture (in the case of an
Owned Aircraft), the amount of the insurance proceeds paid to the related
Loan Trustee in respect thereof to the extent then held by such Loan Trustee
(and/or on deposit in the Special Payments Account) or payable to such Loan
Trustee in respect thereof) and (ii) the outstanding principal amount of the
Equipment Notes held by the Subordination Agent secured by such Aircraft
after giving effect to any principal payments of such Equipment Notes on or
before such Distribution Date.
"LTV Ratio" means, for the Class G Certificates, 60% and, for the
Class C Certificates, 66%.
"Minimum Sale Price" means, with respect to any Aircraft or the
Equipment Notes issued in respect of such Aircraft, at any time, the lesser
of (a) 75% of the Appraised Current Market Value of such Aircraft and (b) the
aggregate outstanding principal amount of such Equipment Notes, plus accrued
and unpaid interest thereon.
"Moody's" means Xxxxx'x Investors Service, Inc.
"New Aircraft" has the meaning assigned to such term in the Note
Purchase Agreement.
"Non-Controlling Parties" means, collectively, at any time, the
Policy Provider, the Trustees and the Liquidity Providers which are not the
Controlling Party at such time.
"Non-Extended Facility" has the meaning assigned to such term in
Section 3.6(d).
"Non-Extension Drawing" has the meaning assigned to such term in
Section 3.6(d).
"Non-Performing Equipment Note" means an Equipment Note issued
pursuant to an Indenture that is not a Performing Equipment Note.
"Northwest" means Northwest Airlines, Inc., a Minnesota corporation,
and its successors and assigns.
"Northwest Bankruptcy Event" means the occurrence and continuation of
any of the following:
(a) the commencement of an involuntary case or other
proceeding in respect of Northwest in an involuntary case under the
federal bankruptcy laws, as now or hereafter constituted, or any
other applicable federal or state bankruptcy, insolvency or other
similar law in the United States or seeking the appointment of a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or
similar official) of Northwest or for all or substantially all of its
property, or seeking the winding-up or liquidation of its affairs and
the continuation of any such case or other proceeding undismissed and
unstayed for a period of ninety (90) consecutive days or an order,
judgment or decree shall be entered in any proceeding by any court of
competent jurisdiction appointing, without the consent of Northwest,
a receiver, trustee or liquidator of Northwest, or of any substantial
part of its property, or sequestering any substantial part of the
property of Northwest and any such order, judgment or decree or
appointment or sequestration shall be final or shall remain in force
undismissed, unstayed or unvacated for a period of ninety (90) days
after the date of entry thereof; or
(b) the commencement by Northwest of a voluntary case
under the federal bankruptcy laws, as now constituted or hereafter
amended, or any other applicable federal or state bankruptcy,
insolvency or other similar law in the United States, or the consent
by Northwest to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian, sequestrator (or
other similar official) of Northwest or for all or substantially all
of its property, or the making by Northwest of any assignment for the
benefit of creditors or the taking by Northwest of any corporate
action to authorize any of the foregoing.
"Northwest Provisions" has the meaning provided in Section 9.1(a).
"Note Purchase Agreement" means the Note Purchase Agreement dated as
of June 28, 2000 among Northwest, each Trustee, the Escrow Agent, the
Subordination Agent and the Paying Agent.
"Notice of Avoided Payment" has the meaning assigned to such term in
the Policy.
"Notice of Nonpayment" has the meaning assigned to such term in the
Policy.
"NWA Corp." means Northwest Airlines Corporation (formerly known as
Newbridge Parent Corporation), a Delaware corporation, and its successors and
assigns.
"Officer's Certificate" of any Person means a certification signed by
a Responsible Officer of such Person.
"Operative Agreements" means this Agreement, the Liquidity
Facilities, the Policy, the Policy Provider Agreement, the Policy Fee Letter,
the Fee Letter, the Tax Letter, the Indentures, the Trust Agreements, the
Underwriting Agreement, the Financing Agreements, the Leases, the Equipment
Notes and the Certificates, together with all exhibits and schedules included
with any of the foregoing and each of the other documents and instruments
referred to in the definitions of "Operative Documents" contained in the
Leases or any Owned Aircraft Indenture.
"Outstanding" means, when used with respect to each Class of
Certificates, as of the date of determination, all Certificates of such Class
theretofore authenticated and delivered under the related Trust Agreement,
except:
(i) Certificates of such Class theretofore cancelled by
the Registrar (as defined in such Trust Agreement) or delivered to
the Trustee thereunder or such Registrar for cancellation;
(ii) Certificates of such Class for which money in the
full amount required to make the final distribution with respect to
such Certificates pursuant to Section 11.01 of such Trust Agreement
has been theretofore deposited with the related Trustee in trust for
the holders of such Certificates as provided in Section 4.01 of such
Trust Agreement pending distribution of such money to such
Certificateholders pursuant to such final distribution payment; and
(iii) Certificates of such Class in exchange for or in
lieu of which other Certificates have been authenticated and
delivered pursuant to such Trust Agreement;
provided, however, that in determining whether the holders of the requisite
Outstanding amount of such Certificates have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, any
Certificates owned by Northwest or any of its Affiliates shall be disregarded
and deemed not to be Outstanding, except that, in determining whether such
Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Certificates that
such Trustee knows to be so owned shall be so disregarded. Certificates so
owned that have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to the satisfaction of the applicable Trustee the
pledgee's right so to act with respect to such Certificates and that the
pledgee is not Northwest or any of its Affiliates.
"Overdue Scheduled Payment" means any Scheduled Payment which is not
in fact received by the Subordination Agent within five days of the Scheduled
Payment Date relating thereto.
"Owned Aircraft" has the meaning assigned to such term in the
preliminary statements of this Agreement.
"Owned Aircraft Indenture" means, with respect to each Owned
Aircraft, the Indenture pertaining to such Aircraft.
"Owner Participant" means, with respect to any Indenture pertaining
to a Leased Aircraft, the Owner Participant (as defined therein) and any
permitted successor or assign of such Owner Participant.
"Owner Trustee" means, with respect to any Indenture pertaining to a
Leased Aircraft, the Owner Trustee (as defined therein) not in its individual
capacity but solely as trustee under the related owner trust agreement,
together with any successor trustee appointed pursuant to such owner trust
agreement.
"Participation Agreements" means, with respect to each Indenture, the
Participation Agreements referred to therein, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with its
terms.
"Pass Through Trust Agreement" means the Pass Through Trust
Agreement, dated as of June 3, 1999 by and among the Guarantor, Northwest and
the State Street Bank and Trust Company of Connecticut, National Association,
not in its individual capacity except as expressly provided therein, but
solely as trustee (in such capacity, together with its successors in such
capacity, the "Pass Through Trustee").
"Payee" has the meaning assigned to such term in Section 2.4(e).
"Paying Agent" means State Street Bank and Trust Company, as paying
agent under each Escrow and Paying Agent Agreement, together with its
successors in such capacity.
"Performing Equipment Note" means an Equipment Note issued pursuant
to an Indenture with respect to which no payment default has occurred and is
continuing (without giving effect to any Acceleration thereof); provided that
in the event of a bankruptcy proceeding involving Northwest under Title 11 of
the United States Code (the "Bankruptcy Code"), (i) any payment default
existing during the 60-day period under Section 1110(a)(1)(A) of the
Bankruptcy Code (or such longer period as may apply under Section 1110(b) of
the Bankruptcy Code) (the "Section 1110 Period") shall not be taken into
consideration, unless during the Section 1110 Period the trustee in such
proceeding or Northwest refuses to assume or agree to perform its obligations
under the Lease related to such Equipment Notes (in the case of a Leased
Aircraft) or under the Indenture related to such Equipment Note (in the case
of an Owned Aircraft) and (ii) any payment default occurring after the date
of the order of relief in such proceeding but during the Section 1110 Period
shall not be taken into consideration if such payment default is cured under
Section 1110(a)(1)(B) of the Bankruptcy Code before the later of 30 days
after the date of such default or the expiration of the Section 1110 Period
and (iii) any payment default occurring after the Section 1110 Period will
not be taken into consideration if such payment default is cured before the
end of the grace period, if any, set forth in the related Lease (in the case
of a Leased Aircraft) or Owned Aircraft Indenture (in the case of an Owned
Aircraft).
"Performing Note Deficiency" means any time that less than 65% of the
then aggregate outstanding principal amount of all Equipment Notes are
Performing Equipment Notes.
"Person" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company, trust,
trustee, unincorporated organization or government or any agency or political
subdivision thereof.
"Policy" means the MBIA Financial Guaranty Insurance Policy No. 32575
issued as of the Closing Date, by the Policy Provider in favor of the
Subordination Agent, for the benefit of the Class G Certificateholders, as
amended, supplemented or otherwise modified from time to time in accordance
with its terms.
"Policy Account" means the Eligible Deposit Account established by
the Subordination Agent pursuant to Section 2.2(a)(iii).
"Policy Drawing" means any payment of a claim under the Policy.
"Policy Expenses" means all amounts (including amounts in respect of
expenses) owing to the Policy Provider under the Policy Provider Agreement,
the Participation Agreements or the Note Purchase Agreement other than (i)
any amounts due under the Policy Fee Letter, (ii) the amount of any Policy
Drawing and any interest accrued thereon, (iii) reimbursement of and interest
on the Liquidity Obligations paid to the Liquidity Provider by the Policy
Provider, (iv) any indemnity payments owed to the Policy Provider, (v) any
amounts that the Policy Provider is entitled to receive by virtue of the
subrogation rights of the Policy Provider hereunder or under the Escrow and
Paying Agent Agreement for the Class G Trust, including, without limitation,
fees and expenses incurred in connection with the enforcement of such rights
and (vi) any Excess Reimbursement Obligations.
"Policy Fee Letter" means the fee letter, dated as of June 28, 2000
from the Policy Provider to Northwest and the Subordination Agent setting
forth the Premium and certain other amounts payable in respect of the Policy.
"Policy Provider" means MBIA Insurance Corporation, or any successor
thereto, as issuer of the Policy.
"Policy Provider Agreement" means the Insurance and Indemnity
Agreement, dated as of the date of issuance of the Certificates, among the
Subordination Agent, the Class G Trustee, Northwest and the Policy Provider
pursuant to which, among other things, the Subordination Agent agrees to
reimburse the Policy Provider for amounts paid pursuant to claims made under
the Policy.
"Policy Provider Default" means the occurrence of any of the
following events (a) the Policy Provider fails to make a payment required
under the Policy in accordance with its terms and such failure remains
unremedied for two Business Days following the delivery of Written Notice of
such failure to the Policy Provider or (b) the Policy Provider (i) files any
petition or commences any case or proceeding under any provisions of any
federal or state law relating to insolvency, bankruptcy, rehabilitation,
liquidation or reorganization, (ii) makes a general assignment for the
benefit of its creditors or (iii) has an order for relief entered against it
under any federal or state law relating to insolvency, bankruptcy,
rehabilitation, liquidation or reorganization that is final and
nonappealable, or (c) a court of competent jurisdiction, the New York
Insurance Department or another competent regulatory authority enters a final
and nonappealable order, judgment or decree (i) appointing a custodian,
trustee, agent or receiver for the Policy Provider or for all or any material
portion of its property or (ii) authorizing the taking of possession by a
custodian, trustee, agent or receiver of the Policy Provider (or taking of
possession of all or any material portion of the Policy Provider's property).
"Policy Provider Election" has the meaning assigned to such term in
Section 3.7(c).
"Policy Provider Obligations" means all reimbursement and other
amounts, including fees and indemnities, due to the Policy Provider under the
Policy Provider Agreement, but shall not include (i) any amounts due under
the Policy Fee Letter, (ii) any interest on Policy Drawings except, if the
Class G Liquidity Provider has failed to honor its obligation to make a
payment on any Interest Drawing in respect of the Class G Certificates,
interest on the portion of any Policy Drawing made to cover the shortfall
attributable to such failure by the Liquidity Provider in an amount equal to
the amount of interest that would have accrued on such Interest Drawing if
such Interest Drawing had been made at the interest rate applicable to such
Interest Drawing until such Policy Drawing has been repaid in full, up to a
maximum of three such Policy Drawings and (iii) any amounts that the Policy
Provider is entitled to receive by virtue of the subrogation rights of the
Policy Provider hereunder or under the Escrow Agreement for the Class G
Trust, including without limitation, fees and expenses incurred in connection
with the enforcement of such rights. For the avoidance of doubt, and subject
to the effect of payment priorities with respect to Excess Reimbursement
Obligations, Policy Provider Obligations include reimbursement of and
interest on the Liquidity Obligations in respect of the Liquidity Facilities
paid by the Policy Provider to the Liquidity Provider.
"Policy Provider Rating" shall mean the respective ratings by each of
the Ratings Agencies of the Policy Provider's financial strength and/or
claims paying ability in respect of the Policy.
"Policy Provider Threshold Rating" shall mean a Policy Provider
Rating of Aaa by Moody's and AAA by Standard & Poor's.
"Pool Balance" means, with respect to each Trust or the Certificates
issued by any Trust, as of any date, (i) the original aggregate face amount
of the Certificates of such Trust which, in the case of the Class G Trust, is
$476,319,000 and in the case of the Class C Trust is $45,882,000 less (ii)
the aggregate amount of all payments made in respect of the Certificates of
such Trust or in respect of Deposits relating to such Trust other than
payments made in respect of interest or premium thereon or reimbursement of
any costs and expenses in connection therewith. The Pool Balance for each
Trust or the Certificates issued by any Trust as of any Distribution Date
shall be computed after giving effect to any special distribution with
respect to unused Deposits, any payment of principal, if any, on the
Equipment Notes or other Trust Property held in such Trust and the
distribution thereof to be made on such date and, with respect to the Class G
Trust, payments under the Policy for the benefit of the Class G
Certificateholders (other than in respect of the Liquidity Facilities and
interest on the Class G Certificates).
"Premium" means the sum of (a) the premium payable in respect of the
Policy on the Closing Date and on each Distribution Date thereafter in an
amount equal to 1/2 of the product of (i) the Premium Percentage and (ii)
with respect to the payment to be made on the Closing Date, the Pool Balance
of the Class G Certificates on the Closing Date, or with respect to the
payments to be made on each Distribution Date, the Pool Balance of the Class
G Certificates on such Distribution Date after giving effect to any
distributions to be made on such Distribution Date and (b) any additional
amounts in connection with the prepayment of the Class G Certificates as due
and when due in accordance with the Policy Fee Letter; provided, however, the
Premium payable on the Closing Date shall be pro rated from the Closing Date
to the first Distribution Date (based upon a 360 day year of twelve 30 day
months).
"Premium Percentage" shall have the meaning set forth in the Policy
Fee Letter.
"Proceeding" means any suit in equity, action at law or other
judicial or administrative proceeding.
"Provider Incumbency Certificate" has the meaning assigned to such
term in Section 2.5(c).
"Provider Representatives" has the meaning assigned to such term in
Section 2.5(c).
"PTC Event of Default" means, with respect to each Trust Agreement,
the failure to pay within 10 Business Days of the due date thereof: (i) the
outstanding Pool Balance of the applicable Class of Certificates on the Final
Legal Distribution Date for such Class (unless, in the case of the Class G
Certificates, the Subordination Agent shall have made a drawing under the
Policy in an aggregate amount sufficient to pay such outstanding Pool Balance
and shall have distributed such amount to the Class G Trustee) or (ii)
interest due on such Certificates on any Distribution Date (unless, in the
case of the Class G or Class C Certificates, the Subordination Agent shall
have made an Interest Drawing or a withdrawal from the Cash Collateral
Account or a drawing under the Policy with respect thereto in an amount
sufficient to pay such interest and shall have distributed such amount to the
Trustee entitled thereto).
"Rating Agencies" means, collectively, at any time, each nationally
recognized rating agency which shall have been requested to rate the
Certificates and which shall then be rating the Certificates. Initially, the
Rating Agencies shall consist of Moody's and Standard & Poor's.
"Ratings Confirmation" means, with respect to any action proposed to
be taken, a written confirmation from each of the Rating Agencies that such
action would not result in (i) a reduction of the rating for any Class of
Certificates below the then current rating for such Class of Certificates or
(ii) a withdrawal or suspension of the rating of any Class of Certificates.
"Regular Distribution Dates" means each April 1 and October 1,
commencing on October 1, 2000; provided, however, that, if any such day shall
not be a Business Day, the related distribution shall be made on the next
succeeding Business Day without additional interest.
"Replacement Liquidity Facility" means, for any Trust, an irrevocable
revolving credit agreement in substantially the form of the initial Liquidity
Facility for such Trust, including reinstatement provisions or in such other
form (which may include a letter of credit) as shall permit the Rating
Agencies to confirm in writing their respective ratings then in effect for
the related Certificates (before downgrading of such ratings, if any, as a
result of the circumstances identified in Section 3.6(c) without regard to
the Policy), and, in the case of the Class G Liquidity Facility only, be
consented to by the Policy Provider, which consent shall not be unreasonably
withheld or delayed, in a face amount (or an aggregate face amount) equal to
the Required Amount for such Liquidity Facility and issued by a Replacement
Liquidity Provider, provided that, if a form of Liquidity Facility that is
not substantially in the form of the replaced Liquidity Facility is to be
used, Northwest shall have received a satisfactory opinion of tax counsel
satisfactory to Northwest with respect to such form of Replacement Liquidity
Facility (and a copy of such opinion shall be furnished to the Subordination
Agent).
"Replacement Liquidity Provider" means a Person having unsecured debt
ratings which are equal to or higher than the Threshold Rating.
"Required Amount" means, with respect to each Liquidity Facility and
each Cash Collateral Account related thereto, for any day, the sum of the
aggregate amount of interest, calculated at the rate per annum equal to the
Stated Interest Rate for the related Class of Certificates, that would be
payable on such Class of Certificates on each of the three successive Regular
Distribution Dates immediately following such day or, if such day is a
Regular Distribution Date, on such day and the succeeding two Regular
Distribution Dates, in each case calculated on the basis of the Pool Balance
of such Class of Certificates on such date and without regard to expected
future payments of principal on such Class of Certificates. The Pool Balance
for purposes of the definition of Required Amount with respect to the Class G
Liquidity Facility shall, in the event of any Policy Provider Election, be
deemed to be reduced by an amount (if positive) by which (a) the outstanding
principal balance of the Series G Equipment Note in respect of which such
Policy Provider Election has been made shall exceed (b) the amount of any
Policy Drawings previously paid by the Policy Provider in respect of
principal on such Series G Equipment Note.
"Responsible Officer" means (i) with respect to the Subordination
Agent and each of the Trustees, any officer in the corporate trust
administration department of the Subordination Agent or such Trustee or any
other officer customarily performing functions similar to those performed by
the Persons who at the time shall be such officers, respectively, or to whom
any corporate trust matter is referred because of his knowledge of and
familiarity with a particular subject and (ii) with respect to each Liquidity
Provider, any authorized officer or agent of such Liquidity Provider.
"Scheduled Payment" means, with respect to any Equipment Note,
(i) any payment of principal and interest on such Equipment Note (other than
an Overdue Scheduled Payment) due from the obligor thereon or (ii) any
payment of interest on the corresponding Class of Certificates with funds
drawn under any Liquidity Facility (or under the Policy in the case of any
Series G Equipment Notes), which payment represents the installment of
principal at the stated maturity of such installment of principal on such
Equipment Note, the payment of regularly scheduled interest accrued on the
unpaid principal amount of such Equipment Note, or both; provided that any
payment of principal of, premium, if any, or interest resulting from the
redemption or purchase of any Equipment Note shall not constitute a Scheduled
Payment.
"Scheduled Payment Date" means, with respect to any Scheduled
Payment, the date on which such Scheduled Payment is scheduled to be made.
"Section 2.4(b) Fraction" has the meaning assigned to such term in
Section 2.4(b)(i).
"Series C Equipment Notes" means the 9.179% Series C Equipment Notes
issued pursuant to each Indenture by the related Owner Trustee or Northwest,
as the case may be, and authenticated by the Loan Trustee thereunder, and any
such Equipment Notes issued in exchange therefor or replacement thereof
pursuant to the terms of such Indenture.
"Series D Equipment Notes" means the equipment notes, if any, issued
pursuant to any Indenture by the related Owner Trustee or Northwest, as the
case may be, and authenticated by the Loan Trustee thereunder, and designated
as "Series D" thereunder, and any such equipment notes issued in exchange
therefor or replacement thereof pursuant to the terms of such Indenture.
"Series G Equipment Notes" means the 8.072% Series G Equipment Notes
issued pursuant to each Indenture by the related Owner Trustee or Northwest,
as the case may be and authenticated by the Loan Trustee thereunder, and any
such Equipment Notes issued in exchange therefor or replacement thereof
pursuant to the terms of such Indenture.
"Special Distribution Date" means, with respect to any Special
Payment, the date chosen by the Subordination Agent pursuant to Section
2.4(a) or Section 3.7 for the distribution of such Special Payment in
accordance with this Agreement or the Election Distribution Date; provided,
however, that, if any such day shall not be a Business Day, the related
distribution shall be made on the next succeeding Business Day without
additional interest.
"Special Payment" means any payment (other than a Scheduled Payment)
in respect of, or any proceeds of, any Equipment Note, Trust Indenture Estate
or Collateral, including Overdue Scheduled Payments, payments in respect of
the redemption or repurchase of any Equipment Note and payments in respect of
the sale of any Equipment Note to the related Owner Trustee, Owner
Participant or any other Person.
"Special Payments Account" means the Eligible Deposit Account created
pursuant to Section 2.2 as a sub-account to the Collection Account.
"Specified Investments" has the meaning assigned to such term in the
Pass Through Trust Agreement.
"Standard & Poor's" means Standard & Poor's Ratings Services, a
division of XxXxxx-Xxxx Inc.
"State Street of Connecticut" has the meaning assigned to it in the
preamble to this Agreement.
"Stated Amount" with respect to any Liquidity Facility, means the
Maximum Commitment (as defined in such Liquidity Facility) of the applicable
Liquidity Provider thereunder.
"Stated Expiration Date" has the meaning specified in Section 3.6(d).
"Stated Interest Rate" means (i) with respect to the Class G
Certificates, 8.072% per annum and (ii) with respect to the Class C
Certificates, 9.179% per annum.
"Subordination Agent" has the meaning assigned to it in the preamble
to this Agreement.
"Subordination Agent Incumbency Certificate" has the meaning assigned
to such term in Section 2.5(a).
"Subordination Agent Representatives" has the meaning assigned to
such term in Section 2.5(a).
"Tax" and "Taxes" mean any and all taxes, fees, levies, duties,
tariffs, imposts, and other charges of any kind (together with any and all
interest, penalties, loss, damage, liability, expense, additions to tax and
additional amounts or costs incurred or imposed with respect thereto) imposed
or otherwise assessed by the United States or by any state, local or foreign
government (or any subdivision or agency thereof) or other taxing authority,
including, without limitation: taxes or other charges on or with respect to
income, franchises, windfall or other profits, gross receipts, property,
sales, use, capital stock, payroll, employment, social security, workers'
compensation, unemployment compensation, or net worth and similar charges;
taxes or other charges in the nature of excise, withholding, ad valorem,
stamp, transfer, value added, taxes on goods and services, gains taxes,
license, registration and documentation fees, customs duties, tariffs, and
similar charges.
"Tax Letter" means the tax letter dated as of June 28, 2000, between
the Company and CSFB.
"Threshold Rating" means the short-term unsecured debt rating of P-1
by Moody's and A-1 by Standard & Poor's with respect to the Liquidity
Provider for each Trust.
"Treasury Regulations" means regulations, including proposed or
temporary regulations, promulgated under the Code. References herein to
specific provisions of proposed or temporary regulations shall include
analogous provisions of final Treasury Regulations or other successor
Treasury Regulations.
"Triggering Event" means (x) the occurrence of an Indenture Default
under all of the Indentures resulting in a PTC Event of Default with respect
to the most senior Class of Certificates then Outstanding, (y) the
Acceleration of all of the outstanding Equipment Notes (provided that, with
respect to the period prior to the Delivery Period Expiry Date, such
Equipment Notes have an aggregate principal balance in excess of
$300,000,000) or (z) the occurrence of a Northwest Bankruptcy Event.
"Trust" means either of the Class G Trust or the Class C Trust.
"Trust Accounts" has the meaning assigned to such term in Section
2.2(a).
"Trust Agreement" means either of the Class G Trust Agreement or
Class C Trust Agreement.
"Trust Indenture Estate" has the meaning assigned to such term in
each Indenture.
"Trustee" means any of the Class G Trustee or the Class C Trustee.
"Trustee Incumbency Certificate" has the meaning assigned to such
term in Section 2.5(b).
"Trustee Representatives" has the meaning assigned to such term in
Section 2.5(b).
"Underwriters" means Credit Suisse First Boston Corporation, Xxxxxx
Xxxxxxx & Co. Incorporated, Xxxxxxx Xxxxx Barney Inc., Chase Securities Inc.
and U.S. Bancorp Xxxxx Xxxxxxx Inc.
"Underwriting Agreement" means the Underwriting Agreement dated as of
June 21, 2000, by and among the Underwriters, Northwest and the Guarantor,
relating to the purchase of the Certificates by the Underwriters, as the same
may be amended, supplemented or otherwise modified from time to time in
accordance with its terms.
"Withdrawal Notice" has the meaning assigned to such term in Section
3.6(d).
"Written Notice" means, from (i) any Trustee, Liquidity Provider or
the Policy Provider, a written instrument executed by the Designated
Representative of such Person, and (ii) the Subordination Agent, a written
instrument executed by a Person designated in the Officer's Certificate of
the Subordination Agent delivered on the Closing Date. An invoice delivered
by a Liquidity Provider pursuant to Section 3.1 in accordance with its normal
invoicing procedures shall constitute Written Notice under such Section.
ARTICLE II
TRUST ACCOUNTS; CONTROLLING PARTY
SECTION 2.1 Agreement to Terms of Subordination; Payments
from Monies Received Only. (a) Each Trustee hereby acknowledges and agrees
to the terms of subordination and distribution set forth in this Agreement in
respect of each Class of Certificates and agrees to enforce such provisions
and cause all payments in respect of the Equipment Notes and the Liquidity
Facilities and the Policy to be applied in accordance with the terms of this
Agreement. In addition, each Trustee hereby agrees to cause the Equipment
Notes purchased by the related Trust to be registered in the name of the
Subordination Agent or its nominee, as agent and trustee for such Trustee, to
be held in trust by the Subordination Agent solely for the purpose of
facilitating the enforcement of the subordination and other provisions of
this Agreement.
(b) Each of the Trustees and the Subordination Agent hereby
agrees and, as provided in each Trust Agreement, each Certificateholder, by
its acceptance of a Certificate, each Liquidity Provider, by entering into
the Liquidity Facility to which it is a party, and the Policy Provider, by
entering into the Policy Provider Agreement, has agreed to look solely to
such amounts to the extent available for distribution to it as provided in
this Agreement and to the relevant Deposits and that none of the Trustees,
Owner Trustees, Loan Trustees, Owner Participants nor the Subordination Agent
is personally liable to any of them for any amounts payable or any liability
under this Agreement, any Trust Agreement, any Liquidity Facility, the Policy
Provider Agreement or such Certificate, except (in the case of the
Subordination Agent) as expressly provided herein or (in the case of the
Trustees) as expressly provided in each Trust Agreement or (in the case of
the Owner Trustees and the Loan Trustees) as expressly provided in any
Operative Agreement.
SECTION 2.2 Trust Accounts. (a) Upon the execution of
this Agreement, the Subordination Agent shall establish and maintain in its
name (i) the Collection Account as an Eligible Deposit Account, bearing a
designation clearly indicating that the funds deposited therein are held in
trust for the benefit of the Trustees, the Certificateholders, the Liquidity
Providers and the Policy Provider, (ii) as a sub-account in the Collection
Account, the Special Payments Account as an Eligible Deposit Account, bearing
a designation clearly indicating that the funds deposited therein are held in
trust for the benefit of the Trustees, the Certificateholders, the Liquidity
Providers and the Policy Provider and (iii) the Policy Account as an Eligible
Deposit Account bearing a designation clearly indicating that the funds
deposited therein are held in trust for the benefit of the Class G Trustee
and the Class G Certificateholders. The Subordination Agent shall establish
and maintain the Cash Collateral Accounts pursuant to and under the
circumstances set forth in Section 3.6(f) hereof. Upon such establishment
and maintenance under Section 3.6(f) hereof, the Cash Collateral Accounts
shall, together with the Collection Account, constitute the "Trust Accounts"
hereunder.
(b) Funds on deposit in the Trust Accounts shall be
invested and reinvested by the Subordination Agent in Eligible Investments
selected by the Subordination Agent if such investments are reasonably
available and have maturities no later than the earlier of (i) 90 days
following the date of such investment and (ii) the Business Day immediately
preceding the Regular Distribution Date or the date of the related
distribution pursuant to Section 2.4 hereof, as the case may be, next
following the date of such investment; provided, however, that following the
making of a Downgrade Drawing or a Non-Extension Drawing under any Liquidity
Facility, the Subordination Agent shall invest and reinvest such amounts in
Eligible Investments at the direction of the Liquidity Provider funding such
Drawing and the Subordination Agent shall use reasonable efforts to cause
such amounts to be invested in Specified Investments which yield at least an
amount equal to the interest (excluding the Applicable Margin (as defined in
the applicable Liquidity Facility)) that is payable to such Liquidity
Provider in respect of such amounts pursuant to Section 3.7 of the relevant
Liquidity Facility (it being understood that it may not be feasible to obtain
such a yield). Unless otherwise expressly provided in this Agreement, any
Investment Earnings shall be deposited in the Collection Account when
received by the Subordination Agent and shall be applied by the Subordination
Agent in the same manner as the principal amount of such investment is to be
applied and any losses shall be charged against the principal amount
invested, in each case net of the Subordination Agent's reasonable fees and
expenses in making such investments. The Subordination Agent shall not be
liable for any loss resulting from any investment, reinvestment or
liquidation required to be made under this Agreement other than by reason of
its willful misconduct or gross negligence or, with respect to the handling
or transfer of funds, ordinary negligence. Eligible Investments and any
other investment required to be made hereunder shall be held to their
maturities except that any such investment may be sold (without regard to its
maturity) by the Subordination Agent without instructions whenever such sale
is necessary to make a distribution required under this Agreement.
Uninvested funds held hereunder shall not earn or accrue interest.
(c) The Subordination Agent shall possess all right, title
and interest in all funds on deposit from time to time in the Trust Accounts
and in all proceeds thereof (including all income thereon, except as
otherwise provided herein with respect to Investment Earnings). The Trust
Accounts shall be held in trust by the Subordination Agent under the sole
dominion and control of the Subordination Agent for the benefit of the
Trustees, the Certificateholders, the Liquidity Providers and the Policy
Provider, as the case may be. If, at any time, any of the Trust Accounts
ceases to be an Eligible Deposit Account, the Subordination Agent shall
within 10 Business Days (or such longer period, not to exceed 30 calendar
days, to which the Policy Provider and each Rating Agency may consent)
establish a new Collection Account, Special Payments Account, Policy Account
or Cash Collateral Account, as the case may be, as an Eligible Deposit
Account and shall transfer any cash and/or any investments to such new
Collection Account, Special Payments Account, Policy Account or Cash
Collateral Account, as the case may be. So long as the Subordination Agent
is an Eligible Institution, the Trust Accounts shall be maintained with it as
Eligible Deposit Accounts.
SECTION 2.3 Deposits to the Collection Account and Special
Payments Account. (a) The Subordination Agent shall, upon receipt thereof,
deposit in the Collection Account all Scheduled Payments received by it
(other than any Scheduled Payment which by the express terms hereof is to be
deposited to the Policy Account or a Cash Collateral Account).
(b) The Subordination Agent shall, on each date when one or
more Special Payments are made to the Subordination Agent as holder of the
Equipment Notes, deposit in the Special Payments Account the aggregate amount
of such Special Payments.
SECTION 2.4 Distributions of Special Payments. (a) Notice
of Special Payment. Except as provided in Section 2.4(e), upon receipt by
the Subordination Agent, as registered holder of the Equipment Notes, of any
notice of a Special Payment (or, in the absence of any such notice, upon
receipt by the Subordination Agent of a Special Payment), the Subordination
Agent shall promptly give notice thereof to each Trustee, the Liquidity
Providers and the Policy Provider. The Subordination Agent shall promptly
calculate the amount of the redemption or purchase of Equipment Notes or the
amount of any Overdue Scheduled Payment, as the case may be, comprising such
Special Payment under the applicable Indenture or Indentures and shall
promptly send to each Trustee and the Liquidity Provider a Written Notice of
such amount and the amount allocable to each Trust. Such Written Notice
shall also set the distribution date for such Special Payment (a "Special
Distribution Date"), which, subject to Section 3.7, shall be a Business Day
which follows the later to occur of (x) the 15th day after the date of such
Written Notice or (y) the date the Subordination Agent has received or
expects to receive such Special Payment. Amounts on deposit in the Special
Payments Account shall be distributed in accordance with Sections 2.4(b) and
2.4(c) hereof, as applicable.
(b) (i) Redemptions and Purchases of Equipment Notes. So
long as no Triggering Event shall have occurred (whether or not continuing),
the Subordination Agent shall make distributions pursuant to this Section
2.4(b) of amounts on deposit in the Special Payments Account on account of
the redemption or purchase (including, without limitation, a purchase
resulting from the sale of the Equipment Notes permitted by Article IV
hereof) of all of the Equipment Notes issued pursuant to an Indenture on the
Special Distribution Date for such Special Payment in the following order of
priority:
first, such amount as shall be required to pay (A) the
aggregate amount of all accrued and unpaid Liquidity Expenses and
Policy Expenses then in arrears ("past due amounts") plus (B) the
product of (x) the aggregate amount of all accrued and unpaid
Liquidity Expenses and Policy Expenses not in arrears to such Special
Distribution Date multiplied by (y) a fraction, the numerator of
which is the aggregate outstanding principal amount of Equipment
Notes being redeemed, purchased or prepaid on such Special
Distribution Date and the denominator of which is the aggregate
outstanding principal amount of all Equipment Notes (the "Section
2.4(b) Fraction") ("accrued amounts"), shall be distributed to the
relevant Liquidity Providers and the Policy Provider first in
satisfaction of any past due amounts then in satisfaction of the
accrued amounts, in each case, pari passu on the basis of the amount
of Liquidity Expenses and Policy Expenses, owed to each Liquidity
Provider and the Policy Provider;
second, such amount as shall be required to pay (i) (A) all
accrued and unpaid interest then in arrears on all Liquidity
Obligations (at the rate provided in the applicable Liquidity
Facility, determined after giving effect to payments made by the
Policy Provider to each Liquidity Provider, if any, in respect of
interest on drawings under the Liquidity Facilities) plus (B) the
product of (x) the aggregate amount of all accrued and unpaid
interest on all Liquidity Obligations not in arrears to such Special
Distribution Date (at the rate provided in the applicable Liquidity
Facility and determined after giving effect to payments made by the
Policy Provider to each Liquidity Provider, if any, in respect of
interest on drawings under the Liquidity Facilities) multiplied by
(y) the Section 2.4(b) Fraction, to the Liquidity Providers pari
passu on the basis of the amount of such accrued and unpaid interest
owed to each Liquidity Provider, (ii) if the Class G Liquidity
Provider has defaulted in its obligation to make any Interest Drawing
in respect of the Class G Certificates, (A) the aggregate amount of
interest accrued on the portion of any Policy Drawing made to cover
the shortfall attributable to such default by the Liquidity Provider
at the rate provided in the "except" clause of clause (ii) of the
definition of "Policy Provider Obligations" which are then in arrears
plus (B) the product of (x) the aggregate amount of all accrued and
unpaid interest on such Policy Drawings not in arrears to such
Special Distribution Date multiplied by (y) the Section 2.4(b)
Fraction, to the Policy Provider and (iii) if the Policy Provider has
elected to pay to each Liquidity Provider all outstanding drawings
and interest owing to such Liquidity Provider under its Liquidity
Facility pursuant to subsection 2.6(c) hereof, the amount of such
payment made to the Liquidity Providers attributable to such interest
accrued on such drawings, shall be distributed to the Liquidity
Providers and the Policy Provider pari passu;
third, such amount as shall be required (A) if any Cash
Collateral Account had been previously funded as provided in Section
3.6(f), to fund such Cash Collateral Account up to its Required
Amount shall be deposited in such Account, (B) if any Liquidity
Facility shall become a Downgraded Facility or a Non-Extended
Facility at a time when unreimbursed Interest Drawings under such
Liquidity Facility have reduced the Available Amount thereunder to
zero, to deposit into the related Cash Collateral Account an amount
equal to such Account s Required Amount shall be deposited in such
Account, and (C) after application of amounts required pursuant to
subclause (A) or subclause (B) of this clause "third", (x) to pay or
reimburse the Liquidity Provider in respect of such Liquidity
Facility in an amount equal to the amount of any unreimbursed
Interest Drawings under such Liquidity Facility shall be distributed
to such Liquidity Provider (other than amounts payable pursuant to
clauses first or second of this Section 2.4(b) and as determined
after giving effect to payments made by the Policy Provider to the
Liquidity Provider in respect of principal of drawings under the
Liquidity Facilities) and (y) if the Policy Provider has elected to
pay to each Liquidity Provider all outstanding drawings and interest
owing to such Liquidity Provider under its Liquidity Facility
pursuant to subsection 2.6(c) hereof, to reimburse the Policy
Provider for the principal amount of such payment made to the
Liquidity Providers, shall be distributed to such Liquidity Providers
and the Policy Provider pari passu on the basis of the amounts of all
such unreimbursed Liquidity Obligations and such payments under the
Policy;
fourth, if, with respect to any particular Liquidity
Facility, any amounts are to be distributed pursuant to either
subclause (A) or (B) of clause "third" above, then the Liquidity
Provider with respect to such Liquidity Facility shall be paid the
excess of (x) the aggregate outstanding amount of unreimbursed
advances (whether or not then due) under such Liquidity Facility over
(y) the Required Amount for the relevant Class, pari passu on the
basis of such amounts in respect of each Liquidity Provider;
fifth, such amount as shall be required to pay in full
Expected Distributions to the holders of Class G Certificates on such
Special Distribution Date shall be distributed to the Class G
Trustee;
sixth, such amount as shall be required to pay Policy
Provider Obligations then due (other than amounts payable pursuant to
the preceding clauses of this Section 2.4(b)(i) and other than any
Excess Reimbursement Obligations) to the Policy Provider;
seventh, such amount as shall be required to pay in full
Expected Distributions to the holders of Class C Certificates on such
Special Distribution Date shall be distributed to the Class C
Trustee; and
eighth, such amount as shall be required to pay (x) Excess
Reimbursement Obligations to the Policy Provider and (y) the product
of any amounts due under the Policy Fee Letter multiplied by the
Section 2.4(b) Fraction;
ninth, the balance, if any, of such Special Payment shall be
transferred to the Collection Account for distribution in accordance
with Section 3.2 hereof.
For the purposes of this Section 2.4(b)(i), clause (x) of the
definition of "Expected Distributions" shall be deemed to read as
follows: "(x) accrued, due and unpaid interest on such Certificates
excluding interest, if any, payable with respect to the Deposits
related to such Trust".
(ii) Upon the occurrence of a Triggering Event (whether
or not continuing), the Subordination Agent shall make distributions
pursuant to this Section 2.4(b) of amounts on deposit in the Special
Payments Account on account of the redemption or purchase of all of
the Equipment Notes issued pursuant to an Indenture on the Special
Distribution Date for such Special Payment in accordance with Section
3.3 hereof.
(c) Other Special Payments. Except as provided in clause
(e) below, any amounts on deposit in the Special Payments Account other than
in respect of amounts to be distributed pursuant to Section 2.4(b) shall be
distributed on the Special Distribution Date therefor in accordance with
Article III hereof.
(d) Investment of Amounts in Special Payments Account. Any
amounts on deposit in the Special Payments Account prior to the distribution
thereof pursuant to Section 2.4(b) or (c) shall be invested in accordance
with Section 2.2(b). Investment Earnings on such investments shall be
distributed in accordance with Section 2.4(b) or (c), as the case may be.
(e) Certain Payments. The Subordination Agent will
distribute promptly upon receipt thereof (i) any indemnity payment received
by it from the Owner Participant, the Owner Trustee or Northwest in respect
of any Trustee, any Liquidity Provider, the Policy Provider, the Paying
Agent, the Depositary or any Escrow Agent (collectively, the "Payees") and
(ii) any compensation (including, without limitation, any fees payable to any
Liquidity Provider under Section 2.03 of any Liquidity Facility or to the
Policy Provider under the Policy Fee Letter) received by it from the Owner
Participant, the Owner Trustee or Northwest under any Operative Agreement in
respect of any Payee, directly to the Payee entitled thereto.
SECTION 2.5 Designated Representatives. (a) With the
delivery of this Agreement, the Subordination Agent shall furnish to each
Liquidity Provider, the Policy Provider and each Trustee, and from time to
time thereafter may furnish to each Liquidity Provider, the Policy Provider
and each Trustee, at the Subordination Agent's discretion, or upon any
Liquidity Provider's, the Policy Provider's or Trustee's request (which
request shall not be made more than one time in any 12-month period), a
certificate (a "Subordination Agent Incumbency Certificate") of a Responsible
Officer of the Subordination Agent certifying as to the incumbency and
specimen signatures of the officers of the Subordination Agent and the
attorney-in-fact and agents of the Subordination Agent (the "Subordination
Agent Representatives") authorized to give Written Notices on behalf of the
Subordination Agent hereunder. Until each Liquidity Provider, the Policy
Provider and each Trustee receives a subsequent Subordination Agent
Incumbency Certificate, it shall be entitled to rely on the last
Subordination Agent Incumbency Certificate delivered to it hereunder.
(b) With the delivery of this Agreement, each Trustee shall
furnish to the Subordination Agent, and from time to time thereafter may
furnish to the Subordination Agent, at such Trustee's discretion, or upon the
Subordination Agent's request (which request shall not be made more than one
time in any 12-month period), a certificate (a "Trustee Incumbency
Certificate") of a Responsible Officer of such Trustee certifying as to the
incumbency and specimen signatures of the officers of such Trustee and the
attorney-in-fact and agents of such Trustee (the "Trustee Representatives")
authorized to give Written Notices on behalf of such Trustee hereunder.
Until the Subordination Agent receives a subsequent Trustee Incumbency
Certificate, it shall be entitled to rely on the last Trustee Incumbency
Certificate delivered to it hereunder.
(c) With the delivery of this Agreement, each Liquidity
Provider and the Policy Provider shall furnish to the Subordination Agent,
and from time to time thereafter may furnish to the Subordination Agent, at
such Liquidity Provider's or Policy Provider's discretion, or upon the
Subordination Agent's request (which request shall not be made more than one
time in any 12-month period), a certificate (each a "Provider Incumbency
Certificate") of any authorized signatory of such Liquidity Provider or
Policy Provider certifying as to the incumbency and specimen signatures of
any officer, attorney-in-fact, agent or other designated representative of
such Liquidity Provider or Policy Provider (in each case, the "Provider
Representatives" and, together with the Subordination Agent Representatives
and Trustee Representatives, the "Designated Representatives") authorized to
give Written Notices on behalf of such Liquidity Provider or Policy Provider
hereunder. Until the Subordination Agent receives a subsequent Provider
Incumbency Certificate, it shall be entitled to rely on the last Provider
Incumbency Certificate delivered to it hereunder.
SECTION 2.6 Controlling Party. (a) The Trustees, the
Liquidity Providers and the Policy Provider hereby agree that, with respect
to any Indenture at any given time, the Loan Trustee thereunder will be
directed (i) in taking, or refraining from taking, any action with respect to
such Indenture or the Equipment Notes issued thereunder, so long as no
Indenture Default has occurred and is continuing thereunder, by the holders
of at least a majority of the outstanding principal amount of such Equipment
Notes (provided that, for so long as the Subordination Agent is the
registered holder of the Equipment Notes, the Subordination Agent shall act
with respect to this clause (i) in accordance with the directions of the
Trustees representing holders of Certificates representing an undivided
interest in such principal amount of Equipment Notes) except as provided in
Section 9.1(b) hereof, and (ii) after the occurrence and during the
continuance of an Indenture Default thereunder (which, in the case of an
Indenture pertaining to a Leased Aircraft, has not been cured by the
applicable Owner Trustee or the applicable Owner Participant, if applicable,
pursuant to Section 4.03 of such Indenture), in taking, or refraining from
taking, any action with respect to such Indenture or such Equipment Notes,
including exercising remedies thereunder (including accelerating the
Equipment Notes issued thereunder or foreclosing the Lien on the Aircraft
securing such Equipment Notes), by the Controlling Party.
(b) Subject to subparagraph (c) below, the Person who shall
be the "Controlling Party" with respect to any Indenture shall be: (x) the
Policy Provider until payment of Final Distributions to the holders of Class
G Certificates and no obligations owing to the Policy Provider remain
outstanding or, if a Policy Provider Default has occurred and is continuing,
the Class G Trustee until payment of Final Distributions to the holders of
Class G Certificates; and thereafter, (y) the Class C Trustee. For purposes
of giving effect to the foregoing, the Trustees (other than the Controlling
Party) irrevocably agree (and the Certificateholders (other than the
Certificateholders represented by the Controlling Party) shall be deemed to
agree by virtue of their purchase of Certificates) that the Subordination
Agent, as record holder of the Equipment Notes, shall exercise its voting
rights in respect of the Equipment Notes as directed by the Controlling Party
and any vote so exercised shall be binding upon the Trustees and all
Certificateholders.
The Subordination Agent shall give written notice to all of
the other parties to this Agreement promptly upon a change in the identity of
the Controlling Party. Each of the parties hereto agrees that it shall not
exercise any of the rights of the Controlling Party at such time as it is not
the Controlling Party hereunder; provided, however, that nothing herein
contained shall prevent or prohibit any Non-Controlling Party from exercising
such rights as shall be specifically granted to such Non-Controlling Party
hereunder and under the other Operative Agreements.
(c) Notwithstanding the foregoing, at any time after 18
months from the earliest to occur of (i) the date on which the entire
Available Amount under any Liquidity Facility shall have been drawn (for any
reason other than a Downgrade Drawing or a Non-Extension Drawing) and any
amount remains unreimbursed, (ii) the date on which the entire amount of any
Downgrade Drawing or Non-Extension Drawing has been withdrawn from a Cash
Collateral Account to pay interest on the related Class of Certificates and
any amount remains unreimbursed and (iii) the date on which all Equipment
Notes shall have been Accelerated (provided that with respect to the period
prior to the Delivery Period Expiry Date, such Equipment Notes have an
aggregate outstanding principal balance in excess of $300,000,000), the
Liquidity Provider with the higher outstanding amount of unreimbursed
Liquidity Obligations (so long as such Liquidity Provider has not defaulted
in its obligation to make any advance under any Liquidity Facility, the
"Eligible Provider") shall have the right to elect, by Written Notice to the
Subordination Agent, the Policy Provider and each of the Trustees, to become
the Controlling Party hereunder with respect to any Indenture at any time
from and including the last day of such 18-month period, provided that if,
within 15 Business Days after its receipt of any such Written Notice from
such Liquidity Provider (which notice may be given on or after the fifteenth
Business Day prior to the end of such 18-month period) the Policy Provider
pays to each Liquidity Provider all outstanding drawings owing to such
Liquidity Provider in respect of its Liquidity Facility, and interest accrued
thereon to such date, the Policy Provider shall remain the Controlling Party
so long as no Policy Provider Default has occurred and is continuing (in
which case the Eligible Provider, if it so elects and if Liquidity
Obligations owing to it remain outstanding, or if it does not so elect or if
no Liquidity Obligations remain outstanding, the Class G Trustee, shall
become the Controlling Party). In connection with the delivery of any such
endorsed Policy, the parties hereto agree to enter into an amendment to this
Agreement and the Subordination Agent agrees to enter into an amendment to
the Policy Provider Agreement, in each instance, to make such changes thereto
as may be necessary to give effect to the foregoing (any such amendment to
this Agreement to be subject to delivery to each of the Trustees and the
Subordination Agent of a Ratings Confirmation issued by each Rating Agency
with respect thereto and each such amendment to be in form and substance
reasonably satisfactory to each party thereto). In addition, each Liquidity
Provider agrees to request the Policy Drawings permitted by such endorsed
Policy and that the proceeds thereof be applied to the Liquidity Obligations
owing to it.
(d) The exercise of remedies by the Controlling Party under
this Agreement shall be expressly limited by Section 4.1(a)(ii) hereof.
(e) The Controlling Party shall not be entitled to require
or obligate any Non-Controlling Party to provide funds necessary to exercise
any right or remedy hereunder.
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF
AMOUNTS RECEIVED
SECTION 3.1 Written Notice of Distribution. (a) No later
than 3:00 P.M. (New York City time) on the Business Day immediately preceding
each Distribution Date (or Special Distribution Date for purposes of Section
2.4(b) hereof, as the case may be), each of the following Persons shall
deliver to the Subordination Agent a Written Notice setting forth the
following information as at the close of business on such Business Day:
(i) With respect to the Class G Certificates, the Class
G Trustee shall separately set forth the amounts to be paid in
accordance with clause "fifth" of Section 3.2 or Section 2.4(b), as
the case may be, hereof;
(ii) With respect to the Class C Certificates, the Class
C Trustee shall separately set forth the amounts to be paid in
accordance with clause "seventh" of Section 3.2 or Section 2.4(b), as
the case may be, hereof;
(iii) With respect to each Liquidity Facility, the
Liquidity Provider thereunder shall separately set forth the amounts
to be paid in accordance with clauses "first", "second", "third" and
"fourth" of Section 3.2 or Section 2.4(b), as the case may be,
hereof;
(iv) The Policy Provider shall set forth the amounts to
be paid to it in accordance with clauses "first", "second", "third",
"sixth" and "eighth" of Section 2.4(b) or Section 3.2, as the case
may be, hereof; and
(v) Each Trustee shall set forth the amounts to be paid
in accordance with clause "ninth" of Section 3.2 hereof.
The notices required under this Section 3.1(a) shall be provided to the
Subordination Agent by the parties referenced therein or by any one of them
pursuant to an agreement between the parties referred to therein, and may
state that, unless there has been a prepayment of the Certificates, such
notice is to remain in effect until any substitute notice or amendment shall
be given to the Subordination Agent by the party providing such notice.
(b) Following the occurrence of a Triggering Event, the
Subordination Agent shall request the following information from the
following Persons, and each of the following Persons shall, upon the request
of the Subordination Agent, deliver a Written Notice to the Subordination
Agent setting forth for such Person the following information:
(i) With respect to the Class G Certificates, the Class
G Trustee shall separately set forth the amounts to be paid in
accordance with clauses "first" (relating to reimbursement payments
made by the Class G Certificateholders) and "seventh" of Section 3.3
hereof;
(ii) With respect to the Class C Certificates, the Class
C Trustee shall separately set forth the amounts to be paid in
accordance with clauses "first" (relating to reimbursement payments
made by the Class C Certificateholders) and "ninth" of Section 3.3
hereof;
(iii) With respect to each Liquidity Facility, the
Liquidity Provider thereunder shall separately set forth the amounts
to be paid in accordance with clauses "first," "second," "third",
"fourth" and "fifth" of Section 3.3 hereof; and
(iv) The Policy Provider shall separately set forth
amounts to be paid to it in accordance with clauses "first",
"second", "third", "fourth", "eighth" and "tenth" of Section 3.3
hereof; and
(v) Each Trustee shall set forth the amounts to be paid
in accordance with clause "sixth" of Section 3.3 hereof.
(c) At such time as a Trustee, a Liquidity Provider or the
Policy Provider shall have received all amounts owing to it (and, in the case
of a Trustee, the Certificateholders for which it is acting) pursuant to
Section 2.4, 3.2, 3.3 or 3.7 hereof, as applicable, and, in the case of a
Liquidity Provider or the Policy Provider, its commitment under the related
Liquidity Facility or the Policy shall have terminated or expired, such
Person shall, by a Written Notice, so inform the Subordination Agent and each
other party to this Agreement.
(d) As provided in Section 6.5 hereof, the Subordination
Agent shall be fully protected in relying on any of the information set forth
in a Written Notice provided by any Trustee, any Liquidity Provider or the
Policy Provider pursuant to paragraphs (a) through (c) above and shall have
no independent obligation to verify, calculate or recalculate any amount set
forth in any Written Notice delivered in accordance with such paragraphs.
(e) Any Written Notice delivered by a Trustee, a Liquidity
Provider or the Policy Provider, as applicable, pursuant to Section 3.1(a),
3.1(b) or 3.1(c) hereof, if made prior to 10:00 A.M. (New York City time)
shall be effective on the date delivered (or if delivered later shall be
effective as of the next Business Day). Subject to the terms of this
Agreement, the Subordination Agent shall as promptly as practicable comply
with any such instructions; provided, however, that any transfer of funds
pursuant to any instruction received after 10:00 A.M. (New York City time) on
any Business Day may be made on the next succeeding Business Day.
(f) In the event the Subordination Agent shall not receive
from any Person any information set forth in paragraphs (a) or (b) above
which is required to enable the Subordination Agent to make a distribution to
such Person pursuant to Section 2.4, 3.2 or 3.3 hereof, the Subordination
Agent shall request such information in writing and, failing to receive any
such information, the Subordination Agent shall, after written notice to such
person, not make such distribution(s) to such Person. In such event, the
Subordination Agent shall make distributions pursuant to clauses "first"
through "eighth" of Section 2.4 or 3.2 and clauses "first" through "eleventh"
of Section 3.3 to the extent it shall have sufficient information to enable
it to make such distributions, and shall continue to hold any funds
remaining, after making such distributions, until the Subordination Agent
shall receive all necessary information to enable it to distribute any funds
so withheld.
(g) On such dates (but not more frequently than monthly) as
any Liquidity Provider, the Policy Provider or any Trustee shall request, the
Subordination Agent shall send to such party a written statement reflecting
all amounts on deposit with the Subordination Agent pursuant to Section
3.1(f) hereof.
SECTION 3.2 Distribution of Amounts on Deposit in the
Collection Account. Except as otherwise provided in Sections 2.4, 3.1(f),
3.3, 3.4 and 3.6(b), amounts on deposit in the Collection Account (or, in the
case of any amount described in Section 2.4(c), on deposit in the Special
Payments Account) shall be promptly distributed on each Distribution Date
(or, in the case of any amount described in Section 2.4(c), on the Special
Distribution Date therefor) in the following order of priority and in
accordance with the information provided to the Subordination Agent pursuant
to Section 3.1(a) hereof:
first, such amount as shall be required to pay (i) all
accrued and unpaid Liquidity Expenses owed to each Liquidity Provider
and (ii) all accrued and unpaid Policy Expenses owed to the Policy
Provider, shall be distributed to the Liquidity Providers and the
Policy Provider pari passu on the basis of the amount of Liquidity
Expenses and Policy Expenses owed to each Liquidity Provider and the
Policy Provider;
second, such amount as shall be required to pay in full (i)
the aggregate amount of interest accrued on all Liquidity Obligations
(at the rate provided in the applicable Liquidity Facility determined
after giving effect to payments made by the Policy Provider to each
Liquidity Provider, if any, in respect of interest on drawings under
the Liquidity Facilities) and unpaid shall be distributed to the
Liquidity Providers pari passu on the basis of the amount of
Liquidity Obligations owed to each Liquidity Provider, (ii) if the
Class G Liquidity Provider has defaulted in its obligation to make
any Interest Drawing in respect of the Class G Certificates, the
aggregate amount of interest accrued on the portion of any Policy
Drawing made to cover the shortfall attributable to such default by
the Liquidity Provider at the rate provided in the "except" clause of
the definition of "Policy Provider Obligations" and (iii) if the
Policy Provider has elected to pay to each Liquidity Provider all
outstanding drawings and interest owing to such Liquidity Provider
under its Liquidity Facility pursuant to subsection 2.6(c) hereof,
the amount of such payment made to the Liquidity Providers
attributable to such interest accrued on such drawings, shall be
distributed to the Liquidity Providers and the Policy Provider pari
passu on the basis of the amounts owing to each;
third, such amount as shall be required (A) if any Cash
Collateral Account had been previously funded as provided in Section
3.6(f), to fund such Account up to its Required Amount shall be
deposited in such Account, (B) if any Liquidity Facility shall become
a Downgraded Facility or a Non-Extended Facility at a time when
unreimbursed Interest Drawings under such Liquidity Facility have
reduced the Available Amount thereunder to zero, to deposit into the
related Cash Collateral Account an amount equal to such Account's
Required Amount shall be deposited in such Cash Collateral Account,
and (C) after applications of the amounts required pursuant to
subclause (A) or subclause (B) of this clause "third", (x) to pay or
reimburse the Liquidity Provider in respect of such Liquidity
Facility in an amount equal to the amount of all Liquidity
Obligations then due under such Liquidity Facility (other than
amounts payable pursuant to clause "first" or "second" of this
Section 3.2 and as determined after giving effect to payments made by
the Policy Provider to the Liquidity Providers in respect of
principal of drawings under the Liquidity Facilities) and (y) if the
Policy Provider has elected to pay to each Liquidity Provider all
outstanding drawings and interest owing to such Liquidity Provider
under its Liquidity Facility pursuant to subsection 2.6(c) hereof,
the principal amount of such payment made to the Liquidity Providers,
shall be distributed to such Liquidity Providers and the Policy
Provider pari passu on the basis of the amounts of all such
unreimbursed Liquidity Obligations and such payments under the
Policy;
fourth, if, with respect to any particular Liquidity
Facility, any amounts are to be distributed pursuant to either
subclause (A) or (B) of clause "third" above, then the Liquidity
Provider with respect to such Liquidity Facility shall be paid the
excess of (x) the aggregate outstanding amount of unreimbursed
advances (whether or not then due) under such Liquidity Facility over
(y) the Required Amount for the relevant Class, pari passu on the
basis of such amounts in respect of each Liquidity Provider;
fifth, such amount as shall be required to pay in full
Expected Distributions to the holders of the Class G Certificates on
such Distribution Date shall be distributed to the Class G Trustee;
sixth, such amount as shall be required to pay the Policy
Provider all Policy Provider Obligations then due (other than amounts
payable pursuant to the preceding clauses of this Section 3.2 and
other than Excess Reimbursement Obligations) to the Policy Provider;
seventh, such amount as shall be required to pay in full
Expected Distributions to the holders of the Class C Certificates on
such Distribution Date shall be distributed to the Class C Trustee;
eighth, such amount as shall be required to pay in full any
Excess Reimbursement Obligations and any amounts due under the Policy
Fee Letter shall be distributed to the Policy Provider;
ninth, such amount as shall be required to pay in full the
aggregate unpaid amount of fees and expenses payable as of such
Distribution Date to the Subordination Agent and each Trustee
pursuant to the terms of this Agreement and the Trust Agreements, as
the case may be, shall be distributed to the Subordination Agent and
such Trustee; and
tenth, the balance, if any, of any such payment remaining
thereafter shall be held in the Collection Account for later
distribution in accordance with this Article III (including the
priorities set forth therein).
SECTION 3.3 Distribution of Amounts on Deposit Following a
Triggering Event. (a) Except as otherwise provided in Sections 3.1(f) and
3.6(b) hereof, upon the occurrence of a Triggering Event and at all times
thereafter, all funds in the Collection Account or the Special Payments
Account shall be promptly distributed by the Subordination Agent in the
following order of priority:
first, such amount as shall be required to reimburse (i) the
Subordination Agent for any out-of-pocket costs and expenses actually
incurred by it (to the extent not previously reimbursed) in the
protection of, or the realization of the value of, the Equipment
Notes or any Trust Indenture Estate, shall be applied by the
Subordination Agent in reimbursement of such costs and expenses,
(ii) each Trustee for any amounts of the nature described in clause
(i) above actually incurred by it under the applicable Trust
Agreement (to the extent not previously reimbursed), shall be
distributed to such Trustee and (iii) the Policy Provider for any
amounts of the nature described in clause (i) above actually incurred
by it (to the extent not previously reimbursed), shall be distributed
to the Policy Provider, and (iv) any Liquidity Provider, Policy
Provider or Certificateholder for payments, if any, made by it to the
Subordination Agent or any Trustee in respect of amounts described in
clause (i) above, shall be distributed to such Liquidity Provider,
Policy Provider or to the applicable Trustee for the account of such
Certificateholder, in each such case, pari passu on the basis of all
amounts described in clauses (i) through (iv) above;
second, such amount remaining as shall be required to pay
(i) all accrued and unpaid Liquidity Expenses owed to each Liquidity
Provider and (ii) all accrued and unpaid Policy Expenses owed to the
Policy Provider shall be distributed to each Liquidity Provider and
the Policy Provider pari passu on the basis of the amount of
Liquidity Expenses and Policy Expenses owed to each Liquidity
Provider, and the Policy Provider;
third, such amount remaining as shall be required to pay (i)
the aggregate amount of interest accrued on all Liquidity Obligations
(at the rate provided in the applicable Liquidity Facility determined
after giving effect to payments made by the Policy Provider to each
Liquidity Provider, if any, in respect of interest on drawings under
the Liquidity Facilities) and unpaid shall be distributed to the
Liquidity Providers pari passu on the basis of the amount of
Liquidity Obligations owed to each Liquidity Provider, (ii) if the
Class G Liquidity Provider has defaulted in its obligation to make
any Interest Drawing in respect of the Class G Certificates, the
aggregate amount of interest accrued on the portion of any Policy
Drawing made to cover the shortfall attributable to such default by
the Liquidity Provider at the rate provided in the "except" clause of
the definition of "Policy Provider Obligations" and (iii) if the
Policy Provider has elected to pay to each Liquidity Provider all
outstanding drawings and interest owing to such Liquidity Provider
under its Liquidity Facility pursuant to subsection 2.6(c) hereof,
the amount of such payment made to the Liquidity Providers
attributable to such interest accrued on such drawings, shall be
distributed to the Liquidity Providers and the Policy Provider pari
passu on the basis of the amounts owing to each;
fourth, such amount remaining as shall be required (A) if
any Cash Collateral Account had been previously funded as provided in
Section 3.6(f), unless (i) a Performing Note Deficiency exists and a
Liquidity Event of Default shall have occurred and be continuing with
respect to the relevant Liquidity Facility or (ii) a Final Drawing
shall have occurred with respect to such Liquidity Facility, to fund
such Cash Collateral Account up to its Required Amount (less the
amount of any repayments of Interest Drawings under such Liquidity
Facility while subclause (A)(i) above is applicable) shall be
deposited in such Account, (B) if any Liquidity Facility shall become
a Downgraded Facility or a Non-Extended Facility at a time when
unreimbursed Interest Drawings under such Liquidity Facility have
reduced the Available Amount thereunder to zero, unless (i) a
Performing Note Deficiency exists and a Liquidity Event of Default
shall have occurred and be continuing with respect to the relevant
Liquidity Facility or (ii) a Final Drawing shall have occurred with
respect to such Liquidity Facility, to deposit into the related Cash
Collateral Account an amount equal to such Accounts Required Amount
(less the amount of any repayments of Interest Drawings under such
Liquidity Facility while subclause (B)(i) above is applicable) shall
be deposited in such Cash Collateral Account, and (C) after
application of the amounts required pursuant to subclause (A) or
subclause (B) of this clause "fourth", (x) to pay in full the
outstanding amount of all Liquidity Obligations then due under such
Liquidity Facility (other than amounts payable pursuant to clause
"second" or "third" of this Section 3.3 and as determined after
giving effect to payments made by the Policy Provider to the
Liquidity Providers in respect of principal of drawings under the
Liquidity Facilities) and (y) if the Policy Provider has elected to
pay to each Liquidity Provider all outstanding drawings and interest
owing to such Liquidity Provider under its Liquidity Facility
pursuant to subsection 2.6(c) hereof, the principal amount of such
payment made to the Liquidity Providers, shall be distributed to such
Liquidity Providers and the Policy Provider pari passu on the basis
of the amounts of all such unreimbursed Liquidity Obligations and
such payments under the Policy;
fifth, if, with respect to any particular Liquidity
Facility, any amounts are to be distributed pursuant to either
subclause (A) or (B) of clause "fourth" above, then the Liquidity
Provider with respect to such Liquidity Facility shall be paid the
excess of (x) the aggregate outstanding amount of unreimbursed
advances (whether or not then due) under such Liquidity Facility over
(y) the Required Amount for the relevant Class (less the amount of
any repayments of Interest Drawings under such Liquidity Facility
while subclause (A)(i) or (B)(i), as the case may be, of clause
"fourth" above is applicable), pari passu on the basis of such
amounts in respect of each Liquidity Provider;
sixth, such amount as shall be required to reimburse or pay
(i) the Subordination Agent for any Tax (other than Taxes imposed on
compensation paid hereunder), expense, fee, charge or other loss
incurred by or any other amount payable to the Subordination Agent in
connection with the transactions contemplated hereby (to the extent
not previously reimbursed), shall be applied by the Subordination
Agent in reimbursement of such amount, (ii) each Trustee for any Tax
(other than Taxes imposed on compensation paid under the applicable
Trust Agreement), expense, fee, charge, loss or any other amount
payable to such Trustee under the applicable Trust Agreements (to the
extent not previously reimbursed), shall be distributed to such
Trustee and (iii) each Certificateholder for payments, if any, made
by it pursuant to Section 5.2 hereof in respect of amounts described
in clause (i) above, shall be distributed to the applicable Trustee
for the account of such Certificateholder, in each such case, pari
passu on the basis of all amounts described in clauses (i) through
(iii) above;
seventh, such amount remaining as shall be required to pay
in full Adjusted Expected Distributions on the Class G Certificates
shall be distributed to the Class G Trustee;
eighth, such amount remaining as shall be required to pay
the Policy Provider Obligations then due to the Policy Provider under
the Policy Provider Agreement (other than amounts payable pursuant to
clauses "first" through "fourth" above and other than any Excess
Reimbursement Obligations) shall be paid to the Policy Provider;
ninth, such amount remaining as shall be required to pay in
full Adjusted Expected Distributions on the Class C Certificates
shall be distributed to the Class C Trustee;
tenth, such amount remaining as shall be required to pay any
Excess Reimbursement Obligations and any amounts due under the Policy
Fee Letter to the Policy Provider;
eleventh, such amount remaining shall be retained in the
Collection Account until the immediately succeeding Distribution Date
or, if all Classes of Certificates shall have been paid in full,
shall be distributed to the Owner Trustee to the extent that the
amount received from the Loan Trustees and deposited in the
Collection Account exceed the amounts described in clauses "first"
through "tenth" above; and
twelfth, amount remaining shall be distributed to the
Certificateholders of the related Trust.
SECTION 3.4 Other Payments. Any payments received by the
Subordination Agent for which no provision as to the application thereof is
made in this Agreement shall be distributed by the Subordination Agent in the
order of priority specified in Section 3.3 hereof.
SECTION 3.5 Payments to the Trustees, the Liquidity
Providers and the Policy Provider. Any amounts distributed hereunder to any
Liquidity Provider shall be paid to such Liquidity Provider by wire transfer
of funds to the address such Liquidity Provider shall provide to the
Subordination Agent. The Subordination Agent shall provide a Written Notice
of any such transfer to the applicable Liquidity Provider, as the case may
be, at the time of such transfer. Any amounts distributed hereunder by the
Subordination Agent to any Trustee which shall not be the same institution as
the Subordination Agent shall be paid to such Trustee by wire transfer of
funds to the address such Trustee shall provide to the Subordination Agent.
SECTION 3.6 Liquidity Facilities. (a) Interest Drawings.
If on any Distribution Date, after giving effect to the subordination
provisions of this Agreement, the Subordination Agent shall not have
sufficient funds for the payment of any amounts due and owing in respect of
accrued interest on the Class G Certificates or the Class C Certificates (at
the Stated Interest Rate for such Class of Certificates), then, prior to
10:00 a.m. (New York City time) on such Distribution Date, the Subordination
Agent shall request a drawing (each such drawing, an "Interest Drawing")
under the Liquidity Facility with respect to such Class of Certificates (and
concurrently with the making of such request, the Subordination Agent shall
give notice to the Policy Provider of such insufficiency of funds) in an
amount equal to the lesser of (i) an amount sufficient to pay the amount of
such accrued interest (at the Stated Interest Rate for such Class of
Certificates) or (ii) the Available Amount under such Liquidity Facility, and
shall pay such amount to the Trustee with respect to such Class of
Certificates in payment of such accrued interest.
` (b) Application of Interest Drawings. Notwithstanding
anything to the contrary contained in this Agreement, (i) all payments
received by the Subordination Agent in respect of an Interest Drawing under
the Class G Liquidity Facility and all amounts withdrawn by the Subordination
Agent from the Class G Cash Collateral Account, and payable in each case to
the Class G Certificateholders, shall be promptly distributed to the Class G
Trustee and (ii) all payments received by the Subordination Agent in respect
of an Interest Drawing under the Class C Liquidity Facility and all amounts
withdrawn by the Subordination Agent from the Class C Cash Collateral
Account, and payable in each case to the Class C Certificateholders, shall be
promptly distributed to the Class C Trustee.
(c) Downgrade Drawings. If at any time the short-term
unsecured debt rating of any Liquidity Provider issued by either Rating
Agency is lower than the applicable Threshold Rating, within 30 days after
receiving notice of such downgrade (but no later than the expiration date of
the Liquidity Facility issued by the downgraded Liquidity Provider (the
"Downgraded Facility")), such Liquidity Provider may arrange, or the
Subordination Agent (in consultation with Northwest), may arrange for a
Replacement Liquidity Provider to issue and deliver a Replacement Liquidity
Facility to the Subordination Agent. If a Downgraded Facility has not been
replaced in accordance with the terms of this paragraph, the Subordination
Agent shall, on such 30th day (or if such 30th day is not a Business Day, on
the next succeeding Business Day) (or, if earlier, the expiration date of
such Downgraded Facility), request a drawing in accordance with and to the
extent permitted by such Downgraded Facility (such drawing, a "Downgrade
Drawing") of all available and undrawn amounts thereunder. Amounts drawn
pursuant to a Downgrade Drawing shall be maintained and invested as provided
in Section 3.6(f) hereof. The Liquidity Provider may also arrange for a
Replacement Liquidity Provider to issue and deliver a Replacement Liquidity
Facility at any time after such Downgrade Drawing so long as such Downgrade
Drawing has not been reimbursed in full to the Liquidity Provider.
(d) Non-Extension Drawings. If any Liquidity Facility with
respect to any Class of Certificates is scheduled to expire on a date (the
"Stated Expiration Date") prior to the date that is 15 days after the Final
Legal Distribution Date for such Class of Certificates, the Subordination
Agent may, by notice to the Liquidity Provider (each such notice being an
"Extension Notice") given no later than the 40th day and no earlier than the
60th day prior to the then applicable Expiry Date, request an extension of
the Expiry Date to the earlier of (i) the date which is 15 days after the
Final Legal Distribution Date for such Class of Certificates and (ii) the
date that is the day immediately preceding the 364th day occurring after the
last day of the Consent Period (as hereinafter defined). Whether or not a
Liquidity Provider has received a request from the Subordination Agent, such
Liquidity Provider may, but shall not be obligated to, by a notice (a
"Consent Notice") to the Subordination Agent, given during the period
commencing on the date that is 60 days prior to the Expiry Date then in
effect and ending on the date that is 25 days prior to the Expiry Date then
in effect for such Liquidity Facility (such period, with respect to such
Liquidity Facility, the "Consent Period"), consent to such extension of the
Expiry Date, which consent may be given or withheld by the Liquidity Provider
in its absolute and sole discretion; provided, however, that such extension
shall not be effective with respect to the Liquidity Provider if by a notice
(a "Withdrawal Notice") to the Subordination Agent during the Consent Period
the Liquidity Provider revokes its Consent Notice. If a Withdrawal Notice
has been given during the applicable Consent Period or if the Liquidity
Provider shall not have delivered a Consent Notice within the Consent Period
(and, in each case, if the Liquidity Provider shall not have been replaced in
accordance with Section 3.6(e) hereof), the Subordination Agent shall be
entitled on and after the date on which the Consent Period ends (but prior to
the then effective Expiry Date), in accordance with and to the extent
permitted by the terms of the expiring Liquidity Facility (a "Non-Extended
Facility") to request a drawing under such expiring Liquidity Facility (such
drawing, a "Non-Extension Drawing") of all available and undrawn amounts
thereunder. Amounts drawn pursuant to any Non-Extension Drawing shall be
maintained and invested in accordance with Section 3.6(f) hereof.
(e) Issuance of Replacement Liquidity Facility. At any
time, the Subordination Agent may, at its option, in consultation with
Northwest, arrange for a Replacement Liquidity Facility to replace the
Liquidity Facility for any Class of Certificates; provided that, the initial
Liquidity Provider and the initial Replacement Liquidity Provider may not be
replaced with respect to any Liquidity Facility by the Subordination Agent or
Northwest prior to the fifth anniversary of the Closing unless there shall
have become due to the initial Liquidity Provider amounts pursuant to Section
3.1, 3.2 or 3.3 of the Liquidity Facilities or the Tax Letter and the
replacement of the initial Liquidity Provider would reduce or eliminate the
obligation to pay such amounts; provided further that (i) the initial
Liquidity Provider may arrange for a Replacement Liquidity Provider with
respect to any Liquidity Facility at any time (in which event Northwest shall
make commercially reasonable efforts to facilitate such replacement) and (ii)
the Liquidity Provider may arrange, or the Subordination Agent (in
consultation with Northwest) may arrange, for a Replacement Liquidity
Provider pursuant to paragraphs (c) and (d) of this Section 3.6. In any such
consultation, the Subordination Agent shall accept the recommendations of
Northwest in the absence of a good faith reason not to do so. No such
Replacement Liquidity Facility executed in connection therewith shall become
effective and no such Replacement Liquidity Facility shall be deemed a
"Liquidity Facility" under the Operative Agreements, unless and until (i) the
conditions referred to in the immediately following paragraph shall have been
satisfied and (ii) if such Replacement Liquidity Facility shall materially
adversely affect the rights, remedies, interests or obligations of the Class
G Certificateholders or the Class C Certificateholders under any of the
Operative Agreements, the applicable Trustee shall have consented, in
writing, to the execution and issuance of such Replacement Liquidity
Facility.
In connection with the issuance of each Replacement
Liquidity Facility, the Subordination Agent shall (x) prior to the issuance
of such Replacement Liquidity Facility, obtain written confirmation from each
Rating Agency that such Replacement Liquidity Facility will not cause a
reduction of the rating then in effect for any Class of Certificates by such
Rating Agency (without regard to any downgrading of the ratings of any
Liquidity Provider being replaced pursuant to Section 3.6(c) hereof and
without regard to the Policy) and, in the case of the Class G Liquidity
Facility only, the written consent of the Policy Provider (which consent
shall not be unreasonably withheld or delayed), (y) pay all Liquidity
Obligations then owing to the replaced Liquidity Provider (which payment
shall be made first from available funds in the Cash Collateral Account as
described in clause (v) of Section 3.6(f) hereof and thereafter from any
other available source, including, without limitation, a drawing under the
Replacement Liquidity Facility, it being understood that no Replacement
Liquidity Facility shall become effective (other than insofar as necessary to
permit the repayment of amounts owed to the replaced Liquidity Provider)
until all amounts owed to the replaced Liquidity Provider have been paid) and
(z) cause the issuer of the Replacement Liquidity Facility to deliver the
Replacement Liquidity Facility to the Subordination Agent, together with a
legal opinion opining that such Replacement Liquidity Facility is an
enforceable obligation of such Replacement Liquidity Provider. Upon
satisfaction of the conditions set forth in this Section 3.6(e), (i) the
replaced Liquidity Facility shall terminate and (ii) such Replacement
Liquidity Provider shall be deemed to be a Liquidity Provider with the rights
and obligations of a Liquidity Provider hereunder and under the other
Operative Agreements and such Replacement Liquidity Facility shall be deemed
to be a Liquidity Facility hereunder and under the other Operative
Agreements.
(f) Cash Collateral Accounts; Withdrawals; Investments. In
the event the Subordination Agent shall draw all available amounts under the
Class G Liquidity Facility or the Class C Liquidity Facility pursuant to
Section 3.6(c), 3.6(d) or 3.6(i), amounts so drawn shall be deposited by the
Subordination Agent in the Class G Cash Collateral Account or the Class C
Cash Collateral Account, respectively. Amounts so deposited shall be
invested in Eligible Investments in accordance with Section 2.2(b) hereof.
Investment Earnings on amounts on deposit in the Cash Collateral Accounts
shall be deposited in the Collection Account. The Subordination Agent shall
deliver a written statement to the respective Liquidity Provider one day
prior to each Distribution Date setting forth the aggregate amount of
Investment Earnings held in the applicable Cash Collateral Accounts as of
such date. In addition, from and after the date funds are so deposited, the
Subordination Agent shall make withdrawals from such account as follows:
(i) on each Distribution Date, the Subordination Agent
shall, to the extent it shall not have received funds to pay accrued
and unpaid interest on the Class G Certificates (at the Stated
Interest Rate for the Class G Certificates) from any other source,
withdraw from the Class G Cash Collateral Account, and pay to the
Class G Trustee an amount equal to the lesser of (x) an amount
necessary to pay accrued and unpaid interest (at the Stated Interest
Rate for the Class G Certificates) on such Class G Certificates and
(y) the amount on deposit in the Class G Cash Collateral Account;
(ii) on each Distribution Date, the Subordination Agent
shall, to the extent it shall not have received funds to pay accrued
and unpaid interest on the Class C Certificates (at the Stated
Interest Rate for the Class C Certificates) from any other source,
withdraw from the Class C Cash Collateral Account, and pay to the
Class C Trustee an amount equal to the lesser of (x) an amount
necessary to pay accrued and unpaid interest (at the Stated Interest
Rate for the Class C Certificates) on such Class C Certificates and
(y) the amount on deposit in the Class C Cash Collateral Account;
(iii) on each date on which the Pool Balance of the Class
G Trust shall have been reduced by payments made to the Class G
Certificateholders pursuant to Section 2.4, 3.2 or 3.3 hereof or
pursuant to Section 2.03 of the Escrow and Paying Agent Agreement for
such Class, the Subordination Agent shall withdraw from the Class G
Cash Collateral Account such amount as is necessary so that, after
giving effect to the reduction of the Pool Balance on such date
(including any such reduction resulting from a prior withdrawal of
amounts on deposit in the Class G Cash Collateral Account on such
date), the Required Amount (with respect to the Class G Liquidity
Facility) will be on deposit in the Class G Cash Collateral Account
and shall first, pay such amount to the Class G Liquidity Provider
until the Liquidity Obligations (with respect to the Class G
Certificates) shall have been paid in full, and second, deposit any
remaining amount in the Collection Account;
(iv) on each date on which the Pool Balance of the Class
C Trust shall have been reduced by payments made of the Class C
Certificateholders pursuant to Section 2.4, 3.2 or 3.3 hereof or
pursuant to Section 2.03 of the Escrow and Paying Agent Agreement for
such Class, the Subordination Agent shall withdraw from the Class C
Cash Collateral Account such amount as is necessary so that, after
giving effect to the reduction of the Pool Balance on such date
(including any such reduction resulting from a prior withdrawal of
amounts on deposit in the Class C Cash Collateral Account on such
date), the Required Amount (with respect to the Class C Liquidity
Facility) will be on deposit in the Class C Cash Collateral Account
and shall first, pay such amount to the Class C Liquidity Provider
until the Liquidity Obligations (with respect to the Class C
Certificates) shall have been paid in full, and second, deposit any
remaining amount in the Collection Account;
(v) if a Replacement Liquidity Facility for any Class of
Certificates shall be delivered to the Subordination Agent following
the date on which funds have been deposited into the Cash Collateral
Account for such Class of Certificates, the Subordination Agent shall
withdraw all amounts on deposit in such Cash Collateral Account and
shall pay such amounts to each replaced Liquidity Provider pari passu
until all Liquidity Obligations owed to such Person shall have been
paid in full, and shall deposit any remaining amount in the
Collection Account; and
(vi) following the payment of Final Distributions with
respect to any Class of Certificates, on the date on which the
Subordination Agent shall have been notified by the Liquidity
Provider for such Class of Certificates that the Liquidity
Obligations owed to such Liquidity Provider have been paid in full,
the Subordination Agent shall withdraw all amounts on deposit in the
Cash Collateral Account in respect of such Class of Certificates and
shall deposit such amount in the Collection Account.
(g) Reinstatement. With respect to any Interest Drawing
under the Liquidity Facility for any Trust, upon the reimbursement of the
applicable Liquidity Provider for all or any part of the amount of such
Interest Drawing, together with any accrued interest thereon, the Available
Amount of such Liquidity Facility shall be reinstated by an amount equal to
the amount so reimbursed to the applicable Liquidity Provider, but not to
exceed the Required Amount for such Liquidity Facility; provided, however,
that such Liquidity Facility shall not be so reinstated in part or in full at
any time if (x) both (i) a Triggering Event shall have occurred and (ii) a
Performing Note Deficiency exists or (y) a Final Drawing shall have occurred
and be continuing under such Liquidity Facility. In the event that at any
time prior to both the occurrence of a Triggering Event and the existence of
a Performing Note Deficiency funds are withdrawn from any Cash Collateral
Account pursuant to clauses (i), (ii) or (iii) of Section 3.6(f) hereof, then
funds received by the Subordination Agent prior to both the occurrence of a
Triggering Event and the existence of a Performing Note Deficiency shall be
deposited in such Cash Collateral Account as provided in clause "third" of
Section 2.4(b), clause "third" of Section 3.2 or clause "fourth" of
Section 3.3, as applicable, and applied in accordance with Section 3.6(f)
hereof.
(h) Reimbursement. The amount of each drawing under the
Liquidity Facilities shall be due and payable, together with interest
thereon, on the dates and at the rates, respectively, provided in the
Liquidity Facilities.
(i) Final Drawing. If any action is required under a
Liquidity Facility to be taken by the Subordination Agent in order to make a
Final Drawing thereunder, the Subordination Agent shall not fail to take such
action. Upon receipt of the proceeds of a Final Drawing under the related
Liquidity Facility, the Subordination Agent shall maintain and invest such
proceeds in accordance with Section 3.6(f) hereof.
(j) Reduction of Stated Amount. Promptly following each
date on which the Required Amount of the Liquidity Facility for a Class of
Certificates is reduced as a result of a distribution to the
Certificateholders of such Class of Certificates, the Subordination Agent
shall, if such Liquidity Facility provides for reductions of the Stated
Amount of such Liquidity Facility and if such reductions are not automatic,
request the Liquidity Provider for such Class of Certificates to reduce such
Stated Amount to an amount equal to the Required Amount with respect to such
Liquidity Facility (as calculated by the Subordination Agent after giving
effect to such payment). Each such request shall be made in accordance with
the provisions of the applicable Liquidity Facility.
(k) Relation to Subordination Provisions. Interest
Drawings under the Liquidity Facilities and withdrawals from the Cash
Collateral Accounts, in each case, in respect of interest on the Certificates
of any Class, will be distributed to the Trustee for such Class of
Certificates, notwithstanding Sections 3.2, 3.3 and 3.6(h) hereof.
SECTION 3.7 The Policy. (a) Interest Drawings. If on any
Regular Distribution Date (other than the Final Legal Distribution Date)
after giving effect to the application of available funds in accordance with
the priorities specified in Section 2.4 and Article III, and taking into
account the application of any amounts received by the Escrow Agent in the
Class G Paying Agent Account in respect of accrued interest on the Class G
Deposits, any Drawing paid under the Class G Liquidity Facility in respect of
such interest and any withdrawal of funds from the Class G Cash Collateral
Account in respect of such interest, the Subordination Agent (or in the case
of the Escrow Receipts, the Paying Agent) does not then have sufficient funds
available for the payment of all amounts due and owing in respect of accrued
and unpaid interest on the Class G Certificates or any Deposit relating to
the Escrow Receipts, in each case at the Stated Interest Rate for the Class G
Certificates on such Distribution Date ("Accrued Class G Interest"), then,
prior to 1:00 p.m. (New York City time) on such Distribution Date, the
Subordination Agent (i) shall deliver a Notice of Nonpayment, as provided in
the Policy to the Policy Provider or its fiscal agent, requesting a Policy
Drawing under the Policy (for payment into the Policy Account) in an amount
sufficient to enable the Subordination Agent to pay such Accrued Class G
Interest and (ii) shall pay such amount from the Policy Account to the Class
G Trustee or the Escrow Agent for the Class G Trust for deposit into the
Class G Paying Agent Account, as the case may be, in payment of such Accrued
Class G Interest on such Distribution Date.
(b) Proceeds Deficiency Drawing. If on any Special
Distribution Date (other than an Election Distribution Date or a Special
Distribution Date established pursuant to clause (ii) of the third paragraph
of Section 3.7(c)) established by the Subordination Agent by reason of its
receipt of a Special Payment (a "Disposition Payment") constituting the
proceeds of any Series G Equipment Note or related Trust Indenture Estate or
Collateral, as the case may be, there exists a shortfall in the amounts
available to the Subordination Agent (after giving effect to the application
of available funds in accordance with the priorities specified in Section 2.4
and Article III, and taking into account the application of any amounts
received by the Escrow Agent in the Class G Paying Agent Account in respect
of accrued interest on the Class G Deposits, any Drawing paid under the Class
G Liquidity Facility in respect of such interest, any withdrawal of funds in
the Class G Cash Collateral Account in respect of such interest and the
amount of such Special Payment) required to reduce the outstanding Pool
Balance of the Class G Certificates by an amount equal to the outstanding
principal amount of the applicable Series G Equipment Note (determined
immediately prior to the receipt of such Disposition Payment) plus accrued
and unpaid interest on the amount of such reduction accrued at the Stated
Interest Rate for the Class G Certificates for the period from the
immediately preceding Regular Distribution Date to such Special Distribution
Date, then, prior to 1:00 p.m. (New York City time) on such Special
Distribution Date, the Subordination Agent (x) shall deliver a Notice of
Nonpayment, as provided in the Policy (for payment into the Policy Account)
in an amount equal to the amount of such shortfall and (y) shall pay such
amount from the Policy Account to the Class G Trustee in payment of such
reduction in the outstanding Pool Balance of the Class G Certificates plus
such accrued and unpaid interest on such Special Distribution Date.
(c) No Proceeds Drawing. On the first Business Day that
is 18 months after the last date on which full payment was made on any Series
G Equipment Note (a "Defaulted Series G Equipment Note") as to which there
has subsequently been a failure to pay principal or that has subsequently
been accelerated, if the Subordination Agent has not theretofore made a
drawing under the Policy pursuant to Section 3.7(b), the Subordination Agent
shall deliver a Notice of Nonpayment, as provided in the Policy, to the
Policy Provider or its fiscal agent, requesting a Policy Drawing under the
Policy (for payment into the Policy Account) in an amount equal to the then
outstanding principal amount of such Defaulted Series G Equipment Note plus
accrued and unpaid interest thereon from the immediately preceding Regular
Distribution Date. The Subordination Agent shall promptly, but not less than
25 days prior to the such Business Day, send to the Class G Trustee and the
Class C Trustee, the Liquidity Provider for the Class G Liquidity Facility
and the Policy Provider a Written Notice establishing such Business Day as
the date for the distribution of the proceeds of such Policy Drawing, which
date shall constitute a Special Distribution Date. No later than 1:00 p.m.
(New York City time) on the specified Special Distribution Date the
Subordination Agent shall make the specified Policy Drawing and upon its
receipt of the proceeds thereof pay the amount thereof from the Policy
Account to the Class G Trustee in reduction of the outstanding Pool Balance
of the Class G Certificates together with such accrued and unpaid interest
thereon. For the avoidance of doubt, after the payment in full of such
amount under this Section 3.7(c), the Subordination Agent shall have no right
to make any further Policy Drawings under Section 3.7(c) in respect of such
Defaulted Series G Equipment Note except for a drawing under Section 3.7(e).
Notwithstanding the foregoing, the Policy Provider has the
right at the end of any such 18-month period, so long as no Policy Provider
Default shall have occurred and be continuing, to elect (the "Policy Provider
Election") instead to pay (a) on such Special Distribution Date an amount
equal to the scheduled principal and interest that came due on such Defaulted
Series G Equipment Note (without regard to the acceleration thereof) but was
not paid during such 18-month period (after giving effect to the application
of funds received from the Class G Liquidity Facility and the Class G Cash
Collateral Account, in each case attributable to such interest) and (b)
thereafter, on each Regular Distribution Date, an amount equal to the
scheduled principal and interest that were to become due on such Defaulted
Series G Equipment Note on the related payment date (without regard to any
acceleration thereof) until the establishment of an Election Distribution
Date or a Special Distribution Date. Following a Policy Provider Election
with respect to a Defaulted Series G Equipment Note, on any Business Day
(which shall be a Special Distribution Date; each, an "Election Distribution
Date") elected by the Policy Provider upon 20 days' Written Notice to the
Subordination Agent and the Class G Trustee, the Policy Provider may,
notwithstanding the Policy Provider Election, request the Subordination Agent
to, and the Subordination Agent shall, make a Policy Drawing for an amount
equal to the then outstanding principal balance of such Defaulted Series G
Equipment Note (less any Policy Drawings previously paid by the Policy
Provider in respect of principal of such Defaulted Series G Equipment Note)
and accrued and unpaid interest on such amounts at the Stated Interest Rate
for the Class G Certificates from the previous Regular Distribution Date to
such Election Distribution Date.
Further, following a Policy Provider Election with respect
to a Defaulted Series G Equipment Note, upon either (i) the occurrence and
continuance of a Policy Provider Default or (ii) the receipt by the
Subordination Agent of a Special Payment constituting the Disposition Payment
in respect of such Defaulted Series G Equipment Note or related Trust
Indenture Estate or Collateral, as the case may be, then the Subordination
Agent shall on any Business Day (which shall be a Special Distribution Date)
elected by the Subordination Agent upon 20 days' Written Notice to the Class
G Trustee and the Policy Provider, make a Policy Drawing for an amount equal
to the then outstanding principal balance of such Defaulted Series G
Equipment Note (less any Policy Drawings previously paid by the Policy
Provider in respect of principal of such Equipment Note) and accrued and
unpaid interest on such amounts at the Stated Interest Rate for the Class G
Certificates from the immediately preceding Regular Distribution Date to such
Special Distribution Date. The Subordination Agent shall make each such
drawing referred to in this subparagraph (c) under the Policy (for payment
into the Policy Account) no later than 1:00 p.m. (New York City time) on the
relevant Special Distribution Date and upon its receipt of the proceeds
thereof pay the amount thereof from the Policy Account to the Class G Trustee
in reduction of the outstanding Pool Balance of the Class G Certificates
together with such accrued and unpaid interest thereon.
In addition, regardless of whether or not the Policy
Provider makes a Policy Provider Election, the Policy Provider shall, at the
end of the first occurring 18-month period described in Section 3.7(c),
endorse the Policy (if not already endorsed to so provide) to provide for the
payment to the Class G Liquidity Provider and the Class C Liquidity Provider
of interest accruing on the outstanding drawings in respect of the Class G
Liquidity Facility and Class C Liquidity Facility from and after the end of
such 18-month period as and when such interest becomes due in accordance with
such Liquidity Facilities.
(d) Final Policy Drawing. If on the Final Legal
Distribution Date of the Class G Certificates after giving effect to the
application of available funds in accordance with the priorities specified in
Section 2.4 and Article III, and taking into account the application of any
amounts received by the Escrow Agent in the Class G Paying Agent Account in
respect of accrued interest on the Class G Deposits, any Drawing paid under
the Class G Liquidity Facility in respect of interest included in the Final
Distribution and any withdrawal of funds in the Class G Cash Collateral
Account in respect of interest included in the Final Distribution, the
Subordination Agent does not then have sufficient funds available on such
date for the payment in full of the Final Distribution (calculated as at such
date but excluding any accrued and unpaid premium) on the Class G
Certificates then, prior to 1:00 p.m. (New York City time) on such date the
Subordination Agent shall: (i) deliver a Notice of Nonpayment, as provided
in the Policy, to the Policy Provider or its fiscal agent, requesting a
Policy Drawing under the Policy (for payment into the Policy Account) in an
amount equal to the minimum amount sufficient to enable the Subordination
Agent to pay the Final Distribution (calculated as at such date but excluding
any accrued and unpaid premium) on the Class G Certificates, and (ii) shall
pay such amount from the Policy Account to the Class G Trustee in payment of
such amount on such date.
If on the Final Withdrawal Date (as defined in the Escrow
and Paying Agent Agreement for the Class G Trust) the full amount of the
Class G Deposit has not been used to purchase the Class G Equipment Notes and
there is a shortfall in the amount available to the Paying Agent for the
payment in full of the unpaid principal amount of the Escrow Receipts then,
prior to 1:00 p.m. (New York City time) on such date, the Subordination Agent
shall: (i) deliver a Notice of Nonpayment, as provided in the Policy, to the
Policy Provider or its fiscal agent, requesting a Policy Drawing under the
Policy (for payment into the Policy Account) in an amount equal to the amount
of such shortfall and (ii) shall pay such amount from the Policy Account to
the Paying Agent for the Class G Trust in payment of such amount on such
date.
(e) Avoidance Drawings. If at any time the
Subordination Agent shall have actual knowledge of the issuance of any Final
Order, the Subordination Agent shall promptly give notice thereof to each
Trustee, the Liquidity Providers and the Policy Provider. The Subordination
Agent shall thereupon calculate the relevant Avoided Payments resulting
therefrom and shall promptly: (a) send to the Class G Trustee a Written
Notice of such amount and (b) deliver to the Policy Provider or its fiscal
agent, a Notice of Avoided Payment, together with a copy of the documentation
required by the Policy with respect thereto, requesting a Policy Drawing (for
payment to the receiver, conservator, debtor-in-possession or trustee in
bankruptcy and/or to the Subordination Agent for deposit into the Policy
Account) in an amount equal to the amount of relevant Avoided Payment. Such
Written Notice shall also set the date for the distribution of the proceeds
of such Policy Drawing which date shall constitute a Special Distribution
Date and shall be the earlier of the third Business Day that immediately
precedes the expiration of the Policy and the Business Day that immediately
follows the 25th day after the date of such Written Notice. No later than
1:00 p.m. (New York City time) on the specified Special Distribution Date,
the Subordination Agent shall make the specified Policy Drawing and upon its
receipt of the proceeds thereof, pay the amount thereof from the Policy
Account to the Class G Trustee in reinstatement of the Avoided Payment.
(f) Application of Policy Drawings. Notwithstanding
anything to the contrary contained in this Agreement (including, without
limitation, Sections 2.4, 3.2 and 3.3 hereof), all payments received by the
Subordination Agent in respect of a Policy Drawing shall be promptly paid
from the Policy Account to the Class G Trustee for distribution to the Class
G Certificateholders or the holders of the Escrow Receipts, as the case may
be.
(g) Reduction of Outstanding Pool Balance. Promptly
following each date on which the Pool Balance of the Class G Certificates is
reduced as a result of a payment under this Agreement, the Subordination
Agent shall inform the Policy Provider of such reduction. Anything contained
herein to the contrary notwithstanding, (i) no Policy Drawing for payment in
respect of the Class G Certificates under clause (a) of this Section 3.7
shall be in excess of Accrued Class G Interest and (ii) no Policy Drawing
under clauses (b)-(d) of this Section 3.7 shall be for an amount in excess of
the outstanding Pool Balance of the Class G Certificates plus accrued and
unpaid interest thereon at the Stated Interest Rate for the Class G
Certificates. Nothing contained in this Intercreditor Agreement shall be
deemed to alter or amend the liabilities, obligations, requirements or
procedures of the Policy Provider under the Policy and the Policy Provider
shall not be obligated to make payment except at the times and in the amounts
and under the circumstances expressly set forth in the Policy.
(h) Resubmission of Notice for Payment. If the Policy
Provider at any time informs the Subordination Agent in accordance with the
Policy that a Notice of Nonpayment or Notice of Avoided Payment submitted by
the Subordination Agent does not satisfy the requirements of the Policy, the
Subordination Agent shall, as promptly as possible after being so informed,
submit to the Policy Provider an amended and revised Notice of Nonpayment or
Notice of Avoided Payment, as the case may be, and shall pay to the Class G
Trustee out of the Policy Account the amount received pursuant to such
amended or revised Notice of Nonpayment or Notice of Avoided Payment, as the
case may be, when received.
(i) Subrogation. The Policy Provider will be subrogated
to all of the rights of the holders of the Class G Certificates to payment on
the Class G Certificates to the extent of the payments made under the Policy
as set forth herein.
ARTICLE IV
EXERCISE OF REMEDIES
SECTION 4.1 Directions from the Controlling Party. (a)
(i) Following the occurrence and during the continuation of an Indenture
Default under any Indenture, the Controlling Party shall direct the Loan
Trustee under such Indenture in the exercise of remedies available to the
holders of the Equipment Notes issued pursuant to such Indenture, including,
without limitation, the ability to vote all such Equipment Notes in favor of
declaring all of the unpaid principal amount of such Equipment Notes and
accrued and unpaid interest thereon to be due and payable under, and in
accordance with, the provisions of such Indenture. Subject to the Owner
Trustees and the Owner Participants rights, if any, set forth in the
Indentures with respect to Leased Aircraft to purchase the Equipment Notes,
if the Equipment Notes issued pursuant to any Indenture have been Accelerated
following an Indenture Default with respect thereto, the Controlling Party
may sell, assign, contract to sell or otherwise dispose of and deliver all
(but not less than all) of such Equipment Notes to any Person at public or
private sale, at any location at the option of the Controlling Party, all
upon such terms and conditions as it may reasonably deem advisable in
accordance with applicable law.
(ii) Subject to the Owner Trustees' and the Owner
Participants' rights set forth in the Indentures with respect to Leased
Aircraft to purchase the Equipment Notes, and notwithstanding the foregoing,
so long as any Certificates remain Outstanding, during the period ending on
the date which is nine months after the earlier of (x) the Acceleration of
the Equipment Notes issued pursuant to any Indenture or (y) the occurrence of
a Northwest Bankruptcy Event, without the consent of each Trustee, (A) no
Aircraft subject to the Lien of such Indenture or such Equipment Notes may be
sold if the net proceeds from such sale would be less than the Minimum Sale
Price for such Aircraft or such Equipment Notes, and (B) with respect to any
Leased Aircraft, the amount and payment dates of rentals payable by Northwest
under the Lease for such Aircraft may not be adjusted, if, as a result of
such adjustment, the discounted present value of all such rentals would be
less than 75% of the discounted present value of the rentals payable by
Northwest under such Lease before giving effect to such adjustment, in each
case, using the weighted average interest rate of the Equipment Notes issued
pursuant to such Indenture as the discount rate.
(iii) At the request of the Controlling Party, the
Subordination Agent may from time to time during the continuance of an
Indenture Default (and before the occurrence of a Triggering Event)
commission LTV Appraisals with respect to the related Aircraft.
(iv) After a Triggering Event occurs and any Equipment
Note becomes a Non-Performing Equipment Note, the Subordination Agent shall
obtain LTV Appraisals for the Aircraft as soon as practicable and additional
LTV Appraisals on or prior to each anniversary of the date of such initial
LTV Appraisals; provided that, if the Controlling Party reasonably objects to
the appraised value of the Aircraft shown in any such LTV Appraisals, the
Controlling Party shall have the right to obtain or cause to be obtained at
its expense substitute LTV Appraisals (including any LTV Appraisals based
upon physical inspection of the Aircraft).
(b) The Controlling Party shall take such actions as it may
reasonably deem most effectual to complete the sale or other disposition of
such Aircraft or Equipment Notes. In addition, in lieu of any sale,
assignment, contract to sell or other disposition, the Subordination Agent,
on behalf of the Controlling Party, may maintain possession of such Equipment
Notes and continue to apply monies received in respect of such Equipment
Notes in accordance with Article III hereof. In addition, in lieu of such
sale, assignment, contract to sell or other disposition, or in lieu of such
maintenance of possession, the Controlling Party may instruct the Loan
Trustee under such Indenture to foreclose on the Lien on the related Aircraft
or to take any other remedial action permitted under such Indenture or
applicable law.
SECTION 4.2 Remedies Cumulative. Each and every right,
power and remedy given to the Trustees, the Liquidity Providers, the Policy
Provider, the Controlling Party or the Subordination Agent specifically or
otherwise in this Agreement shall be cumulative and shall be in addition to
every other right, power and remedy herein specifically given or now or
hereafter existing at law, in equity or by statute, and each and every right,
power and remedy whether specifically herein given or otherwise existing may,
subject always to the terms and conditions hereof, be exercised from time to
time and as often and in such order as may be deemed expedient by any
Trustee, any Liquidity Provider, the Policy Provider, the Controlling Party
or the Subordination Agent, as appropriate, and the exercise or the beginning
of the exercise of any power or remedy shall not be construed to be a waiver
of the right to exercise at the same time or thereafter any other right,
power or remedy. No delay or omission by any Trustee, any Liquidity
Provider, the Policy Provider, the Controlling Party or the Subordination
Agent in the exercise of any right, remedy or power or in the pursuit of any
remedy shall impair any such right, power or remedy or be construed to be a
waiver of any default or to be an acquiescence therein.
SECTION 4.3 Discontinuance of Proceedings. In case any
party to this Agreement (including the Controlling Party in such capacity)
shall have instituted any Proceeding to enforce any right, power or remedy
under this Agreement by foreclosure, entry or otherwise, and such Proceedings
shall have been discontinued or abandoned for any reason or shall have been
determined adversely to the Person instituting such Proceeding, then and in
every such case each such party shall, subject to any determination in such
proceedings, be restored to its former position and rights hereunder, and all
rights, remedies and powers of such party shall continue as if no such
Proceedings had been instituted.
SECTION 4.4 Right of Certificateholders to Receive Payments
Not to Be Impaired. Anything in this Agreement to the contrary
notwithstanding but subject to each Trust Agreement, the right of any
Certificateholder or Liquidity Provider or the Policy Provider, respectively,
to receive payments pursuant to Section 2.4, 3.2 or 3.3 hereof when due, or
to institute suit for the enforcement of any such payment on or after the
applicable Distribution Date, shall not be impaired or affected without the
consent of such Certificateholder, such Liquidity Provider or the Policy
Provider, respectively.
SECTION 4.5 Undertaking for Costs. In any suit for the
enforcement of any right or remedy under this Agreement or in any suit
against any Controlling Party or the Subordination Agent for any action taken
or omitted by it as Controlling Party or Subordination Agent, as the case may
be, a court in its discretion may require the filing by any party litigant in
the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys' fees
and expenses, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party
litigant. The provisions of this Section do not apply to a suit instituted
by the Subordination Agent, a Liquidity Provider, the Policy Provider or a
Trustee or a suit by Certificateholders holding more than 10% of the original
principal amount of any Class of Certificates.
ARTICLE V
DUTIES OF THE SUBORDINATION AGENT;
AGREEMENTS OF TRUSTEES, ETC.
SECTION 5.1 Notice of Indenture Default or Triggering
Event. (a) In the event the Subordination Agent shall have actual knowledge
of the occurrence of an Indenture Default or a Triggering Event, as promptly
as practicable, and in any event within 10 days after obtaining knowledge
thereof, the Subordination Agent shall transmit by mail to the Rating
Agencies, the Liquidity Providers, the Policy Provider and the Trustees
notice of such Indenture Default or Triggering Event, unless such Indenture
Default or Triggering Event shall have been cured or waived. For all
purposes of this Agreement, in the absence of actual knowledge on the part of
a Responsible Officer, the Subordination Agent shall not be deemed to have
knowledge of any Indenture Default or Triggering Event unless notified in
writing by one or more Trustees, one or more Liquidity Providers, the Policy
Provider or one or more Certificateholders.
(b) Other Notices. The Subordination Agent will furnish to
each Liquidity Provider, the Policy Provider and Trustee, promptly upon
receipt thereof, duplicates or copies of all reports, notices, requests,
demands, certificates, financial statements and other instruments furnished
to the Subordination Agent as registered holder of the Equipment Notes or
otherwise in its capacity as Subordination Agent to the extent the same shall
not have been otherwise directly distributed to such Liquidity Provider, the
Policy Provider or Trustee, as applicable, pursuant to the express provision
of any other Operative Agreement.
SECTION 5.2 Indemnification. The Subordination Agent shall
not be required to take any action or refrain from taking any action under
Section 5.1 (other than the first sentence thereof) or Article IV hereof
unless the Subordination Agent shall have been indemnified (to the extent and
in the manner reasonably satisfactory to the Subordination Agent) against any
liability, cost or expense (including counsel fees and expenses) which may be
incurred in connection therewith. The Subordination Agent shall not be under
any obligation to take any action under this Agreement and nothing contained
in this Agreement shall require the Subordination Agent to expend or risk its
own funds or otherwise incur any financial liability in the performance of
any of its duties hereunder or in the exercise of any of its rights or powers
if it shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it. The Subordination Agent shall not be required to take any
action under Section 5.1 (other than the first sentence thereof) or Article
IV hereof, nor shall any other provision of this Agreement be deemed to
impose a duty on the Subordination Agent to take any action, if the
Subordination Agent shall have been advised by counsel that such action is
contrary to the terms hereof or is otherwise contrary to law.
SECTION 5.3 No Duties Except as Specified in Intercreditor
Agreement. The Subordination Agent shall not have any duty or obligation to
take or refrain from taking any action under, or in connection with, this
Agreement, except as expressly provided by the terms of this Agreement; and
no implied duties or obligations shall be read into this Agreement against
the Subordination Agent. The Subordination Agent agrees that it will, in its
individual capacity and at its own cost and expense (but without any right of
indemnity in respect of any such cost or expense under Section 7.1 hereof)
promptly take such action as may be necessary to duly discharge all Liens on
any of the Trust Accounts or any monies deposited therein which result from
claims against it in its individual capacity not related to its activities
hereunder or from a breach of its obligations that constitute willful
misconduct or gross negligence hereunder or any other Operative Agreement.
SECTION 5.4 Notice from the Liquidity Providers and
Trustees. If a Responsible Officer of any Liquidity Provider, the Policy
Provider or any Trustee has actual notice of an Indenture Default or a
Triggering Event, such Person shall promptly use its best efforts give notice
thereof to all other Liquidity Providers and Trustees and to the Policy
Provider and to the Subordination Agent, provided, however, that no such
Person shall have any liability hereunder as a result of its failure to
deliver any such notice.
ARTICLE VI
THE SUBORDINATION AGENT
SECTION 6.1 Authorization; Acceptance of Trusts and Duties.
Each of the Class G Trustee and Class C Trustee hereby designates and
appoints the Subordination Agent as the agent and trustee of such Trustee
under the applicable Liquidity Facility and authorizes the Subordination
Agent to enter into the applicable Liquidity Facility as agent and trustee
for such Trustee. Each of the Liquidity Providers, the Trustees and the
Policy Provider hereby designates and appoints the Subordination Agent as the
Subordination Agent under this Agreement.
The Subordination Agent hereby accepts the duties hereby
created and applicable to it as the Subordination Agent and agrees to perform
the same but only upon the terms of this Agreement and agrees to receive and
disburse all monies received by it in accordance with the terms hereof. The
Subordination Agent shall not be answerable or accountable under any
circumstances, except (a) for its own willful misconduct or gross negligence
or, with respect to the handling or transfer of funds, ordinary negligence,
(b) as provided in Section 2.2 hereof and (c) for liabilities that may result
from the material inaccuracy of any representation or warranty of the
Subordination Agent made in its individual capacity in any Operative
Agreement. The Subordination Agent shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Subordination
Agent, unless it is proved that the Subordination Agent was negligent in
ascertaining the pertinent facts.
SECTION 6.2 Absence of Duties. The Subordination Agent
shall have no duty to see to any recording or filing of this Agreement or any
other document, or to see to the maintenance of any such recording or filing.
SECTION 6.3 No Representations or Warranties as to
Documents. The Subordination Agent in its individual capacity does not make
nor shall be deemed to have made any representation or warranty as to the
validity, legality or enforceability of this Agreement or any other Operative
Agreement or as to the correctness of any statement contained in any thereof,
except for the representations and warranties of the Subordination Agent,
made in its individual capacity, under any Operative Agreement to which it is
a party. The Certificateholders, the Trustees and the Liquidity Providers
make no representation or warranty hereunder whatsoever.
SECTION 6.4 No Segregation of Monies; No Interest. Any
monies paid to or retained by the Subordination Agent pursuant to any
provision hereof and not then required to be distributed to any Trustee, the
Policy Provider or any Liquidity Provider as provided in Articles II and III
hereof need not be segregated in any manner except to the extent required by
such Articles II and III and by law, and the Subordination Agent shall not
(except as otherwise provided in Section 2.2 hereof) be liable for any
interest thereon; provided, however, that any payments received or applied
hereunder by the Subordination Agent shall be accounted for by the
Subordination Agent so that any portion thereof paid or applied pursuant
hereto shall be identifiable as to the source thereof.
SECTION 6.5 Reliance; Agents; Advice of Counsel. The
Subordination Agent shall not incur liability to anyone in acting upon any
signature, instrument, notice, resolution, request, consent, order,
certificate, report, opinion, bond or other document or paper believed by it
to be genuine and believed by it to be signed by the proper party or parties.
As to the Pool Balance of any Trust as of any date, the Subordination Agent
may for all purposes hereof rely on a certificate signed by any Responsible
Officer of the applicable Trustee, and such certificate shall constitute full
protection to the Subordination Agent for any action taken or omitted to be
taken by it in good faith in reliance thereon. As to any fact or matter
relating to the Liquidity Providers, the Policy Provider or the Trustees the
manner of ascertainment of which is not specifically described herein, the
Subordination Agent may for all purposes hereof rely on a certificate, signed
by any Responsible Officer of the applicable Liquidity Provider or Trustee or
the Policy Provider, as the case may be, as to such fact or matter, and such
certificate shall constitute full protection to the Subordination Agent for
any action taken or omitted to be taken by it in good faith in reliance
thereon. The Subordination Agent shall assume, and shall be fully protected
in assuming, that each of the Liquidity Providers, the Policy Provider and
each of the Trustees are authorized to enter into this Agreement and to take
all action to be taken by them pursuant to the provisions hereof, and shall
not inquire into the authorization of each of the Liquidity Providers and
each of the Trustees with respect thereto. In the administration of the
trusts hereunder, the Subordination Agent may execute any of the trusts or
powers hereof and perform its powers and duties hereunder directly or through
agents or attorneys and may consult with counsel, accountants and other
skilled persons to be selected and retained by it, and the Subordination
Agent shall not be liable for the acts or omissions of any agent appointed
with due care or for anything done, suffered or omitted in good faith by it
in accordance with the advice or written opinion of any such counsel,
accountants or other skilled persons.
SECTION 6.6 Capacity in Which Acting. The Subordination
Agent acts hereunder solely as agent and trustee herein and not in its
individual capacity, except as otherwise expressly provided in the Operative
Agreements.
SECTION 6.7 Compensation. The Subordination Agent shall be
entitled to reasonable compensation, including expenses and disbursements,
for all services rendered hereunder and shall have a priority claim to the
extent set forth in Article III hereof on all monies collected hereunder for
the payment of such compensation, to the extent that such compensation shall
not be paid by others. The Subordination Agent agrees that it shall have no
right against any Trustee or Liquidity Provider or the Policy Provider for
any fee as compensation for its services as agent under this Agreement. The
provisions of this Section 6.7 shall survive the termination of this
Agreement.
SECTION 6.8 May Become Certificateholder. The institution
acting as Subordination Agent hereunder may become a Certificateholder and
have all rights and benefits of a Certificateholder to the same extent as if
it were not the institution acting as the Subordination Agent.
SECTION 6.9 Subordination Agent Required; Eligibility.
There shall at all times be a Subordination Agent hereunder which shall be a
corporation organized and doing business under the laws of the United States
of America or of any State or the District of Columbia having a combined
capital and surplus of at least $100,000,000 (or the obligations of which,
whether now in existence or hereafter incurred, are fully and unconditionally
guaranteed by a corporation organized and doing business under the laws of
the United States, any State thereof or of the District of Columbia and
having a combined capital and surplus of at least $100,000,000), if there is
such an institution willing and able to perform the duties of the
Subordination Agent hereunder upon reasonable or customary terms. Such
corporation shall be a citizen of the United States and shall be authorized
under the laws of the United States or any State thereof or of the District
of Columbia to exercise corporate trust powers and shall be subject to
supervision or examination by federal, state or District of Columbia
authorities. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of any of the aforesaid
supervising or examining authorities, then, for the purposes of this Section
6.9, the combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published.
In case at any time the Subordination Agent shall cease to
be eligible in accordance with the provisions of this Section, the
Subordination Agent shall resign immediately in the manner and with the
effect specified in Section 8.1.
SECTION 6.10 Money to Be Held in Trust. All Equipment
Notes, monies and other property deposited with or held by the Subordination
Agent pursuant to this Agreement shall be held in trust for the benefit of
the parties entitled to such Equipment Notes, monies and other property. All
such Equipment Notes, monies or other property shall be held in the Trust
Department of the institution acting as Subordination Agent hereunder.
ARTICLE VII
INDEMNIFICATION OF SUBORDINATION AGENT
SECTION 7.1 Scope of Indemnification. The Subordination
Agent shall be indemnified hereunder to the extent and in the manner
described in Section 7(c) of the Participation Agreements and Section 7 of
the Note Purchase Agreement. The indemnities contained in such Section 7(c)
shall survive the termination of this Agreement.
ARTICLE VIII
SUCCESSOR SUBORDINATION AGENT
SECTION 8.1 Replacement of Subordination Agent; Appointment
of Successor. The Subordination Agent may resign at any time by so notifying
the Trustees and the Liquidity Providers. The Liquidity Provider or the
Controlling Party may remove the Subordination Agent for cause by so
notifying the Subordination Agent and may appoint a successor Subordination
Agent. The Controlling Party shall remove the Subordination Agent if:
(1) the Subordination Agent fails to comply with Section
6.9 hereof;
(2) the Subordination Agent is adjudged bankrupt or
insolvent;
(3) a receiver or other public officer takes charge of the
Subordination Agent or its property; or
(4) the Subordination Agent otherwise becomes incapable of
acting.
If the Subordination Agent resigns or is removed or if a
vacancy exists in the office of Subordination Agent for any reason (the
Subordination Agent in such event being referred to herein as the retiring
Subordination Agent), the Controlling Party in consultation with Northwest
shall promptly appoint a successor Subordination Agent.
Any corporation into which the Subordination Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the
Subordination Agent shall be a party, or any corporation to which
substantially all the corporate trust business of the Subordination Agent may
be transferred, shall, subject to the terms of Section 6.9 hereof, be the
Subordination Agent hereunder and under the other Operative Agreements to
which the Subordination Agent is a party without further act, except that
such Person shall give prompt subsequent notice of such transaction to the
Liquidity Provider and each Trustee.
A successor Subordination Agent shall deliver a written
acceptance of its appointment as Subordination Agent hereunder to the
retiring Subordination Agent, upon which the resignation or removal of the
retiring Subordination Agent shall become effective, and the successor
Subordination Agent shall have all the rights, powers and duties of the
Subordination Agent under this Agreement. The successor Subordination Agent
shall send a written notice of its succession to the Liquidity Providers, the
Policy Provider and the Trustees. The retiring Subordination Agent shall
promptly transfer its rights under each of the Liquidity Facilities, the
Policy and all of the property held by it as Subordination Agent to the
successor Subordination Agent.
If a successor Subordination Agent does not take office
within 60 days after the retiring Subordination Agent resigns or is removed,
the retiring Subordination Agent or one or more of the Trustees may petition
any court of competent jurisdiction for the appointment of a successor
Subordination Agent.
If the Subordination Agent fails to comply with Section 6.9
hereof (to the extent applicable), one or more of the Trustees or one or more
of the Liquidity Providers, the Policy Provider or Northwest may petition any
court of competent jurisdiction for the removal of the Subordination Agent
and the appointment of a successor Subordination Agent.
Notwithstanding the foregoing, no resignation or removal of
the Subordination Agent shall be effective unless and until a successor has
been appointed. No appointment of a successor Subordination Agent shall be
effective unless and until the Rating Agencies shall have delivered a Ratings
Confirmation.
ARTICLE IX
SUPPLEMENTS AND AMENDMENTS
SECTION 9.1 Amendments, Waivers, Etc. (a) This Agreement
may not be supplemented, amended or modified without the consent of each
Trustee (acting, except in the case of any amendment pursuant to Section 9.5
hereof, with the consent of holders of Certificates of the related Class
evidencing interests in the related Trust aggregating not less than a
majority in interest in such Trust or as otherwise authorized pursuant to the
relevant Trust Agreement), the Subordination Agent, the Policy Provider and
each Liquidity Provider; provided, however, that this Agreement may be
supplemented, amended or modified without the consent of any Trustee if such
supplement, amendment or modification cures an ambiguity or inconsistency or
does not materially adversely affect such Trustee or the holders of the
related Class of Certificates; provided further, however, that, if such
supplement, amendment or modification would (x) directly or indirectly modify
or supersede, or otherwise conflict with, Section 2.2(b), Section 3.6(e),
Section 3.6(f)(other than the last sentence thereof) (collectively, together
with this proviso and Section 9.1, the "Northwest Provisions") or (y)
otherwise adversely affect the interests of a potential Replacement Liquidity
Provider or of Northwest with respect to its ability to replace any Liquidity
Facility or with respect to its payment obligations under any Financing
Agreement, Leased Aircraft Indenture or Owned Aircraft Indenture, then such
supplement, amendment or modification shall not be effective without the
additional written consent of Northwest. Notwithstanding the foregoing,
without the consent of each Certificateholder, the Policy Provider and each
Liquidity Provider, no supplement, amendment or modification of this
Agreement may (i) reduce the percentage of the interest in any Trust
evidenced by the Certificates issued by such Trust necessary to consent to
modify or amend any provision of this Agreement or to waive compliance
therewith or (ii) modify Section 2.4, 3.2 or 3.3 hereof, relating to the
distribution of monies received by the Subordination Agent hereunder from the
Equipment Notes or pursuant to the Liquidity Facilities or the Policy.
Nothing contained in this Section shall require the consent of a Trustee at
any time following the payment of Final Distributions with respect to the
related Class of Certificates.
(b) In the event that the Subordination Agent, as the
registered holder of any Equipment Notes, receives a request for its consent
to any amendment, modification, consent or waiver under such Equipment Notes,
the Indenture pursuant to which such Equipment Notes were issued, or the
related Lease, Participation Agreement or other related document, (i) if no
Indenture Default shall have occurred and be continuing with respect to such
Indenture, the Subordination Agent shall request directions with respect to
each Series of such Equipment Notes from the Trustee of the Trust which holds
such Equipment Notes, except that so long as the Final Distribution on the
Class G Certificates has not been made or any Policy Provider Obligations
remain outstanding and no Policy Provider Default shall have occurred and be
continuing, the Subordination Agent shall request directions from the Policy
Provider rather than the Class G Trustee with respect to the Class G
Equipment Notes held in the Class G Trust, and shall vote or consent in
accordance with the directions of such Trustee or the Policy Provider and
(ii) if any Indenture Default (which, in the case of any Indenture pertaining
to a Leased Aircraft, has not been cured by the applicable Owner Trustee or
the applicable Owner Participant, if applicable, pursuant to Section 4.03 of
such Indenture) shall have occurred and be continuing with respect to such
Indenture, the Subordination Agent will exercise its voting rights as
directed by the Controlling Party, subject to Sections 4.1 and 4.4 hereof;
provided that no such amendment, modification or waiver shall, without the
consent of each Liquidity Provider, the Policy Provider and the Class G
Certificateholders, reduce the amount of rent, supplemental rent or
stipulated loss values payable by Northwest under any Lease or reduce the
amount of principal or interest payable by Northwest under any Equipment Note
issued under any Indenture in respect of an Owned Aircraft.
SECTION 9.2 Subordination Agent Protected. If, in the
reasonable opinion of the institution acting as the Subordination Agent
hereunder, any document required to be executed pursuant to the terms of
Section 9.1 affects any right, duty, immunity or indemnity with respect to it
under this Agreement, any Liquidity Facility or the Policy, the Subordination
Agent may in its discretion decline to execute such document.
SECTION 9.3 Effect of Supplemental Agreements. Upon the
execution of any amendment or supplement hereto pursuant to the provisions
hereof, this Agreement shall be and be deemed to be modified and amended in
accordance therewith and the respective rights, limitations of rights,
obligations, duties and immunities under this Agreement of the parties hereto
and beneficiaries hereof shall thereafter be determined, exercised and
enforced hereunder subject in all respects to such modifications and
amendments, and all the terms and conditions of any such supplemental
agreement shall be and be deemed to be part of the terms and conditions of
this Agreement for any and all purposes. In executing or accepting any
supplemental agreement permitted by this Article IX, the Subordination Agent
shall be entitled to receive, and shall be fully protected in relying upon,
an opinion of counsel stating that the execution of such supplemental
agreement is authorized or permitted by this Agreement.
SECTION 9.4 Notice to Rating Agencies and the Policy
Provider. Promptly following its receipt of each amendment, consent,
modification, supplement or waiver contemplated by this Article IX, the
Subordination Agent shall send a copy thereof to each Rating Agency and the
Policy Provider.
SECTION 9.5 Addition of Class D Trustee. If with respect to
any Aircraft Class D Certificates are issued, this Agreement shall be amended
by written agreement of Northwest and the Subordination Agent to provide for
the subordination of such Class D Certificates to the Class G Certificates
and the Class C Certificates substantially in the same manner as the Class C
Certificates are subordinated hereunder to the Class G Certificates. No such
amendment shall materially adversely affect any Trustee, any Liquidity
Provider or the Policy Provider. The amendment to this Agreement to give
effect to the issuance of any Class D Certificates shall include, without
limitation:
(i) the Class D Trust Trustee shall be added as a party to
this Agreement; and
(ii) the definitions of "Cash Collateral Account,"
"Certificate," "Class," "Equipment Notes," "Final Legal Distribution
Date," "Liquidity Facilities," "Liquidity Provider," "LTV Ratio,"
"Stated Interest Rate," "Trust," "Trust Agreement" and "Controlling
Party" shall be revised, as appropriate, to reflect the issuance of
the Class D Certificates (and the subordination thereof); and
(iii) the provisions of this Agreement governing payments
with respect to Certificates and related notices, including, without
limitation, Sections 2.4, 3.1, 3.2, 3.3 and 3.6(e), shall be revised
to provide for distributions on the Class D Certificates after
payment of all relevant distributions on the Class C Certificates.
If with respect to any Aircraft, Series D Equipment Notes are issued to any
Person other than the Class D Trust, this Agreement shall be amended by
written agreement of Northwest and the Subordination Agent to (i) provide for
each holder of a Series D Equipment Note to be bound by the provisions of
Section 2.6(a) hereof so that the Controlling Party shall be entitled to
direct the Loan Trustee as provided therein (and such Series D Equipment
Notes shall make effective provision therefor so as to bind each holder
thereof to such provisions of Section 2.6(a) hereof) and (ii) to revise the
definitions of "Controlling Party" and "Equipment Notes", as appropriate, to
reflect the issuance of the Series D Equipment Notes (and the prior rights,
as against the holders of such Series D Equipment Notes, of the Policy
Provider, the Class G Trustee and the Class C Trustee to be such "Controlling
Party"). No such amendment shall materially adversely affect any Trustee,
any Liquidity Provider or the Policy Provider.
ARTICLE X
MISCELLANEOUS
SECTION 10.1 Termination of Intercreditor Agreement.
Following payment of Final Distributions with respect to each Class of
Certificates and the payment in full of all Liquidity Obligations to the
Liquidity Providers and all Policy Provider Obligations to the Policy
Provider and provided that there shall then be no other amounts due to the
Certificateholders, the Trustees, the Liquidity Providers, the Subordination
Agent and the Policy Provider hereunder or under the Trust Agreements, and
that the commitment of (i) the Liquidity Providers under the Liquidity
Facilities and (ii) the Policy Provider under the Policy shall have expired
or been terminated, this Agreement and the trusts created hereby shall
terminate and this Agreement shall be of no further force or effect. Except
as aforesaid or otherwise provided, this Agreement and the trusts created
hereby shall continue in full force and effect in accordance with the terms
hereof.
SECTION 10.2 Intercreditor Agreement for Benefit of
Trustees, Liquidity Providers, Policy Provider and Subordination Agent.
Nothing in this Agreement, whether express or implied, shall be construed to
give to any Person other than the Trustees, the Liquidity Providers, the
Policy Provider and the Subordination Agent any legal or equitable right,
remedy or claim under or in respect of this Agreement.
SECTION 10.3 Notices. Unless otherwise expressly specified
or permitted by the terms hereof, all notices, requests, demands,
authorizations, directions, consents, waivers or documents provided or
permitted by this Agreement to be made, given, furnished or filed shall be in
writing, mailed by certified mail, postage prepaid, or by confirmed telecopy
and
(i) if to the Subordination Agent, addressed to it at
its office at:
x/x Xxxxx Xxxxxx Xxxx and Trust Company
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Corporate Trust Department
Fax: (000) 000-0000
(ii) if to the Trustee, addressed to it at its office
at:
State Street Bank and Trust Company of Connecticut,
National Association
000 Xxxxxx Xxxxxx, Xxxxxxx Square
Hartford, Connecticut 06103
Attention: Corporate/Muni Department
Fax: (000) 000-0000
(iii) if to any Liquidity Provider, addressed to it at its
office at:
CREDIT SUISSE FIRST BOSTON
00 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxx and Janko Gogolia
Telecopy: (000) 000-0000
(iv) if to the Policy Provider, addressed to it at its
office at:
MBIA Insurance Corporation
000 Xxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Attention: Insured Portfolio Management, Structured
Finance
Fax: (000) 000-0000
Whenever any notice in writing is required to be given by any Trustee or
Liquidity Provider, the Subordination Agent or the Policy Provider to any of
the other of them, such notice shall be deemed given and such requirement
satisfied when such notice is received, if such notice is mailed by certified
mail, postage prepaid or by courier service or if such notice is sent by
confirmed telecopy addressed as provided above. Any party hereto may change
the address to which notices to such party will be sent by giving notice of
such change to the other parties to this Agreement.
SECTION 10.4 Severability. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
SECTION 10.5 No Oral Modifications or Continuing Waivers.
No terms or provisions of this Agreement may be changed, waived, discharged
or terminated orally, but only by an instrument in writing signed by the
party or other Person against whom enforcement of the change, waiver,
discharge or termination is sought and any other party or other Person whose
consent is required pursuant to this Agreement and any waiver of the terms
hereof shall be effective only in the specific instance and for the specific
purpose given.
SECTION 10.6 Successors and Assigns. All covenants and
agreements contained herein shall be binding upon, and inure to the benefit
of, each of the parties hereto and the successors and assigns of each, all as
herein provided.
SECTION 10.7 Headings. The headings of the various
Articles and Sections herein and in the table of contents hereto are for
convenience of reference only and shall not define or limit any of the terms
or provisions hereof.
SECTION 10.8 Counterpart Form. This Agreement may be
executed by the parties hereto in separate counterparts, each of which when
so executed and delivered shall be an original, but all such counterparts
shall together constitute but one and the same agreement.
SECTION 10.9 Subordination. (a) As between the Liquidity
Providers and the Policy Provider, on the one hand, and the Trustees and the
Certificateholders, on the other hand, and as between and among the
Certificateholders of all Classes of Certificates, this Agreement shall be a
subordination agreement for purposes of Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx
Bankruptcy Code, as amended from time to time.
(b) Notwithstanding the provisions of this Agreement, if
prior to the payment in full to the (i) Liquidity Providers of all Liquidity
Obligations then due and payable and (ii) Policy Provider of all Policy
Provider Obligations then due and payable, any party hereto shall have
received any payment or distribution in respect of Equipment Notes or any
other amount under the Indentures or other Operative Agreements which, had
the subordination provisions of this Agreement been properly applied to such
payment, distribution or other amount, would not have been distributed to
such Person, then such payment, distribution or other amount shall be
received and held in trust by such Person and paid over or delivered to the
Subordination Agent for application as provided herein.
(c) If any Trustee, any Liquidity Provider, the
Subordination Agent or the Policy Provider receives any payment in respect of
any obligations owing hereunder (or, in the case of the Liquidity Providers
or the Policy Provider, in respect of the Liquidity Obligations or the Policy
Provider Obligations, as the case may be), which is subsequently invalidated,
declared preferential, set aside and/or required to be repaid to a trustee,
receiver or other party, then, to the extent of such payment, such
obligations (or, in the case of the Liquidity Providers or the Policy
Provider, such Liquidity Obligations or the Policy Provider Obligations, as
the case may be) intended to be satisfied shall be revived and continue in
full force and effect as if such payment had not been received.
(d) The Trustees (on behalf of themselves and the holders
of Certificates), the Liquidity Providers, the Subordination Agent and the
Policy Provider confirm that the payment priorities specified in Sections
2.4, 3.2 and 3.3 shall apply in all circumstances, notwithstanding the fact
that the obligations owed to the Trustees and the holders of Certificates are
secured by certain assets and the Liquidity Obligations and Policy Provider
Obligations may not be so secured. The Trustees expressly agree (on behalf
of themselves and the holders of Certificates) not to assert priority over
the holders of Liquidity Obligations or Policy Provider Obligations due to
their status as secured creditors in any bankruptcy, insolvency or other
legal proceeding.
(e) Each of the Trustees (on behalf of themselves and the
holders of Certificates), the Liquidity Providers, the Policy Provider and
the Subordination Agent may take any of the following actions without
impairing its rights under this Agreement:
(i) obtain a lien on any property to secure any amounts
owing to it hereunder, including, in the case of the Liquidity
Providers and the Policy Provider, the Liquidity Obligations or the
Policy Provider Obligations, as the case may be,
(ii) obtain the primary or secondary obligation of any
other obligor with respect to any amounts owing to it hereunder,
including, in the case of the Liquidity Providers and the Policy
Provider, any of the Liquidity Obligations or the Policy Provider
Obligations, as the case may be,
(iii) renew, extend, increase, alter or exchange any
amounts owing to it hereunder, including, in the case of the
Liquidity Providers and the Policy Provider, any of the Liquidity
Obligations or the Policy Provider Obligations, as the case may be,
or release or compromise any obligation of any obligor with respect
thereto,
(iv) refrain from exercising any right or remedy, or
delay in exercising such right or remedy, which it may have, or
(v) take any other action which might discharge a
subordinated party or a surety under applicable law;
provided, however, that the taking of any such actions by any of the
Trustees, the Liquidity Providers, the Policy Provider or the Subordination
Agent shall not prejudice the rights or adversely affect the obligations of
any other party under this Agreement.
SECTION 10.10 Governing Law. THIS AGREEMENT SHALL IN ALL
RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE.
SECTION 10.11 Submission to Jurisdiction; Waiver of Jury
Trial; Waiver of Immunity. (a) Each of the parties hereto hereby
irrevocably and unconditionally:
(i) submits for itself and its property in any legal
action or proceeding relating to this Agreement or any other
Operative Agreement, or for recognition and enforcement of any
judgment in respect hereof or thereof, to the nonexclusive general
jurisdiction of the courts of the State of New York, the courts of
the United States of America for the Southern District of New York,
and the appellate courts from any thereof;
(ii) consents that any such action or proceedings may be
brought in such courts, and waives any objection that it may now or
hereafter have that the venue of any such action or proceeding was
brought in an inconvenient court and agrees not to plead or claim the
same;
(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form and mail), postage
prepaid, to each party hereto at its address set forth in Section
10.3 hereof, or at such other address of which the other parties
shall have been notified pursuant thereto; and
(iv) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or
shall limit the right to xxx in any other jurisdiction.
(b) EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE
ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING
TO THE SUBJECT MATTER OF THIS AGREEMENT AND THE RELATIONSHIP THAT IS BEING
ESTABLISHED, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS,
BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH OF
THE PARTIES WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS
LEGAL COUNSEL, AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL
RIGHTS FOLLOWING CONSULTATION WITH SUCH LEGAL COUNSEL. THIS WAIVER IS
IRREVOCABLE, AND CANNOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS
WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective officers thereunto duly
authorized, as of the day and year first above written, and acknowledge that
this Agreement has been made and delivered in the City of New York, and this
Agreement has become effective only upon such execution and delivery.
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION, not in
its individual capacity but solely as
Trustee for each of the Trusts
By:______________________________________
Name:
Title:
CREDIT SUISSE FIRST BOSTON, NEW YORK
BRANCH, as Class G Liquidity Provider and
Class C Liquidity Provider
By:______________________________________
Name:
Title:
By:______________________________________
Name:
Title:
STATE STREET BANK AND TRUST COMPANY, not in
its individual capacity except as expressly
set forth herein but solely as
Subordination Agent and trustee
By:______________________________________
Name:
Title:
MBIA INSURANCE CORPORATION
as Policy Provider
By:______________________________________
Name:
Title:
