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EXHIBIT 4.38
FIRST AMENDMENT TO PARTICIPATION AGREEMENT
Dated as of October 1, 1995
among
SOUTHWEST AIRLINES CO.,
as Lessee
AMSOUTH LEASING CORPORATION,
as Owner Participant
SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION,
in its individual capacity only as expressly provided herein and
otherwise solely as Owner Trustee,
and
WILMINGTON TRUST COMPANY,
in its individual capacity and as Indenture Trustee
and in its capacity as Pass Through Trustee under
each of the two Pass Through Trust Agreements
and as Holder
One Boeing Model 737-3H4 Aircraft
(Southwest Airlines 1995 Trust N604SW)
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FIRST AMENDMENT TO PARTICIPATION AGREEMENT
THIS FIRST AMENDMENT TO PARTICIPATION AGREEMENT dated as of October 1,
1995 (this "Amendment") by and among (i) Southwest Airlines Co., a Texas
corporation ("Lessee"), (ii) AmSouth Leasing Corporation, an Alabama
corporation ("Owner Participant"), (iii) Shawmut Bank Connecticut, National
Association, a national banking association, not in its individual capacity,
except as expressly provided herein, but solely as Owner Trustee under the
Trust Agreement ("Owner Trustee"), and (iv) Wilmington Trust Company, a
Delaware banking corporation, in its individual capacity and as Indenture
Trustee under the Trust Indenture (the "Indenture Trustee") and in its capacity
as Pass Through Trustee under each of the two separate Pass Through Trust
Agreements ("Pass Through Trustee") and as Holder, amends that certain
Participation Agreement respecting the aircraft having U.S. registration number
N604SW and dated as of August 1, 1995 (the "Participation Agreement"), by and
among Lessee, Owner Participant, Texas Commerce Bank National Association (the
"Original Loan Participant"), Owner Trustee and Indenture Trustee,
WITNESSETH:
WHEREAS, except as otherwise defined in this Amendment, capitalized
terms used herein shall have the meanings attributed thereto in the
Participation Agreement; and
WHEREAS, the Delivery Date occurred on August 25, 1995; and
WHEREAS, concurrently with the execution of this Amendment, the Series
SWA 1995 Trust N604SW-I Certificate held by the Original Loan Participant is
being refinanced by the issuance of one or more new Certificates issued to Pass
Through Trustee as Holder; and
WHEREAS, as contemplated by Section 18 of the Participation Agreement,
the parties hereto desire to amend the Participation Agreement in certain
respects;
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, the parties hereto agree as follows:
Section 1. Amendment to Schedule I. Schedule I to the
Participation Agreement is hereby deleted in its entirety and replaced with
Schedule I to this Agreement.
Section 2. Amendments to Section 7(b). Section 7(b) of the
Participation Agreement is hereby amended in the following manner:
(i) Section 7(b) is hereby amended such that wherever the
phrase "Operative Agreement" or "Operative Agreements" is used, such phrase is
hereby amended to be and read in its entirety as follows:
"Operative Agreement or each Pass Through Trust Agreement" and
"Operative Agreements or each Pass Through Trust Agreement"
PARTICIPATION AMENDMENT [N604SW]
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except in the case of Section 7(b)(iii) where the phrase "Operative
Agreements" is hereby amended to be and read, in its entirety, "Operative
Agreements and the Pass Through Trust Agreements."
(ii) Section 7(b)(i) is hereby amended as follows:
(a) the following language is added immediately after the
words "combined or unitary return with such Indemnified
Party)" and before the words "harmless from, any and all":
"except that for purposes of this Section 7(b)(i) an
Indemnified Party shall not include any Holder other than
Original Loan Participant";
(b) unless as otherwise provided in (c) below, wherever the
term "Certificates" is used, such term is hereby amended to be
and read in its entirety as follows:
"Certificates and each Pass Through Certificate"; and
(c) the language immediately after the phrase "or the
issuance, reissuance, acquisition, redemption, expiration or
subsequent transfer thereof under the Trust Indenture" is
hereby amended to be and read in its entirety as follows:
"and each Pass Through Trust Agreement, or the beneficial
interest in the Trust Estate and each Pass Through Trust
Estate or the creation thereof, or any payments made pursuant
to any such agreement or instrument or upon or with respect to
the property held by Owner Participant or by the Trust Estate
or by Indenture Trustee under the Trust Indenture or the
property held by Pass Through Trustee under the respective
Pass Through Trust Estate, amounts payable with respect to the
Certificates and each Pass Through Certificate, including
withholding Taxes imposed on payments of principal, interest,
Premium or Break Amount on the Certificates or payments of
principal of, interest on or any other amounts payable with
respect to each Pass Through Certificate that are asserted
against the Owner Participant, Owner Trustee or Pass Through
Trustee, as withholding agent, or otherwise with respect to or
in connection with the transactions contemplated by the
Operative Agreements."
Section 3. Amendments to Section 7(c). Section 7(c) of the
Participation Agreement shall be amended in the following manner:
(i) Section 7(c) is hereby amended such that wherever the
phrase "Operative Agreement" or "Operative Agreements" is used, such phrase
includes each Pass Through Trust Agreement.
(ii) Clause (d) of Section 7(c)(i) is hereby amended to be
and read in its entirety as follows:
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"(d) the offer, sale or delivery of the Certificates or the
Pass Through Certificates, whether before or after the
Delivery Date (the indemnity in this clause (d) to extend also
to any Person who controls an Indemnified Party, its
successors, assigns, employees, servants and agents within the
meaning of Section 15 of the Securities Act)."
(iii) The final paragraph of Section 7(c) is hereby amended
to be and read in its entirety as follows:
"Lessee agrees to pay the reasonable and continuing fees and
expenses of Indenture Trustee (including the reasonable fees
and expenses of its counsel and any agent appointed in
accordance with Section 9.02(c) of the Trust Indenture) and
Pass Through Trustee and, as provided in Section 6.07 of the
Trust Agreement, Owner Trustee (including, but not limited to,
the reasonable fees and expenses of its counsel), without
cost, on a net after-tax basis, to Owner Participant, for
acting as such, other than such fees and expenses which
constitute Transaction Costs. Lessee agrees that it will pay
the reasonable fees and expenses of any separate owner trustee
or co-trustee appointed pursuant to Section 9.02 of the Trust
Agreement as a result of any requirement of law or if
otherwise required by any Operative Agreement or if requested,
or consented to, by the Lessee."
Section 4. Amendments to Section 8. Section 8 of the
Participation Agreement is hereby amended in the following respects:
(i) The last sentence of Section 8(b) is hereby amended
by deleting the words "Section 101(16) of the Act"
therein and substituting therefor the reference "49
U.S.C. Section 40102(a)(15)(C)."
(ii) Section 8(e) is hereby amended to be and read in its
entirety as follows:
"(e) (i) Pass Through Trustee hereby agrees that, except
as otherwise required by applicable law including, without
limitation, any law which requires Pass Through Trustee to act
within its own discretion, it shall not, without the prior
written consent of Owner Trustee, direct Indenture Trustee to
take or refrain from taking any action under the Trust
Indenture that requires the approval, waiver, authorization,
direction or consent of, or notice from, the Holders holding a
specified percentage in principal amount of Outstanding (as
defined in the Trust Indenture) Certificates unless Pass
Through Trustee receives a Direction (as defined in the
relevant Pass Through Trust Agreement) to so direct the
Indenture Trustee from Certificateholders (as defined in the
relevant Pass Through Trust Agreement) holding the same
percentage of Certificates (as defined in the relevant Pass
Through Trust Agreement) evidencing Fractional Undivided
Interests (as defined in the relevant Pass Through Trust
Agreement) in the Trust (as defined in the relevant Pass
Through Trust Agreement) holding the Certificates.
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(ii) Lessee and Pass Through Trustee hereby agree
that Article X of each Pass Through Trust Agreement (to the
extent relating to the Certificates) shall not be amended
without the prior written consent of Owner Participant.
(iii) Pass Through Trustee hereby agrees that,
except as otherwise required by applicable law including,
without limitation, any law which requires Pass Through
Trustee to act within its own discretion, if requested to do
so by Owner Trustee or Owner Participant, Pass Through Trustee
shall request a Direction from the relevant Certificateholders
to establish whether Pass Through Trustee, in its capacity as
a Holder, may direct the Indenture Trustee to take or refrain
from taking any action under the Operative Agreements."
(iii) Section 8(l) is hereby amended by deleting the
references therein to the Original Loan Participant.
(iv) Section 8(bb) is hereby amended to be and read in its
entirety as follows:
"(bb) Transfers of Debt Interests. Except in connection
with any transfer pursuant to Section 17 or 18 hereof, or
Section 8.03(e)(ii) of the Indenture, each Holder covenants
that it will not transfer its Certificate to any Person unless
such Person represents and warrants in writing to such Holder,
the Owner Participant and Lessee either that (a) no part of
the funds used by it to acquire its Certificate constitutes
`plan assets' of any `employee benefit plan' within the
meaning of ERISA or any `plan' within the meaning of Section
4975(e)(1) of the Code or (b) its purchase or acquisition of
such Certificate will not result in a nonexempt prohibited
transaction under Section 4975 of the Code or Section 406 of
ERISA. Any such Person shall require any transferee of its
interest to make the representations and warranties in the
preceding sentence."
(v) Section 8(dd) is hereby amended to be and read in its
entirety as follows:
"(dd) Deferred Equity. Owner Participant hereby
unconditionally agrees with Lessee, and only with Lessee (and
not with any other party to this Agreement or the Holders of
any Certificates), that, so long as no Lease Event of Default
or Lease Default (of the type described in Section 14.1 or
14.5 of the Lease) shall have occurred and be continuing, it
will pay or cause to be paid to Indenture Trustee on the
Deferred Equity Date sufficient funds to effect the payment of
an amount (the "Deferred Equity Amount") equal to the amount
due on such date in respect of accrued interest on the
Certificates from the Section 18 Refinancing Date (as defined
in Section 18 hereof) to and including the Deferred Equity
Date. Owner Participant and Owner Trustee hereby direct the
Indenture Trustee, and Indenture Trustee hereby agrees, to
apply the Deferred Equity Amount to the payment of interest on
the Certificates which may be due and payable pursuant to the
provisions of the Trust Indenture on the Deferred Equity Date.
Owner Participant agrees to make payment of the Deferred
Equity Amount in immediately available funds on or before
11:00 a.m., New York City time, on
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the Deferred Equity Date, provided that the Owner Participant
agrees to give Lessee notice by 11:00 a.m., New York City
time, on the second Business Day prior to the Deferred Equity
Date if it shall not make such payment. Indenture Trustee
agrees to give Lessee prompt notice if it shall not have
received such payment by noon, New York City time, on the
Deferred Equity Date. In the event Owner Participant fails to
make such payment, and Lessee shall make an Advance as
required by Section 3.8 of the Lease, Lessee may obtain
reimbursement in the manner and to the extent provided in
Section 3.8 of the Lease for the Advance, together with
interest on such amount at the rate described below from (and
including) the date of the making of such Advance to (but
excluding) the date of reimbursement by the Owner Participant
or the date Lessee deducts such Advance from other payments to
the extent and as provided in Section 3.8 of the Lease and,
without duplication of the foregoing, shall have such remedies
as may be available to it against the Owner Participant at law
or in equity in respect of the recovery of any such Advance.
Interest shall accrue on the amount of the Advance at an
annual rate equal to 5% in excess of the Base Rate, unless the
Advance is made when any Lease Event of Default or Lease
Default (of the type described in Section 14.1 or 14.5 of the
Lease) shall have occurred and be continuing, in which event
interest shall accrue on the amount of such Advance at the
Base Rate, but in each case not to exceed the maximum rate
permitted by applicable law. All amounts paid to Lessee by
the Owner Participant in respect of any Advance or deducted by
Lessee pursuant to Section 3.8 of the Lease shall be applied
first to payment to Lessee of interest and then to payment to
Lessee of amounts equal to such Advance."
Section 5. Amendments to Section 11(f). Section 11(f) of the
Participation Agreement is hereby amended such that wherever the phrase
"Operative Agreement" or "Operative Agreements" is used, such phrase is hereby
amended to be and read in its entirety as follows:
"Operative Agreement and each Pass Through Trust Agreement"
and "Operative Agreements and each Pass Through Trust
Agreement."
Section 6. Amendments to Section 15. Section 15(b) of the
Participation Agreement is hereby amended to be and read in its entirety as
follows:
"(b) Survival. The representations, warranties,
indemnities and agreements of Lessee, Owner Trustee, Indenture
Trustee, Owner Participant, Pass Through Trustee and any
Holder provided for in this Agreement, and Lessee's, Owner
Trustee's, Indenture Trustee's, Owner Participant's, Pass
Through Trustee's and any Holder's obligations under any and
all thereof, shall survive the making available of the Owner
Participant's Commitment, the delivery or return of the
Aircraft, the transfer of any interest of Owner Participant in
the Trust Estate or the Aircraft or any Engine or the transfer
of any interest by any Holder in any Certificate or the Trust
Indenture Estate and the expiration or other termination of
this Agreement, any other Operative Agreement or the Pass
Through Trust Agreements, except as otherwise expressly
provided herein or therein."
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Section 7. Amendment to Section 16. Section 16(b) of the
Participation Agreement is hereby amended by changing ".365%" in clause (i)
thereof to read ".386568" and by changing ".625%" in clause (ii) thereof to
read ".623122."
Section 8. Amendment to Section 17. Section 17(a)(3) of the
Participation Agreement is hereby amended by deleting the second parenthetical
contained in clause (i) thereof.
Section 9. Ratification. Except as amended hereby, the
Participation Agreement continues and shall remain in full force and effect in
all respects.
Section 10. Authorization to Execute Amendments. By execution of
this Amendment, Owner Participant hereby authorizes, directs and instructs
Owner Trustee to execute and deliver this Amendment and any and all other
amendments, agreements and certificates as may be necessary as a result of the
refinancing contemplated hereby and by Section 18 of the Participation
Agreement.
Section 11. Pass Through Trustee a Party. Effective as of the
date hereof, Pass Through Trustee shall be a party to the Participation
Agreement and shall have the rights and obligations of the Holders as set forth
in the Participation Agreement, as amended hereby.
Section 12. Counterparts. This Amendment may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
Section 13. Governing Law. THIS AMENDMENT SHALL IN ALL RESPECTS
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE. THIS AMENDMENT IS BEING DELIVERED IN THE STATE OF NEW YORK.
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IN WITNESS WHEREOF, the parties hereto have caused this First
Amendment to Participation Agreement to be duly delivered in the State of New
York and executed by their respective officers thereunto duly authorized as of
the day and year first above written.
SOUTHWEST AIRLINES CO., Lessee
By /s/ XXXX X. XXXX
Treasurer
AMSOUTH LEASING CORPORATION,
Owner Participant
By /s/ XXXXXXX X. XXXXX
President
SHAWMUT BANK CONNECTICUT,
NATIONAL ASSOCIATION, in its
individual capacity only as
expressly provided herein and
otherwise solely as Owner Trustee
By /s/ XXXXXX X. XXXX, XX.
Title: Vice President
WILMINGTON TRUST COMPANY,
not in its individual capacity,
except as otherwise expressly
provided herein, but solely as
Indenture Trustee
By /s/ XXXXX X. XXXXXXXX, XX.
Title: Senior Financial Services Officer
WILMINGTON TRUST COMPANY,
in its capacity as Pass Through
Trustee under each of the
separate Pass Through Trust
Agreements and as Holder
By /s/ XXXXX X. XXXXXXXX, XX.
Title: Senior Financial Services Officer
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SCHEDULE I
Names and Addresses
Lessee:
Southwest Airlines Co. Owner Trustee:
0000 Xxxx Xxxxx Xxxxx Shawmut Bank Connecticut,
P.O. Box 36611 National Association
Xxxxxx, Xxxxx 00000-0000 000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: Treasurer
Telecopy: (000) 000-0000 Attn: Corporate Trust
Administration
Telecopy: (000) 000-0000
Owner Participant:
AmSouth Leasing Corporation
0000 Xxxxx Xxxxxx Xxxxx, 0xx Xxxxx Indenture Trustee and Pass Through Trustee and
Xxxxxxxxxx, Xxxxxxx 00000 Holder:
Wilmington Trust Company
Attn: President Xxxxxx Square North
Telecopy: (205)307-4124 0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Payment Instructions:
AmSouth Bank of Alabama Attn: Corporate Trust
ABA No. 000000000 Administration
For the account of AmSouth Telecopy: (000) 000-0000
Leasing Corporation
Account No. 00000000 Payment Instructions:
Reference: Southwest Airlines 1995 Wilmington Trust Company
Notify: AmSouth Leasing Operations: Wilmington, Delaware
(000) 000-0000 ABA No. 000000000
For the account of Southwest
Airlines 1995-1
Account No. 30875-0
Reference: N604SW
Attn: Xxxxx X. Xxxxxxxx
Corporate Trust Administration
PARTICIPATION AGREEMENT [N604SW]
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