Document:

Exhibit 10.20

 

***Indicates CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.

 

AMENDMENT No.1 TO THE A330 FINANCING LETTER AGREEMENT No.1

 

As of December                    
2002

 

Northwest Airlines, Inc.

2700 Lone Oak Parkway

Eagan, Minnesota 55121

Attention:                           Mr. Daniel B. Matthews,

Senior Vice President Finance & Treasurer

 

 

Re:                               A330-300
Aircraft Financing

 

WHEREAS:

 

Northwest
Airlines, Inc. (“NWA”) and AVSA, S.A.R.L. (“AVSA”) have entered into an Airbus
A330 Purchase Agreement dated as of December 21, 2000 (as amended with
effect prior to the date hereof, the “A330 Agreement”)
which covers, among other matters, the sale by AVSA and the purchase by NWA of
certain A330 aircraft (the “A330 Aircraft”)
as described in the specifications annexed to the A330 Agreement.  NWA and AVSA have also entered into an A330
Financing Letter Agreement No. 1 dated as of December 21, 2000 (the “A330 FLA”), which sets forth certain additional terms and
conditions regarding financing assistance for the A330 Aircraft.

 

NWA and AVSA
have entered into an Airbus A319-100 Purchase Agreement dated as of September 19,
1997 (as amended with effect prior to the date hereof, the “A319/A320 Agreement”) which covers, among other matters, the
sale by AVSA and the purchase by NWA of certain A320 and A319 aircraft (the “A319/A320 Aircraft”) as described in the specifications
annexed to the A319/A320 Agreement.

 

NWA and AVSA
have entered into Amendment No.10 to the A319/A320 Agreement and Amendment No.2
to the A330 Agreement amendment as of even date herewith (the “Restructuring Agreements”) which respectively cover, among
other things, the rescheduling of deliveries of A319/A320 Aircraft and A330
Aircraft and additional *** applicable to certain A330 Aircraft.

 

As an inducement for NWA to enter into the Restructuring Agreements and
for the purpose of providing improved financial assistance to NWA, AVSA and NWA
have agreed to enter into this Amendment No. 1 (the “Amendment
“) to the A330 FLA.

 

 

IT IS NOW AGREED AS FOLLOWS:

 

This Amendment
shall not constitute part of the A330 Agreement or the Restructuring Agreement
in respect of the A330 Agreement, but shall be a separate and independent
contract of financial accommodation.

 

This Amendment shall, subject to its terms and conditions, amend and
supplement certain provisions of the A330 FLA and, to the extent of any
conflict between this Amendment and the A330 FLA, the provisions of this
Amendment shall prevail.

 

Capitalized
terms used herein and not otherwise defined in this Amendment will have the
meanings assigned thereto in the A330 FLA.

 

Subject to the terms and conditions of this Amendment, the A330 FLA
shall be amended as follows with effect from execution of the Restructuring
Agreements and all related documentation in a form satisfactory to AVSA and
NWA:

 

A. Improved financing support:

 

1. Improved A330 financing support for 2003, 2004 and 2005 deliveries:

 

Subject to clause 3 below, the A330 Short Term Credit support
(including Initial Term and Extended Term) to be provided or the provision of
which is to be procured by AVSA shall be modified and improved on the following
terms and conditions applicable to up to a maximum of twelve (12) A330 Aircraft
scheduled to be delivered to NWA from August 2003 to the end of 2005 (the “Twelve
Supported A330s”):

 

1.1       AVSA shall increase the
funding commitment level of the A330 Short Term Credit from a maximum of *** per
cent (*** %) to a maximum of *** per cent (*** %) of the Net Aircraft Flyaway
Price solely in respect of the Twelve Supported A330s.

 

1.2       The principal balance
of the A330 Short Term Credit in respect of the Twelve Supported A330s shall
amortize and be repaid by NWA quarterly in arrears in each case as follows:

 

a.               *** per cent (*** %) per quarter of the
drawn amount, during the first two years of such A330 Short Term Credit and ***
 per cent (*** %) per quarter of the
drawn amount, during the third year of such A330 Short Term Credit, for those
of the Twelve Supported A330s scheduled to be delivered in 2003;

 

b.              *** per cent (*** %) per quarter of the
drawn amount, during the first two years of such A330 Short Term Credit and ***
per cent (*** %) per quarter of the drawn amount, during the third year of such
A330 Short Term Credit, for those of the Twelve Supported A330s scheduled to be
delivered in 2004;

 

 

c.               *** per cent (*** %) per quarter of the
drawn amount, during the first two years of such A330 Short Term Credit and ***
per cent (*** %) per quarter of the drawn amount, during the third year of such
A330 Short Term Credit, for those of the Twelve Supported A330s scheduled to be
delivered in 2005.

 

2. Extended Term Interest Rate:

 

The Interest Rate for the Extended Term for any A330 Aircraft selected
by NWA pursuant to the second paragraph of paragraph A.3.6 of the A330 FLA
shall not exceed LIBOR plus *** basis points per annum.

 

3. Other Terms and Conditions:

 

3.1       The terms and conditions of the modified
and improved financing support as set out in clause 1 above shall, subject to
the remainder of this clause 3.1, only apply to the Twelve Supported A330s
scheduled to be delivered to NWA in accordance with the terms of the
Restructuring Agreement in respect of the A330 Aircraft. If, pursuant to (i)
the exercise by NWA of any  deferral
right or (ii) any rescheduling agreement between AVSA and NWA  requested by NWA, the delivery of any A330
Aircraft (for the avoidance of doubt including the Twelve Supported A330s)
scheduled to be delivered between August 2003 and the end of  2005 in accordance with the terms of the
applicable Restructuring Agreement is rescheduled and not delivered before or
during the year 2005, the modified and improved financing support as set out in
clause 1 above shall not apply to such A330 Aircraft.

 

3.2       During the years 2003,
2004 and 2005, NWA shall use commercially reasonable efforts to obtain and use
financing which is more attractive to NWA than the financing support offered by
AVSA and/or any of its affiliates (including Airbus Financial Services and any
of its affiliates or subsidiaries).

 

3.3       Financing Exposure

 

For the purpose of calculating the Exposure from time to time, the
exposure under the AIFS Term Loan shall be the aggregate principal amount
actually outstanding thereunder

 

3.4       Save as amended as set
out above, the A330 FLA shall remain unaltered and in full force and effect.

 

B. Governing law and confidentiality

 

This Amendment shall be governed by and construed in accordance with
the New York law.

 

NWA acknowledges that this Amendment is considered by AVSA as
commercially sensitive and as constituting confidential information. NWA agrees
that the provisions of this Amendment and related documentation will not,
without the prior written consent of AVSA (except as set forth below), be
disclosed to any party other than legal counsel, credit rating agencies and
lead lenders on an as-needed basis and only after securing the written
commitment of those parties to maintain the confidentiality of this Amendment.
Should there be any breach of this provision as a result of any fault of NWA,

 

 

AVSA may withdraw the modified and improved financing support as set
out in clauses 1 and 2 above.

 

Subject to any legal or governmental requirements of disclosure, and
except for disclosure to legal counsel, credit rating agencies and lead lenders
on an as-needed basis, the parties (which for this purpose shall include their
board of directors, employees, agents and advisers (including financial
advisers)) shall maintain the terms and conditions of this Amendment and
related documentation strictly confidential. Without limiting the generality of
the foregoing, NWA and AVSA will limit the disclosure of the contents of this
Amendment and related documentation, to the extent legally permissible, in any
filing required to be made with any governmental agency and shall make such
applications as shall be necessary to implement the foregoing. NWA and AVSA
shall consult with each other prior to the making of any public disclosure or
filing, otherwise permitted hereunder, of this Amendment or the terms and
conditions hereof or any related documentation. In the event that NWA receives
any other disclosure request from any government or any branch, agency or
instrumentality thereof or any government-related entity, which NWA believes
would be advisable to satisfy in whole or in part, NWA and AVSA will consult
and AVSA will not unreasonably withhold its consent to such disclosure.
Notwithstanding anything in this paragraph to the contrary, AVSA may deliver a
copy of this Amendment to the selected Propulsion Systems Manufacturer. The
provisions of this clause B shall survive any termination of this Amendment
and/or related documentation.

 

 

If the
foregoing correctly sets forth our understanding, please execute the original
and one (1) copy hereof in the space provided below and return
a copy to AVSA.

 

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  AVSA S.A.R.L.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Marie-Pierre Merle-Beral

  	
   

  
	
   

  	
   

  	
  Name: 

  	
  Marie-Pierre Merle-Beral

  
	
   

  	
   

  	
  Title: 

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
  Accepted and Agreed:

  	
   

  
	
   

  	
   

  
	
  NORTHWEST AIRLINES, INC.

  	
   

  
	
   

  	
   

  
	
  By: 

  	
  /s/ Gregory A. May

  	
   

  	
   

  
	
   

  	
  Name: 

  	
  Gregory A. May

  	
   

  
	
   

  	
  Title: 

  	
  Vice President

  Purchasing & Aircraft AcquisitionsExhibit 10.21

 

*** Indicates CONFIDENTIAL
MATERIAL OMITTED AND FILED   SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT.

 

AMENDMENT NO. 2 TO THE A330 FINANCING LETTER AGREEMENT No. 1

 

Northwest Airlines, Inc.

2700 Lone Oak Parkway

Eagan, Minnesota 55121

United States of America

Dated May   , 2004

 

Dear Sir,

 

A330 Financing Letter Agreement No. 1 entered
into between AVSA, S.A.R.L. (“AVSA”) and Northwest Airlines, Inc. (“NWA”), and
dated as of December 21, 2000 as amended by Amendment No. 1 to the A330
Financing Letter No. 1, between AVSA and NWA dated as of December 20, 2002 (the
“A330 FLA”).

 

Capitalised terms used herein
and not otherwise defined herein shall have the meanings ascribed to them in
the A330 FLA.

 

Whereas,
pursuant to Section B of the A330 FLA, AVSA commits to make available to NWA,
on AVSA’s pro-rata share of the Aircraft order, a maximum of eighteen (18)
RVGs, twelve (12) in respect of the initial sixteen (16) Firm Aircraft, and an
additional six (6) in respect of the last eight (8) Firm Aircraft, from the
initial twenty-four (24) Firm Aircraft, to be delivered to NWA under the
Agreement (each an “RVG Aircraft”
and collectively the “RVG Aircraft”);
and

 

Whereas,
the parties hereto wish to amend the provisions of Section B of the A330 FLA.

 

The parties hereto agree as
follows:

 

(1)                                  In
consideration of AVSA making available to NWA, in accordance with the
provisions of this Letter Agreement, a Credit Note (as defined herein) at
delivery of each RVG Aircraft, NWA agrees to release AVSA from all and every
obligation AVSA has in relation to the issue of RVG’s pursuant to the A330 FLA.

 

(2)                                  Subject
to the provisions of paragraphs 4 to 6 inclusive below, AVSA will make
available to NWA at delivery of each RVG Aircraft a credit note in the
following amounts:

 

(i)                                     *** Dollars (US$ ***) as at September 2003, in
respect of each A330-300 RVG Aircraft; and

 

(ii)                                  *** (US$ ***) as at July 2004, in respect of each
A330-200 RVG Aircraft,

 

1

 

(each a “Credit Note” and collectively the “Credit Notes”, each Credit Note will be
applied towards partial payment of the Final Contract Price at delivery of the
applicable RVG Aircraft).

 

(3)                                  The
amount of each Credit Note will be adjusted from September 2003 or July 2004,
as appropriate up to and including the scheduled month of delivery of the
relevant RVG Aircraft as specified in the Agreement, in accordance with the
airframe escalation formula set out at section 3 of letter agreement number 11
to the Agreement, applying basic indices as follows:

 

(i)                                     A330-330
Credit Notes:

 

ECIb = average
ECI-SIC-3721W for August 2002/September 2002/October 2002 (162.7)

 

ICb = IC –
average IC-Index for August 2002/September 2002/ October 2002 (133.8)

 

(ii)                                  A330-200
Credit Notes:

 

ECIb = average ECI-SCI-3721W for June
2003/July 2003/August 2003 (167.2)

 

ICb = average
IC-Index for June 2003/July 2003/August 2003 (139.1).

 

(4)                                  Except
for the Credit Notes specified in paragraph 7 below, AVSA’s obligation to issue
a Credit Note in respect of an RVG Aircraft is contingent upon the following:

 

(i)                                     NWA not being in
breach of its obligation set out at C2.0 (ii) of the A330 FLA or in breach of
any of its obligations pursuant to paragraph 6 of this Letter Agreement;
and/or

 

(ii)                                  NWA shall not have
elected to have AVSA or its subsidiary or affiliate participate in an EETC
pursuant to the A330 FLA in respect of the relevant RVG Aircraft; and/or

 

(iii)                               Except with respect to
the sixteenth Firm Aircraft (based upon the initial delivery schedule), the RVG
Aircraft shall not be an aircraft pursuant to which United Technologies Pratt
and Whitney Inc. have any financial support obligation under the Agreement or a
separate agreement of financial accommodation; and/or

 

(iv)                              NWA
serving written notice on AVSA, not less than five (5) days prior to the
scheduled delivery month of the relevant RVG Aircraft, of its intention to
utilise one of the available Credit Notes, in order to support the financing documentation and/or the invoice
preparation.

 

2

 

(5)                                  If,
after the date of this Letter Agreement, AVSA or its subsidiary and/or
affiliate implements financing for the benefit of NWA, whether as a junior,
senior or sole lender, in accordance with the provisions of Section A of the
A330 FLA on an RVG Aircraft, then, for the purpose of calculating the amount to
be financed by AVSA (or its subsidiary and/or affiliate) under the A330 FLA,
the Net Flyaway Price of such RVG Aircraft shall be defined as the Final
Contract price of the relevant RVG Aircraft plus Buyer Furnished Equipment less
all airframe and engine credits available at delivery of such RVG Aircraft,
including, without limitation, the Credit Note, if any, made available for such
RVG Aircraft.

 

(6)                                  In
the event that AVSA has issued a Credit Note in respect of any RVG Aircraft and
pursuant to the A330 FLA AVSA subsequently participates, at the request of NWA,
in an EETC in respect of that RVG Aircraft, NWA will repay to AVSA or its
subsidiary or affiliate, as appropriate, the amount of that Credit Note plus
interest at a rate per annum of three-month LIBOR (assuming consecutive three-month interest periods) plus *** basis points (*** %), which has accrued from the date of issue of
the Credit Note until repayment of the same. Such repayment to be made by NWA
not later than ten (10) days following AVSA’s participation in such EETC.

 

(7)                                  A Credit Note will be
made available, in accordance with the terms of this Letter Agreement, in
respect of A330-323 manufacturer’s serial number 542 (“MSN 542”)
and A330-323 manufacturer’s serial number 578 (“MSN 578”),
delivered to NWA on September 16, 2003 and March 19, 2004, respectively.

 

The amount of
the Credit Note in respect of MSN 542 will be *** Dollars
(US$ ***) plus interest on such two million two hundred thousand Dollars from
the date of delivery of MSN 542 to the date of application of the Credit Note
(as described below) at the same rate of interest calculated and invoiced to NWA
for the same period of time by Airbus Finance Company Limited (“AFC”) as administrative agent pursuant to the Credit
Agreement dated as of September 16, 2003 between NWA and AFC in respect of MSN
542 (the “MSN 542 Credit Agreement”).  Such Credit Note will be applied against the
outstanding principal owed by NWA to AFC pursuant to the MSN 542 Credit
Agreement, on the next interest payment date, being June 16, 2004, under
the MSN 542 Credit Agreement.

 

AFC and NWA
shall amend the MSN 542 Credit Agreement and AFC shall agree to provide a
revised amortization schedule. For the purpose of calculating such revised
amortization schedule (including the Initial Term and Extended Term), the MSN
542 Credit Agreement initial principal amount of the Loan (as defined in the
MSN 542 Credit Agreement) shall be reduced by the amount of the Credit Note
applied.

 

The amount of
the Credit Note in respect of MSN 578 will be *** Dollars
(US$ ***) plus interest on such two million two hundred thousand Dollars from
the date of delivery of MSN 578 to the date of application of the Credit Note
(as described below) at the same rate of interest calculated and invoiced to
NWA for the same period of time by Airbus Finance Company Limited (“AFC”) as administrative agent pursuant to the Credit
Agreement dated as of

 

3

 

March 19,
2004 between NWA and AFC in respect of MSN 578 (the “MSN 578
Credit Agreement”) . Such Credit Note will be applied against the
outstanding principal owed by NWA to AFC pursuant to the MSN 578 Credit
Agreement, on the next interest payment date, being June 21, 2004, under
the MSN 578 Credit Agreement.

 

4

 

AFC and NWA
shall amend the MSN 578 Credit Agreement and AFC shall agree to provide a
revised amortization schedule. For the purpose of calculating such revised
amortization schedule (including the Initial Term and Extended Term), the MSN
578 Credit Agreement initial principal amount of the Loan (as defined in the
MSN 578 Credit Agreement) shall be reduced by the amount of the Credit Note
applied.

 

(8)                                In
the event that all or any of the circumstances set out at Section C1.0 of the
A330 FLA arise, the obligations of AVSA under this Letter Agreement shall
terminate without further act and without prejudice to any of AVSA’s right at
law or pursuant to the A330 FLA.

 

(9)                                This Letter Agreement
shall incorporate the provisions of section C7.0 and C8.0 of the A330 FLA, as
if set out in full herein.

 

(10)                          This
Letter Agreement shall be governed by and construed in accordance with the laws
of the State of New York.

 

(11)                          Any
ambiguity between the A330 FLA and this Letter Agreement shall be interpreted
so as to give effect to the terms of this Letter Agreement and except as set out
herein the A330 FLA shall not be amended.

 

(12)                          The
Letter Agreement may be executed in any number of counterparts and by the
parties hereto on separate counterparts. Each counterparts shall constitute an
original of this Letter Agreement and together, the counterparts shall
constitute one document.

 

(13)                            For
the avoidance of doubt:

 

(i)                                     Notwithstanding
anything to the contrary contained in this Letter Agreement or in the A330 FLA,
subject to the terms and conditions contained in this Letter Agreement, NWA
shall be entitled to a Credit Note with respect to the sixteenth Firm Aircraft
(based on the initial delivery schedule) whether or not such sixteenth Firm
Aircraft is an RVG Aircraft and regardless of which entity is then the
financier for such sixteenth Firm Aircraft (including United Technologies Pratt
and Whitney Inc., AVSA, AFC or any party related thereto or any other party),
and

 

(ii)                                  MSN
552 shall not be eligible to benefit from a Credit Note.

 

 

Yours faithfully,

 

 

	
  /s/
  Marie-Pierre Merle-Beral

  	
   

  
	
  for and on
  behalf of AVSA S.A.R.L.

  

 

5

 

We hereby accept and agree to
the provisions of this Letter Agreement.

 

 

	
  /s/ James
  Cottle

  	
   

  
	
  Signed for
  and on behalf of Airbus Finance Company
  Limited.

  
	
   

  	
   

  
	
  By:

  	
  James Cottle

  
	
  Name:

  	
  James Cottle

  
	
  Title:

  	
  Director

  
			

 

 

	
  Northwest Airlines, Inc.

  
	
   

  
	
   

  
	
  By: 

  	
  /s/

  	
  Daniel B.
  Matthews

  	
   

  
	
  Name: 

  	
  Daniel B.
  Matthews

  
	
  Title:

  	
  Senior Vice
  President and Treasurer

  

 

6

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