Exhibit 4.3

 

REGISTRATION RIGHTS AGREEMENT

 

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of November 4, 2003 among Northwest Airlines Corporation, a Delaware corporation (the “Company”), Northwest Airlines, Inc., a Minnesota corporation (the “Guarantor”), and Citigroup Global Markets Inc. (the “Initial Purchaser”) pursuant to the Purchase Agreement, dated October 29, 2003 (the “Purchase Agreement”), among the Company, the Guarantor and the Initial Purchaser.  In order to induce the Initial Purchaser to enter into the Purchase Agreement, the Company and the Guarantor have agreed to provide the registration rights set forth in this Agreement.  The execution of this Agreement is a condition to the closing under the Purchase Agreement.

 

The Company and the Guarantor agree with the Initial Purchaser, (i) for its benefit as Initial Purchaser and (ii) for the benefit of the beneficial owners (including the Initial Purchaser) from time to time of the Securities (as defined herein), and the beneficial owners from time to time of the Underlying Common Stock (as defined herein) issuable upon conversion of Securities (each of the foregoing a “Holder” and together the “Holders”), as follows:

 

SECTION 1.  Definitions .  Capitalized terms used herein without definition shall have their respective meanings set forth in the Purchase Agreement.  In addition to the terms that are defined elsewhere in this Agreement, the following terms shall have the following meanings:

 

“ Additional Amount ” has the meaning specified in Section 2(e) hereof.

 

“ Additional Amount Accrual Period ” has the meaning specified in Section 2(e) hereof.

 

“ Additional Amount Payment Date ” means each May 15 and November 15.

 

“ Additional Notes ” means up to an additional $45,000,000 aggregate original principal amount of 7.625% Convertible Senior Notes due 2023 of the Company to be purchased pursuant to the Purchase Agreement.

 

“ Affiliate ”, with respect to any specified person, has the meaning specified in Rule 144.

 

“ Applicable Conversion Price ” means, as of any date of determination, the Applicable Principal Amount per $1,000 original principal amount of Notes as of such date of determination divided by the Conversion Rate in effect as of such date of determination or, if no Notes are then outstanding, the Conversion Rate that would be in effect were Notes then outstanding.

 

“ Applicable Principal Amount ” means, as of any date of determination, (1) with respect to each $1,000 original principal amount of Notes means the accrued accreted principal amount with respect to such Notes through such date of determination,

 

 

(2) if the Notes have been converted to Semiannual Coupon Notes upon a Tax Event, the Restated Principal Amount with respect to the Notes, or (3) if no Notes are then outstanding, such sum calculated as if such Notes were then outstanding.

 

“ Business Day ” means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which banking institutions in The City of New York are authorized or obligated by law or executive order to close.

 

“ Common Stock ” means any shares of the common stock, $0.01 par value, of the Company and any other shares of common stock as may constitute “Common Stock” for purposes of the Indenture, including the Underlying Common Stock.

 

“ Company ” has the meaning specified in the first paragraph of this Agreement.

 

“ Conversion Rate ” has the meaning assigned to such term in the Indenture.

 

“ Deferral Notice ” has the meaning specified in Section 3(i) hereof.

 

“ Deferral Period ” has the meaning specified in Section 3(i) hereof.

 

“ Effectiveness Deadline Date ” has the meaning specified in Section 2(a) hereof.

 

“ Effectiveness Period ” means the period of two years from the Issue Date or such shorter period ending on the date that all Registrable Securities have ceased to be Registrable Securities.

 

“ Event ” has the meaning specified in Section 2(e) hereof.

 

“ Event Date ” has the meaning specified in Section 2(e) hereof.

 

“ Event Termination Date ” has the meaning specified in Section 2(e) hereof.

 

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

 

“ Filing Deadline Date ” has the meaning specified in Section 2(a) hereof.

 

“ Firm Notes ” means an aggregate of $225,000,000 original principal amount of the 7.625% Convertible Senior Notes due 2023 of the Company to be purchased pursuant to the Purchase Agreement.

 

“ guarantee ” means, as applied to any obligation, (i) a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, contingent or otherwise, the practical effect of which is to assure in any way the payment or performance (or payment of damages in the event of non-performance)

 

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of all or any part of such obligation, including, without limiting the foregoing, the payment of amounts drawn down by letters of credit.

 

“ Guarantee ” means the guarantee of the Notes by the Guarantor in accordance with the provisions of Article 13 of the Indenture.

 

“ Guarantor ” has the meaning specified in the first paragraph of this Agreement.

 

“ Holder ” has the meaning specified in the second paragraph of this Agreement.

 

“ Indenture ” means the Indenture dated as of the date hereof, as amended from time to time, among the Company, the Guarantor and U.S. Bank National Association, as trustee, pursuant to which the Securities are being issued.

 

“ Initial Purchaser ” has the meaning specified in the first paragraph of this Agreement.

 

“ Initial Shelf Registration Statement ” has the meaning specified in Section 2(a) hereof.

 

“ Issue Date ” means November 4, 2003.

 

“ Material Event ” has the meaning specified in Section 3(i) hereof.

 

“ Notes ” means the Firm Notes and the Additional Notes.

 

“ Notice and Questionnaire ” means a written notice delivered to the Company containing substantially the information called for by the Selling Securityholder Notice and Questionnaire attached as Annex A to the Offering Memorandum dated October 29, 2003 of the Company and the Guarantor relating to the Securities.

 

“ Notice Holder ” means on any date, any Holder that has delivered a Notice and Questionnaire to the Company on or prior to such date.

 

“ Prospectus ” means the prospectus included in any Registration Statement (including, without limitation, a prospectus that discloses information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 415 promulgated under the Securities Act), as amended or supplemented by any amendment or prospectus supplement, including post-effective amendments, and all materials incorporated by reference or explicitly deemed to be incorporated by reference in such Prospectus.

 

“ Purchase Agreement ” has the meaning specified in the first paragraph of this Agreement.

 

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“ Record Holder ” means, with respect to any Additional Amount Payment Date relating to any Note or shares of Underlying Common Stock as to which any Additional Amount has accrued, the registered holder of such Note or such shares of Underlying Common Stock, as the case may be, on the 15 ^th day immediately prior to the next succeeding Additional Amount Payment Date.

 

“ Registrable Securities ” means the Securities and the Underlying Common Stock until such securities have been converted or exchanged and, at all times subsequent to any such conversion or exchange, any securities into or for which such securities have been converted or exchanged, and any security issued with respect thereto upon any stock dividend, split, merger or similar event until, in the case of any such security, the earliest of (i) its effective registration under the Securities Act and resale in accordance with the Registration Statement covering it, (ii) expiration of the holding period that would be applicable thereto under Rule 144(k) were it not held by an Affiliate of the Company or the Guarantor, or (iii) its sale to the public pursuant to Rule 144.

 

“ Registration Statement ” means any registration statement of the Company and the Guarantor that covers any of the Registrable Securities pursuant to the provisions of this Agreement, including the Prospectus, amendments and supplements to such registration statement, including post-effective amendments, all exhibits, and all materials incorporated by reference or explicitly deemed to be incorporated by reference in such registration statement.

 

“ Restated Principal Amount ” has the meaning assigned to such term in the Indenture.

 

“ Rule 144 ” means Rule 144 under the Securities Act, as such Rule may be amended from time to time, or any similar or successor rule or regulation hereafter adopted by the SEC having substantially the same effect as such Rule.

 

“ Rule 144A ” means Rule 144A under the Securities Act, as such Rule may be amended from time to time, or any similar or successor rule or regulation hereafter adopted by the SEC having substantially the same effect as such Rule.

 

“ SEC ” means the United States Securities and Exchange Commission and any successor agency.

 

“ Securities ” means the Notes and the Guarantees collectively.

 

“ Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations promulgated by the SEC thereunder.

 

“ Semiannual Coupon Notes ” has the meaning specified in Section  2(e) hereof.

 

“ Shelf Registration Statement ” has the meaning specified in Section 2(a) hereof.

 

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“ Subsequent Shelf Registration Statement ” has the meaning specified in Section 2(b) hereof.

 

“ Tax Event ” has the meaning assigned to such term in the Indenture.

 

“ TIA ” means the Trust Indenture Act of 1939, as amended.

 

“ Trustee ” means U.S. Bank National Association (or any successor entity), the Trustee under the Indenture.

 

“ Underlying Common Stock ” means the Common Stock into which the Securities are convertible or issued upon any such conversion.

 

SECTION 2.  Shelf Registration .

 

(a)   The Company and the Guarantor shall prepare and file or cause to be prepared and filed with the SEC no later than a date which is one-hundred and twenty (120) days after the Issue Date (the “Filing Deadline Date”) a Registration Statement for an offering to be made on a delayed or continuous basis pursuant to Rule 415 of the Securities Act (a “Shelf Registration Statement”) registering the resale from time to time by Holders of all of the Registrable Securities (the “Initial Shelf Registration Statement”).  The Initial Shelf Registration Statement shall be on Form S-3 or another appropriate form permitting registration of such Registrable Securities for resale by such Holders in accordance with the methods of distribution reasonably elected by the Holders and set forth in the Initial Shelf Registration Statement; provided that in no event will such method(s) of distribution take the form of an underwritten offering of the Registrable Securities without the prior agreement of the Company.  The Company and the Guarantor shall use their reasonable best efforts to cause the Initial Shelf Registration Statement to be declared effective under the Securities Act no later than the date (the “Effectiveness Deadline Date”) that is one-hundred and eighty (180) days after the Issue Date, and to keep, subject to Section 3(i)(A) hereof, the Initial Shelf Registration Statement (or any Subsequent Shelf Registration Statement) continuously effective under the Securities Act until the expiration of the Effectiveness Period.  Each Holder that became a Notice Holder on or prior to the date ten (10) Business Days prior to the time that the Initial Shelf Registration Statement became effective shall be named as a selling security holder in the Initial Shelf Registration Statement and the related Prospectus in such a manner as to permit such Holder to deliver such Prospectus to purchasers of Registrable Securities in accordance with applicable law (other than laws not generally applicable to all such Holders).  Notwithstanding the foregoing, no Holder shall be entitled to have the Registrable Securities held by it covered by such Shelf Registration Statement unless such Holder has provided a Notice and Questionnaire in accordance with Section 2(d) and is in compliance with Section 4.  Neither the Company nor the Guarantor shall permit any of its security holders (other than the Holders of Registrable Securities) to include any of the Company’s or the Guarantor’s securities in the Shelf Registration Statement (or any subsequent Shelf Registration Statement).

 

(b)   If the Initial Shelf Registration Statement or any Subsequent Shelf Registration Statement ceases to be effective for any reason at any time during the

 

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Effectiveness Period, the Company and the Guarantor shall use their best efforts to obtain the prompt withdrawal of any order suspending the effectiveness thereof, and in any event shall within thirty (30) days of such cessation of effectiveness amend the Shelf Registration Statement in a manner reasonably expected by the Company and the Guarantor to obtain the withdrawal of the order suspending the effectiveness thereof, or file an additional Shelf Registration Statement covering all of the securities that as of the date of such filing are Registrable Securities (a “Subsequent Shelf Registration Statement”).  If a Subsequent Shelf Registration Statement is filed, the Company and the Guarantor shall use reasonable efforts to cause the Subsequent Shelf Registration Statement to become effective as promptly as is reasonably practicable after such filing or, if filed during a Deferral Period, after the expiration of such Deferral Period, and to keep such Registration Statement (or subsequent Shelf Registration Statement), subject to Section 3(i)(A) hereof, continuously effective until the end of the Effectiveness Period.

 

(c)   The Company and the Guarantor shall supplement and amend the Shelf Registration Statement if required by the rules, regulations or instructions applicable to the registration form used by the Company and the Guarantor for such Shelf Registration Statement, if required by the Securities Act or, to the extent to which the Company does not reasonably object, as reasonably requested by the Initial Purchaser or by the Trustee on behalf of the registered Holders.

 

(d)   Each Holder of Registrable Securities agrees that if such Holder wishes to sell Registrable Securities pursuant to a Shelf Registration Statement and related Prospectus, it will do so only in accordance with this Section 2(d) and Section 3(i) and Section 4.  Each Holder of Registrable Securities wishing to sell Registrable Securities pursuant to a Shelf Registration Statement and related Prospectus agrees to deliver a Notice and Questionnaire to the Company at least five (5) Business Days prior to any intended distribution of Registrable Securities under the Shelf Registration Statement.  From and after the date the Initial Shelf Registration Statement is declared effective, the Company and the Guarantor shall, as promptly as is reasonably practicable after the date a fully completed and legible Notice and Questionnaire is received by the Company, (i) if required by applicable law, file with the SEC a post-effective amendment to the Shelf Registration Statement or prepare and, if required by applicable law, file a supplement to the related Prospectus or a supplement or amendment to any document incorporated therein by reference or file any other document required by the SEC so that the Holder delivering such Notice and Questionnaire is named as a selling security holder in the Shelf Registration Statement and the related Prospectus in such a manner as to permit such Holder to deliver such Prospectus to purchasers of the Registrable Securities in accordance with applicable law (other than laws not generally applicable to all Holders of Registrable Securities wishing to sell Registrable Securities pursuant to the Shelf Registration Statement and related Prospectus) and, if the Company and the Guarantor shall file a post-effective amendment to the Shelf Registration Statement, use reasonable efforts to cause such post-effective amendment to be declared effective under the Securities Act as promptly as is reasonably practicable; (ii) provide such Holder copies of any documents filed pursuant to Section 2(d)(i); and (iii) notify such Holder as promptly as is reasonably practicable after the effectiveness under the Securities Act of any post-effective amendment filed pursuant to Section 2(d)(i); provided that if such Notice and Questionnaire is delivered during a Deferral Period, the Company shall so inform the Holder delivering

 

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such Notice and Questionnaire and shall take the actions set forth in clauses (i), (ii) and (iii) above upon expiration of the Deferral Period in accordance with Section 3(i), provided further that if under applicable law the Company and the Guarantor have more than one option as to the type or manner of making any such filing, they will make the required filing or filings in the manner or of a type that is reasonably expected to result in the earliest availability of the Prospectus for effecting resales of Registrable Securities. Notwithstanding anything contained herein to the contrary, the Company and the Guarantor shall be under no obligation to name any Holder that is not a Notice Holder as a selling security holder in any Registration Statement or related Prospectus; provided , however , that any Holder that becomes a Notice Holder pursuant to the provisions of Section 2(d) of this Agreement (whether or not such Holder was a Notice Holder at the time the Registration Statement was initially declared effective) shall be named as a selling security holder in the Registration Statement or related Prospectus subject to and in accordance with the requirements of this Section 2(d).

 

(e)   The parties hereto agree that the Holders of Registrable Securities will suffer damages, and that it would not be feasible to ascertain the extent of such damages with precision, if (i) the Initial Shelf Registration Statement has not been filed on or prior to the Filing Deadline Date, (ii) the Initial Shelf Registration Statement has not been declared effective under the Securities Act on or prior to the Effectiveness Deadline Date, or (iii) the aggregate duration of Deferral Periods in any period exceeds the number of days permitted in respect of such period pursuant to Section 3(i) hereof (each of the events of a type described in any of the foregoing clauses (i) through (iii) is individually referred to herein as an “Event,” and the Filing Deadline Date in the case of clause (i), the Effectiveness Deadline Date in the case of clause (ii), and the date on which the aggregate duration of Deferral Periods in any period exceeds the number of days permitted by Section 3(i) hereof in the case of clause (iii), being referred to herein as an “Event Date”).  Events shall be deemed to continue until the “Event Termination Date,” which shall be the following dates with respect to the respective types of Events:  the date the Initial Shelf Registration Statement is filed in the case of an Event of the type described in clause (i), the date the Initial Shelf Registration Statement is declared effective under the Securities Act in the case of an Event of the type described in clause (ii), and termination of the Deferral Period that caused the limit on the aggregate duration of Deferral Periods in a period set forth in Section 3(i) to be exceeded in the case of the commencement of an Event of the type described in clause (iii).

 

Accordingly, commencing on (and including) any Event Date and ending on (but excluding) the next date after an Event Termination Date (an “Additional Amount Accrual Period”), the Company and the Guarantor agree to pay an additional amount (the “Additional Amount”), payable on the Additional Amount Payment Dates to Record Holders of then outstanding Securities that are Registrable Securities or of then outstanding shares of Underlying Common Stock issued upon conversion of Securities that are Registrable Securities, as the case may be, accruing, for each portion of such Additional Amount Accrual Period beginning on and including an Additional Amount Payment Date (or, in respect of the first time that the Additional Amount is to be paid to Holders on an Additional Amount Payment Date as a result of the occurrence of any particular Event, from the Event Date) and ending on but excluding the first to occur of (A) the date of the end of the Additional Amount Accrual Period or (B) the next Additional Amount Payment Date, at a rate per annum equal

 

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to one-quarter of one percent (0.25%) for the first ninety (90)-day period from the Event Date, and thereafter at a rate per annum equal to one-half of one percent (0.50%) of the aggregate Applicable Principal Amount of such Notes, the aggregate Applicable Conversion Price of the shares of Underlying Common Stock and the Restated Principal Amount of the semiannual coupon notes following a Tax Event (“Semiannual Coupon Notes”), as the case may be, in each case determined as of the Business Day immediately preceding the next Additional Amount Payment Date; provided that any Additional Amount accrued with respect to any Security or portion thereof called for redemption on a redemption date or converted into Underlying Common Stock on a conversion date or to Semiannual Coupon Notes prior to the Additional Amount Payment Date shall, in any such event, be paid instead to the Holder who submitted such Security or portion thereof for redemption or conversion on the applicable redemption date or conversion date, as the case may be, on such date (or promptly following the conversion date, in the case of conversion).  Notwithstanding the foregoing, no Additional Amounts shall accrue as to any Registrable Security from and after the earlier of (x) the date such security is no longer a Registrable Security and (y) expiration of the Effectiveness Period.  The rate of accrual of the Additional Amount with respect to any period shall not exceed the rate provided for in this paragraph notwithstanding the occurrence of multiple concurrent Events.  Following the cure of all Events requiring the payment by the Company and/or the Guarantor of Additional Amounts to the Holders of Registrable Securities pursuant to this Section, the accrual of Additional Amounts will cease (without in any way limiting the effect of any subsequent Event requiring the payment of Additional Amounts by the Company and/or the Guarantor).

 

The Trustee, subject to the applicable provisions of the Indenture, shall be entitled on behalf of Holders of Securities, Underlying Common Stock or Semiannual Coupon Notes, to seek any available remedy for the enforcement of this Agreement, including for the payment of any Additional Amount.  Notwithstanding the foregoing, the parties agree that the sole monetary damages payable for a violation of the terms of this Agreement with respect to which additional amounts are expressly provided shall be such Additional Amount.  Nothing shall preclude a Notice Holder or Holder of Registrable Securities from pursuing or obtaining specific performance or other equitable relief with respect to this Agreement.

 

All of the Company’s and the Guarantor’s obligations set forth in this Section 2(e) that are outstanding with respect to any Registrable Security at the time such security ceases to be a Registrable Security shall survive until such time as all such obligations with respect to such security have been satisfied in full (notwithstanding termination of this Agreement pursuant to Section 8(k)).

 

The parties hereto agree that the Additional Amounts provided for in this Section 2(e) constitute a reasonable estimate of the damages that may be incurred by Holders of Registrable Securities by reason of the failure of the Shelf Registration Statement to be filed or declared effective or available for effecting resales of Registrable Securities in accordance with the provisions hereof.

 

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SECTION 3.  Registration Procedures .  In connection with the registration obligations of the Company and the Guarantor under Section 2 hereof, the Company and the Guarantor shall:

 

(a)   Before filing any Registration Statement or Prospectus or any amendments or supplements (other than supplements that do nothing more substantive than name one or more Notice Holders as selling security holders) thereto with the SEC, furnish to the Initial Purchaser copies of all such documents proposed to be filed and use reasonable efforts to reflect in each such document when so filed with the SEC such comments as the Initial Purchaser reasonably shall propose within three (3) Business Days of the delivery of such copies to the Initial Purchaser.

 

(b)   Prepare and file with the SEC such amendments and post-effective amendments to each Registration Statement as may be necessary to keep such Registration Statement continuously effective for the applicable period specified in Section 2(a); cause the related Prospectus to be supplemented by any required Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 (or any similar provisions then in force) under the Securities Act; and use reasonable efforts to comply with the provisions of the Securities Act applicable to it with respect to the disposition of all securities covered by such Registration Statement during the Effectiveness Period in accordance with the intended methods of disposition by the sellers thereof set forth in such Registration Statement as so amended or such Prospectus as so supplemented.

 

(c)   As promptly as reasonably practicable give notice to the Notice Holders and the Initial Purchaser (i) when any Prospectus, Prospectus supplement, Registration Statement or post-effective amendment to a Registration Statement has been filed with the SEC and, with respect to a Registration Statement or any post-effective amendment, when the same has been declared effective, (ii) of any request, following the effectiveness of the Initial Shelf Registration Statement under the Securities Act, by the SEC or any other federal or state governmental authority for amendments or supplements to any Registration Statement or related Prospectus or for additional information, (iii) of the issuance by the SEC or any other federal or state governmental authority of any stop order or injunction suspending or enjoining the use of any Prospectus or the effectiveness of any Registration Statement or the initiation or threatening of any proceedings for that purpose, (iv) of the receipt by the Company or the Guarantor of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose, (v) of the occurrence of (but not the nature of or details concerning) a Material Event (provided, however, that no notice by the Company or the Guarantor shall be required pursuant to this clause (v) in the event that either the Company and the Guarantor promptly file a Prospectus supplement to update the Prospectus or the Company files a Current Report on Form 8-K or other appropriate Exchange Act report that is incorporated by reference into the Registration Statement, which, in either case, contains the requisite information with respect to such Material Event that results in such Registration Statement no longer containing any untrue statement of material fact or omitting to state a material fact necessary to make the statements contained therein not misleading) and (vi) of the determination by the Company and the Guarantor that a post-effective amendment to a Registration Statement will be filed

 

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with the SEC, which notice may, at the dis