TRUST SUPPLEMENT No. 2007-1A Dated as of October 3, 2007 between WILMINGTON TRUST COMPANY as Trustee, and SOUTHWEST AIRLINES CO. to PASS THROUGH TRUST AGREEMENT Dated as of July 1, 2005 Southwest Airlines Pass Through Trust 2007-1A 6.15% Southwest...
Exhibit 4.3
EXECUTION COPY
TRUST SUPPLEMENT No. 2007-1A
Dated as of October 3, 2007
between
WILMINGTON TRUST COMPANY
as Trustee,
as Trustee,
and
to
PASS THROUGH TRUST AGREEMENT
Dated as of July 1, 2005
Dated as of July 1, 2005
$412,100,000
Southwest Airlines Pass Through Trust 2007-1A
6.15% Southwest Airlines
Pass Through Certificates,
Series 2007-1A
6.15% Southwest Airlines
Pass Through Certificates,
Series 2007-1A
TABLE OF CONTENTS
Page | ||||||
ARTICLE I THE CERTIFICATES | 2 | |||||
Section 1.01. |
The Certificates | 2 | ||||
ARTICLE II DEFINITIONS | 3 | |||||
Section 2.01. |
Definitions | 3 | ||||
ARTICLE III DISTRIBUTIONS; STATEMENTS TO CERTIFICATEHOLDERS | 7 | |||||
Section 3.01. |
Statements to Applicable Certificateholders | 7 | ||||
Section 3.02. |
Special Payments Account | 8 | ||||
Section 3.03. |
Distributions from Special Payments Account | 8 | ||||
Section 3.04. |
Limitation of Liability for Payments | 9 | ||||
ARTICLE IV DEFAULT | 10 | |||||
Section 4.01. |
Purchase Rights of Certificateholders | 10 | ||||
Section 4.02. |
Amendment of Section 6.05 of the Basic Agreement | 12 | ||||
ARTICLE V THE TRUSTEE | 12 | |||||
Section 5.01. |
Delivery of Documents; Delivery Dates | 12 | ||||
Section 5.02. |
[Intentionally Omitted] | 13 | ||||
Section 5.03. |
The Trustee | 13 | ||||
Section 5.04. |
Representations and Warranties of the Trustee | 13 | ||||
Section 5.05. |
Trustee Liens | 14 | ||||
ARTICLE VI ADDITIONAL AMENDMENT; SUPPLEMENTAL AGREEMENTS | 14 | |||||
Section 6.01. |
[Reserved] | 14 | ||||
Section 6.02. |
Supplemental Agreements Without Consent of Applicable Certificateholders | 14 | ||||
Section 6.03. |
Supplemental Agreements with Consent of Applicable Certificateholders | 15 | ||||
ARTICLE VII TERMINATION OF TRUST | 15 | |||||
Section 7.01. |
Termination of the Applicable Trust | 15 | ||||
ARTICLE VIII MISCELLANEOUS PROVISIONS | 16 | |||||
Section 8.01. |
Basic Agreement Ratified | 16 | ||||
Section 8.02. |
GOVERNING LAW | 16 | ||||
Section 8.03. |
Execution in Counterparts | 16 | ||||
Section 8.04. |
Intention of Parties | 17 |
This Trust Supplement No. 2007-1A, dated as of October 3, 2007 (herein called the “Trust
Supplement”), between Southwest Airlines Co., a Texas corporation (the “Company”), and
Wilmington Trust Company (the “Trustee”), to the Pass Through Trust Agreement, dated as of
July 1, 2005, between the Company and the Trustee (the “Basic Agreement”).
WITNESSETH:
WHEREAS, the Basic Agreement, unlimited as to the aggregate principal amount of Certificates
(unless otherwise specified herein, capitalized terms used herein without definition having the
respective meanings specified in the Basic Agreement) which may be issued thereunder, has
heretofore been executed and delivered;
WHEREAS, pursuant to each Indenture, the Company proposes to issue, on a recourse basis,
Equipment Notes each secured by one of sixteen aircraft (each, an “Aircraft”) owned by the Company;
WHEREAS, the Trustee hereby declares the creation of this Southwest Airlines Pass Through
Trust 2007-1A (the “Applicable Trust”) for the benefit of the Applicable
Certificateholders, and the initial Applicable Certificateholders as the grantors of the Applicable
Trust, by their respective acceptances of the Applicable Certificates, join in the creation of the
Applicable Trust with the Trustee;
WHEREAS, all Certificates to be issued by the Applicable Trust will evidence fractional
undivided interests in the Applicable Trust and will convey no rights, benefits or interests in
respect of any property other than the Trust Property;
WHEREAS, pursuant to the terms and conditions of the Basic Agreement as supplemented by this
Trust Supplement (the “Agreement”) and each Participation Agreement, the Trustee on behalf
of the Applicable Trust (using a portion of the proceeds from the sale of the Applicable
Certificates, shall purchase one or more Equipment Notes having the same interest rate as, and
final maturity date not later than the final Regular Distribution Date of, the Applicable
Certificates issued hereunder and shall hold such Equipment Notes in trust for the benefit of the
Applicable Certificateholders;
WHEREAS, all of the conditions and requirements necessary to make this Trust Supplement, when
duly executed and delivered, a valid, binding and legal instrument in accordance with its terms and
for the purposes herein expressed, have been done, performed and fulfilled, and the execution and
delivery of this Trust Supplement in the form and with the terms hereof have been in all respects
duly authorized;
WHEREAS, this Trust Supplement 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 premises herein, it is agreed between the Company and
the Trustee as follows:
2
ARTICLE I
THE CERTIFICATES
THE CERTIFICATES
Section 1.01. The Certificates. There is hereby created a series of certificates to
be issued, under the Agreement to be known as “Southwest Airlines Pass Through Certificates, Series
2007-1A” (hereinafter defined as the “Applicable Certificates”). Each Applicable Certificate
represents a fractional undivided interest in the Applicable Trust created hereby. The Applicable
Certificates shall be the only instruments evidencing a fractional undivided interest in the
Applicable Trust.
The terms and conditions applicable to the Applicable Certificates are as follows:
(a) The aggregate principal amount of the Applicable Certificates that shall be
authenticated under the Agreement is $412,100,000 and subject to Section 5.01 of this Trust
Supplement and except for Applicable Certificates authenticated and delivered under Sections
3.03, 3.04, 3.05 and 3.06 of the Basic Agreement, no Applicable Certificates shall be
authenticated under the Agreement.
(b) The Regular Distribution Dates with respect to any payment of Scheduled Payments
means February 1 and August 1 of each year, commencing on February 1, 2008, until payment of
all of the Scheduled Payments to be made under the Equipment Notes has been made.
(c) The Special Distribution Dates with respect to the Applicable Certificates means
any Business Day on which a Special Payment is to be distributed pursuant to the Agreement.
(d) (i) The Applicable Certificates shall be in the form attached hereto as Exhibit A
with such appropriate insertions, omissions, substitutions and other variations as are
required or permitted by the Agreement or as the Trustee may deem appropriate to reflect the
fact that the Applicable Certifications are being issued under this Trust Supplement. Any
Person acquiring or accepting an Applicable Certificate or an interest therein will, by such
acquisition or acceptance, be deemed to represent and warrant to and for the benefit of the
Company that either (i) the assets of an employee benefit plan subject to Title I of the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”), or of a plan subject
to Section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”), have not been
used to purchase or hold Applicable Certificates or an interest therein or (ii) the purchase
and holding of Applicable Certificates or an interest therein are exempt from the prohibited
transaction restrictions of ERISA and the Code pursuant to one or more prohibited
transaction statutory or administrative exemptions.
(ii) The Applicable Certificates shall be Book-Entry Certificates and shall be subject
to the conditions set forth in the Blanket Issuer Letter of Representations dated September
16, 2004 between the Company and the Clearing Agency.
3
(e) The “Participation Agreements” as defined in this Trust Supplement are the “Note
Purchase Agreements” referred to in the Basic Agreement.
(f) The Applicable Certificates are subject to the Intercreditor Agreement.
(g) The Applicable Certificates are entitled to the benefits of the Liquidity Facility.
(h) The Responsible Party is the Company.
(i) The date referred to in clause (i) of the definition of the term “PTC Event of
Default” in the Basic Agreement is the Final Maturity Date.
(j) The “particular sections of the Note Purchase Agreement”, for purposes of clause
(3) of Section 7.07 of the Basic Agreement, are Section 8.1 of each Participation Agreement.
(k) The Equipment Notes to be acquired and held in the Applicable Trust, and the
related Aircraft and Note Documents, are described in the related Participation Agreement.
ARTICLE II
DEFINITIONS
DEFINITIONS
Section 2.01. Definitions. For all purposes of the Basic Agreement as supplemented
by this Trust Supplement, the following capitalized terms have the following meanings (any term
used herein which is defined in both this Trust Supplement and the Basic Agreement shall have the
meaning assigned thereto in this Trust Supplement for purposes of the Basic Agreement as
supplemented by this Trust Supplement):
Agreement: Means the Basic Agreement, as supplemented by this Trust
Supplement.
Aircraft: Means each of the Aircraft in respect of which a Participation
Agreement is entered into on the date hereof (or any substitute aircraft, including engines
therefor, owned by the Company and securing one or more Equipment Notes).
Applicable Certificate: Has the meaning specified in Section 1.01 of this
Trust Supplement and includes any Certificate issued in exchange therefor or replacement
thereof pursuant to the Agreement.
Applicable Certificateholder: Means the Person in whose name an Applicable
Certificate is registered on the Register for the Applicable Certificates.
4
Applicable Participation Agreement: Has the meaning specified in Section
5.01(b) of this Trust Supplement.
Applicable Trust: Has the meaning specified in the recitals hereto.
Basic Agreement: Has the meaning specified in the first paragraph of this
Trust Supplement.
Boeing: Means The Boeing Company.
Business Day: Means any day other than a Saturday, a Sunday or a day on which
commercial banks are required or authorized to close in Dallas, Texas, New York, New York,
or, so long as any Applicable Certificate is Outstanding, the city and state in which the
Trustee, the Subordination Agent or any Loan Trustee maintains its Corporate Trust Office or
receives and disburses funds.
Certificate: Has the meaning specified in the Intercreditor Agreement.
Certificate Buyout Event: Means that a Southwest Bankruptcy Event has occurred
and is continuing and the following events have occurred: (A) (i) the 60-day period
specified in Section 1110(a)(2)(A) of the U.S. Bankruptcy Code (the “60-Day Period”) has
expired and (ii) Southwest has not entered into one or more agreements under Section
1110(a)(2)(A) of the U.S. Bankruptcy Code to perform all of its obligations under all of the
Indentures or, if it has entered into such agreements, has at any time failed to cure any
default under any of the Indentures in accordance with Section 1110(a)(2)(B) of the
Bankruptcy Code; or (B) if prior to the expiry of the 60-Day Period, Southwest shall have
abandoned any Aircraft.
Class: Has the meaning specified in the Intercreditor Agreement.
Company: Has the meaning specified in the first paragraph of this Trust
Supplement.
Controlling Party: Has the meaning specified in the Intercreditor Agreement.
Cut-off Date: Means the earlier of (a) October 18, 2007 and (b) the date on
which a Triggering Event occurs.
Distribution Date: Means any Regular Distribution Date or Special Distribution
Date as the context requires.
Final Maturity Date: Means February 1, 2024.
Indenture: Means each of the separate trust indentures and mortgages relating
to the Aircraft, each as specified or described in Schedule I to the Intercreditor Agreement
in each case as the same may be amended, supplemented or otherwise modified from time to
time in accordance with its terms.
5
Intercreditor Agreement: Means the Intercreditor Agreement dated as of October
3, 2007 among the Trustee, the Other Trustees, the Liquidity Provider and Wilmington Trust
Company, as Subordination Agent and as trustee thereunder, as amended, supplemented or
otherwise modified from time to time in accordance with its terms.
Investors: Means the Underwriters, together with all subsequent beneficial
owners of the Applicable Certificates.
Liquidity Facility: Means, initially, the Revolving Credit Agreement dated as
of October 3, 2007 relating to the Applicable Certificates, between the Liquidity Provider
and Wilmington Trust Company, as Subordination Agent, as agent and trustee for the
Applicable Trust, and, from and after the replacement of such agreement pursuant to the
Intercreditor Agreement, the replacement liquidity facility therefor, in each case as
amended, supplemented or otherwise modified from time to time in accordance with their
respective terms.
Liquidity Provider: Means, initially, BNP Paribas, a société anonyme duly
established under the laws of France, acting through its New York branch, and any
replacements or successors therefor appointed in accordance with the Intercreditor
Agreement.
Note Documents: Means the Equipment Notes with respect to the Applicable
Certificates and, with respect to any such Equipment Note, the Indenture and the
Participation Agreement relating to such Equipment Note.
Other Agreements: Means (i) the Basic Agreement as supplemented by Trust
Supplement No. 2007-1B dated as of the date hereof relating to Southwest Airlines Pass
Through Trust 2007-1B, (ii) the Basic Agreement as supplemented by a Trust Supplement
relating to any Additional Trust and (iii) the Basic Agreement as supplemented by a Trust
Supplement relating to any Refinancing Trust.
Other Trustees: Means the trustees under the Other Agreements, and any
successor or other trustee appointed as provided therein.
Other Trusts: Means the Southwest Airlines Pass Through Trust 2007-1B, an
Additional Trust or Trusts, if any, and a Refinancing Trust or Trusts, if any, created by
the Other Agreements.
Participation Agreement: Means, with respect to each Aircraft, each
Participation Agreement referred to in the related Indenture, as the same may be amended,
supplemented or otherwise modified in accordance with its terms.
Pool Balance: Means, as of any date, (i) the original aggregate face amount of
the Applicable Certificates, less (ii) the aggregate amount of all payments made as of such
date in respect of such Applicable Certificates other than payments made in respect of
interest or premium thereon or reimbursement of any costs or expenses incurred in
6
connection therewith. The Pool Balance as of any date shall be computed after giving
effect to any payment of principal of the Equipment Notes, or payment with respect to other
Trust Property and the distribution thereof to be made on that date.
Pool Factor: Means, as of any Distribution Date, the quotient (rounded to the
seventh decimal place) computed by dividing (i) the Pool Balance by (ii) the original
aggregate face amount of the Applicable Certificates. The Pool Factor as of any
Distribution Date shall be computed after giving effect to any payment of principal of the
Equipment Notes, or payment with respect to other Trust Property and the distribution
thereof to be made on that date.
Prospectus Supplement: Means the final Prospectus Supplement dated September
19, 2007 relating to the offering of the Applicable Certificates and the Class B
Certificates issued under the Other Agreements.
Ratings Confirmation: Has the meaning specified in the Intercreditor
Agreement.
Southwest Bankruptcy Event: Has the meaning specified in the Intercreditor
Agreement.
Special Payment: Means any payment (other than a Scheduled Payment) in respect
of, or any proceeds of, any Equipment Note or Collateral (as defined in each Indenture).
Triggering Event: Has the meaning assigned to such term in the Intercreditor
Agreement.
Trust Property: Means (i) subject to the Intercreditor Agreement, the
Equipment Notes held as the property of the Applicable Trust, all monies at any time paid
thereon and all monies due and to become due thereunder, (ii) funds from time to time
deposited in the Certificate Account and the Special Payments Account and, subject to the
Intercreditor Agreement, any proceeds from the sale by the Trustee pursuant to Article VI of
the Basic Agreement of any Equipment Note and (iii) all rights of the Applicable Trust and
the Trustee, on behalf of the Applicable Trust, under the Intercreditor Agreement the
Indentures, the Participation Agreements and the Liquidity Facility, including, without
limitation, all rights to receive certain payments thereunder, and all monies paid to the
Trustee on behalf of the Applicable Trust pursuant to the Intercreditor Agreement or the
Liquidity Facility.
Trust Supplement: Has the meaning specified in the first paragraph of this
trust supplement.
Trustee: Has the meaning specified in the first paragraph of this Trust
Supplement.
7
Underwriters: Means, collectively, Xxxxxx Xxxxxxx & Co. Incorporated,
Citigroup Global Markets Inc., Comerica Securities, Inc., SG Americas Securities, LLC and
UBS Securities LLC.
Underwriting Agreement: Means the Underwriting Agreement dated September 19,
2007 among the Underwriters and the Company, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with its terms.
ARTICLE III
DISTRIBUTIONS; STATEMENTS TO CERTIFICATEHOLDERS
DISTRIBUTIONS; STATEMENTS TO CERTIFICATEHOLDERS
Section 3.01. Statements to Applicable Certificateholders. (a) On each Distribution
Date, the Trustee will include with each distribution to Applicable Certificateholders of a
Scheduled Payment or Special Payment, as the case may be, a statement setting forth the information
provided below. Such statement shall set forth (per $1,000 face amount Applicable Certificate as
to (ii) and (iii) below) the following information:
(i) the aggregate amount of funds distributed on such Distribution Date under the
Agreement, indicating the amount allocable to each source, including any portion thereof
paid by the Liquidity Provider;
(ii) the amount of such distribution under the Agreement allocable to principal and the
amount allocable to premium, if any;
(iii) the amount of such distribution under the Agreement allocable to interest; and
(iv) the Pool Balance and the Pool Factor.
With respect to the Applicable 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 that such
Clearing Agency post on its Internet bulletin board a securities position listing setting forth the
names of all Clearing Agency Participants reflected on such Clearing Agency’s books as holding
interests in the Applicable Certificates on such Record Date. On each Distribution Date, the
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 interests in the Applicable 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 an Applicable Certificateholder of record a statement containing the sum of
the amounts determined pursuant to clauses (a)(i), (a)(ii) and (a)(iii) above for such calendar
year or, in the event such Person was an Applicable Certificateholder of record during a portion of
such calendar year, for such portion of such year, and such other items as are
8
readily available to the Trustee and which an Applicable Certificateholder shall reasonably
request as necessary for the purpose of such Applicable Certificateholder’s preparation of its U.S.
federal income tax returns. Such statement and such other items shall be prepared on the basis of
information supplied to the Trustee 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 to the holders of interests in the Applicable Certificates in the manner
described in Section 3.01(a) of this Trust Supplement.
(c) Promptly following the date of any early redemption or purchase of, or any default in the
payment of principal or interest in respect of, any of the Equipment Notes held in the Applicable
Trust, the Trustee shall furnish to Applicable Certificateholders of record on such date a
statement setting forth (x) the expected Pool Balances for each subsequent Regular Distribution
Date, (y) the related Pool Factors for such Regular Distribution Dates and (z) the expected
principal distribution schedule of the Equipment Notes, in the aggregate, held as Trust Property at
the date of such notice.
(d) The Trustee shall provide promptly to the Applicable Certificateholders all material
non-confidential information received by the Trustee from the Company.
(e) This Section 3.01 supersedes and replaces Section 4.03 of the Basic Agreement, with
respect to the Applicable Trust.
Section 3.02. Special Payments Account. (a) The Trustee shall establish and
maintain on behalf of the Applicable Certificateholders a Special Payments Account as one or more
accounts, which shall be non-interest bearing except as provided in Section 4.04 of the Basic
Agreement. The Trustee shall hold the Special Payments Account in trust for the benefit of the
Applicable Certificateholders and shall make or permit withdrawals therefrom only as provided in
the Agreement. On each day when one or more Special Payments are made to the Trustee under the
Intercreditor Agreement, the Trustee, upon receipt thereof, shall immediately deposit the aggregate
amount of such Special Payments in the Special Payments Account.
(b) This Section 3.02 supersedes and replaces Section 4.01(b) of the Basic Agreement in its
entirety, with respect to the Applicable Trust.
Section 3.03. Distributions from Special Payments Account. (a) On each Special
Distribution Date with respect to any Special Payment or as soon thereafter as the Trustee has
confirmed receipt of any Special Payments due on the Equipment Notes held (subject to the
Intercreditor Agreement) in the Applicable Trust or realized upon the sale of such Equipment Notes,
the Trustee shall distribute out of the Special Payments Account the entire amount of such Special
Payment deposited therein pursuant to Section 3.02(a) of this Trust Supplement. There shall be so
distributed to each Applicable Certificateholder of record on the Record Date with respect to such
Special Distribution Date (other than as provided in Section 7.01 of this Trust Supplement
concerning the final distribution) by check mailed to such Applicable Certificateholder, at the address appearing in the Register, such Applicable
Certificateholder’s pro rata share (based on the Fractional Undivided Interest in the Applicable
Trust held by such Applicable Certificateholder) of the total amount in the Special Payments
Account on account of
9
such Special Payment, except that, with respect to Applicable Certificates
registered on the Record Date in the name of a Clearing Agency (or its nominee), such distribution
shall be made by wire transfer in immediately available funds to the account designated by such
Clearing Agency (or such nominee).
(b) The Trustee shall, at the expense of the Company, cause notice of each Special Payment to
be mailed to each Applicable Certificateholder at his address as it appears in the Register. In
the event of redemption or purchase of Equipment Notes held in the Applicable Trust, such notice
shall be mailed not less than 15 days prior to the Special Distribution Date for the Special
Payment resulting from such redemption or purchase, which Special Distribution Date shall be the
date of such redemption or purchase. 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, stating the Special Distribution Date for such Special Payment which shall
occur not less than 15 days after the date of such notice and as soon as practicable thereafter.
Notices mailed by the Trustee shall set forth:
(i) the Special Distribution Date and the Record Date therefor (except as otherwise
provided in Section 7.01 of this Trust Supplement),
(ii) the amount of the Special Payment for each $1,000 face amount Applicable
Certificate and the amount thereof constituting principal, premium, if any, and interest,
(iii) the reason for the Special Payment, and
(iv) if the Special Distribution Date is the same date as a Regular Distribution Date,
the total amount to be received on such date for each $1,000 face amount Applicable
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 the Trust is canceled, the Trustee, as soon
as possible after learning thereof, shall cause notice thereof to be mailed to each Applicable
Certificateholder at its address as it appears on the Register.
(b) This Section 3.03 supersedes and replaces Section 4.02(b) and Section 4.02(c) of the
Basic Agreement in their entirety, with respect to the Applicable Trust.
Section 3.04. Limitation of Liability for Payments. Section 3.09 of the Basic Agreement shall be amended, with respect to the Applicable Trust, by
deleting the phrase “the Owner Trustees or the Owner Participants” in the second sentence thereof
and adding in lieu thereof “the Liquidity Provider”.
10
ARTICLE IV
DEFAULT
DEFAULT
Section 4.01. Purchase Rights of Certificateholders. (a) By acceptance of its
Applicable Certificate, each Applicable Certificateholder agrees that at any time after the
occurrence and during the continuation of a Certificate Buyout Event:
(i) each Class B Certificateholder (other than the Company or any of its Affiliates)
shall have the right to purchase all, but not less than all, of the Applicable Certificates
upon 15 days’ written notice to the Trustee and each other Class B Certificateholder, on the
third Business Day next following the expiry of such 15-day notice period, provided
that (A) if prior to the end of such 15-day period any other Class B Certificateholder
(other than the Company or any of its Affiliates) notifies such purchasing Class B
Certificateholder that such other Class B Certificateholder wants to participate in such
purchase, then such other Class B Certificateholder (other than the Company or any of its
Affiliates) may join with the purchasing Class B Certificateholder to purchase all, but not
less than all, of the Applicable Certificates pro rata based on the Fractional Undivided
Interest in the Class B Trust held by each such Class B Certificateholder and (B) if prior
to the end of such 15-day period any other Class B Certificateholder fails to notify the
purchasing Class B Certificateholder of such other Class B Certificateholder’s desire to
participate in such a purchase, then such other Class B Certificateholder shall lose its
right to purchase the Applicable Certificates pursuant to this Section 4.01(a)(i);
(ii) if any Additional Certificates are issued pursuant to one or more Additional
Trusts, each Additional Certificateholder (other than the Company or any of its Affiliates),
shall have the right (which shall not expire upon any purchase of the Applicable
Certificates pursuant to clause (i) above) to purchase all, but not less than all, of the
Applicable Certificates, the Class B Certificates and any Additional Certificates ranked
senior to the Additional Certificates held by the purchasing Additional Certificateholders
upon 15 days’ written notice to the Trustee, the Class B Trustee, any Additional Trustee
with respect to Additional Certificates that rank senior to the Additional Certificates held
by the purchasing Additional Certificateholders and each other Additional Certificateholder
of the same Class, on the third Business Day next following the expiry of such 15-day notice
period, provided that (A) if prior to the end of such 15-day period any other
Additional Certificateholder of such Class (other than the Company or any of its Affiliates)
notifies such purchasing Additional Certificateholder that such other Additional
Certificateholder wants to participate in such purchase, then such other Additional
Certificateholder (other than the Company or any of its Affiliates) may join with the
purchasing Additional Certificateholder to purchase all, but not less
than all, of the Applicable Certificates, the Class B Certificates and such senior
Additional Certificates pro rata based on the Fractional Undivided Interest in the
applicable Additional Trust held by each such Additional Certificateholder and (B) if prior
to the end of such 15-day period any other Additional Certificateholder of such Class fails
to notify the purchasing Additional Certificateholder of such other Additional
11
Certificateholder’s desire to participate in such a purchase, then such other Additional
Certificateholder shall lose its right to purchase the Applicable Certificates, the Class B
Certificates and such senior Additional Certificates pursuant to this Section 4.01(a)(ii);
and
(iii) if any Refinancing Certificates are issued, each Refinancing Certificateholder
shall have the same right (subject to the same terms and conditions) to purchase
Certificates pursuant to this Section 4.01(a) (and to receive notice in connection
therewith) as the Certificateholders of the Class that such Refinancing Certificates
refinanced.
The purchase price with respect to the Applicable Certificates shall be equal to the Pool
Balance of the Applicable Certificates, 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
Applicable Certificateholders under the Agreement, the Intercreditor Agreement or any Note Document
or on or in respect of the Applicable Certificates; provided, however, that no such
purchase of Applicable Certificates shall be effective unless the purchaser(s) shall certify to the
Trustee that contemporaneously with such purchase, such purchaser(s) is (are) purchasing, pursuant
to the terms of the Agreement and the Other Agreements, (A) in the case of any purchase of the
Applicable Certificates pursuant to clause (i) above, all of the Applicable Certificates or (B) in
all other cases, the Applicable Certificates, the Class B Certificates, and, if applicable, the
Additional Certificates that are senior to the securities held by such purchaser(s). Each payment
of the purchase price of the Applicable Certificates referred to in the first sentence hereof 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 4.01. Each Applicable Certificateholder agrees by its acceptance of
its Applicable Certificate that (at any time after the occurrence of a Certificate Buyout Event) it
will, upon payment from such Class B Certificateholder(s), Additional Certificateholder(s) or
Refinancing Certificateholders, as the case may be, of the purchase price set forth in the first
sentence of this paragraph, (i) forthwith sell, assign, transfer and convey to the purchaser(s)
thereof (without recourse, representation or warranty of any kind except for its own acts), all of
the right, title, interest and obligation of such Applicable Certificateholder in the Agreement,
the Intercreditor Agreement, the Liquidity Facility, the Note Documents and all Applicable
Certificates held by such Applicable 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 Applicable
Certificateholder’s obligations under the Agreement, the Intercreditor Agreement, the Liquidity
Facility, the Note Documents and all such Applicable Certificates), and (ii) if such purchase
occurs after a Record Date relating to any distribution and prior to or on the related Distribution
Date, forthwith turn over to the purchaser(s) of its Applicable Certificate all amounts, if any,
received by it on
account of such distribution. The Applicable Certificates will be deemed to be purchased on
the date payment of the purchase price is made notwithstanding the failure of the Applicable
Certificateholders to deliver any Applicable Certificates and, upon such a purchase, (I) the only
rights of the Applicable Certificateholders will be to deliver the Applicable Certificates to the
purchaser(s) and receive the purchase price for such Applicable Certificates and (II) if the
12
purchaser(s) shall so request, such Applicable Certificateholder will comply with all the
provisions of Section 3.04 of the Basic Agreement to enable new Applicable Certificates 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 Applicable Certificates shall be borne by the
purchaser thereof.
As used in this Section 4.01 and elsewhere in this Trust Supplement, the terms “Additional
Certificate”, “Additional Certificateholder”, “Additional Equipment Notes”, “Additional Trust”,
“Additional Trust Agreement”, “Additional Trustee”, “Class B Certificate”, “Class B
Certificateholder”, “Class B Trust”, “Class B Trust Agreement”, “Class B Trustee”, “Refinancing
Certificates”, “Refinancing Certificateholder”, “Refinancing Equipment Notes” and “Refinancing
Trust” shall have the respective meanings assigned to such terms in the Intercreditor Agreement.
(b) This Section 4.01 supersedes and replaces Section 6.01(b) of the Basic Agreement, with
respect to the Applicable Trust.
Section 4.02. Amendment of Section 6.05 of the Basic Agreement. Section 6.05 of the
Basic Agreement shall be amended, with respect to the Applicable Trust, by deleting the phrase “and
thereby annul any Direction given by such Certificateholders or the Trustee to such Loan Trustee
with respect thereto,” set forth in the first sentence thereof.
ARTICLE V
THE TRUSTEE
THE TRUSTEE
Section 5.01. Delivery of Documents; Delivery Dates. (a) The Trustee is hereby
directed (i) to execute and deliver the Intercreditor Agreement, each Participation Agreement and
each Indenture on or prior to the Issuance Date, each in the form delivered to the Trustee by the
Company, and (ii) subject to the respective terms thereof, to perform its obligations thereunder.
Upon request of the Company and the satisfaction or waiver of the closing conditions specified in
the Underwriting Agreement, the Trustee shall execute, deliver, authenticate, issue and sell
Applicable Certificates in authorized denominations equaling in the aggregate the amount set forth,
with respect to the Applicable Trust, in Schedule I to the Underwriting Agreement evidencing the
entire ownership interest in the Applicable Trust, which amount equals the maximum aggregate
principal amount of Equipment Notes which may be purchased by the Trustee pursuant to the
Participation Agreements. Except as provided in Sections 3.03, 3.04, 3.05 and 3.06 of the Basic
Agreement, the Trustee shall not execute, authenticate or deliver Applicable Certificates in excess
of the aggregate amount specified in this
paragraph. The provisions of this Section 5.01(a) supersede and replace the first sentence of
Section 3.02(a) of the Basic Agreement, with respect to the Applicable Trust.
(b) On the Issuance Date, the Trustee shall, subject to the conditions set forth in Section 4
of each Participation Agreement, perform its obligations under the Participation Agreement (the
“Applicable Participation Agreement”) and cause such certificates, documents and legal
opinions relating to the Trustee to be duly delivered as required by the Applicable
13
Participation
Agreement. Upon satisfaction of the conditions specified in the Applicable Participation
Agreement, the Trustee shall purchase the applicable Equipment Notes using a portion of the
proceeds of the sale of the Applicable Certificates. The purchase price of such Equipment Notes
shall equal the principal amount of such Equipment Notes.
(c) The Trustee acknowledges its acceptance of all right, title and interest in and to the
Trust Property to be acquired pursuant to Section 5.01(b) of this Trust Supplement and each
Applicable Participation Agreement, and declares that it holds and will hold such right, title and
interest for the benefit of all present and future Applicable Certificateholders, upon the trusts
set forth in the Agreement. By its acceptance of an Applicable Certificate, each initial
Applicable Certificateholder, as a grantor of the Applicable Trust, joins with the Trustee in the
creation of the Applicable Trust. The provisions of this Section 5.01(c) supersede and replace the
provisions of Section 2.03 of the Basic Agreement, with respect to the Applicable Trust.
Section 5.02. [Intentionally Omitted]
Section 5.03. The Trustee. (a) Subject to Section 5.04 of this Trust Supplement and
Section 7.15 of the Basic Agreement, the Trustee shall not be responsible in any manner whatsoever
for or in respect of the validity or sufficiency of this Trust Supplement or the Participation
Agreements or the due execution hereof or thereof by the Company or the other parties thereto
(other than the Trustee), or for or in respect of the recitals and statements contained herein or
therein, all of which recitals and statements are made solely by the Company, except that the
Trustee hereby represents and warrants that each of this Trust Supplement, the Basic Agreement,
each Applicable Certificate, the Intercreditor Agreement, and the Participation Agreements has been
executed and delivered by one of its officers who is duly authorized to execute and deliver such
document on its behalf.
(b) Except as herein otherwise provided and except during the continuation of an Event of
Default in respect of the Applicable Trust created hereby, no duties, responsibilities or
liabilities are assumed, or shall be construed to be assumed, by the Trustee by reason of this
Trust Supplement other than as set forth in the Agreement, and this Trust Supplement is executed
and accepted on behalf of the Trustee, subject to all the terms and conditions set forth in the
Agreement, as fully to all intents as if the same were herein set forth at length.
Section 5.04. Representations and Warranties of the Trustee. The Trustee hereby
represents and warrants that:
(a) the Trustee has full power, authority and legal right to execute, deliver and
perform this Trust Supplement, the Intercreditor Agreement and the Note Documents to which
it is a party and has taken all necessary action to authorize such execution, delivery and
performance by it of this Trust Supplement, the Intercreditor Agreement and the Note
Documents to which it is a party;
14
(b) the execution, delivery and performance by the Trustee of this Trust Supplement,
the Intercreditor Agreement and the Note Documents to which it is a party (i) will not
violate any provision of any United States federal law or the law of the state of the United
States where it is located 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;
(c) the execution, delivery and performance by the Trustee of this Trust Supplement,
the Intercreditor Agreement and the Note Documents to which it is a party 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 the United States where it is
located regulating the banking and corporate trust activities of the Trustee; and
(d) this Trust Supplement, the Intercreditor Agreement and the Note Documents to which
it is a party have been, or will be, as applicable, duly executed and delivered by the
Trustee and constitute, or will constitute, as applicable, the legal, valid and binding
agreements of the Trustee, enforceable against it in accordance with their respective terms;
provided, however, 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.
Section 5.05. Trustee Liens. The Trustee in its individual capacity agrees, in
addition to the agreements contained in Section 7.17 of the Basic Agreement, that it will at its
own cost and expense promptly take any action as may be necessary to duly discharge and satisfy in
full any Trustee’s Liens on or with respect to the Trust Property which is attributable to the
Trustee in its individual capacity and which is
unrelated to the transactions contemplated by the Intercreditor Agreement or the Participation
Agreements.
ARTICLE VI
ADDITIONAL AMENDMENT; SUPPLEMENTAL AGREEMENTS
ADDITIONAL AMENDMENT; SUPPLEMENTAL AGREEMENTS
Section 6.01. [Reserved].
Section 6.02. Supplemental Agreements Without Consent of Applicable
Certificateholders. Without limitation of Section 9.01 of the Basic Agreement, under the terms
of, and subject to the limitations contained in, Section 9.01 of the Basic Agreement, the
15
Company
may (but will not be required to), and the Trustee (subject to Section 9.03 of the Basic Agreement)
shall, at the Company’s request, at any time and from time to time, (i) enter into one or more
agreements supplemental to a Participation Agreement, for any of the purposes set forth in clauses
(1) through (9) of such Section 9.01, and (without limitation of the foregoing or Section 9.01 of
the Basic Agreement) (a) clauses (2) and (3) of such Section 9.01 shall also be deemed to include
the Company’s obligations under (in the case of clause (2)), and the Company’s rights and powers
conferred by (in the case of clause (3)), the Participation Agreements, and (b) references in
clauses (4), (6) and (7) of such Section 9.01 to “any Intercreditor Agreement or any Liquidity
Facility” shall also be deemed to refer to “the Intercreditor Agreement, the Liquidity Facility or
the Participation Agreements”, (ii) enter into one or more agreements supplemental to the
Agreement, the Intercreditor Agreement or the Participation Agreements to provide for the formation
of one or more Additional Trusts, the issuance of Additional Certificates, the purchase by any
Additional Trust of applicable Additional Equipment Notes and other matters incidental thereto or
otherwise contemplated by Section 2.01(b) of the Basic Agreement, subject to the provisions of
Section 9.1 of the Intercreditor Agreement, and (iii) enter into one or more agreements
supplemental to the Agreement to provide for the formation of one or more Refinancing Trusts, the
issuance of Refinancing Certificates, the purchase by any Refinancing Trust of applicable
Refinancing Equipment Notes and other matters incidental thereto or as otherwise contemplated by
Section 2.01(b) of the Basic Agreement, subject to the provisions of Section 9.1(c) of the
Intercreditor Agreement.
Section 6.03. Supplemental Agreements with Consent of Applicable Certificateholders.
Without limitation of Section 9.02 of the Basic Agreement, the provisions of Section 9.02 of the
Basic Agreement shall apply to agreements or amendments for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of a Participation Agreement or
modifying in any manner the rights and obligations of the Applicable Certificateholders under a
Participation Agreement.
ARTICLE VII
TERMINATION OF TRUST
TERMINATION OF TRUST
Section 7.01. Termination of the Applicable Trust. (a) The respective obligations
and responsibilities of the Company and the Trustee with respect to the Applicable Trust shall
terminate upon the distribution to all Applicable Certificateholders and the Trustee 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; provided, however, that in no event shall the
Applicable Trust continue beyond one hundred ten (110) years following the date of the execution of
this Trust Supplement.
Notice of any termination, specifying the Distribution Date upon which the Applicable
Certificateholders may surrender their Applicable Certificates to the Trustee for payment of the
final distribution and cancellation, shall be mailed promptly by the Trustee to Applicable
Certificateholders not earlier than the 60th day and not later than the 15th
day next
16
preceding such final Distribution Date specifying (A) the Distribution Date upon which the
proposed final payment of the Applicable Certificates will be made upon presentation and surrender
of Applicable Certificates 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
Distribution Date is not applicable, payments being made only upon presentation and surrender of
the Applicable Certificates 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 Applicable
Certificateholders. Upon presentation and surrender of the Applicable Certificates in accordance
with such notice, the Trustee shall cause to be distributed to Applicable Certificateholders such
final payments.
In the event that all of the Applicable Certificateholders shall not surrender their
Applicable 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
Applicable Certificateholders to surrender their Applicable Certificates for cancellation and
receive the final distribution with respect thereto. No additional interest shall accrue on the
Applicable Certificates after the Distribution Date specified in the first written notice. In the
event that any money held by the Trustee for the payment of distributions on the Applicable
Certificates 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 Company.
(b) The provisions of this Section 7.01 supersede and replace the provisions of Section 11.01
of the Basic Agreement in its entirety, with respect to the Applicable Trust.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
MISCELLANEOUS PROVISIONS
Section 8.01. Basic Agreement Ratified. Except and so far as herein expressly
provided, all of the provisions, terms and conditions of the Basic Agreement are in all respects
ratified and confirmed; and the Basic Agreement and this Trust Supplement shall be taken, read and
construed as one and the same instrument. All replacements of provisions of, and other
modifications of the Basic Agreement set forth in this Trust Supplement are solely with respect to
the Applicable Trust.
Section 8.02. GOVERNING LAW. THE AGREEMENT AND THE APPLICABLE CERTIFICATES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Section 8.03. Execution in Counterparts. This Trust Supplement may be executed in
any number of counterparts, each of which shall be an original, but such counterparts shall
together constitute but one and the same instrument.
17
Section 8.04. Intention of Parties. The parties hereto intend that the Applicable
Trust be classified for U.S. federal income tax purposes as a grantor trust under Subpart E, Part I
of Subchapter J of the Internal Revenue Code of 1986, as amended, and not as a trust or association
taxable as a corporation or as a partnership. Each Applicable Certificateholder and Investor, by
its acceptance of its Applicable Certificate or a beneficial interest therein, agrees to treat the
Applicable Trust as a grantor trust for all U.S. federal, state and local income tax purposes. The
powers granted and obligations undertaken pursuant to the Agreement shall be so construed so as to
further such intent.
18
IN WITNESS WHEREOF, the Company and the Trustee have caused this Trust Supplement to be duly
executed by their respective officers thereto duly authorized, as of the day and year first written
above.
SOUTHWEST AIRLINES CO. |
||||
By: | /s/ Xxxxx Xxxxxxx | |||
Name: | Xxxxx Xxxxxxx | |||
Title: | Vice President Treasurer | |||
WILMINGTON TRUST COMPANY, as Trustee |
||||
By: | /s/ Xxxxx X. Xxxxxx | |||
Name: | Xxxxx X. Xxxxxx | |||
Title: | Vice President |
EXHIBIT A
FORM OF CERTIFICATE
Certificate
No.
No.
[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 the registered owner hereof, Cede & Co., has an interest herein.]*
SOUTHWEST AIRLINES PASS THROUGH TRUST 2007-1A
Southwest Airlines Pass Through Certificate, Series 2007-1A
Issuance Date: October 3, 2007
Issuance Date: October 3, 2007
Final Maturity Date: February 1, 2024
Evidencing A Fractional Undivided Interest In The Southwest Airlines Pass
Through Trust 2007-1A, The Property Of Which Shall Include Certain Equipment
Notes Each Secured By An Aircraft Owned By Southwest Airlines, Co.
$[ ] Fractional Undivided Interest
representing 0.0002426595% of the Trust per $1,000 face amount
representing 0.0002426595% 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 Southwest Airlines Pass
Through Trust 2007-1A (the “Trust”) created by Wilmington Trust Company, as trustee (the
“Trustee”), pursuant to a Pass Through Trust Agreement, dated as of July 1, 2005 (the
“Basic Agreement”), between the Trustee and Southwest Airlines, Co., a Texas corporation
(the “Company”), as supplemented by Trust Supplement No. 2007-1A thereto, dated as of
October 3, 2007 (the “Trust Supplement” and, together with the Basic Agreement, the
“Agreement”), between the Trustee and the
* | This legend to appear on Book-Entry Certificates to be deposited with The Depository Trust Company. |
A-2
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 “Southwest Airlines Pass
Through Certificates, Series 2007-1A” (herein called the “Certificates”). This Certificate
is issued under and is subject to the terms, provisions and conditions of the Agreement. By virtue
of its acceptance hereof, the holder of this Certificate (the “Certificateholder” and,
together with all other holders of Certificates issued by the Trust, the
“Certificateholders”) assents to and agrees to be bound by the provisions of the Agreement
and the Intercreditor Agreement. The property of the Trust includes certain Equipment Notes and
all rights of the Trust to receive payments under the Intercreditor Agreement and the Liquidity
Facility (the “Trust Property”). Each issue of the Equipment Notes is secured by, among
other things, a security interest in an Aircraft 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.
Subject to and in accordance with the terms of the Agreement and the Intercreditor Agreement,
from funds then available to the Trustee, there will be distributed on February 1 and August 1 of
each year (a “Regular Distribution Date”) commencing February 1, 2008, 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 and the Intercreditor 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 presentation or surrender of this Certificate or the making of any
notation hereon, except that with respect to Certificates registered on the Record Date in the name
of a Clearing Agency (or its nominee), such distribution shall be made by wire transfer. 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
A-3
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 Company or the Trustee or any affiliate thereof. The Certificates are limited
in right of 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 is made to the Agreement for information with
respect to the interests, rights, benefits, obligations, privileges, 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 therein, 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 issued in a different denomination. 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.
A-4
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.
Each Certificateholder and Investor, by its acceptance of this Certificate or a beneficial
interest herein, agrees to treat the Trust as a grantor trust for all U.S. federal, state and local
income tax purposes.
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.
Any Person acquiring or accepting this Certificate or an interest herein will, by such
acquisition or acceptance, be deemed to have represented and warranted to and for the benefit of
the Company that either: (i) the assets of an employee benefit plan subject to Title I of the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”), or of a plan subject
to Section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”), have not
been used to purchase or hold this Certificate or an interest herein or (ii) the purchase and
holding of this Certificate or an interest herein are exempt from the prohibited transaction
restrictions of ERISA and the Code pursuant to one or more prohibited transaction statutory or
administrative exemptions.
THIS CERTIFICATE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK.
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.
A-5
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed.
SOUTHWEST AIRLINES PASS THROUGH
TRUST 2007-1A By: WILMINGTON TRUST COMPANY, as Trustee |
||||
By: | ||||
Name: | ||||
Title: |
A-6
FORM OF THE TRUSTEE’S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned Agreement.
WILMINGTON TRUST COMPANY, as Trustee |
||||
By: | ||||
Name: | ||||
Title: | ||||