SOUTHWEST AIRLINES CO. UNDERWRITING AGREEMENT
Exhibit
1.1
5
3/4%
Notes due 2016
December
11, 2006
Barclays
Capital Inc.
000
Xxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Citigroup
Global Markets Inc.
000
Xxxxxxxxx Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
As
the
Representatives of the several Underwriters
Ladies
and Gentlemen:
Southwest
Airlines Co., a Texas corporation (the “Company”), proposes to issue and sell to
the underwriters named in Schedule I hereto $300,000,000 aggregate
principal amount of its debt securities (the “Securities”) with the interest
rate and date of maturity set forth on Schedule I hereto on the terms and
conditions stated herein. The Securities will be issued under an indenture
dated
as of September 17, 2004 (the “Indenture”) between the Company and Xxxxx Fargo
Bank, N.A., as Trustee. As used herein, unless the context otherwise requires,
the term “Underwriters” shall mean the firms named as Underwriters in Schedule
I, and the term “you” shall mean Barclays Capital Inc. and Citigroup Global
Markets Inc. Terms not otherwise defined herein shall have the meanings
specified in the Indenture. For purposes hereof, the term “Operative Agreements”
shall mean, collectively, this Agreement, the Indenture and the
Securities.
The
Company understands that the Underwriters propose to make a public offering
of
the Securities as soon as the Underwriters deem advisable after this Agreement
has been executed and delivered.
The
Company has filed with the Securities and Exchange Commission (the “Commission”)
a registration statement on Form S-3 (No. 333-100861), including the related
preliminary prospectus or prospectuses, which registration statement has been
declared effective by the Commission and the Indenture has been qualified under
the Trust Indenture Act of 1939, as amended (the “1939 Act”). Such registration
statement covers the registration of the Securities under the Securities Act
of
1933, as amended (the “1933 Act”). Promptly after execution and delivery of this
Agreement, the Company will prepare and file a prospectus in accordance with
the
provisions of paragraph (b) of Rule 424 (“Rule 424(b)”) of the of the rules and
regulations of the Commission (the “1933 Act Regulations”) under the 1933 Act.
Such registration statement as amended to the date of this Agreement, including
the information (if any) deemed to be part of the registration statement at
the
time of effectiveness pursuant to Rule 430A or Rule 430B under the 1933 Act
and the documents incorporated therein pursuant to Part I, Item 12 of Form
S-3
as of its most recent effective date, is hereinafter referred to as the
“Registration Statement,” and the related base prospectus in the form first used
to confirm sales of the Securities (or in the form first made available to
the
Underwriters by the Company to meet requests of purchasers pursuant to Rule
173
under the Securities Act), including the documents incorporated therein pursuant
to Part I, Item 12 of Form S-3 as of such date, is hereinafter referred to
as
the “Base Prospectus.” The Base Prospectus, as supplemented by the prospectus
supplement specifically relating to the Securities in the form first used to
confirm sales of the Securities (or in the form first made available to the
Underwriters by the Company to meet requests of purchasers pursuant to Rule
173
under the Securities Act), including the documents incorporated therein pursuant
to Part I, Item 12 of Form S-3 as of such date of such prospectus or prospectus
supplement, is hereinafter referred to as the “Prospectus,” and the term
“preliminary prospectus” means any preliminary form of the Prospectus.
For
purposes of this Agreement, all references to the Registration Statement, any
preliminary prospectus, the Prospectus or any amendment or supplement to any
of
the foregoing shall be deemed to include the copy filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval system
(“XXXXX”).
All
references in this Agreement to financial statements and schedules and other
information which is “contained,” “included” or “stated” in the Registration
Statement, any preliminary prospectus or the Prospectus (or other references
of
like import) shall be deemed to mean and include all such financial statements
and schedules and other information which is incorporated by reference in or
otherwise deemed by the 1933 Act Regulations to be a part of or included in
the
Registration Statement, any preliminary prospectus or the Prospectus, as the
case may be; and all references in this Agreement to amendments or supplements
to the Registration Statement, any preliminary prospectus or the Prospectus
shall be deemed to mean and include the filing of any document under the
Securities Exchange Act of 1934, as amended (the “1934 Act”), which is
incorporated by reference in or otherwise deemed by the 1933 Act Regulations
to
be a part of or included in the Registration Statement, such preliminary
prospectus or the Prospectus, as the case may be.
1.
Representations
and Warranties.
(a) The
Company represents and warrants to each Underwriter as of the date
hereof
and
agrees with each Underwriter 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 has the corporate power
and authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement, the General Disclosure
Package (as defined in Section 1(a)(ii) below) and 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 and its consolidated
subsidiaries taken as a whole (a “Material Adverse Effect”).
(ii)
The
Company meets the requirements for the use of Form S-3 under the 1933 Act
Regulations. At the time of first filing of the Registration Statement, at
the
earliest time thereafter that the Company or another offering participant made
a
bona fide offer (within the meaning of Rule 164(h)(2) of the 1933 Act
Regulations) of the Securities and at the date hereof, the Company was not
and
is not an “ineligible issuer,” as defined in Rule 405. 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 and any request on the part of the Commission
for
additional information has been complied with.
At
the
respective times the first filing of the Registration Statement and each
amendment thereto became effective, at each deemed effective date with respect
to the Underwriters pursuant to Rule 430B(f)(2) of the 1933 Act Regulations
and
at the Closing Time, the Registration Statement complied and will 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
thereunder (the “Trust Indenture Regulations”) and 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 to make the statements therein not
misleading.
Neither
the Prospectus nor any amendments or supplements thereto, as of its date, at
the
time the Prospectus or any such amendment or supplement is first filed in
accordance with Rule 424(b), and at the Closing Time, included or will
include an untrue statement of a material fact or omitted or will 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.
Each
preliminary prospectus (including the prospectus or prospectuses filed as part
of the first filing of the Registration Statement or any amendment thereto)
complied when so filed in all material respects with the 1933 Act Regulations
(after taking into account the information permitted to be omitted pursuant
to
Rules 430B and 430C of the 1933 Act Regulations, as applicable) and each
preliminary prospectus and the Prospectus delivered to the Underwriters for
use
in connection with this offering was identical to the electronically transmitted
copies thereof filed with the Commission pursuant to XXXXX, except to the extent
permitted by Regulation S-T.
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As
of the
Applicable Time, neither (x) the Issuer General Use Free Writing Prospectus(es)
(as defined below) issued as of or prior to the Applicable Time, the Statutory
Prospectus (as defined below) and the Final Term Sheet (as defined below),
all
considered together (collectively, the “General Disclosure Package”), nor (y)
any individual Issuer Limited Use Free Writing Prospectus, when considered
together with the General Disclosure Package, included any untrue statement
of a
material fact or omitted to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were
made, not misleading.
As
used
in this subsection and elsewhere in this Agreement:
“Applicable
Time” means 4:54 p.m. (Eastern time) on December 11, 2006 or such other time as
agreed by the Company and the Representative.
“Issuer
Free Writing Prospectus” means any “issuer free writing prospectus,” as defined
in Rule 433 of the 1933 Act Regulations (“Rule 433”), relating to the
Securities.
“Issuer
General Use Free Writing Prospectus” means any Issuer Free Writing Prospectus
that is intended for general distribution to prospective investors, as evidenced
by its being specified in Schedule III hereto.
“Issuer
Limited Use Free Writing Prospectus” means any Issuer Free Writing Prospectus
that is not an Issuer General Use Free Writing Prospectus.
“Statutory
Prospectus” means the Base Prospectus, as supplemented immediately prior to the
Applicable Time including any document incorporated by reference therein as
of
the date of such supplement.
Each
Issuer Free Writing Prospectus, as of its issue date and at all subsequent
times
through the completion of the public offer and sale of the Securities or until
any earlier date that the issuer notified or notifies the Representative as
described in Section 3(e), did not, does not and will not include any
information that conflicted, conflicts or will conflict with the information
contained in the Registration Statement, any preliminary prospectus relating
to
the Securities, the Statutory Prospectus, the General Disclosure Package or
the
Prospectus, including any document incorporated by reference therein and any
preliminary or other prospectus deemed to be a part thereof that has not been
superseded or modified.
The
representations and warranties in this Section 1(a)(ii) shall not apply to
statements in or omissions from the Registration Statement, the Prospectus
or
any Issuer Free Writing Prospectus (or any amendment or supplement thereto),
made in reliance upon and in conformity with information furnished to the
Company in writing by the Representative expressly for use therein 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).
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(iii)
The
documents incorporated by reference in the Registration Statement, the General
Disclosure Package and 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 and with the
other information in the Prospectus and the General Disclosure Package, at
the
time the Registration Statement and any amendments thereto became effective,
at
the time the Prospectus was first filed with the Commission in accordance with
Rule 424(b), at the Applicable Time and at the Closing Time, did not and will
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
or
are made, not misleading.
(iv)
The
consolidated financial statements of the Company included or incorporated by
reference in the Registration Statement, the General Disclosure Package and
the
Prospectus present fairly in all material respects 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, the General Disclosure
Package and the Prospectus 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
incorporated by reference 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)
Except
as
stated in or contemplated by the General Disclosure Package or the Prospectus,
subsequent to the date of the most recent financial statements included or
incorporated in the General Disclosure Package and the Prospectus, there has
not
been any material adverse change in the business, properties, financial
condition, results of operations or prospects of the Company and its
consolidated subsidiaries taken as a whole (a “Material Adverse
Change”).
(vi)
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” 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.
(vii) This
Agreement has been duly authorized, executed and delivered by the
Company.
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(viii) The
Indenture has been duly authorized, executed and delivered by the Company and,
assuming the due authorization, execution and delivery thereof by
the Trustee, is a valid
and binding agreement of, the Company, enforceable against the Company in
accordance with its terms, except as enforcement thereof may be
limited by bankruptcy,
insolvency (including,
without limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or other similar laws now or hereafter in
effect relating to creditors’ rights generally and except as enforcement thereof
is subject to general principles of equity (regardless of whether enforcement
is
considered in a
proceeding in equity or at law). The Indenture has been duly
qualified under the 1939 Act
(ix) The
Securities have been duly authorized by the Company and when duly authenticated
by the Trustee and executed and delivered in the manner provided for in the
Indenture and sold and paid for as provided in this Agreement, the Securities
will be legally and validly executed, issued and delivered and will be valid
and
binding obligations of the Company entitled to the benefits of the Indenture
and
enforceable against the Company in accordance with their terms, except as
enforcement thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors’ rights generally and except as enforcement thereof is subject to
general principles of equity (regardless of whether enforcement is considered
in
a proceeding in equity or at law).
(x) The
execution, delivery and performance of the Operative Agreements and
the
consummation of the transactions contemplated herein and in the
General
Disclosure Package and the Prospectus and compliance by the Company with its
obligations hereunder and thereunder do not and will not conflict with or result
in a breach of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any assets or properties
of
the Company or any of its subsidiaries pursuant to, any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, lease or other
agreement or instrument 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 assets
or properties of the Company or any of its subsidiaries is subject, the result
of which could reasonably be expected to have a Material Adverse Effect, nor
will such action result in any violation of (i) the provisions of the charter
or
bylaws of the Company or any of its Subsidiaries or (ii) any applicable law
or
statute or any order, rule, regulation or judgment of any court or governmental
agency or body having jurisdiction over the Company or any of its subsidiaries
or any of their assets, properties or operations, except, with respect to (ii)
above, for any such violations that could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(xi) No
authorization, approval, consent, order or license of or filing with or notice
to any government, governmental instrumentality or court, domestic or foreign,
is required on behalf of the Company for (i) the valid authorization,
issuance, sale and delivery of the Securities, (ii) the valid
authorization, execution, delivery and performance by the Company of the
Operative Agreements, or (iii) the consummation by the Company of the
transactions contemplated by the Operative Agreements, except such as are
required under the 1933 Act, the 1934 Act, the 1939 Act and the securities
or
blue sky or similar laws of the various states and of foreign
jurisdictions.
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(xii) Except
as
disclosed in the General Disclosure Package or the Prospectus, there is no
action, suit or proceeding before or by any governmental agency or body or
court, domestic or foreign, now pending or, to the knowledge of the Company,
threatened against the Company or any of its subsidiaries or any of their
respective properties that individually (or in the aggregate in the case of
any
class of related lawsuits), could reasonably be expected to result in a Material
Adverse Effect or that could reasonably be expected to materially and adversely
affect the consummation of the transactions contemplated by this Agreement
or
the other Operative Agreements.
(xiii) Except
as
disclosed in the General Disclosure Package or the Prospectus, no union contract
dispute respecting the employees of the Company or any subsidiary exists or,
to
the knowledge of the Company, is imminent that, in either case, could reasonably
be expected to have a Material Adverse Effect.
(xiv) Each
of
the Company and its subsidiaries has all necessary consents, authorizations,
approvals, orders, certificates and permits of and from, and has made all
declarations and filings with, all federal, state, local and other governmental
authorities, all self-regulatory organizations and all courts and other
tribunals, and is in compliance with all statutes and regulations as required,
to own, lease, license and use its properties and assets and to conduct its
business in the manner described in the General Disclosure Package and the
Prospectus, except to the extent that the failure to so obtain, declare, file
or
comply would not have a Material Adverse Effect.
(xv) Except
as
disclosed in the General Disclosure Package or the Prospectus, (x) to the
knowledge of the Company, neither the Company nor any of its subsidiaries is
in
violation of any statute, rule, regulation, decision or order of any
governmental agency or body or any court, domestic or foreign, relating to
the
use, disposal or release of hazardous or toxic substances (collectively,
“environmental laws”), owns or operates any real property contaminated with any
substance that is subject to any environmental laws, or is subject to any claim
relating to any environmental laws, which violation, contamination, liability
or
claim individually or in the aggregate is reasonably expected to have a Material
Adverse Effect, and (y) the Company is not aware of any pending
investigation which might lead to such a claim that is reasonably expected
to
have a Material Adverse Effect.
(xvi) Except
as
disclosed in the General Disclosure Package or the Prospectus, neither the
Company nor any of its subsidiaries is in violation of its charter or by-laws
or
in default (nor has any event occurred which with notice or lapse of time or
both would constitute a default or acceleration) in the performance of any
obligation, agreement or condition contained in any indenture, mortgage, loan
agreement, bond, debenture, note agreement or other evidence of indebtedness,
lease, contract or other agreement or instrument to which the Company or any
of
its subsidiaries is a party or by which any of them or their respective
properties is bound or affected and none of the Company or any of its
subsidiaries is in violation of any judgment, ruling, decree, order, franchise,
license or permit or any statute, rule or regulation applicable to the business
or properties of any of the Company or any of its subsidiaries, except for
such
violations or defaults which do not have a Material Adverse Effect.
6
(xvii) The
Company carries, or is covered by, insurance in such amounts and covering such
risks as is customary for major U.S. airlines operating similar flight equipment
over similar routes.
(xviii) The
accountants that examined and issued an auditors’ report with respect to the
consolidated financial statements of the Company and the financial statement
schedules, if any, included or incorporated by reference in the Registration
Statement are independent public accountants within the meaning of the 1933
Act
and the 1933 Act Regulations.
(xix) The
Company is not an “investment company”, or an entity “controlled” by an
“investment company”, within the meaning of the Investment Company Act of 1940,
as amended (the “Investment Company Act”) required to register under the
Investment Company Act; and after giving effect to the offering and sale of
the
Securities and the application of the proceeds thereof as described in the
General Disclosure Package and the Prospectus, the Company will not be an
“investment company”, or an entity “controlled” by an “investment company”, as
defined in the Investment Company Act, required to register under the Investment
Company Act.
(xx) This
Agreement and the other Operative Agreements will, upon execution and delivery
thereof, conform in all material respects to the descriptions thereof contained
in the General Disclosure Package and the Prospectus.
(xxi) Since
the
date of the most recent balance sheet of the Company audited by the accountants
whose auditors’ report was included or incorporated by reference in the
Registration Statement, the General Disclosure Package and the Prospectus
and
the
audit committee of the Company’s board of directors, (i) the Company has not
been advised of (A) any significant deficiencies in the design or operation
of
internal controls that are reasonably likely to adversely affect the ability
of
the Company to record, process, summarize and report financial data, or any
material weaknesses in internal controls (whether or not remediated) and (B)
any
fraud, whether or not material, that involves management or other employees
who
have a significant role in the internal controls of the Company, and (ii) since
that date, there have been no changes in internal controls that have materially
affected, or are reasonably likely to materially affect, internal controls,
including any corrective actions with regard to significant deficiencies and
material weaknesses.
7
(xxii) Except
as
may be set forth in the Registration Statement, the General Disclosure Package
and the Prospectus, the Company maintains required “disclosure controls and
procedures” (as defined in Rules 13a-15(e) and 15d-15(e) under the 0000 Xxx) and
the Company’s “disclosure controls and procedures” are designed to reasonably
ensure that material information (both financial and non-financial) required
to
be disclosed by the Company in the reports that it files or furnishes under
the
1934 Act is communicated to the Company’s management as appropriate to allow
timely decisions regarding required disclosure and to make the certifications
of
the Chief Executive Officer and Chief Financial Officer of the Company required
under the 1934 Act with respect to such reports.
(b) 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 Securities
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.
2. Purchase
and Sale.
Subject
to the terms and conditions and in reliance upon the representations and
warranties set forth herein, the Company agrees to sell to each Underwriter,
and
each Underwriter agrees, severally and not jointly, to purchase from the
Company, at a purchase price of 98.884% of the principal amount thereof, the
aggregate principal amounts of such Securities set forth opposite the name
of
such Underwriter in Schedule I hereto, together with interest thereon, if any,
from December 14, 2006, if closing occurs thereafter.
3.
Delivery
and Payment.
Payment
of the purchase price for any Securities to be purchased by the Underwriters
shall be made at the offices of the Company, 0000 Xxxx Xxxxx Xxxxx, Xxxxxx,
Xxxxx 00000, or at such other place as shall be agreed upon by you and the
Company, at 9:00 A.M., New York time, on the third business
day (unless postponed in accordance with the provisions of Section 10) following
the date hereof or at such other date, time or location as otherwise shall
be
agreed upon by you and the Company (such time being referred to as the “Closing
Time” and such date being referred to as the “Closing Date”). Unless otherwise
specified, delivery of the Securities shall be made to The Depository Trust
Company for your account against payment by you to the Company of the purchase
price thereof by wire transfer of Federal funds or other immediately available
funds. Such Securities shall be registered in the form of a single global
certificate 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 Date. The
Company agrees to have the Securities available for inspection by you at its
offices in Dallas, Texas, not later than 5:00 P.M. on the business day prior
to
the Closing Date.
8
(b) It
is
understood that each Underwriter has authorized you, on its behalf and for
its
account, to accept delivery of, receipt for, and make payment of the purchase
price for, the Securities that it has agreed to purchase. You, individually
and
not as a representative, may (but shall not be obligated to) make payment of
the
purchase price for the Securities to be purchased by any Underwriter whose
check
or checks shall not have been received by the Closing Time.
4.
Offering
by Underwriters.
It is
understood that the several Underwriters propose to offer the Securities for
sale to the public as set forth in the Prospectus.
5.
Agreements.
The
Company covenants with each Underwriter that:
(a)
Immediately
following the execution of this Agreement and subject to paragraph (c) below,
the Company will cause the Prospectus containing the information omitted in
reliance upon Rule 430B, and any supplement thereto, to be filed in a form
approved by the Representatives with the Commission pursuant to the applicable
paragraph of Rule 424(b) within the time period prescribed (without reliance
on
Rule 424(b)(8)), and will furnish to the Underwriters named therein as many
copies of the Prospectus as you shall reasonably request.
(b)
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 that 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
any
document incorporated by reference therein or otherwise deemed to be a part
thereof or for additional information, and (v) or any order preventing or
suspending the use of any preliminary prospectus, or of the initiation or
threatening of any proceedings for any of such purposes or of any examination
pursuant to Section 8(e) of the 1933 Act concerning the Registration Statement,
(vi) if the Company becomes the subject of a proceeding under Section 8A of
the
1933 Act in connection with the offering of the Securities and (vii) of the
receipt by the Company of any notification with respect to the suspension of
the
qualification of the Securities for sale in any jurisdiction or the institution
or threatening of any proceeding for such 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. The Company will
file
the pricing term sheet attached hereto as Schedule II (the “Final Term Sheet”)
pursuant to Rule 433(d) under the 1933 Act within the time required by such
Rule
and will file promptly all other material required to be filed by the Company
with the Commission pursuant to Rule 433(d) under the 1933 Act.
(c)
For
so
long as a Prospectus is required to be delivered in connection with the
Securities (including in circumstances where such requirement may be satisfied
pursuant to Rule 172), 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, 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.
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(d)
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 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 Securities.
(e)
If,
at
any time prior to the filing of the Prospectus pursuant to Rule 424(b), any
event occurs as a result of which the General Disclosure Package would include
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein in the light of the circumstances
under
which they were made at such time not misleading, the Company will (i) notify
promptly the Representative so that any use of the General Disclosure Package
may cease until it is amended or supplemented; (ii) subject to paragraph (c)
above , amend or supplement the General Disclosure Package to correct such
statement or omission; and (iii) supply any amendment or supplement to you
in
such quantities as you may reasonably request.
(f) If
at any
time when the Prospectus is required by the 1933 Act to be delivered in
connection with sales of the Securities (including in circumstances where such
requirement may be satisfied pursuant to Rule 172) 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, subject
to paragraph (c) above, 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.
If at any time when the Prospectus is required by the 1933 Act to be delivered
in connection with sales of the Securities (including in circumstances where
such requirement may be satisfied pursuant to Rule 172) there occurred or occurs
an event or development as a result of which an Issuer Free Writing Prospectus
conflicted or would conflict with the information contained in the Registration
Statement relating to the Securities or included or would include an untrue
statement of a material fact or omitted or would omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances prevailing at that subsequent time, not misleading, the Company
will promptly notify you and will promptly amend or supplement, at its own
expense, such Issuer Free Writing Prospectus to eliminate or correct such
conflict, untrue statement or omission.
10
(g)
With
respect to the sale of the Securities, 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.
(h)
The
Company will endeavor, in cooperation with you, to qualify the Securities 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 Securities; 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 Securities have been qualified as provided above.
(i)
Between
the date of this Agreement and the Closing Date, the Company shall not, without
your prior written consent, offer, sell, or enter into any agreement to sell
(as
public debt securities registered under the 1933 Act (other than the Securities)
or as debt securities which may be resold in a transaction exempt from the
registration requirements of the 1933 Act in reliance on Rule 144A thereunder
and which are marketed through the use of a disclosure document containing
substantially the same information as a prospectus for similar debt securities
registered under the 1933 Act), any debt securities similar to the Securities,
equipment notes, pass through certificates, equipment trust certificates or
equipment purchase certificates secured by aircraft owned or leased by the
Company (or rights relating thereto).
(j) The
Company represents and agrees that, unless it obtains the prior written consent
of the Representatives, and each Underwriter represents and agrees that, unless
it obtains the prior written consent of the Company and the Representatives,
it
has not made and will not make any offer relating to the Securities that would
constitute an “issuer free writing prospectus,” as defined in Rule 433, or that
would otherwise constitute a “free writing prospectus,” as defined in Rule 405,
required to be filed with the Commission or retained by the Company under Rule
433, other than a free writing prospectus containing the information contained
in the Final Term Sheet; provided, however, that the prior written consent
of
the parties hereto shall be deemed to have been given in respect of the Issuer
General Use Free Writing Prospectus. The Company represents that it has treated
or agrees that it will treat each Issuer General Use Free Writing Prospectus
as
an “issuer free writing prospectus,” as defined in Rule 433, and has complied
and will comply with the requirements of Rule 433 applicable to any Issuer
General Use Permitted Free Writing Prospectus, including timely filing with
the
Commission where required, legending and record keeping.
11
6.
Conditions to the Obligations of Underwriters. The several obligations of
the Underwriters to purchase the Securities 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 as of the date hereof, as of the date of the
effectiveness of any amendment to the Registration Statement filed after the
date hereof and prior to the Closing Date (including the filing of any document
incorporated therein by reference), as of the Applicable Time and as of the
Closing Date, 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, on its part to be performed and observed and to the following
additional conditions precedent:
(a) At
the
Closing Time, (i) the Prospectus, and any supplement thereto, shall have been
filed within the time period required by Rule 424(b) (without reliance on Rule
424(b)(8)); and (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
any
request on the
part
of the Commission for additional information shall have been complied with
to
the reasonable satisfaction of counsel to the Underwriters.
(b)
At
the
Closing Time, you shall have received the following opinions:
(1)
the
opinion of the General Counsel of the Company, dated
the
Closing Date, in form and substance reasonably satisfactory to you and
substantially to the effect set forth in Exhibit
A
hereto;
(2)
the
opinion of Xxxxxx & Xxxxxx L.L.P., counsel to the Company, dated
the
Closing Date, in form and substance reasonably satisfactory to you and
substantially to the effect set forth as the first paragraph following paragraph
12 in Exhibit
A
hereto;
and
(3) the
opinion of Mayer, Brown, Xxxx & Maw L.L.P., counsel to the Underwriters,
with respect to such matters as you may reasonably request.
(c)
Subsequent
to the execution and delivery of this Agreement, there shall not have occurred
any Material Adverse Change that, in your judgment, is material and adverse
and
that makes it, in your judgment, impracticable or inadvisable to proceed with
the completion of the public offering of the Securities on the terms and in
the
manner contemplated by the Prospectus.
(d) You
shall
have received a certificate of the Vice Chairman of the Board and Chief
Executive Officer, the President or the Senior Vice President and
Chief
Financial Officer of the Company and the Treasurer or the Secretary of the
Company, dated as of the Closing Date to the effect that:
12
(1)
the
representations and warranties of the Company in this Agreement are true and
correct in all material respects at 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;
(2)
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
(3)
since
the
respective dates as of which information is given in the Registration Statement,
the General Disclosure Package and the Prospectus, there has been no Material
Adverse Change.
(e)
At
the
time of execution of this Agreement, the Underwriters shall have received a
letter dated such date, in form and substance satisfactory to the Underwriters,
from the Company’s independent public accountants, containing statements and
information of the type ordinarily included in accountants’ “comfort letters” to
underwriters with respect to the financial statements and certain other
financial or statistical data and certain financial information contained in
or
incorporated by reference into the Registration Statement, the General
Disclosure Package and the Prospectus.
(f) At
the
Closing Time, the Underwriters shall have received a letter, dated as of Closing
Date, from the Company’s independent public accountants to the effect that they
reaffirm the statements made in the letter furnished pursuant to
subsection (e) of this Section, except that the specified date referred to
shall be a date not more than three business days prior to Closing
Time.
(g)
Subsequent
to the execution and delivery of this Agreement and prior to the Closing Time,
(i) there shall not have been any downgrading in the rating accorded any of
the
Company’s securities by any “nationally recognized statistical rating
organization”, as such term is defined for purposes of Rule 436(g)(2) under the
1933 Act, or (ii) any public announcement that any such organization has under
surveillance or review, in each case for possible change, its ratings of any
such securities (other than an announcement with positive implications of a
possible upgrading, and no implication of a possible downgrading, of such
rating).
(h) At
the
Closing Time, the Securities shall be rated (x) not lower than “A” by
Standard & Poor’s Ratings Services, and (y) not lower than “Baa1” by
Xxxxx’x Investors Service, Inc.
(i) 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 Securities 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.
13
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
Closing Date, 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 telephone or
facsimile confirmed in writing. Notwithstanding any such termination,
the
provisions
of Sections 8 and 11 shall remain in effect.
7.
Payment
of Expenses.
The
Company will pay all expenses incident to the performance of its obligations
under this Agreement, including:
(a)
the
filing of the Registration Statement and all amendments thereto, any preliminary
prospectus, any Issuer Free Writing Prospectus, and the Prospectus and any
amendments or supplements thereto;
(b)
the
preparation, printing, issuance and delivery of the Securities;
(c)
the
reasonable fees and disbursements of the Company’s accountants and counsel and
of the Trustee and its counsel, and of any issuing and paying agent or transfer
agent;
(d)
the
qualification of the Securities under securities laws in accordance with the
provisions of Section 5(g), including filing fees and the reasonable fees and
disbursements of counsel to the Underwriters in connection therewith and in
connection with the preparation of any Blue Sky Survey;
(e)
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
Securities;
(f)
the
preparation and delivery to the Underwriters of copies of the Operative
Agreements;
(g)
any
fees
charged by rating agencies for the rating of the Securities; and
(h)
the
fees
and expenses, if any, incurred with respect to any filing with the National
Association of Securities Dealers, Inc.
14
If
this
Agreement is terminated by you in accordance with the provisions of Section
6
hereof, the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
Mayer, Brown, Xxxx & Maw L.L.P., counsel for the Underwriters, or, in any
other case, including any termination pursuant to Section 9 or 10 hereof, the
Underwriters will pay all of their own expenses, including their fees of
counsel, transfer taxes on resale of any of the Securities and any advertising
expenses connected with any offers they may make.
8.
Indemnification
and Contribution; Default of Underwriters.
(a)
The
Company agrees to indemnify and hold harmless each Underwriter, its
affiliates (as such term is defined in Rule 501(b) under the 1933 Act), its
selling agent
and each
person, if any, who controls such Underwriter within the meaning of either
Section 15 of the 1933 Act or Section 20 of the 1934 Act from and against any
and all losses, claims, damages and liabilities (including, without limitation,
any legal or other expenses reasonably incurred by any Underwriter or any such
controlling person in connection with defending or investigating any such action
or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement (or any amendment thereof)
or caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or
caused
by any untrue statement or alleged untrue statement of a material fact included
in the Base Prospectus, the Statutory Prospectus, any preliminary prospectus
relating to the Securities, any Issuer Free Writing Prospectus or any “issuer
information” filed or required to be filed pursuant to Rule 433(d) under the
1933 Act Regulations or the Prospectus (or in 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,
except
in each case insofar as such losses, claims, damages or liabilities are caused
by any such untrue statement or omission or alleged untrue statement or omission
based upon and in conformity with information relating to any Underwriter
furnished to the Company in writing by such Underwriter specifically for
inclusion in any such document (“Underwriter Information”).
(b) Each
Underwriter agrees, severally and not jointly, to indemnify and hold harmless
the Company, its directors, each of the officers who signed the Registration
Statement and each person, if any, who controls the Company, within the meaning
of either Section 15 of the 1933 Act or Section 20 of the 1934 Act, to the
same
extent as the foregoing indemnity from the Company to such Underwriter but
only
with reference to the Underwriter Information provided by such
Underwriter.
15
(c) In
case
any proceeding (including any governmental investigation) shall be instituted
involving any person in respect of which indemnity may be sought pursuant to
either paragraph (a) or (b) above, such person (the “indemnified party”) shall
promptly notify the person against whom such indemnity may be sought (the
“indemnifying party”) in writing. The indemnifying party, upon request of the
indemnified party, shall, and the indemnifying party may elect to, retain
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in such
proceeding and the indemnifying party shall pay the fees and disbursements
of
such counsel related to such proceeding. In any such proceeding, any indemnified
party shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such indemnified party unless
(i) the indemnifying party and the indemnified party shall have mutually
agreed to the retention of such counsel, (ii) the named parties to any such
proceeding (including any impleaded parties) include both the indemnifying
party
and the indemnified party and representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests between
them, or (iii) the indemnifying party shall have failed to retain counsel
as required by the prior sentence to represent the indemnified party within
a
reasonable amount of time. It is understood that the indemnifying party shall
not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more than one separate
firm
(in addition to any local counsel) for all such indemnified parties and that
all
such fees and expenses shall be reimbursed as they are incurred. The firm chosen
to represent the indemnified parties shall be designated in writing by you
in
the case of parties indemnified pursuant to paragraph (a) above and by the
Company in the case of parties indemnified pursuant to paragraph (b) above.
The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees
to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment. Notwithstanding the foregoing sentence, if
at
any time an indemnified party shall have requested in writing an indemnifying
party to reimburse the indemnified party for fees and expenses of counsel as
contemplated by the second and third sentences of this paragraph, the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 90 days after receipt by such indemnifying party of
the
aforesaid request and (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior to the
date of such settlement, unless such fees and expenses are being disputed in
good faith. The indemnifying party at any time may, subject to the last sentence
of this Section 8(c), settle or compromise any proceeding described in this
paragraph at the expense of the indemnifying party. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement (i) includes
an unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding and (ii) does not include a
statement as to, or an admission of, fault, culpability or a failure to act
by
or on behalf of an indemnified party.
16
(d) To
the
extent the indemnification provided for in paragraph (a) or (b) of this Section
8 is required to be made but is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities, then
the
applicable indemnifying party under such paragraph, in lieu of indemnifying
such
indemnified party thereunder, shall contribute to the amount paid or payable
by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company, on the one hand, and the
Underwriters, on the other hand, from the offering of such Securities or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault
of
the Company on the one hand and the Underwriters on the other hand in connection
with the statements or omissions that resulted in such losses, claims, damages
or liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriters
on the other hand in connection with the offering of such Securities shall
be
deemed to be in the same respective proportions as the proceeds from the
offering of such Securities received by the Company (before deducting expenses)
less total underwriting discounts and commissions paid to the Underwriters
by
the Company, and the total underwriting discounts and commissions paid to the
Underwriters by the Company, in each case as set forth on the cover of the
Prospectus, bear to the aggregate public offering price of such Securities.
The
relative fault of the Company on the one hand and of the Underwriters on the
other hand shall be determined by reference to, among other things, whether
the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or information supplied by the Underwriters, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Underwriters’ respective obligations to contribute
pursuant to this Section 8 are several in proportion to the respective principal
amount of Securities they have purchased hereunder, and not joint.
(e) The
Company and the Underwriters agree that it would not be just or equitable if
contribution pursuant to this Section 8 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of
the
equitable considerations referred to in paragraph (d) above. The amount paid
or
payable by an indemnified party as a result of the losses, claims, damages
and
liabilities referred to in paragraph (d) above shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 8, no Underwriter shall be required to contribute any amount in excess
of the amount by which the total price at which the Securities underwritten
by
it and distributed to the public were offered to the public exceeds the amount
of any damages that such Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
9.
Default
by an Underwriter.
If any
Underwriter or Underwriters default in their obligations to purchase Securities
hereunder and the aggregate principal amount of the Securities that such
defaulting Underwriter or Underwriters agreed but failed to purchase does not
exceed 10% of the total principal amount of the Securities, you may make
arrangements satisfactory to the Company for the purchase of such Securities
by
other persons, including any of the Underwriters, but if no such arrangements
are made by the Closing Date, the non-defaulting Underwriters shall be obligated
severally, in proportion to their respective commitments hereunder, to purchase
the Securities that such defaulting Underwriter or Underwriters agreed but
failed to purchase. If any Underwriter or Underwriters so default and the
aggregate principal amount of the Securities with respect to which such default
or defaults occurs exceeds 10% of the total principal amount of the Securities
and arrangements satisfactory to you and the Company for purchase of such
Securities by other persons are not made within 36 hours after such default,
this Agreement will terminate without liability on the part of any
non-defaulting Underwriter or the Company, except as provided in Section 7
and 8
hereof. As used in this Agreement, the term “Underwriter” includes any person
substituted for an Underwriter under this Section. Nothing herein will relieve
a
defaulting Underwriter from liability for its default.
17
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 if
after
the
execution and delivery of this Agreement and prior to the Closing Time
(i) trading generally shall have been suspended or materially limited on or
by, as the case may be, any of the New York Stock Exchange or the National
Association of Securities Dealers, Inc., (ii) trading of any securities of
the Company shall have been suspended on any exchange or in any over-the-counter
market, (iii) a general moratorium on commercial banking activities in New
York shall have been declared by either Federal or New York State authorities,
(iv) any outbreak or escalation of hostilities shall have occurred in which
the
United States is involved, any declaration of war by Congress or any substantial
national or international calamity or emergency shall occur and the effect
of
which is such as to make it, in your judgment, impracticable or inadvisable
to
proceed with the offering or delivery of the Securities on the terms and in
the
manner contemplated in the Prospectus or (v) there shall have occurred such
a
material adverse change in general economic, political or financial conditions
(or the effect of international conditions on the financial markets in the
United States shall be such) as to make it, in your judgment, impracticable
or
inadvisable to proceed with the offering or delivery of the Securities on the
terms and in the manner contemplated in the Prospectus. In
the
event of any such termination of this Agreement, the provisions of Section
7
hereof, the indemnity and contribution agreements set forth in Section 8 hereof,
and the provisions of Sections 11 through 15 hereof shall remain in
effect.
11.
Representations
and Indemnities to Survive.
The
respective indemnities, agreements, representations, warranties and other
statements of the Company or its officers and of the Underwriters set forth
in
or made pursuant to this Agreement will remain in full force and effect,
regardless of any termination of this Agreement, any investigation, or statement
as to the results thereof, made by or on behalf of any Underwriter, the Company
or any of their respective representatives, officers or directors or any
controlling person and will survive delivery of and payment for the Securities.
If for any reason the purchase of the Securities by the Underwriters is not
consummated, the Company shall remain responsible for the expenses to be paid
or
reimbursed by it pursuant to Section 7 and the respective obligations of the
Company and the Underwriters pursuant to Section 8 shall remain in effect.
If
the purchase of the Securities by the Underwriters is not consummated for any
reason other than solely because of the occurrence of the termination of this
Agreement pursuant to Section 9 or 10, the Company will reimburse the
Underwriters for all out-of-pocket expenses (including reasonable fees and
disbursements of counsel) reasonably incurred by them in connection with the
offering of such Securities and comply with its other obligations under
Section 7.
18
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. Notices to the Company shall be directed to it at Southwest Airlines
Co., 0000 Xxxx Xxxxx Xxxxx, Xxxxxx, Xxxxx 00000-0000, Attention of the Senior
Vice President - Finance and Chief Financial Officer, with a copy thereof
directed to the General Counsel.
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 Securities from any Underwriter shall be deemed to be a successor
by reason merely of such purchase.
14.
Arms-length
Transactions.
The
Company acknowledges and agrees that (i) the purchase and sale of the
Securities pursuant to this Agreement, including the determination of the public
offering price of the Securities and any related discounts and commissions,
is
an arm’s-length commercial transaction between the Company, on the one hand, and
the several Underwriters on the other, (ii) in connection with the offering
contemplated hereby and the process leading to such transaction each Underwriter
is and has been acting solely as a principal and is not the agent or fiduciary
of the Company, or its stockholders, creditors, employees or any other party,
(iii) no Underwriter has assumed or will assume an advisory or fiduciary
responsibility in favor of the Company with respect to the offering contemplated
hereby or the process leading thereto (irrespective of whether such Underwriter
has advised or is currently advising the Company on other matters) and no
Underwriter has any obligation to the Company with respect to the offering
contemplated hereby except the obligations expressly set forth in this
Agreement, (iv) the Underwriters and their respective affiliates may be engaged
in a broad range of transactions that involve interests that differ from those
of the Company, and (v) the Underwriters have not provided any legal,
accounting, regulatory or tax advice with respect to the offering contemplated
hereby and the Company has consulted its own legal, accounting, regulatory
and
tax advisors to the extent it deemed appropriate.
19
15.
APPLICABLE
LAW.
THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE
STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
16.
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 facsimile and such counterpart so
received
by facsimile shall for all purposes constitute an original.
[signature
pages follow]
20
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 each Underwriter
and the Company in accordance with its terms.
Very truly yours,
|
|
||
|
By
|
/s/
Xxxxx Xxxxxx
|
|
|
Name:
Xxxxx Xxxxxx
|
||
|
Title:
Senior Vice President - Finance
|
||
|
and Chief Financial Officer
|
||
CONFIRMED
AND ACCEPTED, as of
the
date
first above written:
BARCLAYS
CAPITAL INC.
CITIGROUP
GLOBAL MARKETS INC.
As
Representatives of the several Underwriters
By:
BARCLAYS CAPITAL INC.
By:
/s/
Xxxxxx Xxxxxxx
Name: Xxxxxx Xxxxxxx
Title: Director
By:
CITIGROUP GLOBAL MARKETS INC.
By:
/s/
Xxxxx Xxxxxxxxx
Name: Xxxxx Xxxxxxxxx
Title: Director
21
SCHEDULE
I
|
Underwriters
|
Aggregate
Principal Amount of Securities
|
|||
|
Barclays
Capital Inc.
|
$
|
105,000,000
|
|
|
|
Citigroup
Global Markets Inc.
|
|
$
|
105,000,000
|
|
|
Lazard
Capital Markets LLC
|
|
$
|
30,000,000
|
|
|
Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
|
|
$
|
30,000,000
|
|
|
Xxxxx
Fargo Securities, LLC
|
|
$
|
30,000,000
|
|
|
Total
|
|
$
|
300,000,000
|
|
S-1
SCHEDULE
II
$300,000,000
5 3/4% Notes due 2016
PRICING
TERM SHEET
Filed
Pursuant to Rule 433
Registration
No. 333-100861
Dated
December 11, 0000
Xxxxxxxxx
Xxxxxxxx Co.
$300,000,000
5.75% Notes due 2016
Pricing
Term Sheet
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Issuer:
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Size:
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$300,000,000
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Maturity:
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December
15, 2016
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Coupon:
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5.75%
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Price
to Public:
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99.534%
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Yield
to maturity:
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5.812%
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Spread
to Benchmark Treasury:
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+
130 basis points
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Benchmark
Treasury:
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4.625%
due November 15, 2016
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Benchmark
Treasury Yield:
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4.512%
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Interest
Payment Dates:
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June
15 and December 15, commencing June 15, 2007
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Redemption
Provisions:
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Make-whole
call:
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At
any time at a discount rate of Treasury plus 25 basis
points
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Settlement:
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December
14, 2006
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CUSIP:
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000000XX0
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Ratings
(Xxxxx’x/S&P/Fitch):
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Baa1/A/A
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Note:
A
securities rating is not a recommendation to buy, sell or hold securities
and may be subject to revision or withdrawal at any
time.
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The
issuer has filed registration statements (including prospectuses) with the
SEC
for the offering to which this communication relates. Before you invest, you
should read the prospectuses in those registration statements and other
documents the issuer has filed with the SEC for more complete information about
the issuer and this offering. You may get these documents for free by visiting
XXXXX on the SEC Web site at xxx.xxx.xxx. Alternatively, the issuer, any
underwriter or any dealer participating in the offering will arrange to send
you
the prospectus if you request it by calling toll-free: Barclays Capital Inc.
at
(000) 000-0000, extension 2663 or Citigroup Global Markets Inc. at (000)
000-0000.
S-2
SCHEDULE
III
Issuer
General Use Free Writing Prospectus
The
pricing term sheet identified on Schedule II.
S-3
Exhibit
A
Barclays
Capital Inc.
000
Xxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Citigroup
Global Markets Inc.
000
Xxxxxxxxx Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
As
the
Representatives of the several Underwriters
Ladies
and Gentlemen:
I
am the
Vice President - General Counsel of Southwest Airlines Co., a Texas corporation
(“Southwest”). In such capacity, I and persons on my legal staff have acted as
counsel to Southwest in connection with the transactions contemplated by the
Underwriting Agreement dated December 11, 2006 among Barclays Capital Inc.,
Citigroup Global Markets Inc., and the other Underwriters party thereto
(collectively, the “Underwriters”) and Southwest (the “Underwriting Agreement”).
Capitalized terms used but not defined herein shall have the meanings ascribed
to them in the Underwriting Agreement. This opinion is furnished pursuant to
Section 6(b)(1) of the Underwriting Agreement.
In
arriving at the opinions expressed below, I or members of my legal staff have
reviewed the following documents, each of which is dated as of the date hereof,
except where otherwise indicated above or below:
(a) an
executed copy of the Underwriting Agreement,
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(b)
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an
executed copy of the Indenture, between Southwest and Xxxxx Fargo
Bank,
N.A., as trustee (the “Indenture”),
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(c)
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the
global security representing the Southwest Airlines $300,000,000
5 3/4% Notes due 2016 (the “Notes”), such Notes to be issued under
the Indenture,
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(d)
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the
registration statement on Form S-3 (Registration No. 333-100861),
filed by
Southwest under the Securities Act of 1933, as amended, and the rules
and
regulations there under (collectively, the “Securities Act”), with the
Commission (the registration statement at the time when it became
effective, including the exhibits thereto and the documents incorporated
by reference therein, is referred to herein as the “Registration
Statement”),
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A-1
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(e)
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the
prospectus included in the Registration Statement (the “Base Prospectus”)
relating to debt securities,
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(f)
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the
preliminary prospectus supplement dated December 11, 2006 with respect
to
the Notes and the Final Term Sheet referred to below (the Base Prospectus,
as supplemented and modified by such preliminary prospectus supplement
and
Final Term Sheet and including the documents incorporated by reference
therein, the “General Disclosure
Package”),
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(g)
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the
final prospectus supplement dated December 11, 2006 with respect
to the
Notes (the “Prospectus Supplement”; and the Base Prospectus as
supplemented and modified by the Prospectus Supplement and including
the
documents incorporated by reference therein, the
“Prospectus”),
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(h)
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the
information included on Schedule II of the Underwriting Agreement,
the
Issuer General Use Free Writing Prospectus or Final Term Sheet, in
the
form filed with the Commission on December 11, 2006 pursuant to Rule
433
under the Securities Act, and
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(i)
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the
documents delivered to you by Southwest at the closing pursuant to
the
Underwriting Agreement, including copies of Southwest’s articles of
incorporation (the “Articles of Incorporation”) and bylaws certified by
the Secretary of State of the State of Texas and the Assistant Secretary
of Southwest, respectively.
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The
Indenture, the Notes and the Underwriting Agreement are referred to herein
collectively as the “Transaction Documents”.
In
addition, I or members of my legal staff have reviewed the originals or copies
certified or otherwise identified to my or their satisfaction of all such
corporate records of Southwest and such other instruments and other certificates
of public officials, officers and representatives of Southwest and such other
persons, and I or members of my legal staff have made such investigations of
law, as I deemed appropriate as a basis for the opinions expressed
below.
In
arriving at the opinions expressed below, I and members of my legal staff have
assumed the authenticity of all documents submitted to us as originals and
the
conformity to the originals of all documents submitted to us as copies. In
addition, I and members of my legal staff have assumed and have not verified
the
accuracy as to factual matters of each document I or they have reviewed
including, without limitation, the accuracy of the representations and
warranties of Southwest in the Underwriting Agreement. As used herein, the
phrase “to my knowledge” shall mean to my actual knowledge after reasonable
investigation, including inquiry of members of my legal staff, but shall not
be
interpreted to impute to me knowledge of others.
A-2
Based
on
the foregoing, and subject to the further assumptions, qualifications and
limitations set forth below, it is my opinion that:
1. Southwest
has been duly incorporated and is an existing corporation in good standing
under
the laws of the State of Texas, with corporate power to own, lease and operate
its properties and conduct its business as described in the Prospectus;
Southwest is duly qualified to do business as a foreign corporation in good
standing in all other jurisdictions in the United States in which its ownership
or lease of property or the conduct of its business requires such qualification,
except where the failure to be so qualified would not have a material adverse
effect on the business or consolidated financial condition of
Southwest.
2. To
my
knowledge, there is no action, suit or proceeding before or by any governmental
agency or body or court, domestic or foreign, now pending against Southwest
or
any of its subsidiaries or any of their respective properties that (i) is
required to be disclosed in the Registration Statement and is not so disclosed
or (ii) that could reasonably be expected to have a Material Adverse Effect
or a
material adverse effect on the ability of Southwest to perform its obligations
under any of the Transaction Documents.
3. Southwest
is a “citizen of the United States” within the meaning of Section 40102(a)(15)
of Title 49 of the United States Code, as amended, holding an air carrier
operating certificate issued by the Secretary of Transportation pursuant to
Chapter 447 of Title 49 of the United States Code, as amended, for aircraft
capable of carrying 10 or more individuals or 6,000 pounds or more of
cargo.
4. The
execution, delivery and performance by Southwest of the Transaction Documents,
and the consummation by Southwest of the transactions contemplated by such
documents, will not result in any violation of the provisions of the articles
of
incorporation or by-laws of Southwest or, to my knowledge, any applicable law,
administrative regulation or any administrative or court decree, nor does any
such action, to my knowledge, constitute a breach of, or default under, or
(except as contemplated therein) result in the creation or imposition of any
lien, charge or encumbrance upon any assets of Southwest or any of the
Subsidiaries pursuant to, any material contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which Southwest is a party or
by
which it is bound or to which any of the assets of Southwest is
subject.
5. The
execution and delivery by Southwest of the Indenture, the Notes and the
Underwriting Agreement have been duly authorized by all necessary corporate
action of Southwest, and each of the Indenture, the global security representing
the Notes and the Underwriting Agreement has been duly executed and delivered
by
Southwest. Each of the Indenture and the Notes is a valid and binding obligation
of Southwest enforceable against Southwest in accordance with its
terms.
6. The
Indenture and the Notes conform in all material respects to the descriptions
thereof in the Prospectus and the Prospectus Supplement;
A-3
7. The
Indenture is qualified under the 1939 Act.
8. The
issuance and sale of the Notes to the Underwriters pursuant to the Underwriting
Agreement, the valid authorization, execution and delivery of the Transaction
Documents by Southwest and the performance by Southwest of its obligations
under
the Transaction Documents do not require Southwest to obtain or effect any
consent, approval, authorization, registration or qualification of or with
any
governmental agency or body of the United States or the State of Texas, except
such as may be required under federal or state securities or blue sky
laws.
9. To
my
knowledge, except as disclosed in the Prospectus, there is no event of default
under any material agreement or instrument under which indebtedness of Southwest
is outstanding or by which it is bound or any of its properties is
subject.
10. The
Registration Statement has become effective under the Securities Act and, to
my
knowledge, (i) no stop order suspending the effectiveness of the Registration
Statement has been issued and (ii) no proceedings for that purpose have been
instituted or threatened by the Commission.
11. Without
independent check or verification of the statements contained therein, the
Registration Statement and the Base Prospectus (other than the financial
statements, financial statement schedules and other financial or statistical
data included therein, or omitted therefrom, as to which I am not expressing
an
opinion), in each case excluding the documents incorporated or deemed
incorporated by reference therein, as of their respective effective or issue
dates, appear on their face to have been appropriately responsive in all
material respects to the requirements of the Securities Act.
12. Each
document filed pursuant to the Securities Exchange Act of 1934, as amended,
and
the rules and regulations there under (the “Exchange Act”), and incorporated or
deemed incorporated by reference in the Registration Statement or the Prospectus
(other than the exhibits thereto, the financial statements, financial statement
schedules and other financial or statistical data included therein, or
incorporated or deemed incorporated therein by reference, or omitted therefrom,
as to which I am not expressing an opinion), when so filed with the Commission,
appeared on its face to have been appropriately responsive in all material
respects to the requirements of the Exchange Act.
A-4
I
have
examined the Registration Statement, the Base Prospectus and the Prospectus
Supplement. The limitations inherent in the independent verification of factual
matters and in the role of General Counsel are such, however, that I cannot
and
do not assume any responsibility for the accuracy, completeness or fairness
of
the statements made therein have made no independent check or verification
thereof. In the course of the preparation of the Registration Statement and
the
Prospectus, I have participated in conferences with certain officers and
employees of Southwest and with representatives of the Underwriters. My
examination of the Registration Statement and the Prospectus and my
participation in the above-mentioned conferences did not disclose to me any
information which has led me to believe that (i) the Registration Statement
(other than the exhibits thereto, the financial statements, financial statement
schedules and other financial or statistical data included therein, or
incorporated or deemed incorporated by reference therein, or omitted therefrom)
and each amendment thereto, at each deemed effective date with respect to the
Underwriters pursuant to Rule 430B(f)(2) of the 1933 Act Regulations, contained
any untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary in order to make the statements
therein not misleading, (ii) the Prospectus (other than the financial
statements, financial statement schedules and other financial or statistical
data included therein, or incorporated or deemed incorporated by reference
therein, or omitted therefrom), as of its date contained, or as of the date
hereof contains, any untrue statement of a material fact or, as of its date
omitted, or as of the date hereof omits, to state a material fact necessary
in
order to make the statements therein, in the light of the circumstances in
which
they were made, not misleading or (iii)
the
General Disclosure Package (other than the financial statements, financial
statement schedules and other financial or statistical data included therein,
or
incorporated or deemed incorporated by reference therein, or omitted therefrom),
as of the Applicable Time, contained any untrue statement of a material fact
or
omitted to state any material fact necessary in order to make the statements
therein, in the light of circumstances under which they were made, not
misleading.
Insofar
as the foregoing opinions relate to the valid existence and good standing of
Southwest, they are based solely on a certificate of existence and of good
standing received from the Secretary of State of the State of Texas and the
Comptroller of Public Accounts of the State of Texas. Insofar as the foregoing
opinions relate to qualification to do business of Southwest and the
Subsidiaries, they are based solely on certificates of foreign qualification
received from the applicable Secretary of State’s office.
The
opinions in the last sentence of paragraph 5 above are subject to (i)
bankruptcy, insolvency, fraudulent transfer, fraudulent conveyance or other
similar laws affecting the rights or remedies of creditors generally, (ii)
general principles of equity including, without limitation, laches and estoppel
as equitable defenses and concepts of materiality, reasonableness, good faith
and fair dealing (regardless of whether enforceability is considered or applied
in a proceeding in equity or at law) and (iii) the qualification that the remedy
of specific performance and injunctive and other forms of equitable relief
may
be subject to equitable defenses and to the discretion of the court before
which
any proceeding therefore may be brought.
The
foregoing opinions are limited to the federal law of the United States of
America and the law of the State of Texas, in each case as in effect on the
date
hereof, except that I express no opinion with respect to (i) the laws,
regulations or ordinances of any county, town or municipality or governmental
subdivision or agency thereof, (ii) (x) state securities or blue sky laws and
(y) except as set forth in paragraphs 7, 10, 11 and 12 above, federal securities
laws, including without limitation the Securities Act, the Exchange Act, the
Trust Indenture Act of 1939, as amended, and the Investment Company Act of
1940,
as amended, (iii) any federal or state tax, antitrust or fraudulent transfer
or
conveyance laws, and (iv) the Employee Retirement Income Security Act of 1974,
as amended. In addition, my opinions are based upon a review of those laws,
statutes, rules and regulations which, in my experience, are normally applicable
to transactions of the type contemplated by the Transaction
Documents.
A-5
The
opinions set forth above may be relied upon by Xxxxx Fargo Bank, N.A., as
Trustee under the Indenture, as fully as if this opinion letter had been
addressed to it. Otherwise, such opinions are solely for the benefit of you
and
your counsel and may not be relied upon in any manner by any other persons
without my written permission. This opinion letter speaks only as of the date
hereof and I disclaim any obligation to advise you of changes of law or fact
that occur after the date hereof.
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Very
truly yours,
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Xxxxxxx
Xxxxxxxx
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Vice
President-General Counsel
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A-6
