<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 7, 1999
REGISTRATION NO. 333-79215
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
<TABLE>
<S> <C>
NORTHWEST AIRLINES CORPORATION NORTHWEST AIRLINES, INC.
(Exact name of Registrants as specified in their charters)
DELAWARE MINNESOTA
(State or other jurisdiction of incorporation or organization)
4512 4512
(Primary Standard Industrial Classification Code Number)
41-1905580 41-0449230
(I.R.S. Employer Identification Number)
</TABLE>
------------------------
2700 LONE OAK PARKWAY
EAGAN, MINNESOTA 55121
(612) 726-2111
(Address, including zip code, and telephone number, including area code, of
Registrants' principal executive offices)
------------------------------
DOUGLAS M. STEENLAND, ESQ.
EXECUTIVE VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
NORTHWEST AIRLINES CORPORATION
2700 LONE OAK PARKWAY
EAGAN, MINNESOTA 55121
(612) 726-2111
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------------------
COPY TO:
STEPHAN J. FEDER, ESQ.
SIMPSON THACHER & BARTLETT
425 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017-3954
(212) 455-2000
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this registration statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, other than securities offered only in connection with dividend
or interest reinvestment plans, please check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
Pursuant to Rule 429 of the Rules and Regulations of the Securities and
Exchange Commission under the Securities Act of 1933, the Forms of Prospectus
included in this Registration Statement also relate to an aggregate remaining
amount of $478,800,000 of the classes of Securities covered by such Forms of
Prospectus previously registered under the Registration Statement on Form S-3
(File No. 333-41579-01). A filing fee of $352,764 was paid on December 5, 1997
in connection with the remaining amount of Securities registered under the
Registration Statement on Form S-3 (File No. 333-41579-01). This Registration
Statement is a new Registration Statement, constitutes Post Effective Amendment
No. 2 to Registration Statement No. 333-41579-01, and such Post-Effective
Amendment shall hereafter become effective concurrently with the effectiveness
of this Registration Statement and in accordance with Section 8(c) of the
Securities Act of 1933.
--------------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE>
EXPLANATORY NOTE
This Registration Statement consists of two separate Prospectuses, covering
securities to be registered as follows:
(1) Debt Securities and Warrants to Purchase Debt Securities of
Northwest Airlines, Inc. and Guarantees of the Debt Securities by Northwest
Airlines Corporation; and
(2) Pass Through Certificates of Northwest Airlines, Inc. and related
Guarantees of Northwest Airlines Corporation.
Separate financial statements of Northwest Airlines, Inc. are not being
provided because all of the securities being issued by Northwest Airlines, Inc.
under this Registration Statement are fully and unconditionally guaranteed by
Northwest Airlines Corporation and such separate financial statements are
therefore not deemed material.
<PAGE>
SUBJECT TO COMPLETION, DATED JUNE 7, 1999
PROSPECTUS
$1,500,000,000
NORTHWEST AIRLINES, INC.
DEBT SECURITIES AND WARRANTS TO PURCHASE DEBT SECURITIES
------------------
Payment of Principal, Premium, if any, and Interest Fully and Unconditionally
Guaranteed by
NORTHWEST AIRLINES CORPORATION
---------------
Northwest Airlines, Inc. may from time to time offer its debt securities and
warrants to purchase debt securities. The debt securities will be fully and
unconditionally guaranteed by Northwest Airlines Corporation, the indirect
parent of Northwest Airlines, Inc.
When we decide to sell a particular series of securities, we will provide
specific terms of the offered securities in a prospectus supplement. You should
read this prospectus and any prospectus supplement carefully before you invest.
------------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
------------------------
The date of this prospectus is , 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
About this Prospectus...................................................................................... 2
Incorporation of Certain Documents by Reference............................................................ 3
Disclosure Regarding Forward-looking Statements............................................................ 3
The Company................................................................................................ 4
Use of Proceeds............................................................................................ 4
Ratio of Earnings to Fixed Charges......................................................................... 4
Description of Debt Securities............................................................................. 5
Description of Warrants.................................................................................... 18
Plan of Distribution....................................................................................... 20
Legal Opinions............................................................................................. 21
Experts.................................................................................................... 21
</TABLE>
YOU SHOULD RELY ONLY ON THE INFORMATION PROVIDED IN THIS PROSPECTUS AND ANY
PROSPECTUS SUPPLEMENT, INCLUDING THE INFORMATION INCORPORATED BY REFERENCE. WE
HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH DIFFERENT INFORMATION. NORTHWEST
AIRLINES, INC. WILL OFFER TO SELL THE SECURITIES AND SEEK OFFERS TO BUY THE
SECURITIES, ONLY IN JURISDICTIONS WHERE OFFERS AND SALES ARE PERMITTED. THE
INFORMATION CONTAINED IN OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS IS
ACCURATE ONLY AS OF THE DATE OF THIS PROSPECTUS, REGARDLESS OF THE TIME OF
DELIVERY OF THIS PROSPECTUS OR OF ANY SALES OF THE SECURITIES.
ABOUT THIS PROSPECTUS
This prospectus is part of registration statements that we filed with the
Securities and Exchange utilizing a "shelf" registration process. Under this
shelf process, we may sell any combination of debt securities and warrants to
purchase debt securities described in this prospectus in one or more offerings
up to a total dollar amount of $1,500,000,000 or the equivalent of this amount
in foreign currencies or foreign currency units.
This prospectus provides you with a general description of the securities we
may offer. Each time we offer securities, we will provide you with a prospectus
supplement that will describe the specific amounts, prices and terms of the
offered securities. The prospectus supplement may also add, update or change
information contained in this prospectus. You should read both this prospectus
and any prospectus supplement together with additional information described
below under "Incorporation of Certain Documents by Reference."
This prospectus does not contain all of the information in the registration
statements. Statements we make in this prospectus about the contents of any
contract, agreement or other document are not necessarily complete. If that
contract, agreement or other document has been filed as an exhibit to the
registration statements, we refer you to the exhibit for a more complete
description. The information in this prospectus is accurate only as of the date
of this prospectus, regardless of the time of delivery of this prospectus or any
sale of the securities.
In this prospectus, "Northwest" refers to Northwest Airlines, Inc., "NWA
Corp." to Northwest Airlines Corporation and the "Company," "we," "us" or "our"
to NWA Corp. and its consolidated subsidiaries.
2
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
NWA Corp. files annual, quarterly and current reports, proxy statements and
other information with the SEC. You may read and copy any document we file at
the SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. Our SEC filings are also available to the public
over the internet at the SEC's web site at http://www.sec.gov. Northwest is not
required to file separate reports, proxy and information statements or other
information with the SEC pursuant to the Securities Exchange Act of 1934.
Instead, we have provided information with respect to Northwest, to the extent
required, in filings made by NWA Corp.
The SEC allows us to "incorporate by reference" the information we file with
them, which means that we can disclose important information to you by referring
you to those documents. The information incorporated by reference is considered
to be a part of this prospectus, and information that we file later with the SEC
will automatically update and supersede this information. We incorporate by
reference the documents listed below and any future filings made with the SEC
under Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934
until we complete our offering of the securities:
- Annual Report on Form 10-K for the year ended December 31, 1998;
- Quarterly Report on Form 10-Q for the quarter ended March 31, 1999; and
- Current Reports on Form 8-K filed on January 22, 1999, February 24, 1999
and April 19, 1999.
You may request a copy of these filings (other than exhibits to them) at no
cost, by writing or telephoning us at the following address:
Secretary's Office
Northwest Airlines Corporation
5101 Northwest Drive, Dept. A1180
St. Paul, Minnesota 55111-3034
Telephone: (612) 726-2111
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. These forward-looking statements are subject to a number
of risks and uncertainties, all of which are difficult to predict and many of
which are beyond the Company's control. Forward-looking statements are typically
identified by the words "may," "will," "believe," "expect," "anticipate,"
"intend," "estimate" and similar expressions. Actual results could differ
materially from those contemplated by these forward-looking statements as a
result of a number of factors. It is not reasonably possible to itemize all of
the many factors and specific events that could affect the outlook of an airline
operating in the global economy. Some factors that could significantly impact
expected capacity, load factors, revenues, expenses and cash flows include the
airline pricing environment, fuel costs, labor negotiations both at the Company
and other carriers, low-fare carrier expansion, capacity decisions of other
carriers, actions of the U.S. and foreign governments, foreign currency exchange
rate fluctuation, inflation, the general economic environment in the U.S. and
other regions of the world and other factors discussed herein.
In light of these risks and uncertainties, there can be no assurance that
the results and events contemplated by the forward-looking statements contained
in this prospectus will in fact be realize. Potential investors are cautioned
not to place undue reliance on these forward-looking statements. The Company
does not undertake any obligation to update or revise any forward-looking
statements. All subsequent written or oral forward-looking statements
attributable to the Company or persons acting on behalf of the Company are
expressly qualified in their entirety by the factors described above.
3
<PAGE>
THE COMPANY
Northwest, the principal wholly-owned indirect subsidiary of NWA Corp.,
operates the world's fourth largest airline (as measured by 1997 revenue
passenger miles ("RPMs")) and engages principally in commercial transportation
of passengers and cargo. Northwest's business focuses on the development of a
global airline network through its strategic assets that include:
- domestic hubs at Detroit, Minneapolis/St. Paul and Memphis;
- an extensive Pacific route system with hubs at Tokyo and Osaka;
- a transatlantic alliance with KLM Royal Dutch Airlines which operates
through a hub in Amsterdam and, subject to regulatory approvals, with
Alitalia which operates through hubs in Rome and Milan; and
- a global alliance with Continental Airlines, Inc.
Northwest operates substantial domestic and international route networks and
directly serves more than 150 cities in 21 countries in North America, Asia and
Europe. Northwest had more than 50.5 million enplanements and flew over 66.7
billion RPMs in 1998. Northwest began operations in 1926.
On November 20, 1998, NWA Corp. effected a holding company reorganization.
As a result, Northwest Airlines Holdings Corporation (formerly known as
Northwest Airlines Corporation and, prior to the reorganization, the publicly
traded holding company, "Old NWA Corp.") became a direct wholly-owned subsidiary
of NWA Corp. NWA Corp. is now the publicly traded holding company, which owns
directly Old NWA Corp. and indirectly the holding and operating subsidiaries of
Old NWA Corp. References in this prospectus to NWA Corp. for time periods prior
to November 20, 1998 refer to Old NWA Corp.
Our principal executive offices are located at 2700 Lone Oak Parkway, Eagan,
Minnesota 55121; our mailing address is 5101 Northwest Drive, St. Paul,
Minnesota 55111-3034 and our telephone number is (612) 726-2111.
USE OF PROCEEDS
Unless the applicable prospectus supplement indicates otherwise, net
proceeds from the sale of the offered securities will be added to Northwest's
working capital. We will use the proceeds for general corporate purposes,
including the repayment of outstanding indebtedness and financing of capital
expenditures. We do not currently expect to discharge any indebtedness or
finance any capital expenditures with the proceeds of the sale of the offered
securities.
RATIO OF EARNINGS TO FIXED CHARGES
We have set forth below the ratio of earnings to fixed charges for NWA Corp.
and its consolidated subsidiaries for the periods indicated. The ratio of
earnings to fixed charges represents the number of times that fixed charges were
covered by earnings. In computing the ratio, earnings represent consolidated
earnings (loss) before income taxes, cumulative effect of accounting change and
fixed charges (excluding capitalized interest). Fixed charges consist of
interest expense (including capitalized interest), one-third of rental expense,
which is considered representative of the interest factor, and amortization of
debt discount and expense.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
- ------------------------------------------------------- ----------------------
<S> <C> <C> <C> <C> <C> <C>
1994 1995 1996 1997 1998 1998 1999
- --------- --------- --------- --------- ----- --------- -----
1.88..... 1.90 2.74 3.05 (a) 2.01 (b)
</TABLE>
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(a) Earnings were inadequate to cover fixed charges by $452 million for the year
ended December 31, 1998.
(b) Earnings were inadequate to cover fixed charges by $69 million for three
months ended March 31, 1999.
4
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DESCRIPTION OF DEBT SECURITIES
The debt securities offered pursuant to this prospectus ("Debt Securities")
may be issued as unsecured and unsubordinated debt securities ("Senior Debt
Securities") or as unsecured and subordinated debt securities ("Senior
Subordinated Debt Securities"). The following description of the terms of the
Debt Securities summarizes certain general terms and provisions of the Debt
Securities to which any prospectus supplement may relate. The applicable
prospects supplement will describe the particular terms and provisions of the
Debt Securities offered by that prospectus supplement and the application of
these general terms and provisions to them.
The Senior Debt Securities will be issued under an Indenture among
Northwest, as issuer, NWA Corp., as guarantor, Old NWA Corp. and State Street
Bank and Trust Company, as trustee (the "Trustee") (the "Senior Indenture"). The
Senior Subordinated Debt Securities are to be issued under an Indenture among
Northwest, as issuer, NWA Corp., as guarantor, and the Trustee (the
"Subordinated Indenture"). We refer to the Senior Indenture and the Subordinated
Indenture each as an "Indenture" and together as the "Indentures." A copy of the
form of each Indenture is filed as an exhibit to the registration statement of
which this prospectus is a part.
Northwest may offer a series of Debt Securities at the same time that it
makes an offer of warrants ("Warrants") to purchase an additional portion of the
same or another series of Debt Securities. Northwest also may offer Warrants to
purchase a series of Debt Securities independently of any offering of Debt
Securities. See "Description of Warrants."
The statements in this prospectus relating to the Debt Securities and the
Indentures are summaries. You should refer to the Indentures for the complete
terms of the Debt Securities and the Indentures, including the definitions of
certain capitalized terms in this prospectus. Where we make no distinction
between the Senior Debt Securities and the Senior Subordinated Debt Securities
or between the Senior Indenture and the Subordinated Indenture, those summaries
refer to any Debt Securities and either Indenture. Whenever we refer to
particular defined terms of the Indentures in this prospectus or in a prospectus
supplement, those defined terms are incorporated by reference in this prospectus
or in that prospectus supplement.
The applicable prospectus supplement will set forth the anticipated market
for the Debt Securities and the specific use of proceeds of an offering of them.
TO THE EXTENT THAT ANY PROVISION IN ANY PROSPECTUS SUPPLEMENT IS
INCONSISTENT WITH ANY PROVISION IN THIS SUMMARY, THE PROVISION OF THE PROSPECTUS
SUPPLEMENT WILL CONTROL.
GENERAL
The Indentures do not limit the aggregate principal amount of Debt
Securities which may be issued under those Indentures. Northwest may issue from
time to time Debt Securities in one or more series under those Indentures. The
Senior Debt Securities will be unsecured and unsubordinated obligations of
Northwest and will rank equally with all other unsecured and unsubordinated
indebtedness of Northwest. The Senior Subordinated Debt Securities will be
unsecured obligations of Northwest and, as set forth below under "Subordination
of Senior Subordinated Debt Securities," will be subordinated in right of
payment to all Senior Indebtedness of Northwest.
You should refer to the prospectus supplement which accompanies this
prospectus for a description of the specific series of Debt Securities that
Northwest is offering by that prospectus supplement or, if Northwest is offering
Warrants, the Debt Securities that it will issue upon exercise of those
Warrants. These terms may include:
(1) the specific designation of the Debt Securities, including whether
they are Senior Debt Securities or Senior Subordinated Debt Securities;
5
<PAGE>
(2) any limit upon the aggregate principal amount of the Debt
Securities;
(3) the maturity date or dates of the principal of the Debt Securities
or the method of determining the maturity date or dates;
(4) the rate or rates (which may be fixed or variable) at which the Debt
Securities will bear interest, if there is any interest, or the method of
calculating the interest rate or rates;
(5) the date or dates on which interest, if any, will accrue or the
method of determining that date or dates;
(6) the date or dates on which interest, if any, will be payable and the
record date or dates for the interest payment date or dates;
(7) the place or places where principal of or, premium, if any, and
interest, if any, on the Debt Securities will be payable;
(8) if Northwest may redeem, at its option, the Debt Securities in whole
or in part, (A) the period or periods, (B) the price or prices, (C) the
currency or currencies (including currency units) and (D) the terms and
conditions for the optional redemption or redemptions;
(9) if Northwest is obligated to redeem or purchase the Debt Securities
in whole or in part, pursuant to any sinking fund or similar provisions,
upon the happening of specified events or at the option of a holder of the
Debt Securities, (A) the period or periods, (B) the price or prices and (C)
the terms and conditions for the mandatory redemption or redemptions;
(10) the denominations of the Debt Securities that Northwest is
authorized to issue;
(11) regarding the currency or currency units,
- the currency or currency units for which the Debt Securities may be
purchased or in which the Debt Securities may be denominated, and/or
- the currency or currency units in which principal of, premium, if
any, and /or interest, if any, on the Debt Securities will be payable or
redeemable, and
- whether Northwest or the holders of any Debt Securities may elect
to pay or receive payments in a currency or currency units other than the
currency in which the Debt Securities are stated to be payable or
redeemable;
(12) if other than the principal amount, the portion of the principal
amount of the Debt Securities which will be payable upon declaration of the
acceleration of the maturity, or the method by which that portion will be
determined;
(13) the person to whom any interest on any Debt Security will be
payable, if other than the person in whose name that Debt Security is
registered on the applicable record date;
(14) any addition to, or modification or deletion of, any Event of
Default or any covenant of Northwest or NWA Corp. specified in the Indenture
with respect to the Debt Securities;
(15) the application, if any, of the means of defeasance or covenant
defeasance specified for the Debt Securities and coupons, if any;
(16) whether the Debt Securities are to be issued in whole or in part in
the form of one or more temporary or permanent global securities and, if so,
the identity of the depositary for such global security or securities;
(17) the terms and conditions relating to Warrants issued by Northwest,
if any, in connection with or for the purchase of the Debt Securities;
6
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(18) any index used to determine the amount of payments of principal of,
and premium, if any, and interest, if any, on the Debt Securities;
(19) any provisions relating to the exchange of the Debt Securities; and
(20) any other special terms of the Debt Securities.
Unless the applicable prospectus supplement specifies otherwise, the Debt
Securities will not be listed on any securities exchange.
Unless the applicable prospectus supplement specifies otherwise, Northwest
will issue Debt Securities in fully registered form without coupons. If
Northwest issues Debt Securities of any series in bearer form, the applicable
prospectus supplement will describe the special restrictions and considerations,
including special offering restrictions and special Federal income tax
considerations, applicable to those Debt Securities and to payment on and
transfer and exchange of those Debt Securities. Bearer Securities will be
transferable by delivery.
Debt Securities may be sold at a substantial discount below their stated
principal amount, bearing no interest or interest at a rate which at the time of
issuance is below market rates. Certain Federal income tax consequences and
special considerations applicable to those Debt Securities will be described in
the applicable prospectus supplement.
The applicable prospectus supplement also will set forth the foreign
currency or currency units and describe the restrictions, elections, certain
Federal income tax considerations, specific terms and other information with
respect to the issue of Debt Securities, if:
- the purchase price of any Debt Securities is payable in one or more
foreign currencies or currency units,
- any Debt Securities are denominated in one or more foreign currencies
or currency units, or
- the principal of, premium, if any, or interest, if any, on any Debt
Securities is payable in one or more foreign currencies or currency units.
DENOMINATIONS, PAYMENT, REGISTRATION, TRANSFER AND EXCHANGE
Northwest will issue Registered Securities in denominations of $1,000 and
integral multiples of $1,000, and Bearer Securities in denominations of $5,000.
In each case, Northwest may issue Debt Securities in other denominations and
currencies as may be in the terms of the Debt Securities of any particular
series. Subject to any applicable laws or regulations, Northwest will make
payments on the Debt Securities in the designated currency at the designated
office or agency of Northwest, unless the applicable prospectus supplement sets
forth otherwise. However, Northwest at its option may make interest payments, if
any, on Debt Securities in registered form:
- by checks mailed by the Trustee to the holders of Debt Securities
entitled to interest payments at their registered addresses, or
- by wire transfer to an account maintained by the Person entitled to
interest payments as specified in the Register.
Unless the applicable prospectus supplement indicates otherwise, Northwest will
pay any installment of interest on Debt Securities in registered form to the
Person in whose name the Debt Security is registered at the close of business on
the regular record date for that installment of interest.
Subject to any applicable laws and regulations, Northwest will make payments
on Debt Securities in bearer form in the currency and in the manner designated
in the applicable prospectus supplement at the paying agencies outside the
United States as it may appoint from time to time. The applicable prospectus
supplement will name the paying agents outside the United States initially
appointed by
7
<PAGE>
Northwest for a series of Debt Securities. Northwest may at any time designate
additional paying agents or rescind the designation of any paying agents.
However, if Debt Securities of a series are issuable as Registered Securities,
Northwest will be required to maintain at least one paying agent in each Place
of Payment for that series, and if Debt Securities of a series are issuable as
Bearer Securities, Northwest will be required to maintain a paying agent in a
Place of Payment outside the United States where the Debt Securities of that
series and any related coupons may be presented and surrendered for payment. In
connection with the payment of the principal of, premium, if any, and interest,
if any, on the Debt Security, Northwest will have the right to require a holder
of any Debt Security to certify information to Northwest. In the absence of that
certification, Northwest will be entitled to rely on any legal presumption to
enable Northwest to determine its duties and liabilities, if any, to deduct or
withhold taxes, assessments or governmental charges from that payment.
Unless the applicable prospectus supplement sets forth otherwise, Registered
Securities will be transferable or exchangeable at the agency of Northwest
designated by it from time to time. Debt Securities may be transferred or
exchanged without service charge, other than any tax or other governmental
charge imposed in connection with the transfer or exchange.
If Northwest redeems any Debt Securities in part, Northwest will not be
required:
(1) to issue, register the transfer of or exchange Debt Securities of
any series during a period beginning at the opening of business 15 days
before any selection of Debt Securities of the series to be redeemed and
ending at the close of business on
- the day of mailing of the relevant notice of redemption, if the
Debt Securities of that series are issuable only as Registered
Securities,
- the day of the first publication of the relevant notice of
redemption, if the Debt Securities of that series are issuable only as
Bearer Securities, or
- the day of mailing of the relevant notice of redemption, if the
Debt Securities of that series are issuable both as Bearer Securities and
as Registered Securities and there is no publication;
(2) to register the transfer or exchange of any Registered Securities,
or their portion, called for redemption or otherwise surrendered for
repayment, except the unredeemed or unrepaid portion of any Registered
Security being redeemed or repaid in part; or
(3) to exchange any Bearer Security called for redemption, except to
exchange that Bearer Security for a Registered Security of that series and
like tenor which is immediately surrendered for redemption.
SUBORDINATION OF SENIOR SUBORDINATED DEBT SECURITIES
As set forth in the Subordinated Indenture, the obligation of Northwest to
pay the principal of, premium, if any, and interest, if any, on the Senior
Subordinated Debt Securities will be subordinated and junior in right of payment
to the prior payment in full of all Senior Indebtedness of Northwest. The Senior
Subordinated Debt Securities will rank equally with any future Indebtedness of
Northwest which by its terms states that it will rank equally with the Senior
Subordinated Debt Securities. The Senior Subordinated Debt Securities will rank
senior to all other existing and future subordinated Indebtedness or other
subordinated obligations of Northwest. However, payment from the money or the
proceeds of U.S. Government Obligations held in any defeasance trust described
under "Defeasance" below is not subordinate to any Senior Indebtedness or
subject to the restrictions described in this prospectus.
"Senior Indebtedness" of Northwest means all Indebtedness of Northwest
(other than the Senior Subordinated Debt Securities) unless the Indebtedness, by
its terms or the terms of the instrument
8
<PAGE>
creating or evidencing it, is subordinate in right of payment to or equal with
the Senior Subordinated Debt Securities. Senior Indebtedness, however, does not
include:
(a) any Indebtedness, guarantee or other obligation of Northwest that is
subordinated or junior in any respect to any other Indebtedness of
Northwest, or
(b) any Indebtedness of Northwest to any of its Subsidiaries or to any
Person of which Northwest is a Subsidiary.
"Indebtedness" of any Person means, without duplication, the principal of,
premium, if any, and any accrued and unpaid interest (including post-petition
interest, whether or not allowable as a claim in bankruptcy) on:
(1) indebtedness of that Person for money borrowed;
(2) guarantees by that Person of indebtedness for money borrowed by any
other Person;
(3) indebtedness of that Person evidenced by notes, debentures, bonds or
other instruments of indebtedness, for payment of which that Person is
responsible or liable;
(4) obligations for the reimbursement of any obligor on any letter of
credit, banker's acceptance or similar credit transaction;
(5) obligations of that Person under Capital Leases and Flight Equipment
leases;
(6) obligations under interest rate and currency swaps, caps, collars
options, forward or spot contracts or similar arrangements or with respect
to foreign currency hedges or aircraft fuel hedges;
(7) commitment and other bank financing fees under contractual
obligations associated with bank debt;
(8) any indebtedness representing the deferred and unpaid purchase price
of any property or business; and
(9) all deferrals, renewals, extensions and refundings of any of these
indebtedness or obligations.
However, Indebtedness does not include:
(a) amounts owed to trade creditors in the ordinary course of business,
(b) nonrecourse indebtedness secured by real property located outside
the United States, or
(c) operating lease rental payments (other than Flight Equipment lease
rental payments) in the ordinary course of business.
Northwest may not pay the principal of, premium, if any, or interest on the
Senior Subordinated Debt Securities or deposit pursuant to the provisions
described under "Defeasance" below if:
(1) any Senior Indebtedness is not paid when due (following the
expiration of any applicable grace period); or
(2) any other default on Senior Indebtedness occurs and the maturity of
any Senior Indebtedness is accelerated in accordance with its terms,
unless, in either case,
(a) the failure to pay or the acceleration relates to Senior
Indebtedness in an aggregate amount equal to or less than $20 million;
(b) the default has been cured or waived or has ceased to exist;
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(c) the acceleration has been rescinded; or
(d) the Senior Indebtedness has been paid in full.
A failure to make any payment with respect to the Senior Subordinated Debt
Securities as a result of the foregoing provisions will not limit the right of
the holders of the Senior Subordinated Debt Securities to accelerate the
maturity as a result of the payment default.
If any distribution of the assets of Northwest is made upon any dissolution,
total or partial liquidation or reorganization of or similar proceeding relating
to Northwest, the holders of Senior Indebtedness will be entitled to receive
payment in full before the holders of the Senior Subordinated Debt Securities
are entitled to receive any payment. Because of this subordination, in the event
of insolvency, creditors of Northwest who are holders of Senior Indebtedness or
of other unsubordinated Indebtedness may recover more, ratably, than the holders
of the Senior Subordinated Debt Securities.
THE PARENT GUARANTY
NWA Corp. will unconditionally guarantee, pursuant to the Indentures, the
due and punctual payment of the principal of, premium, if any, and interest, if
any, on the Debt Securities when they become due, whether by acceleration or
otherwise. The Parent Guaranty will be enforceable without any need first to
enforce Debt Securities against Northwest. As set forth in the Subordinated
Indenture, the Parent Guaranty of the Senior Subordinated Debt Securities will
be subordinated and junior in right of payment to the prior payment in full of
all Senior Indebtedness of NWA Corp. The terms of the subordination will
parallel the subordination terms applicable to the Senior Subordinated Debt
Securities as set forth above under "Subordination of Senior Subordinated Debt
Securities." For purposes of the Parent Guaranty, Senior Indebtedness of NWA
Corp. means all Indebtedness of NWA Corp. other than the Parent Guaranty, unless
the Indebtedness, by its terms or by the terms of the instrument creating or
evidencing it, is subordinate in right of payment to or equal with the Parent
Guaranty. However, the Senior Indebtedness of NWA Corp. does not include any
Indebtedness of NWA Corp. to any of its subsidiaries. The Parent Guaranty of the
Senior Subordinated Debt Securities will rank equally with any future
Indebtedness of NWA Corp. which by its terms states that it will rank equally
with the Parent Guaranty of the Senior Subordinated Debt Securities. The Parent
Guaranty of the Senior Subordinated Debt Securities will rank senior to all
other existing and future subordinated Indebtedness or other subordinated
obligations of NWA Corp.
GLOBAL DEBT SECURITIES
Northwest may issue Debt Securities of a series in whole or in part as one
or more fully registered global securities (a "Registered Global Security") that
will be deposited with a depositary (the "Depositary") or with a nominee for the
Depositary identified in the applicable prospectus supplement. In that case,
Northwest will issue one or more Registered Global Securities in a denomination
or aggregate denominations equal to the portion of the aggregate principal
amount of outstanding Debt Securities of the series to be represented by those
Registered Global Security or Securities. Unless and until it is exchanged in
whole or in part for Debt Securities in definitive certificated form, a
Registered Global Security may not be registered for transfer or exchange except
in the circumstances described in the applicable prospectus supplement and
except as a whole,
- by the Depositary for the Registered Global Security to a nominee of
that Depositary,
- by a nominee of the Depositary to the Depositary or another nominee of
the Depositary, or
- by the Depositary or any nominee of the Depositary to a successor
Depositary for that series or a nominee of the successor Depositary.
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The applicable prospectus supplement will describe the specific terms of the
depositary arrangement with respect to any portion of a series of Debt
Securities to be represented by a Registered Global Security. Northwest expects
that the following provisions will apply to depositary arrangements.
Upon the issuance of any Registered Global Security and the deposit of that
Registered Global Security with or on behalf of the Depositary for that
Registered Global Security, the Depositary will credit, on its book-entry
registration and transfer system, the respective principal amounts of the Debt
Securities represented by that Registered Global Security to the accounts of
institutions ("participants") that have accounts with the Depositary or its
nominee. The accounts to be credited will be designated by the underwriters or
agents engaging in the distribution of the Debt Securities or by Northwest, if
Northwest directly offers and sells the Debt Securities. Ownership of beneficial
interests in a Registered Global Security will be limited to participants or
persons that may hold interests through participants. Ownership of beneficial
interests by participants in a Registered Global Security will be shown on, and
the transfer of that ownership interest will be effected only through, records
maintained by the Depositary for that Registered Global Security or by its
nominee. Ownership of beneficial interests in a Registered Global Security by
persons that hold through participants will be shown on, and the transfer of
that ownership interest within such participant will be effected only through,
records maintained by such participant. The laws of some jurisdictions require
that certain purchasers of securities take physical delivery of the securities
in certificated form. These limitations and laws may impair the ability to
transfer beneficial interests in the Registered Global Securities.
So long as the Depositary for a Registered Global Security, or its nominee,
is the registered owner of that Registered Global Security, the Depositary or
its nominee, as the case may be, will be considered the sole owner or holder of
the Debt Securities represented by that Registered Global Security for all
purposes under the Indentures. Unless the applicable prospectus supplement
specifies otherwise and except as specified below, owners of beneficial
interests in a Registered Global Security will not be entitled to have Debt
Securities of the series represented by that Registered Global Security
registered in their names, will not receive or be entitled to receive physical
delivery of Debt Securities of that series in certificated form and will not be
considered the holders of the Debt Securities for any purposes under the
Indentures. Accordingly, each person who owns a beneficial interest in a
Registered Global Security must rely on the procedures of the Depositary and, if
such person is not a participant, on the procedures of the participant through
which that person owns its interest, to exercise any rights of a holder under
the Indentures. The Depositary may grant proxies and otherwise authorize
participants to give or take any request, demand, authorization, direction,
notice, consent, waiver or other action which a holder is entitled to give or
take under the Indentures. Northwest understands that, under existing industry
practices, if Northwest requests any action of holders or an owner of a
beneficial interest in a Registered Global Security desires to give any notice
or take any action a holder is entitled to give or take under the Indentures,
the Depositary would authorize the participants to give the notice or take the
action, and participants would authorize beneficial owners who own through the
participants to give the notice or take the action or would otherwise act upon
the instructions of beneficial owners who own through them.
Unless the applicable prospectus supplement specifies otherwise, payments
with respect to principal, premium, if any, and interest, if any, on Debt
Securities represented by a Registered Global Security registered in the name of
a Depositary or its nominee will be made to such Depositary or its nominee, as
the case may be, as the registered owner of the Registered Global Security.
Northwest expects that the Depositary for any Debt Securities represented by
a Registered Global Security, upon receipt of any payment of principal, premium
or interest, will immediately credit participants' accounts with payments in
amounts proportionate to their respective beneficial interests in the principal
amount of that Registered Global Security as shown on the records of the
Depositary. Northwest also expects that payments by participants to owners of
beneficial interests in a Registered
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Global Security held through the participants will be governed by standing
instructions and customary practices, as is now the case with the securities
held for the accounts of customers registered in "street names," and will be the
responsibility of the participants. None of Northwest, NWA Corp., Old NWA Corp.,
the Trustee or any agent of Northwest shall have any responsibility or liability
for any aspect of the records relating to or payments made on account of
beneficial ownership interests of a Registered Global Security, or for
maintaining, supervising or reviewing any records relating to the beneficial
ownership interests.
Unless the applicable prospectus supplement specifies otherwise, if the
Depositary for any Debt Securities represented by a Registered Global Security
is at any time unwilling or unable to continue as Depositary and a successor
Depositary is not appointed by Northwest within ninety days, Northwest will
issue those Debt Securities in definitive certificated form in exchange for that
Registered Global Security. In addition, Northwest may at any time and in its
sole discretion determine not to have any of the Debt Securities of a series
represented by one or more Registered Global Securities and, in that event, will
issue Debt Securities of that series in definitive certificated form in exchange
for all of the Registered Global Securities representing those Debt Securities.
Further, if Northwest so specifies with respect to the Debt Securities of a
series, an owner of a beneficial interest in a Registered Global Security
representing Debt Securities of that series may, on terms acceptable to
Northwest and the Depositary for that Registered Global Security, receive Debt
Securities of that series in definitive form registered in the name of that
beneficial owner or its designee.
CONSOLIDATION, MERGER OR SALE BY NORTHWEST OR NWA CORP.
Each Indenture provides that neither Northwest nor NWA Corp. may merge or
consolidate with or into any other corporation or sell, convey, transfer, lease
or otherwise dispose of all or substantially all of its assets to any Person,
unless:
(1) (A) in the case of a merger or consolidation, Northwest or NWA Corp.
is the surviving corporation, as the case may be, or
(B) (i) in the case of a merger or consolidation where Northwest or
NWA Corp. is not the surviving corporation or (ii) in the case of the sale,
conveyance or other disposition of all or substantially all of the assets,
- the resulting, successor or acquiring Person is a corporation
organized and existing under the laws of the United States of America or
its State or the District of Columbia, and
- that corporation expressly assumes by supplemental indenture all
the obligations of Northwest under the Debt Securities, any related
coupons and the Indentures, or all the obligations of NWA Corp. under the
Parent Guaranty and the Indentures, as the case may be;
(2) immediately after giving effect to the merger or consolidation, or
the sale, conveyance, transfer, lease or other disposition (including,
without limitation, any Debt directly or indirectly incurred or anticipated
to be incurred in connection with or in respect of that transaction), no
Default or Event of Default will have occurred and be continuing; and
(3) certain other conditions are met.
If a successor corporation assumes the obligations of Northwest or NWA
Corp., as the case may be, then that successor corporation will succeed to and
be substituted for Northwest or NWA Corp., as the case may be, under the
Indentures and under the Debt Securities and any related coupons or under the
Parent Guaranty, as the case may be, and all obligations of Northwest or NWA
Corp., as the case may be, will terminate. If any permitted consolidation,
merger, sale, conveyance, disposition or other change of control transaction
(including a highly leveraged transaction), the holders of the Debt Securities
will not have the right to require redemption of those Debt Securities or
similar rights unless the applicable prospectus supplement sets forth otherwise.
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EVENTS OF DEFAULT, NOTICE AND CERTAIN RIGHTS ON DEFAULT
Events of Default with respect to Debt Securities of any series issued under
the Indentures are defined in the Indentures as:
(1) default for thirty days in payment of any interest on any Debt
Security of that series or any related coupon or any additional amount
payable with respect to Debt Securities of that series as specified in the
applicable prospectus supplement when due;
(2) default in payment of principal or premium, if any, on redemption or
otherwise, or in the making of a mandatory sinking fund payment of any Debt
Securities of that series when due;
(3) default for sixty days after notice to Northwest and NWA Corp. by
the Trustee, or to Northwest, NWA Corp. and the Trustee by the holders of
25% or more in aggregate principal amount of the Debt Securities of that
series then outstanding, in the performance of any other agreement
applicable to the Debt Securities of that series, in the Indenture or in any
supplemental indenture or board resolution referred to therein under which
the Debt Securities of that series may have been issued; and
(4) certain events of bankruptcy, insolvency or reorganization of
Northwest or NWA Corp.
The applicable prospectus supplement will describe any other Events of
Default applicable to a specified series of Debt Securities. An Event of Default
with respect to a particular series of Debt Securities will not necessarily be
an Event of Default with respect to any other series of Debt Securities.
If an Event of Default specified in the Indentures occurs with respect to
the Debt Securities of any series issued under the Indentures and is continuing,
either the Trustee for that series or the holders of 25% or more in aggregate
principal amount of all of the outstanding Debt Securities of that series, by
written notice to Northwest and NWA Corp., may declare (a) the principal of all
the Debt Securities of that series to be due and payable or (b) in the case of
original issue discount Debt Securities or indexed Debt Securities, the portion
of the principal amount specified in the applicable prospectus supplement to be
due and payable. If the holders of Debt Securities give notice of the
declaration of acceleration to Northwest and NWA Corp., then they are also
required to give notice to the Trustee for that series.
The Trustee for any series of Debt Securities is required to give notice to
the holders of the Debt Securities of that series of all uncured Defaults within
ninety days after the occurrence of a Default known to it with respect to Debt
Securities of that series. However, that notice will not be given until 60 days
after the occurrence of a Default with respect to Debt Securities of that series
involving a failure to perform a covenant other than the obligation to pay
principal, premium, if any, or interest, if any, or make a mandatory sinking
fund payment. In addition, the Trustee may withhold that notice if and so long
as a committee of its Responsible Officers in good faith determines that
withholding that notice is in the interest of the holders of the Debt Securities
of that series, except in the case of a default in payment on the Debt
Securities of that series. "Default" means any event which is, or, after notice
or passage of time or both, would be, an Event of Default.
The Trustee will be under no obligation to exercise any of its rights or
powers under the Indentures at the request or direction of any of the holders of
Debt Securities, unless those holders have offered the Trustee reasonable
indemnity. Subject to those provisions for indemnification of the Trustee, the
holders of not less than a majority in aggregate principal amount of the Debt
Securities of each series affected (with each series voting as a class) may
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee for that series, or exercising any trust or power
conferred on that Trustee.
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Each of NWA Corp. and Northwest will file annually with the Trustee a
certificate as to its compliance with all conditions and covenants of the
applicable Indenture.
The holders of not less than a majority in aggregate principal amount of any
series of Debt Securities by notice to the Trustee for that series may waive, on
behalf of the holders of all Debt Securities of that series, any past Default or
Event of Default with respect to that series and its consequences, and may
rescind and annul a declaration of acceleration with respect to that series,
unless a judgment or decree based on that acceleration has been obtained and
entered. However, a Default or Event of Default in the payment of the principal
of, premium, if any, or interest, if any, on any Debt Security (and any
resulting acceleration) and certain other defaults may not be waived.
MODIFICATION OF THE INDENTURES
Northwest, NWA Corp. and the Trustee may enter into one or more supplemental
indentures, without the consent of the holders of any of the Debt Securities, in
order to:
(1) evidence the succession of another corporation to Northwest or NWA
Corp. and the assumption of the covenants of Northwest or NWA Corp. by a
successor;
(2) (A) add to the covenants of Northwest or NWA Corp. or surrender any
right or power of Northwest or NWA Corp., and
(B) make the occurrence, or the occurrence and continuance, of a
default in any of those additional covenants, restrictions or conditions a
Default or an Event of Default that permits the enforcement of all or any of
the remedies provided in the Indentures.
However, in respect of any of those additional covenants,
restrictions or conditions, the supplemental indenture may:
- provide for a particular period of grace after default, which
period may be shorter or longer than the period allowed in the case of
other defaults,
- provide for an immediate enforcement upon that default, or
- limit the remedies available to the Trustee upon that default;
(3) add additional Events of Default with respect to any series;
(4) add or change any provisions to permit or facilitate the issuance of
Debt Securities in bearer form or in global form;
(5) under certain circumstances, add, change or eliminate any provision
affecting Debt Securities not yet issued;
(6) secure the Debt Securities;
(7) add to the conditions, limitations and restrictions on the
authorized amount, terms or purposes of issue, authentication and delivery
of Debt Securities as set forth in the Indentures, other conditions,
limitations and restrictions to be observed after that addition;
(8) establish the form or terms of Debt Securities;
(9) evidence and provide for successor Trustees;
(10) if allowed without penalty under applicable laws and regulations,
permit payment in respect of Debt Securities in bearer form in the United
States;
(11) correct or supplement any inconsistent provisions or add any other
provisions, on the condition that this action does not adversely affect the
interests of any holder of Debt Securities of any series issued under the
Indentures in any material respect;
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(12) cure any ambiguity or correct any mistake; or
(13) supplement any of the provisions of the Indentures to permit or
facilitate the defeasance and discharge of any series of Debt Security, on
the condition that this action does not adversely affect the interests of
the holders of that series or any other series of Debt Securities or any
related coupons in any material respect.
Northwest, NWA Corp. and the Trustee, with the consent of the holders of not
less than a majority in aggregate principal amount of the outstanding Debt
Securities of each series affected by the supplemental indenture, may execute
supplemental indentures adding any provisions to or changing or eliminating any
of the provisions of the Indentures or any supplemental indenture or modifying
the rights of the holders of Debt Securities of that series. However, no
supplemental indenture may, without the consent of the holder of each Debt
Security that is affected,
(1) change the time for payment of principal or interest on any Debt
Security;
(2) reduce the principal of, or any installment of principal of, or
interest on any Debt Security;
(3) reduce the amount of premium, if any, payable upon the redemption of
any Debt Security;
(4) reduce the amount of principal payable upon acceleration of the
maturity of an Original Issue Discount Debt Security;
(5) change the coin or currency in which any Debt Security or any
premium or interest is payable;
(6) impair the right to institute suit for the enforcement of any
payment on or with respect to any Debt Security;
(7) reduce the percentage in principal amount of the outstanding Debt
Securities of any series required to:
- consent to modify or amend the Indentures,
- waive compliance with certain provisions of the Indentures, or
- waive certain defaults;
(8) change the obligation of Northwest to maintain an office or agency
in the places and for the purposes specified in the Indentures;
(9) modify the obligations of NWA Corp. to make payment under the Parent
Guaranty; or
(10) modify any of the provisions in (1) through (9) above.
DEFEASANCE
If the applicable prospectus supplement so indicates, Northwest may elect
either to:
(1) defease and be discharged from any and all obligations with respect
to the Debt Securities of or within any series, except as described below
("defeasance"), or
(2) be released from its obligations with respect to certain covenants
applicable to the Debt Securities of or within any series ("covenant
defeasance"),
when Northwest deposits, in trust for the above mentioned purpose, with the
Trustee for that series of Debt Securities (or other qualifying trustee) money
and/or Government Obligations which through the payment of principal and
interest in accordance with their terms will provide money in the amount
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sufficient to pay the principal of, premium, if any, and interest, if any, on
the Debt Securities to Maturity or redemption, as the case may be, and any
mandatory sinking fund or similar payments.
When a defeasance occurs, Northwest will be deemed to:
(1) have paid and discharged the entire indebtedness represented by the
Debt Securities and any related coupons, and
(2) have satisfied all of its other obligations under the Debt
Securities and any related coupons.
However, it will not be deemed to have satisfied:
(a) its obligations with respect to the rights of holders of the Debt
Securities to receive, solely from the trust funds deposited to defease the
Debt Securities, payments in respect of the principal of, premium, if any,
and interest, if any, on the Debt Securities or any related coupons when the
payments are due, and
(b) certain other obligations as provided in the Indentures.
When a covenant defeasance occurs, Northwest will:
(1) be released only from its obligations to comply with certain
covenants contained in the Indentures relating to the Debt Securities,
(2) continue to be obligated in all other respects under those Debt
Securities, and
(3) continue to be contingently liable with respect to the payment of
principal, premium, if any, and interest, if any, with respect to those Debt
Securities.
Unless the applicable prospectus supplement specifies otherwise and except
as described below, the conditions to both defeasance and covenant defeasance
are as follows:
(1) the defeasance or covenant defeasance must not result in a breach or
violation of, or constitute a Default or Event of Default under, the
applicable Indenture, or result in a breach or violation of, or constitute a
default under, any other material agreement or instrument of Northwest or
NWA Corp.;
(2) certain bankruptcy related Defaults or Events of Default with
respect to Northwest or NWA Corp. must not have occurred and be continuing
during the period commencing on the date of the deposit of the trust funds
to defease the Debt Securities and ending on the 91st day after that date;
(3) Northwest must deliver to the Trustee an Opinion of Counsel to the
effect that the holders of the Debt Securities:
- will not recognize income, gain or loss for Federal income tax
purposes as a result of the defeasance or covenant defeasance, and
- will be subject to Federal income tax on the same amounts and in
the same manner and at all the same times as would have been the case if
the defeasance or covenant defeasance had not occurred.
In the case of defeasance, the Opinion of Counsel must refer to and
be based upon a ruling of the Internal Revenue Service or a change in
applicable Federal income tax law occurring after the date of the
Indentures;
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(4) Northwest must deliver to the Trustee an Officers' Certificate and
an Opinion of Counsel with respect to:
- compliance with the conditions precedent to the defeasance or
covenant defeasance, and
- certain registration requirements under the Investment Company Act
of 1940; and
(5) any additional conditions to the defeasance or covenant defeasance
which may be imposed on Northwest pursuant to the applicable Indenture.
The Indentures require that a nationally recognized firm of independent
public accountants deliver to the Trustee a written certification as to the
sufficiency of the trust funds deposited for the defeasance or covenant
defeasance of the Debt Securities. Holders of the Debt Securities do not have
recourse against that firm under the Indentures. If the applicable prospectus
supplement so indicates, in addition to obligations of the United States or an
agency or instrumentality of the United States, Government Obligations may
include obligations of the government or any agency or instrumentality of the
government issuing the currency in which Debt Securities of that series are
payable. If the Government Obligations deposited with the Trustee for the
defeasance of the Debt Securities decrease in value or default subsequent to
their being deposited, Northwest will have no further obligation, and the
holders of the Debt Securities will have no additional recourse against
Northwest, as a result of the decrease in value or default. As described above,
in the event of a covenant defeasance, Northwest remains contingently liable
with respect to the payment of principal, premium, if any, and interest, if any,
with respect to the Debt Securities.
Northwest may exercise its defeasance option with respect to the Debt
Securities even if it has previously exercised its covenant defeasance option.
If Northwest exercises its defeasance option, payment of the Debt Securities may
not be accelerated because of a Default or an Event of Default. If Northwest
exercises its covenant defeasance option, payment of the Debt Securities may not
be accelerated by reason of a Default or an Event of Default with respect to the
covenants to which the covenant defeasance is applicable. However, if
acceleration were to occur, the realizable value at the acceleration date of the
money and Government Obligations in the defeasance trust could be less than the
principal and interest then due on the Debt Securities, because the required
deposit in the defeasance trust is based upon scheduled cash flow rather than
market value, which will vary depending upon interest rates and other factors.
The applicable prospectus supplement may further describe the provisions, if
any, applicable to defeasance or covenant defeasance with respect to Debt
Securities of a particular series.
THE TRUSTEE
State Street Bank and Trust Company is the Trustee under the Indentures.
Northwest and NWA Corp. also maintain banking and other commercial relationships
with State Street Bank and Trust Company and its affiliates in the ordinary
course of business and State Street Bank and Trust Company acts as Trustee under
several other indentures for NWA Corp. and Northwest.
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DESCRIPTION OF WARRANTS
Northwest may issue Warrants to purchase Debt Securities. Northwest may
issue Warrants together with or separately from any Debt Securities offered by
any prospectus supplement and, if it issues Warrants together with Debt
Securities, the Warrants may be attached to or separate from the Debt
Securities. Northwest will issue the Warrants under one or more separate Warrant
Agreements (each, a "Warrant Agreement") to be entered into between Northwest
and State Street Bank and Trust Company, as warrant agent (the "Warrant Agent"),
all as set forth in the prospectus supplement relating to the particular issue
of Warrants.
The statements in this prospectus relating to the Warrants and the Warrant
Agreements are summaries. You should refer to the Warrant Agreements for the
complete terms of the Warrants and the Warrant Agreements. A form of Warrant
Agreement for Warrants Sold Attached to Debt Securities and a form of Warrant
Agreement for Warrants Sold Alone have been incorporated by reference as
exhibits to the registration statement of which this prospectus is a part.
GENERAL
If Northwest offers Warrants, you should refer to the applicable prospectus
supplement which accompanies this prospectus for a description of the specific
terms of the Warrants, including:
(1) the specific designation and aggregate number of the Warrants;
(2) the offering price and the currency or composite currencies for
which the Warrants may be purchased,
(3) the designation (including whether the Debt Securities are Senior
Debt Securities or Senior Subordinated Debt Securities), aggregate principal
amount, currency or composite currencies and terms of the Debt Securities
purchasable upon exercise of the Warrants;
(4) if Warrants are issued together with any Debt Securities,
- the designation and terms of the Debt Securities with which the
Warrants are issued, and
- the number of Warrants issued with the minimum denomination of each
Debt Security;
(5) if Warrants are issued together with any Debt Securities, the date
on and after which the Warrants and the related Debt Securities will be
separately transferable;
(6) - the principal amount of Debt Securities purchasable upon exercise
of one Warrant, and
- the price or the manner of determining the price and currency or
composite currencies or other consideration, which may include Debt
Securities, for which that principal amount of Debt Securities may be
purchased;
(7) - the date on which the right to exercise the Warrants will
commence, and
- the date on which the right shall expire (the "Expiration Date");
(8) the terms of any mandatory or optional redemption by Northwest;
(9) certain Federal income tax consequences;
(10) whether the certificates for Warrants will be issued in registered
or unregistered form; and
(11) any other special terms of the Warrants.
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Unless the applicable prospectus supplement specifies otherwise, the Warrants
will not be listed on any securities exchange.
Holders of Warrant certificates may exchange them for new Warrant
certificates, may present them (if in registered form) for registration of
transfer and exchange, and may exercise them at an office or agency of the
Warrant Agent maintained for that purpose (the "Warrant Agent Office"). No
service charge will be made for any transfer or exchange of Warrant
certificates, but Northwest may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection with the transfer or
exchange. Prior to the exercise of their Warrants, holders of Warrants will not
have any of the rights of holders of the Debt Securities that they may purchase
upon the exercise of the Warrants. These rights include the right to receive
payments of principal of, premium, if any, or interest, if any, on the Debt
Securities purchasable upon the exercise or to enforce covenants in the
Indenture.
EXERCISE OF WARRANTS
Each Warrant will entitle its holder to purchase the principal amount of
Debt Securities (a) at the exercise price, (b) for the consideration and (c)
during the period or periods, in each case as set forth in, or calculable from,
the prospectus supplement relating to the Warrants. Holders of Warrants may
exercise their Warrants at any time during the specified period up to 5:00 P.M.
New York City time on the Expiration Date set forth in the applicable prospectus
supplement. After the close of business on the Expiration Date, or a later date
to which the Expiration Date may be extended by Northwest, unexercised Warrants
will become void.
Holders of Warrants may exercise their Warrants by:
(1) paying the Warrant Agent the amount provided in the applicable
prospectus supplement required to purchase the Debt Securities purchasable
upon the exercise of the Warrants, and
(2) providing the Warrant Agent with certain information set forth on
the reverse side of the Warrant certificate.
Unless the applicable prospectus supplement specifies otherwise, when the
Warrant Agent receives the payment and the Warrant certificate properly
completed and duly executed at the Warrant Agent Office or any other office or
agency indicated in the applicable prospectus supplement, Northwest will, as
soon as practicable, issue and deliver the Debt Securities purchasable upon the
exercise. If fewer than all of the Warrants represented by the Warrant
certificate are exercised, a new Warrant certificate will be issued for the
amount of unexercised Warrants.
MODIFICATION OF WARRANT AGREEMENTS
Northwest and the Warrant Agent may supplement or amend the Warrant
Agreement, without the consent of any Warrantholder, in order to:
(1) cure any ambiguity;
(2) correct or supplement any provision contained in the Warrant
Agreement, which may be defective or inconsistent with any other provisions;
or
(3) make other provisions in regard to matters or questions arising
under the Warrant Agreement, which Northwest and the Warrant Agent may deem
necessary or desirable and which do not adversely affect the interests of
the Warrantholders.
19
<PAGE>
WARRANT AGENT
State Street Bank and Trust Company will act as the Warrant Agent under the
Warrant Agreement. Northwest and NWA Corp. maintain banking and other commercial
relationships with State Street Bank and Trust Company and its affiliates in the
ordinary course of business. The Warrant Agent will act solely as an agent of
Northwest in connection with the Warrants and will not assume any obligation or
relationship of agency or trust for or with any holders of Warrants or
beneficial owners of Warrants.
PLAN OF DISTRIBUTION
Northwest may sell Securities (a) through underwriters, (b) directly to
investors or other persons or (c) through dealers or agents. The applicable
prospectus supplement will name any underwriter, dealer or agent involved in the
offer and sale of the Offered Securities.
The Offered Securities may be sold (a) at a fixed price or prices, which may
be changed, (b) from time to time at market prices prevailing at the time of
sale, (c) at prices related to those market prices, or (d) at negotiated prices.
Dealer trading may take place in certain of the Offered Securities, including
Offered Securities not listed on any securities exchange.
Northwest may, from time to time, authorize underwriters acting as
Northwest's agents to offer and sell the Offered Securities upon the terms and
conditions set forth in any prospectus supplement. In connection with the sale
of Offered Securities, underwriters may be deemed to have received compensation
from Northwest in the form of underwriting discounts or commissions and may also
receive commissions from purchasers of Offered Securities for whom they may act
as agent. Underwriters may sell Offered Securities to or through dealers, and
those dealers may receive compensation in the form of discounts, concessions or
commissions from the underwriters and/or commissions, which may be changed from
time to time, from the purchasers for whom they may act as agent.
If Northwest directly uses a dealer in the sale of Offered Securities,
Northwest will sell the Offered Securities to the dealer, as principal. The
dealer may then resell the Offered Securities to the public at varying prices to
be determined by the dealer at the time of resale. The applicable prospectus
supplement will name any dealer and set forth the terms of any of those sales.
Northwest may offer and sell Offered Securities through agents designated by
Northwest from time to time. The applicable prospectus supplement will name any
agent involved in the offer or sale of the Offered Securities and set forth any
commissions payable by Northwest to that agent. Unless the applicable prospectus
indicates otherwise, the agent will be acting on a best efforts basis for the
period of its appointment.
Northwest may directly solicit offers to purchase Offered Securities and
sell them directly to institutional investors or others who may be deemed to be
underwriters within the meaning of the Securities Act of 1933 with respect to
any resale of the Offered Securities. The applicable prospectus supplement will
describe the terms of any of those sales. Except as set forth in the applicable
prospectus supplement, no director, officer or employee of Northwest or NWA
Corp. will solicit or receive a commission in connection with direct sales by
Northwest of the Offered Securities, although these persons may respond to
inquiries by potential purchasers and perform ministerial and clerical work in
connection with any of these direct sales.
The applicable prospectus supplement will set forth any underwriting
compensation paid by Northwest to underwriters, dealers or agents in connection
with the offering of Offered Securities, and any discounts, concessions or
commissions allowed by underwriters to participating dealers. Underwriters,
dealers and agents participating in the distribution of the Offered Securities
may be deemed to be underwriters, and any discounts and commissions received by
them and any profit
20
<PAGE>
realized by them on resale of the Offered Securities may be deemed to be
underwriting discounts and commissions under the Securities Act of 1933.
Underwriters, dealers and agents may be entitled, under agreements with
Northwest and NWA Corp., to indemnification against and contribution toward
certain civil liabilities, including liabilities under the Securities Act of
1933, and to reimbursement by Northwest and NWA Corp. for certain expenses.
Underwriters, dealers and agents may engage in transactions with, or perform
services for, NWA Corp., Northwest and NWA Corp.'s other subsidiaries in the
ordinary course of business.
If the applicable prospectus supplement so indicates, subject to existing
market conditions, Northwest will authorize dealers acting as Northwest's agents
to solicit offers by certain institutions to purchase Offered Securities from
Northwest at the public offering price set forth in the applicable prospectus
supplement pursuant to Delayed Delivery Contracts ("Contracts") that provide for
payment and delivery on the date or dates stated in the applicable prospectus
supplement. Each Contract will be for an amount not less than, and the aggregate
principal amount of Offered Securities sold pursuant to Contracts shall not be
less nor more than, the respective amounts stated in the applicable prospectus
supplement. Institutions with whom Contracts may be made include commercial and
savings banks, insurance companies, pension funds, investment companies,
educational and charitable institutions and other institutions, but will in all
cases be subject to the approval of Northwest. Contracts will not be subject to
any conditions, except the purchase by an institution of the Offered Securities
covered by its Contracts will not at the time of delivery be prohibited under
the laws of any jurisdiction in the United States to which the institution is
subject. The applicable prospectus supplement will indicate the commission that
will be granted to underwriters and agents soliciting purchases of Offered
Securities pursuant to Contracts accepted by Northwest. Agents and underwriters
will have no responsibility in respect of the delivery or performance of
Contracts.
The Offered Securities may or may not be listed on a national securities
exchange or a foreign securities exchange. If Northwest uses an underwriter or
underwriters in the sale of any Offered Securities, the applicable prospectus
supplement will contain a statement as to the underwriters' intention, if any,
at the date of the prospectus supplement to make a market in the Offered
Securities. No assurances can be given that there will be a market for the
Offered Securities.
The applicable prospectus supplement will set forth the place and time of
delivery for the Offered Securities. Northwest will issue the Debt Securities
that are issuable upon exercise of Warrants upon payment of the exercise and
otherwise in accordance with the relevant terms applicable to the Warrants and
described in the applicable prospectus supplement.
LEGAL OPINIONS
Unless the applicable prospectus supplement indicates otherwise, the
validity of the Debt Securities, the Parent Guaranty and Warrants offered by
this prospectus will be passed upon for Northwest and NWA Corp. by Simpson
Thacher & Bartlett, New York, New York. In rendering that opinion, Simpson
Thacher & Bartlett will be relying as to matters of Minnesota law on an opinion
from the Office of the General Counsel of NWA Corp. and Northwest.
EXPERTS
Ernst & Young LLP, independent auditors, have audited the consolidated
financial statements and schedule of NWA Corp. included in NWA Corp.'s Annual
Report on Form 10-K for the year ended December 31, 1998, as set forth in their
report on the consolidated financial statements and schedule incorporated by
reference in this prospectus. Those consolidated financial statements and
schedule are incorporated by reference in this prospectus in reliance on Ernst &
Young LLP's report, given on their authority as experts in accounting and
auditing.
21
<PAGE>
$1,500,000,000
NORTHWEST AIRLINES, INC.
DEBT SECURITIES AND WARRANTS TO PURCHASE DEBT SECURITIES
------------------
Payment of Principal Premium, if any, and Interest Fully and Unconditionally
Guaranteed by
NORTHWEST AIRLINES CORPORATION
---------------
<PAGE>
SUBJECT TO COMPLETION, DATED JUNE 7, 1999
PROSPECTUS
$1,500,000,000
NORTHWEST AIRLINES, INC.
PASS THROUGH CERTIFICATES
------------------
Applicable Underlying Payments Fully and Unconditionally
Guaranteed by
NORTHWEST AIRLINES CORPORATION
---------------
Northwest Airlines, Inc. may from time to time offer pass through
certificates. Pass through certificates may be issued in one or more series in
amounts, at prices and on terms to be determined at the time of the offering.
The pass through certificates will represent interests in the assets of the
pass through trusts formed to finance the acquisition of specified aircraft. The
assets of the pass through trusts will include equipment notes issued
(a) on a nonrecourse basis by one or more owner trustees pursuant to
separate leveraged lease transactions to finance or refinance a portion of
the cost of aircraft which have been or will be leased to Northwest
Airlines, Inc., or
(b) with recourse to Northwest Airlines, Inc. to finance all or a
portion of the cost of, or to purchase all or a portion of the outstanding
debt with respect to, aircraft which have been or will be purchased and
owned by Northwest Airlines, Inc.
The pass through certificates will not represent interests in or obligations
of Northwest Airlines, Inc. or any of its affiliates. Northwest Airlines
Corporation will fully and unconditionally guarantee the lease and recourse
obligations of Northwest Airlines, Inc. referred to above.
When we decide to sell a particular series of pass through certificates, we
will provide the specific terms thereof in a prospectus supplement. You should
read this prospectus and any prospectus supplement carefully before you invest.
This prospectus may not be used to consummate sales of pass through certificates
unless accompanied by a prospectus supplement.
The pass through certificates may be sold to or through underwriters,
through dealers or agents or directly to purchasers. The prospectus supplement
will set forth the names of any underwriters, dealers or agents involved in the
sale of the pass through certificates in respect of which this prospectus is
being delivered, the proposed amounts, if any, to be purchased by underwriters
and the compensation, if any, of such underwriters or agents.
The Securities and Exchange Commission and state securities regulators have
not approved or disapproved these securities, or determined if this prospectus
is truthful or complete. Any representation to the contrary is a criminal
offense.
------------------------
The date of this prospectus is , 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
About This Prospectus...................................................................................... 2
Incorporation of Certain Documents by Reference............................................................ 3
Disclosure Regarding Forward-looking Statements............................................................ 3
The Company................................................................................................ 4
General Outline of Trust Structure......................................................................... 4
Use of Proceeds............................................................................................ 6
Ratio of Earnings to Fixed Charges......................................................................... 6
Description of the Certificates............................................................................ 7
Description of the Equipment Notes......................................................................... 20
United States Federal Income Tax Consequences.............................................................. 25
ERISA Considerations....................................................................................... 29
Plan of Distribution....................................................................................... 30
Legal Opinions............................................................................................. 31
Experts.................................................................................................... 31
</TABLE>
YOU SHOULD RELY ONLY ON THE INFORMATION PROVIDED IN THIS PROSPECTUS AND ANY
PROSPECTUS SUPPLEMENT, INCLUDING THE INFORMATION INCORPORATED BY REFERENCE. WE
HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH DIFFERENT INFORMATION. NORTHWEST
AIRLINES, INC. WILL OFFER TO SELL THE SECURITIES AND SEEK OFFERS TO BUY THE
SECURITIES, ONLY IN JURISDICTIONS WHERE OFFERS AND SALES ARE PERMITTED. THE
INFORMATION CONTAINED IN OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS IS
ACCURATE ONLY AS OF THE DATE OF THIS PROSPECTUS, REGARDLESS OF THE TIME OF
DELIVERY OF THIS PROSPECTUS OR OF ANY SALES OF THE SECURITIES.
ABOUT THIS PROSPECTUS
This prospectus is part of registration statements that we filed with the
Securities and Exchange utilizing a "shelf" registration process. Under this
shelf process, we may sell pass through certificates described in this
prospectus in one or more offerings up to a total dollar amount of
$1,500,000,000 or the equivalent of this amount in foreign currencies or foreign
currency units.
This prospectus provides you with a general description of the pass through
certificates we may offer. Each time we offer pass through certificates, we will
provide you with a prospectus supplement that will describe the specific
amounts, prices and terms of the offered securities. The prospectus supplement
may also add, update or change information contained in this prospectus. You
should read both this prospectus and any prospectus supplement together with
additional information described below under "Incorporation of Certain Documents
by Reference."
This prospectus does not contain all of the information in the registration
statements. Statements we make in this prospectus about the contents of any
contract, agreement or other document are not necessarily complete. If that
contract, agreement or other document has been filed as an exhibit to the
registration statements, we refer you to the exhibit for a more complete
description. The information in this prospectus is accurate only as of the date
of this prospectus, regardless of the time of delivery of this prospectus or any
sale of the securities.
In this prospectus, "Northwest" refers to Northwest Airlines, Inc., "NWA
Corp." to Northwest Airlines Corporation and the "Company," "we," "us" or "our"
to NWA Corp. and its consolidated subsidiaries.
2
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
NWA Corp. files annual, quarterly and current reports, proxy statements and
other information with the SEC. You may read and copy any document we file at
the SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. Our SEC filings are also available to the public
over the internet at the SEC's web site at http://www.sec.gov. Northwest is not
required to file separate reports, proxy and information statements or other
information with the SEC pursuant to the Securities Exchange Act of 1934.
Instead, we have provided information with respect to Northwest, to the extent
required, in filings made by NWA Corp.
The SEC allows us to "incorporate by reference" the information we file with
them, which means that we can disclose important information to you by referring
you to those documents. The information incorporated by reference is considered
to be a part of this prospectus, and information that we file later with the SEC
will automatically update and supersede this information. We incorporate by
reference the documents listed below and any future filings made with the SEC
under Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934
until we complete our offering of the securities:
- Annual Report on Form 10-K for the year ended December 31, 1998;
- Quarterly Report on Form 10-Q for the quarter ended March 31, 1999; and
- Current Reports on Form 8-K filed on January 24, 1999, February 24, 1999
and April 19, 1999.
You may request a copy of these filings (other than exhibits to them) at no
cost, by writing or telephoning us at the following address:
Secretary's Office
Northwest Airlines Corporation
5101 Northwest Drive, Dept. A1180
St. Paul, Minnesota 55111-3034
Telephone: (612) 726-2111
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. These forward-looking statements are subject to a number
of risks and uncertainties, all of which are difficult to predict and many of
which are beyond the Company's control. Forward-looking statements are typically
identified by the words "may," "will," "believe," "expect," "anticipate,"
"intend," "estimate" and similar expressions. Actual results could differ
materially from those contemplated by these forward-looking statements as a
result of a number of factors. It is not reasonably possible to itemize all of
the many factors and specific events that could affect the outlook of an airline
operating in the global economy. Some factors that could significantly impact
expected capacity, load factors, revenues, expenses and cash flows include the
airline pricing environment, fuel costs, labor negotiations both at the Company
and other carriers, low-fare carrier expansion, capacity decisions of other
carriers, actions of the U.S. and foreign governments, foreign currency exchange
rate fluctuation, inflation, the general economic environment in the U.S. and
other regions of the world and other factors discussed herein.
In light of these risks and uncertainties, there can be no assurance that
the results and events contemplated by the forward-looking statements contained
in this prospectus will in fact be realize. Potential investors are cautioned
not to place undue reliance on these forward-looking statements. The Company
does not undertake any obligation to update or revise any forward-looking
statements. All subsequent written or oral forward-looking statements
attributable to the Company or persons acting on behalf of the Company are
expressly qualified in their entirety by the factors described above.
3
<PAGE>
THE COMPANY
Northwest, the principal wholly-owned subsidiary of NWA Corp., operates the
world's fourth largest airline (as measured by 1997 revenue passenger miles
("RPMs")) and is engaged in the business of transporting passengers and cargo.
Northwest's business focuses on the development of a global airline network
through its strategic assets that include:
- domestic hubs at Detroit, Minneapolis/St. Paul and Memphis;
- an extensive Pacific route system with hubs at Tokyo and Osaka;
- a transatlantic alliance with KLM Royal Dutch Airlines, which operates
through a hub in Amsterdam and, subject to regulatory approvals, with
Alitalia which operates through hubs in Rome and Milan; and
- a global alliance with Continental Airlines, Inc.
Northwest operates substantial domestic and international route networks and
directly serves more than 150 cities in 21 countries in North America, Asia and
Europe. Northwest had more than 50.5 million enplanements and flew over 66.7
billion RPMs in 1998.
On November 20, 1998 NWA Corp. effected a holding company reorganization. As
a result, Northwest Airlines Holding Corporation (formerly known as Northwest
Airlines Corporation and, prior to the reorganization, the publicly traded
holding company, "Old NWA Corp.") became a direct wholly-owned subsidiary of NWA
Corp. NWA Corp. is now the publicly traded holding company, which owns directly
Old NWA Corp. and indirectly the holding and operating subsidiaries of Old NWA
Corp. References in this prospectus to NWA Corp. for time periods prior to
November 20, 1998 refer to Old NWA Corp.
Our principal executive offices are located at 2700 Lone Oak Parkway, Eagan,
Minnesota 55121; our mailing address is 5101 Northwest Drive, St. Paul,
Minnesota 55111-3034 and our telephone number is (612) 726-2111.
GENERAL OUTLINE OF TRUST STRUCTURE
A separate Northwest Airlines Pass Through Trust (each, a "Trust") will be
formed for each series or class of pass through certificates ("Certificates").
Each Trust will be formed pursuant to the Pass Through Trust Agreement (each, a
"Basic Agreement") and a supplement thereto (a "Trust Supplement") to be entered
into among Northwest, NWA Corp. and State Street Bank and Trust Company of
Connecticut, National Association (the "Trustee"), as trustee under the Trust.
Each Certificate in a series or class will represent a fractional undivided
interest in the related Trust and will have no rights, benefits or interests in
respect of any other Trust. The property of the Trusts (the "Trust Property")
will consist of
- equipment notes issued (a) on a nonrecourse basis by one or more owner
trustees pursuant to separate leveraged lease transactions (the "Leased
Aircraft Notes") to finance or refinance a portion of the equipment cost
of aircraft, including engines (each, a "Leased Aircraft" and,
collectively, the "Leased Aircraft"), which have been or will be leased to
Northwest pursuant to a separate lease agreement (each such lease
agreement, a "Lease") for each Leased Aircraft, or (b) with recourse to
Northwest (the "Owned Aircraft Notes" and, together with any Leased
Aircraft Notes, the "Equipment Notes") to finance all or a portion of the
equipment cost of, or to purchase all or a portion of the outstanding debt
with respect to, aircraft, including engines (each, an "Owned Aircraft"
and, collectively, the "Owned Aircraft"; together with Leased Aircraft,
the "Aircraft"), which have been or will be purchased and owned by
Northwest;
4
<PAGE>
- the rights of such trust to acquire Equipment Notes under the related note
purchase or refunding agreements;
- in the case of a delayed purchase of aircraft, the rights of such Trust in
respect of certain escrowed funds;
- if so specified in the related prospectus supplement, the rights of such
Trust under an intercreditor agreement (the "Intercreditor Agreement")
with respect to cross-subordination or other intercreditor matters;
- if so specified in the related prospectus supplement, monies receivable
under any liquidity facility arrangements for such Trust; and
- funds from time to time deposited with the related Trustee.
Concurrently with the execution and delivery of each Trust Supplement, the
Trustee will enter into one or more note purchase or refunding agreements (each
such agreement being herein referred to as a "Note Purchase Agreement") pursuant
to which it will purchase one or more Equipment Notes relating to one or more of
the Aircraft described in the applicable prospectus supplement. Pursuant to the
applicable Note Purchase Agreements, the Trustee will purchase one or more
Equipment Notes. The Equipment Notes that constitute the property of each Trust
will have identical interest rates (in each case equal to the rate applicable to
the Certificates issued by such Trust). The maturity dates of the Equipment
Notes acquired by each Trust will occur on or before the final distribution date
applicable to the Certificates issued by such Trust. The Trustee will distribute
the amount of payments of principal, premium, if any, and interest received by
it as holder of the Equipment Notes to the Certificateholders of the Trust in
which such Equipment Notes are held. See "Description of the Certificates" and
"Description of the Equipment Notes."
Interest paid on the Equipment Notes held in each Trust will be passed
through to the holders of the Certificates relating to such Trust on the dates
and at the rate per annum set forth in the prospectus supplement relating to
such Certificates until the final distribution date for such Trust. Principal
paid on the Equipment Notes held in each Trust will be passed through to the
holders of the Certificates relating to such Trust in scheduled amounts on the
dates set forth in the prospectus supplement relating to such Certificates until
the final distribution date for such Trust. The Equipment Notes issued with
respect to any Aircraft will be secured by a security interest in such Aircraft
and, in the case of the Leased Aircraft, by a security interest in the related
Lease, including the right to receive rentals payable in respect of such Leased
Aircraft by Northwest.
The Leased Aircraft Notes will be issued under separate trust indentures
(the "Leased Aircraft Indentures") between a bank, trust company or other
institution specified in the related prospectus supplement, as trustee
thereunder (in such capacity, herein referred to as the "Loan Trustee"), and an
institution specified in the related prospectus supplement acting, not in its
individual capacity, but solely as owner trustee (an "Owner Trustee") of a
separate trust for the benefit of one or more institutional investors (each, an
"Owner Participant"). With respect to each Leased Aircraft, the related Owner
Participant will have provided or will provide from sources other than the
Leased Aircraft Notes a portion of the equipment cost of the related Leased
Aircraft. No Owner Participant, however, will be personally liable for any
amount payable under the related Leased Aircraft Indenture or the Leased
Aircraft Notes issued thereunder. Simultaneously with the acquisition of each
Leased Aircraft, the related Owner Trustee leased or will lease such Aircraft to
Northwest pursuant to a separate Lease. The Owned Aircraft Notes will be issued
under separate trust indentures (the "Owned Aircraft Indentures" and, together
with any Leased Aircraft Indentures, the "Indentures") between the applicable
Loan Trustee and Northwest.
Although neither the Certificates nor the Leased Aircraft Notes will be
direct obligations of, or guaranteed by, Northwest, the amounts unconditionally
payable by Northwest for lease of Leased
5
<PAGE>
Aircraft will be sufficient to pay in full when due all payments required to be
made on the corresponding Leased Aircraft Notes.
NWA Corp. will fully and unconditionally guarantee (the "Parent Guaranty")
to the holders from time to time of Certificates (i) with respect to related
Owned Aircraft Notes, the full and prompt payment of principal, premium, if any,
and interest thereon when and as the same shall become due and payable, whether
at maturity, upon redemption or otherwise and (ii) with respect to related
Leased Aircraft Notes, the full and prompt payment of all amounts payable by
Northwest under the related Lease when and as the same shall become due and
payable. The Parent Guaranty will be enforceable without any need first to
enforce the obligations of Northwest against Northwest.
With respect to Equipment Notes of differing payment priorities issued in
respect of one or more Aircraft, the rights of the holders of the related
Certificates will be subject to an intercreditor agreement (the "Intercreditor
Agreeement").
USE OF PROCEEDS
Except as set forth in a prospectus supplement for a specific offering of
Certificates, the proceeds from the sale of the Certificates will be used by the
Trustee on behalf of the applicable Trust or Trusts to purchase either (a)
Leased Aircraft Notes or (b) Owned Aircraft Notes.
Any portion of the proceeds from the sale of Certificates not used by the
Trustee to purchase Equipment Notes on or prior to the date specified therefor
in the applicable prospectus supplement will be distributed on a Special
Distribution Date (as defined below) to the applicable Certificateholders,
together with interest, but without premium. See "Description of Certificates--
Special Distribution Upon Unavailability of Aircraft."
RATIO OF EARNINGS TO FIXED CHARGES
We have set forth below the ratio of earnings to fixed charges for NWA Corp.
and its consolidated subsidiaries for the periods indicated. The ratio of
earnings to fixed charges represents the number of times that fixed charges were
covered by earnings. In computing the ratio, earnings represent consolidated
earnings (loss) before income taxes, cumulative effect of accounting change and
fixed charges (excluding capitalized interest). Fixed charges consist of
interest expense (including capitalized interest), one-third of rental expense,
which is considered representative of the interest factor, and amortization of
debt discount and expense.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
- ------------------------------------------------------- ----------------------
1994 1995 1996 1997 1998 1998 1999
- --------- --------- --------- --------- ----- --------- -----
<S> <C> <C> <C> <C> <C> <C>
1.88 1.90 2.74 3.05 (a) 2.01 (b)
</TABLE>
- ------------------------
(a) Earnings were inadequate to cover fixed charges by $452 million for the year
ended December 31, 1998.
(b) Earnings were inadequate to cover fixed charges by $69 million for three
months ended March 31, 1999.
6
<PAGE>
DESCRIPTION OF THE CERTIFICATES
The following description of the Certificates summarizes certain general
terms and provisions of the Certificates to which any prospectus supplement may
relate. This summary relates to the Basic Agreement (the form of which has been
filed as an exhibit to the registration statement of which this prospectus is a
part) and each of the Trust Supplements, the Trusts to be formed thereby and the
Certificates to be issued by each Trust except to the extent, if any, described
in the applicable prospectus supplement. The prospectus supplement that
accompanies this prospectus contains a glossary of the material terms used with
respect to the specific series or class of Certificates being offered thereby.
The Trust Supplement relating to each series or class of Certificates and the
forms of the material operative agreements relating thereto (including, if
applicable, Note Purchase Agreement, Indenture, Lease, Trust Agreement,
participation agreement, Intercreditor Agreement and liquidity arrangement) will
be filed as exhibits to a post-effective amendment to the Registration Statement
of which this prospectus is a part, a Current Report on Form 8-K, a Quarterly
Report on Form 10-Q or an Annual Report on Form 10-K, as applicable, filed by
NWA Corp. with the SEC.
The Certificates offered pursuant to this prospectus will be limited to
$1,500,000,000 aggregate public offering price (or its equivalent (based on the
applicable exchange rate at the time of sale) in one or more foreign currencies
or currency units).
TO THE EXTENT THAT ANY PROVISION IN ANY PROSPECTUS SUPPLEMENT IS
INCONSISTENT WITH ANY PROVISION IN THIS SUMMARY, THE PROVISION OF SUCH
PROSPECTUS SUPPLEMENT WILL CONTROL.
GENERAL
Each Certificate will represent a fractional undivided interest in the Trust
created by the Trust Supplement pursuant to which such Certificate was issued.
All payments and distributions on account of the Certificates will be made only
from the related Trust Property. Each Certificate will represent a pro rata
share of the outstanding principal amount of the Equipment Notes held in the
related Trust. Unless otherwise specified in the applicable prospectus
supplement, each Certificate will be issued in minimum denominations of $1,000
or any integral multiple thereof (except that one Certificate of each Trust may
be issued in an odd amount, due to the fact that the aggregate amount offered by
such Trust may not represent an integral multiple of $1,000).
The Certificates will not represent an interest in or obligation of
Northwest, NWA Corp., the Trustee, any of the Loan Trustees or Owner Trustees in
their individual capacities, any Owner Participant, or any affiliate of any
thereof. Each Certificateholder by its acceptance of a Certificate agrees to
look solely to the income and proceeds from the Trust Property as provided in
the Basic Agreement and the applicable Trust Supplement and to its rights under
the Parent Guaranty.
The Equipment Notes issued under an Indenture may be held in more than one
Trust and one Trust may hold Equipment Notes issued under more than one
Indenture (each Indenture the Equipment Notes of which are held in a Trust, a
"Related Indenture"). Unless otherwise provided in a prospectus supplement, only
Equipment Notes having the same priority of payment (the Equipment Notes of any
such priority, a "class" or "series") may be held in the same Trust.
Interest will be passed through to Certificateholders of each Trust at the
rate per annum payable on the Equipment Notes held in such Trust, as set forth
for such Trust on the cover page of the applicable prospectus supplement.
Reference is made to the prospectus supplement that accompanies this
prospectus for a description of the specific series or class of Certificates
being offered thereby, including:
- the specific designation and title of such Certificates;
7
<PAGE>
- the Regular Distribution Dates (as defined below) and Special Distribution
Dates (as defined below) applicable to such Certificates;
- the currency or currencies (including currency units) in which such
Certificates may be denominated;
- the specific form of such Certificates, including whether or not such
Certificates are to be issued in accordance with a book-entry system;
- a description of the Equipment Notes to be purchased by such Trust,
including (a) the period or periods within which, the price or prices at
which, and the terms and conditions upon which such Equipment Notes may or
must be redeemed or defeased in whole or in part, by Northwest or, with
respect to Leased Aircraft Notes, the Owner Trustee, (b) the payment
priority of such Equipment Notes in relation to any other Equipment Notes
issued with respect to the related Aircraft, (c) any additional security
or liquidity enhancements therefor and (d) any intercreditor or other
rights or limitations between or among the holders of Equipment Notes of
different priorities issued by the same Owner Trustee;
- a description of the related Aircraft, including whether such Aircraft is
a Leased Aircraft or an Owned Aircraft;
- a description of the related Note Purchase Agreement and Related
Indentures, including a description of the events of default under the
Related Indentures, the remedies exercisable upon the occurrence of such
events of default and any limitations on the exercise of such remedies
with respect to such Equipment Notes;
- if such Certificates relate to Leased Aircraft, a description of the
related Lease, trust agreement and participation agreement, including (a)
the names of the related Owner Trustees, (b) a description of the events
of default under the related Leases, the remedies exercisable upon the
occurrence of such events of default and any limitations on the exercise
of such remedies with respect to such Leased Aircraft Notes, and (c) the
rights of the related Owner Trustee, if any, and/or Owner Participant, if
any, to cure failures of Northwest to pay rent under the related Lease;
- the extent, if any, to which the provisions of the operative documents
applicable to such Equipment Notes may be amended by the parties thereto
without the consent of the holders of, or only upon the consent of the
holders of a specified percentage of aggregate principal amount of, such
Equipment Notes;
- cross-default or cross-collateralization provisions in the Related
Indentures;
- subordination provisions among the holders of Certificates, including any
cross-subordination provisions among the holders of Certificates in
separate Trusts; and
- any other special terms pertaining to such Certificates.
If any Certificates are denominated in one or more foreign currencies or
currency units, the restrictions, certain United States federal income tax
considerations, specific terms and other information with respect to such
Certificates and such foreign currency or currency units will be set forth in
the applicable prospectus supplement.
BOOK-ENTRY REGISTRATION
GENERAL
If specified in the applicable prospectus supplement, the Certificates will
be subject to the provisions described below and under the caption "--Definitive
Certificates." Upon issuance, each
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series or class of Certificates will be represented by one fully registered
global certificate. Each global certificate will be deposited with, or on behalf
of, The Depository Trust Company ("DTC") and registered in the name of Cede &
Co. ("Cede"), or its nominee. No person acquiring an interest in such
Certificates ("Certificate Owner") will be entitled to receive a certificate
representing such person's interest in such Certificates, except as set forth
below under "--Definitive Certificates." Unless and until Definitive
Certificates are issued under the limited circumstances described herein, all
references to actions by Certificateholders shall refer to actions taken by DTC
upon instructions from DTC Participants (as defined below), and all references
herein to distributions, notices, reports and statements to Certificateholders
shall refer, as the case may be, to distributions, notices, reports and
statements to DTC or Cede, as the registered holder of such Certificates, or to
DTC Participants for distribution to Certificate Owners in accordance with DTC
procedures.
Northwest has been advised that DTC is a limited purpose trust company
organized under the laws of the State of New York, a member of the Federal
Reserve System, a "clearing corporation" within the meaning of the New York
Uniform Commercial Code and "clearing agency" registered pursuant to section 17A
of the Exchange Act. DTC was created to hold securities for its participants
("DTC Participants") and to facilitate the clearance and settlement of
securities transactions between DTC Participants through electronic
book-entries, thereby eliminating the need for physical transfer of
certificates. DTC Participants include securities brokers and dealers, banks,
trust companies and clearing corporations. Indirect access to the DTC system
also is available to others such as banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with a DTC Participant
either directly or indirectly ("Indirect Participants").
Certificate Owners that are not DTC Participants or Indirect Participants
but desire to purchase, sell or otherwise transfer ownership of, or other
interests in, the Certificates may do so only through DTC Participants and
Indirect Participants. In addition, Certificate Owners will receive all
distributions of principal and interest from the Trustee through DTC
Participants or Indirect Participants, as the case may be. Under a book-entry
format, Certificate Owners may experience some delay in their receipt of
payments, because such payments will be forwarded by the Trustee to Cede, as
nominee for DTC. DTC will forward such payments in same-day funds to DTC
Participants who are credited with ownership of the Certificates in amounts
proportionate to the principal amount of each such DTC Participant's respective
holdings of beneficial interests in the Certificates. DTC Participants will
thereafter forward payments to Indirect Participants or Certificate Owners, as
the case may be, in accordance with customary industry practices. The forwarding
of such distributions to the Certificate Owners will be the responsibility of
such DTC Participants. Unless and until the Definitive Certificates are issued
under the limited circumstances described herein, the only "Certificateholder"
will be Cede, as nominee of DTC. Certificate Owners will not be recognized by
the Trustee as Certificateholders, as such term is used in the Basic Agreement,
and Certificate Owners will be permitted to exercise the rights of
Certificateholders only indirectly through DTC and DTC Participants.
Under the rules, regulations and procedures creating and affecting DTC and
its operations (the "Rules"), DTC is required to make book-entry transfers of
the Certificates among DTC Participants on whose behalf it acts with respect to
the Certificates and to receive and transmit distributions of principal,
premium, if any, and interest with respect to the Certificates. DTC Participants
and Indirect Participants with which Certificate Owners have accounts with
respect to the Certificates similarly are required to make book-entry transfers
and receive and transmit such payments on behalf of their respective customers.
Accordingly, although Certificate Owners will not possess the Certificates, the
Rules provide a mechanism by which Certificate Owners will receive payments and
will be able to transfer their interests.
Because DTC can only act on behalf of DTC Participants, who in turn act on
behalf of Indirect Participants, the ability of a Certificate Owner to pledge
the Certificates to persons or entities that do
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not participate in the DTC system, or to otherwise act with respect to such
Certificates, may be limited due to the lack of a physical certificate for such
Certificates.
DTC has advised Northwest that it will take any action permitted to be taken
by a Certificateholder under the Basic Agreement only at the direction of one or
more DTC Participants to whose accounts with DTC the Certificates are credited.
Additionally, DTC has advised Northwest that in the event any action requires
approval by Certificateholders of a certain percentage of beneficial interest in
each Trust, DTC will take such action only at the direction of and on behalf of
DTC Participants whose holders include undivided interests that satisfy any such
percentage. DTC may take conflicting actions with respect to other undivided
interests to the extent that such actions are taken on behalf of DTC
Participants whose holders include such undivided interests.
Neither Northwest, NWA Corp. nor the Trustee will have any liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests in the Certificates held by Cede, as nominee for DTC, or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
The applicable prospectus supplement will specify any additional book-entry
registration procedures applicable to Certificates denominated in a currency
other than United States dollars.
SAME-DAY SETTLEMENT AND PAYMENT
So long as the Certificates are registered in the name of Cede, as nominee
for DTC, all payments made by Northwest to the Loan Trustee under any Lease or
any Owned Aircraft Indentures will be in immediately available funds. Such
payments, including the final distribution of principal with respect to the
Certificates of any Trust, will be passed through to DTC in immediately
available funds.
Secondary trading in long-term notes and debentures of corporate issuers is
generally settled in clearinghouse or next-day funds. In contrast, secondary
trading in pass through certificates is generally settled in immediately
available or same-day funds. Any Certificates registered in the name of Cede, as
nominee for DTC, will trade in DTC's Same-Day Funds Settlement System until
maturity, and secondary market trading activity in the Certificates will
therefore be required by DTC to settle in immediately available funds. No
assurance can be given as to the effect, if any, of settlement in same-day funds
on trading activity in the Certificates.
DEFINITIVE CERTIFICATES
Unless the applicable prospectus supplement specifies otherwise, if DTC is
at any time unwilling or unable to continue as Depositary and a successor
Depositary is not appointed by Northwest within ninety days, Northwest will
issue those Certificates in definitive certificated form in exchange for that
Registered Global Security. In addition, Northwest may at any time and in its
sole discretion determine not to have any of the Certificates of a series or
class represented by one or more Registered Global Securities and, in that
event, will issue Certificates of that series or class in definitive
certificated form in exchange for all of the Registered Global Securities
representing those Certificates. Further, if Northwest so specifies with respect
to the Certificates of a series or class, an owner of a beneficial interest in a
Registered Global Security representing Certificates of that series or class
may, on terms acceptable to Northwest and DTC, receive Certificates of that
series or class in definitive form registered in the name of that beneficial
owner or its designee.
Upon the occurrence of any event described in the immediately preceding
paragraph, the Trustee will be required to notify all Certificate Owners through
DTC Participants of the availability of Definitive Certificates. Upon surrender
by DTC of the certificates representing the Certificates and receipt of
instructions for re-registration, the Trustee will reissue the Certificates as
Definitive Certificates to Certificate Owners.
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Distributions of principal, premium, if any, and interest with respect to
Certificates will thereafter be made by the Trustee directly in accordance with
the procedures set forth in the Basic Agreement and the applicable Trust
Supplements, to holders in whose names the Definitive Certificates were
registered at the close of business on the applicable record date. Such
distributions will be made by check mailed to the address of such holder as it
appears on the register maintained by the Trustee. The final payment on any
Certificate, however, will be made only upon presentation and surrender of such
Certificate at the office or agency specified in the notice of final
distribution to Certificateholders.
Definitive Certificates will be freely transferable and exchangeable at the
office of the Trustee upon compliance with the requirements set forth in the
Basic Agreement and the applicable Trust Supplements. No service charge will be
imposed for any registration of transfer or exchange, but payment of a sum
sufficient to cover any tax or other governmental charge shall be required.
PAYMENTS AND DISTRIBUTIONS
Payments of principal, premium, if any, and interest with respect to the
Equipment Notes held in each Trust will be distributed by the Trustee, upon
receipt, to Certificateholders of such Trust on the dates and in the currency
specified in the applicable prospectus supplement, except
- in certain cases when some or all of such Equipment Notes are in default
as described in the applicable prospectus supplement and
- that such payments are subject to the effect of any cross-subordination or
other intercreditor provisions set forth in the prospectus supplement for
a series or class of Certificates.
Payments of principal of, and interest on, the unpaid principal amount of
the Equipment Notes held in each Trust will be scheduled to be received by the
Trustee on the dates specified in the applicable prospectus supplement (such
scheduled payments of interest and principal on the Equipment Notes to the
Trustee are herein referred to as "Scheduled Payments," and the dates specified
in the applicable prospectus supplement for distribution of Scheduled Payments
to the Trustee are herein referred to as "Regular Distribution Dates"). See
"Description of the Equipment Notes General." Subject to the effect of any
cross-subordination or other intercreditor provisions set forth in the
prospectus supplement for a series or class of Certificates, each
Certificateholder of each Trust will be entitled to receive a pro rata share of
any distribution in respect of Scheduled Payments of principal and interest made
on the Equipment Notes held in the Trust.
Payments of principal, premium, if any, and interest received by the Trustee
on account of the early redemption, if any, of the Equipment Notes relating to
one or more Aircraft held in a Trust, and payments, other than Scheduled
Payments received on a Regular Distribution Date, received by the Trustee
following default in respect of Equipment Notes held in a Trust relating to one
or more Aircraft ("Special Payments") will be distributed on the date determined
pursuant to the applicable prospectus supplement (a "Special Distribution Date")
except that, unless otherwise specified in the applicable prospectus supplement,
payments received by the Trustee following default in respect of the Equipment
Notes on a Regular Distribution Date as a result of a drawing under any
liquidity facility arrangement specified in the applicable prospectus supplement
(each, a "Liquidity Facility") provided for the benefit of the
Certificateholders shall be distributed on such Regular Distribution Date. The
Trustee will mail notice to the Certificateholders of record of the applicable
Trust not less than 20 days prior to the Special Distribution Date on which any
Special Payment is scheduled to be distributed by the Trustee stating such
anticipated Special Distribution Date.
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POOL FACTORS
The Pool Factor (as defined below) for the Trusts will decline in proportion
to the scheduled repayments of principal on the Equipment Notes held in such
Trust as described in the applicable prospectus supplement unless there has been
- an early redemption,
- a purchase of an issue of Equipment Notes by the related Owner Trustee
after an Indenture Default (as defined below),
- a default in the payment of principal in respect of one or more issues of
the Equipment Notes held in a Trust or
- certain actions have been taken following a default thereon, as described
in the applicable prospectus supplement,
in which event the Pool Factor and the Pool Balance (as defined below) of
each Trust so affected will be recomputed after giving effect thereto and notice
thereof will be mailed to the Certificateholders of such Trust. Each Trust will
have a separate Pool Factor.
Unless otherwise described in the applicable prospectus supplement, the
"Pool Balance" for each Trust or for the Certificates issued by any Trust
indicates, as of any date, the original aggregate face amount of the
Certificates of such Trust less the aggregate amount of all payments made in
respect of the Certificates of 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 as of any Regular
Distribution Date or Special Distribution Date shall be computed after giving
effect to the 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
that date.
Unless otherwise described in the applicable prospectus supplement, the
"Pool Factor" for each Trust as of any Regular Distribution Date or Special
Distribution Date is the quotient (rounded to the seventh decimal place)
computed by dividing (i) the Pool Balance by (ii) the aggregate original
principal amount of the Equipment Notes held in such Trust. The Pool Factor for
each Trust as of any Regular Distribution Date or Special Distribution Date
shall be computed after giving effect to the payment of principal, if any, on
the Equipment Notes held in such Trust and distribution thereof to be made on
that date. The Pool Factor for each Trust will initially be 1.0000000;
thereafter, the Pool Factor for each Trust will decline as described above to
reflect reductions in the Pool Balance of such Trust. The amount of a
Certificateholder's pro rata share of the Pool Balance of a Trust can be
determined by multiplying the original denomination of the holder's Certificate
of such Trust by the Pool Factor for such Trust as of the applicable Regular
Distribution Date or Special Distribution Date. The Pool Factor and the Pool
Balance for each Trust will be mailed to Certificateholders of such Trust on
each Regular Distribution Date and Special Distribution Date.
REPORTS TO CERTIFICATEHOLDERS
On each Regular Distribution Date and Special Distribution Date, the Trustee
will include with each distribution of a Scheduled Payment or Special Payment to
Certificateholders of the related Trust a statement, giving effect to such
distribution to be made on such Regular Distribution Date or Special
Distribution Date, setting forth the following information (per $1,000 aggregate
principal amount of Certificate for such Trust, as to (i) and (ii) below):
(i) the amount of such distribution allocable to principal and the amount
allocable to premium, if any;
(ii) the amount of such distribution allocable to interest; and
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(iii) the Pool Balance and the Pool Factor for such Trust.
If so specified in the related prospectus supplement, the Trustee for a
series or class of Certificates may include in such statement additional
information, such as (i) the aggregate amount of funds distributed on such
payment date and the source of such funds and (ii) in the case of a delayed
purchase, certain information regarding the escrowed funds.
So long as the Certificates are registered in the name of Cede, as nominee
for DTC, on the record date prior to each Regular Distribution Date and Special
Distribution Date, the Trustee will request from DTC a Securities Position
Listing setting forth the names of all DTC Participants reflected on DTC's books
as holding interests in the Certificates on such record date. On each Regular
Distribution Date and Special Distribution Date, the Trustee will mail to each
such DTC Participant the statement described above and will make available
additional copies as requested by such DTC Participant for forwarding to
Certificate Owners.
In addition, after the end of each calendar year, the Trustee will prepare
for each Certificateholder of each Trust at any time during the preceding
calendar year a report containing the sum of the amounts determined pursuant to
clauses (i) and (ii) above with respect to the Trust for such calendar year or,
in the event such person was a Certificateholder during only a portion of such
calendar year, for the applicable portion of such calendar year, and such other
items as are readily available to the Trustee and which a Certificateholder
shall reasonably request as necessary for the purpose of such
Certificateholder's preparation of its federal income tax returns. Such report
and such other items shall be prepared on the basis of information supplied to
the Trustee by the DTC Participants and shall be delivered by the Trustee to
such DTC Participants to be available for forwarding by such DTC Participants to
Certificate Owners in the manner described above.
At such time, if any, as the Certificates are issued in the form of
Definitive Certificates, the Trustee will prepare and deliver the information
described above to each Certificateholder of record of each Trust as the name
and period of beneficial ownership of such Certificateholder appears on the
records of the registrar of the Certificates.
VOTING OF EQUIPMENT NOTES
Subject to the effect of any cross-subordination provisions set forth in the
related prospectus supplement, the Trustee, as holder of the Equipment Notes
held in each Trust, has the right to vote and give consents and waivers with
respect to such Equipment Notes under the Related Indentures. The Basic
Agreement and related Trust Supplement set forth
(i) the circumstances in which the Trustee may direct any action or cast any
vote as the holder of the Equipment Notes held in the applicable Trust
at its own discretion,
(ii) the circumstances in which the Trustee shall seek instructions from the
Certificateholders of such Trust, and
(iii) the percentage of Certificateholders required to direct the Trustee to
take any such action.
If specified in the related prospectus supplement, the right of a Trustee to
vote and give consents and waivers with respect to the Equipment Notes held in
the related Trust may, in the circumstances set forth in an intercreditor
agreement to be executed by such Trustee, be exercisable by another person
specified in such prospectus supplement.
EVENTS OF DEFAULT AND CERTAIN RIGHTS UPON AN EVENT OF DEFAULT
The prospectus supplement related to a series or class of Certificates will
specify the events of default under the Basic Agreement (an "Event of Default")
and the Related Indentures (an "Indenture Default"). With respect to Leased
Aircraft Notes, the Indenture Defaults will include events of default
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under the related Leases (a "Lease Event of Default"). With respect to any
Equipment Notes which are supported by a Liquidity Facility the Indenture
Defaults may include events of default under such Liquidity Facility. Unless
otherwise provided in a prospectus supplement, all of the Equipment Notes issued
under the same Indenture will relate to one or more specific Aircraft and there
will be no cross-collateralization or cross-default provisions in the
Indentures. Events resulting in an Indenture Default under any particular
Indenture will not necessarily result in an Indenture Default occurring under
any other Indenture.
As described below under "--Cross-Subordination Issues," a prospectus
supplement may provide the terms of any cross-subordination provisions among
Certificateholders of separate Trusts. If such provisions are so provided,
payments made pursuant to a Related Indenture under which an Indenture Default
(and as to which payments continue to be made as scheduled) has not occurred may
be distributed first to the holders of the Certificates issued under the Trust
which holds the most senior Equipment Notes issued under all Related Indentures.
With respect to Leased Aircraft Notes, the ability of the Owner Trustee or
Owner Participant under the Related Indenture to cure Indenture Defaults,
including Indenture Defaults that result from the occurrence of a Lease Event of
Default under the related Lease, will be described in the prospectus supplement.
Unless otherwise provided in a prospectus supplement, with respect to any
Certificates or Equipment Notes entitled to the benefits of a Liquidity
Facility, a drawing under any such Liquidity Facility for the purpose of making
a payment of interest as a result of the failure by Northwest to have made a
corresponding payment will not cure an Indenture Default related to such failure
by Northwest.
The prospectus supplement related to a series or class of Certificates will
set forth the percentage of Certificateholders of such Trust entitled to direct
the Trustee to take any action with respect to the related Equipment Notes and,
if applicable, Equipment Notes issued under any other Related Indenture. If the
Equipment Notes outstanding under an Indenture are held by more than one Trust,
then the ability of the Certificateholders issued with respect to any one Trust
to cause the Loan Trustee with respect to any Equipment Notes held in such Trust
to accelerate the Equipment Notes under the Related Indenture or to direct the
exercise of remedies by the Loan Trustee under the Related Indenture will
depend, in part, upon the proportion between the aggregate principal amount of
the Equipment Notes outstanding under such Indenture and held in such Trust and
the aggregate principal amount of all Equipment Notes outstanding under such
Indenture. In addition, if cross-subordination provisions are applicable to any
series or class of Certificates, then the ability of the Certificateholders of
any one Trust holding Equipment Notes issued under Related Indentures to cause
the Loan Trustee with respect to any Equipment Notes held in such Trust to
accelerate the Equipment Notes under the Related Indenture or to direct the
exercise of remedies by the Loan Trustee under the Related Indenture will
depend, in part, upon the class or series of Notes held in such Trust. If the
Equipment Notes outstanding under an Indenture are held by more than one Trust,
then each Trust will hold Equipment Notes with different terms from the
Equipment Notes held in the other Trusts and therefore the Certificateholders of
a Trust may have divergent or conflicting interests from those of the
Certificateholders of the other Trusts holding Equipment Notes relating to the
same Indenture. In addition, so long as the same institution acts as Trustee of
each Trust, in the absence of instructions from the Certificateholders of any
such Trust, the Trustee for such Trust could for the same reason be faced with a
potential conflict of interest upon an Indenture Default. In such event, the
Trustee has indicated that it would resign as Trustee of one or all such Trusts,
and a successor trustee would be appointed in accordance with the terms of the
Basic Agreement.
The prospectus supplement for a series or class of Certificates will specify
whether and under what circumstances the Trustee may or shall sell for cash to
any person all or part of the related Equipment Notes. Any proceeds received by
the Trustee upon any such sale shall be deposited in an account established by
the Trustee for the benefit of the Certificateholders of such Trust (the
"Special Payments
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Account"). The market for Equipment Notes in default may be very limited, and
there can be no assurance that they could be sold for a reasonable price.
Furthermore, so long as the same institution acts as Trustee of multiple Trusts,
it may be faced with a conflict in deciding from which Trust to sell Equipment
Notes to available buyers. If the Trustee sells any such Equipment Notes with
respect to which an Indenture Default exists for less than their outstanding
principal amount, the Certificateholders of such Trust will receive a smaller
amount of principal distributions than anticipated and will not have any claim
for the shortfall against Northwest, any Owner Trustee, Owner Participant, the
Trustee or (except for the Parent Guaranty) their affiliates. Furthermore,
neither the Trustee nor the Certificateholders of such Trust could take any
action with respect to any remaining Equipment Notes held in such Trust so long
as no Indenture Defaults exist with respect thereto.
With respect to any Trust, the following amounts shall be deposited into the
Special Payments Account and distributed to the related Certificateholders of
such Trust on a Special Payments Date:
- Any amount, other than Scheduled Payments received on a Regular
Distribution Date, distributed to the Trustee of such Trust by the Loan
Trustee under any Indenture on account of the Equipment Notes held in such
Trust following an Indenture Default under such Indenture.
- If a prospectus supplement provides that the applicable Owner Trustee may,
under circumstances specified therein, redeem or purchase the outstanding
Equipment Notes issued under the Related Indenture, the price paid by such
Owner Trustee to the Trustee of such Trust for the Equipment Notes issued
under such Indenture and held in such Trust.
Any funds representing payments received with respect to any Equipment Notes
held in such Trust in default, or the proceeds from the sale by the Trustee of
any such Equipment Notes, held by the Trustee in the Special Payments Account
for such Trust shall, to the extent practicable, be invested and reinvested by
the Trustee in Permitted Investments pending the distribution of such funds on a
Special Distribution Date. "Permitted Investments" will be specified in the
related prospectus supplement.
The Basic Agreement provides that the Trustee of each Trust shall, within 90
days after the occurrence of a default in respect of such Trust, give to the
Certificateholders of such Trust notice, transmitted by mail, of all uncured or
unwaived defaults with respect to such Trust known to it, provided that, except
in the case of default in the payment of principal, premium, if any, or interest
on any of the Equipment Notes held in such Trust, the Trustee shall be protected
in withholding such notice if it in good faith determines that the withholding
of such notice is in the interests of such Certificateholders. The term
"default" as used in this paragraph only means the occurrence of an Event of
Default with respect to a Trust as described above, except that in determining
whether any such Event of Default has occurred, any grace period or notice in
connection therewith shall be disregarded.
The Basic Agreement contains a provision entitling the Trustee of each
Trust, subject to the duty of the Trustee during a default to act with the
required standard of care, to be offered reasonable security or indemnity by the
Certificateholders of such Trust before proceeding to exercise any right or
power under the Basic Agreement at the request of such Certificateholders.
The prospectus supplement for a series or class of Certificates will specify
the percentage of Certificateholders entitled to waive, or to instruct the
Trustee to waive, any past Event of Default with respect to such Trust and
thereby annul any direction given with respect thereto. The prospectus
supplement for a series or class of Certificates will also specify the
percentage of Certificateholders (and whether of such Trust or of any other
Trust holding Equipment Notes issued under Related Indentures) entitled to
waive, or to instruct the Trustee or the Loan Trustee to waive, any past
Indenture Default with respect to the Equipment Notes held in such Trust and
thereby annul any direction given with respect thereto.
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MERGER, CONSOLIDATION AND TRANSFER OF ASSETS
Northwest will be prohibited from consolidating with or merging into any
other corporation or transferring substantially all of its assets as an entirety
to any other corporation unless
- (i) the surviving successor or transferee corporation shall (a) be a
"citizen of the United States" (as defined in Section 40102(a)(15) of
Title 49 of the United States Code) holding a carrier operating
certificate issued by the Secretary of Transportation pursuant to Chapter
447 of Title 49, United States Code, for aircraft capable of carrying 10
or more individuals or 6,000 pounds or more of cargo and with respect to
which there is in force an air carrier operating certificate issued
pursuant to Part 121 of the regulations under the sections of Title 49,
United States Code, relating to aviation and (b) expressly assume all of
the obligations of Northwest contained in the Basic Agreement and any
Trust Supplement, the Note Purchase Agreements and the Indentures and,
with respect to the Leased Aircraft Notes, the Participation Agreements
and the Leases, and any other operative documents;
- (ii) immediately after giving effect to such transaction, no Indenture
Default (with respect to the Owned Aircraft Notes) or Lease Event of
Default (with respect to the Leased Aircraft Notes) shall have occurred
and be continuing; and
- (iii) Northwest shall have delivered a certificate and an opinion or
opinions of counsel indicating that such transaction, in effect, complies
with such conditions.
MODIFICATIONS OF THE BASIC AGREEMENT
The Basic Agreement contains provisions permitting Northwest, NWA Corp. and
the Trustee of each Trust to enter into a supplemental trust agreement, without
the consent of the holders of any of the Certificates of such Trust,
- to provide for the formation of such Trust and the issuance of a series or
class of Certificates,
- to evidence the succession of another corporation to Northwest or NWA
Corp. and the assumption by such corporation of Northwest's or NWA Corp.'s
obligations under the Basic Agreement and the applicable Trust Supplement,
- to add to the covenants of Northwest or NWA Corp. for the benefit of
holders of such Certificates, or to surrender any right or power in the
Basic Agreement conferred upon Northwest or NWA Corp.,
- to cure any ambiguity or correct or supplement any defective or
inconsistent provision of the Basic Agreement or the applicable Trust
Supplement or to make any other provisions with respect to matters or
questions arising thereunder, provided such action shall not adversely
affect the interests of the holders of such Certificates, or to cure any
ambiguity or correct any mistake,
- to modify, eliminate or add to the provisions of the Basic Agreement to
the extent necessary to continue the qualification of the Basic Agreement
(including any supplemental agreement) under the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act") and to add to the Basic
Agreement such other provisions as may be expressly permitted by the Trust
Indenture Act,
- to provide for a successor Trustee or to add to or change any provision of
the Basic Agreement as necessary to facilitate the administration of the
Trusts thereunder by more than one Trustee,
- to add, eliminate or change any provisions under such Basic Agreement that
will not adversely affect the Certificateholders in any material respect,
provided that in each case, such modification does not cause the
corresponding Trust to become taxable as an "association"
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within the meaning of Treasury Regulation Section 301.7701-2 or a
"publicly traded partnership" within the meaning of Section 7704 of the
Code taxable as a corporation and
- to make any other amendments or modifications to the Basic Agreement,
provided such amendments or modifications shall only apply to Certificates
issued thereafter.
The Basic Agreement also contains provisions permitting Northwest, NWA Corp.
and the Trustee of each Trust, with the consent of the Certificateholders of
such Trust evidencing fractional undivided interests aggregating not less than a
majority in interest of such Trust, and, with respect to any Leased Aircraft,
with the consent of the applicable Owner Trustee (such consent not to be
unreasonably withheld), to execute supplemental trust agreements adding any
provisions to or changing or eliminating any of the provisions of the Basic
Agreement, to the extent relating to such Trust, and the applicable Trust
Supplement, or modifying the rights of the Certificateholders, except that no
such supplemental trust agreement may, without the consent of each
Certificateholder so affected thereby,
- reduce in any manner the amount of, or delay the timing of, any receipt by
the Trustee of payments on the Equipment Notes held in such Trust or
distributions in respect of any Certificate related to such Trust, or
change the date or place of any payment in respect of any Certificate, or
make distributions payable in coin or currency other than that provided
for in such Certificates, or impair the right of any Certificateholder of
such Trust to institute suit for the enforcement of any such payment when
due,
- permit the disposition of any Equipment Note held in such Trust, except as
provided in the Basic Agreement or the applicable Trust Supplement, or
otherwise deprive any Certificateholder of the benefit of the ownership of
the applicable Equipment Notes,
- reduce the percentage of the aggregate fractional undivided interests of
the Trust provided for in the Basic Agreement or the applicable Trust
Supplement, the consent of the holders of which is required for any such
supplemental trust agreement or for any waiver provided for in the Basic
Agreement or such Trust Supplement,
- modify any of the provisions relating to the rights of the
Certificateholders in respect of the waiver of events of default or
receipt of payment or
- cause the Trust to become taxable as an "association" within the meaning
of Treasury Regulation Section 301.7701-2 or a "publicly traded
partnership" within the meaning of Section 7704 of the Code taxable as a
corporation.
MODIFICATION OF INDENTURE AND RELATED AGREEMENTS
The prospectus supplement will specify the Trustee's obligations in the
event that the Trustee, as the holder of any Equipment Notes held in a Trust,
receives a request for its consent to any amendment, modification or waiver
under the Indenture or other documents relating to such Equipment Notes
(including any Lease with respect to Leased Aircraft Notes or any Liquidity
Facility).
CROSS-SUBORDINATION ISSUES
The Equipment Notes issued under an Indenture may be held in more than one
Trust and one Trust may hold Equipment Notes issued under more than one Related
Indenture. Unless otherwise provided in a prospectus supplement, only Equipment
Notes of the same class or series may be held in the same Trust. In such event,
payments made on account of a subordinate class or series of Equipment Notes
issued under a Related Indenture may, under circumstances described in the
related prospectus supplement, be subordinated to the prior payment of all
amounts owing to Certificateholders of a Trust which holds senior Equipment
Notes issued under all Related Indentures. The prospectus supplement related to
an issuance of Certificates will describe any such "cross-subordination"
provisions and any
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related terms, including the percentage of Certificateholders under any Trust
which are permitted to (i) grant waivers of defaults under any Related
Indenture, (ii) consent to the amendment or modification of any Related
Indentures or (iii) direct the exercise of remedial actions under any Related
Indentures.
TERMINATION OF THE TRUSTS
The obligations of Northwest, NWA Corp. and the Trustee with respect to a
Trust will terminate upon the distribution to Certificateholders of such Trust
of all amounts required to be distributed to them pursuant to the Basic
Agreement and the applicable Trust Supplement and the disposition of all
property held in such Trust. The Trustee will send to each Certificateholder of
record of such Trust notice of the termination of such Trust, the amount of the
proposed final payment and the proposed date for the distribution of such final
payment for such Trust. The final distribution to any Certificateholder of such
Trust will be made only upon surrender of such Certificateholder's Certificates
at the office or agency of the Trustee specified in such notice of termination.
DELAYED PURCHASE
In the event that, on the delivery date of any Certificates, all of the
proceeds from the sale of such Certificates are not used to purchase the
Equipment Notes contemplated to be held in the related Trust, such Equipment
Notes may be purchased by the Trustee at any time on or prior to a subsequent
date specified in the applicable prospectus supplement. In such event, the
proceeds from the sale of such Certificates not used to purchase Equipment Notes
will be held under an arrangement described in the applicable prospectus
supplement pending the purchase of the Equipment Notes not so purchased. If any
such proceeds are not subsequently used to purchase Equipment Notes by the date
specified in the prospectus supplement, such proceeds will be returned to the
holders of such Certificates.
THE PARENT GUARANTY
NWA Corp. will unconditionally guarantee (i) with respect to related Owned
Aircraft Notes, the full and prompt payment of principal, premium, if any, and
interest thereon when and as the same shall become due and payable, whether at
maturity, upon redemption or otherwise, and (ii) with respect to related Leased
Aircraft Notes, the full and prompt payment of all amounts payable by Northwest
under the related Lease when and as the same shall become due and payable.
The Parent Guaranty will be enforceable without any need first to enforce
any Owned Aircraft Note or Lease against Northwest. The Parent Guaranty will be
an unsecured obligation of NWA Corp.
LIQUIDITY FACILITY
The related prospectus supplement may provide that one or more payments of
interest on the Certificates of one or more series or classes will be supported
by a Liquidity Facility issued by an institution identified in the related
prospectus supplement. The provider of such Liquidity Facility will have a claim
senior to the Certificateholders' as specified in the related prospectus
supplement.
THE TRUSTEE
The Trustee for each series or class of Certificates will be identified in
the prospectus supplement. With certain exceptions, the Trustee will make no
representations as to the validity or sufficiency of the Basic Agreement, the
Trust Supplements, the Certificates, the Equipment Notes, the Indentures, the
Leases or other related documents. With respect to any series or class of
Certificates, the Trustee shall not be liable for any action taken or omitted to
be taken by it in good faith in accordance with the direction of the holders of
a majority in principal amount of outstanding Certificates of such series or
class. Subject to such provisions, such Trustee shall be under no obligation to
exercise any of its rights
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or powers under the Basic Agreement at the request of any holders of
Certificates issued thereunder unless they shall have offered to the Trustee
indemnity satisfactory to it. The Basic Agreement provides that the Indenture
Trustee in its individual or any other capacity may acquire and hold
Certificates issued thereunder and, subject to certain conditions, may otherwise
deal with Northwest, NWA Corp. and, with respect to the Leased Aircraft, with
any Owner Trustee and Owner Participant with the same rights it would have if it
were not the Trustee.
The Trustee may resign with respect to any or all of the Trusts at any time,
in which event Northwest will be obligated to appoint a successor trustee. If
the Trustee
- ceases to be eligible to continue as Trustee with respect to a Trust or
- becomes incapable of acting as Trustee or
- becomes insolvent,
Northwest may remove such Trustee, or any Certificateholder of such Trust
for at least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the removal of such
Trustee and the appointment of a successor trustee. Any resignation or removal
of the Trustee with respect to a Trust and appointment of a successor trustee
for such Trust will not become effective until acceptance of the appointment by
the successor trustee. Pursuant to such resignation and successor trustee
provisions, it is possible that a different trustee could be appointed to act as
the successor trustee with respect to each Trust. All references in this
prospectus to the Trustee should be read to take into account the possibility
that the Trusts could have different successor trustees in the event of such a
resignation or removal.
The Basic Agreement provides that Northwest will pay the Trustee's fees and
expenses and indemnify the Trustee against certain liabilities.
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DESCRIPTION OF THE EQUIPMENT NOTES
The statements made under this caption are summaries and reference is made
to the entire prospectus and detailed information appearing in the applicable
prospectus supplement. Where no distinction is made between the Leased Aircraft
Notes and the Owned Aircraft Notes or between their respective Indentures, such
statements refer to any Equipment Notes and any Indenture.
TO THE EXTENT THAT ANY PROVISION IN ANY PROSPECTUS SUPPLEMENT IS
INCONSISTENT WITH ANY PROVISION IN THIS SUMMARY, THE PROVISION OF SUCH
PROSPECTUS SUPPLEMENT WILL CONTROL.
GENERAL
All Equipment Notes will be issued under a separate Indenture either (a)
between the related Owner Trustee of a trust for the benefit of the Owner
Participant who is the beneficial owner of the related Aircraft, and the related
Loan Trustee, or (b) between Northwest and the related Loan Trustee. The
Equipment Notes issued pursuant to clause (a) of the preceding sentence will be
nonrecourse obligations of the applicable Owner Trust. Each Equipment Note will
be authenticated under an Indenture by the Loan Trustee. All Equipment Notes
issued under the same Indenture will relate to, and be secured by, one or more
Aircraft identified and described in the related prospectus supplement and
which, in the case of Equipment Notes issued as described in such clause (a),
are leased to Northwest pursuant to a Lease between the Owner Trustee under the
applicable Owner Trust and Northwest or, in the case of Equipment Notes issued
as described in clause (b), owned by Northwest.
With respect to each Leased Aircraft, the related Owner Trustee has acquired
or will acquire such Aircraft from Northwest or the manufacturer of such
Aircraft, as the case may be, has granted or will grant a security interest in
such Aircraft to the related Loan Trustee as security for the payments of the
related Leased Aircraft Notes, and has leased or will lease such Aircraft to
Northwest pursuant to the related Lease which has been or will be assigned to
the related Loan Trustee. Pursuant to each such Lease, Northwest will be
obligated to make or cause to be made rental and other payments to the related
Loan Trustee on behalf of the related Owner Trustee in amounts that will be
sufficient to make payments of the principal, interest and premium, if any,
required to be made in respect of such Leased Aircraft Notes when and as due and
payable.
The rental obligations of Northwest under each Lease and the obligations of
Northwest under each Owned Aircraft Indenture and under the Owned Aircraft Notes
will be general obligations of Northwest. Except in certain circumstances
involving Northwest's purchase of a Leased Aircraft and the assumption of the
Leased Aircraft Notes related thereto, the Leased Aircraft Notes are not
obligations of, or guaranteed by, Northwest.
PRINCIPAL AND INTEREST PAYMENTS
Interest received by the Trustee on the Equipment Notes held in each Trust
will be passed through to the Certificateholders of such Trust on the dates and
at the rate per annum set forth in the applicable prospectus supplement until
the final distribution for such Trust. Principal received by the Trustee on the
Equipment Notes held in each Trust will be passed through to the
Certificateholders of such Trust in scheduled amounts on the dates set forth in
the applicable prospectus supplement until the final distribution date for such
Trust.
If any date scheduled for any payment of principal, premium, if any, or
interest with respect to the Equipment Notes is not a Business Day, such payment
will be made on the next succeeding Business Day without any additional
interest.
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REDEMPTION
The applicable prospectus supplement will describe the circumstances,
whether voluntary or involuntary, under which the Equipment Notes may be
redeemed or purchased prior to the stated maturity date thereof, in whole or in
part, the premium, if any, applicable upon certain redemptions or purchases and
other terms applying to the redemptions or purchases of such Equipment Notes.
SECURITY
The Leased Aircraft Notes will be secured by
- an assignment by the related Owner Trustee to the related Loan Trustee of
such Owner Trustee's rights (except for certain rights, including those
described below) under the Lease or Leases with respect to the related
Aircraft, including the right to receive payments of rent thereunder,
- a mortgage granted to such Loan Trustee in such Aircraft, subject to the
rights of Northwest under such Lease or Leases, and
- an assignment to such Loan Trustee of certain of such Owner Trustee's
rights with respect to such Aircraft under the purchase agreement between
Northwest and the related manufacturer.
Under the terms of each Lease, Northwest's obligations in respect of each
Leased Aircraft will be those of a lessee under a "net lease." Accordingly,
Northwest will be obligated, among other things and at its expense, to cause
each Leased Aircraft to be duly registered, to pay all costs of operating such
Aircraft and to maintain, service, repair and overhaul (or cause to be
maintained, serviced, repaired and overhauled) such Aircraft. With respect to
the Leased Aircraft, the assignment by the related Owner Trustee to the related
Loan Trustee of its rights under the related Lease will exclude, among other
things, rights of such Owner Trustee and the related Owner Participant relating
to indemnification by Northwest for certain matters, insurance proceeds payable
to such Owner Trustee in its individual capacity and to such Owner Participant
under liability insurance maintained by Northwest pursuant to such Lease or by
such Owner Trustee or such Owner Participant, insurance proceeds payable to such
Owner Trustee in its individual capacity or to such Owner Participant under
certain casualty insurance maintained by such Owner Trustee or such Owner
Participant pursuant to such Lease and any rights of such Owner Participant or
such Owner Trustee to enforce payment of the foregoing amounts and their
respective rights to the proceeds of the foregoing.
The Owned Aircraft Notes will be secured by
- a mortgage granted to the related Loan Trustee of all of Northwest's
right, title and interest in and to such Owned Aircraft, and
- if so provided in the related prospectus supplement, an assignment to such
Loan Trustee of certain of Northwest's rights with respect to such
Aircraft under the purchase agreement between Northwest and the related
manufacturer.
Under the terms of each Owned Aircraft Indenture, Northwest will be
obligated, among other things and at its expense, to cause each Owned Aircraft
to be duly registered, to pay all costs of operating such Aircraft and to
maintain, service, repair and overhaul (or cause to be maintained, serviced,
repaired and overhauled) such Aircraft.
The prospectus supplement will specify the required insurance coverage with
respect to the Aircraft.
Northwest will be required, except under certain circumstances, to keep each
Aircraft registered under the Federal Aviation Act of 1958, as amended (the
"Federal Aviation Act"), and to record the Indenture and the Lease, if
applicable, among other documents, with respect to each Aircraft under the
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Federal Aviation Act. Such recordation of the Indenture, the Lease, if
applicable, and other documents with respect to each Aircraft will give the
related Loan Trustee a perfected security interest in the related Aircraft
whenever it is located in the United States or any of its territories and
possessions; the Convention on the International Recognition of Rights in
Aircraft (the "Convention") provides that such security will also be recognized,
with certain limited exceptions, in those jurisdictions that have ratified or
adhere to the Convention. Northwest will have the right, subject to certain
conditions, at its own expense to register each Aircraft in countries other than
the United States. Each Aircraft may also be operated by Northwest or under
lease, sublease or interchange arrangements in countries that are not parties to
the Convention. The extent to which the related Loan Trustee's security interest
would be recognized in an Aircraft located in a country that is not a party to
the Convention, and the extent to which such security interest would be
recognized in a jurisdiction adhering to the Convention if the Aircraft is
registered in a jurisdiction not a party to the Convention, is uncertain.
Moreover, in the case of an Indenture Default, the ability of the related Loan
Trustee to realize upon its security interest in an Aircraft could be adversely
affected as a legal or practical matter if such Aircraft were registered or
located outside the United States.
Unless otherwise specified in the applicable prospectus supplement, the
Equipment Notes will not be cross-collateralized and consequently the Equipment
Notes issued in respect of any one Aircraft will not be secured by any other
Aircraft or, in the case of Leased Aircraft Notes, the Lease related thereto.
Unless and until an Indenture Default with respect to a Leased Aircraft has
occurred and is continuing, the related Loan Trustee may exercise only limited
rights of the related Owner Trustee under the related Lease.
Funds, if any, held from time to time by the Loan Trustee with respect to
any Aircraft, prior to the distribution thereof, will be invested and reinvested
by such Loan Trustee. Such investment and reinvestment will be at the direction
of Northwest (except, with respect to a Leased Aircraft, in the case of a Lease
Event of Default under the applicable Lease or, with respect to an Owned
Aircraft, in the case of an Indenture Default under the applicable Indenture),
in certain investments described in the Related Indenture. The net amount of any
loss resulting from any such investments will be paid by Northwest.
Section 1110 of the Bankruptcy Code provides that the right of lessors,
conditional vendors and holders of security interests with respect to
"equipment" (as defined in Section 1110 of the Bankruptcy Code) to take
possession of such equipment in compliance with the provisions of a lease,
conditional sale contract or security agreement, as the case may be, is not
affected after 60 days after the filing of a petition under Chapter 11 of the
Bankruptcy Code by (a) the automatic stay provision of the Bankruptcy Code,
which provision enjoins creditors' remedies except with the court's approval,
(b) the provision of the Bankruptcy Code allowing the trustee in reorganization
to use property of the debtor during the reorganization period, (c) Section 1129
of the Bankruptcy Code (which governs the confirmation of plans of
reorganization in Chapter 11 cases) and (d) any power of the bankruptcy court to
enjoin a repossession. Section 1110 provides that the right to take possession
of an aircraft may not be exercised for 60 days following the date of
commencement of the reorganization proceedings and may not be exercised at all
after such 60-day period (or such longer period consented to by the lessor,
conditional vendor or holder of a security interest), if the trustee in
reorganization agrees to perform the debtor's obligations that become due on or
after such date and cures all existing defaults (other than defaults resulting
solely from the financial condition, bankruptcy, insolvency or reorganization of
the debtor, the appointment of a trustee or custodian or the failure to satisfy
any penalty rate or provision relating to a default arising from any failure by
the debtor to perform nonmonetary obligations under the applicable agreement).
"Equipment" is defined in Section 1110 of the Bankruptcy Code, in part, as "an
aircraft, aircraft engine, propeller, appliance, or spare part (as defined in
section 40102 of title 49) that is subject to a security interest granted by,
leased to or conditionally sold to a debtor that is a citizen of the United
States (as defined in section 40102 of title 49) holding an air
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carrier operating certificate issued by the Secretary of Transportation pursuant
to chapter 47 of title 49 for aircraft capable of carrying 10 or more
individuals or 6,000 pounds or more of cargo."
Section 1110 does not prevent the trustee or debtor-in-possession from
rejecting a lease (including any Lease) or demanding a renegotiation of such
lease as a condition to not rejecting such lease. In addition, if more than one
aircraft are leased pursuant to a master lease and accompanying lease
supplement, the applicability of Section 1110 would be determined on an
aircraft-by-aircraft basis. Assuming Section 1110 is applicable to all aircraft
subject to a master lease, Section 1110 does not prevent the trustee or
debtor-in-possession from complying with the provisions of Section 1110 with
respect to some lease supplements, and thereby retaining possession of the
related aircraft, and not complying with the provisions of Section 1110 with
respect to other lease supplements, and thereby enabling a repossession of other
aircraft.
In connection with any issuance of Certificates under this prospectus and
the applicable prospectus supplement, Northwest shall have received an opinion
from its counsel to the effect that (i) with respect to any Leased Aircraft, the
related Owner Trustee, as lessor under the related Lease, and the related Loan
Trustee, as assignee of such Owner Trustee's rights under such Lease pursuant to
the Related Indenture, would be entitled to the benefits of Section 1110 of the
Bankruptcy Code with respect to the Aircraft initially delivered under such
Lease and subjected to the Related Indenture or (ii) with respect to any Owned
Aircraft, the related Loan Trustee under the Related Indenture would be entitled
to the benefits of Section 1110 of the Bankruptcy Code with respect to the
Aircraft initially subjected to the Related Indenture. Such opinions will not
address the possible replacement of an Aircraft after an Event of Loss (as
defined in the Indenture) in the future.
RANKING OF EQUIPMENT NOTES
Some of the Equipment Notes related to one or more Aircraft, as described in
the related prospectus supplement, may be subordinated and junior in right of
payment to other Equipment Notes related to the same Aircraft. The terms of such
subordination, if any, will be described in the related prospectus supplement.
PAYMENTS AND LIMITATION OF LIABILITY
Each Leased Aircraft will be leased by the related Owner Trustee to
Northwest for a term commencing on the delivery date thereof to such Owner
Trustee and expiring on a date not earlier than the latest maturity date of the
related Leased Aircraft Notes, unless previously terminated as permitted by the
terms of the related Lease. The basic rent and other payments under each such
Lease will be payable by Northwest in accordance with the terms specified in the
applicable prospectus supplement, and will be assigned by the related Owner
Trustee under the Related Indenture to the Loan Trustee to provide the funds
necessary to pay principal of, premium, if any, and interest due from such Owner
Trustee on the Leased Aircraft Notes issued under such Indenture. In certain
cases, the basic rent payments under a Lease may be adjusted, but each Lease
will provide that under no circumstances will rent payments by Northwest be less
than the scheduled payments on the related Leased Aircraft Notes. The balance of
any basic rent payment under each Lease, after payment of amounts due on the
Leased Aircraft Notes issued under the Indenture corresponding to such Lease,
will be paid over to the applicable Owner Participant. Northwest's obligation to
pay rent and to cause other payments to be made under each Lease will be general
obligations of Northwest.
With respect to the Leased Aircraft Notes, except in certain circumstances
involving Northwest's purchase of a Leased Aircraft and the assumption of the
Leased Aircraft Notes related thereto, the Leased Aircraft Notes will not be
obligations of, or guaranteed by, Northwest or any of its affiliates. With
respect to the Leased Aircraft Notes, none of the Owner Trustees, the Owner
Participants or the Loan Trustees shall be personally liable to any holder of
such Leased Aircraft Notes for amounts
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payable under such Leased Aircraft Notes, or, except as provided in the
Indentures relating thereto in the case of the Owner Trustees and the Loan
Trustees, for any liability under such Indentures. Except in the circumstances
referred to above, all amounts payable under any Leased Aircraft Notes (other
than payments made in connection with an optional redemption or purchase by the
related Owner Trustee or the related Owner Participant) will be made only from
(i) the assets subject to the lien of the Related Indenture with respect to such
Aircraft or the income and proceeds received by the related Loan Trustee
therefrom (including rent payable by Northwest under the related Lease) or (ii)
if so provided in the related prospectus supplement, the applicable Liquidity
Facility.
With respect to the Leased Aircraft Notes, except as otherwise provided in
the Related Indentures, no Owner Trustee shall be personally liable for any
amount payable or for any statements, representations, warranties, agreements or
obligations under such Indentures or under such Leased Aircraft Notes except for
its own willful misconduct or gross negligence. None of the Owner Participants
shall have any duty or responsibility under the Leased Aircraft Indentures or
under such Leased Aircraft Notes to the related Loan Trustee or to any holder of
any such Leased Aircraft Note.
Northwest's obligations under each Owned Aircraft Indenture and under the
Owned Aircraft Notes will be general obligations of Northwest.
DEFEASANCE OF THE INDENTURES AND THE EQUIPMENT NOTES IN CERTAIN CIRCUMSTANCES
Unless otherwise specified in the applicable prospectus supplement, the
applicable Indenture provides that the obligations of the related Loan Trustee
and, with respect to any Leased Aircraft Notes, the related Owner Trustee or,
with respect to any Owned Aircraft Notes, Northwest under the applicable
Indenture shall be deemed to have been discharged and paid in full (except for
certain obligations, including the obligations to register the transfer or
exchange of Equipment Notes, to replace stolen, lost, destroyed or mutilated
Equipment Notes and to maintain paying agencies and hold money for payment in
trust) on the 91st day after the date of irrevocable deposit with the related
Loan Trustee of money or certain obligations of the United States or any agency
or instrumentality thereof the payment of which is backed by the full faith and
credit of the United States which, through the payment of principal and interest
in respect thereof in accordance with their terms, will provide money in an
aggregate amount sufficient to pay when due (including as a consequence of
redemption in respect of which notice is given on or prior to the date of such
deposit) principal of, premium, if any, and interest on all Equipment Notes
issued thereunder in accordance with the terms of such Indenture. Such discharge
may occur only if, among other things, there has been published by the Internal
Revenue Service a ruling to the effect that holders of such Equipment Notes will
not recognize income, gain or loss for federal income tax purposes as a result
of such deposit, defeasance and discharge and will be subject to federal income
tax on the same amount and in the same manner and at the same time as would have
been the case if such deposit, defeasance and discharge had not occurred.
Upon such defeasance, or upon payment in full of the principal of, premium,
if any, and interest on all Equipment Notes issued under any Indenture on the
maturity date therefor or deposit with the applicable Loan Trustee of money
sufficient therefor no earlier than one year prior to the date of such maturity,
the holders of such Equipment Notes will have no beneficial interest in or other
rights with respect to the related Aircraft or other assets subject to the lien
of such Indenture and such lien shall terminate.
ASSUMPTION OF LEASE OBLIGATIONS BY NORTHWEST
Unless otherwise specified in the applicable prospectus supplement with
respect to Leased Aircraft, upon the exercise by Northwest of any purchase
options it may have under the related Lease prior to the end of the term of such
Lease, Northwest may assume on a full recourse basis all of the obligations of
the Owner Trustee (other than its obligations in its individual capacity) under
the
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Indenture with respect to such Aircraft, including the obligations to make
payments in respect of the related Leased Aircraft Notes. In such event, certain
relevant provisions of the related Lease, including (among others) provisions
relating to maintenance, possession and use of the related Aircraft, liens,
insurance and events of default will be incorporated into such Indenture, and
the Leased Aircraft Notes issued under such Indenture will not be redeemed and
will continue to be secured by such Aircraft.
LIQUIDITY FACILITY
The related prospectus supplement may provide that one or more payments of
interest on the related Equipment Notes of one or more series or classes or
distributions made by the Trustee of the related Trust will be supported by a
Liquidity Facility issued by an institution identified in the related prospectus
supplement. Unless otherwise provided in the related prospectus supplement, the
provider of the Liquidity Facility will have a senior claim upon the assets
securing the Equipment Notes.
INTERCREDITOR ISSUES
Equipment Notes may be issued in different classes or series, which means
that the Equipment Notes may have different payment priorities even though they
are issued by the same Owner Trustee and relate to the same Aircraft. In such
event, the related prospectus supplement will describe the priority of
distributions among such Equipment Notes (and any Liquidity Facilities
therefor), the ability of any class or series to exercise and/or enforce any or
all remedies with respect to the related Aircraft (and, if the Equipment Notes
are Leased Aircraft Notes, the Lease related thereto) and certain other
intercreditor terms and provisions.
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
GENERAL
The following discussion represents the opinion of Cadwalader, Wickersham &
Taft as to the principal U.S. federal income tax consequences to
Certificateholders of the purchase, ownership and disposition of the
Certificates. Except as otherwise specified, the discussion is addressed to
beneficial owners of Certificates ("U.S. Certificateholders") that are citizens
or residents of the United States, corporations, partnerships or other entities
created or organized in or under the laws of the United States or any State,
estates the income of which is subject to U.S. federal income taxation
regardless of its source or, generally, trusts if a court within the United
States is able to exercise primary supervision over the administration of such
trust, and one or more of the foregoing persons have the authority to control
all substantial decisions of such trust ("U.S. Persons") that will hold the
Certificates as capital assets. This discussion does not address the tax
treatment of U.S. Certificateholders that may be subject to special tax rules,
such as banks, insurance companies, dealers in securities or commodities,
tax-exempt entities, holders that will hold Certificates as part of a straddle
or holders that have a "functional currency" other than the U.S. Dollar, nor
does it address the tax treatment of U.S. Certificateholders that do not acquire
Certificates as part of the initial offering. This discussion does not describe
any tax consequences arising under the laws of any State, locality or taxing
jurisdiction other than the United States.
This discussion is based upon the tax laws of the United States as in effect
on the date of this prospectus, as well as judicial and administrative
interpretations thereof (in final or proposed form) available on or before such
date. All of the foregoing are subject to change or differing interpretations,
which could apply retroactively. Prospective investors should note that no
rulings have been or will be sought from the Internal Revenue Service (the
"IRS") with respect to any of the federal income tax consequences discussed
below, and no assurance can be given the IRS will not take contrary positions.
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PROSPECTIVE INVESTORS SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE
FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP
AND DISPOSITION OF THE CERTIFICATES.
TAX STATUS OF THE TRUSTS
In the opinion of Cadwalader, Wickersham & Taft, special counsel to
Northwest, each Trust will not be classified as an association or a publicly
traded partnership taxable as a corporation for U.S. federal income tax purposes
and will not be subject to federal income tax. Each Trust will file federal
income tax returns and report to investors on the basis that it is a grantor
trust under Subpart E, Part I of Subchapter J of the Code. If a Trust were
treated as a partnership for U.S. federal income tax purposes rather than as a
grantor trust, in the opinion of Cadwalader, Wickersham & Taft, the consequences
to U.S. Certificateholders and, to the extent described below, Non-U.S.
Certificateholders, would not be materially different. The remainder of this
discussion describes the consequences of the treatment as a grantor trust.
Certificateholders who are not U.S. Persons should consult their own tax
advisors as to the suitability to them of an investment in the Certificates.
TAXATION OF CERTIFICATEHOLDERS GENERALLY
A U.S. Certificateholder will be treated as owning its pro rata undivided
interest in each of the Equipment Notes and any other property held by the
related Trust. Accordingly, each U.S. Certificateholder's share of interest paid
on the Equipment Notes will be taxable as ordinary income, as it is paid or
accrued, in accordance with such owner's method of accounting for U.S. federal
income tax purposes and a U.S. Certificateholder's share of premium, if any,
paid on the Equipment Notes will be treated as capital gain. Any amounts
received by a Trust from Interest Drawings under the relevant Liquidity Facility
will be treated for U.S. federal income tax purposes as having the same
characteristics as the payments they replace.
Each U.S. Certificateholder will be entitled to deduct, consistent with its
method of accounting, its pro rata share of fees and expenses paid or incurred
by the corresponding Trust as provided in Section 162 or 212 of the Code.
Certain fees and expenses, including fees paid to the Trustee and the Liquidity
Provider, will be borne by parties other than the Certificateholders. It is
possible that such fees and expenses will be treated as constructively received
by the Trust, in which event a U.S. Certificateholder will be required to
include in income and will be entitled to deduct its pro rata share of such fees
and expenses. If a U.S. Certificateholder is an individual, estate or trust, the
deduction for such holder's share of such fees or expenses will be allowed only
to the extent that all of such holder's miscellaneous itemized deductions,
including such holder's share of such fees and expenses, exceed 2% of such
holder's adjusted gross income. In addition, in the case of U.S.
Certificateholders who are individuals, certain otherwise allowable itemized
deductions will be subject generally to additional limitations on itemized
deductions under the applicable provisions of the Code.
EFFECT OF SUBORDINATION OF SUBORDINATED CERTIFICATEHOLDERS
If any Trust with respect to a series or class are subordinated with respect
to other Trusts of the same series or class (such Trusts being the "Subordinated
Trusts" and the related Certificates being the "Subordinated Certificates")
receives less than the full amount of the receipts of principal or interest paid
with respect to the Equipment Notes held by it (any shortfall in such receipts
being the "Shortfall Amounts") because of the subordination of the Equipment
Notes held by such Trust under the Intercreditor Agreement, the corresponding
owners of beneficial interests in the Subordinated Certificates (the
"Subordinated Certificateholders") would probably be treated for federal income
tax purposes as if they had (1) received as distributions their full share of
such receipts, (2) paid over to the relevant preferred class of
Certificateholders an amount equal to their share of such Shortfall Amount, and
(3) retained the right to reimbursement of such amounts to the extent of future
amounts payable to such Subordinated Certificateholders with respect to such
Shortfall Amount.
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Under this analysis, (1) Subordinated Certificateholders incurring a
Shortfall Amount would be required to include as current income any interest or
other income of the corresponding Subordinated Trust that was a component of the
Shortfall Amount, even though such amount was in fact paid to the relevant
preferred class of Certificateholders, (2) a loss would only be allowed to such
Subordinated Certificateholders when their right to receive reimbursement of
such Shortfall Amount became worthless (i.e., when it becomes clear that funds
will not be available from any source to reimburse such loss), and (3)
reimbursement of such Shortfall Amount prior to such a claim of worthlessness
would not be taxable income to Subordinated Certificateholders because such
amount was previously included in income. These results should not significantly
affect the inclusion of income for Subordinated Certificateholders on the
accrual method of accounting, but could accelerate inclusion of income to
Subordinated Certificateholders on the cash method of accounting by, in effect,
placing them on the accrual method.
ORIGINAL ISSUE DISCOUNT
The Equipment Notes may be issued with original issue discount ("OID"),
which may require U.S. Certificateholders to include such OID in gross income in
advance of the receipt or accrual of the stated interest on such Equipment
Notes. The prospectus supplement will state whether any Equipment Notes to be
held by the related Trust will be issued with OID. Generally, a holder of a debt
instrument issued with original issue discount that is not DE MINIMIS must
include such original issue discount in income for federal income tax purposes
as it accrues, in advance of the receipt of the cash attributable to such
income, under a method that takes into account the compounding of interest.
MARKET DISCOUNT
Generally, the term "market discount" means the excess of the remaining
principal amount of a Certificate over the holder's tax basis in such
Certificate immediately after its acquisition, subject to a DE MINIMIS
exception.
A holder who acquires a Certificate at a market discount will be required to
treat any gain realized on the disposition of such Certificate, except in
certain nonrecognition transactions, as ordinary income to the extent of the
market discount that accrued during the period that such holder held such
Certificate. Further, a disposition of a Certificate by gift (and in certain
other circumstances) could result in the recognition of market discount income,
computed as if such Certificate had been sold for its fair market value.
In the case of a partial principal payment on indebtedness subject to the
market discount rules, Section 1276 of the Code requires that such payment be
included in gross income as ordinary income to the extent such payment does not
exceed the market discount that has accrued during the period such indebtedness
was held. The amount of any accrued market discount later required to be
included in income upon a disposition, or subsequent partial principal payment,
will be reduced by the amount of accrued market discount previously included in
income.
Until Treasury regulations are issued, the explanatory Conference Committee
Report to the Tax Reform Act of 1986 (the "Conference Report") indicates that
holders of installment obligations (such as the Equipment Notes) with market
discount may elect to accrue market discount either (i) on the basis of a
constant interest rate or (ii) in the ratio to the total amount of remaining
market discount that the amount of stated interest paid in the accrual period
bears to the total amount of stated interest remaining to be paid on the
installment obligation as of the beginning of such period. Under Section 1277 of
the Code, if in any taxable year interest paid or accrued on indebtedness
incurred or continued to purchase or carry indebtedness subject to the market
discount rules exceeds the interest currently includable in income with respect
to such indebtedness, deduction of the excess interest must be deferred to the
extent of the market discount allocable to the taxable year. The deferred
portion of
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any interest expense will generally be deductible when such market discount is
included in income upon the sale or other disposition (including repayment) of
the indebtedness.
A holder of a Certificate acquired at a market discount may elect under
Section 1278 of the Code, in the manner provided by Revenue Procedure 92-67,
1992-34 I.R.B. 6, to include such discount in income as it accrues. The current
inclusion election applies to all market discount obligations acquired on or
after the first day to which the election applies, and may not be revoked
without the consent of the IRS. If a holder of a Certificate elects to include
market discount in income as it accrues, the foregoing rules of Section 1276 and
1277 of the Code with respect to the recognition of ordinary income on a sale or
other disposition of such Certificate and the deferral of interest deductions on
indebtedness related to such Certificate would not apply.
The IRS is authorized to issue regulations to implement the market discount
provisions of the Code. No such regulations have been issued or proposed. It is
impossible to anticipate what effect, if any, such regulations could have on the
Certificateholders.
AMORTIZABLE BOND PREMIUM
A U.S. Certificateholder should generally be considered to have acquired an
interest in an Equipment Note at a premium to the extent the purchaser's tax
basis allocable to such interest exceeds the remaining principal amount of the
Equipment Note allocable to such interest. In that event, a U.S.
Certificateholder who holds a Certificate as a capital asset may elect to
amortize that premium as an offset to interest income under Section 171 of the
Code with corresponding reductions in the U.S. Certificateholder's tax basis in
its Certificate. In the case of installment obligations (such as the Equipment
Notes), the Conference Report indicates a Congressional intent that amortization
will be in accordance with the same rules that will apply to the accrual of
market discount on installment obligations (see discussion above).
Under certain circumstances, amortizable bond premium may be determined by
reference to any early call date. It is unclear how the amortizable bond premium
rules apply where, as in the case with the Equipment Notes, the amount of
redemption premium payable on an early call date is unknown. In addition, the
treatment of any unamortized bond premium remaining at the time of an early call
is unclear. The U.S. Certificateholders are urged to consult their own tax
advisors as to the treatment of any amortizable bond premiums.
SALE OR OTHER DISPOSITION OF THE CERTIFICATES
Upon the sale, exchange or other disposition of a Certificate, a U.S.
Certificateholder generally will recognize capital gain or loss equal to the
difference between the amount realized on the disposition (other than any amount
attributable to accrued interest which will be taxable as ordinary income) and
the U.S. Certificateholder's adjusted tax basis in the related Equipment Notes
and any other assets held by the corresponding Trust. A U.S. Certificateholder's
adjusted tax basis will equal the holder's cost for its Certificate, plus any
accrued OID or market discount previously included in income or less any
amortized bond premium or any previously recognized losses or prior principal
payments. Any gain or loss generally will be capital gain or loss (other than
accrued market discount not previously included in income) if the Certificate
was held as a capital asset.
FOREIGN CERTIFICATEHOLDERS
Subject to the discussion of backup withholding below, payments of principal
and interest (including OID) on the Equipment Notes to, or on behalf of, any
beneficial owner of a Certificate that is not a U.S. Person (a "Non-U.S.
Certificateholder") will not be subject to U.S. federal withholding tax;
PROVIDED, in the case of interest, that (i) such Non-U.S. Certificateholder does
not actually or constructively own 10% or more of the total combined voting
power of all classes of the stock of any
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Owner Participant (in the case of Leased Aircraft Notes) or of Northwest (in the
case of Owned Aircraft Notes), (ii) such Non-U.S. Certificateholder is not a
controlled foreign corporation for U.S. tax purposes that is related to an Owner
Participant (in the case of Leased Aircraft Notes) or of Northwest (in the case
of Owned Aircraft Notes), and (iii) either (A) the Non-U.S. Certificateholder
certifies, under penalties of perjury, that it is not a U.S. Person and provides
its name and address or (B) a securities clearing organization, bank or other
financial institution that holds customers' securities in the ordinary course of
its trade or business (a "financial institution") and holds the Certificate
certifies, under penalties of perjury, that such statement has been received
from the Non-U.S. Certificateholder by it or by another financial institution
and furnishes the payor with a copy thereof.
Any capital gain realized upon the sale, exchange, retirement or other
disposition of a Certificate or upon receipt of premium paid on an Equipment
Note by a Non-U.S. Certificateholder will not be subject to U.S. federal income
or withholding taxes if (i) such gain is not effectively connected with a U.S.
trade or business of the holder and (ii) in the case of an individual, such
holder is not present in the United States for 183 days or more in the taxable
year of the sale, exchange, retirement or other disposition or receipt.
Any interest or gain described in the two preceding paragraphs will be
subject to regular U.S. federal income tax at graduated rates if it is
effectively connected with the conduct of a U.S. trade or business by a non-U.S.
Certificateholder.
BACKUP WITHHOLDING
In general, information reporting requirements will apply to certain
payments within the United States of principal, interest, OID and premium on the
Certificates, and to payments of the proceeds of certain sales of Certificates
made to U.S. Certificateholders other than certain exempt recipients (such as
corporations). A 31% "backup withholding" tax may apply to such payments if the
holder fails or has failed to provide an accurate taxpayer identification number
or otherwise establish an exemption or fails to report in full interest income.
With respect to Non-U.S. Certificateholders, payments made on a Certificate and
proceeds from the sale of a Certificate owned by a Non-U.S. Certificateholder
will generally not be subject to such information reporting requirements or
backup withholding tax if such Non-U.S. Certificateholder provides the
applicable statement as to its non-U.S. status or otherwise establishes an
exemption.
Backup withholding is not an additional tax. Any amounts withheld under the
backup withholding rules will be allowed as a refund or credit against such
holder's U.S. federal income tax liability, if any, provided the required
information is furnished to the IRS.
The Treasury Department recently issued final Treasury Regulations (the
"FINAL REGULATIONS") governing withholding, backup withholding and information
reporting requirements. The Final Regulations do not significantly alter the
substantive withholding and information reporting requirements discussed herein;
they unify current certification procedures and forms and clarify reliance
standards. The Final Regulations will generally become effective for payments
made after December 31, 2000.
ERISA CONSIDERATIONS
Unless otherwise indicated in the applicable prospectus supplement, the
Certificates may, subject to certain legal restrictions, be purchased and held
by an employee benefit plan (a "Plan") subject to Title I of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or an individual
retirement account or an employee benefit plan subject to section 4975 of the
Code. A fiduciary of a Plan must determine that the purchase and holding of a
Certificate is consistent with its fiduciary duties under ERISA and does not
result in a non-exempt prohibited transaction as defined in section 406 of ERISA
or section 4975 of the Code. Employee benefit plans which are governmental
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plans (as defined in section 3(32) of ERISA) and certain church plans (as
defined in section 3(33) of ERISA) are not subject to Title I of ERISA or
section 4975 of the Code. The Certificates may, subject to certain legal
restrictions, be purchased and held by such plans.
PLAN OF DISTRIBUTION
Northwest may sell Securities (a) through underwriters, (b) directly to
investors or other persons or (c) through dealers or agents. The applicable
prospectus supplement will name any underwriter, dealer or agent involved in the
offer and sale of the Certificates.
The Certificates may be sold (a) at a fixed price or prices, which may be
changed, (b) from time to time at market prices prevailing at the time of sale,
(c) at prices related to those market prices, or (d) at negotiated prices.
Dealer trading may take place in certain of the Certificates, including
Certificates not listed on any securities exchange.
Northwest may, from time to time, authorize underwriters acting as
Northwest's agents to offer and sell the Certificates upon the terms and
conditions set forth in any prospectus supplement. In connection with the sale
of Certificates, underwriters may be deemed to have received compensation from
Northwest in the form of underwriting discounts or commissions and may also
receive commissions from purchasers of Certificates for whom they may act as
agent. Underwriters may sell Certificates to or through dealers, and those
dealers may receive compensation in the form of discounts, concessions or
commissions from the underwriters and/or commissions, which may be changed from
time to time, from the purchasers for whom they may act as agent.
If Northwest directly uses a dealer in the sale of Certificates, Northwest
will sell the Certificates to the dealer, as principal. The dealer may then
resell the Certificates to the public at varying prices to be determined by the
dealer at the time of resale. The applicable prospectus supplement will name any
dealer and set forth the terms of any of those sales.
Northwest may offer and sell Certificates through agents designated by
Northwest from time to time. The applicable prospectus supplement will name any
agent involved in the offer or sale of the Certificates and set forth any
commissions payable by Northwest to that agent. Unless the applicable prospectus
indicates otherwise, the agent will be acting on a best efforts basis for the
period of its appointment.
Northwest may directly solicit offers to purchase Certificates and sell them
directly to institutional investors or others who may be deemed to be
underwriters within the meaning of the Securities Act of 1933 with respect to
any resale of the Certificates. The applicable prospectus supplement will
describe the terms of any of those sales. Except as set forth in the applicable
prospectus supplement, no director, officer or employee of Northwest or NWA
Corp. will solicit or receive a commission in connection with direct sales by
Northwest of the Certificates, although these persons may respond to inquiries
by potential purchasers and perform ministerial and clerical work in connection
with any of these direct sales.
The applicable prospectus supplement will set forth any underwriting
compensation paid by Northwest to underwriters, dealers or agents in connection
with the offering of Certificates, and any discounts, concessions or commissions
allowed by underwriters to participating dealers. Underwriters, dealers and
agents participating in the distribution of the Certificates may be deemed to be
underwriters, and any discounts and commissions received by them and any profit
realized by them on resale of the Certificates may be deemed to be underwriting
discounts and commissions under the Securities Act of 1933.
Underwriters, dealers and agents may be entitled, under agreements with
Northwest and NWA Corp., to indemnification against and contribution toward
certain civil liabilities, including liabilities
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under the Securities Act of 1933, and to reimbursement by Northwest and NWA
Corp. for certain expenses.
Underwriters, dealers and agents may engage in transactions with, or perform
services for, NWA Corp., Northwest and NWA Corp.'s other subsidiaries in the
ordinary course of business.
If the applicable prospectus supplement so indicates, subject to existing
market conditions, Northwest will authorize dealers acting as Northwest's agents
to solicit offers by certain institutions to purchase Certificates from
Northwest at the public offering price set forth in the applicable prospectus
supplement pursuant to Delayed Delivery Contracts ("Contracts") that provide for
payment and delivery on the date or dates stated in the applicable prospectus
supplement. Each Contract will be for an amount not less than, and the aggregate
principal amount of Certificates sold pursuant to Contracts shall not be less
nor more than, the respective amounts stated in the applicable prospectus
supplement. Institutions with whom Contracts may be made include commercial and
savings banks, insurance companies, pension funds, investment companies,
educational and charitable institutions and other institutions, but will in all
cases be subject to the approval of Northwest. Contracts will not be subject to
any conditions, except the purchase by an institution of the Certificates
covered by its Contracts will not at the time of delivery be prohibited under
the laws of any jurisdiction in the United States to which the institution is
subject. The applicable prospectus supplement will indicate the commission that
will be granted to underwriters and agents soliciting purchases of Certificates
pursuant to Contracts accepted by Northwest. Agents and underwriters will have
no responsibility in respect of the delivery or performance of Contracts.
The Certificates may or may not be listed on a national securities exchange
or a foreign securities exchange. If Northwest uses an underwriter or
underwriters in the sale of any Certificates, the applicable prospectus
supplement will contain a statement as to the underwriters' intention, if any,
at the date of the prospectus supplement to make a market in the Certificates.
No assurances can be given that there will be a market for the Certificates.
The applicable prospectus supplement will set forth the place and time of
delivery for the Certificates. Northwest will issue the Debt Securities that are
issuable upon exercise of Warrants upon payment of the exercise and otherwise in
accordance with the relevant terms applicable to the Warrants and described in
the applicable prospectus supplement.
LEGAL OPINIONS
Unless the applicable prospectus supplement indicates otherwise, the
validity of the Certificates and the Parent Guaranty will be passed upon for
Northwest by Simpson Thacher & Bartlett, New York, New York. Unless the
applicable prospectus supplement indicates otherwise, Simpson Thacher & Bartlett
will rely on the opinion of counsel for the Trustee as to certain matters
relating to the authorization, execution and delivery of such Certificates by,
and the valid and binding effect thereof on, such Trustee. Certain federal
income tax matters will be passed upon by Cadwalader, Wickersham & Taft, New
York, New York, special tax counsel to Northwest.
EXPERTS
Ernst & Young LLP, independent auditors, have audited the consolidated
financial statements and schedule of NWA Corp. included in NWA Corp.'s Annual
Report on Form 10-K for the year ended December 31, 1998, as set forth in their
report on the consolidated financial statements and schedule incorporated in by
reference in this prospectus. Such consolidated financial statements and
schedule are incorporated in this prospectus by reference in reliance on Ernst &
Young LLP's report, given on their authority as experts in accounting and
auditing.
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$1,500,000,000
NORTHWEST AIRLINES, INC.
PASS THROUGH CERTIFICATES
------------------
Applicable Underlying Payments
Fully and Unconditionally Guaranteed by
NORTHWEST AIRLINES CORPORATION
---------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses in connection with the issuance and distribution of
the securities being registered, other than underwriting discounts and
commissions, are set forth in the following table.
<TABLE>
<S> <C>
Securities and Exchange Commission fee.......................... $ 283,894
Printing and engraving expenses................................. 600,000*
Accountants' fees and expenses.................................. 100,000*
Legal fees and expenses......................................... 1,300,000*
Blue Sky fees and expenses...................................... 60,000*
Trustees' fees and expenses..................................... 40,000*
Rating Agency fees.............................................. 500,000*
Miscellaneous................................................... 216,106*
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Total..................................................... $3,100,000*
---------
---------
</TABLE>
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* Estimated and subject to future contingencies.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 302A.521 of the Minnesota Business Corporation Act (the "Minnesota
Law") requires a Minnesota corporation to indemnify a person made or threatened
to be made a party to a proceeding by reason of the former or present official
capacity of the person against judgments, penalties, fines and reasonable
expenses (including attorneys' fees), PROVIDED that the person has not otherwise
been indemnified, was acting in good faith, received no improper personal
benefit as a result of the conduct in question, in the case of a criminal
proceeding, had no reasonable cause to believe the conduct was unlawful and,
depending upon the capacity in which such person was acting, believed that the
conduct was in the best interests of the corporation or was not considered to be
opposed to the best interests of the corporation. Under the Minnesota Law, the
termination of a proceeding by judgment, order, settlement, conviction or upon a
pleading of NOLO CONTENDERE or its equivalent does not, of itself, establish
that a person is not eligible for indemnification. Minnesota corporations are
permitted to include provisions in their bylaws or articles of incorporation
that prohibit or limit indemnification otherwise required by the Minnesota law.
Section 4.01 of Northwest Airlines, Inc.'s ("Northwest") amended and
restated bylaws (filed as Exhibit 4(n)) requires Northwest to indemnify any
persons, including officers and directors as permitted by Section 302A.521 of
the Minnesota Law.
Section 145 of the General Corporation Law of the State of Delaware (the
"Delaware Law") empowers a Delaware corporation to indemnify any persons who
are, or are threatened to be made, parties to any threatened, pending or
completed legal action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of such
corporation), by reason of the fact that such person is or was an officer,
director, employee or agent of such corporation, or is or was serving at the
request of such corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise. The
indemnity may include expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding, provided that such officer,
director, employee or agent acted in good faith and in a manner he reasonably
believed to be in or not opposed to the corporation's best interests, and, for
criminal proceedings, had no reasonable cause to believe his conduct was
unlawful. A Delaware corporation may indemnify officers and directors in an
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action by or in the right of the corporation under the same conditions, except
that no indemnification is permitted without judicial approval if the officer or
director is adjudged to be liable to the corporation. Where an officer or
director is successful on the merits or otherwise in the defense of any action
referred to above, the corporation must indemnify him against the expenses which
such officer or director actually and reasonably incurred.
In accordance with Section 102(b)(7) of the Delaware Law, the Restated
Certificate of Incorporation of Northwest Airlines Corporation ("NWA Corp.")
provides that the directors of NWA Corp. shall not be personally liable to NWA
Corp. or its stockholders for monetary damages for violations of their fiduciary
duty.
Article VIII of the bylaws, as amended and restated, of NWA Corp. (filed as
Exhibit 4(l)) provides for indemnification of the officers and directors of NWA
Corp. to the full extent permitted by applicable law.
ITEM 16. EXHIBITS
The following Exhibits are filed as part of this Registration Statement:
<TABLE>
<S> <C>
Exhibit 1(a)* Form of Underwriting Agreement for Debt Securities or Warrants to Purchase
Debt Securities of Northwest.
Exhibit 1(b)* Form of Underwriting Agreement for Pass Through Certificates of Northwest.
Exhibit 4(a) Senior Debt Securities Indenture, dated as of March 1, 1997, among
Northwest, Old NWA Corp. and State Street Bank and Trust Company ("State
Street"), as Trustee, relating to the Senior Debt Securities of Northwest
(filed as Exhibit 4(a) to the Registration Statement on Form S-3 (File No.
333-28649, and herein after "Registration Statement No. 333-28649") and
incorporated herein by reference), as supplemented by Supplemental
Indenture, dated as of November 20, 1998, among NWA Corp., Old NWA Corp.,
Northwest, and State Street, as Trustee (filed as Exhibit 4(b)(4) of NWA
Corp.'s Current Report on Form 8-K dated January 22, 1999 and incorporated
herein by reference) and Second Supplemental Indenture dated as of February
25, 1999, among NWA Corp., Old NWA Corp., Northwest and State Street as
Trustee (filed as Exhibit 4(c) of NWA Corp.'s Current Report on Form 8-K
dated April 19, 1999 and incorporated herein by reference).
Exhibit 4(b) Form of Senior Subordinated Debt Securities Indenture among Northwest, NWA
Corp. and State Street, as Trustee, relating to the Senior Subordinated Debt
Securities of Northwest (filed as Exhibit 4(b) to Registration Statement No.
33-74772 and incorporated herein by reference).
Exhibit 4(c) Form of Senior Debt Securities of Northwest (filed as Exhibit 4(c) to the
Registration Statement No. 333-28649 and incorporated herein by reference).
Exhibit 4(d) Form of Senior Subordinated Debt Securities of Northwest (filed as Exhibit
4(d) to the Registration Statement No. 333-28649 and incorporated herein by
reference).
Exhibit 4(e) Form of Warrant Agreement for Warrants to Purchase Debt Securities of
Northwest that are Sold Attached to Debt Securities of Northwest (filed as
Exhibit 4(g) to Registration Statement No. 33-74772 and incorporated herein
by reference).
Exhibit 4(f) Form of Warrant to Purchase Debt Securities of Northwest that are Sold
Attached to Debt Securities of Northwest (included as part of Exhibit 4(e)).
Exhibit 4(g) Form of Warrant Agreement for Warrants to Purchase Debt Securities of
Northwest that are Sold Alone (filed as Exhibit 4(i) to Registration
Statement No. 33-74772 and incorporated herein by reference).
Exhibit 4(h) Form of Warrant to Purchase Debt Securities of Northwest that are Sold Alone
(included as part of Exhibit 4(g)).
</TABLE>
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<TABLE>
<S> <C>
Exhibit 4(i)* Pass Through Trust Agreement among NWA Corp., Northwest and State Street,
Bank and Trust Company of Connecticut, National Association ("State Street
Connecticut") as Trustee, relating to Pass Through Certificates of
Northwest.
Exhibit 4(j) Form of Pass Through Certificate (included as part of Exhibit 4(i)).
Exhibit 4(k) Restated Certificate of Incorporation of NWA Corp. (filed as Exhibit 4.1 to
NWA Corp.'s Registration Statement on Form S-3 (File No. 333-69655) and
incorporated herein by reference).
Exhibit 4(l) Amended and Restated By-Laws of NWA Corp. (filed as Exhibit 4.1 to the NWA
Corp.'s Quarterly Report on Form 10-Q for the three months ended March 31,
1999 (hereinafter "1999 First 10-Q") and incorporated herein by reference).
Exhibit 4(m) Restated Certificate of Incorporation of Northwest (filed as Exhibit 4(s) to
Registration Statement No. 33-74772 and incorporated herein by reference).
Exhibit 4(n) Amended and Restated Bylaws of Northwest (filed as Exhibit 4.2 to the 1999
First 10-Q and incorporated herein by reference).
Exhibit 4(o) Certificate of Designation of Series C Preferred Stock of NWA Corp.
(included in Exhibit 4(k)).
Exhibit 4(p) Certificate of Designation of Series D Junior Participating Preferred Stock
of NWA Corp. (included in Exhibit 4(k)).
Exhibit 4(q) The Registrants hereby agree to furnish to the Commission, upon request,
copies of certain instruments defining the rights of holders of long-term
debt of the kind described in Item 601(b)(4) of Regulation S-K.
Exhibit 5* Opinion of Simpson Thacher & Bartlett as to the legality of the Securities.
Exhibit 8* Tax Opinion of Cadwalader, Wickersham & Taft relating to Pass Through
Certificates.
Exhibit 23(a)* Consent of Ernst & Young LLP.
Exhibit 23(b) Consent of Simpson Thacher & Bartlett (included as part of Exhibit 5).
Exhibit 23(c) Consent of Cadwalader, Wickersham & Taft (included as part of Exhibit 8).
Exhibit 24 Powers of Attorney (included in signature pages of this Registration
Statement).
Exhibit 25(a) Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"), of State Street, as Trustee under the
Senior Debt Securities Indenture of Northwest and NWA Corp. (filed as
Exhibit 25.1 to NWA Corp.'s Current Report on Form 8-K, dated March 6, 1997,
and incorporated herein by reference).
Exhibit 25(b) Form T-1 Statement of Eligibility under the Trust Indenture Act of State
Street, as Trustee under the Senior Subordinated Debt Securities Indenture
of Northwest and NWA Corp. (filed as Exhibit 25(b) to Registration Statement
No. 333-13307 and incorporated herein by reference).
Exhibit 25(c)* Form T-1 Statement of Eligibility under the Trust Indenture Act of State
Street Connecticut, as Trustee under the Pass Through Trust Agreement of
Northwest and NWA Corp.
Exhibit 99(a)* Trustee Parent Guarantee of State Street in favor of State Street
Connecticut in connection with the Pass Through Trust Agreement of Northwest
and NWA Corp.
</TABLE>
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* Filed herewith.
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ITEM 17. UNDERTAKINGS
(a) Each of the undersigned registrants hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the Registration Statement. Notwithstanding the foregoing, any increase
or decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective Registration Statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
Registration Statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by NWA
Corp. pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial BONA FIDE offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) Each of the undersigned registrants hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933, each filing of
NWA Corp.'s annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Each of the undersigned registrants hereby undertakes if securities are
to be offered pursuant to competitive bidding: (1) to use its best efforts to
distribute prior to the opening of bids, to prospective bidders, underwriters
and dealers, a reasonable number of copies of a prospectus which at that time
meets the requirements of section 10(a) of the Securities Act of 1933, and
relating to the securities offered at competitive bidding, as contained in this
Registration Statement, together with any supplements thereto, and (2) to file
an amendment to this Registration Statement reflecting the results of bidding,
the terms of the reoffering and related matters to the extent required by the
applicable form, not later than the first use, authorized by the issuer after
the opening of bids, of a prospectus relating to the securities offered at
competitive bidding, unless no further public offering of such securities by the
issuer and no reoffering of such securities by purchasers is proposed to be
made.
II-4
<PAGE>
(d) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrants pursuant to the foregoing provisions, or otherwise, the
registrants have been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act of
1933, and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by a registrant
of expenses incurred or paid by a director, officer or controlling person of
such registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, the applicable registrant will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
(e) Each of the undersigned registrants hereby undertakes to file an
application for the purpose of determining the eligibility of the trustee to act
under subsection (a) of Section 310 of the Trust Indenture Act in accordance
with the rules and regulations prescribed by the Commission under Section
305(b)(2) of the Trust Indenture Act.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Northwest
Airlines, Inc. has duly caused this Amendment to Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized in the City
of Minneapolis, State of Minnesota, on June 7, 1999.
<TABLE>
<S> <C> <C>
NORTHWEST AIRLINES, INC.
By: /s/ DOUGLAS M. STEENLAND
-----------------------------------------
Douglas M. Steenland
EXECUTIVE VICE PRESIDENT,
GENERAL COUNSEL AND SECRETARY
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------ -------------------------- -------------------
<C> <S> <C>
President, Chief Executive
* Officer and Director
- ------------------------------ (Principal Executive June 7, 1999
John H. Dasburg Officer)
Executive Vice President
* and Chief Financial
- ------------------------------ Officer (Principal June 7, 1999
Mickey P. Foret Financial Officer)
Vice President-Finance and
* Chief Accounting Officer
- ------------------------------ (Principal Accounting June 7, 1999
Rolf S. Andresen Officer)
*
- ------------------------------ Chairman of the Board of June 7, 1999
Gary L. Wilson Directors
*
- ------------------------------ Director June 7, 1999
Ray W. Benning, Jr.
- ------------------------------ Director
Richard C. Blum
*
- ------------------------------ Director June 7, 1999
Elaine L. Chao
</TABLE>
II-6
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------ -------------------------- -------------------
<C> <S> <C>
*
- ------------------------------ Director June 7, 1999
Alfred A. Checchi
*
- ------------------------------ Director June 7, 1999
James G. Coulter
- ------------------------------ Director
Doris Kearns Goodwin
- ------------------------------ Director
Dennis F. Hightower
*
- ------------------------------ Director June 7, 1999
George J. Kourpias
*
- ------------------------------ Director June 7, 1999
Frederic V. Malek
*
- ------------------------------ Director June 7, 1999
Walter F. Mondale
*
- ------------------------------ Director June 7, 1999
V. A. Ravindran
*
- ------------------------------ Director June 7, 1999
Michael G. Ristow
*
- ------------------------------ Director June 7, 1999
Leo M. van Wijk
</TABLE>
<TABLE>
<S> <C> <C>
/s/ DOUGLAS M. STEENLAND
------------------------------------
Douglas M. Steenland
*By: ATTORNEY-IN-FACT
</TABLE>
II-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Northwest
Airlines Corporation has duly caused this Amendment to Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized in the
City of Minneapolis, State of Minnesota, on June 7, 1999.
<TABLE>
<S> <C> <C>
NORTHWEST AIRLINES CORPORATION
By: /s/ DOUGLAS M. STEENLAND
-----------------------------------------
Douglas M. Steenland
EXECUTIVE VICE PRESIDENT,
GENERAL COUNSEL AND SECRETARY
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------ -------------------------- -------------------
<C> <S> <C>
President, Chief Executive
* Officer and Director
- ------------------------------ (Principal Executive June 7, 1999
John H. Dasburg Officer)
Executive Vice President
* and Chief Financial
- ------------------------------ Officer (Principal June 7, 1999
Mickey P. Foret Financial Officer)
Vice President-Finance and
* Chief Accounting Officer
- ------------------------------ (Principal Accounting June 7, 1999
Rolf S. Andresen Officer)
*
- ------------------------------ Chairman of the Board of June 7, 1999
Gary L. Wilson Directors
- ------------------------------ Director June 7, 1999
Ray W. Benning, Jr.
- ------------------------------ Director
Richard C. Blum
*
- ------------------------------ Director June 7, 1999
Elaine L. Chao
</TABLE>
II-8
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------ -------------------------- -------------------
<C> <S> <C>
- ------------------------------ Director June 7, 1999
Alfred A. Checchi
*
- ------------------------------ Director June 7, 1999
James G. Coulter
- ------------------------------ Director
Doris Kearns Goodwin
- ------------------------------ Director
Dennis F. Hightower
*
- ------------------------------ Director June 7, 1999
George J. Kourpias
*
- ------------------------------ Director June 7, 1999
Frederic V. Malek
*
- ------------------------------ Director June 7, 1999
Walter F. Mondale
*
- ------------------------------ Director June 7, 1999
V. A. Ravindran
*
- ------------------------------ Director June 7, 1999
Michael G. Ristow
*
- ------------------------------ Director June 7, 1999
Leo M. van Wijk
</TABLE>
<TABLE>
<S> <C> <C>
/s/ DOUGLAS M. STEENLAND
------------------------------------
Douglas M. Steenland
*By: ATTORNEY-IN-FACT
</TABLE>
II-9
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------------------ ----------------------------------------------------------------------------------------------
<S> <C>
Exhibit 1(a)* Form of Underwriting Agreement for Debt Securities or Warrants to Purchase Debt Securities of
Northwest.
Exhibit 1(b)* Form of Underwriting Agreement for Pass Through Certificates of Northwest.
Exhibit 4(a) Senior Debt Securities Indenture, dated as of March 1, 1997, among Northwest, Old NWA Corp.
and State Street Bank and Trust Company ("State Street"), as Trustee, relating to the Senior
Debt Securities of Northwest (filed as Exhibit 4(a) to the Registration Statement on Form S-3
(File No. 333-28649, and herein after "Registration Statement No. 333-28649") and incorporated
herein by reference), as supplemented by Supplemental Indenture, dated as of November 20, 1998
among NWA Corp., Old NWA Corp., Northwest, and State Street, as Trustee (filed as Exhibit
4(b)(4) of NWA Corp.'s Current Report on Form 8-K dated January 22, 1999 and incorporated
herein by reference) and Second Supplemental Indenture dated as of February 25, 1999, among
NWA Corp., Old NWA Corp., Northwest and State Street as Trustee (filed as Exhibit 4(c) of NWA
Corp.'s Current Report on Form 8-K dated April 19, 1999 and incorporated herein by reference).
Exhibit 4(b) Form of Senior Subordinated Debt Securities Indenture among Northwest, NWA Corp. and State
Street, as Trustee, relating to the Senior Subordinated Debt Securities of Northwest (filed as
Exhibit 4(b) to Registration Statement No. 33-74772 and incorporated herein by reference).
Exhibit 4(c) Form of Senior Debt Securities of Northwest (filed as Exhibit 4(c) to the Registration
Statement No. 333-28649 and incorporated herein by reference).
Exhibit 4(d) Form of Senior Subordinated Debt Securities of Northwest (filed as Exhibit 4(d) to the
Registration Statement No. 333-28649 and incorporated herein by reference).
Exhibit 4(e) Form of Warrant Agreement for Warrants to Purchase Debt Securities of Northwest that are Sold
Attached to Debt Securities of Northwest (filed as Exhibit 4(g) to Registration Statement No.
33-74772 and incorporated herein by reference).
Exhibit 4(f) Form of Warrant to Purchase Debt Securities of Northwest that are Sold Attached to Debt
Securities of Northwest (included as part of Exhibit 4(e)).
Exhibit 4(g) Form of Warrant Agreement for Warrants to Purchase Debt Securities of Northwest that are Sold
Alone (filed as Exhibit 4(i) to Registration Statement No. 33-74772 and incorporated herein by
reference).
Exhibit 4(h) Form of Warrant to Purchase Debt Securities of Northwest that are Sold Alone (included as part
of Exhibit 4(g)).
Exhibit 4(i)* Pass Through Trust Agreement among NWA Corp., Northwest and State Street Bank and Trust
Company of Connecticut, National Association ("State Street Connecticut"), as Trustee,
relating to Pass Through Certificates of Northwest.
Exhibit 4(j) Form of Pass Through Certificate (included as part of Exhibit 4(i)).
Exhibit 4(k) Restated Certificate of Incorporation of NWA Corp. (filed as Exhibit 4.1 to NWA Corp.'s
Registration Statement on Form S-3 (File No. 333-69655) and incorporated herein by reference).
Exhibit 4(l) Amended and Restated By-Laws of NWA Corp. (filed as Exhibit 4.1 to the NWA Corp.'s Quarterly
Report on Form 10-Q for the three months ended March 31, 1999 (hereinafter "1999 First 10-Q")
and incorporated herein by reference).
Exhibit 4(m) Restated Certificate of Incorporation of Northwest (filed as Exhibit 4(s) to Registration
Statement No. 33-74772 and incorporated herein by reference).
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------------------ ----------------------------------------------------------------------------------------------
<S> <C>
Exhibit 4(n) Amended and Restated Bylaws of Northwest (filed as Exhibit 4.2 to the 1999 First 10-Q and
incorporated herein by reference).
Exhibit 4(o) Certificate of Designation of Series C Preferred Stock of NWA Corp. (included in Exhibit
4(k)).
Exhibit 4(p) Certificate of Designation of Series D Junior Participating Preferred Stock of NWA Corp.
(included in Exhibit 4(k)).
Exhibit 4(q) The Registrants hereby agree to furnish to the Commission, upon request, copies of certain
instruments defining the rights of holders of long-term debt of the kind described in Item
601(b)(4) of Regulation S-K.
Exhibit 5* Opinion of Simpson Thacher & Bartlett as to the legality of the Securities.
Exhibit 8* Tax Opinion of Cadwalader, Wickersham & Taft relating to Pass Through Certificates.
Exhibit 23(a)* Consent of Ernst & Young LLP.
Exhibit 23(b) Consent of Simpson Thacher & Bartlett (included as part of Exhibit 5).
Exhibit 23(c) Consent of Cadwalader, Wickersham & Taft (included as part of Exhibit 8).
Exhibit 24 Powers of Attorney (included in signature pages of this Registration Statement).
Exhibit 25(a) Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"), of State Street, as Trustee under the Senior Debt Securities Indenture
of Northwest and NWA Corp. (filed as Exhibit 25.1 to NWA Corp.'s Current Report on Form 8-K,
dated March 6, 1997, and incorporated herein by reference).
Exhibit 25(b) Form T-1 Statement of Eligibility under the Trust Indenture Act of State Street, as Trustee
under the Senior Subordinated Debt Securities Indenture of Northwest and NWA Corp. (filed as
Exhibit 25(b) to Registration Statement No. 333-13307 and incorporated herein by reference).
Exhibit 25(c)* Form T-1 Statement of Eligibility under the Trust Indenture Act of State Street Connecticut,
as Trustee under the Pass Through Trust Agreement of Northwest and NWA Corp.
Exhibit 99(a)* Trustee Parent Guarantee of State Street in favor of State Street Connecticut in connection
with the Pass Through Trust Agreement of Northwest and NWA Corp.
</TABLE>
- ------------------------
* Filed herewith.
<PAGE>
Exhibit 1(a)
================================================================================
NORTHWEST AIRLINES, INC., ISSUER
[NORTHWEST AIRLINES CORPORATION, GUARANTOR]
[SENIOR/SENIOR SUBORDINATED DEBT SECURITIES]
[AND]
[WARRANTS TO PURCHASE SENIOR/SENIOR SUBORDINATED DEBT SECURITIES]
UNDERWRITING AGREEMENT
Dated as of: _______, ____
================================================================================
<PAGE>
NORTHWEST AIRLINES, INC., ISSUER
[NORTHWEST AIRLINES CORPORATION, GUARANTOR]
[Senior/Senior Subordinated Debt Securities]
[and]
[Warrants to Purchase Senior/Senior Subordinated Debt Securities]
UNDERWRITING AGREEMENT
____________, ____
[Underwriters]
[Address]
Dear Sirs:
Northwest Airlines, Inc., a Minnesota corporation (the "Company"),
proposes to issue and sell to the underwriters named in Schedule I hereto [an
aggregate of $___________ principal amount [at maturity] of [Title of Debt
Securities] (the"Notes"), with the guarantee (collectively, the "Guarantees")
endorsed thereon of Northwest Airlines Corporation, a Delaware corporation and
the ultimate parent company of the Company ("NWA Corp.")][and][the Warrants (the
AWarrants@[and, together with the Notes and the Guarantees, the ASecurities@])
to purchase an aggregate of $________ principal amount [at maturity] of [the
Notes][[Title of Debt Securities issuable upon the exercise of the Warrants](the
AWarrant Debt Securities@)]]. [The Notes are to be issued pursuant to an
Indenture dated as of March 1, 1997 (the "Original Indenture") among the
Company, Northwest Airlines Holdings Corporation ("Old NWA Corp"), as guarantor,
and State Street Bank and Trust Company, as trustee (the "Trustee"), as
supplemented by a Supplemental Indenture, dated as of November 20, 1998 among
the Company, as issuer, the Guarantor, Old NWA Corp. and the Trustee (the "First
Supplemental Indenture") and by a Second Supplemental Indenture dated as of
February 25, 1999 (the "Second Supplemental Indenture" and, together with
Original Indenture and the First Supplemental Indenture, the "Indenture") among
the Corporation, the Guarantor, Old NWA Corp. and the Trustee.][The Warrants are
to be issued pursuant to a Warrant Agreement dated as of ________, ____ between
the Company and ___________, as warrant agent (the AWarrant Agent@).] As used
herein, unless the context otherwise requires, the terms "Underwriter", "you" or
"your" shall mean _______________.
[NWA Corp.] [Northwest Airlines Corporation, a Delaware corporation and
the ultimate parent company of the Company (ANWA Corp.@)] and the Company have
filed with the
<PAGE>
2
Securities and Exchange Commission (the "Commission") shelf registration
statements on Form S-3 (File Nos. 333-41579 and 333-79215) relating to certain
classes of securities (such registration statements, including the exhibits
thereto and the documents filed by NWA Corp. with the Commission pursuant to the
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the Commission thereunder (collectively, the "Exchange Act") that are
incorporated by reference therein, as amended at the date hereof, being herein
referred to as the "Registration Statement") and the offering thereof from time
to time in accordance with Rule 415 of the Securities Act of 1933, as amended,
and the rules and regulations of the Commission thereunder (collectively, the
"Securities Act"). The Registration Statement has been declared effective by the
Commission. A prospectus supplement reflecting the terms of the Notes, the terms
of the offering thereof and the other matters set forth therein, as further
specified in Section 5(c) hereof, will be prepared and filed together with the
base prospectus referred to below pursuant to Rule 424 under the Securities Act
(such prospectus supplement, in the form first filed on or after the date hereof
pursuant to Rule 424, being herein referred to as the "Prospectus Supplement"
and any prospectus supplement relating to the Notes filed prior to the filing of
the Prospectus Supplement being herein referred to as a "Preliminary Prospectus
Supplement"). The base prospectus, dated __________, _____ included in the
Registration Statement relating to offerings of debt securities generally, as
supplemented by the Prospectus Supplement, and including the documents
incorporated by reference therein, is herein called the "Prospectus", except
that, if such base prospectus is amended or supplemented on or prior to the date
on which the Prospectus Supplement is first filed pursuant to Rule 424, the term
"Prospectus" shall refer to such base prospectus as so amended or supplemented
and as supplemented by the Prospectus Supplement, in either case including the
documents that are incorporated by reference therein. Any reference herein to
the terms "amendment" or "supplement" with respect to the Registration
Statement, the Prospectus, any Preliminary Prospectus Supplement or any
preliminary prospectus shall be deemed to refer to and include any documents
filed with the Commission under the Exchange Act after the date hereof, the date
the Prospectus is filed with the Commission, or the date of such Preliminary
Prospectus Supplement or preliminary prospectus, as the case may be, and
incorporated therein by reference pursuant to Item 12 of Form S-3 under the
Securities Act.
SECTION 1. REPRESENTATIONS AND WARRANTIES. NWA Corp. and the Company
jointly and severally represent and warrant to, and agree with the Underwriter
that:
(a) NWA Corp. and the Company meet the requirements for use of
Form S-3 under the Securities Act; the Registration Statement has
become effective; on the original effective date of the Registration
Statement, on the effective date of the most recent post-effective
amendment thereto, if any, and on the date of the filing by NWA Corp.
of any annual report on Form 10-K after the original effective date of
the Registration Statement, the Registration Statement, and any
amendments and supplements thereto complied in all material respects
with the requirements of the Securities Act and the Registration
Statement did not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; on the date
hereof and on the Closing Date (as defined below), neither the
Prospectus nor any amendments thereof and supplements thereto, includes
or
<PAGE>
3
will include an untrue statement of a material fact or omits or will
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; PROVIDED, HOWEVER, that this representation and
warranty shall not apply to any statements or omissions based upon
information relating to the Underwriter furnished in writing to NWA
Corp. or the Company by or on behalf of the Underwriter expressly for
use in the Prospectus or to statements or omissions in that part of the
Registration Statement which shall constitute the Statement of
Eligibility of the Trustee under the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"), on Form T-1.
(b) The documents incorporated by reference in the Prospectus
pursuant to Item 12 of Form S-3 under the Securities Act, at the time
they were or hereafter are filed with the Commission, complied and will
comply in all material respects with the requirements of the Exchange
Act.
(c) Ernst & Young LLP, who have reported upon the audited
consolidated financial statements and the financial statement
schedules, if any, included or incorporated by reference in the
Registration Statement, are independent public accountants within the
meaning of the Securities Act.
(d) This Agreement has been duly authorized, executed and
delivered by each of the Company and NWA Corp..
(e) The Company does not have any "significant subsidiaries"
as defined in Regulation S-X, [and NWA Corp. does not have any
significant subsidiaries (other than the Company)].
(f) The consolidated financial statements included or
incorporated by reference in the Registration Statement present fairly
the consolidated financial position of NWA Corp. and its consolidated
subsidiaries as of the dates indicated and the consolidated results of
operations and cash flows or changes in financial position of NWA Corp.
and its consolidated subsidiaries for the periods specified. Except as
stated therein, such financial statements have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods involved. The financial
statement schedules, if any, included or incorporated by reference in
the Registration Statement present fairly the information required to
be stated therein. The summary consolidated financial data included in
the Prospectus present fairly the information shown therein and have
been compiled on a basis consistent with that of the audited
consolidated financial statements included or incorporated by reference
in the Registration Statement.
(g) [Each of] the Company [and NWA Corp.] is a corporation
duly organized, validly existing and in good standing under the laws of
the State of Minnesota [and Delaware, respectively,] with corporate
power and authority under such laws to own, lease and operate its
properties and conduct its business as described in the Prospectus
<PAGE>
4
and to perform its obligations under this Agreement; and [each of NWA
Corp. and] the Company is duly qualified to transact business as a
foreign corporation and is in good standing in each other jurisdiction
in which it owns or leases property of a nature, or transacts business
of a type, that would make such qualification necessary, except to the
extent that the failure to so qualify or be in good standing would not
have a material adverse effect on the condition (financial or other),
earnings, business or prospects of NWA Corp. and its consolidated
subsidiaries, considered as one enterprise (a "Material Adverse
Effect").
(h) The Company is a "citizen of the United States" (as
defined in Section 40102(a)(15) of Title 49 of the United States Code)
and is an air carrier operating under a certificate issued by the
Secretary of Transportation pursuant to Chapter 447 of Title 49, United
States Code, for aircraft capable of carrying 10 or more individuals or
6,000 pounds or more of cargo. There is in force with respect to the
Company an air carrier operating certificate issued pursuant to Part
121 of the regulations under the sections of Title 49, United States
Code, relating to aviation (the "Federal Aviation Act"). All of the
outstanding shares of capital stock of the Company have been duly
authorized and validly issued and are fully paid and non-assessable and
are owned by NWA Corp., indirectly through Old NWA Corp. and NWA Inc.,
each a Delaware corporation, free and clear of any pledge, lien,
security interest, charge, claim, equity or encumbrance of any kind.
[(i) The Indenture, each supplement thereto, if any, to the
date hereof and the supplement thereto or board resolution setting
forth the terms of the Notes in Officers' Certificates (as defined in
the Indenture) (the Indenture, as so supplemented by such supplement or
supplements and board resolution, being herein referred to as the
"Designated Indenture") will be substantially in the form heretofore
delivered to you and, when duly executed and delivered by the Company,
NWA Corp. and the Trustee, will constitute a valid and binding
obligation of the Company and NWA Corp., enforceable against the
Company and NWA Corp. in accordance with its terms, except as may be
subject to (A) bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, (B) general principles of equity
(regardless of whether enforcement is considered in a proceeding in
equity or at law) and (C) an implied covenant of good faith and fair
dealing. The Designated Indenture conforms in all material respects to
the description thereof in the Prospectus, and the Original Indenture
as executed is substantially in the form filed as an exhibit to the
Registration Statement and has been duly qualified under the Trust
Indenture Act.
(j) When executed, authenticated, issued and delivered in the
manner provided for in the Designated Indenture and sold and paid for
as provided in this Agreement, the Notes and the related Guarantees
will constitute valid and binding obligations of the Company or NWA
Corp., as the case may be, entitled to the benefits of the Designated
Indenture and enforceable against the Company or NWA Corp., as the case
may be, in accordance with their terms, except as may be subject to (A)
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws
<PAGE>
5
relating to or affecting creditors' rights generally, (B) general
principles of equity (regardless of whether enforcement is considered
in a proceeding in equity or at law) and (C) an implied covenant of
good faith and fair dealing. Each of the Notes and the related
Guarantees conforms in all material respects to the descriptions
thereof in the Prospectus.]
[(k) When executed and delivered by the Company and the
Warrant Agent, the Warrant Agreement will be a valid and binding
agreement of the Company, enforceable in accordance with its terms,
except as may be subject to (A) bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating
to or affecting creditors' rights generally, (B) general principles of
equity (regardless of whether enforcement is considered in a proceeding
in equity or at law) and (C) an implied covenant of good faith and fair
dealing. The Warrant Agreement conforms in all material respects to the
description thereof in the Prospectus and is substantially in the form
filed as an exhibit to the Registration Statement.
(l) When executed, countersigned, issued and delivered in the
manner provided for in the Warrant Agreement and sold and paid for as
provided in this Agreement, the Warrants will be a valid and binding
agreement of the Company, enforceable in accordance with its terms,
except as may be subject to (A) bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating
to or affecting creditors' rights generally, (B) general principles of
equity (regardless of whether enforcement is considered in a proceeding
in equity or at law) and (C) an implied covenant of good faith and fair
dealing. The Warrants conform in all material respects to the
description thereof in the Prospectus.
(m) The Warrant Debt Securities have been duly authorized,
created, [reserved] and when issued and delivered in the manner
provided for in the Indenture and upon the exercise of the Warrants in
accordance with the terms of the Warrant Agreement, such Warrant Debt
Securities and the related Guarantees will constitute valid and binding
obligations of the Company or the Guarantor, as the case may be,
entitled to the benefits of the Indenture and enforceable against the
Company or the Guarantor, as the case may be, in accordance with their
terms, except as may be subject to (A) bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally, (B) general
principles of equity (regardless of whether enforcement is considered
in a proceeding in equity or at law) and (C) an implied covenant of
good faith and fair dealing. Each of the Warrant Debt Securities and
the related Guarantees will conform in all material respects to the
descriptions thereof in the Prospectus.]
(n) Since the respective dates as of which information is
given in the Prospectus, except as otherwise stated therein or
contemplated thereby, there has not been any material adverse change in
the condition (financial or otherwise), earnings, business or prospects
of NWA Corp. and its consolidated subsidiaries, considered as one
enterprise, whether or not arising in the ordinary course of business.
<PAGE>
6
(o) [Neither] the Company [nor NWA Corp.] is [not] in default
in the performance or observance of any obligation, agreement, covenant
or condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other agreement or instrument to which it is
a party or by which it may be bound or to which any of its properties
may be subject, except for such defaults that would not have a Material
Adverse Effect. The execution and delivery by the Company and NWA
Corp.[, as applicable] of this Agreement and [the Designated
Indenture,] [the Warrant Agreement,] the issuance and delivery of the
[Notes] [Securities] [Warrants] [and the related Guarantees] and the
consummation by the Company and NWA Corp. of the transactions
contemplated by this Agreement and the Prospectus, and compliance by
the Company and NWA Corp. with the terms of this Agreement have been
duly authorized by all necessary corporate action on the part of the
Company and NWA Corp. and do not and will not result in any violation
of the charter or by-laws of the Company or NWA Corp., and do not and
will not result in a breach of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the
Company or NWA Corp. under (A) any contract, indenture, mortgage, loan
agreement, note, lease or other agreement or other instrument to which
the Company or NWA Corp. is a party or by which either may be bound or
to which any of its properties may be subject and which is included or
incorporated by reference as an exhibit to any document incorporated by
reference in the Prospectus or included as an exhibit to the
Registration Statement, except for such breaches, defaults, liens,
charges or encumbrances that would not have a Material Adverse Effect
or (B) any existing applicable law, rule, regulation, judgment, order
or decree of any government, governmental instrumentality or court,
domestic or foreign, having jurisdiction over the Company or NWA Corp.
or any of their respective properties (other than the securities or
Blue Sky or similar laws of the various states and of foreign
jurisdictions), except for such breaches, defaults, liens, charges or
encumbrances that would not have a Material Adverse Effect.
(p) No authorization, approval, consent, order or license of
or filing with or notice to any government, governmental
instrumentality or court, domestic or foreign, is required for the
valid authorization, issuance, sale and delivery of the [Notes]
[Securities] [Warrants] [and the related Guarantees], the valid
authorization, execution, delivery and performance by NWA Corp. and/or
the Company of this Agreement or the consummation of the transactions
contemplated by this Agreement, except such as are required under the
Securities Act, [the Trust Indenture Act] and the securities or Blue
Sky or similar laws of the various states and of foreign jurisdictions.
(q) Except as disclosed in the Prospectus, there is no
action, suit or proceeding before or by any government, governmental
instrumentality or court, domestic or foreign, now pending or, to the
knowledge of the Company [or NWA Corp.], threatened against the Company
[or NWA Corp.] that is required to be disclosed in the Prospectus or
that could reasonably be expected to have a Material Adverse Effect or
that could reasonably be expected to materially and adversely affect
the consummation of the transactions contemplated by this Agreement;
the aggregate of all pending legal or governmental
<PAGE>
7
proceedings that are not described in the Prospectus to which the
Company [or NWA Corp.] is a party or which affect any of their
respective properties, including ordinary routine litigation incidental
to their business, would not reasonably be expected to have a Material
Adverse Effect.
(r) There are no contracts or documents of a character
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
that are not described and filed as required.
(s) The Company [and NWA Corp.] each possess all adequate
certificates, authorizations and permits issued by appropriate
governmental agencies or bodies which are necessary to conduct, in all
material respects, the business now operated by them and have not
received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit that, if
determined adversely to the Company [or NWA Corp.], would have, singly
or in the aggregate, a Material Adverse Effect.
(t) Except as disclosed in the Prospectus, no labor dispute
with the employees of the Company [or NWA Corp.] exists or, to the
knowledge of the Company [and NWA Corp.,] is imminent, in either case,
which might reasonably be expected to have a Material Adverse Effect.
(u) [Neither] the Company [nor NWA Corp.] is [not], and after
giving effect to the application of the proceeds of the sale of the
[Notes] [Securities] [Warrants] as described in the Prospectus,
[neither] the Company [nor NWA Corp.] will [not] be required to
register as, an "investment company" under the Investment Company Act
of 1940, as amended (the "Investment Company Act").
(v) The Company [and NWA Corp. have] [has] not taken and will
not take, directly or indirectly, any action prohibited by Regulation M
under the Exchange Act, to the extent applicable, in connection with
the offering of the [Notes] [Securities] [Warrants] [and the related
Guarantees].
(w) The information regarding year 2000 compliance and the
Euro conversion included or incorporated by reference in the
Registration Statement and the Prospectus complies in all material
respects with the requirements of the Securities Act (including Staff
Legal Bulletin No. 6, SEC Release No. 33-7558 (July 29, 1998) and SEC
Release No. 33-7609 (November 9, 1998)).
Any certificate signed by a duly authorized officer of the Company or
NWA Corp. and delivered to the Underwriter or to counsel for the Underwriter in
connection with the offering of the [Notes][Securities][Warrants][and the
related Guarantees] shall be deemed a representation and warranty by the Company
[or NWA Corp., as the case may be,] to the Underwriter as to the matters covered
thereby.
<PAGE>
8
SECTION 2. PURCHASE AND SALE. Subject to the terms and conditions set
forth herein and in reliance upon the representations and warranties herein
contained, [each of] the Company [and NWA Corp.] agrees to sell to the
Underwriter, and the Underwriter agrees to purchase from the Company
[$__________ aggregate principal amount [at maturity] of Notes, at a purchase
price of ______% of the principal amount [at maturity] thereof (plus accrued
interest, if any, from _______, ____)] [and][the Warrants to purchase an
aggregate of $________ principal amount [at maturity] of the Warrant Debt
Securities].
SECTION 3. DELIVERY OF AND PAYMENT FOR THE NOTES. (a) Delivery of and
payment for the [Notes] [and] [Warrants] shall be made at the offices of
________________ at _____ on ________, _____ or on such other date, time and
place as may be agreed upon by the Company, [NWA Corp.] and you (such date and
time of delivery and payment for the Notes being herein called the "Closing
Date"). Delivery of the [Notes][and][Warrants] shall be made to your account at
The Depository Trust Company against payment by you to or upon the order of the
Company of the purchase price by wire transfer of immediately available funds to
the Company's account at Norwest Bank (National Association) or as otherwise
instructed in writing by the Company. Upon delivery, the [Notes][and][Warrants]
shall be in fully registered form in such denominations and registered in such
names, or otherwise, as you shall have requested in writing at least two full
business days in advance of the Closing Date. The Company [and NWA Corp.] shall
not be obligated to deliver any of the [Notes][and][Warrants] except upon
payment for all the [Notes][and][Warrants] to be purchased as provided herein.
(b) The Company agrees to have one or more global certificates
representing the [Notes][and][Warrants] available for inspection and checking by
you in New York, New York not later than one full business day prior to the
Closing Date.
SECTION 4. CONDITIONS OF UNDERWRITER'S OBLIGATION. The obligation of
the Underwriter to purchase and pay for the [Notes][and][Warrants] pursuant to
this Agreement are subject to the following conditions:
(a) On the Closing Date, no stop order suspending the
effectiveness of the Registration Statement shall have been issued
under the Securities Act and no proceedings therefor shall have been
instituted or threatened by the Commission.
(b) On the Closing Date, you shall have received an opinion
of Simpson Thacher & Bartlett, as counsel for the Company [and NWA
Corp.], dated the Closing Date and in form and substance reasonably
satisfactory to you and counsel for the Underwriter, substantially to
the effect set forth in Exhibit A hereto.
(c) On the Closing Date, you shall have received an opinion
of the General Counsel of the Company [and NWA Corp.], dated the
Closing Date and in form and substance reasonably satisfactory to you
and counsel for the Underwriter, substantially to the effect set forth
in Exhibit B hereto.
<PAGE>
9
(d) On the Closing Date, you shall have received an opinion
of ___________, as counsel for the Underwriter, dated the Closing Date,
with respect to the issuance and sale of the
[Notes][Securities][Warrants] [and the related Guarantees], the
Registration Statement, the Prospectus and other related matters as the
Underwriter may reasonably require.
(e) On the Closing Date, (i) (A) the Registration Statement,
as it may then be amended or supplemented, shall not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading, (B) the Prospectus, as it may then be amended or
supplemented, shall not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances under which they were made, (C) the Company [and NWA
Corp.] shall have complied with all agreements and satisfied all
conditions on [their respective][its] part[s] to be performed or
satisfied at or prior to the Closing Date, and (D) the other
representations and warranties of the Company and NWA Corp. set forth
in Section 1(a) shall be accurate in all material respects as though
expressly made at and as of the Closing Date (except to the extent that
such representations and warranties refer to an earlier or later date,
in which case they shall be accurate in all material respects as of
such dates) and (ii) subsequent to the execution and delivery of this
Agreement, there shall not have been any material adverse change in the
condition (financial or other), earnings, business or prospects of NWA
Corp. and its consolidated subsidiaries, considered as one enterprise,
whether or not arising in the ordinary course of business, that in your
judgment, is so material and adverse that it makes it impracticable or
inadvisable to proceed with the public offering or sale of and payment
for the [Notes][or][Warrants]. At the Closing Date, you shall have
received a certificate of the President or a Senior or Executive Vice
President, and other senior officers of the Company [and NWA Corp.]
approved by you, dated as of the Closing Date, to such effect.
(f) On each of the date hereof and the Closing Date, you
shall have received a letter, dated the date hereof or the Closing
Date, as the case may be, in form and substance satisfactory to you and
counsel to the Underwriter, from Ernst & Young LLP, the Company's [and
NWA Corp.=s] independent public accountants, containing statements and
information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain other financial or statistical data and certain financial
information contained in or incorporated by reference into the
Registration Statement and the Prospectus.
(g) Subsequent to the execution and delivery of this
Agreement and prior to the Closing Date, there shall not have been any
downgrading nor any notice given to the Company [or NWA Corp.] or any
public notice given, in either case by a rating agency described below,
of any intended or potential downgrading or of a possible change that
does not indicate the direction of the possible change, in the rating
accorded any of the Company's or NWA Corp.'s securities, including the
[Notes][Securities][Warrants][and
<PAGE>
10
the related Guarantees], by any "nationally recognized statistical
rating organization", as such term is defined for purposes of Rule
436(g)(2) under the Securities Act.
(h) The Company [and NWA Corp.] shall have furnished to you
and to counsel for the Underwriter, in form and substance satisfactory
to you and to them, such other documents, certificates and opinions as
such counsel may reasonably request in order to pass upon the matters
referred to in Section 4(d) and in order to evidence the accuracy and
completeness of any of the representations, warranties or statements,
the performance of any covenant by the Company [or NWA Corp.]
theretofore to be performed, or the compliance with any of the
conditions herein contained.
If any of the conditions specified in this Section 4 shall not have
been fulfilled when and as required by this Agreement to be fulfilled, this
Agreement may be terminated by you on notice to the Company and NWA Corp. at any
time prior to the Closing Date and such termination shall be without liability
of any party to any other party, except as provided in Section 6.
Notwithstanding any such termination, the provisions of Section 7 shall remain
in effect.
SECTION 5. CERTAIN COVENANTS OF THE COMPANY AND NWA CORP.. The Company
and NWA Corp. covenant with the Underwriter as follows:
(a) To furnish to you, without charge, as soon as practicable
on the business day next succeeding the date of This Agreement and
during the period mentioned in paragraph (e) below, as many copies of
the Prospectus, and any supplements or amendments thereto, as you may
reasonably request.
(b) To furnish to you as many conformed copies of the
Registration Statement (as originally filed) and of all amendments
thereto, whether filed before or after such Registration Statement
became effective, as many copies of all exhibits and documents filed
therewith or incorporated by reference therein (through the end of the
period mentioned in paragraph (e) below) and one signed and as many
conformed copies of all consents and certificates of experts as you may
reasonably request and, if requested by you, to furnish to you one
conformed copy of the Registration Statement (as originally filed) and
of each amendment thereto (including documents incorporated by
reference into the Prospectus but without exhibits).
(c) Promptly following the execution of this Agreement, to
prepare a Prospectus Supplement that complies with the Securities Act
and that sets forth the principal amount of the Notes and their terms
not otherwise specified in the Preliminary Prospectus Supplement, if
any, or the base prospectus included in the Registration Statement, the
name of the Underwriter participating in the offering and the principal
amount of the Notes that it has agreed to purchase, the price[s] at
which the [Notes][and][Warrants] are to be purchased by the Underwriter
from the Company, any initial public offering price, any selling
concession and reallowance and any delayed delivery arrangements, and
such other information as you, the Company [and NWA Corp.] deem
appropriate in connection with the offering of the
[Notes][and][Warrants].
<PAGE>
11
The Company and NWA Corp. will timely transmit copies of the Prospectus
Supplement to the Commission for filing pursuant to Rule 424 under the
Securities Act.
(d) Before amending or supplementing the Registration
Statement or the Prospectus, to furnish the Underwriter with a copy of
each such proposed amendment or supplement, and to file no such
proposed amendment or supplement to which you reasonably object by
notice to the Company [and NWA Corp.] after a reasonable period of
review; PROVIDED that the foregoing shall not prevent NWA Corp. from
filing reports required to be filed by it pursuant to the Exchange Act,
and provided further that NWA Corp. shall have provided you with a copy
of any such report prior to its filing with the Commission.
(e) If, during such period after the first date of the public
offering of the [Notes][and][Warrants] when the Prospectus is required
by law to be delivered in connection with sales of the [Notes][or][the
Warrants] by an Underwriter or dealer any event shall occur as a result
of which it is necessary, in the reasonable opinion of counsel for the
Underwriter or counsel for the Company [and NWA Corp.], to amend the
Registration Statement or amend or supplement the Prospectus in order
to make the statements therein, in the light of the circumstances when
the Prospectus is delivered to a purchaser, not misleading, or if it is
necessary, in the reasonable opinion of either such counsel, to amend
the Registration Statement or amend or supplement the Prospectus to
comply with law, forthwith to prepare and furnish, at its own expense,
to the Underwriter and to the dealers (whose names and addresses you
will furnish to the Company [and NWA Corp.]) to which the
[Notes][or][Warrants] may have been sold by you and to any other
dealers upon request, either amendments or supplements to the
Prospectus so that the statements in the Prospectus as so amended or
supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so that the
Registration Statement or the Prospectus, as so amended or
supplemented, will comply with law and to cause such amendments or
supplements to be filed promptly with the Commission. Neither your
consent to, nor the Underwriter's delivery of, any such amendment or
supplement shall constitute a waiver of any of the conditions set forth
in Section 4.
(f) During the period mentioned in paragraph (e) above, to
notify you immediately, (i) of the effectiveness of any amendment to
the Registration Statement, (ii) of the transmittal to the Commission
for filing of any supplement to the Prospectus or any document that
would as a result thereof be incorporated by reference in the
Prospectus, (iii) of the receipt of any comments from the Commission
with respect to the Registration Statement, the Prospectus or the
Prospectus Supplement, (iv) of any request by the Commission for any
amendment to the Registration Statement or any supplement to the
Prospectus or for additional information relating thereto or to any
document incorporated by reference in the Prospectus and (v) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement, of the suspension of the
qualification of the Notes for offering or sale in any jurisdiction, or
of the institution or threatening of any proceeding for any of such
purposes; and to use every
<PAGE>
12
reasonable effort to prevent the issuance of any such stop order or of
any order suspending such qualification and, if any such order is
issued, to obtain the lifting thereof at the earliest possible moment.
(g) To use their respective reasonable efforts, in cooperation
with the Underwriter, to qualify the [Notes][Securities][Warrants][and
related Guarantees] for offer and sale under the securities laws of
such states and other jurisdictions as you may reasonably request and
to maintain such qualifications in effect for so long as required for
the distribution of such [Notes][Securities][Warrants][and related
Guarantees]; PROVIDED, HOWEVER, that neither the Company nor NWA Corp.
shall be obligated to file any general consent to service of process or
to qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to
taxation in respect of doing business in any jurisdiction in which it
is not otherwise so subject. The Company [and NWA Corp.] will use their
reasonable efforts to file such statement and reports as may be
required by the laws of each jurisdiction in which the
[Notes][Securities][Warrants][and the related Guarantees] have been
qualified as above provided. The Company [and NWA Corp.] will also
supply you with such information as is necessary for the determination
of legality of the [Notes][Securities][Warrants][and the related
Guarantees] for investment under the laws of such jurisdictions as you
may reasonably request.
(h) To make generally available to NWA Corp.'s security
holders as soon as practicable, but not later than 45 days after the
close of the period covered thereby, an earnings statement of NWA Corp.
(in form complying with the provisions of Rule 158 of the Securities
Act), covering (i) a period of 12 months beginning after the effective
date of the Registration Statement and any post-effective amendment
thereof but not later than the first day of NWA Corp.'s fiscal quarter
next following such effective date and (ii) a period of 12 months
beginning after the date of this Agreement but not later than the first
day of NWA Corp.'s fiscal quarter next following the date of this
Agreement.
(i) For a period of two years after the Closing Date, to make
available upon request to the Underwriter, copies of all annual
reports, quarterly reports and current reports filed with the
Commission on Forms 10-K, 10-Q and 8-K, or such other similar forms as
may be designated by the Commission, and such other documents, reports
and information as shall be furnished by the Company or NWA Corp. to
the holders of [Notes][Securities][Warrants][and the related
Guarantees] or to their security holders generally provided that at
such time NWA Corp. is required to furnish such reports under the
Exchange Act.
(j) Between the date of this Agreement and the Closing Date,
not to offer, sell, or enter into any agreement to sell, directly or
indirectly, any debt securities issued or guaranteed by the Company or
NWA Corp. with a maturity of more than one year in any offering (other
than the Notes), without your prior written consent.
<PAGE>
13
(k) To use the proceeds from the sale of the
[Notes][and][Warrants] in the manner described in the Prospectus
Supplement under the caption "Use of Proceeds".
(l) During the period when a prospectus relating to the
[Notes][and] [Warrants] is required to be delivered under Section 5(c)
of the Securities Act, to file promptly all documents required to be
filed with the Commission pursuant to Section 13, 14 or 15(d) of the
Exchange Act.
(m) Until the completion of the resale of the
[Notes][and][Warrants] by the Underwriter, none of the Company, NWA
Corp. or any of their affiliated purchasers (as defined in Rule 100
under the Exchange Act), either alone or with one or more other
persons, will bid for or purchase, for any account in which it or any
of its affiliated purchasers has a beneficial interest, any
[Notes][and][Warrants], or attempt to induce any person to purchase any
[Notes][and][Warrants]; and neither they nor any of their affiliated
purchasers will make bids or purchases for the purpose of creating
actual, or apparent, active trading in the [Notes][and][Warrants] or of
raising the price of the Notes.
(n) To comply to the best of their abilities with the
Securities Act, the Exchange Act [and the Trust Indenture Act] so as to
permit the completion of the distribution of [the Notes][and][Warrants]
as contemplated in this Agreement and in the Prospectus.
SECTION 6. PAYMENT OF EXPENSES. The Company [and NWA Corp.] will pay or
cause to be paid all costs and expenses incident to the performance of their
obligations under this Agreement, including, without limitation, (a) the
preparation, printing and filing of the Registration Statement (including
financial statements and exhibits), as originally filed and as amended, any
Preliminary Prospectus Supplement and the Prospectus and any amendments or
supplements thereto, and the cost of furnishing copies thereof to the
Underwriter, (b) the printing or processing and distribution of this Agreement,
the [Notes], the Blue Sky Survey and any Legal Investment Survey, (c) the
delivery of the Notes [and][Warrants], (d) the fees and disbursements of counsel
and accountants for NWA Corp. and the Company, (e) the qualification of the
[Notes][and][Warrants] with the National Association of Securities Dealers, Inc.
(the "NASD") and under the applicable securities laws in accordance with Section
5(g), including filing fees and reasonable fees and disbursements of counsel for
the Underwriter in connection therewith and in connection with the Blue Sky
Survey, (f) any fees charged by rating agencies for rating the Notes (including
annual surveillance fees related to the Notes as long as they are outstanding)
and (g) the fees and expenses of the Trustee, including the reasonable fees and
disbursements of counsel for the Trustee, in connection with the Notes.
If this Agreement is terminated by the Underwriter in accordance with
the provisions of Section 4 or 8, the Company [and NWA Corp., jointly and
severally,] agree[s] to reimburse the Underwriter for all its reasonable
out-of-pocket expenses, including the fees and disbursements of counsel for the
Underwriter.
<PAGE>
14
SECTION 7. INDEMNIFICATION AND CONTRIBUTION. (a) The Company [and NWA
Corp., jointly and severally], agree[s] to indemnify and hold harmless the
Underwriter and each person, if any, who controls the Underwriter within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act from and against any and all losses, claims, damages and liabilities
(including, without limitation, any legal or other expenses reasonably incurred
by the Underwriter or any such controlling person in connection with defending
or investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof, any Preliminary Prospectus Supplement or the
Prospectus (as amended or supplemented if the Company [or NWA Corp.] shall have
furnished any amendments or supplements thereto), or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages or liabilities are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information relating to the Underwriter furnished in writing to NWA Corp. [and
the Company] by or on behalf of the Underwriter expressly for use therein;
PROVIDED that such indemnity with respect to the Prospectus shall not inure to
the benefit of the Underwriter (or any person controlling the Underwriter) from
whom the person asserting any such loss, claim, damage or liability purchased
the Notes which are the subject thereof if such person was not sent a copy of
the Prospectus at or prior to the confirmation of the sale of such
[Notes][and][Warrants] to such person in any case where such delivery is
required by the Securities Act and the untrue statement or omission of a
material fact contained in such Preliminary Prospectus Supplement was corrected
in such subsequent Prospectus, unless such failure to deliver the Prospectus was
a result of noncompliance by the Company [and NWA Corp.] with their delivery
requirements set forth in Section 5 hereof.
(b) The Underwriter agrees to indemnify and hold harmless the Company
and NWA Corp., each of their directors, each of their officers who signed the
Registration Statement and each person, if any, who controls the Company or NWA
Corp. within the meaning of either Section 15 of the Securities Act or Section
20 of the Exchange Act to the same extent as the foregoing indemnity from the
Company and NWA Corp. to the Underwriter, but only with reference to information
relating to the Underwriter furnished in writing to [NWA Corp. or] the Company
16 by or on behalf of the Underwriter expressly for use in the Registration
Statement, any Preliminary Prospectus Supplement, the Prospectus or any
amendments or supplements thereto.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to either of the two preceding paragraphs, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing. An indemnifying
party may participate at its own expense in the defense of such action. If it so
elects within a reasonable time after receipt of such notice, an indemnifying
party, jointly with any other indemnifying parties receiving such notice, may,
except as provided in the immediately following sentence, assume the defense of
such action, with counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party may
designate in such proceeding and shall pay the fees and disbursements of such
counsel
<PAGE>
15
related to such proceeding. In any such proceeding, any indemnified party shall
have the right to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them. It
is understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel) for all such
indemnified parties and that all such fees and expenses shall be reimbursed as
they are incurred. Such firm shall be designated in writing by
___________________, in the case of parties indemnified pursuant to paragraph
(a) above, and by the Company [or NWA Corp.], in the case of parties indemnified
pursuant to paragraph (b). The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified 17 party from all liability on claims
that are the subject matter of such proceeding.
(d) If the indemnification provided for in paragraphs (a) and (b) of
this Section 7 is unavailable to an indemnified party or insufficient in respect
of any losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company [and NWA Corp.] on the one hand and the
Underwriter on the other hand from the offering of the [Notes] [and] [the
Warrants] or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company [and NWA Corp.] on the one hand and of the Underwriter on
the other hand in connection with the statements or omissions that resulted in
such losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative benefits received by the Company [and NWA
Corp.] on the one hand and the Underwriter on the other hand in connection with
the offering of the [Notes][and][the Warrants] shall be deemed to be in the same
respective proportions as the net proceeds from the offering of the
[Notes][and][the Warrants] (before deducting expenses) received by the Company
and the total underwriting discounts and commissions received by the
Underwriter, in each case as set forth on the cover of the Prospectus, bear to
the aggregate public offering price of the [Notes][and][the Warrants]. The
relative fault of the Company [and NWA Corp.] on the one hand and of the
Underwriter on the other hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by
<PAGE>
16
the Company [or NWA Corp.] or by the Underwriter and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
(e) The Company, [NWA Corp.] and the Underwriter agree that it would
not be just or equitable if contribution pursuant to this Section 7 were
determined by PRO RATA allocation or by any other method of allocation that does
not take account of the equitable considerations referred to in paragraph (d)
above. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages and liabilities referred to in paragraph (d) above shall
be deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 7, the Underwriter shall not be required to
contribute any amount in excess of the amount by 18 which the total price at
which the [Notes][and][Warrants] underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages that the
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The remedies provided for in this
Section 7 are not exclusive and shall not limit any rights or remedies which may
otherwise be available to any indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in this Section
7 and the representations and warranties of the Company or NWA Corp. contained
in this Agreement shall remain operative and in full force and effect regardless
of (i) any termination of this Agreement, (ii) any investigation made by or on
behalf of the Underwriter or any person controlling the Underwriter or by or on
behalf of NWA Corp. or Company, its officers or directors or any person
controlling NWA Corp. or the Company and (iii) acceptance of and payment for any
of the [Notes][and][Warrants.]
SECTION 8. TERMINATION OF AGREEMENT. (a)(i) This Agreement shall be
subject to termination in your absolute discretion, by notice given to the
Company [and NWA Corp], if after the execution and delivery of this Agreement
and prior to the Closing Date (A) trading generally shall have been suspended or
materially limited on the New York Stock Exchange or the Nasdaq National Market,
(B) trading of any securities of [NWA Corp. or] the Company shall have been
suspended on any exchange or in any over-the-counter market, (C) a general
moratorium on commercial banking activities in New York shall have been declared
by either Federal or New York State authorities, or (D) there shall have
occurred any outbreak or escalation of hostilities involving the United States
or any calamity or crisis and (ii) in the case of any of the events specified in
clauses (i) (A) through (D), such event singly or together with any other such
event makes it, in your reasonable judgment, impracticable to market the [Notes]
[Securities][Warrants] [and the related Guarantees] on the terms and in the
manner contemplated in the Prospectus or inadvisable to enforce contracts for
the sale of the [Notes][Securities] [Warrants][and the related Guarantees].
<PAGE>
17
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party, except
to the extent provided in Section 6. Notwithstanding any such termination, the
provisions of Section 7 shall remain in effect. If this Agreement shall be
terminated by the Underwriter because of any failure or refusal on the part of
[NWA Corp. or] the Company to comply with the terms or to fulfill any of the
conditions of this Agreement, or if for any reason [NWA Corp. or] the Company
shall be unable to perform its obligations under this Agreement, the Company
will reimburse the Underwriter for all out-of-pocket expenses (including the
reasonable fees and disbursements of its counsel) reasonably incurred by the
Underwriter in connection with this Agreement or the offering contemplated
hereunder.
(c) This Agreement may also terminate pursuant to the provisions of
Section 4, with the effect stated in such Section.
SECTION 9. COUNTERPARTS. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
SECTION 10. GOVERNING LAW AND TIME. This Agreement shall be governed by
and construed in accordance with the internal laws of the State of New York.
Specified times of the day refer to New York City time.
SECTION 11. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if delivered,
mailed, or transmitted by any standard form of telecommunication, including
telex or facsimile transmission. Notices to the Underwriter shall be directed to
________________, ____________________, Telephone No.: _______________,
Facsimile No.: ______________, Attention: ______________.
SECTION 12. PARTIES. This Agreement is made solely for the benefit of
the Underwriter, the Company, NWA Corp. and, to the extent expressed, any person
controlling the Company, NWA Corp. or the Underwriter within the meaning of
Section 15 of the Securities Act, and their respective executors,
administrators, successors and assigns and no other person shall acquire or have
any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include any purchaser, as such purchaser, from the
Underwriter of the Notes.
SECTION 13. HEADINGS. The headings of the sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed a
part of this Agreement.
<PAGE>
18
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
instrument will become a binding agreement among the Company, NWA Corp. and the
Underwriter in accordance with its terms.
Very truly yours,
NORTHWEST AIRLINES, INC.
By:
-----------------------------------
Name:
Title:
NORTHWEST AIRLINES CORPORATION
By:
-----------------------------------
Name:
Title:
Accepted as of the date first above written:
[Underwriters]
By:
-----------------------------
By:
-----------------------------
Name:
Title:
<PAGE>
EXHIBIT A
Form of Opinion of
Simpson Thacher & Bartlett
[(i) NWA Corp. has been duly incorporated and is validly existing and
in good standing as a corporation under the laws of the State of Delaware and
has full corporate power and authority to conduct its business as described in
the Registration Statement and Prospectus.
(ii) Each of the Original Indenture, the First Supplemental Indenture
and the Second Supplemental Indenture has been duly authorized, executed and
delivered by NWA Corp., and the Original Indenture has been duly qualified under
the Trust Indenture Act; and, assuming that the Indenture is the valid and
legally binding obligation of the Trustee, the Indenture constitutes a valid and
legally binding obligation of the Company and NWA Corp., enforceable against the
Company and NWA Corp. in accordance with its terms.
(iii) The Notes have been duly authorized, executed and issued by the
Company and, assuming due authentication thereof by the Trustee and upon payment
and delivery in accordance with this Agreement, will constitute valid and
legally binding obligations of the Company, enforceable against the Company in
accordance with their respective terms.
(iv) The Guarantees have been duly authorized, executed and issued by
NWA Corp. and, assuming the authentication of the Notes by the Trustee and upon
payment for and delivery of the Notes in accordance with this Agreement, will
constitute valid and legally binding obligations of NWA Corp., enforceable
against NWA Corp. in accordance with their respective terms.]
[(v) The Warrant Agreement has been duly authorized, executed and
delivered by the Company and, assuming that the Warrant Agreement is the valid
and legally binding obligation of the Warrant Agent, the Warrant Agreement
constitutes a valid and binding obligation of the Company, enforceable in
accordance with its terms.
(vi) The Warrants have been duly authorized, executed and issued by the
Company and, assuming due countersigning thereof by the Warrant Agent and upon
payment and delivery in accordance with this Agreement, will constitute valid
and binding obligations of the Company, enforceable in accordance with their
respective terms.]
(vii) The statements made in the Prospectus under the captions
["Description of Notes" and "Description of Debt Securities,"][and]["Description
of Warrants"] insofar as
<PAGE>
they purport to constitute summaries of certain terms of [the Notes,
the Guarantees and the Indenture][and][the Warrants and the Warrant
Agreement] specifically referred to therein, constitute accurate
summaries of such terms in all material respects.
(viii) This Agreement has been duly authorized, executed and
delivered by NWA Corp.
(ix) No consent, approval, authorization, order, registration
or qualification of or with any federal or New York governmental agency
or body or any Delaware governmental agency or body acting pursuant to
the Delaware General Corporation Law or, to our knowledge, any federal
or New York court or any Delaware court acting pursuant to the Delaware
General Corporation Law is required for the issue and sale of [the
Notes and the Guarantees][and][the Warrants] in the manner contemplated
by this Agreement, except for the registration under the Securities Act
of [the Notes and the Guarantees][and][the Warrants], and such
consents, approvals, authorizations, registrations or qualifications as
may be required under state securities or Blue Sky laws in connection
with the purchase and distribution of [the Notes and the
Guarantees][and][the Warrants] by the Underwriter.
(x) [Neither] the Company [nor NWA Corp.] is [not], and, after
giving effect to the application of the proceeds of the sale of the
Notes as described in the Prospectus, [neither] the Company [nor NWA
Corp.] will [not] be, required to register as an "investment company"
within the meaning of and subject to regulation under the Investment
Company Act of 1940, as amended.
(xi) The Registration Statement has become effective under the
Securities Act, the Prospectus has been filed in accordance with Rule
424(b) of the rules and regulations of the Commission under the
Securities Act and, to our knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceeding for that purpose has been instituted or threatened by the
Commission.
Such counsel may state that its opinion as set forth in paragraphs
(ii), (iii) and (iv) are subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing. In addition, such counsel shall
also state that they have not independently verified the accuracy, completeness
or fairness of the statements made or included in the Registration Statement,
the Prospectus or the documents incorporated by reference (collectively, the
"Exchange Act Documents") and take no responsibility therefor, except as and to
the extent set forth in paragraph (v) above, and in the course of the
preparation by the Company and NWA Corp. of the Registration Statement and the
Prospectus (excluding the Exchange Act Documents), such counsel participated in
conferences with certain officers and employees of the Company and NWA Corp.,
with representatives of the independent public accountants for the Company and
NWA Corp. and with counsel to the Company and NWA
A-2
<PAGE>
Corp. Such counsel may state that they did not prepare the Exchange Act
Documents (other than the Form 8-Ks), however, such counsel reviewed the
Exchange Act Documents with the Company and NWA Corp. and with counsel to the
Company and NWA Corp. prior to their filing with the Commission, and, based upon
such counsel's examination of the Registration Statement, the Prospectus and the
Exchange Act Documents, such counsel's investigations made in connection with
the preparation of Registration Statement and the Prospectus (excluding the
Exchange Act Documents) and such counsel's participation in the conferences
referred to above, (i) such counsel is of the opinion that the Registration
Statement at the time such Registration Statement became effective and the
Prospectus (excluding the Exchange Act Documents), as of __________, ____,
complied as to form in all material respects with the requirements of the
Securities Act, [the Trust Indenture Act] and the applicable rules and
regulations of the Commission thereunder and that the Exchange Act Documents
complied as to form when filed in all material respects with the requirements of
the Exchange Act and the applicable rules and regulations of the Commission
thereunder, except that in each case such counsel may state that it expresses no
opinion with respect to the financial statements or other financial or
statistical data contained or incorporated by reference in the Registration
Statement, the Prospectus or the Exchange Act Documents, and (ii) such counsel
has no reason to believe that the Registration Statement, at the time such
Registration Statement became effective (including the Exchange Act Documents on
file with the Commission on such effective date) contained any untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein not misleading or
that the Prospectus (including the Exchange Act Documents) as of __________,
____ or as of the Closing Date contains an untrue statement of a material fact
or omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except that in each case such counsel may state that it expresses no
belief with respect to the financial statements and other financial or
statistical data contained or incorporated by reference in the Registration
Statement, the Prospectus or the Exchange Act Documents.
Insofar as the opinions expressed by such counsel relate to or are
dependent upon matters governed by the laws of the State of Minnesota, such
counsel may state that it has relied upon the opinion of the Office of the
General Counsel of the Company, delivered to you concurrently with such
counsel's opinion.
A-3
<PAGE>
EXHIBIT B
Form of Opinion of the General Counsel
of NWA Corp. and the Company
(i) The Company has been duly incorporated, is validly
existing and in good standing under the laws of the State of Minnesota
with corporate power and corporate authority under such laws to own,
lease and operate its properties and conduct its business as described
in the Prospectus and to perform its obligations under this Agreement,
the Designated Indenture and the Notes.
(ii) The Company is duly qualified to transact business as a
foreign corporation and is in good standing in each other jurisdiction
in which it owns or leases property of a nature, or transacts business
of a type, that would make such qualification necessary, except where
the failure to so qualify or be in good standing would not have a
Material Adverse Effect.
[(iii) NWA Corp. is duly qualified to transact business as a
foreign corporation and is in good standing in the State of Minnesota.]
(iv) The Company is a "citizen of the United States" (as
defined in Section 40102(a)(15) of Title 49 of the United States Code)
and is an air carrier operating under a certificate issued by the
Secretary of Transportation pursuant to Chapter 447 of Title 49, United
States Code, for aircraft capable of carrying 10 or more individuals or
6,000 pounds or more of cargo; there is in force with respect to the
Company an air carrier operating certificate issued pursuant to Part
121 of the regulations under the Federal Aviation Act; all of the
outstanding shares of capital stock of the Company have been duly
authorized and validly issued and are fully paid and non-assessable and
are owned by NWA Corp., indirectly through Old NWA Corp. and NWA Inc.,
each a Delaware corporation, free and clear of any pledge, lien,
security interest, charge, claim, equity or encumbrance of any kind.
(v) To such counsel's knowledge, except as disclosed in the
documents incorporated by reference in the Registration Statement and
the Prospectus (the "Exchange Act Documents"), there are no statutes or
regulations, or any pending or threatened legal or governmental
proceedings, required to be described in the Prospectus that are not
described as required, nor any contracts or documents of a character
required to be described or referred to in the Registration Statement
or the Prospectus or to be filed as exhibits to the Registration
Statement that are not described, referred to or filed as required.
(vi) The execution and delivery by NWA Corp. and the Company
of this Agreement and [the Indenture][and][the Warrant Agreement], the
issuance and sale of the
B-1
<PAGE>
[Notes][and][Warrants][and the related Guarantees], the consummation by
[NWA Corp. and] the Company of the transactions contemplated by this
Agreement and [the Designated Indenture][and][the Warrant Agreement]
and compliance by the Company [and NWA Corp.] with the terms hereof and
thereof do not and will not result in any violation of the charter or
by-laws of the Company [or NWA Corp.], and do not and will not result
in a breach of any of the terms or provisions of, or constitute a
default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company [or
NWA Corp.] under (A) any indenture, mortgage, loan agreement, note,
lease or other agreement or instrument included or incorporated by
reference as an exhibit to the Exchange Act Documents (except for such
breaches, defaults, liens, charges or encumbrances that would not have
a Material Adverse Effect) or included as an exhibit to the
Registration Statement (except for such breaches, defaults, liens,
charges or encumbrances that would not have a Material Adverse Effect),
(B) any existing law, rule or regulation of the State of Minnesota or
the United States of America applicable to the Company [or NWA Corp.]
(other than the securities or Blue Sky laws of the State of Minnesota,
as to which such counsel need express no opinion), or (C) any judgment,
order or decree of any government, governmental instrumentality or
court, domestic or foreign, known to such counsel and having
jurisdiction over the Company [or NWA Corp.] or any of [their
respective][its] properties.
(vii) Under any provision of law or regulation applicable to
the Company [or NWA Corp.] of the State of Minnesota or the United
States of America, no authorization, approval, consent, order or
license of or filing with or notice to any governmental agency or body
or any court is required for the valid authorization, issuance and
delivery of the [Notes][Warrants][or the related Guarantees], the valid
authorization, execution and delivery by the Company and NWA Corp. of,
and the performance by the Company and NWA Corp. of their respective
obligations under, this Agreement and [the Designated Indenture][the
Warrant Agreement], except such as are required under the securities or
Blue Sky laws of the State of Minnesota.
(viii) This Agreement has been duly authorized, executed and
delivered by the Company.
[(ix) The Designated Indenture has been duly authorized,
executed and delivered by the Company; the Notes have been duly
authorized by requisite corporate action on the part of the Company and
have been duly executed and issued by the Company.]
[(x) The Warrant Agreement has been duly authorized, executed
and delivered by the Company; the Warrants have been duly authorized by
requisite corporate action on the part of the Company and have been
duly executed and issued by the Company.]
B-2
<PAGE>
(xi) The Exchange Act Documents (except for the financial
statements and schedules and other financial data included or
incorporated by reference therein or omitted therefrom, as to which
such counsel need express no opinion), as of the dates they were filed
with the Commission, complied as to form in all material respects with
the requirements of the Exchange Act.
In addition, counsel shall state that such counsel or lawyers on his
staff have participated in the preparation of the Registration Statement, the
Prospectus and the Exchange Act Documents and have participated in conferences
with certain officers and employees of the Company and NWA Corp., counsel
employed by the Company and NWA Corp., representatives of the independent public
accountants for the Company and NWA Corp., representatives of the Underwriter
and counsel for the Underwriter, at which conferences the contents of the
Registration Statement and Prospectus and related matters were discussed. Such
counsel shall also state that, although such counsel is not passing upon and
does not assume any responsibility for the accuracy, completeness or fairness of
the statements contained in the Registration Statement, the Prospectus or the
Exchange Act Documents and has not made any independent check or verification
thereof, on the basis of the participation of such counsel or lawyers on his
staff in the conferences referred to above and their examination of the
Registration Statement, the Prospectus and the Exchange Act Documents, nothing
has come to such counsel's attention that leads him to believe that the
Registration Statement, as of the effective date hereof (including the Exchange
Act Documents on file with the Commission on such effective date) contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
or the Prospectus (including the Exchange Act Documents) as of its date or at
the Closing Date contained or contains an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except that such counsel need express no opinion with
respect to the financial statements, schedules and other financial data included
or incorporated or deemed to be incorporated by reference in the Registration
Statement or Prospectus [or with respect to the Statement of Qualification on
Form T-1].
B-3
<PAGE>
Exhibit 1(b)
================================================================================
NORTHWEST AIRLINES, INC., ISSUER
NORTHWEST AIRLINES CORPORATION, GUARANTOR
PASS THROUGH CERTIFICATES
SERIES ________
UNDERWRITING AGREEMENT
Dated as of: _________ __, ____
================================================================================
<PAGE>
NORTHWEST AIRLINES, INC., ISSUER
NORTHWEST AIRLINES CORPORATION, GUARANTOR
UNDERWRITING AGREEMENT
_____________ __, ____
[Underwriters]
[Address]
Dear Sirs:
Northwest Airlines, Inc., a Minnesota corporation (the "Company"),
proposes that State Street Bank and Trust Company of Connecticut, National
Association, as pass through trustee (the "Trustee") under the Class A Trust,
the Class B Trust [add as necessary] (each as defined below), issue and sell to
the underwriters named in Schedule II hereto its pass through certificates in
the aggregate principal amounts and with the interest rates and final
distribution dates set forth on Schedule I hereto (the "Offered Certificates")
on the terms and conditions stated herein. The aggregate principal amount of
Offered Certificates due on each such final distribution date is referred to as
a "Pass Through Certificate Designation."
The Offered Certificates will be issued pursuant to the Pass Through
Trust Agreement, dated as of June 3,1999, among Northwest Airlines Corporation,
a Delaware corporation and the ultimate parent company of the Company (the
"Guarantor"), the Company and the Trustee (the "Basic Agreement"), as
supplemented with respect to each series of Offered Certificates by a separate
Pass Through Trust Supplement to be dated as of the Closing Date (as defined
below) (individually, a "Trust Supplement"), among the Guarantor, the Company
and the Trustee (the Basic Agreement as supplemented by each such Trust
Supplement being referred to herein individually as a "Pass Through Agreement").
The Trust Supplements are related to the creation and administration of
Northwest Airlines Pass Through Trust, Series _______ (the "Class A Trust"),
Northwest Airlines Pass Through Trust, Series _______ (the "Class B Trust") [add
as necessary] (the ["Class C Trust"] and, together with [the Class A Trust and
the Class B Trust,] the "Trusts").
As used herein, unless the context otherwise requires, the term
"Underwriters" shall mean the firms named as Underwriters in Schedule II, and
the term "you" shall mean the Underwriter or Underwriters, if no underwriting
syndicate is purchasing the Offered Certificates, or the representative or
representatives of the Underwriters, if an underwriting syndicate is purchasing
the Offered Certificates, as indicated in Schedule II.
<PAGE>
2
The cash proceeds of the offering of Offered Certificates by each Trust
will be paid to [First Security Bank, National Association], as escrow agent
(the "Escrow Agent"), under an Escrow and Paying Agent Agreement among the
Escrow Agent, the Underwriters, the Trustee and [State Street Bank and Trust
Company of Connecticut, National Association], as paying agent (the "Paying
Agent"), for the benefit of the holders of Offered Certificates issued by such
Trust (each, an "Escrow Agreement"). The Escrow Agent will deposit such cash
proceeds (each, a "Deposit") with [ABN AMRO Bank N.V., Chicago Branch] (the
"Depositary"), in accordance with a Deposit Agreement relating to the respective
Trust (the "Deposit Agreement"), and will withdraw Deposits upon request to
allow the Trustee to purchase Equipment Notes (as defined in the Note Purchase
Agreement referred to herein) from time to time pursuant to a Note Purchase
Agreement to be dated as of the Closing Date (the "Note Purchase Agreement")
among the Guarantor, the Company, [State Street Bank and Trust Company of
Connecticut, National Association], as Trustee of each of the Trusts, as
Subordination Agent (as hereinafter defined) and as Paying Agent, and the Escrow
Agent. The Escrow Agent will issue receipts to be attached to each related
Offered Certificate ("Escrow Receipts") representing each holder's fractional
undivided interest in amounts deposited with the Escrow Agent and will pay to
such holders through the related Paying Agent interest accrued on the Deposits
and received by such Paying Agent pursuant to the related Deposit Agreement at a
rate per annum equal to the interest rate applicable to the corresponding
Offered Certificates.
Certain amounts of interest payable on the Offered Certificates will be
entitled to the benefits of separate liquidity facilities. [Citibank, N.A.] (the
"Liquidity Provider") will enter into a separate revolving credit agreement with
respect to each Trust (each, a "Liquidity Facility") to be dated as of the
Closing Date for the benefit of the holders of the Offered Certificates. The
Liquidity Provider and the holders of the Offered Certificates will be entitled
to the benefits of an Intercreditor Agreement to be dated as of the Closing Date
(the "Intercreditor Agreement") among the Trustee, [State Street Bank and Trust
Company of Connecticut, National Association], as subordination agent and
trustee thereunder (the "Subordination Agent"), and the Liquidity Provider.
The Guarantor and the Company have filed with the Securities and
Exchange Commission (the "Commission") shelf registration statements on Form S-3
(File Nos. 333-41579-01 and 333-79215) relating to certain classes of securities
(such registration statements, including the exhibits thereto and the documents
filed by the Guarantor with the Commission pursuant to the Securities Exchange
Act of 1934, as amended, and the rules and regulations of the Commission
thereunder (collectively, the "Exchange Act") that are incorporated by reference
therein, as amended at the date hereof, being herein referred to as the
"Registration Statement") and the offering thereof from time to time in
accordance with Rule 415 of the Securities Act of 1933, as amended, and the
rules and regulations of the Commission thereunder (collectively, the
"Securities Act"). The Registration Statement has been declared effective by the
Commission. A prospectus supplement reflecting the terms of the Offered
Certificates, the terms of the offering thereof and the other matters set forth
therein, as further specified in Section 5(c) hereof, will be prepared and filed
together with the base prospectus referred to below pursuant to Rule 424 under
the Securities Act (such prospectus supplement, in the form first filed on or
after the
<PAGE>
3
date hereof pursuant to Rule 424, being herein referred to as the "Prospectus
Supplement" and any prospectus supplement relating to the Offered Certificates
filed prior to the filing of the Prospectus Supplement being herein referred to
as a "Preliminary Prospectus Supplement"). The base prospectus, dated ________
__, ____, included in the Registration Statement relating to offerings of pass
through certificates generally, as supplemented by the Prospectus Supplement,
and including the documents incorporated by reference therein, is herein called
the "Prospectus", except that, if such base prospectus is amended or
supplemented on or prior to the date on which the Prospectus Supplement is first
filed pursuant to Rule 424, the term "Prospectus" shall refer to such base
prospectus as so amended or supplemented and as supplemented by the Prospectus
Supplement, in either case including the documents incorporated by reference
therein. Any reference herein to the terms "amendment" or "supplement" with
respect to the Registration Statement, the Prospectus, any Preliminary
Prospectus Supplement or any preliminary prospectus shall be deemed to refer to
and include any documents filed with the Commission under the Exchange Act after
the date hereof, the date the Prospectus is filed with the Commission, or the
date of such Preliminary Prospectus Supplement or preliminary prospectus, as the
case may be, and incorporated therein by reference pursuant to Item 12 of Form
S-3 under the Securities Act.
Capitalized terms not otherwise defined in this Agreement shall have
the meanings specified therefor in the Pass Through Agreements, the Note
Purchase Agreement or the Intercreditor Agreement referred to in the Pass
Through Agreements; PROVIDED that, as used in this Agreement, the term
"Operative Documents" shall mean the Deposit Agreements, the Escrow Agreements,
the Intercreditor Agreement, the Liquidity Facilities, the Pass Through
Agreements, the Note Purchase Agreement, the Participation Agreements, the
Indentures, the Leases and the Guarantees.
SECTION 1. REPRESENTATIONS AND WARRANTIES. The Guarantor and the
Company jointly and severally represent and warrant to, and agree with each
Underwriter that:
(a) The Guarantor and the Company meet the requirements for
use of Form S-3 under the Securities Act; the Registration Statement
has become effective; on the original effective date of the
Registration Statement, on the effective date of the most recent
post-effective amendment thereto, if any, and on the date of the filing
by the Guarantor of any annual report on Form 10-K after the original
effective date of the Registration Statement, the Registration
Statement, and any amendments and supplements thereto complied in all
material respects with the requirements of the Securities Act and the
Registration Statement did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; on
the date hereof and on the Closing Date (as defined below), neither the
Prospectus nor any amendments thereof and supplements thereto, includes
or will include an untrue statement of a material fact or omits or will
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; PROVIDED, HOWEVER, that this representation and
warranty shall not apply to any statements or omissions based
<PAGE>
4
upon information relating to any Underwriter furnished in writing to
the Guarantor or the Company by or on behalf of any Underwriter
expressly for use in the Prospectus or to statements or omissions in
that part of the Registration Statement which shall constitute the
Statement of Eligibility of the Trustee under the Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act"), on Form T-1.
(b) The documents incorporated by reference in the Prospectus
pursuant to Item 12 of Form S-3 under the Securities Act, at the time
they were or hereafter are filed with the Commission, complied and will
comply in all material respects with the requirements of the Exchange
Act.
(c) Ernst & Young LLP, who have reported upon the audited
consolidated financial statements and the financial statement
schedules, if any, included or incorporated by reference in the
Registration Statement, are independent public accountants within the
meaning of the Securities Act.
(d) This Agreement has been duly authorized, executed and
delivered by each of the Company and the Guarantor.
(e) The Company does not have any "significant subsidiaries"
as defined in Regulation S-X, and the Guarantor does not have any
significant subsidiaries (other than the Company).
(f) The consolidated financial statements included or
incorporated by reference in the Registration Statement present fairly
the consolidated financial position of the Guarantor and its
consolidated subsidiaries as of the dates indicated and the
consolidated results of operations and cash flows or changes in
financial position of the Guarantor and its consolidated subsidiaries
for the periods specified. Except as stated therein, such financial
statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the
periods involved. The financial statement schedules, if any, included
or incorporated by reference in the Registration Statement present
fairly the information required to be stated therein. The summary
consolidated financial data included in the Prospectus present fairly
the information shown therein and have been compiled on a basis
consistent with that of the audited consolidated financial statements
included or incorporated by reference in the Registration Statement.
(g) Each of the Company and the Guarantor is a corporation
duly organized, validly existing and in good standing under the laws of
the State of Minnesota and Delaware, respectively, with corporate power
and authority under such laws to own, lease and operate its properties
and conduct its business as described in the Prospectus and to perform
its obligations under this Agreement; and each of the Guarantor and the
Company is duly qualified to transact business as a foreign corporation
and is in good standing in each other jurisdiction in which it owns or
leases property of a nature, or
<PAGE>
5
transacts business of a type, that would make such qualification
necessary, except to the extent that the failure to so qualify or be in
good standing would not have a material adverse effect on the condition
(financial or other), earnings, business or prospects of the Guarantor
and its consolidated subsidiaries, considered as one enterprise (a
"Material Adverse Effect").
(h) The Company is a "citizen of the United States" (as
defined in Section 40102(a)(15) of Title 49 of the United States Code)
and is an air carrier operating under a certificate issued by the
Secretary of Transportation pursuant to Chapter 447 of Title 49, United
States Code, for aircraft capable of carrying 10 or more individuals or
6,000 pounds or more of cargo. There is in force with respect to the
Company an air carrier operating certificate issued pursuant to Part
121 of the regulations under the sections of Title 49, United States
Code, relating to aviation (the "Federal Aviation Act"). All of the
outstanding shares of capital stock of the Company have been duly
authorized and validly issued and are fully paid and non-assessable and
are owned by the Guarantor, indirectly through Holdings and NWA Inc.,
each a Delaware corporation, free and clear of any pledge, lien,
security interest, charge, claim, equity or encumbrance of any kind.
(i) The Operative Documents to which the Guarantor, Holdings
and/or the Company will be a party will be duly executed and delivered
by the Guarantor, Holdings and/or the Company, as the case may be on or
prior to the Closing Date or the applicable Delivery Date (as defined
in the Participation Agreements), as the case may be.
(j) The Operative Documents to which the Guarantor, Holdings
and/or the Company is, or is to be, a party are or will be
substantially in the form heretofore supplied to you (in the case of
the Indentures, the Leases and the Participation Agreements relating to
the Leased Aircraft, except for such modifications permitted by the
Note Purchase Agreement), and, when duly executed and delivered by the
Guarantor, Holdings or the Company, as the case may be, will constitute
valid and binding obligations of the Guarantor, Holdings or the
Company, as the case may be, enforceable against the Guarantor,
Holdings and the Company, as the case may be, in accordance with their
terms, except as may be subject to (A) bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally, (B) general
principles of equity (regardless of whether enforcement is considered
in a proceeding in equity or at law), (C) in the case of any Lease,
applicable laws which may affect the remedies provided therein but
which do not affect the validity of such Lease or make such remedies
inadequate for the potential realization of the benefits intended to be
provided thereby and (D) an implied covenant of good faith and fair
dealing. The Basic Agreement as executed is substantially in the form
filed as an exhibit to the Registration Statement and has been duly
qualified under the Trust Indenture Act. The Offered Certificates, the
Equipment Notes and the Operative Documents will conform in all
material respects to the descriptions thereof in the Prospectus.
<PAGE>
6
(k) When executed, authenticated, issued and delivered in the
manner provided for in each Pass Through Agreement and sold and paid
for as provided in this Agreement, the Offered Certificates will
constitute valid and binding obligations of the related Trustees,
entitled to the benefits of the related Pass Through Agreements and
enforceable against the related Trustees in accordance with their
terms, except as may be subject to (A) bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally, (B) general
principles of equity (regardless of whether enforcement is considered
in a proceeding in equity or at law) and (C) an implied covenant of
good faith and fair dealing. When executed, authenticated, issued and
delivered in the manner provided for in the related Escrow Agreements,
the Escrow Receipts will be legally and validly issued and will be
entitled to the benefits of the related Escrow Agreements.
(l) The Equipment Notes to be issued under each Indenture,
when duly executed and delivered by the related Owner Trustee or the
Company, as the case may be, and duly authenticated by the Indenture
Trustee in accordance with the terms of such Indenture, will be duly
issued under such Indenture and will constitute the valid and binding
obligations of such Owner Trustee or the Company, as the case may be,
except as may be subject to (A) bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating
to or affecting creditors' rights generally, (B) general principles of
equity (regardless of whether enforcement is considered in a proceeding
in equity or at law) and (C) an implied covenant of good faith and fair
dealing. The holders of the Equipment Notes will be entitled to the
benefits of such Indenture.
(m) Since the respective dates as of which information is
given in the Prospectus, except as otherwise stated therein or
contemplated thereby, there has not been any material adverse change in
the condition (financial or otherwise), earnings, business or prospects
of the Guarantor and its consolidated subsidiaries, considered as one
enterprise, whether or not arising in the ordinary course of business.
(n) Neither the Company nor the Guarantor is in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other agreement or instrument to which it is
a party or by which it may be bound or to which any of its properties
may be subject, except for such defaults that would not have a Material
Adverse Effect. The execution and delivery by the Company and the
Guarantor of this Agreement and by the Company, Holdings and/or the
Guarantor of the Operative Documents to which the Company, Holdings
and/or Guarantor is, or is to be, a party, the issuance and delivery of
the Offered Certificates, the consummation by the Company, Holdings and
the Guarantor of the transactions contemplated by this Agreement, by
such Operative Documents and the Prospectus, and compliance by the
Company, Holdings and the Guarantor with the terms of this Agreement
and such Operative Documents have been duly authorized by all necessary
corporate action on the part of the Company, Holdings and the Guarantor
and
<PAGE>
7
do not and will not result in any violation of the charter or by-laws
of the Company, Holdings or the Guarantor, and do not and will not
result in a breach of any of the terms or provisions of, or constitute
a default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company,
Holdings or the Guarantor under (A) any contract, indenture, mortgage,
loan agreement, note, lease or other agreement or other instrument to
which the Company, Holdings or the Guarantor is a party or by which
either may be bound or to which any of its properties may be subject
and which is included or incorporated by reference as an exhibit to any
document incorporated by reference in the Prospectus or included as an
exhibit to the Registration Statement (other than the Operative
Documents and except for such breaches, defaults, liens, charges or
encumbrances that would not have a Material Adverse Effect) or (B) any
existing applicable law, rule, regulation, judgment, order or decree of
any government, governmental instrumentality or court, domestic or
foreign, having jurisdiction over the Company or the Guarantor or any
of their respective properties (other than the securities or Blue Sky
or similar laws of the various states and of foreign jurisdictions),
except for such breaches, defaults, liens, charges or encumbrances that
would not have a Material Adverse Effect.
(o) No authorization, approval, consent, order or license of
or filing with or notice to any government, governmental
instrumentality or court, domestic or foreign, is required for the
valid authorization, issuance, sale and delivery of the Offered
Certificates and the Equipment Notes, the valid authorization,
execution, delivery and performance by the Guarantor and/or the Company
of this Agreement and the Operative Documents to which the Guarantor
and/or the Company is, or is to be, a party, or the consummation by the
Guarantor or the Company of the transactions contemplated by this
Agreement and such Operative Documents, except such as are required
under the Securities Act, the Trust Indenture Act and the securities or
Blue Sky or similar laws of the various states and of foreign
jurisdictions and except for filings or recordings with the Federal
Aviation Administration (the "FAA") and under the Uniform Commercial
Code as is in effect in Utah and Minnesota, which filings or recordings
shall have been made, or duly presented for filing, on or prior to the
applicable Delivery Date (as defined in the Participation Agreement
relating to the Aircraft to be acquired or leased on such date).
(p) Except as disclosed in the Prospectus, there is no action,
suit or proceeding before or by any government, governmental
instrumentality or court, domestic or foreign, now pending or, to the
knowledge of the Company or the Guarantor, threatened against the
Company or the Guarantor that is required to be disclosed in the
Prospectus or that could reasonably be expected to have a Material
Adverse Effect or that could reasonably be expected to materially and
adversely affect the consummation of the transactions contemplated by
this Agreement; the aggregate of all pending legal or governmental
proceedings that are not described in the Prospectus to which the
Company or the Guarantor is a party or which affect any of their
respective properties, including ordinary routine litigation incidental
to their business, would not reasonably be expected to have a Material
Adverse Effect.
<PAGE>
8
(q) There are no contracts or documents of a character
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
that are not described and filed as required.
(r) The Company and the Guarantor each possess all adequate
certificates, authorizations and permits issued by appropriate
governmental agencies or bodies which are necessary to conduct, in all
material respects, the business now operated by them and have not
received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit that, if
determined adversely to the Company or the Guarantor, would have,
singly or in the aggregate, a Material Adverse Effect.
(s) Except as disclosed in the Prospectus, no labor dispute
with the employees of the Company or the Guarantor exists or, to the
knowledge of the Company and the Guarantor, is imminent, in either
case, which might reasonably be expected to have a Material Adverse
Effect.
(t) None of the Guarantor, the Company or any Trust is an
"investment company", within the meaning of the Investment Company Act
of 1940, as amended (the "Investment Company Act"); and after giving
effect to the offering and sale of the Offered Certificates and the
application of the proceeds thereof as described in the Prospectus,
none of the Trusts will be, nor will the escrow arrangements relating
to the Trusts contemplated by the respective Escrow Agreements result
in the creation of, an "investment company", as defined in the
Investment Company Act.
(u) The Company and the Guarantor have not taken and will not
take, directly or indirectly, any action prohibited by Regulation M
under the Exchange Act, to the extent applicable, in connection with
the offering of the Offered Certificates.
(v) The information regarding year 2000 compliance and the
Euro conversion included or incorporated by reference in the
Registration Statement and the Prospectus complies in all material
respects with the requirements of the Securities Act (including Staff
Legal Bulletin No. 6, SEC Release No. 33-7558 (July 29, 1998) and SEC
Release No. 33-7609 (November 9, 1998)).
Any certificate signed by a duly authorized officer of the Company or
the Guarantor and delivered to an Underwriter or to counsel for the Underwriters
in connection with the offering of Offered Certificates shall be deemed a
representation and warranty by the Company or the Guarantor, as the case may be,
to the Underwriters as to the matters covered thereby.
SECTION 2. PURCHASE AND SALE. (a) Subject to the terms and conditions
set forth herein and in Schedule III, and in reliance upon the representations
and warranties herein contained, the Guarantor and the Company agree to cause
the Trustee to sell to each Underwriter, and each Underwriter agrees, severally
and not jointly, to purchase from the Trustee, at the
<PAGE>
9
purchase price specified in Schedule I, the respective amounts of Offered
Certificates of each Pass Through Certificate Designation set forth opposite the
name of such Underwriter in Schedule II. Concurrently with the issuance of the
Offered Certificates, the Escrow Agent shall issue and deliver to the Trustee
the Escrow Receipts in accordance with the terms of the Escrow Agreements, which
Escrow Receipts shall be attached to the related Offered Certificates.
(b) The Company is advised by you that the Underwriters propose to make
a public offering of the Offered Certificates as soon after this Agreement has
been entered into as in your judgment is advisable as set forth in the
Prospectus.
(c) As compensation to the Underwriters for their respective
commitments and obligations hereunder in respect of the Offered Certificates,
including their respective undertakings to distribute the Offered Certificates,
the Company will pay to the Underwriters the sum set forth in Schedule III. Such
payment will be made on the Closing Date simultaneously with the issuance and
sale of the Offered Certificates (with the related Escrow Receipts attached) to
the Underwriters. Payment of such compensation shall be made by wire transfer of
immediately available funds.
SECTION 3. DELIVERY OF AND PAYMENT FOR THE OFFERED CERTIFICATES. (a)
Delivery of and payment for the Offered Certificates (with attached Escrow
Receipts) shall be made at the offices of Simpson Thacher & Bartlett, 425
Lexington Avenue, New York, New York 10017-3954 at 10:00 A.M. on ________ __,
____ or on such other date, time and place as may be agreed upon by the Company,
the Guarantor and you (such date and time of delivery and payment for the
Offered Certificates being herein called the "Closing Date"). Delivery of the
Offered Certificates (with attached Escrow Receipts) issued by each Trust shall
be made to your account at The Depository Trust Company for the respective
accounts of the several Underwriters against payment by the Underwriters to or
upon the order of the Trustee by wire transfer of immediately available funds to
the Company's account at Norwest Bank (National Association) or as otherwise
instructed in writing by the Company. Upon delivery the Offered Certificates
shall be registered in the name of Cede & Co. or in such other names, and in
such denominations as you may request in writing at least two full business days
in advance of the Closing Date.
(b) The Company agrees to have one or more global certificates
representing the Offered Certificates available for inspection and checking by
you in New York, New York not later than one full business day prior to the
Closing Date.
SECTION 4. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several
obligations of the Underwriters to purchase and pay for the Offered Certificates
pursuant to this Agreement are subject to the following conditions:
(a) On the Closing Date, no stop order suspending the
effectiveness of the Registration Statement shall have been issued
under the Securities Act and no proceedings therefor shall have been
instituted or threatened by the Commission.
<PAGE>
10
(b) On the Closing Date, you shall have received an opinion of
each of Simpson Thacher & Bartlett, counsel for the Company and the
Guarantor, and Cadwalader, Wickersham & Taft, special counsel for the
Company and the Guarantor, each dated the Closing Date and in form and
substance reasonably satisfactory to you and counsel for the
Underwriters, substantially to the effect set forth in Exhibits A-1 and
A-2 hereto, respectively.
(c) On the Closing Date, you shall have received an opinion of
the General Counsel of the Company and the Guarantor, dated the Closing
Date and in form and substance reasonably satisfactory to you and
counsel for the Underwriters, substantially to the effect set forth in
Exhibit B hereto.
(d) On the Closing Date, you shall have received an opinion of
Bingham Dana LLP, counsel for State Street Bank and Trust Company of
Connecticut, National Association, individually and as Trustee,
[Subordination Agent and Paying Agent,] dated the Closing Date and in
form and substance reasonably satisfactory to you and counsel to the
Underwriters, substantially to the effect as set forth in Exhibit C
hereto.
(e) On the Closing Date, you shall have received an opinion of
[Ray, Quinney & Nebeker], counsel for the Escrow Agent, dated the
Closing Date, and in form and substance reasonably satisfactory to you
and counsel to the Underwriters, substantially to the effect as set
forth in Exhibit D hereto.
(f) On the Closing Date, you shall have received an opinion of
[Milbank, Tweed, Hadley & McCloy], counsel for the Liquidity Provider,
dated the Closing Date and in form and substance reasonably
satisfactory to you and counsel to the Underwriters, substantially to
the effect as set forth in Exhibit E hereto.
(g) On the Closing Date, you shall have received an opinion of
[Clifford Chance, Netherlands counsel for the Depositary, and an
opinion of Vedder, Price, Kaufman & Kammholz, U.S.] counsel for the
Depositary, each dated the Closing Date and in form and substance
reasonably satisfactory to you and substantially to the effect set
forth in Exhibit[s] F[-1 and F-2] hereto, respectively.
(h) On the Closing Date, you shall have received an opinion of
___________________, as counsel for the Underwriters, dated the Closing
Date, with respect to the issuance and sale of the Offered
Certificates, the Registration Statement, the Prospectus and other
related matters as the Underwriters may reasonably require.
(i) On the Closing Date, (i) (A) the Registration Statement,
as it may then be amended or supplemented, shall not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading, (B) the Prospectus, as it may then be amended or
supplemented, shall not contain an untrue statement of a material fact
or omit to state a material fact
<PAGE>
11
required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances under which they
were made, (C) the Company and the Guarantor shall have complied with
all agreements and satisfied all conditions on their respective parts
to be performed or satisfied at or prior to the Closing Date, and (D)
the other representations and warranties of the Company and the
Guarantor set forth in this Agreement and each of the Operative
Documents shall be accurate in all material respects as though
expressly made at and as of the Closing Date (except to the extent that
such representations and warranties refer to an earlier or later date,
in which case they shall be accurate in all material respects as of
such dates) and (ii) subsequent to the execution and delivery of this
Agreement, there shall not have been any material adverse change in the
condition (financial or other), earnings, business or prospects of the
Guarantor and its consolidated subsidiaries, considered as one
enterprise, whether or not arising in the ordinary course of business
that, in your judgment, is so material and adverse that it makes it
impracticable or inadvisable to proceed with the public offering or the
sale of and payment for the Offered Certificates. At the Closing Date,
you shall have received a certificate of the President or a Senior or
Executive Vice President, and other senior officers of the Company and
the Guarantor approved by you, dated as of the Closing Date, to such
effect.
(j) On each of the date hereof and the Closing Date, you shall
have received a letter, dated the date hereof or the Closing Date, as
the case may be, in form and substance satisfactory to you and counsel
to the Underwriters, from Ernst & Young LLP, the Company's and the
Guarantor=s independent public accountants, containing statements and
information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain other financial or statistical data and certain financial
information contained in or incorporated by reference into the
Registration Statement and the Prospectus.
(k) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date, there shall not have been any
downgrading nor any notice given to the Company or the Guarantor or any
public notice given, in either case by a rating agency described below,
of any intended or potential downgrading or of a possible change that
does not indicate the direction of the possible change, in the rating
accorded any of the Company's or the Guarantor's securities, including
Offered Certificates, by any "nationally recognized statistical rating
organization", as such term is defined for purposes of Rule 436(g)(2)
under the Securities Act.
(l) The Company and the Guarantor shall have furnished to you
and to counsel for the Underwriters, in form and substance satisfactory
to you and to them, such other documents, certificates and opinions as
such counsel may reasonably request in order to pass upon the matters
referred to in Section 4[(h)] and in order to evidence the accuracy and
completeness of any of the representations, warranties or statements,
the performance of any covenant by the Company or the Guarantor
theretofore to be performed, or the compliance with any of the
conditions herein contained.
<PAGE>
12
(m) On the Closing Date, each of the Operative Documents
(other than the Indentures, Leases, Participation Agreements and
Guarantees) shall have been duly executed and delivered by each of the
parties thereto; the representations and warranties of the Company and
the Guarantor contained in each of such executed Operative Documents
shall be true and correct in all material respects as of the Closing
Date (except to the extent that they relate solely to an earlier or
later date, in which case they shall be true and correct as of such
earlier or later date) and the Underwriters shall have received a
certificate of the President or a Senior or Executive Vice President of
the Company, dated as of the Closing Date, to such effect.
(n) Each of the Appraisers shall have furnished to the
Underwriters a letter from such Appraiser, addressed to the Guarantor
and the Company and dated the Closing Date, confirming that such
Appraiser and each of its directors and officers (i) is not an
affiliate of the Guarantor, the Company or any of its affiliates, (ii)
does not have any substantial interest, direct or indirect, in the
Guarantor, the Company or any of its affiliates and (iii) is not
connected with the Guarantor, the Company or any of its affiliates as
an officer, employee, promoter, underwriter, trustee, partner, director
or person performing similar functions.
(o) On the Closing Date, the Offered Certificates shall be
rated "__", in the case of the Offered Certificates of the Class A
Trust, "__", in the case of the Offered Certificates of the Class B
Trust and [add as necessary] by Standard & Poor's Ratings Service; and
"___", in the case of the Offered Certificates of the Class A Trust,
"__", in the case of the Offered Certificates of the Class B Trust and
[add as necessary] by Moody's Investors Service, Inc.
The Guarantor and the Company agree to furnish, promptly after the
Closing Date and the applicable Delivery Date, to the Underwriters a copy of
each opinion required to be delivered under the applicable Participation
Agreement addressed to the Underwriters and of such other documents furnished in
connection with the fulfillment of the conditions precedent therein as the
Underwriters or counsel for the Underwriters may reasonably request.
If any of the conditions specified in this Section 4 shall not have
been fulfilled when and as required by this Agreement to be fulfilled, this
Agreement may be terminated by you on notice to the Company and the Guarantor at
any time prior to the Closing Date and such termination shall be without
liability of any party to any other party, except as provided in Section 6.
Notwithstanding any such termination, the provisions of Section 7 shall remain
in effect.
SECTION 5. CERTAIN COVENANTS OF THE COMPANY AND THE GUARANTOR. The
Company and the Guarantor covenant with each Underwriter as follows:
(a) To furnish to you, without charge, as soon as practicable
on the business day next succeeding the date of this Agreement and
during the period mentioned in
<PAGE>
13
paragraph (e) below, as many copies of the Prospectus, and any
supplements or amendments thereto, as you may reasonably request.
(b) To furnish to you as many conformed copies of the
Registration Statement (as originally filed) and of all amendments
thereto, whether filed before or after such Registration Statement
became effective, as many copies of all exhibits and documents filed
therewith or incorporated by reference therein (through the end of the
period mentioned in paragraph (e) below) and one signed and as many
conformed copies of all consents and certificates of experts as you may
reasonably request and, if requested by you, to furnish to you, for
each of the Underwriters, one conformed copy of the Registration
Statement (as originally filed) and of each amendment thereto
(including documents incorporated by reference into the Prospectus but
without exhibits).
(c) Promptly following the execution of this Agreement, to
prepare a Prospectus Supplement that complies with the Securities Act
and that sets forth the principal amount of the Offered Certificates
and their terms not otherwise specified in the Preliminary Prospectus
Supplement or the base prospectus included in the Registration
Statement, the name of each Underwriter participating in the offering
and the principal amount of the Offered Certificates that each
severally has agreed to purchase, the name of each Underwriter, if any,
acting as a representative of the Underwriters in connection with the
offering, the price at which the Offered Certificates are to be
purchased by the Underwriters from the Company, any initial public
offering price, any selling concession and reallowance and any delayed
delivery arrangements, and such other information as you, the Company
and the Guarantor deem appropriate in connection with the offering of
the Offered Certificates. The Company and the Guarantor will timely
transmit copies of the Prospectus Supplement to the Commission for
filing pursuant to Rule 424 under the Securities Act.
(d) Before amending or supplementing the Registration
Statement or the Prospectus, to furnish each Underwriter with a copy of
each such proposed amendment or supplement, and to file no such
proposed amendment or supplement to which you reasonably object by
notice to the Company after a reasonable period of review; PROVIDED
that the foregoing shall not prevent the Guarantor from filing reports
required to be filed by it pursuant to the Exchange Act, and PROVIDED
FURTHER that the Guarantor shall have provided you with a copy of any
such report prior to its filing with the Commission.
(e) If, during such period after the first date of the public
offering of the Offered Certificates when the Prospectus is required by
law to be delivered in connection with sales of the Offered
Certificates by an Underwriter or dealer, any event shall occur as a
result of which it is necessary, in the reasonable opinion of counsel
for the Underwriters or counsel for the Company and the Guarantor, to
amend the Registration Statement or amend or supplement the Prospectus
in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if it is necessary, in the reasonable opinion of either
such counsel, to
<PAGE>
14
amend the Registration Statement or amend or supplement the Prospectus
to comply with law, forthwith to prepare and furnish, at its own
expense, to the Underwriters and to the dealers (whose names and
addresses you will furnish to the Company) to which the Offered
Certificates may have been sold by you on behalf of the Underwriters
and to any other dealers upon request, either amendments or supplements
to the Prospectus so that the statements in the Prospectus as so
amended or supplemented will not, in the light of the circumstances
when the Prospectus is delivered to a purchaser, be misleading or so
that the Registration Statement or the Prospectus, as so amended or
supplemented, will comply with law and to cause such amendments or
supplements to be filed promptly with the Commission.
(f) During the period mentioned in paragraph (e) above, to
notify you immediately, (i) of the effectiveness of any amendment to
the Registration Statement, (ii) of the transmittal to the Commission
for filing of any supplement to the Prospectus or any document that
would as a result thereof be incorporated by reference in the
Prospectus, (iii) of the receipt of any comments from the Commission
with respect to the Registration Statement, the Prospectus or the
Prospectus Supplement, (iv) of any request by the Commission for any
amendment to the Registration Statement or any supplement to the
Prospectus or for additional information relating thereto or to any
document incorporated by reference in the Prospectus and (v) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement, of the suspension of the
qualification of the Offered Certificates for offering or sale in any
jurisdiction, or of the institution or threatening of any proceeding
for any of such purposes; and to use every reasonable effort to prevent
the issuance of any such stop order or of any order suspending such
qualification and, if any such order is issued, to obtain the lifting
thereof at the earliest possible moment.
(g) To use their respective reasonable efforts, in cooperation
with the Underwriters, to qualify the Offered Certificates for offer
and sale under the securities laws of such states and other
jurisdictions as you may reasonably request and to maintain such
qualifications in effect for so long as required for the distribution
of such Offered Certificates; PROVIDED, HOWEVER, that neither the
Company nor the Guarantor shall be obligated to file any general
consent to service of process or to qualify as a foreign corporation or
as a dealer in securities in any jurisdiction in which it is not so
qualified or to subject itself to taxation in respect of doing business
in any jurisdiction in which it is not otherwise so subject. The
Company and the Guarantor will use their reasonable efforts to file
such statement and reports as may be required by the laws of each
jurisdiction in which the Offered Certificates have been qualified as
above provided. The Company and the Guarantor will also supply you with
such information as is necessary for the determination of legality of
the Offered Certificates for investment under the laws of such
jurisdictions as you may reasonably request.
(h) To make generally available to the Guarantor's security
holders as soon as practicable, but not later than 45 days after the
close of the period covered thereby, an
<PAGE>
15
earnings statement of the Guarantor (in form complying with the
provisions of Rule 158 of the Securities Act), covering (i) a period of
12 months beginning after the effective date of the Registration
Statement and any post-effective amendment thereof but not later than
the first day of the Guarantor's fiscal quarter next following such
effective date and (ii) a period of 12 months beginning after the date
of this Agreement but not later than the first day of the Guarantor's
fiscal quarter next following the date of this Agreement.
(i) For a period of two years after the Closing Date, to make
available upon request to the Underwriters, copies of all annual
reports, quarterly reports and current reports filed with the
Commission on Forms 10-K, 10-Q and 8-K, or such other similar forms as
may be designated by the Commission, and such other documents, reports
and information as shall be furnished by the Company or the Guarantor
to the holders of Offered Certificates or to their security holders
generally provided that at such time the Guarantor is required to
furnish such reports under the Exchange Act.
(j) Between the date of this Agreement and the Closing Date,
not to offer, sell or enter into any agreement to sell, directly or
indirectly, any equipment notes, pass through certificates, equipment
trust certificates or equipment purchase certificates secured by
aircraft owned or leased by the Company or the Guarantor (or rights
relating thereto) other than the Offered Certificates or Equipment
Notes relating thereto, without your prior written consent.
(k) During the period when a prospectus relating to the
Offered Certificates is required to be delivered under Section 5(c) of
the Securities Act, to file promptly all documents required to be filed
with the Commission pursuant to Section 13, 14 or 15(d) of the Exchange
Act.
(l) To comply to the best of their abilities with the
Securities Act, the Exchange Act and the Trust Indenture Act so as to
permit the completion of the distribution of the Offered Certificates
as contemplated in this Agreement and in the Prospectus.
SECTION 6. PAYMENT OF EXPENSES. The Company and the Guarantor will pay
or cause to be paid all costs and expenses incident to the performance of their
obligations under this Agreement, including, without limitation, (a) the
preparation, printing and filing of the Registration Statement (including
financial statements and exhibits), as originally filed and as amended, any
Preliminary Prospectus Supplement and the Prospectus and any amendments or
supplements thereto, and the cost of furnishing copies thereof to the
Underwriters, (b) the printing or processing and distribution of this Agreement,
the Offered Certificates, the Operative Documents, the Blue Sky Survey and any
Legal Investment Survey, (c) the delivery of the Offered Certificates, (d) the
fees and disbursements of counsel and accountants for the Guarantor and the
Company, (e) the qualification of the Offered Certificates under the applicable
securities laws in accordance with Section 5(g), including filing fees and
reasonable fees and disbursements of counsel for the Underwriters in connection
therewith and in connection with
<PAGE>
16
the Blue Sky Survey, (f) any fees charged by rating agencies for rating the
Offered Certificates (including annual surveillance fees related to the Offered
Certificates as long as they are outstanding), (g) the fees and expenses of the
Trustee, the Subordination Agent, the Liquidity Provider, the Depositary, the
Escrow Agent and the Paying Agent, including the reasonable fees and
disbursements of their respective counsel for the Trustee, in connection with
the Offered Certificates and the Operative Documents, (h) the fees and
disbursements of counsel for the Underwriters, (i) all fees and expenses
relating to appraisals of the Aircraft and (j) all other reasonable
out-of-pocket expenses incurred by the Underwriters in connection with the
transactions contemplated by this Agreement. The Guarantor and the Company will
also cause to be paid all expenses incident to the performance of its
obligations under the Leases and the Indentures and each of the other agreements
and instruments referred to in the Indentures and the Participation Agreements.
If this Agreement is terminated by the Underwriters in accordance with
the provisions of Sections 4 or 8, the Company and the Guarantor, jointly and
severally, agree to reimburse the Underwriters for all their reasonable
out-of-pocket expenses, including the fees and disbursements of counsel for the
Underwriters.
SECTION 7. INDEMNIFICATION AND CONTRIBUTION. (a) The Company and the
Guarantor, jointly and severally, agree to indemnify and hold harmless each
Underwriter and each person, if any, who controls such Underwriter within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act from and against any and all losses, claims, damages and liabilities
(including, without limitation, any legal or other expenses reasonably incurred
by any Underwriter or any such controlling person in connection with defending
or investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof, any Preliminary Prospectus Supplement or the
Prospectus (as amended or supplemented if the Company or the Guarantor shall
have furnished any amendments or supplements thereto), or caused by any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages or liabilities are caused by any such
untrue statement or omission or alleged untrue statement or omission based upon
information relating to any Underwriter furnished in writing to the Guarantor or
the Company by or on behalf of any Underwriter expressly for use therein;
PROVIDED that such indemnity with respect to the Prospectus shall not inure to
the benefit of any Underwriter (or any person controlling such Underwriter) from
whom the person asserting any such loss, claim, damage or liability purchased
the Offered Certificates which are the subject thereof if such person was not
sent a copy of the Prospectus at or prior to the confirmation of the sale of
such Offered Certificates to such person in any case where such delivery is
required by the Securities Act and the untrue statement or omission of a
material fact contained in such Preliminary Prospectus Supplement was corrected
in such subsequent Prospectus, unless such failure to deliver the Prospectus was
a result of noncompliance by the Company and the Guarantor with their delivery
requirements set forth in Section 5 hereof.
<PAGE>
17
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company and the Guarantor, each of their directors, each
of their officers who signed the Registration Statement and each person, if any,
who controls the Company or the Guarantor within the meaning of either Section
l5 of the Securities Act or Section 20 of the Exchange Act to the same extent as
the foregoing indemnity from the Company and the Guarantor to such Underwriter,
but only with reference to information relating to such Underwriter furnished in
writing to the Guarantor or the Company by or on behalf of any Underwriter
expressly for use in the Registration Statement, any Preliminary Prospectus
Supplement, the Prospectus or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to either of the two preceding paragraphs, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing. An indemnifying
party may participate at its own expense in the defense of such action. If it so
elects within a reasonable time after receipt of such notice, an indemnifying
party, jointly with any other indemnifying parties receiving such notice, may,
except as provided in the immediately following sentence, assume the defense of
such action, with counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party may
designate in such proceeding and shall pay the fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any indemnified
party shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them. It
is understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel) for all such
indemnified parties and that all such fees and expenses shall be reimbursed as
they are incurred. Such firm shall be designated in writing by
_________________________________, in the case of parties indemnified pursuant
to paragraph (a) above, and by the Company or the Guarantor, in the case of
parties indemnified pursuant to paragraph (b). The indemnifying party shall not
be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened proceeding
in respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such proceeding.
<PAGE>
18
(d) If the indemnification provided for in paragraphs (a) and (b) of
this Section 7 is unavailable to an indemnified party or insufficient in respect
of any losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Guarantor on the one hand and the
Underwriters on the other hand from the offering of the Offered Certificates or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company and the Guarantor on the one hand and of the Underwriters on the
other hand in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Guarantor
on the one hand and the Underwriters on the other hand in connection with the
offering of the Offered Certificates shall be deemed to be in the same
respective proportions as the net proceeds from the offering of the Offered
Certificates (before deducting expenses) received by the Company and the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover of the Prospectus, bear to the
aggregate public offering price of the Offered Certificates. The relative fault
of the Company and the Guarantor on the one hand and of the Underwriters on the
other hand shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or the Guarantor or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Underwriters' respective obligations to contribute
pursuant to this Section 7 are several in proportion to the respective principal
amounts of Offered Certificates they have purchased hereunder, and not joint.
(e) The Company, the Guarantor and the Underwriters agree that it would
not be just or equitable if contribution pursuant to this Section 7 were
determined by PRO RATA allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to in paragraph (d) above. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in paragraph (d) above shall be
deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 7, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Offered
Certificates underwritten by it and distributed to the public were offered to
the public exceeds the amount of any damages that such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
<PAGE>
19
The remedies provided for in this Section 7 are not exclusive and shall not
limit any rights or remedies which may otherwise be available to any indemnified
party at law or in equity.
(f) The indemnity and contribution provisions contained in this Section
7 and the representations and warranties of the Company or the Guarantor
contained in this Agreement shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement, (ii) any investigation made
by or on behalf of any Underwriter or any person controlling any Underwriter or
by or on behalf of the Guarantor or Company, its officers or directors or any
person controlling the Guarantor or the Company and (iii) acceptance of and
payment for any of the Offered Certificates.
SECTION 8. TERMINATION OF AGREEMENT. (a) (i) This Agreement shall be
subject to termination in your absolute discretion, by notice given to the
Company, if after the execution and delivery of this Agreement and prior to the
Closing Date (A) trading generally shall have been suspended or materially
limited on the New York Stock Exchange or the Nasdaq National Market, (B)
trading of any securities of the Guarantor or the Company shall have been
suspended on any exchange or in any over-the-counter market, (C) a general
moratorium on commercial banking activities in New York shall have been declared
by either Federal or New York State authorities, or (D) there shall have
occurred any outbreak or escalation of hostilities involving the United States
or any calamity or crisis and (ii) in the case of any of the events specified in
clauses (i)(A) through (D), such event singly or together with any other such
event makes it, in your reasonable judgment, impracticable to market the Offered
Certificates on the terms or in the manner contemplated in the Prospectus or
inadvisable to enforce contracts for the sale of the Offered Certificates.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party, except
to the extent provided in Section 6. Notwithstanding any such termination, the
provisions of Section 7 shall remain in effect.
(c) This Agreement may also terminate pursuant to the provisions of
Section 4, with the effect stated in such Section.
SECTION 9. DEFAULT. If, on the Closing Date any one or more of the
Underwriters shall fail or refuse to purchase Offered Certificates that it has
or they have agreed to purchase hereunder on such date, and the aggregate
principal amount of Offered Certificates which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than one-tenth
of the aggregate principal amount of the Offered Certificates to be purchased on
such date, the other Underwriters shall be obligated severally in the
proportions that the principal amount of Offered Certificates specified to be
purchased by them on Schedule II bears to the aggregate principal amount of
Offered Certificates specified to be purchased by all such non-defaulting
Underwriters, or in such other proportions as you may specify, to purchase the
Offered Certificates which such defaulting Underwriter or Underwriters agreed
but failed or refused to purchase on such date; PROVIDED that in no event shall
the principal amount of Offered
<PAGE>
20
Certificates that any Underwriter has agreed to purchase pursuant to Section 2
be increased pursuant to this Section 9 by an amount in excess of one-ninth of
such principal amount of Offered Certificates without the written consent of
such Underwriter. If on the Closing Date any Underwriter or Underwriters shall
fail or refuse to purchase Offered Certificates and the aggregate principal
amount of Offered Certificates with respect to which such default occurs is more
than one-tenth of the aggregate principal amount of Offered Certificates to be
purchased on such date, and arrangements satisfactory to you and the Company for
the purchase of such Offered Certificates are not made within 36 hours after
such default, this Agreement shall terminate without liability on the part of
any non-defaulting Underwriter, the Company or the Guarantor, except that the
Company and the Guarantor will continue to be liable for the payment of expenses
for any non-defaulting Underwriter to the extent set forth in Section 6. In any
such case either you or the Company shall have the right to postpone the Closing
Date, but in no event for longer than seven days, in order that the required
changes, if any, in the Registration Statement and in the Prospectus or in any
other documents or arrangements may be effected. Any action taken under this
paragraph shall not relieve any defaulting Underwriter from liability in respect
of any default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Guarantor or the
Company to comply with the terms or to fulfill any of the conditions of this
Agreement, or if for any reason the Guarantor or the Company shall be unable to
perform its obligations under this Agreement, the Company will reimburse the
Underwriters or such Underwriters as have so terminated this Agreement with
respect to themselves, severally, for all out-of-pocket expenses (including the
reasonable fees and disbursements of their counsel) reasonably incurred by such
Underwriters in connection with this Agreement or the offering contemplated
hereunder.
SECTION 10. COUNTERPARTS. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
SECTION 11. GOVERNING LAW AND TIME. This Agreement shall be governed by
and construed in accordance with the internal laws of the State of New York.
Specified times of the day refer to New York City time.
SECTION 12. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if delivered,
mailed, or transmitted by any standard form of telecommunication, including
telex or facsimile transmission. Notices to the Underwriters shall be directed
to ____________________________________________, Telephone No.: ____________,
Facsimile No.: ____________, Attention: ________________. Notices to the Company
shall be directed to it by mail at Northwest Airlines, Inc., 5101 Northwest
Drive, St. Paul, Minnesota 55111, with a copy to Northwest Airlines Corporation
at the same address, attention of Vice President-Finance and Treasurer, or by
delivery to the Company and the Guarantor at 2700 Lone Oak Parkway, Eagan,
Minnesota 55121, attention of Vice President-Finance and Treasurer.
<PAGE>
21
SECTION 13. PARTIES. This Agreement is made solely for the benefit of
the Underwriters, the Company, the Guarantor and, to the extent expressed, any
person controlling the Company, the Guarantor or the Underwriters within the
meaning of Section 15 of the Securities Act, and their respective executors,
administrators, successors and assigns and no other person shall acquire or have
any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include any purchaser, as such purchaser, from the
Underwriters of the Offered Certificates.
SECTION 14. HEADINGS. The headings of the sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed a
part of this Agreement.
-------------------------
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
instrument will become a binding agreement among the Company, the Guarantor and
each Underwriter in accordance with its terms.
Very truly yours,
NORTHWEST AIRLINES, INC.
By:
------------------------------------
Name:
Title:
NORTHWEST AIRLINES CORPORATION
By:
------------------------------------
Name:
Title:
Accepted as of the date first above written:
[Underwriters]
By:
--------------------------------
By: --------------------------------
Name:
Title:
<PAGE>
EXHIBIT A-1
Form of Opinion of
Simpson Thacher & Bartlett
(i) The Guarantor has been duly incorporated and is validly existing
and in good standing as a corporation under the laws of the State of Delaware
and has full corporate power and authority to conduct its business as described
in the Registration Statement and the Prospectus.
(ii) The Basic Agreement and each Pass Through Agreement have been duly
authorized, executed and delivered by the Guarantor and constitute valid and
legally binding obligations of the Guarantor, the Company and the Trustee
enforceable against the Guarantor, the Company and the Trustee in accordance
with their terms.
(iii) The Basic Agreement has been duly qualified under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act").
(iv) Assuming the Certificates have been duly authorized, executed,
authenticated and issued by the Trustee, upon payment and delivery therefor in
accordance with the Underwriting Agreement, the Certificates will constitute
valid and legally binding obligations of the Trustee enforceable against the
Trustee in accordance with their terms and entitled to the benefits of the
applicable Pass Through Agreement.
(v) No consent, approval, authorization, order, registration or
qualification of or with any federal or New York governmental agency or body or
any Delaware government agency or body acting pursuant to the Delaware General
Corporation Law or, to such counsel=s knowledge, any federal or New York court
or any Delaware court acting pursuant to the Delaware General Corporation Law is
required for the valid authorization, issuance and delivery of the Certificates,
the valid authorization, execution and delivery by the Company, or the Guarantor
of, and the performance by the Company, and the Guarantor of their respective
obligations under, the Basic Agreement, the Pass Through Agreements, the Note
Purchase Agreement and the Underwriting Agreement, except such as have been
obtained and made under the Act and Trust Indenture Act and such as may be
required under state securities laws of the Federal Aviation Act of 1958, as
amended (the "Federal Aviation Act").
(vi) Although we are not aware of any judicial authority, none of the
Trusts is required to be registered under the Investment Company Act of 1940, as
amended (the "Investment Company Act"). Neither the Guarantor nor the Company is
an "investment company" within the meaning of and subject to regulation under
the Investment Company Act.
(vii) Each of the Escrow Agreements and the Note Purchase Agreement is
a valid and binding obligation of the Paying Agent and the Trustee that is a
party thereto enforceable against such Paying Agent and Trustee in accordance
with its terms. The Note
A-1-1
<PAGE>
Purchase Agreement is a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms.
(viii) Each of the Escrow Agreements creates a valid escrow under New
York law and a valid equitable interest in the escrowed property in favor of the
corresponding Trustee. Neither a New York court nor a United States federal
court applying New York law or the Bankruptcy Code (in the case of a holder of
an Escrow Receipt that is eligible for relief under Section 109 of the
Bankruptcy Code), if properly presented with the issue and after having properly
considered such issue, would permit any holder of an Escrow Receipt to terminate
the related Escrow Agreement, except in accordance with its terms.
(ix) So long as an Escrow Agreement has not been terminated and whether
or not any insolvency proceeding has been commenced, creditors of any person
that is a holder of an Escrow Receipt issued under the Escrow Agreement, a
receiver, liquidator, or holder of a lien against the assets of any such person,
and any trustee in bankruptcy of such person (if the person is eligible for
relief under Section 109 of the Bankruptcy Code) (collectively, the "Creditors")
may acquire valid claims or liens, as to the Deposits established under the
Deposit Agreement and as to the related Deposit Agreement and Escrow Agreement,
only against the rights of the holder of the Escrow Receipt under the Escrow
Agreement and do not have, and may not through the enforcement of such
Creditors' rights acquire, any greater right than the holder of the Escrow
Receipt with respect to the Deposits, Deposit Agreement or Escrow Agreement.
(x) No creditor of the Guarantor or any of its subsidiaries, and no
holder of a lien against the assets of any such person, such as trustees,
receivers or liquidators (whether or not any insolvency proceeding has been
commenced), may acquire valid claims or liens as to the Deposits and the related
Deposit Agreements and Escrow Agreements.
(xi) The Intercreditor Agreement, the Liquidity Facilities and the Note
Purchase Agreement constitute valid and legally binding obligations of the
Subordination Agent, enforceable against the Subordination Agent in accordance
with its terms. The Intercreditor Agreement constitutes a valid and legally
binding obligation of each Trustee, enforceable against such Trustee in
accordance with its terms.
(xii) Except as disclosed in the Prospectus, and to our knowledge,
there are no pending or threatened actions, suits or proceedings against the
Guarantor or any of its subsidiaries that are required to be disclosed in the
Registration Statement or the Prospectus that are not so disclosed.
(xiii) The Registration Statement has become effective under the Act,
the Prospectus has been filed in accordance with Rule 424(b) of the rules and
regulations of the Commission under the Act and, to our knowledge, no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been instituted or threatened by the
Commission.
A-1-2
<PAGE>
(xiv) The statements made in the Registration Statement and the
Prospectus under the captions "Description of the Certificates","Description of
the Deposit Agreements", "Description of the Escrow Agreements", "Description of
the Liquidity Facilities", "Description of the Intercreditor Agreement" and
"Description of the Equipment Notes" (other than the statements made under the
sub-caption "The Leases" about which we express no opinion), insofar as they
purport to constitute summaries of certain terms of documents referred to
therein, constitute accurate summaries of the terms of such documents in all
material respects.
(xv) The statements made in the Registration Statement and the
Prospectus under the caption "ERISA Considerations", insofar as such statements
purport to summarize certain legal matters referred to therein, constitute
accurate summaries thereof in all material respects.
(xvi) The Underwriting Agreement has been duly authorized, executed and
delivered by the Guarantor.
(xvii) Each of the Escrow Agreements, the Deposit Agreements and the
Note Purchase Agreement is a valid and binding obligation of the Escrow Agent
enforceable against the Escrow Agent in accordance with its terms.
(xviii) Assuming the Escrow Receipts applicable to an Escrow Agreement
have been duly authorized, executed and issued by the Escrow Agent, upon
delivery to the Depositary on behalf of the Escrow Agent of the initial escrow
amount specified in such Escrow Agreement, such Escrow Receipts will be entitled
to the benefits of such Escrow Agreement.
Such counsel may state that its opinion as set forth in paragraphs
(ii), (iv), (vii), (xi), (xvii) and (xviii) are subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
similar laws affecting creditors' rights generally, general equitable principles
(whether considered in a proceeding in equity or at law) and an implied covenant
of good faith and fair dealing. In addition such counsel shall also state that
they have not independently verified the accuracy, completeness or fairness of
the statements made or included in the Registration Statement, the Prospectus or
[relevant Exchange Act documents] (collectively, the "Exchange Act Documents")
and take no responsibility therefor, except as and to the extent set forth in
paragraphs (viii) and (ix) above, and in the course of the preparation by the
Company and the Guarantor of the Registration Statement and the Prospectus
(excluding the Exchange Act Documents), such counsel participated in conferences
with certain officers and employees of the Company and the Guarantor, with
representatives of the independent public accountants for the Company and the
Guarantor and with counsel to the Company and the Guarantor. Such counsel may
state that they did not prepare the Exchange Act Documents, however, such
counsel discussed the Exchange Act Documents with the Company and the Guarantor
and with counsel to the Company and the Guarantor prior to their filing with the
Commission, and, based upon such counsel's examination of the Registration
Statement, the Prospectus and the Exchange Act Documents, such counsel's
investigations made in connection with the preparation of Registration Statement
and the Prospectus (excluding the Exchange Act Documents) and such counsel's
participation in the conferences referred to above, (i) such
A-1-3
<PAGE>
counsel is of the opinion that the Registration Statement at the time such
Registration Statement became effective and the Prospectus (excluding the
Exchange Act Documents), as of ________ __, ____, complied as to form in all
material respects with the requirements of the Securities Act, the Trust
Indenture Act and the applicable rules and regulations of the Commission
thereunder and that the Exchange Act Documents complied as to form when filed in
all material respects with the requirements of the Exchange Act and the
applicable rules and regulations of the Commission thereunder, except that in
each case such counsel may state that it expresses no opinion with respect to
the financial statements or other financial data contained or incorporated by
reference in the Registration Statement, the Prospectus or the Exchange Act
Documents, and (ii) such counsel has no reason to believe that the Registration
Statement, at the time such Registration Statement became effective (including
the Exchange Act Documents on file with the Commission on such effective date)
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein not misleading or that the Prospectus (including the Exchange Act
Documents) as of ________ __, ____, or as of the Closing Date contains an untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, except that in each case such counsel may
state that it expresses no belief with respect to the financial statements and
other financial data contained or incorporated by reference in the Registration
Statement, the Prospectus or the Exchange Act Documents.
Insofar as the opinions expressed by such counsel relate to or are
dependent upon matters governed by the laws of the State of Minnesota, such
counsel may state that it has relied upon the opinion of the Office of the
General Counsel of the Company, delivered to you concurrently with such
counsel's opinion.
A-1-4
<PAGE>
EXHIBIT A-2
Form of Opinion of
Cadwalader, Wickersham & Taft
(i) The statements set forth under "Description of Equipment NotesCThe
Leases and Certain Provisions of the Owned Aircraft Indentures" in the
Prospectus Supplement, insofar as they purport to constitute summaries of
certain terms of the Form Aircraft Financing Documents referred to in such
caption, constitute accurate summaries of such terms of the Form Aircraft
Financing Documents in all material respects.
(ii) The statements set forth under "Description of the Equipment
NotesC Remedies" in the Prospectus Supplement, insofar as such statements
purport to summarize provisions of Section 1110 of the Bankruptcy Code, provide
a fair summary of such provisions.
(iii) The statements made in the Prospectus Supplement under the
caption "Certain U.S. Federal Income Tax Consequences", insofar as such
statements purport to summarize certain legal matters referred to therein,
constitute accurate summaries thereof in all material respects.
(iv) The Trust created by each Applicable Pass Through Trust Agreement
will not be classified as an association or a publicly traded partnership
taxable as a corporation for federal income tax purposes and will not be subject
to federal income tax.
<PAGE>
EXHIBIT B
Form of Opinion of the General Counsel
of the Guarantor and the Company
(i) The Company has been duly incorporated, is validly existing and in
good standing under the laws of the State of Minnesota with corporate power and
corporate authority under such laws to own, lease and operate its properties and
conduct its business as described in the Prospectus and to perform its
obligations under the Underwriting Agreement, the Pass Through Agreements and
the Operative Documents to which the Company is, or is to be, a party.
(ii) The Company is duly qualified to transact business as a foreign
corporation and is in good standing in each other jurisdiction in which it owns
or leases property of a nature, or transacts business of a type, that would make
such qualification necessary, except where the failure to so qualify or be in
good standing would not have a Material Adverse Effect.
(iii) The Guarantor is duly qualified to transact business as a foreign
corporation and is in good standing in the State of Minnesota.
(iv) The Company is a "citizen of the United States" (as defined in
Section 40102(a)(15) of Title 49 of the United States Code) and is an air
carrier operating under a certificate issued by the Secretary of Transportation
pursuant to Chapter 447 of Title 49, United States Code, for aircraft capable of
carrying 10 or more individuals or 6,000 pounds or more of cargo; there is in
force with respect to the Company an air carrier operating certificate issued
pursuant to Part 121 of the regulations under the Federal Aviation Act; all of
the outstanding shares of capital stock of the Company have been duly authorized
and validly issued and are fully paid and non-assessable and are owned by the
Guarantor, indirectly through Holdings and NWA Inc., each a Delaware
corporation, free and clear of any pledge, lien, security interest, charge,
claim, equity or encumbrance of any kind.
(v) To my knowledge, except as disclosed in the Exchange Act Documents,
there are no statutes or regulations, or any pending or threatened legal or
governmental proceedings, required to be described in the Prospectus that are
not described as required, nor any contracts or documents of a character
required to be described or referred to in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement that are not
described, referred to or filed as required.
(vi) The execution and delivery by the Guarantor, Holdings and/or the
Company, as the case may be, of the Underwriting Agreement and the Operative
Documents to which each, as the case may be, is a party, the issuance and sale
of the Offered Certificates, the issuance of the Escrow Receipts attached to the
Offered Certificates, the consummation by the Guarantor, Holdings and/or the
Company of the transactions contemplated therein and compliance by the
Guarantor, Holdings and/or the Company, as the case may be, with the terms
thereof, do not and will not result in any violation of the charter or by-laws
of the Guarantor, Holdings or the Company, and do not and will not result in a
breach of any of the terms or
<PAGE>
provisions of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance (except for Permitted Liens) upon
any property or assets of the Guarantor, Holdings or the Company under (A) any
indenture, mortgage, loan agreement, note, lease or other agreement or
instrument included or incorporated by reference as an exhibit to the Exchange
Act Documents (except for such breaches, defaults, liens, charges or
encumbrances that would not have a Material Adverse Effect) or included as an
exhibit to the Registration Statement (except for such breaches, defaults,
liens, charges or encumbrances that would not have a Material Adverse Effect),
(B) any existing law, rule or regulation of the State of Minnesota or the United
States of America applicable to the Guarantor, Holdings or the Company (other
than the securities or Blue Sky laws of the State of Minnesota, as to which laws
I express no opinion), or (C) any judgment, order or decree of any government,
governmental instrumentality or court, domestic or foreign, known to me and
having jurisdiction over the Guarantor, Holdings or the Company or any of their
respective properties.
(vii) Under any provision of law or regulation applicable to the
Company, Holdings or the Guarantor of the State of Minnesota or the United
States of America, no authorization, approval, consent, order or license of or
filing with or notice to any governmental agency or body or any court is
required for the valid authorization, issuance and delivery of the Offered
Certificates, the issuance of the Escrow Receipts attached to the Offered
Certificates, the valid authorization, execution and delivery by the Guarantor,
Holdings or the Company of, and the performance by the Company, Holdings and the
Guarantor of their respective obligations under, the Underwriting Agreement and
the Operative Documents, except such as are required under the securities or
Blue Sky laws of the State of Minnesota.
(viii) The Underwriting Agreement has been duly authorized, executed
and delivered by the Company.
(ix) The Exchange Act Documents (except for the financial statements
and schedules and other financial data included or incorporated by reference
therein or omitted therefrom, as to which I express no opinion), as of the dates
they were filed with the Commission, complied as to form in all material
respects with the requirements of the Exchange Act.
In addition counsel shall state that such counsel or lawyers on his
staff have participated in the preparation of the Registration Statement, the
Prospectus and the Exchange Act Documents and have participated in conferences
with certain officers and employees of the Company and the Guarantor, counsel
employed by the Company and the Guarantor, representatives of the independent
public accountants for the Company and the Guarantor, representatives of the
Underwriters and counsel for the Underwriters, at which conferences the contents
of the Registration Statement and Prospectus and related matters were discussed.
Such counsel shall also state that, although such counsel is not passing upon
and does not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement, the
Prospectus or the Exchange Act Documents and has not made any independent check
or verification thereof, on the basis of the participation of such counsel or
lawyers on his staff in the conferences referred to above and their examination
of the Registration
B-2
<PAGE>
Statement, the Prospectus and the Exchange Act Documents, nothing has come to
such counsel's attention that leads him to believe that the Registration
Statement, as of the effective date hereof (including the Exchange Act Documents
on file with the Commission on such effective date) contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
the Prospectus (including the Exchange Act Documents) as of its date or at the
Closing Date contained or contains an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except that such counsel need express no opinion with
respect to the financial statements, schedules and other financial data included
or incorporated or deemed to be incorporated by reference in the Registration
Statement or Prospectus or with respect to the Statement of Qualification on
Form T-1.
B-3
<PAGE>
EXHIBIT C
[Form of Opinion of
Bingham Dana LLP
(i) State Street is a Massachusetts trust company, validly formed and
authorized to operate as a state-chartered trust company under the laws of the
Commonwealth of Massachusetts and, in its individual capacity or as Pass Through
Trustee, Subordination Agent or Paying Agent, as the case may be, has the
requisite corporate and trust power and authority to execute, deliver and
perform its obligations under the Operative Documents to which it is a party
and, in its capacity as Pass Through Trustee, to issue and execute the
Certificates delivered on the date hereof.
(ii) State Street, in its individual capacity or as Pass Through
Trustee, Subordination Agent or Paying Agent, as the case may be, has duly
authorized the Operative Documents to which it is a party, and has duly executed
and delivered the Operative Documents to which it is a party, which constitute
valid and binding obligations of State Street, in its individual capacity or as
Pass Through Trustee, Subordination Agent or Paying Agent, as the case may be,
enforceable against State Street, in its individual capacity or as Pass Through
Trustee, Subordination Agent or Paying Agent, as the case may be, in accordance
with their respective terms.
(iii) The Certificates issued on the date hereof have been duly
authorized and validly executed, authenticated, issued and delivered by State
Street, in its capacity as Pass Through Trustee, pursuant to the Pass Through
Trusts, and such Certificates constitute valid and binding obligations of State
Street, in its capacity as Pass Through Trustee, enforceable against State
Street, as Pass Through Trustee, in accordance with their respective terms and
holders of such Certificates are entitled to the benefits of the Pass Through
Trusts.
(iv) The authorization, execution, delivery and performance by State
Street, in its individual capacity or as Pass Through Trustee, Subordination
Agent or Paying Agent, as the case may be, of the Operative Documents to which
it is a party and the consummation of the transactions therein contemplated and
compliance with the terms thereof and issuance on the date hereof of the
Certificates under the Pass Through Trusts do not and will not result in the
violation of the provisions of the charter documents or by-laws of State Street
and, to the best of our knowledge, do not conflict with, or result in a breach
of any terms or provisions of, or constitute a default under, or result in the
creation or the imposition of any lien, charge or encumbrance upon any property
or assets of State Street under any indenture, mortgage or other agreement or
instrument, in each case known to us, to which State Street is a party or by
which it is bound, or violates any applicable Massachusetts or federal law, rule
or regulation governing State Street's banking or trust powers, or, to the best
of our knowledge, of any judgment, order or decree, in each case known to us,
applicable to State Street of any court, regulatory body, administrative agency,
government or governmental body having jurisdiction over State Street.
<PAGE>
(v) No authorization, approval, consent, license or order of, giving of
notice to, registration with, or taking of any other action in respect of, any
federal or state governmental authority or agency pursuant to any federal or
Massachusetts law governing the banking or trust powers of State Street is
required for the authorization, execution, delivery and performance by State
Street, in its individual capacity or as Pass Through Trustee, Subordination
Agent or Paying Agent, as the case may be, of the Operative Documents to which
it is a party or the consummation of any of the transactions by State Street, in
its individual capacity or as Pass Through Trustee, Subordination Agent or
Paying Agent, as the case may be, contemplated thereby or the issuance of the
Certificates on the date hereof under the Pass Through Trusts (except as shall
have been duly obtained, given or taken); and such authorization, execution,
delivery, performance, consummation and issuance do not conflict with or result
in a breach of any such law.
(vi) There are no taxes, fees or other governmental charges payable
under the laws of the Commonwealth of Massachusetts or any political subdivision
of such state in connection with the execution and delivery by State Street, in
its individual capacity or as Pass Through Trustee, Subordination Agent or
Paying Agent, as the case may be, of the Operative Documents (except for taxes
on any fees payable to State Street in its individual capacity) or in connection
with the issuance, execution and delivery of the Certificates issued on the date
hereof by State Street, as Pass Through Trustee, pursuant to the Pass Through
Trusts (except for taxes on any fees payable to State Street in its individual
capacity), and there are no taxes, fees or other governmental charges payable by
the Subordination Agent imposed by the Commonwealth of Massachusetts or any
political subdivision of such state in connection with the acquisition,
possession or ownership by the Subordination Agent of any of the Equipment Notes
(except for taxes on any fees payable to State Street in its individual
capacity).
(vii) The statements in the February 4, 1999 Prospectus Supplement to
the Northwest Airlines, Inc. Prospectus dated February 27, 1998 under the
caption "Certain Massachusetts Taxes" to the extent that they constitute matters
of law or legal conclusions with respect thereto, have been reviewed by us and
are correct in all material respects.
(viii) To our knowledge, but without having investigated any
governmental records or court dockets, and without having made any other
independent investigation, there are no proceedings pending or overtly
threatened in writing against or affecting State Street in any court or before
any governmental authority, agency, arbitration board or tribunal which, if
adversely determined, individually or in the aggregate, could reasonably be
expected to affect materially and adversely the Pass Through Trusts or affect
the right, power and authority of State Street, in its individual capacity or as
Pass Through Trustee, Subordination Agent or the Paying Agent, as the case may
be, to enter into or perform its obligations under the Operative Documents to
which it is a party or to issue the Certificates on the date hereof.]
C-2
<PAGE>
EXHIBIT D
[Form of Opinion of
Ray, Quinney & Nebeker
1. The Escrow Agent is a national banking association duly organized
and validly existing in good standing under the laws of the United States and
has the full corporate power, authority and legal right under the laws of the
United States of America pertaining to its banking, trust and fiduciary powers
to conduct its business and operations as currently conducted and to enter into,
execute and deliver the Operative Documents (as defined in the Underwriting
Agreement) to which the Escrow Agent is a party (the '`Transaction Documents")
and the Escrow Receipts and perform its obligations thereunder.
2. The execution, delivery and performance by the Escrow Agent of the
Transaction Documents and the Escrow Receipts, the consummation by the Escrow
Agent of the transactions contemplated thereby and compliance by the Escrow
Agent with the terms thereof (i) have been duly authorized by all necessary
corporate action on the part of the Escrow Agent and do not require any
stockholder approval or consent of any trustee or holder of any indebtedness or
obligations of the Escrow Agent, (ii) do not and will not contravene, or result
in a breach of or constitute any default under its charter documents or by-laws,
or the provisions of any indenture, mortgage, contract or other agreement known
to us, to which it is party or by which it or any of its properties is or may be
bound or affected and (iii) does not and will not contravene any law or
governmental rule or regulation of the United States of America or the State of
Utah, or any order, judgment, injunction or decree known to us and applicable to
or binding on the Escrow Agent or by which any of its properties is bound, or
require the consent or approval of, the giving of notice to, or the registration
with, or the taking of any action in respect of, or under, the laws of the
United States of America or the laws of the State of Utah or any subdivision or
agency thereof.
3. Each of the Transaction Documents and the Escrow Receipts has been
duly executed and delivered by the Escrow Agent and assuming that each such
agreement is the legal, valid and binding obligation of each other party
thereto, is the legal, valid and binding obligation of the Escrow Agent,
enforceable against the Escrow Agent in accordance with its terms.
4. To our knowledge, there are no pending or threatened actions, suits,
investigations or proceedings (whether or not purportedly on behalf of the
Escrow Agent) against or affecting the Escrow Agent or any of its property
before or by any court or administrative agency which, individually or in the
aggregate, if adversely determined, (A) would adversely affect the ability of
the Escrow Agent to perform its obligations under any of the Transaction
Documents or the Escrow Receipts or (B) would call into question or challenge
the validity of the Transaction Documents or the Escrow Receipts or the
enforceability thereof.]
<PAGE>
EXHIBIT E
[Form of Opinion of
Milbank, Tweed, Hadley & McCloy
(1) each Relevant Document constitutes the legal, valid and binding
obligation of Citibank, enforceable against Citibank in accordance with its
terms, except as may be limited by bankruptcy, conservatorship, receivership,
insolvency, reorganization, moratorium, fraudulent conveyance or transfer or
other similar laws relating to or affecting the rights of creditors of national
banking associations generally and except as the enforceability of such Relevant
Document is subject to the application of general principles of equity
(regardless of whether considered in a proceeding in equity or at law),
including, without limitation, (a) the possible unavailability of specific
performance, injunctive relief or any other equitable remedy and (b) concepts of
materiality, reasonableness, good faith and fair dealing; and
(2) the payment obligations of Citibank under each Liquidity Agreement
rank at least PARI PASSU in right of payment with all other unsecured and
unsubordinated obligations of Citibank (other than those obligations preferred
by mandatory operation of law and with the exception of any rights of set-off or
counterclaim which may be asserted against Citibank).]
<PAGE>
EXHIBIT F-1
[Form of Opinion of
Clifford Chance
(i) ABN AMRO Bank N.V. is duly registered with the Commercial Register
of the Amsterdam Chamber of Commerce as (i) a public company with limited
liability (NAAMLOZE VENNOOTSCHAP), (ii) incorporated on 29 March 1824 and (iii)
validly existing under the laws of The Netherlands and has the corporate power
under the laws of The Netherlands to enter into the Transaction Documents and to
perform its obligations thereunder through its Chicago Branch.
(ii) The execution, delivery and performance of the Transaction
Documents by the Chicago Branch of ABN AMRO Bank N.V. have been duly authorized
by all necessary corporate action on the part of ABN AMRO Bank N.V. and do not
contravene any provision of applicable law or regulation in The Netherlands or
of the Articles of Association and no further authorization by or any corporate
action of ABN AMRO Bank N.V. is required in connection with the execution,
delivery and performance by it of the Transaction Documents.
(iii) Assuming the Transaction Documents constitute legal, valid and
binding obligations under the laws of the State of New York, and assuming due
authorization, execution and delivery thereof by all other parties to such
Transaction Documents, the Transaction Documents, when executed and delivered by
Claudia C. Heldring and Carla Waggoner of the Chicago Branch of ABN AMRO Bank
N.V., will constitute legal, valid and binding obligations of ABN AMRO Bank N.V.
enforceable against ABN AMRO Bank N.V. in accordance with their terms, except as
such enforceability may be limited by bankruptcy, insolvency, liquidation,
reorganization, moratorium or other similar laws affecting the rights of
creditors against ABN AMRO Bank N.V. generally, as the same may be applied in
the event of bankruptcy, insolvency, liquidation or reorganization of, or other
similar occurrence with respect to, ABN AMRO Bank N.V. or in the event of a
moratorium or similar occurrence affecting ABN AMRO Bank N.V., and subject to
the provisions of Chapter X of the Act on the Supervision of the Credit System
1992 (WET TOEZICHT KREDIETWEZEN 1992) regarding emergency measures for credit
institutions in The Netherlands.
(iv) No consent, approval, authorization or order of, or filing with
any governmental authority or body or any court in The Netherlands is required
as a condition to the enforceability of ABN AMRO Bank N.V.'s obligations under
the Transaction Documents.
(v) The courts of The Netherlands will observe and give effect to the
choice of the laws of the State of New York as the laws governing the
Transaction Documents in any proceedings in relation thereto on the basis and
within the scope of and subject to the limitations imposed by the 1980 Rome
Convention on the Law Applicable to Contractual Obligations (the "Rome
Convention").
<PAGE>
With the express reservation that as Dutch lawyers we are not qualified
to assess the exact meaning and consequences of the terms of the Transaction
Documents under the laws of the State of New York, on the face of such document
we are not aware of any provision that is likely to be manifestly incompatible
with Netherlands' public policy (a limitation on the chosen law arising under
article 16 Rome Convention) or that is likely to give rise to situations where
mandatory rules of Netherlands' law will prevail over the chosen law of such
document (a limitation on the chosen law arising under article 7 Rome
Convention). It should also be noted that we are not aware of any published
order, ruling or decision of a Netherlands' court, in which such a court has
given overriding effect to foreign mandatory rules pertaining to a law other
than the chosen (or applicable) law or Netherlands' law (a limitation on the
chosen law arising under article 7(1) Rome Convention) in commercial or
financial litigation brought before such courts.
(vi) In the absence of an applicable treaty or convention providing for
the recognition and enforcement of judgments in civil and commercial matters
which is binding in The Netherlands, a judgment rendered by a foreign court
against ABN AMRO Bank N.V. will not be recognized and enforced by the courts of
The Netherlands and in order to obtain a judgment that is enforceable against
ABN AMRO Bank N.V., it will be necessary to relitigate the matter before the
competent court of The Netherlands and to submit the judgment rendered by the
foreign court in the course of such proceedings, in which case the Netherlands'
court may give such effect to the foreign judgment as it deems appropriate.
There are no treaties between The Netherlands and the United States of America
on the recognition and enforcement of civil or commercial judgments. However,
according to current practice, based upon case law, Netherlands' courts will in
all probability recognize, give "RES JUDICATA" to and render a judgment in
accordance with a foreign judgment if and to the extent that the following
conditions are met:
(a) the foreign court rendering the judgment has jurisdiction
over the matter on internationally acceptable grounds (e.g. if the
parties have agreed, for example in a contract, to submit their
disputes to the foreign court) and has conducted the proceedings in
accordance with generally accepted principles of fair trial (e.g. after
proper service of process);
(b) the foreign judgment is final and definite; and
(c) such recognition is not in conflict with Netherlands'
public policy (i.e. a fundamental principle of Dutch law) or an
existing Netherlands' judgment.
(vii) Assuming that under the laws of the State of New York to which
they are expressed to be subject, and any other relevant laws (other than those
of The Netherlands) the Transaction Documents constitute general unsecured and
unsubordinated obligations of ABN ARGO Bank N.V., the payment obligations of ABN
AMRO Bank N.V. under the Transaction Documents rank at least PARI PASSU with all
other unsecured and unsubordinated obligations of ABN AMRO Bank N.V. (other than
those obligations preferred by mandatory operation of law and the exception of
any rights of set-off or counter-claim which may be asserted against ABN AMRO
Bank N.V.).
F-1-2
<PAGE>
(viii) Under the laws of The Netherlands, the submission to the
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, contained in Section 14 of the Indemnity Agreement constitutes an
effective submission by ABN AMRO Bank N.V. to the jurisdiction of such courts.
(ix) Payments of interest and principal in respect of the Deposits may
be made free of withholding or deduction for or on account of any taxes of
whatsoever nature imposed, levied, withheld, or assessed by The Netherlands or
any political subdivision or taxing authority thereof or therein.]
F-1-3
<PAGE>
EXHIBIT F-2
[Form of Opinion of Vedder, Price, Kaufman & Kammholz
as U. S. counsel for the Depositary
(i) Each of the Deposit Agreements constitutes the legal, valid and
binding obligation of ABN AMRO enforceable against it in accordance with its
terms, except as such enforcability is limited by (i) bankruptcy, receivership,
conservatorship, insolvency, fraudulent transfer, liquidation, reorganization,
moratorium or other laws affecting creditors' rights and remedies generally from
time to time in effect as the same may be applied in the event of the
bankruptcy, receivership, conservatorship, insolvency, moratorium, liquidation,
reorganization or similar situation of any such party, or other similar
occurrence with respect to any such party or by laws affecting the rights of
creditors or depository institutions, (ii) the possible judicial application of
foreign laws or governmental action affecting creditors' rights generally, (iii)
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law), public policy and applicable
law relating to fiduciary duties, and (iv) any implied covenant of good faith
and fair dealing.
(ii) ABN AMMO Bank N.V. is licensed by the Office of Banks and Real
Estate of the State of Illinois to maintain its branch at 135 LaSalle Street,
Chicago, Illinois (the "Branch"), in accordance with the banking law of the
State of Illinois and the Branch has the full power, authority and legal right
to execute and deliver the Deposit Agreements.
(iii) The execution, delivery and performance by ABN AMRO of the
Deposit Agreements, and the consummation of the transactions contemplated
therein do not violate any banking law, or any governmental rule or regulation
relating thereto, of the United States of America, the State of Illinois or the
State of New York.
(iv) No authorization, consent, approval or other action by, and no
notice to or filing with, any banking authority or regulatory body of the United
States of America, the State of Illinois or the State of New York is required
for the due execution, delivery and performance by ABN AMRO of the Deposit
Agreements other than administrative and ministerial filings which ABN AMRO is
obligated to make in the ordinary course of its business (which filings we have
assumed have been and will continue to be made in a timely manner).
(v) The payment obligations of ABN AMRO under the Deposit Agreements
constitute unsecured and unsubordinated obligations of ABN AMRO.]
<PAGE>
SCHEDULE I
Pass Through Certificates, Series ______
Pass Through Aggregate Final
Certificate Principal Interest Distribution
Designation Amounts Rate Date
- --------------- ------------- ---------- --------------
<PAGE>
SCHEDULE II
Pass Through Certificates, Series ______
<PAGE>
SCHEDULE III
NORTHWEST AIRLINES, INC.
Underwriting fees, discounts,
commissions or other
compensation:
<PAGE>
Exhibit 4(i)
NORTHWEST AIRLINES CORPORATION
NORTHWEST AIRLINES, INC.
and
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION
as Trustee
PASS THROUGH TRUST AGREEMENT
Dated as of June 3, 1999
<PAGE>
Reconciliation and tie between Pass Through Trust Agreement dated as of June 3,
1999 and the Trust Indenture Act of 1939. This reconciliation does not
constitute part of the Pass Through Trust Agreement.
<TABLE>
<CAPTION>
Trust Indenture Act Pass Through Trust
of 1939 Section Agreement Section
- ------------------- ------------------
<S> <C>
310(a)(1) 7.07
(a)(2) 7.07
312(a) 3.09; 8.01; 8.02
313(a) 7.06
314(a) 8.04(a) - (c)
(a)(4) 8.04(d)
(c)(1) 1.02
(c)(2) 1.02
(d)(1) 7.12
11.01
(d)(2) 7.12; 11.01
(d)(3) 2.01
(e) 1.02
315(b) 7.01
316(a)(last sentence) 1.01
(a)(1)(A) 6.04
(a)(1)(B) 6.05
(b) 6.06
(c) 1.04(d)
317(a)(1) 6.03
(b) 7.12
318(a) 12.06
</TABLE>
<PAGE>
TABLE OF CONTENTS
<TABLE>
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ARTICLE I
DEFINITIONS
<S> <C> <C>
Section 1.01. Definitions...........................................................2
Section 1.02. Compliance Certificates and Opinions..................................9
Section 1.03. Form of Documents Delivered to Trustee...............................10
Section 1.04. Acts of Certificateholders...........................................10
ARTICLE II
ORIGINAL ISSUANCE OF CERTIFICATES;
ACQUISITION OF EQUIPMENT NOTES
Section 2.01. Amount Unlimited; Issuable in Series.................................11
Section 2.02. Acquisition of Equipment Notes.......................................13
Section 2.03. Acceptance by Trustee................................................14
Section 2.04. Limitation of Powers.................................................15
ARTICLE III
THE CERTIFICATES
Section 3.01. Form, Denomination and Execution of Certificates.....................15
Section 3.02. Authentication of Certificates.......................................16
Section 3.03. Temporary Certificates...............................................16
Section 3.04. Registration of Transfer and Exchange of Certificates................16
Section 3.05. Mutilated, Destroyed, Lost or Stolen Certificates....................17
Section 3.06. Persons Deemed Owners................................................17
Section 3.07. Cancellation.........................................................17
Section 3.08. Limitation of Liability for Payments.................................17
Section 3.09. Book-Entry and Definitive Certificates...............................17
ARTICLE IV
DISTRIBUTIONS; STATEMENTS TO
CERTIFICATEHOLDERS
Section 4.01. Certificate Account and Special Payments Account.....................19
Section 4.02. Distributions from Certificate Account and Special Payments Account..20
Section 4.03. Statements to Certificateholders.....................................21
Section 4.04. Investment of Special Payment Moneys.................................22
ARTICLE V
THE COMPANY
Section 5.01. Maintenance of Corporate Existence...................................22
Section 5.02. Consolidation, Merger, etc...........................................22
</TABLE>
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<PAGE>
<TABLE>
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ARTICLE VI
DEFAULT
<S> <C> <C>
Section 6.01. Events of Default....................................................23
Section 6.02. Incidents of Sale of Equipment Notes.................................24
Section 6.03. Judicial Proceedings Instituted by Trustee; Trustee May Bring Suit...24
Section 6.04. Control by Certificateholders........................................24
Section 6.05. Waiver of Past Defaults..............................................25
Section 6.06. Right of Certificateholders to Receive Payments Not To Be Impaired...25
Section 6.07. Certificateholders May Not Bring Suit Except Under Certain Conditions26
Section 6.08. Remedies Cumulative..................................................26
Section 6.09. Undertaking for Costs................................................26
ARTICLE VII
THE TRUSTEE
Section 7.01. Notice of Defaults...................................................27
Section 7.02. Certain Rights of Trustee............................................27
Section 7.03. Not Responsible for Recitals or Issuance of Certificates.............28
Section 7.04. May Hold Certificates................................................28
Section 7.05. Money Held in Trust..................................................28
Section 7.06. Compensation and Reimbursement.......................................28
Section 7.07. Corporate Trustee Required; Eligibility..............................30
Section 7.08. Resignation and Removal; Appointment of Successor....................30
Section 7.09. Acceptance of Appointment by Successor...............................31
Section 7.10. Merger, Conversion, Consolidation or Succession to Business..........32
Section 7.11. Maintenance of Agencies..............................................32
Section 7.12. Money for Certificate Payments to Be Held in Trust...................33
Section 7.13. Registration of Equipment Notes in Trustee's Name....................34
Section 7.14. Representations and Warranties of Trustee............................34
Section 7.15. Withholding Taxes; Information Reporting.............................35
Section 7.16. Trustee's Liens......................................................35
Section 7.17. Preferential Collection of Claims....................................35
ARTICLE VIII
CERTIFICATEHOLDERS' LISTS AND REPORTS BY TRUSTEE
Section 8.01. The Company to Furnish Trustee with Names and Addresses of
Certificateholders..................................................35
Section 8.02. Preservation of Information; Communications to Certificateholders....35
Section 8.03. Reports by Trustee...................................................36
Section 8.04. Reports by the Guarantor and Company.................................36
ARTICLE IX
SUPPLEMENTAL AGREEMENTS
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
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<S> <C> <C>
Section 9.01. Supplemental Agreements Without Consent of Certificateholders........37
Section 9.02. Supplemental Agreements with Consent of Certificateholders...........37
Section 9.03. Documents Affecting Immunity or Indemnity............................38
Section 9.04. Execution of Supplemental Agreements.................................38
Section 9.05. Effect of Supplemental Agreements....................................38
Section 9.06. Conformity with Trust Indenture Act..................................39
Section 9.07. Reference in Certificates to Supplemental Agreements.................39
ARTICLE X
AMENDMENTS TO INDENTURE AND NOTE DOCUMENTS
Section 10.01. Amendments and Supplements to Indenture and Other Note Documents....39
ARTICLE XI
TERMINATION OF TRUSTS
Section 11.01. Termination of the Trusts...........................................39
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01. Limitation on Rights of Certificateholders..........................40
Section 12.02. Liabilities of Certificateholders...................................40
Section 12.03. Certificates Nonassessable and Fully Paid...........................41
Section 12.04. Registration of Equipment Notes in Name of Subordination Agent......41
Section 12.05. Notices.............................................................41
Section 12.06. Governing Law.......................................................42
Section 12.07. Severability of Provisions..........................................42
Section 12.08. Trust Indenture Act Controls........................................42
Section 12.09. Effect of Headings and Table of Contents............................43
Section 12.10. Successors and Assigns..............................................43
Section 12.11. Benefits of Agreement...............................................43
Section 12.12. Legal Holidays......................................................43
Section 12.13. Counterparts........................................................43
Section 12.14. Communication by Certificateholders with Other Certificateholders...43
Exhibit A - Form of Certificate
</TABLE>
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<PAGE>
This PASS THROUGH TRUST AGREEMENT, dated as of June 3, 1999, among
Northwest Airlines Corporation, a Delaware corporation (the "Guarantor"),
Northwest Airlines, Inc., a Minnesota corporation (the "Company"), and State
Street Bank and Trust Company of Connecticut, National Association, a national
banking association, as Trustee, is made with respect to the formation from time
to time of separate Northwest Airlines Pass Through Trusts, and the issuance
from time to time of separate series of Pass Through Certificates representing
fractional undivided interests in the respective Trusts.
WITNESSETH:
WHEREAS, from time to time the Guarantor, the Company and the Trustee
may enter into a Trust Supplement (this and certain other defined terms used
herein are defined in Section 1.01) pursuant to which the Trustee shall declare
the creation of a separate Trust for the benefit of the Holders of the series of
Certificates to be issued in respect of such Trust, and the initial Holders of
the Certificates of such series, as the grantors of such Trust, by their
respective acceptances of the Certificates of such series, shall join in the
creation of such Trust with the Trustee;
WHEREAS, all Certificates to be issued in respect of each separate Trust
will be issued as a separate series pursuant to this Agreement, will evidence
fractional undivided interests in such Trust and will have no rights, benefits
or interests in respect of any other separate Trust or the property held
therein, subject, however, to the provisions of any Intercreditor Agreement to
which one or more Trusts may be a party;
WHEREAS, from time to time, pursuant to the terms and conditions of this
Agreement with respect to each separate Trust formed hereunder, the Trustee on
behalf of such Trust shall purchase one or more issues of Equipment Notes having
the same interest rate as, and final maturity dates not later than the final
Regular Distribution Date of, the series of Certificates issued in respect of
such Trust and shall hold such Equipment Notes in trust for the benefit of the
Certificateholders of such Trust;
WHEREAS, to facilitate the sale of Equipment Notes to, and the purchase
of Equipment Notes by, the Trustee on behalf of each Trust created from time to
time pursuant to this Agreement, (i) the Company as the "issuer", as such term
is defined in and solely for purposes of the Securities Act of 1933, as amended,
of the Certificates to be issued in respect of each Trust and as the "obligor",
as such term is defined in and solely for purposes of the Trust Indenture Act of
1939, as amended, and (ii) the Guarantor have each duly authorized the execution
and delivery of this Basic Agreement and each Trust Supplement with respect to
all such Certificates and are undertaking to perform certain administrative and
ministerial duties hereunder and are also undertaking to pay the fees and
expenses of the Trustee;
WHEREAS, this Basic Agreement, as supplemented from time to time, is
subject to the provisions of the Trust Indenture Act of 1939, as amended, and
shall, to the extent applicable, be governed by such provisions;
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:
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2
ARTICLE I
DEFINITIONS
Section 1.01. DEFINITIONS. For all purposes of this Basic 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 other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein:
(3) all references in this Basic Agreement to designated
"Articles", "Sections" and other subdivisions are to the designated
Articles, Sections and other subdivisions of this Basic Agreement;
(4) the words "herein", "hereof" and "hereunder" and other words
of similar import refer to this Basic Agreement as a whole and not to
any particular Article, Section or other subdivision; and
(5) the term "this Agreement" (as distinguished from "this Basic
Agreement") refers, unless the context otherwise requires, to this Basic
Agreement as supplemented by the Trust Supplement creating a particular
Trust and establishing the series of Certificates issued or to be issued
in respect thereof, with reference to such Trust and such series of
Certificates, as this Basic Agreement as so supplemented may be further
supplemented with respect to such Trust and such series of Certificates.
ACT: With respect to any Certificateholder has the meaning specified in
Section 1.04.
AFFILIATE: With respect to any specified Person, means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such Person. For the purposes of this definition, "control",
when used with respect to any specified Person, means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise, and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
AIRCRAFT: Means one or more aircraft, including engines therefor, owned
by or leased to the Company and securing one or more Equipment Notes.
AUTHORIZED AGENT: With respect to the Certificates of any series, means
any Paying Agent or Registrar for the Certificates of such series.
BASIC AGREEMENT: Means this Pass Through Trust Agreement, as the same
may from time to time be supplemented, amended or modified, but does not include
any Trust Supplement.
BOOK-ENTRY CERTIFICATES: With respect to the Certificates of any series,
means a beneficial interest in the Certificates of such series, ownership and
transfers of which shall be made through book entries as described in Section
3.09.
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3
BUSINESS DAY: With respect to the Certificates of any series, means any
day other than a Saturday, a Sunday or a day on which commercial banks are
required or authorized to close in Minneapolis, Minnesota or New York, New York;
and, so long as any such Certificate is outstanding, a city and state in which
the Trustee or any related Loan Trustee maintains its Corporate Trust Office or
receives and disburses funds.
CERTIFICATE: Means any one of the certificates executed and
authenticated by the Trustee, substantially in the form of Exhibit A hereto.
CERTIFICATE ACCOUNT: With respect to the Certificates of any series,
means the account or accounts created and maintained for such series pursuant to
Section 4.01(a) and the related Trust Supplement.
CERTIFICATEHOLDER OR HOLDER: With respect to the Certificates of any
series, means the Person in whose name a Certificate of such series is
registered in the Register for Certificates of such series.
CERTIFICATE OWNER: With respect to the Certificates of any series,
means, for purposes of Section 3.09, the Person who owns a Book-Entry
Certificate of such series.
CLEARING AGENCY: Means an organization registered as a "clearing agency"
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended.
CLEARING AGENCY PARTICIPANT: Means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects, directly or indirectly, book-entry transfers and pledges of
securities deposited with the Clearing Agency.
COMPANY: Means Northwest Airlines, Inc., a Minnesota corporation, or its
successor in interest pursuant to Section 5.02.
CONTROLLING PARTY: Means the Person entitled to act as such pursuant to
the terms of any Intercreditor Agreement.
CORPORATE TRUST OFFICE: With respect to the Trustee or any Loan Trustee,
means the office of such trustee in the city at which at any particular time its
corporate trust business shall be principally administered.
CUT-OFF DATE: With respect to the Certificates of any series, means the
date designated as such in the Trust Supplement establishing such series.
DEFINITIVE CERTIFICATES: With respect to the Certificate of any series,
has the meaning specified in Section 3.09.
DIRECTION: Has the meaning specified in Section 1.04(c).
EQUIPMENT NOTE: With respect to the Certificates of any series, has the
meaning given to "Secured Certificate" in the related Indenture.
ERISA: Means the Employee Retirement Income Security Act of 1974, as
amended from time to time, or any successor federal statute.
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4
ESCROW ACCOUNT: With respect to the Certificates of any series, has the
meaning specified in Section 2.02(b).
ESCROWED FUNDS: With respect to any Trust, has the meaning specified in
Section 2.02(b).
EVENT OF DEFAULT: Means, in respect of any Trust, the occurrence of an
Indenture Default under any Indenture pursuant to which Equipment Notes held by
such Trust were issued.
FRACTIONAL UNDIVIDED INTEREST: Means the fractional undivided interest
in a Trust that is evidenced by a Certificate relating to such Trust.
GUARANTOR: Means Northwest Airlines Corporation, a Delaware corporation,
or its successor in interest.
INDENTURE: With respect to any Trust, means each of the one or more
separate trust indenture and security agreements described in, or on a schedule
attached to, this Agreement which relates to an issue of Equipment Notes to be
held in such Trust and an indenture having substantially the same terms and
conditions as such trust indenture and security agreement and which relates to a
Substitute Aircraft; as each such agreement may be amended or supplemented in
accordance with its respective terms; and INDENTURES means all of such
agreements.
INDENTURE DEFAULT: With respect to any Indenture, means any Indenture
Event of Default (as such term is defined in such Indenture).
INITIAL REGULAR DISTRIBUTION DATE: With respect to the Certificates of
any series, means the first Regular Distribution Date on which a Scheduled
Payment is to be made.
INTERCREDITOR AGREEMENT: Means any agreement by and among one or more
Trusts, one or more Liquidity Providers and a Subordination Agent providing for
the distribution of payments made in respect of Equipment Notes held by such
Trusts.
ISSUANCE DATE: With respect to the Certificates of any series, means the
date of the issuance of such Certificates.
LEASE: Means any lease between an Owner Trustee, as the lessor, and the
Company, as the lessee, referred to in the related Indenture, as each such lease
may be amended or supplemented in accordance with its respective terms; and
LEASES means all such Leases.
LETTER OF REPRESENTATIONS: With respect to the Certificates of any
series, means the agreement among the Company, the Trustee and the initial
Clearing Agency substantially in the form attached as an Exhibit to the related
Trust Supplement.
LIQUIDITY FACILITY: With respect to the Certificates of any Series,
means any revolving credit agreement or similar facility relating to the
Certificates of such series between a Liquidity Provider and a Subordination
Agent, as amended, replaced, supplemented or otherwise modified from time to
time in accordance with its terms and the terms of any Intercreditor Agreement.
<PAGE>
5
LIQUIDITY PROVIDER: With respect to the Certificates of any Series,
means a bank or other financial institution that agrees to provide Liquidity
Facilities for the benefit of the holders of Certificates of such series.
LOAN TRUSTEE: With respect to any Equipment Note or the Indenture
applicable thereto, means the bank or trust company designated as loan or
indenture trustee under such Indenture; and any successor to such Loan Trustee
as such trustee; and LOAN TRUSTEES means all of the Loan Trustees under the
Indentures.
NOTE DOCUMENTS: With respect to any Equipment Note, means the related
Indenture, Note Purchase Agreement, and if the related Aircraft is leased to the
Company, the related Lease and the related Owner Trustee's Purchase Agreement.
NOTE PURCHASE AGREEMENT: With respect to the Certificates of any series,
means any note purchase, refunding, participation or similar agreement providing
for, among other things, the purchase of Equipment Notes by the Trustee on
behalf of the relevant Trust; and NOTE PURCHASE AGREEMENTS means all such
agreements.
OFFICER'S CERTIFICATE: Means a certificate signed, (a) in the case of
the Guarantor or the Company, by (i) a Co-Chairman of the Board of Directors,
the President or any Executive Vice President or Senior Vice President of the
Guarantor or the Company, signing alone or (ii) any Vice President of the
Guarantor or the Company signing together with the Secretary, the Assistant
Secretary, the Treasurer or any Assistant Treasurer of the Guarantor or the
Company, or (b) in the case of the Trustee or an Owner Trustee or a Loan
Trustee, a Responsible Officer of the Trustee or such Owner Trustee or such Loan
Trustee, as the case may be.
OTHER AGREEMENTS: Has the meaning specified in Section 6.01(b).
OPINION OF COUNSEL: Means a written opinion of legal counsel who (a) in
the case of counsel for the Guarantor or the Company, may be (i) a senior
attorney in rank of the officers of the Guarantor or the Company a principal
duty of which is furnishing advice as to legal matters, (ii) Simpson Thacher &
Bartlett or (iii) such other counsel designated by the Guarantor or the Company
and reasonably acceptable to the Trustee and (b) in the case of any Owner
Trustee or any Loan Trustee, may be such counsel as may be designated by any of
them whether or not such counsel is an employee of any of them, and who shall be
reasonably acceptable to the Trustee.
OUTSTANDING: With respect to Certificates of any series, means, as of
the date of determination, all Certificates of such series theretofore
authenticated and delivered under this Agreement, except:
(i) Certificates of such series theretofore cancelled by the
Registrar or delivered to the Trustee or the Registrar for cancellation;
(ii) All of the Certificates of such series if money in the full
amount required to make the final distribution with respect to such
series pursuant to Section 11.01 hereof has been theretofore deposited
with the Trustee in trust for the Holders of the Certificates of such
series as provided in Section 4.01 pending distribution of such money to
such Certificateholders pursuant to such final distribution payment; and
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6
(iii) Certificates of such series in exchange for or in lieu of
which other Certificates of such series have been authenticated and
delivered pursuant to this Agreement.
OWNER PARTICIPANT: With respect to any Equipment Note, means the "Owner
Participant", if any, as referred to in the Indenture pursuant to which such
Equipment Note is issued and any permitted successor or assign of such Owner
Participant; and OWNER PARTICIPANTS at any time of determination means all of
the Owner Participants thus referred to in the Indentures.
OWNER TRUSTEE: with respect to any Equipment Note, means the "Owner
Trustee", if any, as referred to in the Indenture pursuant to which such
Equipment Note is issued, not in its individual capacity but solely as trustee;
and OWNER TRUSTEES means all of the Owner Trustees party to any of the
respective Indentures.
OWNER TRUSTEE'S PURCHASE AGREEMENT: With respect to the Certificates of
any series, if the related Aircraft is leased to the Company, has the meaning
specified therefor in the related Lease.
PAYING AGENT: With respect to the Certificates of any series, means the
paying agent maintained and appointed for the Certificates of such series
pursuant to Section 7.11.
PERMITTED INVESTMENTS: Means obligations of the United States of America
or agencies or instrumentalities thereof for the payment of which the full faith
and credit of the United States of America is pledged, maturing in not more than
60 days or such lesser time as is necessary for payment of any Special Payments
on a Special Distribution Date.
PERSON: Means any person, including any individual, corporation,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization, or government or any agency or political
subdivision thereof.
POOL BALANCE: Means, as of any date, (i) the original aggregate face
amount of the Certificates of any series less (ii) the aggregate amount of all
payments made in respect of such Certificates other than payments made in
respect of interest or premium thereon or reimbursement of any costs or expenses
incurred in connection therewith. The Pool Balance as of any Distribution Date
shall be computed after giving effect to the payment of principal, if any, on
the Equipment Notes or other Trust Property held in the Trust and the
distribution thereof to be made on such Distribution Date.
POOL FACTOR: Means, with respect to any series of Certificates as of any
date, the quotient (rounded to the seventh decimal place) computed by dividing
(i) the Pool Balance of such series as at such date by (ii) the original
aggregate face amount of the Certificates of such series. The Pool Factor as of
any Distribution Date shall be computed after giving effect to the payment of
principal, if any, on the Equipment Notes or other Trust Property and the
distribution thereof to be made on such Distribution Date.
POSTPONED NOTES: With respect to any Trust or the related series of
Certificates, means the Equipment Notes to be held in such Trust as to which a
Postponement Notice shall have been delivered pursuant to Section 2.02(b).
POSTPONEMENT NOTICE: With respect to any Trust or the related series of
Certificates, means an Officer's Certificate of the Company signed by an officer
of the Company (1) requesting that the Trustee temporarily postpone purchase of
the related Equipment Notes to a date later than the Issuance
<PAGE>
7
Date of such series of Certificates, (2) identifying the amount of the purchase
price of each such Equipment Note and the aggregate purchase price for all such
Equipment Notes, (3) setting forth the reasons for such postponement and (4)
with respect to each such Equipment Note, either (a) setting or resetting a new
Transfer Date (which shall be on or prior to the applicable Cut-off Date) for
payment by the Trustee of such purchase price and issuance of the related
Equipment Note, or (b) indicating that such new Transfer Date (which shall be on
or prior to the applicable Cut-off Date) will be set by subsequent written
notice not less than one Business Day prior to such new Transfer Date.
PTC EVENT OF DEFAULT: Means any failure to pay within 10 Business Days
of the due date thereof: (i) the outstanding Pool Balance on a date specified in
any Trust Supplement or (ii) interest due on the Certificates of any series on
any Distribution Date.
RECORD DATE: With respect to any Trust or the related series of
Certificates, means (i) for Scheduled Payments to be distributed on any Regular
Distribution Date, other than the final distribution, with respect to such
series, the 15th day (whether or not a Business Day) preceding such Regular
Distribution Date, and (ii) for Special Payments to be distributed on any
Special Distribution Date, other than the final distribution, with respect to
such series, the 15th day (whether or not a Business Day) preceding such Special
Distribution Date.
REGISTER AND REGISTRAR: With respect to the Certificates of any series,
mean the register maintained and the registrar appointed for such series
pursuant to Sections 3.04 and 7.11.
REGULAR DISTRIBUTION DATE: With respect to distributions of Scheduled
Payments in respect of any series of Certificates, means each date designated as
such in this Agreement, until payment of all the Scheduled Payments to be made
under the Equipment Notes held in such Trust has been made.
REQUEST: Means a request by the Company setting forth the subject matter
of the request accompanied by an Officer's Certificate and an Opinion of Counsel
as provided in Section 1.02 of this Basic Agreement.
RESPONSIBLE OFFICER: With respect to any Trustee, any Loan Trustee and
any Owner Trustee, means any officer in the Corporate Trust Division of the
Trustee, Loan Trustee or Owner 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.
SCHEDULED PAYMENT: With respect to any Equipment Note, means any payment
of principal and interest on such Equipment Note or any payment of interest on
the Certificates of any series with funds drawn under the Liquidity Facility for
such series (other than any such payment which is not in fact received by the
Trustee or any Subordination Agent within five days of the date on which such
payment is scheduled to be made) due from the obligor thereon 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, premium, if any, or
interest resulting from the redemption or purchase of any Equipment Note shall
not constitute a Scheduled Payment.
SEC: Means the Securities and Exchange Commission, as from time to time
constituted or created under the Securities Exchange Act of 1934, or, if at any
time after the execution of this
<PAGE>
8
instrument such Commission is not existing and performing the duties now
assigned to it under the Trust Indenture Act, then the body performing such
duties on such date.
SPECIAL DISTRIBUTION DATE: With respect to the Certificates of any
series, means each date on which a Special Payment is to be distributed as
specified in this Agreement.
SPECIAL PAYMENT: Means (i) any payment (other than a Scheduled Payment)
in respect of, or any proceeds of, any Equipment Note or Trust Indenture Estate
(as defined in each Indenture) or (ii) the amounts required to be distributed
pursuant to the last paragraph of Section 2.02(b) or (iii) the amounts required
to be distributed pursuant to the penultimate paragraph of Section 2.02(b).
SPECIAL PAYMENTS ACCOUNT: With respect to the Certificates of any
series, means the account or accounts created and maintained for such series
pursuant to Section 4.01(b) and the related Trust Supplement.
SPECIFIED INVESTMENTS: With respect to any Trust, means, unless
otherwise specified in the related Trust Supplement, (i) obligations of, or
guaranteed by, the United States Government or agencies thereof, (ii) open
market commercial paper of any corporation incorporated under the laws of the
United States of America or any State thereof rated at least P-2 or its
equivalent by Moody's Investors Service, Inc. or at least A-2 or its equivalent
by Standard & Poor's Rating Group, (iii) certificates of deposit issued by
commercial banks organized under the laws of the United States or of any
political subdivision thereof having a combined capital and surplus in excess of
$500,000,000 which banks or their holding companies have a rating of A or its
equivalent by Moody's Investors Service, Inc. or Standard & Poor's Rating Group;
PROVIDED, HOWEVER, that the aggregate amount at any one time so invested in
certificates of deposit issued by any one bank shall not exceed 5% of such
bank's capital and surplus, (iv) U.S. dollar denominated offshore certificates
of deposit issued by, or offshore time deposits with, any commercial bank
described in (iii) or any subsidiary thereof and (v) repurchase agreements with
any financial institution having combined capital and surplus of at least
$500,000,000 with any of the obligations described in clauses (i) through (iv)
as collateral; PROVIDED FURTHER that if all of the above investments are
unavailable, the entire amounts to be invested may be used to purchase Federal
Funds from an entity described in clause (iii) above; and PROVIDED FURTHER that
no investment shall be eligible as a "Specified Investment" unless the final
maturity or date of return of such investment is on or before the Special
Distribution Date next following the Cut-off Date, if any, for such Trust by
more than 20 days.
SUBORDINATION AGENT: Shall have the meaning specified therefor in any
Intercreditor Agreement.
SUBSTITUTE AIRCRAFT: With respect to any Trust, means any Aircraft of a
type specified in this Agreement and, at the election of the Company,
substituted prior to the applicable Cut-off Date, if any, pursuant to the terms
of this Agreement.
TRANSFER DATE: Has the meaning assigned to that term or any of the terms
"Delivery Date", "Funding Date" or "Closing Date" in a Note Purchase Agreement.
TRIGGERING EVENT: Shall have the meaning specified therefor in any
Intercreditor Agreement.
TRUST: With respect to the Certificates of any series, means the trust
under this Agreement.
<PAGE>
9
TRUSTEE: Means the institution executing this Basic Agreement as
Trustee, or its successor in interest, and any successor trustee appointed as
provided herein.
TRUST INDENTURE ACT: Except as otherwise provided in Section 9.06, means
the Trust Indenture Act of 1939 as in force at the date as of which this Basic
Agreement was executed.
TRUST PROPERTY: With respect to any Trust, means (i) the Equipment Notes
held as the property of such Trust, all monies at any time paid thereon and all
monies due and to become due thereunder, (ii) the rights of such Trust under any
Intercreditor Agreement, including all monies receivable in respect of such
rights, (iii) all monies receivable under any Liquidity Facility for such Trust
and (iv) funds from time to time deposited in the related Escrow Account, the
related Certificate Account and the related Special Payments Account and any
proceeds from the sale by the Trustee pursuant to Article VI hereof of any such
Equipment Note.
TRUST SUPPLEMENT: Means an agreement supplemental hereto pursuant to
which (i) a separate Trust is created for the benefit of the Holders of the
Certificates of a series, (ii) the issuance of the Certificates of such series
representing fractional undivided interests in such Trust is authorized and
(iii) the terms of the Certificates of such series are established.
Section 1.02. COMPLIANCE CERTIFICATES AND OPINIONS. Upon any application
or request by the Company, any Owner Trustee or any Loan Trustee to the Trustee
to take any action under any provision of this Basic Agreement or, in respect of
the Certificates of any series, this Agreement, the Company, such Owner Trustee
or such Loan Trustee, as the case may be, shall furnish to the Trustee an
Officers' Certificate stating that, in the opinion of the signers, all
conditions precedent, if any, provided for in this Basic Agreement or this
Agreement relating to the proposed action have been complied with and an Opinion
of Counsel stating that in the opinion of such counsel all such conditions
precedent, if any, have been complied with, except that in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Basic Agreement or this Agreement
relating to such particular application or request, no additional certificate or
opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Basic Agreement or, in respect of the
Certificates of any series, this Agreement (other than a certificate provided
pursuant to Section 8.04(d)) or any Trust Supplement shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions in this
Basic Agreement or this Agreement relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he
has made such examination or investigation as is necessary to enable him
to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
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10
Section 1.03. FORM OF DOCUMENTS DELIVERED TO TRUSTEE. In any case where
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified by,
or covered by the opinion of, only one such Person, or that they be so certified
or covered by only one document, but one such Person may certify or give an
opinion with respect to some matters and one or more other such Persons as to
other matters and any such Person may certify or give an opinion as to such
matters in one or several documents.
Any Opinion of Counsel stated to be based on the opinion of other
counsel shall be accompanied by a copy of such other opinion.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Basic Agreement or, in respect of the Certificates of any
series, this Agreement, they may, but need not, be consolidated and form one
instrument.
Section 1.04. ACTS OF CERTIFICATEHOLDERS. (a) Any direction, consent,
waiver or other action provided by this Agreement in respect of the Certificates
of any series to be given or taken by Certificateholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Certificateholders in person or by an agent or proxy duly appointed in
writing; and, except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments are delivered to the
Trustee and, where it is hereby expressly required pursuant to this Agreement,
to the Company or any Loan Trustee. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the "Act" of the Certificateholders signing such instrument or instruments.
Proof of execution of any such instrument or of a writing appointing any such
agent shall be sufficient for any purpose of such Trust Supplement and
conclusive in favor of the Trustee, the Company and the related Loan Trustee, if
made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the certificate of any notary public or
other officer of any jurisdiction authorized to take acknowledgments of deeds or
administer oaths that the Person executing such instrument acknowledged to him
the execution thereof, or by an affidavit of a witness to such execution sworn
to before any such notary or such other officer and where such execution is by
an officer of a corporation or association or a member of a partnership, on
behalf of such corporation, association or partnership, such certificate or
affidavit shall also constitute sufficient proof of his authority. The fact and
date of the execution of any such instrument or writing, or the authority of the
Person executing the same, may also be proved in any other reasonable manner
which the Trustee deems sufficient.
(c) In determining whether the Certificateholders of the requisite
Fractional Undivided Interests of Certificates of any series Outstanding have
given any direction, consent or waiver (a "Direction"), under this Agreement,
Certificates owned by the Company, the Guarantor, any related Owner Trustee, any
related Owner Participant or any Affiliate of any such Person shall be
disregarded and deemed not to be Outstanding for purposes of any such
determination. In determining whether the Trustee shall be protected in relying
upon any such Direction, only Certificates which the Trustee knows to be so
owned shall be so disregarded. Notwithstanding the foregoing, (i) if any such
Person owns 100% of the Certificates of any series Outstanding, such
Certificates shall not be so disregarded as aforesaid, and (ii) if any amount of
Certificates of such series so owned by any such Person have been pledged in
good faith, such Certificates shall not be disregarded as aforesaid if the
pledgee establishes to the satisfaction of the Trustee the pledgee's right so to
act with respect to such
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11
Certificates and that the pledgee is not the Company, the Guarantor, any related
Owner Trustee, any related Owner Participant or any Affiliate of any such
Person.
(d) The Company may at its option by delivery of an Officer's
Certificate to the Trustee set a record date to determine the Certificateholders
in respect of the Certificates of any series, entitled to give any consent,
request, demand, authorization, direction, notice, waiver or other Act.
Notwithstanding Section 316(c) of the Trust Indenture Act, such record date
shall be the record date specified in such Officer's Certificate which shall be
a date not more than 30 days prior to the first solicitation of
Certificateholders in connection therewith. If such a record date is fixed, such
consent, request, demand, authorization, direction, notice, waiver or other Act
may be given before or after such record date, but only the Certificateholders
of record of the applicable series at the close of business on such record date
shall be deemed to be Certificateholders for the purposes of determining whether
Certificateholders of the requisite proportion of Outstanding Certificates of
such series have authorized or agreed or consented to such consent, request,
demand, authorization, direction, notice, waiver or other Act, and for that
purpose the Outstanding Certificates of such series shall be computed as of such
record date; PROVIDED that no such consent, request, demand, authorization,
direction, notice, waiver or other Act by the Certificateholders on such record
date shall be deemed effective unless it shall become effective pursuant to the
provisions of this Basic Agreement not later than one year after the record
date.
(e) Any direction, consent, waiver or other action by the
Certificateholder of any Certificate shall bind the Certificateholder of every
Certificate issued upon the transfer thereof or in exchange therefor or in lieu
thereof, whether or not notation of such action is made upon such Certificate.
(f) Except as otherwise provided in Section 1.04(c), Certificates of any
series owned by or pledged to any Person shall have an equal and proportionate
benefit under the provisions of this Agreement, without preference, priority, or
distinction as among all of the Certificates of such series.
ARTICLE II
ORIGINAL ISSUANCE OF CERTIFICATES;
ACQUISITION OF EQUIPMENT NOTES
Section 2.01. AMOUNT UNLIMITED; ISSUABLE IN SERIES.
(a) The aggregate principal amount of Certificates of each series which
may be authenticated and delivered under this Basic Agreement is limited to an
amount equal to the aggregate principal amount of the Equipment Notes held in
the related Trust. The Certificates may be issued from time to time in one or
more series and shall be designated generally as the "Pass Through
Certificates", with such further designations added or incorporated in such
title for the Certificates of each series as specified in the related Trust
Supplement. Each Certificate shall bear upon its face the designation so
selected for the series to which it belongs. All Certificates of the same series
shall be substantially identical except that the Certificates of a series may
differ as to denomination and as may otherwise be provided in the Trust
Supplement establishing the Certificates of such series. Each series of
Certificates issued pursuant to this Agreement will evidence fractional
undivided interests in the related Trust and, except as may be contained in any
Intercreditor Agreement, will have no rights, benefits or interests in respect
of any other Trust or the Trust Property held therein. All Certificates of the
same series shall be in all respects equally and ratably entitled to the
benefits of this Agreement
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12
without preference, priority or distinction on account of the actual time or
times of authentication and delivery, all in accordance with the terms and
provisions of this Agreement.
(b) The following matters shall be established with respect to the
Certificates of each series issued hereunder by a Trust Supplement executed and
delivered by and among the Company, the Guarantor and the Trustee:
(1) the formation of the Trust as to which the Certificates of
such series represent fractional undivided interests and its designation
(which designation shall distinguish such Trust from each other Trust
created under this Basic Agreement and a Trust Supplement);
(2) the specific title of the Certificates of such series (which
title shall distinguish the Certificates of such series from each other
series of Certificates created under this Basic Agreement and a Trust
Supplement);
(3) any limit upon the aggregate principal amount of the
Certificates of such series which may be authenticated and delivered
(which limit shall not pertain to Certificates authenticated and
delivered upon registration of transfer of, or in exchange for, or in
lieu of, other Certificates of the series pursuant to Sections 3.03,
3.04 and 3.05);
(4) the Cut-off Date with respect to the Certificates of such
series;
(5) the Regular Distribution Dates applicable to the Certificates
of such series;
(6) the Special Distribution Dates applicable to the Certificates
of such series;
(7) if other than as provided in Section 7.11(b), the Registrar
or the Paying Agent for the Certificates of such series, including any
Co-Registrar or additional Paying Agent;
(8) if other than as provided in Section 3.01, the denominations
in which the Certificates of such series shall be issuable;
(9) if other than United States dollars, the currency or
currencies (including currency units) in which the Certificates of such
series shall be denominated;
(10) the specific form of the Certificates of such series
(including the interest rate applicable thereto) and whether or not
Certificates of such series are to be issued as Book-Entry Certificates
and, if such Certificates are to be Book-Entry Certificates, the form of
Letter of Representations, if any (or, in the case of any Certificates
denominated in a currency other than United States dollars and if other
than as provided in Section 3.09, whether and the circumstances under
which beneficial owners of interests in such Certificates in permanent
global form may exchange such interests for Certificates of such series
and of like tenor of any authorized form and denomination);
(11) a description of the Equipment Notes to be acquired and held
in the related Trust and of the related Aircraft and Note Documents;
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13
(12) provisions with respect to the terms for which the
definitions set forth in Article I hereof or the terms of Section 11.01
hereof permit or require further specification in the related Trust
Supplement;
(13) any restrictions (including legends) in respect of ERISA;
(14) whether such series will be subject to an Intercreditor
Agreement and, if so, the specific designation of such Intercreditor
Agreement; and
(15) any other terms of the Certificates of such series (which
terms shall not be inconsistent with the provisions of the Trust
Indenture Act), including any terms which may be required or advisable
under United States laws or regulations or advisable in connection with
the marketing of Certificates of the series.
(c) At any time and from time to time after the execution and delivery
of this Basic Agreement and a Trust Supplement forming a Trust and establishing
the terms of Certificates of a series, Certificates of such series shall be
executed, authenticated and delivered by the Trustee to the Person or Persons
specified by the Company upon request of the Company and upon satisfaction of
any conditions precedent set forth in such Trust Supplement or in any other
document to which a Trustee is a party relating to the issuance of the
Certificates of such series.
Section 2.02. ACQUISITION OF EQUIPMENT NOTES.
(a) Unless otherwise specified in the related Trust Supplement, on or
prior to the Issuance Date of the Certificates of a series, the Trustee shall
execute and deliver the related Note Purchase Agreements in the form delivered
to the Trustee by the Company. The Trustee shall issue and sell such
Certificates, in authorized denominations and in such Fractional Undivided
Interests, so as to result in the receipt of consideration in an amount equal to
the aggregate purchase price of such Equipment Notes and, concurrently
therewith, the Trustee shall purchase, pursuant to the terms and conditions of
the Note Purchase Agreements, the Equipment Notes at a purchase price equal to
the amount of such consideration so received. Except as provided in Sections
3.03, 3.04 and 3.05 hereof, the Trustee shall not execute, authenticate or
deliver Certificates of such series in excess of the aggregate amount specified
in this paragraph. The provisions of this Subsection (a) are subject to the
provisions of Subsection (b) below.
(b) If on or prior to the Issuance Date with respect to a series of
Certificates the Company shall deliver to the Trustee a Postponement Notice
relating to one or more Postponed Notes, the Trustee shall postpone the purchase
of such Postponed Notes and shall deposit into an escrow account (as to such
Trust, the "Escrow Account") to be maintained as a part of the related Trust an
amount equal to the purchase price of such Postponed Notes (the "Escrowed
Funds"). The Escrowed Funds so deposited shall be invested by the Trustee at the
written direction and risk of, and for the benefit of, the Company in Specified
Investments (i) maturing no later than any scheduled Transfer Date relating to
such series of Certificates or (ii) if no such Transfer Date has been scheduled,
maturing on the next Business Day, or (iii) if the Company has given notice to
the Trustee that any Postponed Notes will not be issued, with respect to the
portion of the Escrowed Funds relating to such Postponed Notes, maturing on the
next applicable Special Distribution Date, if such investments are reasonably
available for purchase. The Trustee shall make withdrawals from the Escrow
Account only as provided in this Agreement. Upon request of the Company on one
or more occasions and the satisfaction of the closing conditions specified in
the applicable Note Purchase Agreements on or prior to the related Cut-off
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14
Date, the Trustee shall purchase the applicable Postponed Notes with the
Escrowed Funds withdrawn from the Escrow Account. The purchase price shall equal
the principal amount of such Postponed Notes.
The Trustee shall hold all Specified Investments until the maturity
thereof and will not sell or otherwise transfer Specified Investments. If
Specified Investments held in an Escrow Account mature prior to any applicable
Transfer Date, any proceeds received on the maturity of such Specified
Investments (other than any earnings thereon) shall be reinvested by the Trustee
at the written direction and risk of, and for the benefit of, the Company in
Specified Investments maturing as provided in the preceding paragraph.
Any earnings on Specified Investments received from time to time by the
Trustee shall be promptly distributed to the Company. The Company shall pay to
the Trustee for deposit to the relevant Escrow Account an amount equal to any
losses on such Specified Investments as incurred. On the Initial Regular
Distribution Date in respect of the Certificates of any series, the Company will
pay (in immediately available funds) to the Trustee an amount equal to the
interest that would have accrued on any Postponed Notes, if any, purchased after
the Issuance Date if such Postponed Notes had been purchased on the Issuance
Date, from the Issuance Date to, but not including, the date of the purchase of
such Postponed Notes by the Trustee.
If, in respect of the Certificates of any series, the Company notifies
the Trustee prior to the Cut-off Date that any Postponed Notes will not be
issued on or prior to the Cut-off Date for any reason, on the next Special
Distribution Date for such Certificates occurring more than 20 days following
the date of such notice (i) the Company shall pay to the Trustee for deposit in
the related Special Payments Account, in immediately available funds, an amount
equal to the interest that would have accrued on the Postponed Notes designated
in such notice at a rate equal to the interest rate applicable to such
Certificates from the Issuance Date to, but not including, such Special
Distribution Date and (ii) the Trustee shall transfer an amount equal to that
amount of Escrowed Funds that would have been used to purchase the Postponed
Notes designated in such notice and the amount paid by the Company pursuant to
the immediately preceding clause (i) to the related Special Payments Account for
distribution as a Special Payment in accordance with the provisions hereof.
If, on such Cut-off Date, an amount equal to less than all of the
Escrowed Funds (other than Escrowed Funds referred to in the immediately
preceding paragraph) has been used to purchase Postponed Notes, on the next such
Special Distribution Date occurring more than 20 days following such Cut-off
Date (i) the Company shall pay to the Trustee for deposit in such Special
Payments Account, in immediately available funds, an amount equal to the
interest that would have accrued on such Postponed Notes contemplated to be
purchased with such unused Escrowed Funds (other than Escrowed Funds referred to
in the immediately preceding paragraph) but not so purchased at a rate equal to
the interest rate applicable to such Certificates from the Issuance Date to, but
not including, such Special Distribution Date and (ii) the Trustee shall
transfer such unused Escrowed Funds and the amount paid by the Company pursuant
to the immediately preceding clause (i) to such Special Payments Account for
distribution as a Special Payment in accordance with the provisions hereof.
Section 2.03. ACCEPTANCE BY TRUSTEE. The Trustee, upon the execution and
delivery of a Trust Supplement creating a Trust and establishing a series of
Certificates, shall acknowledge its acceptance of all right, title, and interest
in and to the Equipment Notes to be acquired pursuant to Section 2.02 hereof and
the related Note Purchase Agreements and shall declare that the Trustee holds
and will hold such right, title, and interest, together with all other property
constituting the Trust Property of such
<PAGE>
15
Trust, for the benefit of all then present and future Certificateholders of such
series, upon the trusts herein and in such Trust Supplement set forth. By its
payment for and acceptance of each Certificate of such series issued to it under
this Agreement, each initial Certificateholder of such series as grantor of such
Trust shall thereby join in the creation and declaration of such Trust.
Section 2.04. LIMITATION OF POWERS. Each Trust shall be constituted
solely for the purpose of making the investment in the Equipment Notes provided
for in the related Trust Supplement, and, except as set forth herein or in this
Agreement, the Trustee shall not be authorized or empowered to acquire any other
investments or engage in any other activities and, in particular, the Trustee
shall not be authorized or empowered to do anything that would cause such Trust
to fail to qualify as a "grantor trust" for federal income tax purposes
(including as subject to this restriction, acquiring the Aircraft (as defined in
the respective related Indentures) by bidding such Equipment Notes or otherwise,
or taking any action with respect to any such Aircraft once acquired).
ARTICLE III
THE CERTIFICATES
Section 3.01. FORM, DENOMINATION AND EXECUTION OF CERTIFICATES. The
Certificates of each series shall be issued in fully registered form without
coupons and shall be substantially in the form attached hereto as Exhibit A,
with such omissions, variations and insertions as are permitted by this
Agreement, and may have such letters, numbers or other marks of identification
and such legends or endorsements printed, lithographed or engraved thereon, as
may be required to comply with the rules of any securities exchange on which
such Certificates may be listed or to conform to any usage in respect thereof,
or as may, consistently herewith, be prescribed by the Trustee or by the officer
executing such Certificates, such determination by said officer to be evidenced
by his signing the Certificates.
Except as provided in Section 3.09, the definitive Certificates of such
series shall be printed, lithographed or engraved or produced by any combination
of these methods or may be produced in any other manner permitted by the rules
of any securities exchange on which the Certificates may be listed, all as
determined by the officer executing such Certificates, as evidenced by his
execution of such Certificates.
Except as otherwise provided in the related Trust Supplement, the
Certificates of each series shall be issued in minimum denominations of $1,000
or integral multiples thereof except that one Certificate of such series may be
issued in a denomination of less than $1,000.
The Certificates of such series shall be executed on behalf of the
Trustee by manual or facsimile signature of a Responsible Officer of the
Trustee. Certificates of any series bearing the manual or facsimile signature of
an individual who was, at the time when such signature was affixed, authorized
to sign on behalf of the Trustee shall be valid and binding obligations of the
Trustee, notwithstanding that such individual has ceased to be so authorized
prior to the authentication and delivery of such Certificates or did not hold
such office at the date of such Certificates. No Certificate of any series shall
be entitled to any benefit under this Agreement, or be valid for any purpose
unless there appears on such Certificate a certificate of authentication
substantially in the form set forth in Exhibit A hereto executed by the Trustee
by manual signature, and such certificate of authentication upon any Certificate
shall be conclusive evidence, and the only evidence, that such Certificate has
been
<PAGE>
16
duly authenticated and delivered hereunder. All Certificates of any series shall
be dated on the date of their authentication.
Section 3.02. AUTHENTICATION OF CERTIFICATES. The Trustee shall duly
authenticate and deliver Certificates of each series in authorized denominations
equalling in the aggregate the aggregate principal amount of the Equipment Notes
to be purchased by the Trustee pursuant to the related Note Purchase Agreements,
and evidencing the entire ownership of the related Trust.
Section 3.03. TEMPORARY CERTIFICATES. Pending the preparation of
definitive Certificates of any series, the Trustee may execute, authenticate and
deliver temporary Certificates of such series which are printed, lithographed,
typewritten, or otherwise produced, in any denomination, containing
substantially the same terms and provisions as set forth in Exhibit A hereto,
except for such appropriate insertions, omissions, substitutions and other
variations relating to their temporary nature as the officer executing such
temporary Certificates may determine, as evidenced by its execution of such
temporary Certificates.
If temporary Certificates of any series are issued, the Company will
cause definitive Certificates of such series to be prepared without unreasonable
delay. After the preparation of definitive Certificates of such series, the
temporary Certificates shall be exchangeable for definitive Certificates upon
surrender of such temporary Certificates at the Corporate Trust Office of the
Trustee, or at the office or agency of the Trustee maintained in accordance with
Section 7.11, without charge to the holder. Upon surrender for cancellation of
any one or more temporary Certificates, the Trustee shall execute, authenticate
and deliver in exchange therefor definitive Certificates of like series, in
authorized denominations and of a like aggregate Fractional Undivided Interest.
Until so exchanged, such temporary Certificates shall in all respects be
entitled to the same benefits under this Agreement as definitive Certificates.
Section 3.04. REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES. The
Trustee shall cause to be kept at the office or agency to be maintained by it in
accordance with the provisions of Section 7.11 a register (the "Register") for
each series of Certificates in which, subject to such reasonable regulations as
it may prescribe, the Trustee shall provide for the registration of Certificates
of such series and of transfers and exchanges of such Certificates as herein
provided. The Trustee shall initially be the registrar (the "Registrar") for the
purpose of registering Certificates of each series and transfers and exchanges
of such Certificates as herein provided.
Upon surrender for registration of transfer of any Certificate at the
Corporate Trust Office or such other office or agency, the Trustee shall
execute, authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of like series, in authorized
denominations of a like aggregate Fractional Undivided Interest.
At the option of a Certificateholder, Certificates may be exchanged for
other Certificates of like series, in authorized denominations and of a like
aggregate Fractional Undivided Interest, upon surrender of the Certificates to
be exchanged at any such office or agency. Whenever any Certificates are so
surrendered for exchange, the Trustee shall execute, authenticate and deliver
the Certificates that the Certificateholder making the exchange is entitled to
receive. Every Certificate presented or surrendered for registration of transfer
or exchange shall be duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Registrar duly executed by
the Certificateholder thereof or its attorney duly authorized in writing.
<PAGE>
17
No service charge shall be made to a Certificateholder for any
registration of transfer or exchange of Certificates, but the Trustee shall
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
All Certificates surrendered for registration of transfer and exchange
shall be cancelled and subsequently destroyed by the Trustee.
Section 3.05. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES. If (a)
any mutilated Certificate is surrendered to the Registrar, or the Registrar
receives evidence to its satisfaction of the destruction, loss or theft of any
Certificate, and (b) there is delivered to the Registrar and the Trustee such
security, indemnity or bond, as may be required by them to save each of them
harmless, then, in the absence of notice to the Registrar or the Trustee that
such Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute, authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate or
Certificates of like series, in authorized denominations and of like Fractional
Undivided Interest. In connection with the issuance of any new Certificate under
this Section 3.05, the Trustee shall require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Trustee
and the Registrar) connected therewith. Any duplicate Certificate issued
pursuant to this Section 3.05 shall constitute conclusive evidence of the
appropriate Fractional Undivided Interest in the related Trust, as if originally
issued, whether or not the lost, stolen or destroyed Certificate shall be found
at any time.
Section 3.06. PERSONS DEEMED OWNERS. Prior to due presentation of a
Certificate for registration of transfer, the Trustee, the Registrar, and any
Paying Agent of the Trustee may treat the person in whose name any Certificate
is registered as the owner of such Certificate for the purpose of receiving
distributions pursuant to Section 4.02 and for all other purposes whatsoever,
and neither the Trustee, the Registrar, nor any Paying Agent of the Trustee
shall be affected by any notice to the contrary.
Section 3.07. CANCELLATION. All Certificates surrendered for payment or
transfer or exchange shall, if surrendered to any Person party hereto other than
the Registrar, be delivered to the Registrar for cancellation. No Certificates
shall be authenticated in lieu of or in exchange for any Certificates cancelled
as provided in this Section, except as expressly permitted by this Agreement.
All cancelled Certificates held by the Registrar shall be destroyed and a
certification of their destruction delivered to the Trustee.
Section 3.08. LIMITATION OF LIABILITY FOR PAYMENTS. All payments or
distributions made to Certificateholders of any series under the related Trust
Supplement shall be made only from the Trust Property of the related Trust and
only to the extent that the Trustee shall have sufficient income or proceeds
from such Trust Property to make such payments in accordance with the terms of
Article IV of this Agreement. Each Certificateholder, by its acceptance of a
Certificate, agrees that it will look solely to the income and proceeds from the
Trust Property of the related Trust to the extent available for distribution to
such Certificateholder as provided in this Agreement.
Section 3.09. BOOK-ENTRY AND DEFINITIVE CERTIFICATES.
(a) Except for one Certificate of each series that may be issued in a
denomination of less than $1,000, the Certificates of any series may be issued
in the form of one or more typewritten Certificates representing the Book-Entry
Certificates of such series, to be delivered to The Depository Trust Company,
the initial Clearing Agency, by, or on behalf of, the Company. In such case, the
<PAGE>
18
Certificates of such series delivered to The Depository Trust Company shall
initially be registered on the Register in the name of CEDE & Co., the nominee
of the initial Clearing Agency, and no Certificate Owner will receive a
definitive certificate representing such Certificate Owner's interest in the
Certificates of such series, except as provided above and in Subsection (d)
below. As to the Certificates of any series, except with respect to the one
Certificate of such series that may be issued in a denomination of less than
$1,000, unless and until definitive, fully registered Certificates (the
"Definitive Certificates") have been issued pursuant to Subsection (d) below:
(i) the provisions of this Section 3.09 shall be in full force
and effect;
(ii) the Company, the Paying Agent, the Registrar and the
Trustee may deal with the Clearing Agency Participants for all purposes
(including the making of distributions on the Certificates) as the
authorized representatives of the Certificate Owners;
(iii) to the extent that the provisions of this Section 3.09
conflict with any other provisions of this Agreement (other than the
provisions of any Trust Supplement amending this Section 3.09 as
permitted by this Basic Agreement), the provisions of this Section 3.09
shall control;
(iv) the rights of Certificate Owners shall be exercised only
through the Clearing Agency and shall be limited to those established by
law and agreements between such Certificate Owners and the Clearing
Agency Participants; and until Definitive Certificates are issued
pursuant to Subsection (d) below, the Clearing Agency will make
book-entry transfers among the Clearing Agency Participants and receive
and transmit distributions of principal and interest and premium, if
any, on the Certificates to such Clearing Agency Participants; and
(v) whenever this Agreement requires or permits actions to be
taken based upon instructions or directions of Certificateholders of
such series holding Certificates of such series evidencing a specified
percentage of the Fractional Undivided Interests in the related Trust,
the Clearing Agency shall be deemed to represent such percentage only to
the extent that it has received instructions to such effect from
Certificate Owners and/or Clearing Agency Participants owning or
representing, respectively, such required percentage of the beneficial
interest in Certificates of such series and has delivered such
instructions to the Trustee. The Trustee shall have no obligation to
determine whether the Clearing Agency has in fact received any such
instructions.
(b) Except with respect to the one Certificate of each series that may
be issued in a denomination of less than $1,000, whenever notice or other
communication to the Certificateholders of such series is required under this
Agreement, unless and until Definitive Certificates shall have been issued
pursuant to Subsection (d) below, the Trustee shall give all such notices and
communications specified herein to be given to Certificateholders of such series
to the Clearing Agency.
(c) Unless and until Definitive Certificates of a series are issued
pursuant to Subsection (d) below, on the Record Date prior to each applicable
Regular Distribution Date and Special Distribution Date, the Trustee will
request from the Clearing Agency a Securities Position Listing setting forth the
names of all Clearing Agency Participants reflected on the Clearing Agency's
books as holding interests in the Certificates on such Record Date.
<PAGE>
19
(d) If with respect to the Certificates of any series (i) the Company
advises the Trustee in writing that the Clearing Agency is no longer willing or
able to properly discharge its responsibilities and the Trustee or the Company
is unable to locate a qualified successor, (ii) the Company at its option,
advises the Trustee in writing that it elects to terminate the book-entry system
through the Clearing Agency or (iii) after the occurrence of an Event of
Default, Certificate Owners of Book-Entry Certificates of such series evidencing
Fractional Undivided Interests aggregating not less than a majority in interest
in the related Trust, by Act of said Certificate Owners delivered to the Company
and the Trustee, advise the Company, the Trustee and the Clearing Agency through
the Clearing Agency Participants in writing that the continuation of a
book-entry system through the Clearing Agency Participants is no longer in the
best interests of the Certificate Owners of such series, then the Trustee shall
notify all Certificate Owners of such series, through the Clearing Agency, of
the occurrence of any such event and of the availability of Definitive
Certificates. Upon surrender to the Trustee of all the Certificates of such
series held by the Clearing Agency, accompanied by registration instructions
from the Clearing Agency Participants for registration of Definitive
Certificates in the names of Certificate Owners of such series, the Trustee
shall issue and deliver the Definitive Certificates of such series in accordance
with the instructions of the Clearing Agency. Neither the Company, the
Registrar, the Paying Agent nor the Trustee shall be liable for any delay in
delivery of such instructions and may conclusively rely on, and shall be
protected in relying on, such registration instructions. Upon the issuance of
Definitive Certificates of such series, the Trustee shall recognize the Person
in whose name the Definitive Certificates are registered in the Register as
Certificateholders hereunder. Neither the Company nor the Trustee shall be
liable if the Trustee or the Company is unable to locate a qualified successor
Clearing Agency.
(e) Except as otherwise provided in the related Trust Supplement, the
Trustee shall enter into the applicable Letter of Representations with respect
to such series of Certificates and fulfill its responsibilities thereunder.
(f) The provisions of this Section 3.09 may be made inapplicable to any
series or may be amended with respect to any series in the related Trust
Supplement.
ARTICLE IV
DISTRIBUTIONS; STATEMENTS TO
CERTIFICATEHOLDERS
Section 4.01. CERTIFICATE ACCOUNT AND SPECIAL PAYMENTS ACCOUNT.
(a) The Trustee shall establish and maintain on behalf of the
Certificateholders of each series a Certificate Account as one or more
non-interest-bearing accounts. The Trustee shall hold the Certificate Account in
trust for the benefit of the Certificateholders of such series, and shall make
or permit withdrawals therefrom only as provided in this Agreement. On each day
when a Scheduled Payment is made to the Trustee, the Trustee, upon receipt
thereof, shall immediately deposit the aggregate amount of such Scheduled
Payment into the Certificate Account.
(b) The Trustee shall establish and maintain on behalf of the
Certificateholders of each series a Special Payments Account as one or more
accounts, which shall be non-interest bearing except as provided in Section
4.04. The Trustee shall hold the Special Payments Account in trust for the
benefit of the Certificateholders of such series, and shall make or permit
withdrawals therefrom only as provided in this Agreement. On each day when one
or more Special Payments are made to the
<PAGE>
20
Trustee, the Trustee, upon receipt thereof, shall immediately deposit the
aggregate amount of such Special Payments into the Special Payments Account.
(c) The Trustee shall present to the Loan Trustee to which an Equipment
Note relates such Equipment Note on the date of its stated final maturity or, in
the case of any Equipment Note which is to be redeemed in whole pursuant to the
relevant Indenture, on the applicable redemption date under such Indenture.
Section 4.02. DISTRIBUTIONS FROM CERTIFICATE ACCOUNT AND SPECIAL
PAYMENTS ACCOUNT.
(a) On each Regular Distribution Date with respect to a series of
Certificates or as soon thereafter as the Trustee has confirmed receipt of the
payment of the Scheduled Payments due on the Equipment Notes held in the related
Trust on such date, the Trustee shall distribute out of the applicable
Certificate Account the entire amount deposited therein pursuant to Section
4.01(a). There shall be so distributed to each Certificateholder of record of
such series on the Record Date with respect to such Regular Distribution Date
(other than as provided in Section 11.01 concerning the final distribution), by
check mailed to such Certificateholder at the address appearing in the Register,
such Certificateholder's pro rata share (based on the aggregate Fractional
Undivided Interest in the related Trust held by such Certificateholder) of the
aggregate amount in the applicable Certificate Account.
(b) On each Special Distribution Date with respect to any Special
Payment with respect to a series of Certificates or as soon thereafter as the
Trustee has confirmed receipt of the Special Payments due on the Equipment Notes
held in the related Trust or realized upon the sale of such Equipment Note, the
Trustee shall distribute out of the applicable Special Payments Account the
entire amount deposited therein pursuant to Section 4.01(b) of such Special
Payment. There shall be so distributed to each Certificateholder of record of
such series on the Record Date with respect to such Special Distribution Date
(other than as provided in Section 11.01 concerning the final distribution), by
check mailed to such Certificateholder at the address appearing in the Register,
such Certificateholder's pro rata share (based on the aggregate Fractional
Undivided Interest in the related Trust held by such Certificateholder) of the
aggregate amount in the applicable Special Payments Account on account of such
Special Payment.
(c) The Trustee shall, at the expense of the Company, cause notice of
each Special Payment with respect to a series of Certificates to be mailed to
each Certificateholder of such series at his address as it appears in the
Register. In the event of redemption or purchase of Equipment Notes held in the
related Trust, such notice shall be mailed not less than 20 days prior to the
date any such Special Payment is scheduled to be distributed. In the case of any
other Special Payments, such notice shall be mailed as soon as practicable after
the Trustee has confirmed that it has received funds for such Special Payment.
Notices mailed by the Trustee shall set forth:
(i) the Special Distribution Date and the Record Date therefor
(except as otherwise provided in Section 11.01),
(ii) the amount of the Special Payment for each $1,000 face
amount Certificate (taking into account any payment to be made by the
Company pursuant to Section 2.02(b)) and the amount thereof constituting
principal, premium, if any, and interest,
(iii) the reason for the Special Payment, and
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(iv) if the Special Distribution Date is the same date as a
Regular Distribution Date for the Certificates of such series, the total
amount to be received on such date for each $1,000 face amount
Certificate.
If the amount of premium, if any, payable upon the redemption or
purchase of an Equipment Note has not been calculated at the time that the
Trustee mails notice of a Special Payment, it shall be sufficient if the notice
sets forth the other amounts to be distributed and states that any premium
received will also be distributed.
If any redemption of the Equipment Notes held in any Trust is cancelled,
the Trustee, as soon as possible after learning thereof, shall cause notice
thereof to be mailed to each Certificateholder of the related series at its
address as it appears on the Register.
Section 4.03. STATEMENTS TO CERTIFICATEHOLDERS.
(a) On each Regular Distribution Date and Special Distribution Date with
respect to a series of Certificates, the Trustee will include with each
distribution to Certificateholders of the related series a statement, giving
effect to such distribution to be made on such Regular Distribution Date or
Special Distribution Date, as the case may be, setting forth the following
information (per a $1,000 face amount Certificate as to (i) and (ii) below):
(i) The amount of such distribution allocable to principal and
the amount allocable to premium, if any;
(ii) The amount of such distribution allocable to interest; and
(iii) The Pool Balance and the Pool Factor of the related Trust.
With respect to the Certificates registered in the name of a
Clearing Agency or its nominee, on the record date prior to each Distribution
Date, the Trustee will request from the Clearing Agency a securities position
listing setting forth the names of all the Clearing Agency Participants
reflected on the Clearing Agency's books as holding interests in the
Certificates on such record date. On each Distribution Date, the applicable
Trustee will mail to each such Clearing Agency Participant the statement
described above and will make available additional copies as requested by such
Clearing Agency Participant for forwarding to holders of Certificates.
(b) Within a reasonable period of time after the end of each calendar
year but not later than the latest date permitted by law, the Trustee shall
furnish to each Person who at any time during such calendar year was a
Certificateholder of record a statement containing the sum of the amounts
determined pursuant to clauses (a)(i) and (a)(ii) with respect to the related
Trust for such calendar year or, in the event such Person was a
Certificateholder of record during a portion of such calendar year, for the
applicable portion of such year, and such other items as are readily available
to the Trustee and which a Certificateholder shall reasonably request as
necessary for the purpose of such Certificateholder's preparation of its Federal
income tax returns. With respect to Certificates registered in the name of a
Clearing Agency or its nominee, such report and such other items shall be
prepared on the basis of information supplied to the Trustees by the Clearing
Agency Participants and shall be delivered by the Trustee to such Clearing
Agency Participants to be available for forwarding by such Clearing Agency
Participants.
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Section 4.04. INVESTMENT OF SPECIAL PAYMENT MONEYS. Any money received
by the Trustee pursuant to Section 4.01(b) representing a Special Payment which
is not to be promptly distributed shall, to the extent practicable, be invested
in Permitted Investments by the Trustee as directed in writing by the Company
pending distribution of such Special Payment pursuant to Section 4.02. Any
investment made pursuant to this Section 4.04 shall be in such Permitted
Investments having maturities not later than the date that such moneys are
required to be used to make the payment required under Section 4.02 on the
applicable Special Distribution Date and the Trustee shall hold any such
Permitted Investments until maturity. The Trustee shall have no liability with
respect to any investment made pursuant to this Section 4.04, other than by
reason of the willful misconduct or negligence of the Trustee. All income and
earnings from such investments shall be distributed on such Special Distribution
Date as part of such Special Payment.
ARTICLE V
THE COMPANY
Section 5.01. MAINTENANCE OF CORPORATE EXISTENCE. The Company, at its
own cost and expense, will do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence, rights and
franchises, except as otherwise specifically permitted in Section 5.02;
provided, however, that the Company shall not be required to preserve any right
or franchise if the Company shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company.
Section 5.02. CONSOLIDATION, MERGER, ETC. The Company shall not
consolidate with or merge into any other corporation or convey, transfer or
lease substantially all of its assets as an entirety to any Person unless:
(a) the corporation formed by such consolidation or into which the
Company is merged or the Person which acquires by conveyance, transfer or lease
substantially all of the assets of the Company as an entirety shall be a
"citizen of the United States" (as defined in Section 40102(a)(15) of Title 49
of the United States Code) holding a carrier operating certificate issued by the
Secretary of Transportation pursuant to Chapter 447 of Title 49, United States
Code, for aircraft capable of carrying 10 or more individuals or 6,000 pounds or
more of cargo and with respect to which there is in force an air carrier
operating certificate issued pursuant to Part 121 of the regulations under the
sections of Title 49, United States Code, relating to aviation;
(b) the corporation formed by such consolidation or into which the
Company is merged or the Person which acquires by conveyance, transfer or lease
substantially all of the assets of the Company as an entirety shall execute and
deliver to the Trustee applicable to the Certificates of each series a duly
authorized, valid, binding and enforceable agreement in form and substance
reasonably satisfactory to the Trustee containing an assumption by such
successor corporation or Person of the due and punctual performance and
observance of each covenant and condition of the Note Documents and of this
Agreement applicable to the Certificates of each series to be performed or
observed by the Company;
(c) immediately after giving effect to such transaction, no Event of
Default applicable to the Certificates of each series or event which is, or
after notice or passage of time, or both, would be, such an Event of Default
shall have occurred and be continuing; and
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(d) the Company shall have delivered to the Trustee an Officers'
Certificate of the Company and an Opinion of Counsel of the Company (which may
be the Company's General Counsel) reasonably satisfactory to the Trustee, each
stating that such consolidation, merger, conveyance, transfer or lease and the
assumption agreement mentioned in clause (b) above comply with this Section 5.02
and that all conditions precedent herein provided for relating to such
transaction have been complied with.
Upon any consolidation or merger, or any conveyance, transfer or lease
of substantially all of the assets of the Company as an entirety in accordance
with this Section 5.02, the successor corporation or Person formed by such
consolidation or into which the Company is merged or to which such conveyance,
transfer or lease is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Agreement applicable
to the Certificates of each series with the same effect as if such successor
corporation or Person had been named as the Company herein. No such conveyance,
transfer or lease of substantially all of the assets of the Company as an
entirety shall have the effect of releasing the Company or any successor
corporation or Person which shall theretofore have become such in the manner
prescribed in this Section 5.02 from its liability in respect of any Note
Document and of this Agreement applicable to the Certificates of such series to
which it is a party.
ARTICLE VI
DEFAULT
Section 6.01. EVENTS OF DEFAULT. (a) EXERCISE OF REMEDIES: Upon the
occurrence and during the continuation of any Indenture Default under any
Indenture, the Trustee may, to the extent it is the Controlling Party at such
time, direct the exercise of remedies.
(b) PURCHASE RIGHTS OF CERTIFICATEHOLDERS: By acceptance of its
Certificate, each Certificateholder agrees that at any time after the occurrence
and during the continuation of a Triggering Event, each Certificateholder of
Certificates of a series will have certain rights, the exercise of which will be
specified in the applicable Trust Supplement, to purchase the class of
Certificates with immediate seniority to the Certificates held by the purchasing
Certificateholder. The purchase price with respect to the Certificates of any
series shall be equal to the Pool Balance of the Certificates of such series,
together with accrued and unpaid interest thereon to the date of such purchase,
without premium, but including any other amounts then due and payable to the
Certificateholders under this Agreement, any Intercreditor Agreement or any
other Note Document or on or in respect of the Certificates of such series;
provided, however, that no such purchase of Certificates of such series shall be
effective unless the purchaser shall certify to the Trustee that
contemporaneously with such purchase, such purchaser is purchasing, pursuant to
the terms of this Agreement and the other Agreements, if any, relating to
Certificates of a series that are subject to the same Intercreditor Agreement
(such other Agreements, the "Other Agreements"), the Certificates of each such
series that is senior to the Certificates held by such purchaser. Each payment
of the purchase price of the Certificates of any series shall be made to an
account or accounts designated by the Trustee and each such purchase shall be
subject to the terms of this Section. Each Certificateholder of any series
agrees by its acceptance of Certificates of such series that it will, upon
payment from any such Certificateholders of Certificates with a lower seniority
of the purchase price specified herein, forthwith sell, assign, transfer and
convey to the purchaser thereof (without recourse, representation or warranty of
any kind except for its own acts), all of the right, title, interest and
obligation of such Certificateholder in this Agreement, any Intercreditor
Agreement, the Liquidity Facility, the Note
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24
Documents and all Certificates of such series held by such Certificateholder
(excluding all right, title and interest under any of the foregoing to the
extent such right, title or interest is with respect to an obligation not then
due and payable as respects any action or inaction or state of affairs occurring
prior to such sale) and the purchaser shall assume all of such
Certificateholder's obligations under this Agreement, any Intercreditor
Agreement, the Liquidity Facility and the Note Documents. The Certificates of
such series will be deemed to be purchased on the date payment of the purchase
price is made notwithstanding the failure of the Certificateholders to deliver
any Certificates of such series and, upon such a purchase, (i) the only rights
of the Certificateholders will be to deliver the Certificates to the purchaser
and receive the purchase price for such Certificates of such series and (ii) if
the purchaser shall so request, such Certificateholder will comply with all of
the provisions of Section 3.04 hereof to enable new Certificates of such series
to be issued to the purchaser in such denominations as it shall request. All
charges and expenses in connection with the issuance of any such new
Certificates shall be borne by the purchaser thereof.
Section 6.02. INCIDENTS OF SALE OF EQUIPMENT NOTES. Upon any sale of all
or any part of the Equipment Notes made either under the power of sale given
under this Agreement or otherwise for the enforcement of this Agreement, the
following shall be applicable:
(1) CERTIFICATEHOLDERS AND TRUSTEE MAY PURCHASE EQUIPMENT NOTES.
Any Certificateholder, the Trustee in its individual or any other
capacity or any other Person may bid for and purchase any of the
Equipment Notes, and upon compliance with the terms of sale, may hold,
retain, possess and dispose of such Equipment Notes in their own
absolute right without further accountability.
(2) RECEIPT OF TRUSTEE SHALL DISCHARGE PURCHASER. The receipt of
the Trustee or of the officer making such sale shall be a sufficient
discharge to any purchaser for his purchase money, and, after paying
such purchase money and receiving such receipt, such purchaser or its
personal representative or assigns shall not be obliged to see to the
application of such purchase money, or be in any way answerable for any
loss, misapplication or non-application thereof.
(3) APPLICATION OF MONEYS RECEIVED UPON SALE. Any moneys
collected by the Trustee upon any sale made either under the power of
sale given by this Agreement or otherwise for the enforcement of this
Agreement shall be applied as provided in Section 4.02.
Section 6.03. JUDICIAL PROCEEDINGS INSTITUTED BY TRUSTEE; TRUSTEE MAY
BRING SUIT. If there shall be a failure to make payment of the principal of,
premium, if any, or interest on any Equipment Note, or if there shall be any
failure to pay Rent (as defined in the relevant Lease) under any Lease when due
and payable, then the Trustee, in its own name, and as trustee of an express
trust, as holder of such Equipment Notes, to the extent permitted by and in
accordance with the terms of any Intercreditor Agreement and any Note Documents,
shall be entitled and empowered to institute any suits, actions or proceedings
at law, in equity or otherwise, for the collection of the sums so due and unpaid
on such Equipment Notes or under such Lease and may prosecute any such claim or
proceeding to judgment or final decree with respect to the whole amount of any
such sums so due and unpaid.
Section 6.04. CONTROL BY CERTIFICATEHOLDERS. Subject to Section 6.03 and
any Intercreditor Agreement, the Certificateholders holding Certificates of a
series evidencing Fractional Undivided Interests aggregating not less than a
majority in interest in the related Trust shall have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee with
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25
respect to such Trust or pursuant to the terms of any Intercreditor Agreement,
or exercising any trust or power conferred on the Trustee under this Agreement
or any Intercreditor Agreement, including any right of the Trustee as
Controlling Party under any Intercreditor Agreement or as holder of the
Equipment Notes, PROVIDED that
(1) such Direction shall not in the opinion of the Trustee be in
conflict with any rule of law or with this Agreement and would not
involve the Trustee in personal liability or expense,
(2) the Trustee shall not determine that the action so directed
would be unjustly prejudicial to the Certificateholders of such series
not taking part in such Direction, and
(3) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such Direction.
Section 6.05. WAIVER OF PAST DEFAULTS. Subject to any Intercreditor
Agreement, the Certificateholders holding Certificates of a series evidencing
Fractional Undivided Interests aggregating not less than a majority in interest
in the Trust (i) may on behalf of all of the Certificateholders waive any past
Event of Default hereunder and its consequences or (ii) if the Trustee is the
Controlling Party, may direct the Trustee to instruct the applicable Loan
Trustee to waive, any past Indenture Default under any Indenture and its
consequences, and thereby annul any Direction given by such Certificateholders
or the Trustee to such Loan Trustee with respect thereto, except a default:
(1) in the deposit of any Scheduled Payment or Special Payment
under Section 4.01 or in the distribution of any payment under Section
4.02 on the Certificates of a series, or
(2) in the payment of the principal of (premium, if any) or
interest on the Equipment Notes, or
(3) in respect of a covenant or provision hereof which under
Article IX hereof cannot be modified or amended without the consent of
each Certificateholder holding an Outstanding Certificate of a series
affected thereby.
Upon any such waiver, such default shall cease to exist with
respect to Certificates of such series and any Event of Default arising
therefrom shall be deemed to have been cured for every purpose and any direction
given by the Trustee on behalf of the Certificateholders of such series to the
relevant Loan Trustee shall be annulled with respect thereto; but no such waiver
shall extend to any subsequent or other default or Event of Default or impair
any right consequent thereon. Upon any such waiver, the Trustee shall vote the
Equipment Notes issued under the relevant Indenture to waive the corresponding
Indenture Default.
Section 6.06. RIGHT OF CERTIFICATEHOLDERS TO RECEIVE PAYMENTS NOT TO BE
IMPAIRED. Anything in this Agreement to the contrary notwithstanding, including
without limitation Section 6.07 hereof, but subject to any Intercreditor
Agreement, the right of any Certificateholder to receive distributions of
payments required pursuant to Section 4.02 hereof on the applicable Certificates
when due, or to institute suit for the enforcement of any such payment on or
after the applicable Regular Distribution Date or Special Distribution Date,
shall not be impaired or affected without the consent of such Certificateholder.
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Section 6.07. CERTIFICATEHOLDERS MAY NOT BRING SUIT EXCEPT UNDER CERTAIN
CONDITIONS. A Certificateholder of any series shall not have the right to
institute any suit, action or proceeding at law or in equity or otherwise with
respect to this Agreement, for the appointment of a receiver or for the
enforcement of any other remedy under this Agreement, unless:
(1) such Certificateholder previously shall have given written
notice to the Trustee of a continuing Event of Default;
(2) the Certificateholders holding Certificates of such series
evidencing Fractional Undivided Interests aggregating not less than 25%
of the related Trust shall have requested the Trustee in writing to
institute such action, suit or proceeding and shall have offered to the
Trustee indemnity as provided in Section 7.02(e);
(3) the Trustee shall have refused or neglected to institute any
such action, suit or proceeding for 60 days after receipt of such
notice, request and offer of indemnity; and
(4) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Certificateholders
holding Certificates of such series evidencing Fractional Undivided
Interests aggregating not less than a majority in interest in the
related Trust.
It is understood and intended that no one or more of the
Certificateholders of any series shall have any right in any manner whatever
hereunder or under the related Trust Supplement or under the Certificates of
such series to (i) surrender, impair, waive, affect, disturb or prejudice any
property in the Trust Property of the related Trust or the lien of any related
Indenture on any property subject thereto, or the rights of the
Certificateholders of such series or the holders of the related Equipment Notes,
(ii) obtain or seek to obtain priority over or preference to any other such
Certificateholder of such series or (iii) enforce any right under this
Agreement, except in the manner herein provided and for the equal, ratable and
common benefit of all the Certificateholders of such series subject to the
provisions of this Agreement.
Section 6.08. REMEDIES CUMULATIVE. Every remedy given hereunder to the
Trustee or to any of the Certificateholders of any series shall not be exclusive
of any other remedy or remedies, and every such remedy shall be cumulative and
in addition to every other remedy given hereunder or now or hereafter given by
statute, law, equity or otherwise.
Section 6.09. UNDERTAKING FOR COSTS. In any suit for the enforcement of
any right or remedy under this Agreement, or in any suit against the Trustee for
any action taken, suffered or omitted by it as Trustee, a court may require any
party litigant in such suit to file an undertaking to pay the costs of such
suit, and may assess costs against any such party litigant, in the manner and to
the extent provided in the Trust Indenture Act; provided that neither this
Section nor the Trust Indenture Act shall be deemed to authorize any court to
require such an undertaking or to make such an assessment in any suit instituted
by the Company or the Guarantor.
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27
ARTICLE VII
THE TRUSTEE
Section 7.01. NOTICE OF DEFAULTS. As promptly as practicable after, and
in any event within 90 days after the occurrence of any default (as such term is
defined below) hereunder known to the Trustee, the Trustee shall transmit by
mail to the Company, any related Owner Trustees, the related Loan Trustees and
the Certificateholders holding Certificates of the related series in accordance
with Section 313(c) of the Trust Indenture Act, notice of such default hereunder
known to the Trustee, unless such default shall have been cured or waived;
PROVIDED, HOWEVER, that, except in the case of a default in the payment of the
principal of (premium, if any) or interest on any Equipment Note, the Trustee
shall be protected in withholding such notice if and so long as the board of
directors, the executive committee or a trust committee of directors and/or
Responsible Officers of the Trustee in good faith determine that the withholding
of such notice is in the interests of the Certificateholders of the related
series. For the purpose of this Section in respect of any Trust, the term
"default" means any event that is, or after notice or lapse of time or both
would become, an Event of Default in respect of that Trust.
Section 7.02. CERTAIN RIGHTS OF TRUSTEE. Subject to the provisions of
Section 315 of the Trust Indenture Act:
(a) the Trustee may rely and shall be protected in acting or refraining
from acting in reliance upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture or
other paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Request;
(c) whenever in the administration of this Agreement or any
Intercreditor Agreement the Trustee shall deem it desirable that a matter be
proved or established prior to taking, suffering or omitting any action
hereunder, the Trustee (unless other evidence be herein specifically prescribed)
may, in the absence of bad faith on its part, rely upon an Officers' Certificate
of the Company, any related Owner Trustee or any related Loan Trustee;
(d) the Trustee may consult with counsel and the advice of such counsel
or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Agreement or any Intercreditor Agreement
at the request or direction of any of the Certificateholders pursuant to this
Agreement or any Intercreditor Agreement unless such Certificateholders shall
have offered to the Trustee reasonable security or indemnity against the cost,
expenses and liabilities which might be incurred by it in compliance with such
request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, or report, notice, request, direction, consent, order, bond, debenture
or other paper or document;
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(g) the Trustee may execute any of the trusts or powers under this
Agreement or Intercreditor Agreement or perform any duties under this Agreement
or any Intercreditor Agreement either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
under this Agreement or any Intercreditor Agreement;
(h) the Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the direction of the
Certificateholders holding Certificates of any series evidencing Fractional
Undivided Interests aggregating not less than a majority in interest in the
related Trust relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee, under this Agreement or any Intercreditor
Agreement; and
(i) the Trustee shall not be required to expend or risk its own funds in
the performance of any of its duties under this Agreement, 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 is not
reasonably assured to it.
(j) except during the continuance of an Event of Default, the Trustee
undertakes and shall be responsible to perform only such duties as are
specifically set forth herein and no implied covenants or obligations shall be
read into this Agreement or be enforceable against Trustee.
Section 7.03. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF CERTIFICATES.
The recitals contained herein and in the Certificates of each series, except the
certificates of authentication, shall not be taken as the statements of the
Trustee, and the Trustee assumes no responsibility for their correctness.
Subject to Section 7.14, the Trustee makes no representations as to the validity
or sufficiency of this Basic Agreement or any Trust Supplement, any Note
Documents, any Note Purchase Agreement or any Intercreditor Agreement, any
Equipment Notes or the Certificates of any series, except that the Trustee
hereby represents and warrants that this Basic Agreement has been, and each
Trust Supplement, each Certificate and each Intercreditor Agreement of, or
relating to, each series will be, executed and delivered by one of its officers
who is duly authorized to execute and deliver such document on its behalf.
Section 7.04. MAY HOLD CERTIFICATES. The Trustee, any Paying Agent,
Registrar or any of their Affiliates or any other agent, in their respective
individual or any other capacity, may become the owner or pledgee of
Certificates and subject to Sections 310(b) and 311 of the Trust Indenture Act
may otherwise deal with the Company, the Guarantor, any Owner Trustees or the
Loan Trustees with the same rights it would have if it were not Trustee, Paying
Agent, Registrar or such other agent.
Section 7.05. MONEY HELD IN TRUST. Money held by the Trustee or the
Paying Agent in trust hereunder or under any Trust Supplement need not be
segregated from other funds except to the extent required herein or by law and
neither the Trustee nor the Paying Agent shall have any liability for interest
upon any such moneys except as provided for herein.
Section 7.06. COMPENSATION AND REIMBURSEMENT. The Company agrees:
(1) to pay, or cause to be paid, to the Trustee from time to time
reasonable compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
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(2) except as otherwise expressly provided herein or in any Trust
Supplement, to reimburse, or cause to be reimbursed, the Trustee upon
its request for all reasonable out-of-pocket expenses, disbursements and
advances incurred or made by the Trustee in accordance with any
provision of this Basic Agreement, any Trust Supplement or any
Intercreditor Agreement (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except any such
expense, disbursement or advance as may be attributable to its
negligence, willful misconduct or bad faith or as may be incurred due to
the Trustee's breach of its representations and warranties set forth in
Section 7.14;
(3) to indemnify, or cause to be indemnified, the Trustee for,
and to hold it harmless against, any loss, liability or expense (other
than for or with respect to any tax) incurred without negligence,
willful misconduct or bad faith, on its part, arising out of or in
connection with the acceptance or administration of this Trust,
including the costs and expenses of defending itself against any claim
or liability in connection with the exercise or performance of any of
its powers or duties hereunder, except for any such loss, liability or
expense incurred by reason of the Trustee's breach of its
representations and warranties set forth in Section 7.14. The Trustee
shall notify the Company and the Guarantor promptly of any claim for
which it may seek indemnity. The Company and the Guarantor shall defend
the claim and the Trustee shall cooperate in the defense. The Trustee
may have separate counsel with the consent of the Company and the
Guarantor and the Company and the Guarantor will pay the reasonable fees
and expenses of such counsel. Neither the Company nor the Guarantor need
pay for any settlement made without its consent; and
(4) to indemnify, or cause to be indemnified, the Trustee, solely
in its individual capacity, for, and to hold it harmless against, any
tax (except to the extent the Trustee is reimbursed therefor pursuant to
the next paragraph, provided that no indemnification shall be available
with respect to any tax attributable to the Trustee's compensation for
serving as such) incurred without negligence, willful misconduct or bad
faith, on its part, arising out of or in connection with the acceptance
or administration of this Trust, including any costs and expenses
incurred in contesting the imposition of any such tax. The Trustee, in
its individual capacity, shall notify the Company and the Guarantor
promptly of any claim for any tax for which it may seek indemnity. The
Trustee shall permit the Company and the Guarantor to contest the
imposition of such tax and the Trustee, in its individual capacity,
shall cooperate in the defense. The Trustee, in its individual capacity,
may have separate counsel with the consent of the Company and the
Guarantor and the Company and the Guarantor will pay the reasonable fees
and expenses of such counsel. Neither the Company nor the Guarantor need
pay for any taxes paid, in settlement or otherwise, without its consent.
The Trustee shall be entitled to reimbursement from, and shall have a
lien prior to the Certificates of each series upon, all property and funds held
or collected by the Trustee in its capacity as Trustee with respect to such
series or the related Trust for any tax incurred without negligence, bad faith
or willful misconduct, on its part, arising out of or in connection with the
acceptance or administration of such Trust (other than any tax attributable to
the Trustee's compensation for serving as such), including any costs and
expenses incurred in contesting the imposition of any such tax. The Trustee
shall notify the Company of any claim for any tax for which it may seek
reimbursement. The Trustee shall cooperate in the contest by the Company of any
such claim. If the Trustee reimburses itself from the Trust Property of such
Trust for any such tax it will within 30 days mail a brief report setting forth
the amount of such tax and the circumstances thereof to all Certificateholders
of such series as their names and addresses appear in the Register.
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As security for the performance of the obligations of the Company under
this Section with respect to each Trust the Trustee shall have a lien prior to
the Certificates of the related series upon all property and funds held or
collected by the Trustee in its capacity as Trustee with respect to such
Certificates and the related Trust.
Section 7.07. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY. Each Trust shall
at all times have a Trustee which shall be eligible to act as a trustee under
Section 310(a) of the Trust Indenture Act and shall have a combined capital and
surplus of at least $75,000,000 (or a combined capital and surplus in excess of
$5,000,000 and 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 or Territory
thereof or of the District of Columbia that has a combined capital and surplus
of at least $75,000,000). If such corporation publishes reports of conditions at
least annually, pursuant to law or to the requirements of Federal, State,
Territorial or District of Columbia supervising or examining authority, then for
the purposes of this Section 7.07, 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 conditions so published.
In case at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section 7.07 to act as Trustee of any Trust, the
Trustee shall resign immediately as Trustee of such Trust in the manner and with
the effect specified in Section 7.08.
Section 7.08. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee of any Trust pursuant to this Article shall become effective
until the acceptance of appointment by the successor Trustee under Section 7.09.
(b) The Trustee may resign at any time as trustee of any or all Trusts
by giving written notice thereof to the Company, the Authorized Agents, the
related Owner Trustees and the related Loan Trustees. If an instrument of
acceptance by a successor Trustee shall not have been delivered to the Company,
the related Owner Trustees and the Trustee within 30 days after the giving of
such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time as trustee of any Trust by
Act of the Certificateholders of the related series holding Certificates of such
series evidencing Fractional Undivided Interests aggregating not less than a
majority in interest in such Trust delivered to the Trustee and to the Company,
the related Owner Trustees and the related Loan Trustees.
(d) If at any time in respect of any Trust:
(1) the Trustee shall fail to comply with Section 310 of the
Trust Indenture Act after written request therefor by the Company or by
any Certificateholder of the related series who has been a bona fide
certificateholder for at least six months; or
(2) the Trustee shall cease to be eligible under Section 7.07 and
shall fail to resign after written request therefor by the Company or by
any such Certificateholder; or
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(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation;
then, in any case, (i) the Company may remove the Trustee or (ii) any
Certificateholder of the related series who has been a bona fide
Certificateholder for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee of such Trust.
(e) If a Responsible Officer of the Trustee shall obtain actual
knowledge of an Avoidable Tax (as hereinafter defined) in respect of any Trust
which has been or is likely to be asserted, the Trustee shall promptly notify
the Company and shall, within 30 days of such notification, resign as Trustee of
such Trust hereunder unless within such 30-day period the Trustee shall have
received notice that the Company has agreed to pay such tax. The Company shall
promptly appoint a successor Trustee of such Trust in a jurisdiction where there
are no Avoidable Taxes. As used herein, an "Avoidable Tax" in respect of such
Trust means a state or local tax: (i) upon (w) such Trust, (x) such Trust
Property, (y) Certificateholders of such Trust or (z) the Trustee for which the
Trustee is entitled to seek reimbursement from the Trust Property of such Trust,
and (ii) which would be avoided if the Trustee were located in another state, or
jurisdiction within a state, within the United States. A tax shall not be an
Avoidable Tax in respect of any Trust if the Company or any Owner Trustee shall
agree to pay, and shall pay, such tax.
(f) If the Trustee shall resign, be removed or become incapable of
acting as trustee of any Trust, or if a vacancy shall occur in the office of the
Trustee of any Trust for any cause, the Company shall promptly appoint a
successor Trustee of such Trust. If, within one year after such resignation,
removal or incapability, or other occurrence of such vacancy, a successor
Trustee of such Trust shall be appointed by Act of the Certificateholders of the
related series holding Certificates of such series evidencing Fractional
Undivided Interests aggregating not less than a majority in interest in such
Trust delivered to the Company, the related Owner Trustees, the related Loan
Trustee and the retiring Trustee, the successor Trustees so appointed shall,
with the approval of the Company, which approval shall not be unreasonably
withheld, forthwith upon its acceptance of such appointment, become the
successor Trustee of such Trust and supersede the successor Trustee of such
Trust appointed as provided above. If no successor Trustee shall have been so
appointed as provided above and accepted appointment in the manner hereinafter
provided, the resigning Trustee or any Certificateholder who has been a bona
fide Certificateholder of the related series for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee of such Trust.
(g) The successor Trustee of a Trust shall give notice of the
resignation and removal of the Trustee and appointment of the successor Trustee
by mailing written notice of such event by first-class mail, postage prepaid, to
the Certificateholders of the related series as their names and addresses appear
in the Register. Each notice shall include the name of such successor Trustee
and the address of its Corporate Trust Office.
Section 7.09. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR. Every successor
Trustee appointed hereunder shall execute, acknowledge and deliver to the
Company and to the retiring Trustee with respect to any or all Trusts an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee with respect to such Trusts shall become effective and
such successor
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Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee; but, on
request of the Company or the successor Trustee, such retiring Trustee shall
execute and deliver an instrument transferring to such successor Trustee all
such rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee in respect of such Trusts hereunder, subject nevertheless
to its lien, if any, provided for in Section 7.06. Upon request of any such
successor Trustee, the Company, the retiring Trustee and such successor Trustee
shall execute and deliver any and all instruments containing such provisions as
shall be necessary or desirable to transfer and confirm to, and for more fully
and certainly vesting in, such successor Trustee all such rights, powers and
trusts.
If a successor Trustee is appointed with respect to one or more (but not
all) Trusts, the Company, the predecessor Trustee and each successor Trustee
with respect to any Trust shall execute and deliver a supplemental agreement
hereto which shall contain such provisions as shall be deemed necessary or
desirable to confirm that all the rights, powers, trusts and duties of the
predecessor Trustee with respect to the Trusts as to which the predecessor
Trustee is not retiring shall continue to be vested in the predecessor Trustee,
and shall add to or change any of the provisions of this Basic Agreement and the
applicable Trust Supplements as shall be necessary to provide for or facilitate
the administration of the Trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental agreement shall
constitute such Trustees co-Trustees of the same Trust and that each such
Trustee shall be Trustee of separate Trusts.
No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
Section 7.10. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS. Any corporation into which the Trustee 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 Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Certificates shall have been
executed or authenticated, but not delivered, by the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating Trustee
may adopt such execution or authentication and deliver the Certificates so
executed or authenticated with the same effect as if such successor Trustee had
itself executed or authenticated such Certificates.
Section 7.11. MAINTENANCE OF AGENCIES.
(a) With respect to each series of Certificates, there shall at all
times be maintained in the Borough of Manhattan, The City of New York, an office
or agency where Certificates of such series may be presented or surrendered for
registration of transfer or for exchange, and for payment thereof and where
notices and demands to or upon the Trustee in respect of such Certificates or of
the related Trust Supplement may be served. Such office or agency shall be
initially at 61 Broadway, New York, New York 10006. Written notice of the
location of each such other office or agency and of any change of location
thereof shall be given by the Trustee to the Company, the Guarantor, any Owner
Trustees, the Loan Trustees and the Certificateholders of such series. In the
event that no such office or agency shall be maintained or no such notice of
location or of change of location shall be given,
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presentations and demands may be made and notices may be served at the Corporate
Trust Office of the Trustee.
(b) There shall at all times be a Registrar and a Paying Agent hereunder
with respect to the Certificates of each series. Each such Authorized Agent
shall be a bank or trust company, shall be a corporation organized and doing
business under the laws of the United States or any state, with a combined
capital and surplus of at least $75,000,000, or a corporation having a combined
capital and surplus in excess of $5,000,000 the obligations of which are
guaranteed by a corporation organized and doing business under the laws of the
United States or any state, with a combined capital and surplus of at least
$75,000,000, and shall be authorized under such laws to exercise corporate trust
powers, subject to supervision by Federal or state authorities. The Trustee
shall initially be the Paying Agent and, as provided in Section 3.04, Registrar
hereunder with respect to the Certificates of each series. Each Registrar shall
furnish to the Trustee, at stated intervals of not more than six months, and at
such other times as the Trustee may request in writing, a copy of the Register
maintained by such Registrar.
(c) Any corporation into which any Authorized Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any Authorized Agent shall
be a party, or any corporation succeeding to the corporate trust business of any
Authorized Agent, shall be the successor of such Authorized Agent hereunder, if
such successor corporation is otherwise eligible under this Section, without the
execution or filing of any paper or any further act on the part of the parties
hereto or such Authorized Agent or such successor corporation.
(d) Any Authorized Agent may at any time resign by giving written notice
of resignation to the Trustee, the Company, any related Owner Trustees and the
related Loan Trustees. The Company may, and at the request of the Trustee shall,
at any time terminate the agency of any Authorized Agent by giving written
notice of termination to such Authorized Agent and to the Trustee. Upon the
resignation or termination of an Authorized Agent or in case at any time any
such Authorized Agent shall cease to be eligible under this Section (when in
either case, no other Authorized Agent performing the functions of such
Authorized Agent shall have been appointed), the Company shall promptly appoint
one or more qualified successor Authorized Agents, reasonably satisfactory to
the Trustee, to perform the functions of the Authorized Agent which has resigned
or whose agency has been terminated or who shall have ceased to be eligible
under this Section. The Company shall give written notice of any such
appointment made by it to the Trustee, any related Owner Trustees and the
related Loan Trustees; and in each case the Trustee shall mail notice of such
appointment to all Certificateholders of the related series as their names and
addresses appear on the Register for such series.
(e) The Company agrees to pay, or cause to be paid, from time to time to
each Authorized Agent reasonable compensation for its services and to reimburse
it for its reasonable expenses.
Section 7.12. MONEY FOR CERTIFICATE PAYMENTS TO BE HELD IN TRUST. All
moneys deposited with any Paying Agent for the purpose of any payment on
Certificates shall be deposited and held in trust for the benefit of the
Certificateholders entitled to such payment, subject to the provisions of this
Section. Moneys so deposited and held in trust shall constitute a separate trust
fund for the benefit of the Certificateholders with respect to which such money
was deposited.
The Trustee may at any time, for the purpose of obtaining the
satisfaction and discharge of this Agreement or for any other purpose, direct
any Paying Agent to pay to the Trustee all sums held in
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trust by such Paying Agent, such sums to be held by the Trustee upon the same
trusts as those upon which such sums were held by such Paying Agent; and, upon
such payment by any Paying Agent to the Trustee, such Paying Agent shall be
released from all further liability with respect to such money.
Section 7.13. REGISTRATION OF EQUIPMENT NOTES IN TRUSTEE'S NAME. Subject
to the provisions of any Intercreditor Agreement, the Trustee agrees that all
Equipment Notes, and Permitted Investments, if any, shall be issued in the name
of the Trustee as trustee for the applicable Trust or its nominee and held by
the Trustee, or, if not so held, the Trustee or its nominee shall be reflected
as the owner of such Equipment Notes or Permitted Investments as the case may
be, in the register of the issuer of such Equipment Notes or Permitted
Investments.
Section 7.14. REPRESENTATIONS AND WARRANTIES OF TRUSTEE. The Trustee
hereby represents and warrants that:
(a) the Trustee is a national banking association organized and
validly existing, and in good standing under the laws of the United
States;
(b) the Trustee has full power, authority and legal right to
execute, deliver, and perform this Agreement, any Intercreditor
Agreement and the Note Purchase Agreements and has taken all necessary
action to authorize the execution, delivery, and performance by it of
this Agreement, any Intercreditor Agreement and the Note Purchase
Agreements;
(c) the execution, delivery and performance by the Trustee of
this Agreement, any Intercreditor Agreement and the Note Purchase
Agreements (i) will not violate any provision of any United States
federal law or the law of the State of Connecticut governing the banking
and trust powers of the Trustee or any order, writ, judgment, or decree
of any court, arbitrator, or governmental authority applicable to the
Trustee or any of its assets, (ii) will not violate any provision of the
articles of association or by-laws of the Trustee, and (iii) will not
violate any provision of, or constitute, with or without notice or lapse
of time, a default under, or result in the creation or imposition of any
lien on any properties included in the Trust Property pursuant to the
provisions of, any mortgage, indenture, contract, agreement or other
undertaking to which it is a party, which violation, default or lien
could reasonably be expected to have an adverse effect on the Trustee's
performance or ability to perform its duties hereunder or thereunder or
on the transactions contemplated herein or therein;
(d) the execution, delivery and performance by the Trustee of
this Agreement any Intercreditor Agreement and the Note Purchase
Agreements will not require the authorization, consent, or approval of,
the giving of notice to, the filing or registration with, or the taking
of any other action in respect of, any governmental authority or agency
of the United States or the State of Connecticut regulating the banking
and corporate trust activities of the Trustee; and
(e) this Agreement, any Intercreditor Agreement and the Note
Purchase Agreements have been duly executed and delivered by the Trustee
and constitute the legal, valid, and binding agreements of the Trustee,
enforceable against it in accordance with their respective terms,
provided that enforceability may be limited by (i) applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the rights of creditors generally and (ii) general principles
of equity.
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Section 7.15. WITHHOLDING TAXES; INFORMATION REPORTING. As to the
Certificates of any series, the Trustee, as trustee of the related grantor trust
created by this Agreement, shall exclude and withhold from each distribution of
principal, premium, if any, and interest and other amounts due under this
Agreement or under the Certificates of such series any and all withholding taxes
applicable thereto as required by law. The Trustee agrees to act as such
withholding agent and, in connection therewith, whenever any taxes or similar
charges are required to be withheld with respect to any amounts paid by or on
behalf of the Trustee in respect of the Certificates of such series, to withhold
such amounts and timely pay the same to the authority in the name of and on
behalf of the Certificateholders of such series, that it will file any necessary
withholding tax returns or statements when due, and that, as promptly as
possible after the payment thereof, it will deliver to each such
Certificateholder necessary documentation showing the payment thereof, together
with such additional documentary evidence as such Certificateholders of such
series may reasonably request from time to time. The Trustee agrees to file any
other information reports as it may be required to file under United States law.
Section 7.16. TRUSTEE'S LIENS. The Trustee in its individual capacity
agrees that it will, in respect of each Trust created by this Agreement at its
own cost and expense promptly take any action as may be necessary to duly
discharge and satisfy in full any mortgage, pledge, lien, charge, encumbrance,
security interest or claim ("Trustee's Liens") on or with respect to the Trust
Property of such Trust which is attributable to the Trustee either (i) in its
individual capacity and which is unrelated to the transactions contemplated by
this Agreement, the related Note Purchase Agreements or the related Note
Documents, or (ii) as Trustee hereunder or in its individual capacity and which
arises out of acts or omissions which are not contemplated by this Agreement.
Section 7.17. PREFERENTIAL COLLECTION OF CLAIMS. The Trustee shall
comply with Section 311(a) of the Trust Indenture Act, excluding any creditor
relationship listed in Section 311(b) of the Trust Indenture Act. If the Trustee
shall resign or be removed as Trustee, it shall be subject to Section 311(a) of
the Trust Indenture Act to the extent provided therein.
ARTICLE VIII
CERTIFICATEHOLDERS' LISTS AND REPORTS BY TRUSTEE
Section 8.01. THE COMPANY TO FURNISH TRUSTEE WITH NAMES AND ADDRESSES OF
CERTIFICATEHOLDERS. The Company will furnish to the Trustee within 15 days after
each Record Date with respect to a Scheduled Payment, and at such other times as
the Trustee may request in writing, within 30 days after receipt by the Company
of any such request, a list, in such form as the Trustee may reasonably require,
of all information in the possession or control of the Company as to the names
and addresses of the Certificateholders of such series, in each case as of a
date not more than 15 days prior to the time such list is furnished; PROVIDED,
HOWEVER, that so long as the Trustee is the sole Registrar for such series, no
such list need be furnished; and PROVIDED FURTHER, HOWEVER, that no such list
need be furnished for so long as a copy of the Register is being furnished to
the Trustee pursuant to Section 7.11.
Section 8.02. PRESERVATION OF INFORMATION; COMMUNICATIONS TO
CERTIFICATEHOLDERS. The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Certificateholders of each
series contained in the most recent list furnished to the Trustee as provided in
Section 7.11 or Section 8.01, as the case may be, and the names and addresses of
Certificateholders of each series received by the Trustee in its capacity as
Registrar, if so acting. The Trustee may destroy
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any list furnished to it as provided in Section 7.11 or Section 8.01, as the
case may be, upon receipt of a new list so furnished.
Section 8.03. REPORTS BY TRUSTEE. Within 60 days after May 15 of each
year commencing with the first full year following the issuance of any series of
Certificates, the Trustee shall transmit to the Certificateholders of each
series, as provided in Section 313(c) of the Trust Indenture Act, a brief report
dated as of such May 15, if required by Section 313(a) of the Trust Indenture
Act.
Section 8.04. REPORTS BY THE GUARANTOR AND COMPANY. The Guarantor and
the Company each shall:
(a) file with the Trustee, within 30 days after the Guarantor or the
Company is required to file the same with the SEC, copies of the annual reports
and of the information, documents and other reports (or copies of such portions
of any of the foregoing as the SEC may from time to time by rules and
regulations prescribe) which the Guarantor or the Company is required to file
with the SEC pursuant to section 13 or section 15(d) of the Securities Exchange
Act of 1934, as amended; or, if the Guarantor or the Company is not required to
file information, documents or reports pursuant to either of such sections, then
to file with the Trustee and the SEC, in accordance with rules and regulations
prescribed by the SEC, such of the supplementary and periodic information,
documents and reports which may be required pursuant to section 13 of the
Securities Exchange Act of 1934, as amended, in respect of a security listed and
registered on a national securities exchange as may be prescribed in such rules
and regulations;
(b) file with the Trustee and the SEC, in accordance with the rules and
regulations prescribed by the SEC, such additional information, documents and
reports with respect to compliance by the Guarantor and the Company with the
conditions and covenants of the Guarantor and the Company provided for in this
Agreement, as may be required by such rules and regulations, including, in the
case of annual reports, if required by such rules and regulations, certificates
or opinions of independent public accountants, conforming to the requirements of
Section 1.02;
(c) transmit to all Certificateholders, in the manner and to the extent
provided in Section 313(c) of the Trust Indenture Act such summaries of any
information, documents and reports required to be filed by the Guarantor and the
Company pursuant to subsections (a) and (b) of this Section 8.04 as may be
required by rules and regulations prescribed by the SEC;
(d) furnish to the Trustee, not less often than annually, a brief
certificate from the principal executive officer, principal financial officer or
principal accounting officer as to his or her knowledge of the Guarantor's and
the Company's compliance with all conditions and covenants under this Agreement
(it being understood that for purposes of this paragraph (d), such compliance
shall be determined without regard to any period of grace or requirement of
notice provided under this Agreement); and
(e) make available to any Certificateholder upon request, the annual
audited and quarterly unaudited financial statements of the Guarantor which are
provided to the Trustee.
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ARTICLE IX
SUPPLEMENTAL AGREEMENTS
Section 9.01. SUPPLEMENTAL AGREEMENTS WITHOUT CONSENT OF
CERTIFICATEHOLDERS. Without the consent of the Certificateholders, the Guarantor
and the Company may, and the Trustee (subject to Section 9.03) shall, at any
time and from time to time, enter into one or more agreements supplemental
hereto or, if applicable, to the Intercreditor Agreement or a Note Purchase
Agreement in form satisfactory to the Trustee, for any of the following
purposes:
(1) to provide for the formation of a Trust, the issuance of a
series of certificates and the other matters contemplated by Section 2.01(b); or
(2) to evidence the succession of another corporation to the
Company or the Guarantor and the assumption by any such successor of the
covenants of the Company or the Guarantor herein contained; or
(3) to add to the covenants of the Guarantor or the Company for
the benefit of the Certificateholders of any series, or to surrender any right
or power in this Agreement conferred upon the Guarantor or the Company; or
(4) to correct or supplement any provision in this Agreement
which may be defective or inconsistent with any other provision herein or in any
Trust Supplement or to make any other provisions with respect to matters or
questions arising under this Agreement, provided that any such action shall not
adversely affect the interests of the Certificateholders of any series; or to
cure any ambiguity or correct any mistake; or
(5) to modify, eliminate or add to the provisions of this
Agreement to such extent as shall be necessary to continue the qualification of
this Agreement (including any supplemental agreement) under the Trust Indenture
Act, or under any similar Federal statute hereafter enacted, and to add to this
Agreement such other provisions as may be expressly permitted by the Trust
Indenture Act, excluding, however, the provisions referred to in Section
316(a)(2) of the Trust Indenture Act as in effect at the date as of which this
instrument was executed or any corresponding provision in any similar Federal
statute hereafter enacted; or
(6) to evidence and provide for the acceptance of appointment
under this Agreement by a successor Trustee with respect to one or more Trusts
and to add to or change any of the provisions of this Agreement as shall be
necessary to provide for or facilitate the administration of the Trusts
hereunder and thereunder by more than one Trustee, pursuant to the requirements
of Section 7.09; or
(7) to make any other amendments or modifications hereto,
provided such amendments or modifications shall only apply to Certificates of
one or more series to be thereafter issued.
Section 9.02. SUPPLEMENTAL AGREEMENTS WITH CONSENT OF
CERTIFICATEHOLDERS. With respect to each separate Trust and the series of
Certificates relating thereto, with the consent of the Certificateholders
holding Certificates of any series evidencing Fractional Undivided Interests
aggregating not less than a majority in interest in such Trust, by Act of said
Certificateholders delivered
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to the Guarantor, the Company and the Trustee, the Guarantor and the Company may
(with the consent of the Owner Trustee, if any, relating to such certificates,
which consent shall not be unreasonably withheld), and the Trustee (subject to
Section 9.03) shall, enter into an agreement or agreements supplemental hereto
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement, any Intercreditor Agreement
or any Note Purchase Agreement to the extent applicable to such
Certificateholders or of modifying in any manner the rights and obligations of
such Certificateholders under this Agreement; PROVIDED, HOWEVER, that no such
supplemental agreement shall, without the consent of the Certificateholder of
each Outstanding Certificate affected thereby:
(1) reduce in any manner the amount of, or delay the timing of,
any receipt by the Trustee of payments on the Equipment Notes held in such Trust
or distributions that are required to be made herein on any Certificate of such
series, or change any date of payment of any Certificate of such series, or
change the place of payment where, or the coin or currency in which, any
Certificate of such series is payable, or impair the right to institute suit for
the enforcement of any such payment or distribution on or after the Regular
Distribution Date or Special Distribution Date applicable thereto; or
(2) permit the disposition of any Equipment Note in the Trust
Property of such Trust except as permitted by this Agreement, or otherwise
deprive such Certificateholder of the benefit of the ownership of the Equipment
Notes in such Trust; or
(3) alter the priority of distributions specified in the
Intercreditor Agreement; or
(4) reduce the percentage of the aggregate Fractional Undivided
Interests of such Trust which is required for any such supplemental agreement,
or reduce such percentage required for any waiver (of compliance with certain
provisions of this Agreement or certain defaults hereunder and their
consequences) provided for in this Agreement; or
(5) modify any of the provisions of this Section or Section 6.05,
except to increase any such percentage or to provide that certain other
provisions of this Agreement cannot be modified or waived without the consent of
the Certificateholder of each Certificate or such series affected thereby.
It shall not be necessary for any Act of such Certificateholders under
this Section to approve the particular form of any proposed supplemental
agreement, but it shall be sufficient if such Act shall approve the substance
thereof.
Section 9.03. DOCUMENTS AFFECTING IMMUNITY OR INDEMNITY. If in the
opinion of the Trustee any document required to be executed by it pursuant to
the terms of Section 9.01 or 9.02 affects any interest, right, duty, immunity or
indemnity in favor of the Trustee under this Basic Agreement or any Trust
Supplement, the Trustee may in its discretion decline to execute such document.
Section 9.04. EXECUTION OF SUPPLEMENTAL AGREEMENTS. In executing, or
accepting the additional trusts created by, any supplemental agreement permitted
by this Article or the modifications thereby of the trusts created by this
Agreement, the Trustee 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 9.05. EFFECT OF SUPPLEMENTAL AGREEMENTS. Upon the execution of
any supplemental agreement under this Article, this Basic Agreement shall be
modified in accordance therewith, and such
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supplemental agreement shall form a part of this Basic Agreement for all
purposes; and every Certificateholder of each series theretofore or thereafter
authenticated and delivered hereunder shall be bound thereby to the extent
applicable to such series.
Section 9.06. CONFORMITY WITH TRUST INDENTURE ACT. Every supplemental
agreement executed pursuant to this Article shall conform to the requirements of
the Trust Indenture Act as then in effect.
Section 9.07. REFERENCE IN CERTIFICATES TO SUPPLEMENTAL AGREEMENTS.
Certificates of each series authenticated and delivered after the execution of
any supplemental agreement applicable to such series pursuant to this Article
may bear a notation in form approved by the Trustee as to any matter provided
for in such supplemental agreement; and, in such case, suitable notation may be
made upon Outstanding Certificates of such series after proper presentation and
demand.
ARTICLE X
AMENDMENTS TO INDENTURE AND NOTE DOCUMENTS
Section 10.01. AMENDMENTS AND SUPPLEMENTS TO INDENTURE AND OTHER NOTE
DOCUMENTS. In the event that the Trustee, as holder of any Equipment Notes in
trust for the benefit of the Certificateholders of any series or as Controlling
Party, receives a request for a consent to any amendment, modification, waiver
or supplement under any Indenture or other Note Document the Trustee shall
forthwith send a notice of such proposed amendment, modification, waiver or
supplement to each Certificateholder of such series registered on the Register
as of the date of such notice. The Trustee shall request from Certificateholders
of such series a Direction as to (a) whether or not to take or refrain from
taking any action which a holder of such Equipment Note has the option to
direct, (b) whether or not to give or execute any waivers, consents, amendments,
modifications or supplements as a holder of such Equipment Note and (c) how to
vote any Equipment Note if a vote has been called for with respect thereto.
Provided such a request for Certificateholder Direction shall have been made, in
directing any action or casting any vote or giving any consent as the holder of
any Equipment Note, the Trustee shall vote for or give consent to any such
action with respect to such Equipment Note in the same proportion as that of (i)
the aggregate face amounts of all Certificates of such series actually voted in
favor of or for giving consent to such action by Acts of Certificateholders to
(ii) the aggregate face amount of all Outstanding Certificates. For purposes of
the immediately preceding sentence, a Certificate shall have been "actually
voted" if the Holder of such Certificate has delivered to the Trustee an
instrument evidencing such Holder's consent to such Direction on or prior to the
Business Day before the Trustee directs such action or casts such vote or gives
such consent. Notwithstanding the foregoing, but subject to Section 6.04 and any
Intercreditor Agreement, the Trustee may, in its own discretion and at its own
direction consent and notify the relevant Loan Trustee of such consent to any
amendment, modification, waiver or supplement under the relevant Indenture,
Liquidity Facility, or any Note Document, if an Event of Default hereunder shall
have occurred and be continuing, or if such amendment, modification or waiver
will not adversely affect the interests of the Certificateholders.
ARTICLE XI
TERMINATION OF TRUSTS
Section 11.01. TERMINATION OF THE TRUSTS. In respect of each Trust
created by the Basic Agreement as supplemented by a related Trust Supplement,
the respective obligations and responsibilities of the Company, the Guarantor
and the Trustee created under this Agreement and the
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40
Trust created hereby and such Trust shall terminate upon the distribution to all
Holders of the Certificates of the series of such Trust and the Trustee of all
amounts required to be distributed to them pursuant to this Agreement and the
disposition of all property held as part of the Trust Property of the related
series of such Trust; provided, HOWEVER, that in no event shall such Trust
continue beyond the final expiration date determined as provided in this
Agreement.
Notice of any termination of a Trust, specifying the applicable Regular
Distribution Date (or applicable Special Distribution Date, as the case may be)
upon which the Certificateholders of any series may surrender their Certificates
to the Trustee for payment of the final distribution and cancellation, shall be
mailed promptly by the Trustee to Certificateholders of such series not earlier
than the minimum number of days and not more than the maximum number of days
specified therefor in the related Trust Supplement preceding such final
distribution specifying (A) the Regular Distribution Date (or Special
Distribution Date, as the case may be) upon which the proposed final payment of
the Certificates of such series will be made upon presentation and surrender of
Certificates of such series at the office or agency of the Trustee therein
specified, (B) the amount of any such proposed final payment, and (C) that the
Record Date otherwise applicable to such Regular Distribution Date (or Special
Distribution Date, as the case may be) is not applicable, payments being made
only upon presentation and surrender of the Certificates of such series at the
office or agency of the Trustee therein specified. The Trustee shall give such
notice to the Registrar at the time such notice is given to Certificateholders
of such series. Upon presentation and surrender of the Certificates of such
series, the Trustee shall cause to be distributed to Certificateholders of such
series amounts distributable on such Regular Distribution Date (or Special
Distribution Date, as the case may be) pursuant to Section 4.02.
In the event that all of the Certificateholders of such series shall not
surrender their Certificates for cancellation within six months after the date
specified in the above-mentioned written notice, the Trustee shall give a second
written notice to the remaining Certificateholders of such series to surrender
their Certificates for cancellation and receive the final distribution with
respect thereto. In the event that any money held by the Trustee for the payment
of distributions on the Certificates of such series shall remain unclaimed for
two years (or such lesser time as the Trustee shall be satisfied, after sixty
days' notice from the Company, is one month prior to the escheat period provided
under applicable law) after the final distribution date with respect thereto,
the Trustee shall pay to each Loan Trustee the appropriate amount of money
relating to such Loan Trustee and shall give written notice thereof to the
related Owner Trustees and the Company.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01. LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS. The death or
incapacity of any Certificateholder of any series shall not operate to terminate
this Agreement, or the related Trust, nor entitle such Certificateholder's legal
representatives or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a partition or winding up of the Trust,
nor otherwise affect the rights, obligations, and liabilities of the parties
hereto or any of them.
Section 12.02. LIABILITIES OF CERTIFICATEHOLDERS. Neither the existence
of the Trust nor any provision in this Agreement is intended to or shall limit
the liability the Certificateholders would otherwise incur if the
Certificateholders owned Trust Property as co-owners, or incurred any
obligations of the Trust, directly rather than through the Trust.
<PAGE>
41
Section 12.03. CERTIFICATES NONASSESSABLE AND FULLY PAID.
Certificateholders of each series shall not be personally liable for obligations
of the related Trust, the Fractional Undivided Interests represented by the
Certificates of such series shall be nonassessable for any losses or expenses of
such Trust or for any reason whatsoever, and Certificates of such series upon
authentication thereof by the Trustee pursuant to Section 3.02 are and shall be
deemed fully paid. No Certificateholder of such series shall have any right
(except as expressly provided herein) to vote or in any manner otherwise control
the operation and management of the related Trust Property, the related Trust,
or the obligations of the parties hereto, nor shall anything set forth herein,
or contained in the terms of the Certificates of such series, be construed so as
to constitute the Certificateholders of such series from time to time as
partners or members of an association.
Section 12.04. REGISTRATION OF EQUIPMENT NOTES IN NAME OF SUBORDINATION
AGENT. If a Trust is party to an Intercreditor Agreement, the Trustee agrees
that all Equipment Notes to be purchased by such Trust shall be issued in the
name of the Subordination Agent under such Intercreditor Agreement or its
nominee and held by such Subordination Agent in trust for the benefit of the
Certificateholders, or, if not so held, such Subordination Agent or its nominee
shall be reflected as the owner of such Equipment Notes in the register of the
issuer of such Equipment Notes.
Section 12.05. NOTICES.
(a) Unless otherwise specifically provided herein or in the applicable
Trust Supplement with respect to any Trust, all notices required under the terms
and provisions of this Basic Agreement or such Trust Supplement with respect to
such Trust shall be in English and in writing, and any such notice may be given
by United States mail, courier service, telegram, telex, telemessage, telecopy,
telefax, cable or facsimile (confirmed by telephone or in writing in the case of
notice by telegram, telex, telemessage, telecopy, telefax, cable or facsimile)
or any other customary means of communication, and any such notice shall be
effective when delivered, or if mailed, three days after deposit in the United
States mail with proper postage for ordinary mail prepaid,
if to the Company or the Guarantor, to:
MAIL: Northwest Airlines, Inc.
5101 Northwest Drive
St. Paul, Minnesota 55111-3034
COURIER: 2700 Lone Oak Parkway
Eagan, Minnesota 55121
ATTENTION: Senior Vice President-Finance and Treasurer
FACSIMILE: (612) 726-0665
<PAGE>
42
if to the Trustee, to:
State Street Bank and Trust Company of Connecticut, National Association
225 Asylum Street, Goodwin Square
Hartford, Connecticut 06103
Attention: Corporate/Muni Department
Facsimile: (860) 244-1889
Telephone: (860) 244-1822
(b) The Company, the Guarantor or the Trustee, by notice to the other,
may designate additional or different addresses for subsequent notices or
communications.
(c) Any notice or communication to Certificateholders of any series
shall be mailed by first-class mail to the addresses for Certificateholders of
such series shown on the Register kept by the Registrar and to addresses filed
with the Trustee for Certificate Owners of such series. Failure so to mail a
notice or communication or any defect in such notice or communication shall not
affect its sufficiency with respect to other Certificateholders or Certificate
Owners of such series.
(d) If a notice or communication is mailed in the manner provided above
within the time prescribed, it is conclusively presumed to have been duly given,
whether or not the addressee receives it.
(e) If the Company mails a notice or communication to the
Certificateholders of such series, it shall mail a copy to the Trustee and to
each Paying Agent for such series at the same time.
(f) Notwithstanding the foregoing, all communications or notices to the
Trustee shall be deemed to be given only when received by a Responsible Officer
of the Trustee.
(g) The Trustee shall promptly furnish the Company with a copy of any
demand, notice or written communication received by the Trustee hereunder from
any Certificateholder, Owner Trustee or Loan Trustee.
Section 12.06. GOVERNING LAW. THIS BASIC AGREEMENT HAS BEEN DELIVERED IN
THE STATE OF NEW YORK AND, TOGETHER WITH ALL TRUST SUPPLEMENTS AND CERTIFICATES,
SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE
OBLIGATIONS, RIGHTS, AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED
IN ACCORDANCE WITH SUCH LAWS.
Section 12.07. SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions, or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions, or
terms shall be deemed severable from the remaining covenants, agreements,
provisions, or terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement or any Trust, or of
the Certificates of any series or the rights of the Certificateholders thereof.
Section 12.08. TRUST INDENTURE ACT CONTROLS. This Agreement is subject
to the provisions of the Trust Indenture Act and shall, to the extent
applicable, be governed by such provisions.
<PAGE>
43
Section 12.09. EFFECT OF HEADINGS AND TABLE OF CONTENTS. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
Section 12.10. SUCCESSORS AND ASSIGNS. All covenants, agreements,
representations and warranties in this Agreement by the Trustee, the Guarantor
and the Company shall bind and, to the extent permitted hereby, shall inure to
the benefit of and be enforceable by their respective successors and assigns,
whether so expressed or not.
Section 12.11. BENEFITS OF AGREEMENT. Nothing in this Agreement or in
the Certificates of any series, express or implied, shall give to any Person,
other than the parties hereto and their successors hereunder, and the
Certificateholders of each series, any benefit or any legal or equitable right,
remedy or claim under this Agreement.
Section 12.12. LEGAL HOLIDAYS. In any case where any Regular
Distribution Date or Special Distribution Date relating to any Certificate of
any series shall not be a Business Day with respect to such series, then
(notwithstanding any other provision of this Agreement) payment need not be made
on such date, but may be made on the next succeeding Business Day with the same
force and effect as if made on such Regular Distribution Date or Special
Distribution Date, and no interest shall accrue during the intervening period.
Section 12.13. COUNTERPARTS. For the purpose of facilitating the
execution of this Agreement and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and all of which counterparts
shall constitute but one and the same instrument.
Section 12.14. COMMUNICATION BY CERTIFICATEHOLDERS WITH OTHER
CERTIFICATEHOLDERS. Certificateholders of any series may communicate with other
Certificateholders of such series with respect to their rights under this Basic
Agreement, the related Trust Supplement or the Certificates of such series
pursuant to Section 3.12(b) of the Trust Indenture Act. The Company, the
Guarantor, the Trustee and any and all other persons benefitted by this
Agreement shall have the protection afforded by Section 312(c) of the Trust
Indenture Act.
<PAGE>
44
IN WITNESS WHEREOF, the Guarantor, the Company and the Trustee have
caused this Basic Agreement to be duly executed by their respective officers,
all as of the day and year first above written.
NORTHWEST AIRLINES CORPORATION
By /s/ DANIEL B. MATTHEWS
--------------------------------------
Title: Vice President and Assistant
Treasurer
----------------------------------
NORTHWEST AIRLINES, INC.
By /s/ DANIEL B. MATTHEWS
--------------------------------------
Title: Vice President and Assistant
Treasurer
----------------------------------
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION,
as Trustee
By /s/ DONALD E. SMITH
--------------------------------------
Title: Vice President
----------------------------------
<PAGE>
EXHIBIT A
FORM OF CERTIFICATE
1/[Unless this certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to Issuer or
its agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.]
NORTHWEST AIRLINES PASS THROUGH TRUST
Pass Through
Certificate, Series
Final Distribution Date: ,
evidencing a fractional undivided interest
in a trust, the property of which includes
certain equipment notes each secured by
Aircraft owned by or leased to Northwest
Airlines, Inc.
Certificate
No. $ Fractional Undivided Interest representing. %
of the Trust per $1,000 face amount
THIS CERTIFIES THAT , for value received, is
the registered owner of a $ ( dollars)
Fractional Undivided Interest in the Northwest Airlines Pass Through Trust (the
"Trust") created by State Street Bank and Trust Company of Connecticut, National
Association, as trustee (the "Trustee"), pursuant to a Pass Through Trust
Agreement dated as of June 3, 1999 (the "Basic Agreement"), as supplemented by
Trust Supplement No. thereto dated , (collectively,
the "Agreement"), among the Trustee, Northwest Airlines Corporation, a
corporation incorporated under Delaware law (the "Guarantor"), and Northwest
Airlines, Inc., a corporation incorporated under Minnesota law (the "Company"),
a summary of certain of the pertinent provisions of which is set forth below. To
the extent not otherwise defined herein, the capitalized terms used herein have
the meanings assigned to them in the Agreement. This Certificate is one of the
duly authorized Certificates designated as "Pass Through Certificates, Series
" (herein called the "Certificates"). This Certificate is issued
under and is subject to the terms, provisions, and conditions of the Agreement,
to which Agreement the Certificateholder of this Certificate by virtue of the
acceptance hereof assents and by which such Certificateholder is bound. The
property of the Trust includes certain
- ----------
1/This legend to appear on Book-Entry Certificates to be deposited with the
Depository Trust Company. One Certificate may be issued in a denomination of
less than $1,000 which shall not have this legend.
<PAGE>
2
Equipment Notes and all rights of the Trust to receive any payments under any
Intercreditor Agreement or Liquidity Facility (the "Trust Property"). Each issue
of the Equipment Notes is secured by a security interest in aircraft leased to
or owned by the Company.
The Certificates represent fractional undivided interests in the Trust
and the Trust Property, and have no rights, benefits or interest in respect of
any other separate trust established pursuant to the terms of the Basic
Agreement for any other series of certificates issued pursuant thereto. [The
undivided percentage interest in the Trust represented by each of this
Certificate (as specified above) and the other Pass Through Certificates, Series
[ ], was determined on the basis of (x) the aggregate of the Reference
Principal Amount of this Certificate (as specified above) and of the other Pass
Through Certificates, Series [ ] and (y) the aggregate original principal
amounts of the Equipment Notes constituting the Trust Property.]
Subject to and in accordance with the terms of the Agreement and any
Intercreditor Agreement, from funds then available to the Trustee, there will be
distributed on each and (a "Regular Distribution
Date"), commencing on , , to the Person in whose name this
Certificate is registered at the close of business on the 15th day preceding the
Regular Distribution Date, an amount in respect of the Scheduled Payments on the
Equipment Notes due on such Regular Distribution Date, the receipt of which has
been confirmed by the Trustee, equal to the product of the percentage interest
in the Trust evidenced by this Certificate and an amount equal to the sum of
such Scheduled Payments. Subject to and in accordance with the terms of the
Agreement, in the event that Special Payments on the Equipment Notes are
received by the Trustee, from funds then available to the Trustee, there shall
be distributed on the applicable Special Distribution Date, to the Person in
whose name this Certificate is registered at the close of business on the 15th
day preceding the Special Distribution Date, an amount in respect of such
Special Payments on the Equipment Notes, the receipt of which has been confirmed
by the Trustee, equal to the product of the percentage interest in the Trust
evidenced by this Certificate and an amount equal to the sum of such Special
Payments so received. If a Regular Distribution Date or Special Distribution
Date is not a Business Day, distribution shall be made on the immediately
following Business Day with the same force and effect as if made on such Regular
Distribution Date or Special Distribution Date and no interest shall accrue
during the intervening period. The Trustee shall mail notice of each Special
Payment and the Special Distribution Date therefor to the Certificateholder of
this Certificate.
Distributions on this Certificate will be made by the Trustee by check
mailed to the Person entitled thereto, without the presentation or surrender of
this Certificate or the making of any notation hereon. Except as otherwise
provided in the Agreement and notwithstanding the above, the final distribution
on this Certificate will be made after notice mailed by the Trustee of the
pendency of such distribution and only upon presentation and surrender of this
Certificate at the office or agency of the Trustee specified in such notice.
The Certificates do not represent a direct obligation of, or an
obligation guaranteed by, or an interest in, the Guarantor, the Company or the
Trustee or any affiliate thereof. The Certificates are limited in right or
payment, all as more specifically set forth on the face hereof and in the
Agreement. All payments or distributions made to Certificateholders under the
Agreement shall be made only from the Trust Property and only to the extent that
the Trustee shall have sufficient income or proceeds from the Trust Property to
make such payments in accordance with the terms of the Agreement. Each
Certificateholder of this Certificate, by its acceptance hereof, agrees that it
will look solely to the income and proceeds from the Trust Property to the
extent available for distribution to such Certificateholder as provided in the
Agreement. This Certificate does not purport to summarize the Agreement and
reference
<PAGE>
3
is made to the Agreement for information with respect to the interests, rights,
benefits, obligations, proceeds, and duties evidenced hereby. A copy of the
Agreement may be examined during normal business hours at the principal office
of the Trustee, and at such other places, if any, designated by the Trustee, by
any Certificateholder upon request.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Certificateholders under the Agreement at any time
by the Company and the Trustee with the consent of the Certificateholders
holding Certificates evidencing Fractional Undivided Interests aggregating not
less than a majority in interest in the Trust. Any such consent by the
Certificateholder of this Certificate shall be conclusive and binding on such
Certificateholder and upon all future Certificateholders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Certificateholders of any of
the Certificates.
As provided in the Agreement and subject to certain limitations set
forth, the transfer of this Certificate is registrable in the Register upon
surrender of this Certificate for registration of transfer at the offices or
agencies maintained by the Trustee in its capacity as Registrar, or by any
successor Registrar duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Registrar, duly executed by
the Certificateholder hereof or such Certificateholder's attorney duly
authorized in writing, and thereupon one or more new Certificates of authorized
denominations evidencing the same aggregate Fractional Undivided Interest in the
Trust will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in minimum denominations of $1,000 Fractional Undivided Interest and
integral multiples thereof except that one Certificate may be in a denomination
of less than $1,000. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of authorized denominations evidencing the same aggregate
Fractional Undivided Interest in the Trust, as requested by the
Certificateholder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee shall require payment of a sum sufficient to cover any
tax or governmental charge payable in connection therewith.
The Trustee, the Registrar, and any agent of the Trustee or the
Registrar may treat the person in whose name this Certificate is registered as
the owner hereof for all purposes, and neither the Trustee, the Registrar, nor
any such agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon the distribution to
Certificateholders of all amounts required to be distributed to them pursuant to
the Agreement and the disposition of all property held as part of the Trust
Property.
THE AGREEMENT AND THIS CERTIFICATE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAWS PROVISIONS OF THE STATE OF NEW YORK.
<PAGE>
4
Unless the certificate of authentication hereon has been executed by the
Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
NORTHWEST AIRLINES PASS THROUGH TRUST
By: STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
as Trustee
By
--------------------------------
Title:
----------------------------
Dated:
------------------------
<PAGE>
[FORM OF THE TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Certificates referred
to in the within-mentioned Agreement.
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
as Trustee
By:
--------------------------------------
Authorized Officer
<PAGE>
Exhibit 5
[SIMPSON THACHER & BARTLETT LETTERHEAD]
June 7, 1999
Northwest Airlines Corporation
Northwest Airlines, Inc.
2700 Lone Oak Parkway
Eagan, Minnesota 55121
Ladies and Gentlemen:
We have acted as counsel to Northwest Airlines Corporation, a Delaware
corporation ("NWA Corp."), and Northwest Airlines, Inc., a Minnesota corporation
("Northwest" and, together with NWA Corp., the "Registrants"), in connection
with the Registration Statement on Form S-3 (File No. 333-79215) filed by the
Registrants on May 25, 1999 with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act") (the
"Registration Statement"), relating to (i) debt securities of Northwest, which
may be either senior (the "Northwest Senior Securities") or subordinated (the
"Northwest Senior Subordinated Securities") (collectively, the "Northwest Debt
Securities"), including debt securities issuable upon exercise of the Debt
Warrants referred to below, (ii) guarantees of NWA Corp. to be issued in
connection with the Northwest Debt Securities and Pass Through Certificates (as
defined below) (the "Guarantees"), (iii) warrants to purchase Northwest Debt
Securities (the "Debt Warrants") and (iv) pass through certificates (the "Pass
Through Certificates") to be issued by one or more trusts formed by Northwest
relating to certain equipment notes either issued by Northwest or relating to
leases with Northwest, all of which are to be issued and sold by the Registrants
from time to time pursuant to Rule 415 under the Act for an aggregate initial
offering price (together with the aggregate initial offering price
<PAGE>
Northwest Airlines Corporation -2- June 7, 1999
Northwest Airlines, Inc.
of securities previously registered under the Registrant's registration
statement on Form S-3 (File No. 333-41579-01) which have not yet been sold and
which, pursuant to Rule 429 under the Act, are covered by the Prospectuses (as
defined below) included in the Registration Statement) not to exceed
$1,500,000,000 or the equivalent thereof in one or more foreign currencies or
composite currencies. The Registration Statement consists of two separate
prospectuses covering the following securities: (i) Northwest Debt Securities
and Debt Warrants to purchase Northwest Debt Securities and Guarantees of such
Northwest Debt Securities by NWA Corp. (the "Debt Prospectus") and (ii)
Northwest Pass Through Certificates and Guarantees of such Pass Through
Certificates by NWA Corp. (the "Pass Through Prospectus" and, together with the
Debt Prospectus, the "Prospectuses"). The Northwest Debt Securities, Debt
Warrants, Guarantees and Pass Through Certificates are hereinafter referred to
collectively as the "Offered Securities."
The Offered Securities will be sold or delivered from time to time as
set forth in the Registration Statement, any amendment thereto, the two separate
Prospectuses or any supplements thereto ("Prospectus Supplements"). The
Northwest Senior Securities will be issued under an Indenture dated as of March
1, 1997 among Northwest, Northwest Airlines Holdings Corporation and State
Street Bank and Trust Company, as trustee (the "Debt Indenture Trustee")
thereunder, as supplemented by a Supplemental Indenture dated as of November 20,
1998 among NWA Corp., Northwest Airlines Holdings Corporation, Northwest and the
Debt Indenture Trustee and a Second Supplemental Indenture dated as
<PAGE>
Northwest Airlines Corporation -3- June 7, 1999
Northwest Airlines, Inc.
of February 25, 1999, among NWA Corp., Northwest Airlines Holdings Corporation,
Northwest and the Debt Indenture Trustee (as so supplemented, the "Northwest
Senior Indenture"), the Northwest Senior Subordinated Securities will be issued
under an Indenture among Northwest, NWA Corp. and the Debt Indenture Trustee
(the "Northwest Senior Subordinated Indenture" and, together with the Northwest
Senior Indenture, the "Northwest Indentures"). The Pass Through Certificates
will be issued under a Pass Through Trust Agreement dated as of June 3, 1999
among Northwest, NWA Corp. and State Street Bank and Trust Company of
Connecticut, National Association, as trustee (the "Pass Through Trustee")
thereunder (the "Pass Through Trust Agreement") and a Supplement thereto
relating to such series (a "Trust Supplement"). The Debt Warrants that will be
attached to the Northwest Debt Securities will be issued under a Warrant
Agreement for such attached Debt Warrants (the "Attached Warrant Agreement")
between Northwest and the warrant agent thereunder (the "Warrant Agent") and the
Debt Warrants that will be sold separately from the Northwest Debt Securities
will be issued under a Warrant Agreement for such separate Debt Warrants between
Northwest and the Warrant Agent (the "Separate Warrant Agreement" and, together
with the Attached Warrant Agreement, the "Warrant Agreement").
We have examined the Registration Statement, the Northwest Senior
Indenture, the Pass Through Trust Agreement and the forms of the Northwest
Senior Subordinated Indenture and the Warrant Agreement, which have been filed
with the Commission as
<PAGE>
Northwest Airlines Corporation -4- June 7, 1999
Northwest Airlines, Inc.
exhibits to the Registration Statement. We also have examined the originals, or
duplicates or certified or conformed copies, of such records, agreements,
instruments and other documents and have made such other and further
investigations as we have deemed relevant and necessary in connection with the
opinions expressed herein. As to questions of fact material to this opinion, we
have relied upon certificates of public officials and of officers and
representatives of the Registrants.
In rendering the opinions set forth below, we have assumed the
genuineness of all signatures, the legal capacity of natural persons, the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as duplicates or certified
or conformed copies, and the authenticity of the originals of such latter
documents. We also have assumed that (i) a Prospectus Supplement will have been
prepared and filed with the Commission describing the Offered Securities; (ii)
all Offered Securities issued will be issued and sold in compliance with
applicable Federal and state securities laws and solely in the manner stated in
the Registration Statement and the appropriate Prospectus Supplement; (iii) a
definitive purchase, underwriting or similar agreement with respect to any
Offered Securities will have been duly authorized and validly executed and
delivered by one or both of NWA Corp. or Northwest and the other parties
thereto; (iv) any Northwest Debt Securities issuable upon exercise of any Debt
Warrant will be duly authorized, created and, if appropriate, reserved for
issuance upon such exercise; (v) each of the Northwest Senior
<PAGE>
Northwest Airlines Corporation -5- June 7, 1999
Northwest Airlines, Inc.
Indenture and the Pass Through Trust Agreement is the valid and legally binding
obligation of the Debt Indenture Trustee and the Pass Through Trustee, as the
case may be; (vi) at the respective time of execution, authentication, issuance
and delivery of a series of Offered Securities, each of the Northwest
Indentures, the Pass Through Trust Agreement, the Trust Supplement relating to a
series of Pass Through Certificates, the Warrant Agreement and such Offered
Securities, as applicable, will be the valid and legally binding obligation of
the Pass Through Trustee, the Debt Indenture Trustee or the Warrant Agent, as
the case may be, (vii) in the case of NWA Corp., at the respective time of
execution, authentication, issuance and delivery of the Guarantees, the Trust
Supplement and the Northwest Senior Subordinated Indenture, as applicable, will
be duly authorized, executed and delivered by NWA Corp. and (viii) in the case
of Northwest, (a) Northwest has duly authorized, executed and delivered each of
the Northwest Senior Indenture and the Pass Through Trust Agreement and, at the
respective time of execution, authentication, issuance and delivery of a series
Warrants, Northwest Subordinated Debt Securities or Pass Through Certificates,
the Warrant Agreement, the Northwest Senior Subordinated Indenture and the Trust
Supplement relating to such series, as applicable, will be duly authorized,
executed and delivered by Northwest and (b) execution, delivery and performance
by Northwest of the Northwest Indentures, the Pass Through Trust Agreement, the
Trust Supplements, the Warrant Agreements and the Offered Securities do
<PAGE>
Northwest Airlines Corporation -6- June 7, 1999
Northwest Airlines, Inc.
not and will not violate the laws of the State of Minnesota or any other
applicable laws (excepting the laws of the State of New York and the Federal
laws of the United States).
Based upon the foregoing, and subject to the qualifications and
limitations stated herein, we are of the opinion that:
1. With respect to Northwest Debt Securities to be issued
under the Northwest Indentures, assuming that (i) the Board of
Directors, a duly constituted and acting committee of such Board or
duly authorized officers of each of Northwest and NWA Corp. (such Board
of Directors, committee or authorized officers of Northwest and NWA
Corp. being hereinafter referred to, respectively, as the "Northwest
Board" and the "NWA Corp. Board" and, collectively, as the "Boards")
have taken all necessary corporate action to approve such Northwest
Debt Securities, the terms of the offering thereof and related matters,
and (ii) such Northwest Debt Securities have been duly executed,
authenticated, issued and delivered in accordance with the provisions
of the applicable Northwest Indenture and the applicable definitive
purchase, underwriting or similar agreement approved by the Boards, and
upon payment of the consideration therefor provided for therein, or
upon exercise of related Debt Warrants in accordance with their terms,
as the case may be, such Northwest Debt Securities will constitute
valid and legally binding obligations of Northwest enforceable against
Northwest in accordance with their terms.
<PAGE>
Northwest Airlines Corporation -7- June 7, 1999
Northwest Airlines, Inc.
2. With respect to the Debt Warrants, assuming that (i) the
Northwest Board has taken all necessary corporate action to approve the
Debt Warrants, the terms of the offering thereof and related matters,
(ii) the Debt Warrants or certificates representing the Debt Warrants
have been duly executed, countersigned, issued, registered and
delivered in accordance with the applicable Warrant Agreement and the
applicable definitive purchase, underwriting or similar agreement
approved by the Northwest Board, and upon payment of the consideration
therefor provided for therein, the Debt Warrants will constitute valid
and legally binding obligations of Northwest enforceable against
Northwest in accordance with their terms.
3. With respect to the Guarantees, assuming that (i) the NWA
Corp. Board has taken all necessary corporate action to approve the
issuance and terms of such Guarantees, and related matters, (ii) such
Guarantees have been duly executed, issued and delivered in accordance
with the provisions of the applicable Northwest Indenture or Pass
Through Agreement and related Trust Supplement, as the case may be, and
the applicable definitive purchase, underwriting or similar agreement
approved by the NWA Corp. Board., and (iii) the events described in
clauses (i) and (ii) of paragraph 1 or the events described in clauses
(i) and (ii) of paragraph 4 have occurred in respect of the respective
series of Northwest Debt Securities or Pass Through Certificates to
which such Guarantees relate, as the case may be, the Guarantees will
constitute valid
<PAGE>
Northwest Airlines Corporation -8- June 7, 1999
Northwest Airlines, Inc.
and legally binding obligations of NWA Corp. enforceable against NWA
Corp. in accordance with their terms.
4. With respect to each series of Pass Through Certificates,
assuming that (i) the Boards have taken all necessary corporate action
to approve such Pass Through Certificates, the terms of the offering
thereof and related matters and (ii) the Pass Through Certificates of
such series have been duly executed, authenticated, issued and
delivered in accordance with the provisions of the Pass Through Trust
Agreement, the related Trust Supplement and the applicable definitive
purchase, underwriting or similar agreement approved by the Boards, and
upon payment of the consideration therefor provided for therein, such
Pass Through Certificates will constitute valid and legally binding
obligations of Northwest enforceable against Northwest in accordance
with their terms.
Our opinions set forth above are subject to the effects of (i)
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally, (ii)
general equitable principles (whether considered in a proceeding in equity or at
law) and (iii) an implied covenant of good faith and fair dealing.
We are members of the Bar of the State of New York, and we do not
express any opinion herein concerning any law other than the law of the State of
New York, the federal law of the United States and the Delaware General
Corporation Law.
<PAGE>
Northwest Airlines Corporation -9- June 7, 1999
Northwest Airlines, Inc.
We hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement and to the use of our name under the captions "Legal
Opinions" in the Prospectuses forming a part of the Registration Statement.
Very truly yours,
/s/ Simpson Thacher & Bartlett
SIMPSON THACHER & BARTLETT
<PAGE>
[CADWALADER, WICKERSHAM & TAFT LETTERHEAD]
June 7, 1999
Northwest Airlines Corporation
Northwest Airlines, Inc.
2700 Lone Oak Parkway
Eagan, MN 55121
Re: Pass-Through Certificates
("Certificates")
-------------------------
Gentlemen:
We have acted as your special counsel in connection with the
Registration Statement filed on May 25, 1999 with the Securities and Exchange
Commission (the "Commission") pursuant to the Securities Act of 1933, as amended
(the "Registration Statement"). Capitalized terms used and not otherwise defined
herein have the respective meanings ascribed to such terms in the Registration
Statement.
In rendering the opinion set forth below, we have examined and relied
upon the following: (1) the Registration Statement, the prospectus constituting
a part thereof covering the Certificates (the "Pass-Through Trust Prospectus"),
as filed with the Commission; (2) the pass-through trust agreement filed as an
exhibit to the Registration Statement; and (3) such other documents, materials,
and authorities as we have deemed necessary in order to enable us to render our
opinion set forth below.
As special counsel to Northwest Airlines Corporation ("NAC") and
Northwest Airlines, Inc. ("NAI"), we have advised NAC and NAI with respect to
certain federal income tax aspects of the proposed issuance of the Certificates.
Such advice has formed the basis for the description of material federal income
tax consequences for holders of the Certificates that appears under the heading
"United States Federal Income Tax Consequences" in the Pass-Through Trust
Prospectus. Such description represents the opinion of the undersigned as to the
matters discussed therein, and such discussion is incorporated herein by
reference.
This opinion is based on facts and circumstances set forth in the
Pass-Through Trust Prospectus and in the other documents reviewed by us. Our
opinion as to the matters set forth herein could change with respect to a
particular Series of Certificates as a result of changes in facts and
circumstances, changes in the terms of
<PAGE>
Northwest Airlines Corporation -2- June 7, 1999
Northwest Airlines, Inc.
the documents reviewed by us, or changes in the law subsequent to the date
hereof. As the Registration Statement contemplates Series of Certificates with
numerous different characteristics, the particular characteristics of each
Series of Certificates must be considered in determining the applicability of
this opinion to a particular Series of Certificates. The opinion contained in
each Prospectus Supplement and Prospectus prepared pursuant to the Registration
Statement is, accordingly, deemed to be incorporated herein.
We hereby consent to the filing of this letter as an Exhibit
to the Registration Statement and to the references to our firm under the
headings "United States Federal Income Tax Consequences" and "Legal Opinions" in
the Pass-Through Trust Prospectus. This consent is not to be construed as an
admission that we are a person whose consent is required to be filed with the
Registration Statement and Legal Opinions under the provisions of the Act.
Very truly yours,
/s/ Cadwalader, Wickersham & Taft
Cadwalader, Wickersham & Taft
<PAGE>
EXHIBIT 23(a)
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the Caption "Experts" in
Amendment No. 1 to the Registration Statement (Form S-3 No. 333-79215) and
related Prospectuses of Northwest Airlines, Inc. and Northwest Airlines
Corporation and to the incorporation by reference therein of our report dated
January 18, 1999 with respect to the consolidated financial statements and
schedule of Northwest Airlines Corporation included in its Annual Report (Form
10-K) for the year ended December 31, 1998, filed with the Securities and
Exchange Commission.
/S/ ERNST & YOUNG LLP
Minneapolis, Minnesota
June 7, 1999
<PAGE>
Exhibit 25(c)
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
---------
STATEMENT OF ELIGIBILITY UNDER THE
TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(B)(2)
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
06-1304336
(JURISDICTION OF INCORPORATION OR (I.R.S. EMPLOYER
ORGANIZATION IF NOT A U.S. NATIONAL BANK) IDENTIFICATION NO.)
225 Asylum Street, Goodwin Square, Hartford, Connecticut 06103
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Maureen Scannell Bateman, Esq. Executive Vice President and General Counsel
225 Franklin Street, Boston, Massachusetts 02110
(617) 654-3253
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
NORTHWEST AIRLINES CORPORATION NORTHWEST AIRLINES, INC.
(Guarantor) (Issuer)
Delaware Minnesota
(State or other jurisdiction of incorporation or organization)
41-1905580 41-0449230
(I.R.S. Employer Identification Number)
2700 LONE OAK PARKWAY
EAGAN, MINNESOTA 55121
(Address of principal executive offices)
PASS-THROUGH CERTIFICATES AND GUARANTEES
(TITLE OF INDENTURE SECURITIES)
<PAGE>
GENERAL
ITEM 1. GENERAL INFORMATION.
FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISORY AUTHORITY TO
WHICH IT IS SUBJECT.
Comptroller of the Currency
Treasury Department of the United States
Washington, D.C.
Board of Governors of the Federal Reserve System
Washington, D.C.
Federal Deposit Insurance Corporation
Washington, D. C.
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
The obligor is not an affiliate of the trustee or of its parent,
State Street Boston Corporation.
(See note on page 2.)
ITEM 3. THROUGH ITEM 15. NOT APPLICABLE.
ITEM 16. LIST OF EXHIBITS.
LIST BELOW ALL EXHIBITS FILED AS PART OF THIS STATEMENT OF ELIGIBILITY.
1. A COPY OF THE ARTICLES OF ASSOCIATION OF THE TRUSTEE AS NOW IN
EFFECT.
A copy of the Articles of Association of the trustee as now in
effect incorporated herein by reference to Exhibit T-1.1 filed
with Form T-1 Statement, Registration No. 33-40617.
2. A COPY OF THE CERTIFICATE OF AUTHORITY OF THE TRUSTEE TO COMMENCE
BUSINESS, IF NOT CONTAINED IN THE ARTICLES OF ASSOCIATION.
A copy of the Certificate of the Comptroller of the Currency.
3. A COPY OF THE AUTHORIZATION OF THE TRUSTEE TO EXERCISE CORPORATE
TRUST POWERS, IF SUCH AUTHORIZATION IS NOT CONTAINED IN THE DOCUMENTS SPECIFIED
IN PARAGRAPH (1) OR (2), ABOVE.
A copy of the Certification of Fiduciary Powers (included in
Exhibit 2).
4. A COPY OF THE EXISTING BY-LAWS OF THE TRUSTEE, OR INSTRUMENTS
CORRESPONDING THERETO.
A copy of the existing by-laws of the trustee incorporated herein
by reference to Exhibit T-1.1 filed with Form T-1 Statement,
Registration No. 33-40617.
1
<PAGE>
5. A COPY OF EACH INDENTURE REFERRED TO IN ITEM 4. IF THE OBLIGOR IS IN
DEFAULT.
Not applicable.
6. THE CONSENTS OF UNITED STATES INSTITUTIONAL TRUSTEES REQUIRED BY
SECTION 321(B) OF THE ACT.
The consent of the trustee required by Section 321(b) of the Act
is annexed hereto as Exhibit 6 and made a part hereof.
7. A COPY OF THE LATEST REPORT OF CONDITION OF THE TRUSTEE PUBLISHED
PURSUANT TO LAW OR THE REQUIREMENTS OF ITS SUPERVISING OR EXAMINING
AUTHORITY.
A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its supervising
or examining authority is annexed hereto as Exhibit 7 and made a
part hereof.
NOTES
In answering any item of this Statement of Eligibility which relates to
matters peculiarly within the knowledge of the obligor or any underwriter for
the obligor, the trustee has relied upon information furnished to it by the
obligor and the underwriters, and the trustee disclaims responsibility for the
accuracy or completeness of such information.
The answer furnished to Item 2. of this statement will be amended, if
necessary, to reflect any facts which differ from those stated and which would
have been required to be stated if known at the date hereof.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, State Street Bank and Trust Company of Connecticut,
National Association, a national banking association organized and existing
under the laws of the United States, has duly caused this statement of
eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Boston and The Commonwealth of Massachusetts, on
the 2nd of June 1999.
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION
By: /s/ Donald E. Smith
------------------------------------
Name: Donald E. Smith
Title: Vice President
2
<PAGE>
EXHIBIT 1 AND 2
(COMPTROLLER OF THE CURRENCY ADMINISTRATOR OF NATIONAL BANKS--LETTERHEAD)
I Eugene A. Ludwig, Comptroller of the Currency, do hereby certify that:
1. The Comptroller of the Currency, pursuant to Revised Statutes 324, et seq.,
as amended, 12 U.S.C. 1, et seq., as amended, has possession, custody and
control of all records pertaining to the chartering, regulation and supervision
of all National Banking Associations.
2. "State Street Bank and Trust Company of Connecticut, National Association",
Hartford, Connecticut, (Charter No. 22272), is a National Banking Association
formed under the laws of the United States and is authorized thereunder to
transact the business of banking and exercise Fiduciary Powers on the date of
this Certificate.
IN TESTIMONY WHEREOF, I have hereunto
subscribed my name and caused my seal of
office to be affixed to these presents at
the Treasury Department, in the City of
Washington and District of Columbia, this
1st day of April, 1998.
/s/ Eugene A. Ludwig
--------------------------------------------------
Comptroller of the Currency
3
<PAGE>
EXHIBIT 6
CONSENT OF THE TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture
Act of 1939, as amended, in connection with the proposed issuance by Northwest
Airlines, Inc. (Northwest Airlines Corporation, Guarantor) of its Pass-Through
Certificates and Guarantees, we hereby consent that reports of examination by
Federal, State, Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon request therefor.
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION
By: /s/ Donald E. Smith
------------------------------------
Name: Donald E. Smith
Title: Vice President
Dated: June 2, 1999
4
<PAGE>
EXHIBIT 7
<TABLE>
<S> <C> <C>
Legal Title of Bank: State Street Bank and Trust Company of CT, N.A. Call Date: March 31, 1999
Address: Goodwin Square, 225 Asylum Street, Floor 29
City, State Zip Hartford, CT 06103
FDIC Certifcate No.: 33132
</TABLE>
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for March 31, 1999
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.
Schedule RC--Balance Sheet
<TABLE>
<CAPTION>
Thousands of
ASSETS Dollars
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin ................................. 8,532
Interest-bearing balances........................................................... 0
Securities:
Held-to-maturity balances........................................................... 0
Available-for-sale securities....................................................... 90
Federal funds sold and securities purchased under agreements to resell ...................... 0
Loans and lease financing receivables:
Loans and leases, net of unearned income ............... 0
LESS: Allowance for loan and lease losses .............. 0
LESS: Allocated transfer risk reserve................... 0
Loans and leases, net of unearned income, allowance, and reserve ................... 0
Trading assets............................................................................... 0
Premises and fixed assets (including capitalized leases) .................................... 287
Other real estate owned ..................................................................... 0
Investments in unconsolidated subsidiaries and associated companies ......................... 0
Customers' liability to this bank on acceptances outstanding ................................ 0
Intangible assets ........................................................................... 1,946
Other assets................................................................................. 1,399
Total assets ................................................................................ 12,254
Losses deferred pursuant to 12 U.S.C 1823(j) ................................................ 0
Total assets and losses deferred pursuant to 12 U.S.C. 1823(j) .............................. 12,254
</TABLE>
5
<PAGE>
<TABLE>
<S> <C> <C>
Legal Title of Bank: State Street Bank and Trust Company of CT, N.A. Call Date: March 31, 1999
Address: Goodwin Square, 225 Asylum Street, Floor 29
City, State Zip Hartford, CT 06103
FDIC Certifcate No.: 33132
</TABLE>
Schedule RC - Continued
<TABLE>
LIABILITIES
<S> <C>
Deposits:
In domestic offices ................................................................ 0
Noninterest-bearing ........................... 0
Interest-bearing .............................. 0
In foreign offices, Edge and Agreement subsidiaries, and IBFs....................... 0
Noninterest-bearing ........................... 0
Interest-bearing .............................. 0
Federal funds purchased and securities sold under agreements to repurchase .................. 0
Demand notes issued to the U.S. Treasury..................................................... 0
Trading Liabilities ......................................................................... 0
Other borrowed money ........................................................................ 0
with a remaining maturity of one year or less....................................... 0
with a remaining maturity of more than one year through three years................. 0
with a remaining maturity of more than three years.................................. 0
Bank's liability on acceptances executed and outstanding .................................... 0
Other liabilities ........................................................................... 5,030
Total liabilities ........................................................................... 5,030
EQUITY CAPITAL
Perpetual preferred stock and related surplus................................................ 0
Common stock ................................................................................ 500
Surplus ..................................................................................... 2,500
Undivided profits and capital reserves ...................................................... 4,224
Net unrealized holding gains (losses) on available-for-sale securities....................... 0
Cumulative foreign currency translation adjustments.......................................... 0
Total equity capital ........................................................................ 7,224
Losses deferred pursuant to 12 U.S.C. 1823(j)................................................ 0
Total equity capital and losses deferred pursuant to 12 U.S.C. 1823(j)....................... 7,224
Total liabilities, equity capital, and losses deferred pursuant to 12 U.S.C. 1823(j) ........ 12,254
=======
</TABLE>
6
<PAGE>
We, the undersigned directors, attest to the correctness of this statement of
resources and liabilities. We declare that it has been examined by us, and to
the best of our knowledge and belief has been prepared in conformance with the
instructions and is true and correct.
Chris A. Hayes
Deborah A. Robbins
James A. Quale
I, Chris A. Hayes, Senior Vice President, Director and Chairperson of the Board,
of the above named bank do hereby declare that the Report of Condition is true
and correct to the best of my knowledge and belief.
Chris A. Hayes
7
<PAGE>
Exhibit 99(a)
TRUSTEE PARENT GUARANTEE
GUARANTEE, dated as of June 3, 1999 by State Street Bank and Trust
Company, a Massachusetts trust company (the "GUARANTOR") to and for the benefit
of each person listed on SCHEDULE I hereto (collectively, together with their
permitted successors and assigns, the "BENEFICIARIES" and, individually, a
"BENEFICIARY").
WITNESSETH:
WHEREAS, State Street Bank and Trust Company of Connecticut, National
Association, a wholly-owned subsidiary of the Guarantor (the "SUBSIDIARY")
wishes to act pursuant to the agreements listed on SCHEDULE II hereto (as
amended, modified or supplemented from time to time, the "AGREEMENTS").
WHEREAS, the Beneficiaries are willing to have the Subsidiary act under
the Agreements provided that the Guarantor executes and delivers this Guarantee;
WHEREAS, the Guarantor has determined that the execution and delivery by
it of this Guarantee is necessary in order to conduct, promote and attain the
business of the Subsidiary and the Guarantor; and
WHEREAS, the Guarantor has determined that it has a substantial interest
in the Subsidiary's performance of the Agreements.
NOW, THEREFORE, the Guarantor hereby agrees with and for the benefit of
the Beneficiaries as follows:
1. GUARANTEE.
(a) The Guarantor hereby guarantees to the Beneficiaries the
prompt and complete payment by the Subsidiary when due of, and the
faithful performance of, and compliance with, all payment obligations of
the Subsidiary under the Agreements and any other document relating
thereto to which the Subsidiary is or may hereafter become a party or by
which the Subsidiary is or may hereafter become bound (collectively, the
"RELEVANT DOCUMENTS"), in accordance with the terms thereof and the
timely performance of all other obligations of the Subsidiary thereunder
(such payment and other obligations, the "OBLIGATIONS"). In no event,
however, shall the agreement contained herein be construed to constitute
a guarantee of any amount due (i) under any note or other similar
instrument issued under the Relevant Documents or any other payment due
under any Relevant Document that constitute non-recourse
<PAGE>
obligations of the Subsidiary, or (ii) with respect to acts or events
occurring after such time, if any, that the Subsidiary ceases to be a
party to the Relevant Documents. The agreement contained herein shall be
enforceable against the Guarantor, notwithstanding the fact that the
Subsidiary has ceased to be a party to the Relevant Documents, PROVIDED
that the events or acts which give rise to such claim against the
Guarantor occurred at such time as the Subsidiary was a party to the
Relevant Documents.
(b) No payment or payments made by the Subsidiary, the Guarantor,
any other guarantor or any other person or received or collected by any
Beneficiary from the Subsidiary, the Guarantor, any other guarantor or
any other person by virtue of any action or proceeding or any set-off or
appropriation or application at any time or from time to time in
reduction of or in payment of the Obligations shall be deemed to modify,
reduce, release or otherwise affect the liability of the Guarantor
hereunder (except to the extent of such payment) until the Obligations
are paid and performed in full.
(c) If for any reason any Obligations to be performed or observed
by the Subsidiary shall not be observed or performed, or if any amount
payable by the Subsidiary referred to in Section 1(a) hereof shall not
be paid when due and payable, the Guarantor shall promptly perform or
observe or cause to be performed or observed each such Obligation or
undertaking and shall forthwith pay such amount or perform such action
at the place and to the person or entity entitled thereto pursuant to
the Relevant Documents.
2. AMENDMENTS, ETC., WITH RESPECT TO THE OBLIGATIONS; WAIVER OF RIGHTS.
The Guarantor shall remain obligated hereunder notwithstanding that, without any
reservation of rights against the Guarantor and without notice to or further
assent by the Guarantor, any demand for payment or performance of any of the
Obligations made by any Beneficiary may be rescinded by such party and any of
the Obligations continued, and the Obligations, or the liability of any other
party upon or for any part thereof, or any collateral security or guaranty
therefor or right of offset with respect thereto, may, from time to time, in
whole or in part, be renewed, extended, amended, modified, accelerated,
compromised, waived, surrendered or released by any Beneficiary and any Relevant
Document and/or any collateral security document or other guaranty or document
in connection therewith, may be amended, modified, supplemented or terminated,
in whole or in part, as the parties thereto may deem advisable from time to
time, and any collateral security, guaranty or right of offset at any time held
by any Beneficiary for the payment or performance of the Obligations may be
sold, exchanged, waived, surrendered or released.
-2-
<PAGE>
3. GUARANTEE ABSOLUTE AND UNCONDITIONAL. The Guarantor understands and
agrees that this Guarantee shall be construed as a continuing, absolute and
unconditional guarantee of payment and performance (and not merely of
collection) without regard to (a) any defense, set-off or counterclaim (other
than a defense of payment or performance) that may at any time be available to
or be asserted by the Subsidiary against any Beneficiary, (b) the validity or
enforceability of any Relevant Document against the Subsidiary, or (c) any other
circumstances whatsoever (with or without notice to or knowledge of the
Subsidiary or the Guarantor) that constitutes, or might be construed to
constitute, an equitable or legal discharge of the Subsidiary for the
Obligations, or of the Guarantor under this Guarantee, in bankruptcy or in any
other instance (other than a discharge of such Obligations through payment or
performance). When pursuing its rights and remedies hereunder against the
Guarantor, any Beneficiary may, but shall be under no obligation to, pursue such
rights and remedies as it may have against the Subsidiary or any other person or
entity or against any collateral security or guaranty for the Obligations or any
right of offset with respect thereto, and any failure by any Beneficiary to
pursue such other rights or remedies or to collect any payments from the
Subsidiary or any such other person or entity or to realize upon any such
collateral security or guaranty or to exercise any such right of offset, or any
release of the Subsidiary or any such other person or entity or any such
collateral security, guaranty or right of offset, shall not relieve the
Guarantor of any liability hereunder, and shall not impair or affect the rights
and remedies, whether express, implied or available as a matter of law, of any
Beneficiary against the Guarantor. This Guarantee shall remain in full force and
effect and be binding in accordance with and to the extent of its terms upon the
Guarantor and the successors and assigns thereof, and shall inure to the benefit
of the Beneficiaries, and their respective successors, transferees and assigns,
until all of the Obligations and the obligations of the Guarantor under this
Agreement shall have been satisfied by payment and performance in full. The
Guarantor further agrees to pay all expenses (including, without limitation, all
reasonable fees and disbursements of counsel) that may be paid or incurred by
the Beneficiaries in enforcing any rights with respect to, or collecting, any or
all of the Obligations and/or enforcing any rights with respect to, or
collecting against, the Guarantor under this Guarantee.
4. REPRESENTATIONS AND WARRANTIES. The Guarantor hereby represents and
warrants that:
(a) the Guarantor is a trust company duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization;
-3-
<PAGE>
(b) the Guarantor has the corporate power and authority and the
legal right to execute and deliver, and to perform its obligations
under, this Guarantee, and has taken all necessary corporate action to
authorize its execution, delivery and performance of this Guarantee;
(c) this Guarantee constitutes a legal, valid and binding
obligation of the Guarantor enforceable in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally;
(d) the execution, delivery and performance of the Guarantee and
compliance by the Guarantor with all of the provisions thereof do not
and will not contravene (i) any provision of any requirement of law or
any order known to us of any court or governmental authority or agency
applicable to or binding on the Guarantor, (ii) any contractual
obligations of the Guarantor, or (iii) any of the provisions of its
charter documents or By-laws;
(e) no consent or authorization of, filing with or other act by
or in respect of, any arbitrator or governmental authority and no
consent of any other person (including, without limitation, any
stockholder or creditor of the Guarantor) is required in connection with
the execution, delivery, performance, validity or enforceability of this
Guarantee;
(f) the Guarantor is a bank with a combined capital and surplus
or corporation with a tangible net worth of at least $250,000,000, as
determined in accordance with generally accepted accounting principles;
(g) the Guarantor owns all of the capital stock of the
Subsidiary; and
(h) there are no proceedings pending or, to our knowledge,
threatened, and to our knowledge there is no existing basis for any such
proceedings, against or affecting the Guarantor in or before any court
or before any governmental authority or arbitration board or tribunal
which, if adversely determined, might restrict the Guarantor's corporate
power and authority to perform its obligations under the Guarantee.
5. REINSTATEMENT. The Guarantor agrees that this Guarantee shall be
automatically reinstated with respect to any payment made prior to the
termination of this Guarantee by or on behalf of the Subsidiary pursuant to any
Relevant Document to which the Subsidiary is a party if and to the extent that
such payment is rescinded or must be otherwise restored, whether as a result of
any proceedings in bankruptcy or reorganization or otherwise.
-4-
<PAGE>
6. MISCELLANEOUS. None of the terms or provisions of this Guarantee may
be waived, amended or supplemented or otherwise modified except by a written
instrument executed by the Guarantor and the Beneficiaries. This Guarantee shall
be binding upon the successors and assigns of the Guarantor and shall inure to
the benefit of the Beneficiaries and their respective successors, transferees
and assigns. THIS GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH THE LAW OF THE COMMONWEALTH OF MASSACHUSETTS. All notices,
requests and demands to or upon the Guarantor or any Beneficiary to be effective
shall be in writing or by telecopy and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made when delivered by hand,
or, in the case of mail, three days after deposit in the postal system, first
class postage pre-paid, or, in the case of telegraphic notice, when sent,
answerback received, addressed to (a) in the case of the Guarantor, Corporate
Trust Department, 225 Franklin Street, Boston MA 02110; Telecopy No. (617)
664-5371, and (b) in the case of any Beneficiary, the address provided for such
party in the Relevant Documents, or at such other address as such person may
provide to the Guarantor in writing.
[THE NEXT PAGE IS THE SIGNATURE PAGE]
-5-
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused this Guarantee to be duly
executed and delivered by its duly authorized officer as of the day and the year
first above written.
STATE STREET BANK AND TRUST COMPANY
By: /s/ DONALD E. SMITH
-------------------------------------
Name: Donald E. Smith
Title: Vice President
<PAGE>
SCHEDULE I
Northwest Airlines Corporation
Northwest Airlines, Inc.
Each person that shall from time to time be a holder of Pass Through
Certificates (as such term is defined in the Pass Through Trust Agreement
referenced on SCHEDULE II to this Guarantee)
<PAGE>
SCHEDULE II
Pass Through Trust Agreement dated as of the date hereof by and among
the Subsidiary as Pass Through Trustee, Northwest Airlines, Inc., as Issuer and
Northwest Airlines Corporation, as Guarantor, as supplemented from time to time.
