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EXHIBIT 1.3
SOUTHWEST AIRLINES CO.
Pass Through Certificates, Series 1998-A
UNDERWRITING AGREEMENT
May 21, 1998
SALOMON BROTHERS INC
CHASE SECURITIES INC.
LEHMAN BROTHERS INC.
NATIONSBANK MONTGOMERY SECURITIES LLC
c/o SALOMON BROTHERS INC
Seven World Trade Center
New York, New York 10048
Dear Sirs:
Southwest Airlines Co., a Texas corporation (the "Company"), proposes
that Wilmington Trust Company, acting not in its individual capacity but solely
as pass through trustee (the "Trustee") under the Pass Through Trust Agreement
dated as of February 1, 1993 (the "Basic Agreement"), as supplemented for the
pass through certificates (the "Pass Through Certificates") to be purchased
hereunder by a Trust Supplement (a "Trust Supplement"), between the Company and
the Trustee (the Basic Agreement, as supplemented by the Trust Supplement, being
referred to herein as the "Pass Through Agreement"), issue and sell to the
underwriters named in Schedule I hereto its Pass Through Certificates in the
aggregate principal amount and with the interest rate and final distribution
date set forth on Exhibit A hereto (the "Offered Certificates") on the terms and
conditions stated herein and in Schedule II. As used herein, unless the context
otherwise requires, the term "Underwriters" shall mean the firm or firms named
as Underwriter or Underwriters in Schedule I and the term "you" shall mean the
Underwriter or Underwriters, if no underwriting syndicate is purchasing the
Offered Certificates, or the representative or representatives of the
Underwriters, if an underwriting syndicate is purchasing the Offered
Certificates, as indicated in Schedule I.
The Pass Through Certificates will represent interests in a trust (a
"Pass Through Trust") established pursuant to the Pass Through Agreement to fund
the purchase of equipment notes
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("Equipment Notes") which are to be issued as nonrecourse obligations by certain
owner trustees, each acting not in its individual capacity but solely as owner
trustee (each, an "Owner Trustee"), in connection with separate leveraged lease
transactions to be entered into by the Company, in each case to refinance a
portion of the payment by such Owner Trustees of the purchase price for
specified aircraft that have been leased by the Company (the "Aircraft"). Each
Equipment Note will be issued under a separate Trust Indenture and Security
Agreement between Wilmington Trust Company, as Indenture Trustee (the "Indenture
Trustee") and the related Owner Trustee (each, an "Indenture" and, collectively,
the "Indentures").
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-29257) for the
registration of pass through certificates, including the Offered Certificates,
and other securities under the Securities Act of 1933, as amended (the "1933
Act"), and the offering thereof from time to time in accordance with Rule 415 of
the rules and regulations of the Commission under the 1933 Act (the "1933 Act
Regulations"). Such registration statement has been declared effective by the
Commission and the Basic Agreement has been qualified under the Trust Indenture
Act of 1939, as amended (the "1939 Act"). The Company has, pursuant to Rule 424
under the 1933 Act, filed with, or transmitted for filing to, or shall within
the required period of time hereafter file with or transmit for filing to, the
Commission a prospectus supplement (the "Prospectus Supplement") specifically
relating to the Offered Certificates. The term "Registration Statement" means
the above-referenced registration statement in the form in which it became
effective, including the exhibits thereto and the documents incorporated by
reference therein, as amended to the date hereof. The term "Basic Prospectus"
means the prospectus relating to the pass through certificates included in the
Registration Statement. The term "Prospectus" means the Basic Prospectus
supplemented by the Prospectus Supplement, except that if any revised prospectus
and/or prospectus supplement shall be provided to you by the Company for use in
connection with the offering of the Offered Certificates which is not required
to be filed by the Company pursuant to Rule 424(b) of the 1933 Act Regulations,
the term "Prospectus" shall refer to such revised prospectus, if any, together
with any such revised prospectus supplement from and after the time it is first
provided to you for such use. The term "Preliminary Prospectus" means a
preliminary prospectus supplement specifically relating to the Offered
Certificates together with the Basic Prospectus. As used herein, the terms
"Basic Prospectus," "Prospectus" and "Preliminary Prospectus" shall include in
each case the documents, if any, incorporated by reference therein. The terms
"supplement" and "amendment" or "amend" as used herein shall include all
documents deemed to be incorporated by reference in the Prospectus that have
been filed subsequent to the date of the Basic Prospectus by the Company with
the Commission pursuant to the Securities Exchange Act of 1934, as amended (the
"1934 Act").
Capitalized terms used but not otherwise defined in this Agreement
shall have the meanings specified in or pursuant to the Pass Through Agreement
or the Indenture relating to each Equipment Note.
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SECTION 1. Representations and Warranties.
(a) The Company represents and warrants to you and to each Underwriter
named in Schedule I, as of the date hereof, as follows:
(i) Due Incorporation and Qualification. The Company has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of the State of Texas and has the corporate
power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus; the Company is
duly qualified as a foreign corporation to transact business and is in
good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or
the conduct of business, except where those failures to so qualify in
the aggregate would not have a material adverse effect on the business,
properties, financial condition, results of operations or prospects of
the Company.
(ii) Registration Statement and Prospectus. The Company meets
the requirements for the use of Form S-3 under the 1933 Act
Regulations, and the Registration Statement has become effective under
the 1933 Act. At the time the Registration Statement became effective,
the Registration Statement complied, and as of the date hereof does
comply, in all material respects with the requirements of the 1933 Act
and the 1933 Act Regulations and the 1939 Act and the rules and
regulations of the Commission promulgated thereunder. The Registration
Statement, at the time it became effective (and if an amendment to the
Registration Statement or an Annual Report on Form 10-K has been filed
by the Company with the Commission subsequent to the effectiveness of
the Registration Statement, then at the time of the most recent such
filing) did not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; and the Prospectus, as of
the date hereof, does not, and at all times subsequent hereto up to the
Closing Date referred to below will not, contain an untrue statement of
a material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that the
representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement or
Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by an Underwriter expressly for use
in the Registration Statement or Prospectus or to that part of the
Registration Statement which constitutes the Trustee's Statement of
Eligibility and Qualification under the 1939 Act (Form T-1). No stop
order suspending the effectiveness of the Registration Statement has
been issued, and, to the Company's knowledge, no proceedings for that
purpose have been initiated or threatened by the Commission.
(iii) Incorporated Documents. The documents incorporated by
reference in the Prospectus, at the time they were or hereafter are
filed with the Commission, complied and will comply in all material
respects with the requirements of the 1934 Act and the rules and
regulations promulgated thereunder (the "1934 Act Regulations"), and,
when read together
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and with the other information in the Prospectus, at the time the
Registration Statement and any amendments thereto became effective and
as of the date hereof did not and will not contain an untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were or are made, not
misleading.
(iv) Financial Statements. The consolidated financial
statements of the Company included or incorporated by reference in the
Prospectus and the Registration Statement present fairly the
consolidated financial position of the Company as of the dates
indicated and the results of operations, changes in stockholders'
equity and cash flows of the Company, for the respective periods
covered thereby, all in conformity with generally accepted accounting
principles applied, except as stated therein, on a consistent basis
throughout the entire period involved; and the financial schedules
included or incorporated by reference in the Registration Statement
meet the requirements of the 1933 Act Regulations or the 1934 Act
Regulations, as applicable, and fairly present the information required
to be shown therein. The selected consolidated financial data included
in the Prospectus present fairly the information shown therein and have
been compiled on a basis consistent with that of the audited
consolidated financial statements incorporated by reference in the
Registration Statement and the Prospectus.
(v) Material Changes or Material Transactions. Except as
stated in or contemplated by the Prospectus, subsequent to the
respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been any material adverse
change in the financial condition or results of operations of the
Company and its subsidiaries, considered as one enterprise.
(vi) Status as Air Carrier. The Company is a "citizen of the
United States" within the meaning of Section 40102(a)(15)(C) of Title
49, U.S.C. and is a holder of an "air carrier operating certificate"
(herein so-called) issued by the Secretary of Transportation pursuant
to Chapter 447 of Title 49, U.S.C. for aircraft capable of carrying 10
or more individuals or 6,000 pounds or more of cargo.
(b) Additional Certifications. Any certificate signed by any officer of
the Company and delivered to you or to counsel for the Underwriters in
connection with an offering of the Offered Certificates shall be deemed a
representation and warranty by the Company to each Underwriter participating in
such offering as to the matters covered thereby on the date of such certificate
unless subsequently amended or supplemented subsequent thereto. None of the
foregoing applies to statements in or omissions from any of the aforementioned
documents based upon written information furnished to the Company by any
Underwriter specifically for use therein.
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SECTION 2. Purchase and Sale.
Subject to the terms and conditions and in reliance upon the
representations and warranties set forth herein and in Schedule II, if any, the
Company agrees to cause the Trustee to sell to each Underwriter, and each
Underwriter agrees, severally and not jointly, to purchase from the Trustee, at
the purchase price specified in Exhibit A hereto, the respective principal
amounts of such Offered Certificates set forth opposite the name of such
Underwriter in Schedule I hereto.
SECTION 3. Delivery and Payment.
(a) Payment of the purchase price for any Offered Certificates to be
purchased by the Underwriters shall be made at the offices of Southwest Airlines
Co., 2702 Love Field Drive, Dallas, Texas 75235, or at such other place as shall
be agreed upon by you and the Company, at 9:00 A.M., Dallas time, on the 5th
business day (unless postponed in accordance with the provisions of Section 10)
following the date hereof or at such other date, time or location specified in
Schedule II, or as otherwise shall be agreed upon by you and the Company (such
time and date being referred to as the "Closing Time"). Unless otherwise
specified in Schedule II, delivery of the Offered Certificates shall be made to
The Depository Trust Company for your account against payment by you of the
purchase price thereof to, or upon the order of, the Trustee (or such other
person as the Company may direct) by wire transfer of Federal funds or other
immediately available funds. Such Offered Certificates shall be registered in
the name of Cede & Co. or in such other names, and in such denominations, as you
may request in writing at least two business days prior to the Closing Time.
Such Offered Certificates, which may be in temporary form, will be made
available for examination and packaging by you in New York, New York, on or
before the first business day prior to the Closing Time, or at such other time
and place specified in Schedule II.
(b) As compensation to you for your commitments and obligations
hereunder in respect of the Offered Certificates, including your undertakings to
distribute Offered Certificates, the Owner Trustees will pay (or cause to be
paid) to you an amount equal to that percentage of the aggregate principal
amount of each Series of Offered Certificates purchased by you as set forth in
Exhibit A; provided that if the Owner Trustees do not pay such amounts when due,
the Company will pay such amounts and seek reimbursement from the Owner
Trustees. Such payment shall be made simultaneously with the payment by you to
the Trustee of the purchase price of the Offered Certificates as specified in
Sections 2 and 3(a) hereof. Payment of such compensation shall be made by wire
transfer of Federal or other immediately available funds.
SECTION 4. Offering by Underwriters.
It is understood that the several Underwriters propose to offer the
Offered Certificates for sale to the public as set forth in the Prospectus.
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SECTION 5. Agreements.
The Company covenants with the several Underwriters that:
(a) Prospectus Supplement. The Company has prepared a Preliminary
Prospectus containing such information as you and the Company have deemed
appropriate, and immediately following the execution of this Agreement, the
Company will prepare a Prospectus Supplement setting forth the principal amount
of the Offered Certificates covered thereby, the terms of the Offered
Certificates not otherwise specified in the Basic Prospectus, the names of the
Underwriters participating in the offering and the principal amount of the
Offered Certificates which each severally has agreed to purchase, the names of
the Underwriters acting as manager or co-managers in connection with the
offering, the price at which the Offered Certificates are to be purchased by the
Underwriters from the Trustee, the initial public offering price, the selling
concession and reallowance, if any, and such other information as you and the
Company deem appropriate in connection with the offering of the Offered
Certificates. The Company will promptly transmit copies of the Prospectus
Supplement to the Commission for filing pursuant to Rule 424 of the 1933 Act
Regulations and will furnish to the Underwriters named therein as many copies of
the Prospectus as you shall reasonably request.
(b) Notice of Certain Events. The Company will notify you immediately
(i) of the effectiveness of any amendment to the Registration Statement, (ii) of
the transmittal to the Commission for filing of any supplement to the Prospectus
or any document to be filed pursuant to the 1934 Act which will be incorporated
by reference in the Prospectus, (iii) of the receipt of any comments from the
Commission with respect to the Registration Statement, the Prospectus or the
Prospectus Supplement, (iv) of any request by the Commission for any amendment
to the Registration Statement or any amendment or supplement to the Prospectus
or for additional information, and (v) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose. The Company will use its best
efforts to prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof as soon as possible.
(c) Notice of Certain Proposed Filings. For so long as a Prospectus is
required to be delivered in connection with the Offered Certificates, the
Company will give you notice of its intention to file or prepare any amendment
to the Registration Statement or any amendment or supplement to the Prospectus,
whether by the filing of documents pursuant to the 1934 Act, the 1933 Act or
otherwise (except for the Current Report on Form 8-K referred to in the
Prospectus Supplement under "Description of the Certificates"), and will furnish
you with copies of any such amendment or supplement or other documents proposed
to be filed or prepared a reasonable time in advance of such proposed filing or
preparation, as the case may be.
(d) Copies of the Registration Statement and the Prospectus. The
Company will deliver to you as many signed and conformed copies of the
Registration Statement (as originally filed) and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein and
documents incorporated by reference in the Prospectus) as you may reasonably
request. The
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Company will furnish to you as many copies of the Prospectus (as amended or
supplemented) as you shall reasonably request, so long as you are required to
deliver a Prospectus in connection with sales or solicitations of offers to
purchase the Offered Certificates.
(e) Revisions of Prospectus -- Material Changes. If at any time when
the Prospectus is required by the 1933 Act to be delivered in connection with
sales of the Offered Certificates any event shall occur or condition exist as a
result of which it is necessary to further amend or supplement the Prospectus in
order that the Prospectus will not include an untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein not misleading in the light of the circumstances existing at
the time it is delivered to a purchaser, or if it shall be necessary at any such
time to amend or supplement the Registration Statement or the Prospectus in
order to comply with the requirements of the 1933 Act or the 1933 Act
Regulations, the Company will promptly prepare and file with the Commission such
amendment or supplement, whether by filing documents pursuant to the 1934 Act,
the 1933 Act, or otherwise, as may be necessary to correct such untrue statement
or omission or to make the Registration Statement and Prospectus comply with
such requirements.
(f) Earning Statements. With respect to the sale of the Offered
Certificates, the Company will make generally available to its security holders
earning statements (in form complying with the provisions of Rule 158 under the
1933 Act), which will satisfy the requirements of Section 11(a) of the 1933 Act.
(g) Blue Sky Qualifications. The Company will endeavor, in cooperation
with you, to qualify the Offered Certificates for offering and sale under the
applicable securities laws of such states and other jurisdictions of the United
States as the Underwriters may designate, and will maintain such qualifications
in effect for so long as may be required for the distribution of the Offered
Certificates; provided, however, that the Company shall not be obligated to file
any general consent to service of process or to qualify as a foreign corporation
or to subject itself to taxation as doing business in any jurisdiction in which
it is not otherwise required to be so qualified. The Company will file such
statements and reports as may be required by the laws of each jurisdiction in
which the Offered Certificates have been qualified as provided above.
(h) Stand-Off Agreement. The Company will not, between the date of this
Agreement and termination of any trading restrictions with respect to the
Offered Certificates or the Closing Time, whichever is later, without your prior
written consent, offer or sell, or enter into any agreement to sell, any U.S.
dollar denominated taxable debt securities of the Company with a maturity of
more than one year (other than the Offered Certificates which are to be sold
pursuant hereto and commercial paper in the ordinary course of business), except
as may otherwise be provided in Schedule II; provided, however, that, during
such period, the Company may enter into or borrow under any line of credit, loan
agreement or other credit facility with one or more commercial or merchant
banks, regardless of the maturity of any borrowings thereunder.
(i) Business with Cuba. If the Company agrees that the Offered
Certificates should be qualified for sale in Florida and they have been so
qualified, the Company has complied with and,
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until the Closing Time or such later date as the distribution of the Offered
Certificates is completed, but no longer than the period during which the
Prospectus is required to be delivered under the 1933 Act, will comply with the
provisions of Section 517.075 of the Florida blue sky law and, if applicable,
all regulations promulgated thereunder relating to issuers doing business with
Cuba.
SECTION 6. Conditions to the Obligations of Underwriters.
The several obligations of the Underwriters to purchase the Offered
Certificates pursuant to this Agreement will be subject at all times to the
accuracy of the representations and warranties on the part of the Company
herein, to the accuracy of the statements of the Company's officers made in any
certificate furnished pursuant to the provisions hereof, to the performance and
observance by the Company of all covenants and agreements contained herein, or
in Schedule II hereto, on its part to be performed and observed and to the
following additional conditions precedent:
(a) Stop Order; Ratings Change; etc. At the Closing Time, (i) the
Prospectus. and any supplement thereto, shall have been filed within the time
period required by Rule 424(b); (ii) no stop order suspending the effectiveness
of the Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission; and (iii) the
rating assigned as of the date of this Agreement by any "nationally recognized
statistical rating organization," as such term is defined for purposes of Rule
436(g) under the 1933 Act Regulations, to any debt securities of the Company
shall not have been lowered since the execution of this Agreement.
(b) Legal Opinions. At the Closing Time, you shall have received the
following opinions:
(1) Opinion of Company Counsel. The opinion or opinions of the
Associate General Counsel of the Company, dated as of such date, in
form and substance satisfactory to you, to the effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Texas, and the Company has corporate
power and authority to own, lease and operate its properties
and to conduct its business as described in the Prospectus.
(ii) This Agreement has been duly authorized,
executed and delivered by the Company.
(iii) The Pass Through Agreement has been duly
authorized, executed and delivered by the Company and is a
valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except as
may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or other similar laws affecting
enforcement of creditors' rights generally and by general
principles of equity.
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(iv) The Pass Through Agreement constitutes the valid
and binding obligation of the Trustee, enforceable in
accordance with its terms, except as may be limited by
bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization,
moratorium or other similar laws affecting enforcement of
creditors' rights generally and by general principles of
equity.
(v) The Offered Certificates have been duly
authorized, executed, delivered and authenticated by the
Trustee pursuant to the Pass Through Agreement and constitute
valid and binding obligations of the Trustee enforceable
against the Trustee in accordance with their terms except as
may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or other similar laws affecting
enforcement of creditors' rights generally and by general
principles of equity; and the holders of Offered Certificates
are entitled to the benefits of the related Pass Through
Agreement.
(vi) The Offered Certificates, the Pass Through
Agreement and the other Operative Agreements conform in all
material respects as to legal matters to the descriptions
thereof, if any, contained in the Prospectus and any
supplement thereto, and such description of the Offered
Certificates conforms in all material respects to the rights
set forth in the instruments defining the same.
(vii) The Leases and the other Operative Agreements
to which the Company is or is to be a party have been duly
authorized and such documents, upon due execution and delivery
by the Company at the Closing Time as contemplated by the
Refinancing Agreement, will each be a valid and binding
obligation of the Company enforceable against the Company in
accordance with its respective terms, except as may be limited
by bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization,
moratorium or other similar laws affecting enforcement of
creditors' rights generally and by general principles of
equity.
(viii) The Company is a citizen of the United States
(as defined in 49 U.S.C. ss. 40102) holding an air carrier
operating certificate. The Company has such licenses and
authorizations from federal aviation and aeronautical
authorities as are necessary to own its properties and to
conduct its business in the manner described in the
Prospectus, subject to such qualification as may be set forth
in the Prospectus, and for the transactions contemplated by
this Agreement and the offering contemplated by the
Prospectus.
(ix) The statements made in the Prospectus under the
heading "Description of the Equipment Notes -- Remedies --
Section 1110 of the Bankruptcy Code," to the extent that they
constitute matters of law or legal conclusions with respect
thereto, have been reviewed by such counsel, and fairly
present the information disclosed therein in all material
respects.
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(x) No authorization, approval, consent, order or
license of or filing with or notice to any regulatory body or
authority or court (other than under the 1933 Act, the 1939
Act and the securities or Blue Sky laws of the various states)
is required for the valid authorization, issuance, sale and
delivery of the Offered Certificates as herein contemplated or
the valid authorization, execution. delivery and performance
by the Company of this Agreement, the Pass Through Agreement
and the other Operative Agreements to which the Company is or
is to be a party or the consummation by the Company of the
transactions contemplated herein or therein, or, if so
required, all such authorizations, approvals, consents and
licenses, specifying the same, including filings under the
Uniform Commercial Code as is in effect in North Carolina and
Texas, have been made or obtained and are in full force and
effect, and except for any filings or recordings with the FAA
(as to which no opinion need be given).
(xi) The execution and delivery by the Company of
this Agreement, the Pass Through Agreement and the other
Operative Agreements to which the Company is or is to be a
party, the consummation by the Company of the transactions
herein and therein contemplated and compliance with the terms
of this Agreement, the Pass Through Agreement and such
Operative Agreements will not conflict with or result in a
breach of any of the terms or provisions of, or constitute a
default under, or result in the creation or imposition of any
lien (other than as permitted under the Leases), charge or
encumbrance upon any property or assets of the Company or any
subsidiary pursuant to, any material contract, indenture,
mortgage, deed of trust, loan, credit or note agreement, lease
or other agreement or instrument known to such counsel to
which the Company or any of its subsidiaries is a party or by
which it or any of them may be bound or to which any of the
property or assets of the Company or any of its subsidiaries
is subject, nor will such action result in any violation of
the provisions of the charter or by-laws of the Company.
(xii) The Registration Statement has become effective
under the 1933 Act and any required filing of the Prospectus
or any supplement thereto pursuant to Rule 424(b) has been
made in the manner and within the time period required by Rule
424(b); the Basic Agreement has been duly qualified under the
1939 Act; and, to the best of such counsel's knowledge, no
stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose
have been instituted or are pending or contemplated under the
1933 Act; the Registration Statement and the Prospectus, and
each amendment or supplement thereto (except for the financial
statements, schedules and other financial or statistical data
and Form T-1 included therein, as to which such counsel need
express no opinion), comply as to form in all material
respects with the requirements of the 1933 Act and the 1933
Act Regulations and, as to documents incorporated therein
(except for the financial statements, schedules and other
financial or statistical data included therein, as to which
such counsel need express no opinion), to the requirements of
the 1934 Act
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and the 1934 Act Regulations in effect at the time such
documents were filed with the Commission.
(xiii) Although counsel is not aware of any judicial
authority, the Pass Through Trust is not required to be
registered under the Investment Company Act of 1940, as
amended.
(xiv) Such counsel does not know of any proceedings
involving United States aviation law pending against, or
affecting the properties or licenses of, the Company, or of
any United States aviation laws or regulations that would have
a material adverse effect on the financial condition or
results of operations of the Company and its subsidiaries,
considered as one enterprise, or the transactions contemplated
by this Agreement, the Note Purchase Agreements or the other
Operative Agreements, that are required to be described in the
Prospectus and which are not so described.
(xv) There are no transfer taxes or similar fees or
charges under the laws of the State of Texas, or any political
subdivision thereof, required to be paid in connection with
the execution and delivery of this Agreement or any other
Operative Agreements, or the issuance and sale of the Offered
Certificates to the Underwriters.
In addition, such counsel shall confirm in such opinion that
in connection with the preparation of the Registration Statement, the
Prospectus and the documents incorporated by reference therein, such
counsel or lawyers under such counsel's supervision have participated
in conferences with officers and other representatives of the Company
and its independent accountants and with your representatives and your
counsel, at which conferences the contents of the Registration
Statement and the Prospectus and related matters were discussed, and
that, in the course of such preparation and during the above mentioned
conferences, no facts have come to such counsel's attention to cause
such counsel to believe (A) that the Registration Statement (except for
the financial statements and other financial or statistical data
included therein or omitted therefrom and the Statement of Eligibility
and Qualification of the Trustee on Form T-1, as to which such counsel
need not comment), at the time the Registration Statement became
effective (and if an amendment to the Registration Statement or an
Annual Report on Form 10-K has been filed by the Company with the
Commission subsequent to the effectiveness of the Registration
Statement, then at the time of the most recent such filing), contained
an untrue statement of material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading, (B) that the Prospectus or amendment or
supplement thereto (except for the financial statements and other
financial or statistical data included therein or omitted therefrom, as
to which such counsel need not comment), at the time the Prospectus was
issued, at the time any such amended or supplemented prospectus was
issued or at the Closing Time, included or includes an untrue statement
of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, or (C) that
the
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documents incorporated by reference in the Prospectus (except for the
financial statements and other financial or statistical data included
therein or omitted therefrom, as to which such counsel need not
comment), as of the dates they were filed with the Commission, included
an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading.
In rendering such opinions, such counsel may rely, to the
extent deemed necessary for purposes of the opinion set forth in (iii)
(insofar as such opinion relates to the enforceability of the Pass
Through Agreement), (iv) and (v) above, upon the opinions of counsel
for the Trustee and Owner Trustee, as the case may be. Alternatively,
such counsel may cause the opinions set forth in (iii) (insofar as such
opinion relates to the enforceability of the Pass Through Agreement),
(iv) and (v) to be delivered directly to the Underwriters by counsel to
the Trustee or Owner Trustee, as applicable, at the Closing Time. In
addition, such counsel may cause the opinion set forth in (vii) above
to be delivered at the Closing Time directly to the Underwriters by
Vinson & Elkins L.L.P., Houston, Texas, special counsel to the Company.
(2) Opinion of Special Counsel to the Company. The opinion of
Vinson & Elkins L.L.P., Houston, Texas, special counsel to the Company,
dated as of such date, in form and substance satisfactory to you, to
the effect that:
(i) The statements made in the Prospectus and any
supplement thereto under the headings "Federal Income Tax
Consequences" to the extent that they constitute matters of
law or legal conclusions with respect thereto, have been
reviewed by such counsel and fairly present the information
disclosed therein in all material respects.
(ii) The Pass Through Trust created by the Pass
Through Agreement will not be classified as an association
taxable as a corporation for federal income tax purposes, but
rather, will be classified as a grantor trust under Subpart E,
Part I of Subchapter J of the Internal Revenue Code of 1986,
as amended, and each Certificate Owner will be treated as the
owner of a pro rata undivided interest in each of the
Equipment Notes or any other property held in the Pass Through
Trust.
(iii) Each Owner Trustee, as lessor under the related
Lease, and the Indenture Trustee, as assignee of the Owner
Trustee's rights under such Lease pursuant to the related
Indenture, will be entitled to the benefits of Section 1110 of
the Bankruptcy Code with respect to the Aircraft initially
delivered and subjected to the related Indenture (provided
that such counsel need not express an opinion as to the
availability of the benefits of said Section 1110 in the case
of a replacement of such Aircraft).
(iv) Assuming the due authorization, execution and
delivery of each Indenture by the parties thereto as
contemplated by the Note Purchase Agreements
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and subject to any limitations of applicable state law
governing the banking or trust powers of the related Owner
Trustee, each Indenture constitutes valid and binding
obligations of such Owner Trustee enforceable against it in
accordance with its terms, and each Indenture duly creates,
for the benefit of the related Indenture Trustee, the security
interest in the Indenture Estate (other than in respect of the
Granting Clause of such Indenture as to moneys and securities
prior to deposit thereof with such Indenture Trustee) that
such Indenture purports to create. Assuming due authorization,
execution and delivery by the related Owner Trustee and due
authentication by the related Indenture Trustee, the Equipment
Notes constitute valid and binding obligations of such Owner
Trustee enforceable against it in accordance with their terms
and the Equipment Notes are entitled to the benefits and
security afforded by the related Indenture.
Such opinion shall also confirm that In re Western Pacific Airlines,
Civil Action No. 98-K-358 (D.Colo. Mar. 10, 1998), was incorrectly
decided.
(c) Opinion of Counsel to the Underwriters. The opinion of Mayer, Brown
& Platt, counsel to the Underwriters, with respect to such matters as you may
reasonably request.
(d) Officers' Certificate. At the Closing Time, there shall not have
been, since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any change, or any development
involving a prospective change, in or affecting particularly the business or
properties of the Company or its subsidiaries, considered as one enterprise,
which, in the judgment of a majority in interest of the Underwriters, including
any Representatives, materially impairs the investment quality of the Offered
Certificates; and you shall have received a certificate of the President or the
Vice President-Finance and Chief Financial Officer of the Company and the
Treasurer or the Assistant Treasurer of the Company, dated as of the Closing
Time to the effect that:
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of
the Closing Time with the same effect as if made at the Closing Time
and the Company has complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied at or prior to
the Closing Time;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Company's knowledge,
threatened; and
(iii) since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has been
no material adverse change, or any development involving a prospective
material adverse change, in or affecting particularly the business or
properties of the Company or its subsidiaries, considered as one
enterprise.
-13-
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(e) Comfort Letter. At the time of the execution of this Agreement and
at the Closing Time, you shall have received a letter from Ernst & Young LLP or
their successors as the Company's independent auditors (the "Independent
Auditors"), dated as of the date hereof and of the Closing Time, as the case may
be, in form and substance satisfactory to you to the effect that:
(i) they are independent auditors with respect to the Company
within the meaning of the 1933 Act and the 1933 Act Regulations;
(ii) in their opinion the consolidated financial statements
and schedules audited by them and incorporated by reference in the
Company's latest Annual Report on Form 10-K and included or
incorporated by reference in the Registration Statement and Prospectus
comply as to form in all material respects with the applicable
accounting requirements of the 1933 Act and the 1933 Act Regulations or
the 1934 Act and the 1934 Act Regulations, as the case may be;
(iii) on the basis of a reading of the unaudited condensed
consolidated financial statements and schedules of the Company
contained in the Company's Quarterly Reports on Form 10-Q filed with
the Commission since the date of the Company's latest Annual Report on
Form 10-K and included or incorporated by reference in the Prospectus
and the Registration Statement, and the latest available unaudited
interim financial statements of the Company, inquiries of certain
officials of the Company responsible for financial and accounting
matters, a reading of the minute books of the Company since the date of
the latest audited consolidated financial statements of the Company
incorporated by reference in the Registration Statement, and other
specified procedures and inquiries, nothing has come to their attention
that caused them to believe that:
(A) such unaudited condensed consolidated financial
statements of the Company included or incorporated by
reference in the Prospectus and the Registration Statement do
not comply as to form in all material respects with the
applicable accounting requirements of the 1933 Act and the
1933 Act Regulations or the 1934 Act and the 1934 Act
Regulations thereunder, as the case may be, or that, except
for any accounting changes indicated therein, such unaudited
condensed consolidated financial statements are not presented
fairly in conformity with generally accepted accounting
principles applied on a basis substantially consistent with
that of the latest audited consolidated financial statements
of the Company included or incorporated by reference in the
Registration Statement and Prospectus;
(B) with respect to the period subsequent to the date
of the most recent consolidated financial statements included
or incorporated by reference in the Registration Statement and
the Prospectus, as of a specified date not more than five
business days prior to the date of delivery of such letter,
there has been any change in the capital stock or long-term
debt of the Company or, as of such date, there has been any
decrease in consolidated net current assets or net assets, in
each case as compared with amounts shown in the most recent
consolidated balance sheet of the
-14-
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Company included or incorporated by reference in the
Registration Statement and the Prospectus, except in all
instances for changes or decreases which the Prospectus
discloses have occurred or may occur or which are described in
such letter; or
(C) for the period from the date of the most recent
consolidated financial statements included or incorporated by
reference in the Registration Statement and the Prospectus to
such specified date, there was any decrease in operating
revenues, operating income, income before income taxes or net
income of the Company, in each case as compared with the
comparable period of the preceding year, except in all
instances for decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter;
and
(iv) in addition to their audit referred to in their reports
included or incorporated by reference in the Registration Statement and
the Prospectus and the review, inquiries and procedures referred to in
clause (iii) above, such letter shall state that Ernst & Young LLP has
performed other specified procedures, with respect to certain numerical
data and information included or incorporated by reference in the
Registration Statement and the Prospectus, as are reasonably requested
by an Underwriter and specified in such letter and have found such data
and information to be in agreement with the accounting records of or
analysis prepared by the Company.
(f) Satisfaction of Conditions Precedent in Note Purchase Agreements.
At the Closing Time, all conditions precedent specified in the Note Purchase
Agreements with respect to the financing of the Equipment Notes to be issued at
the Closing Time shall have been satisfied at the Closing Time; the
representations and warranties of the Company contained in the Note Purchase
Agreements shall be accurate as of the Closing Time (except to the extent that
they relate solely to an earlier date in which case they shall be accurate as of
such earlier date) and you shall have received a certificate of the Chief
Financial Officer, Treasurer or Assistant Treasurer of the Company, dated as of
the Closing Time, to such effect; and you shall have received a copy of each
opinion required to be delivered under the Refinancing Agreement, dated as of
the Closing Time, and addressed to you, and of such other documents furnished in
connection with the fulfillment of such conditions as you or your counsel may
reasonably request.
(g) Other Documents. At the Closing Time, counsel for the Underwriters
shall have been furnished with such documents and opinions as such counsel may
reasonably require for the purpose of enabling such counsel to pass upon the
issuance and sale of Offered Certificates as herein contemplated and related
proceedings, or in order to evidence the accuracy and completeness of any of the
representations and warranties, or the fulfillment of any of the conditions,
herein contained.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to you and counsel for the Underwriters, this Agreement and all
obligations of the Underwriters hereunder may be cancelled by you at any time at
or prior to the
-15-
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Closing Time, and such termination shall be without liability of any party to
any other party except as provided in Section 7 hereof. Notice of any such
cancellation shall be given to the Company in writing or by the telephone or
telegraph confirmed in writing. Notwithstanding any such termination, the
provisions of Sections 8 and 11 shall remain in effect.
SECTION 7. Payment of Expenses.
The Company will pay all expenses incident to the performance of its
obligations under this Agreement, including:
(i) the printing and filing of the Registration Statement and
all amendments thereto, the Preliminary Prospectus and the Prospectus
and any amendments or supplements thereto;
(ii) the preparation, printing, issuance and delivery of the
Offered Certificates;
(iii) the reasonable fees and disbursements of the Company's
accountants and counsel, of the Trustee, the Owner Trustees, and the
Indenture Trustee and their respective counsel, and of any issuing and
paying agent or transfer agent;
(iv) the qualification of the Offered Certificates under
securities laws in accordance with the provisions of Section 5(g),
including filing fees and, subject to Section 7(ix) below, the
reasonable fees and disbursements of counsel to the Underwriters in
connection therewith and in connection with the preparation of any Blue
Sky Survey and any Legal Investment Survey;;
(v) the printing and delivery to the Underwriters in
quantities as hereinabove stated of copies of the Registration
Statement and any amendments thereto, and of the Prospectus and any
amendments or supplements thereto, and the delivery by the Underwriters
of the Prospectus and any amendments or supplements thereto in
connection with solicitations or confirmations of sales of the Offered
Certificates;
(vi) the preparation and delivery to the Underwriters of
copies of the Pass Through Agreement and the other Operative
Agreements, including all expenses incident to the performance of the
Company's obligations under the Pass Through Agreement and Indentures
and the Leases and each of the other agreements and instruments
referred to in the Indentures and the Refinancing Agreement;
(vii) any fees charged by rating agencies for the rating of
the Offered Certificates;
(viii) the fees and expenses, if any, incurred with respect to
any filing with the National Association of Securities Dealers, Inc.;
and
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(ix) up to $50,000 of fees and disbursements of your counsel,
as heretofore agreed.
If this Agreement is terminated by you in accordance with the
provisions of Section 6 or clause (i) of Section 10 hereof, the Company shall
reimburse the Underwriters for all of their out-of-pocket expenses, including
the reasonable fees and disbursements of counsel for the Underwriters, or, in
any other case, the Underwriters will pay all of their own expenses, including
their fees of counsel, transfer taxes on resale of any of the Offered
Certificates and any advertising expenses connected with any offers they may
make.
SECTION 8. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter within the meaning of
Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), or the omission or
alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement of a
material fact contained in the Prospectus (or any amendment or
supplement thereto) or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or investigation or proceeding by
any governmental agency or body, commenced or threatened, or of any
claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission, if such settlement is
effected with the written consent of the Company; and
(iii) against any expense (including the fees and
disbursements of counsel chosen by you), as incurred, reasonably
incurred in investigating, preparing or defending against any
litigation, or investigation or proceeding by any governmental agency
or body, commenced or threatened, or any claim whatsoever based upon
any such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is not paid
under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter expressly for use in the Registration Statement (or any
-17-
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amendment thereto) or the Prospectus (or any amendment or supplement thereto),
or made in reliance upon the Trustee's Form T-1 Statement of Eligibility and
Qualification under the 1939 Act filed as an exhibit to the Registration
Statement; and provided further that the foregoing indemnity agreement, with
respect to any Preliminary Prospectus shall not inure to the benefit of any
Underwriter from whom the person asserting any such losses, claims, damages or
liabilities purchased Offered Certificates, or any person controlling such
Underwriter, if a copy of the Prospectus (as then amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) was not sent
or given by or on behalf of such Underwriter to such person, if required by law
so to have been delivered, at or prior to the written confirmation of the sale
of the Offered Certificates to such person, and if the Prospectus (as so amended
or supplemented) would have cured the defect giving rise to such losses, claims,
damages or liabilities, unless such failure to deliver the Prospectus was a
result of noncompliance by the Company with the provisions of Section 5(d) or
5(e) hereof; and provided further that the Company will not be liable for any
loss, liability or expense of any settlement of any pending or threatened
litigation, any pending or threatened governmental agency investigation or
proceeding if such settlement is effected without the written consent of the
Company.
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, its directors and officers and each person, if any, who controls
the Company within the meaning of Section 15 of the 1933 Act against any and all
loss, liability, claim, damage and expense described in the indemnity contained
in subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto) or the Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with written
information furnished to the Company by such Underwriter expressly for use in
the Registration Statement (or any amendment thereto) or the Prospectus (or any
amendment or supplement thereto).
(c) Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liability which it may
have otherwise than on account of this indemnity agreement. An indemnifying
party may participate at its own expense in the defense of such action. In no
event shall the indemnifying parties be liable for the fees and expenses of more
than one counsel (in addition to any local counsel hired by such counsel),
separate from such indemnifying parties' own counsel, for all indemnified
parties in connection with any one action or separate but similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in this Section 8 is
for any reason held to be unenforceable by the indemnified parties although
applicable in accordance with its terms, the Company and the Underwriters of
Offered Certificates shall contribute to the aggregate losses, liabilities,
claims, damages and expenses of the nature contemplated by said indemnity
agreement incurred by the Company, and one or more of the Underwriters in
respect of such offering, as incurred, in such proportions so that the
Underwriters are responsible for that portion represented by the percentage
-18-
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that the underwriting discount appearing on Exhibit A hereto in respect of such
offering bears to the initial public offering price appearing thereon and the
Company is responsible for the balance; provided, however, that no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. For purposes of this Section, each person, if
any, who controls an Underwriter within the meaning of Section 15 of the 1933
Act shall have the same rights to contribution as such Underwriter, and each
director of the Company, each officer of the Company who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act shall have the same rights to contribution as the
Company.
SECTION 9. Default by an Underwriter.
If one or more of the Underwriters participating in an offering of
Offered Certificates shall fail at the Closing Time to purchase the Offered
Certificates which it or they are obligated to purchase hereunder (the
"Defaulted Certificates"), then you shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the nondefaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Certificates in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, during such 24 hours you shall not have
completed such arrangements for the purchase of all of the Defaulted
Certificates, then:
(a) if the aggregate principal amount of Defaulted
Certificates does not exceed 10% of the aggregate principal amount of
Offered Certificates to be purchased pursuant to this Agreement, the
nondefaulting Underwriters shall be obligated to purchase the full
amount thereof in the proportions that their respective underwriting
obligations bear to the underwriting obligations of all nondefaulting
Underwriters, or
(b) if the aggregate principal amount of Defaulted
Certificates exceeds 10% of the aggregate principal amount of Offered
Certificates to be purchased pursuant to this Agreement, this Agreement
shall terminate without liability on the part of any nondefaulting
Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability to the Company and any nondefaulting Underwriter in
respect of its default under this Agreement.
In the event of any such default by any Underwriter or Underwriters as
set forth in this Section, either you or the Company shall have the right to
postpone the Closing Time for a period not exceeding seven days in order to
effect any required changes in the Registration Statement or Prospectus or in
any other documents or arrangements.
-19-
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SECTION 10. Termination.
This Agreement shall be subject to termination, in the absolute
discretion of the Underwriters, immediately upon notice to the Company, at any
time prior to the Closing Time (i) if there has been, since the date hereof or
since the respective dates as of which information is given in the Registration
Statement, any material adverse change in the condition, financial or otherwise,
or in the earnings, business affairs or business prospects of the Company,
whether or not arising in the ordinary course of business which, in the judgment
of a majority in interest of the Underwriters, materially impairs the investment
quality of the Offered Certificates, or (ii) if there shall have occurred any
outbreak or escalation of hostilities in which the United States is involved or
other national or international calamity or crisis, the effect of which on the
financial markets of the United States shall be such as to make it, in the
judgment of a majority in interest of the Underwriters, impracticable to market
the Offered Certificates or enforce contracts for the sale of the Offered
Certificates as contemplated by the Prospectus, or (iii) if trading in the
Common Stock of the Company shall have been suspended by the Commission or a
national securities exchange, or if trading generally on the New York Stock
Exchange shall have been suspended, or minimum prices for trading shall have
been fixed, or maximum ranges for prices for securities shall have been
required, by said exchange or by order of the Commission or any other
governmental authority, or if a banking moratorium shall have been declared by
either federal or New York authorities. In the event of any such termination of
this Agreement, the covenant set forth in Section 5(f) hereof, the provisions of
Section 7 hereof, the indemnity and contribution agreements set forth in Section
8 hereof, and the provisions of Sections 11 and 13 hereof shall remain in
effect.
SECTION 11. Representations and Indemnities to Survive.
All representations, warranties and agreements contained in this
Agreement, or contained in certificates of officers of the Company submitted
pursuant hereto, shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of any Underwriter or controlling
person, or by or on behalf of the Company, and shall survive each delivery of
and payment for any of the Offered Certificates.
SECTION 12. Notices.
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed, delivered by Federal Express
service or transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to them at the address indicated on page 1
hereof, with copies thereof directed to Mayer, Brown & Platt, 1675 Broadway, New
York, New York 10019, Attention: Barry P. Biggar. Notices to the Company shall
be directed to it at Southwest Airlines Co., 2702 Love Field Drive, Dallas,
Texas 75235, Attention of the Vice President-Finance, with copies thereof
directed to the Treasurer and Associate General Counsel.
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SECTION 13. Successors.
This Agreement shall inure to the benefit of and be binding upon you
and the Company and any Underwriter who becomes a party hereto and their
respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any firm or corporation, other than the
parties hereto and their respective successors and the controlling persons and
officers and directors referred to in Section 8 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the parties hereto, their respective successors and said
controlling persons and officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation. No
purchaser of Offered Certificates from any Underwriter shall be deemed to be a
successor by reason merely of such purchase.
SECTION 14. Applicable Law.
This Agreement and the rights and obligations of the parties created
hereby and thereby shall be governed by and construed in accordance with the
laws of the State of New York applicable to agreements made and to be performed
in such state.
SECTION 15. Counterparts.
This Agreement may be executed in one or more counterparts and when a
counterpart has been executed by each party, all such counterparts taken
together shall constitute one and the same agreement. A party may submit its
signed counterpart of this Agreement by telecopier and such counterpart so
received by telecopier shall for all purposes constitute an original.
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument along with all counterparts will become a binding agreement
between you and the Company in accordance with its terms.
Very truly yours,
SOUTHWEST AIRLINES CO.
By: /s/ John D. Owen
----------------------------
Name: John D. Owen
Title: Treasurer
CONFIRMED AND ACCEPTED, as of
the date first above written:
SALOMON BROTHERS INC
CHASE SECURITIES INC.
LEHMAN BROTHERS INC.
NATIONSBANK MONTGOMERY
SECURITIES LLC
By: Salomon Brothers Inc
By: /s/ Gregory P. Lee
----------------------------
Name: Gregory P. Lee
Title: Vice President
23
Exhibit A
SOUTHWEST AIRLINES CO.
Pass Through Certificates, Series 1998-A
AGGREGATE INTEREST FINAL PURCHASE UNDERWRITING
AMOUNT * RATE DISTRIBUTION PRICE DISCOUNTS AND
DATE COMMISSIONS
$95,531,435 6.53% January 2, 2019 100% .65%
* The Underwriters severally and not jointly agree to purchase approximately 25%
of the Aggregate Amount.
24
Schedule I
to
Underwriting
Agreement
Dated: May 21, 1998
SOUTHWEST AIRLINES CO.
Pass Through Certificates, Series 1998-A
AGGREGATE AMOUNT
OF PASS THROUGH
CERTIFICATES,
UNDERWRITER SERIES 1998-A
----------- ----------------
SALOMON BROTHERS INC $23,882,585.75
CHASE SECURITIES INC. $23,882,585.75
LEHMAN BROTHERS INC. $23,882,585.75
NATIONSBANK MONTGOMERY
SECURITIES LLC $23,882,585.75
Total $95,531,435.00
25
Schedule II
to
Underwriting
Agreement
SOUTHWEST AIRLINES CO.
Pass Through Certificates, Series 1998-A
Dated: May 21, 1998
To: Southwest Airlines Co.
2702 Love Field Drive
Dallas, Texas 75235
Re: Underwriting Agreement dated May 21, 1998
Title of Offered Certificates: Pass Through Certificates, Series 1998-A
Current ratings: A1/A by Moody's and S&P respectively.
Interest rate: 6.53%
Interest payable: January 2 and July
2 of each year, commencing
on July 2, 1998.
Public Offering price: 100%, plus accrued interest, if any, from
May 29, 1998
Purchase price: 100%, plus accrued interest, if any, from
May 29, 1998
Closing date: May 29, 1998 at 9:00 a.m., Central time
Location for checking
Offered Certificates: The Depository Trust Company
New York, New York
Listing requirement: None
Other terms and conditions: None