Exhibit 10.1
Supplemental Agreement No. 46
to
Purchase Agreement No. 1810
between
THE BOEING COMPANY
and
SOUTHWEST AIRLINES CO.
Relating to Boeing Model 737-7H4 Aircraft (the Aircraft)
     THIS SUPPLEMENTAL AGREEMENT, entered into as of January 27, 2006, by and
between THE BOEING COMPANY, a Delaware corporation with principal offices in
Seattle, Washington, (Boeing) and SOUTHWEST AIRLINES CO., a Texas corporation
with principal offices in Dallas, Texas (Buyer);
     WHEREAS, the parties hereto entered into Purchase Agreement No. 1810 dated
January 19, 1994, relating to Boeing Model 737-7H4 aircraft (the Agreement) and;
     WHEREAS, Buyer has agreed to exercise one (1) April 2007 Block U-W Option
Aircraft (April 2007 Aircraft) and exercise one (1) May 2007 Block U-W Option
Aircraft (May 2007 Aircraft) and;
     NOW THEREFORE, in consideration of the mutual covenants herein contained,
the parties agree to amend the Agreement as follows:
1. The Table of Contents of the Agreement is deleted in its entirety and a new
Table of Contents is attached hereto and incorporated into the Agreement by this
reference.
2. Table 1 is deleted in its entirety and replaced by a new Table 1 which is
attached hereto and is incorporated into the Agreement by this reference.
***Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission pursuant
to a Confidential Treatment Application filed with the Commission.

      P.A. No. 1810   SA-46-1 K/SWA    

 

--------------------------------------------------------------------------------

 

3. Table 2 is deleted in its entirety and replaced by a new Table 2 which is
attached hereto and is incorporated into the Agreement by this reference.
NOTE — Buyer now has fifty-five (55) ‘banked’ Rollover Option Aircraft as a
result of the option exercises covered by Supplemental Agreement No. 21, 23, 24,
26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45
and 46 that may be converted to Option Aircraft at a future date subject to the
terms of Letter Agreement No. 6-1162-RLL-933R19.
4. Attachment A to Letter Agreement No. 6-1162-JMG-669R6 entitled “Special
Matters” is deleted in its entirety and replaced with new Attachment A to
Agreement No. 6-1162-JMG-669R6 entitled “Special Matters” attached hereto and is
hereby incorporated into the Agreement by this reference.
5. Letter Agreement No. 6-1162-NIW-1369 entitled *** previously executed on
December 7, 2005 has been administratively incorporated into the Agreement by
this reference.
6. All references in the Letter Agreements associated with Purchase Agreement
No. 1810 shall be deemed to refer to the purchase by Buyer of two hundred
ninety-one (291) Model 737-7H4 Aircraft, thirty-two (32) Model 737-7H4 Option
Aircraft and two hundred seventeen (217) Model 737-7H4 Rollover Option Aircraft,
to the extent such reference is not specifically addressed herein.
7. The Advance Payments due upon signing assuming execution of this Supplemental
Agreement on or before January 31, 2006 are:
*** for one (1) April 2007 aircraft
*** for one (1) May 2007 aircraft
Buyer will pay the *** directly to Boeing on or before Tuesday, January 31,
2006.
8. As Boeing informed Buyer previously, the International Association of
Machinists and Aerospace Workers began a labor stoppage on September 2, 2005 and
it concluded on September 29, 2005 (The Strike). Due to the Strike impact,
Boeing currently forecasts April 2007 Aircraft to be tendered for delivery in
May 2007. Boeing will continue to evaluate the possibility of delivering April
2007 Aircraft in its Contract Delivery Month. If Boeing delays delivery of
April 2007 Aircraft, such delay is

      P.A. No. 1810   SA-46-2 K/SWA    

 

--------------------------------------------------------------------------------

 

considered to be Excusable Delay in accordance with Article 6 of the Agreement.
Further, the Advance Payment schedule for April 2007 Aircraft has been adjusted
to reflect the current forecast delivery month of May 2007.

      P.A. No. 1810   SA-46-3 K/SWA    

 

--------------------------------------------------------------------------------

 

The Agreement will be deemed to be supplemented to the extent herein provided
and as so supplemented will continue in full force and effect.
EXECUTED IN DUPLICATE as of the day and year first above written.

                  THE BOEING COMPANY   SOUTHWEST AIRLINES CO.    
 
               
 
               
By:
  /s/ Nobuko Wiles   By:   /s/ Laura Wright    
 
               
 
               
Its:
  Attorney-In-Fact   Its:   SVP Finance & CFO    
 
               

      P.A. No. 1810   SA-46-4 K/SWA    

 

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

                              Page     SA           Number     Number  
 
                    ARTICLES                
 
                   
1.
  Subject Matter of Sale     1-1     SA-13
 
                   
2.
  Delivery, Title and Risk of Loss     2-1     SA-28
 
                   
3.
  Price of Aircraft     3-1     SA-28
 
                   
4.
  Taxes     4-1          
 
                   
5.
  Payment     5-1          
 
                   
6.
  Excusable Delay     6-1          
 
                   
7.
  Changes to the Detail Specification     7-1     SA-1
 
                   
8.
  Federal Aviation Requirements and Certificates and Export License     8-1    
     
 
                   
9.
  Representatives, Inspection, Flights and Test Data     9-1          
 
                   
10.
  Assignment, Resale or Lease     10-1          
 
                   
11.
  Termination for Certain Events     11-1          
 
                   
12.
  Product Assurance; Disclaimer and Release; Exclusion of Liabilities;          
     
 
  Customer Support; Indemnification and Insurance     12-1          
 
                   
13.
  Buyer Furnished Equipment and Spare Parts     13-1          
 
                   
14.
  Contractual Notices and Requests     14-1          
 
                   
15.
  Miscellaneous     15-1          

          P.A. No. 1810   i     K/SWA       SA-46

 

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS CON’T

                      SA           Number  
 
            TABLE        
 
           
1.
  Aircraft Information Table   SA-46
 
           
2.
  Option Aircraft Information Table   SA-46
 
            EXHIBITS        
 
           
A
  Aircraft Configuration   SA-36
 
           
B
  Product Assurance Document   SA-1
 
           
C
  Customer Support Document        
 
           
D
  Price Adjustments Due to Economic Fluctuations - Aircraft   SA-13
 
           
E
  Buyer Furnished Equipment Provisions Document        
 
           
F
  Defined Terms Document        
 
           
 
            LETTER AGREEMENTS        
 
           
1810-1
  Waiver of Aircraft Demonstration Flight        

          P.A. No. 1810   ii     K/SWA       SA-46

 

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS CON’T

                      SA           Number   RESTRICTED LETTER AGREEMENTS        
 
           
6-1162-RLL-932R2
  Promotional Support   SA-13
 
           
6-1162-RLL-933R19
  Option Aircraft   SA-28
 
           
6-1162-RLL-934R3
  Disclosure of Confidential   SA-14
 
  Information        
 
           
6-1162-RLL-935R1
  Performance Guarantees   SA-1
 
           
6-1162-NIW-890
  ***   SA-39
 
           
6-1162-RLL-936R4
  Certain Contractual Matters   SA-4
 
           
6-1162-RLL-937
  Alternate Advance Payment Schedule        
 
           
6-1162-RLL-938
  ***        
 
           
6-1162-RLL-939R1
  Certification Flight Test Aircraft   SA-1
 
           
6-1162-RLL-940R1
  Training Matters   SA-1
 
           
6-1162-RLL-941R2
  Other Matters   SA-13
 
           
6-1162-RLL-942
  Open Configuration Matters        
 
           
6-1162-RLL-943R1
  Substitution Rights   SA-6
 
           
6-1162-RLL-944
  Airframe Maintenance Material Cost        
 
  Protection Program        
 
           
6-1162-RLL-945
  Comparison of 737-7H4 and 737-3H4        
 
  Block Fuel Burn        
 
           
6-1162-RLL-1855R3
  Additional Contractual Matters   SA-4
 
           
6-1162-RLL-1856
  ***   SA-1
 
           
6-1162-RLL-1857
  Service Ready Validation Program   SA-1
 
  Field Test        
 
           
6-1162-RLL-1858R1
  Escalation Matters   SA-4

          P.A. No. 1810   iii     K/SWA       SA-46

 

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS CON’T

                      SA           Number   RESTRICTED LETTER AGREEMENTS        
 
           
6-1162-RLL-2036
  Amortization of Costs for        
 
  Customer Unique Changes   SA-1
 
           
6-1162-RLL-2037
  Reconciliation of the Aircraft   SA-1
 
  Basic Price        
 
           
6-1162-RLL-2073
  Maintenance Training Matters   SA-1
 
           
6-1162-KJJ-054
  Business Matters   SA-13
 
           
6-1162-KJJ-055R1
  Structural Matters   SA-25
 
           
6-1162-KJJ-056
  Noise and Emission Matters   SA-13
 
           
6-1162-KJJ-057
  Product Development Matters   SA-13
 
           
6-1162-KJJ-058
  Additional Substitution Rights   SA-13
 
           
6-1162-KJJ-150
  Flight Control Computer & Mode   SA-14
 
  Control Panel Spares Matter        
 
           
6-1162-MSA-185R3
  Delivery Change Contractual   SA-21
 
  Matters        
 
           
6-1162-JMG-669R6
  Special Matters   SA-45
 
           
New Attachment A
      SA-46
 
           
6-1162-JMG-747R1
  ***   SA-36
 
           
6-1162-CHL-217
  Rescheduled Flight Test Aircraft   SA-32
 
           
6-1162-NIW-606R1
  ***   SA-36
 
           
6-1162-NIW-640
  Early Delivery of Two April 2004   SA-35
 
  Aircraft        
 
           
6-1162-NIW-889
  Warranty - Exterior Color Schemes   SA-39
 
  and Markings for YA143 and on        

          P.A. No. 1810   iv     K/SWA       SA-46

 

--------------------------------------------------------------------------------

 

             
6-1162-NIW-1142
  ***   SA-43
 
           
6-1162-NIW-1369
  ***   SA-46

          P.A. No. 1810   v     K/SWA       SA-46

 

--------------------------------------------------------------------------------

 

Table 1 to
Purchase Agreement No. 1810
Aircraft Information Table

                      Base Aircraft             Price     Special Features  
 
               
Block A, B, C, D & E Aircraft
    * **     * **
Block F & G Aircraft
    * **     * **
Block H Aircraft
    * **     * **
Block I Aircraft
    * **     * **
Block J Aircraft
    * **     * **
Block K Aircraft
    * **     * **
Block K-W Aircraft
    * **     * **
Block L Aircraft
    * **     * **
Block T Aircraft
    * **     * **
Block T-W Aircraft
    * **     * **
 
                Block K-W Aircraft: Block K airplanes with production winglets
installation
 
                Block T-W Aircraft: Block T airplanes with production winglets
installation

          SWA   Page 1   SA-46

 

--------------------------------------------------------------------------------

 

Table 1 to
Purchase Agreement No. 1810
Aircraft Information Table

                                              Escalation Estimate Delivery  
Number of   Aircraft   Adv Payment Base Date   Aircraft   Block   Price Per A/P
Dec-2000
    2       E       * **
Jan-2001
    1       E       * **
Feb-2001
    1       E       * **
Mar-2001
    2       E       * **
Jun-2001
    3       E       * **
Sep-2001
    3       E       * **
Oct-1998
    1       F       * **
Nov-1998
    2       F       * **
Dec-1998
    2       F       * **
Mar-1999
    2       G       * **
Jun-1999
    2       H       * **
Jul-1999
    1       H       * **
Aug-1999
    1       H       * **
Sep-1999
    2       H       * **
Oct-1999
    1       H       * **
Mar-2000
    1       H       * **
Apr-2000
    2       H       * **
Sep-2000
    1       H       * **
Oct-2000
    2       H       * **
Mar-2001
    2       H       * **
Apr-2001
    1       H       * **
Oct-2001
    3       H       * **
Nov-2001
    2       I       * **
Dec-2001
    1       I       * **
Jan-2002
    1       I       * **
Mar-2002
    4       I       * **
Apr-2002
    2       I       * **
Dec-2002
    2       I       * **
May-2003
    1       I       * **
Jun-2003
    2       I       * **
Jul-2003
    1       I       * **
Aug-2003
    1       I       * **
Sep-2003
    3       I       * **
Nov-2002
    1       J       * **
Dec-2002
    1       J       * **
Nov-2003
    2       J       * **
Dec-2003
    2       J       * **
Mar-2004
    1       J       * **
Mar-2004
    1       K       * **
Apr-2004
    3       K       * **
May-2004
    1       K       * **

          SWA   Page 2   SA-46

 

--------------------------------------------------------------------------------

 

Table 1 to
Purchase Agreement No. 1810
Aircraft Information Table

                                              Escalation Estimate Delivery  
Number of   Aircraft   Adv Payment Base Date   Aircraft   Block   Price Per A/P
Jun-2004
    2       K       * **
Jul-2004
    2       K       * **
Sep-2004
    1       K-W       * **
Oct-2004
    4       K-W       * **
Oct-1999
    1       L       * **
Nov-1999
    2       L       * **
Dec-1999
    1       L       * **
Jun-2000
    3       L       * **
Jul-2000
    3       L       * **
Sep-2000
    1       L       * **
Oct-2000
    1       L       * **
Nov-2000
    4       L       * **
Dec-2000
    1       L       * **
Jan-2001
    1       L       * **
Feb-2001
    1       L       * **
Jul-2001
    1       L       * **
Sep-2001
    1       L       * **
Oct-2001
    1       L       * **
Mar-2003
    2       L       * **
Jul-2003
    1       L       * **
Aug-2003
    2       L       * **
Nov-2001
    1       T       * **
Feb-2002
    1       T       * **
Jan-2004
    2       T       * **
Feb-2004
    1       T       * **
Apr-2004
    3       T       * **
May-2004
    1       T       * **
Jun-2004
    6       T       * **
Jul-2004
    2       T       * **
Aug-2004
    6       T-W       * **
Sep-2004
    4       T-W       * **
Oct-2004
    0       T-W       * **
Nov-2004
    3       T-W       * **
Dec-2004
    3       T-W       * **
Jan-2005
    5       T-W       * **
Feb-2005
    3       T-W       * **
Mar-2005
    4       T-W       * **
Apr-2005
    4       T-W       * **
May-2005
    2       T-W       * **
Jun-2005
    4       T-W       * **
Jul-2005
    2       T-W       * **
Aug-2005
    2       T-W       * **
Sep-2005
    3       T-W       * **
Oct-2005
    2       T-W       * **

          SWA   Page 3   SA-46

 

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Table 1 to
Purchase Agreement No. 1810
Aircraft Information Table

                                              Escalation Estimate Delivery  
Number of   Aircraft   Adv Payment Base Date   Aircraft   Block   Price Per A/P
Nov-2005
    2       T-W       * **
Dec-2005
    1       T-W       * **
Jan-2006
    1       T-W       * **
Feb-2006
    4       T-W       * **
Mar-2006
    3       T-W       * **
Apr-2006
    2       T-W       * **
May-2006
    5       T-W       * **
Jun-2006
    5       T-W       * **
Jul-2006
    3       T-W       * **
Aug-2006
    3       T-W       * **
Sep-2006
    3       T-W       * **
Oct-2006
    1       T-W       * **
Nov-2006
    2       T-W       * **
Dec-2006
    2       T-W       * **
Jan-2007
    2       T-W       * **
Feb-2007
    3       T-W       * **
Mar-2007
    2       T-W       * **
Apr-2007
    3       T-W       * **
May-2007
    3       T-W       * **
Jun-2007
    2       T-W       * **
Jul-2007
    2       T-W       * **
Aug-2007
    2       T-W       * **
Sep-2007
    2       T-W       * **
Oct-2007
    2       T-W       * **
Nov-2007
    2       T-W       * **
Dec-2007
    2       T-W       * **
Jan-2008
    1       T-W       * **
Feb-2008
    1       T-W       * **
Mar-2008
    1       T-W       * **
Apr-2008
    1       T-W       * **
May-2008
    1       T-W       * **
Jun-2008
    1       T-W       * **

          SWA   Page 4   SA-46

 

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Table 2 to Purchase Agreement No. 1810
(Letter Agreement No. 6-1162-RLL-933R19)
Option Aircraft Information Table
Price Description of Option Aircraft:

                                      Base Aircraft   Special   Aircraft Basic  
Base Year     Price   Features   Price   Dollars
Block U Option Aircraft
    * **     * **     * **   July 1999
(without Winglets)
                               
Block U-W Option Aircraft
    * **     * **     * **   July 1999
(with Winglets)
                               

Delivery of Rollover Option Aircraft:

              Number of   Option     Option   Aircraft Year of Delivery  
Aircraft   Block
2007
  Twenty (20)   Q
2008
  Twenty (20)   R
2009
  Six (6)   S
 
  One Hundred    
2009-2012
  Seventy-One (171)   V

         
Remaining Option Aircraft:
    32  

SA-46

 

--------------------------------------------------------------------------------

 

                                      Adv Payment     Aircraft   Number of  
Option   Base     Delivery   Option   Aircraft   Price Per     Mo. & Yr.  
Aircraft   Block   Option Aircraft   Option Exercise
Jun-2007
    1     U-W   ***   February 1, 2006
Jul-2007
    1     U-W   ***   March 1, 2006
Aug-2007
    1     U-W   ***   April 1, 2006
Sep-2007
    1     U-W   ***   May 1, 2006
Oct-2007
    1     U-W   ***   June 1, 2006
Nov-2007
    1     U-W   ***   July 1, 2006
Dec-2007
    1     U-W   ***   August 1, 2006
Jan-2008
    2     U-W   ***   September 1, 2006
Feb-2008
    3     U-W   ***   October 1, 2006
Mar-2008
    2     U-W   ***   November 1, 2006
Apr-2008
    2     U-W   ***   December 1, 2006
May-2008
    2     U-W   ***   January 1, 2007
Jun-2008
    2     U-W   ***   February 1, 2007
Jul-2008
    2     U-W   ***   March 1, 2007
Aug-2008
    2     U-W   ***   April 1, 2007
Sep-2008
    2     U-W   ***   May 1, 2007
Oct-2008
    2     U-W   ***   June 1, 2007
Nov-2008
    2     U-W   ***   July 1, 2007
Dec-2008
    2     U-W   ***   August 1, 2007

SA-46

 

--------------------------------------------------------------------------------

 

Southwest Airlines Co.
Attachment A to 6-1162-JMG-669R6
***

      P.A. No. 1810
K/SWA   SA-46

--------------------------------------------------------------------------------

 

(BOEING LOGO) [d35241d3524190.gif]

     
 
  The Boeing Company
 
  3855 Lakewood Blvd
 
  Long Beach, CA 90846-0001
 
  (562) 593-5511

6-1162-NIW-1369
Southwest Airlines Co.
P.O. Box 36611 — Love Field
Dallas, Texas 75235
Subject: ***
This Letter Agreement amends Purchase Agreement No. 1810 dated as of January 19,
1994 (the Agreement) between The Boeing Company (Boeing) and Southwest Airlines
Co. (Buyer) relating to Model 737-7H4 aircraft.
All terms used and not defined herein will have the same meaning as in the
Agreement.
1. ***
In consideration of Buyer’s continued exercise of Block U Option Aircraft into
firm aircraft, ***
     ***
2. Confidential Treatment
Buyer understands that certain commercial and financial information contained in
this Agreement is considered by Boeing as confidential. Buyer agrees that it
will treat this Letter and the information contained herein as confidential and
will not, without the prior written consent of Boeing, disclose this Letter
Agreement or any information contained herein to any other person or entity,
except as may be required by applicable law or government regulators.

          Very truly yours,  
 
        THE BOEING COMPANY
 
       
By
  /s/ Nobuko Wiles    
 
       
 
       
Its
  Attorney-In-Fact    
 
       

      P.A. No. 1810   SA-46

 

--------------------------------------------------------------------------------

 

(BOEING LOGO) [d35241d3524190.gif]
Southwest Airlines Co.
6-1162-NIW-1369
ACCEPTED AND AGREED TO this

         
Date:
  January 27, 2006    
 
       
 
        SOUTHWEST AIRLINES CO.
 
       
By
  /s/ Laura Wright    
 
       
 
       
Its
  SVP Finance and CFO    
 
       

      P.A. No. 1810   SA-46

 

--------------------------------------------------------------------------------

 

Supplemental Agreement No. 47
to
Purchase Agreement No. 1810
between
THE BOEING COMPANY
and
SOUTHWEST AIRLINES CO.
Relating to Boeing Model 737-7H4 Aircraft (the Aircraft)
     THIS SUPPLEMENTAL AGREEMENT, entered into as of April 20, 2006, by and
between THE BOEING COMPANY, a Delaware corporation with principal offices in
Seattle, Washington, (Boeing) and SOUTHWEST AIRLINES CO., a Texas corporation
with principal offices in Dallas, Texas (Buyer);
     WHEREAS, the parties hereto entered into Purchase Agreement No. 1810 dated
January 19, 1994, relating to Boeing Model 737-7H4 aircraft (the Agreement) and;
     WHEREAS, Buyer has agreed to exercise the following Option Aircraft:
     Year 2007 — June, July, August, September, October, November and December
     Year 2008 — January (2), February (3), March (2), April (2), May (2), June
(2), July (2), August (2), September (2), October (2), November (2) and December
     If there are more than one Aircraft in the Contract Delivery Month,
quantities are indicated in parenthesis above and;
***Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission pursuant
to a Confidential Treatment Application filed with the Commission.

          P.A. No. 1810
K/SWA   SA-47-1    

 

--------------------------------------------------------------------------------

 

          WHEREAS, Buyer has agreed to convert Rollover Option Aircraft to firm
Aircraft scheduled to deliver as follows:
     Year 2009 — January, February (2), March (2), April (2), May (2), June (2),
July (2), August, September, October, November and December
     Year 2010 — January, February, March, April, May, June, July, August,
September and October
     Year 2011— January, February, March, April, May, June, July, August,
September and October
     Year 2012— January, February, March, April, May, June, July, August,
September and October
     If there are more than one Aircraft in the Contract Delivery Month,
quantities are indicated in parenthesis above and;
          WHEREAS, Buyer has agreed to convert Rollover Option Aircraft to
Option Aircraft scheduled to deliver as follows:
     Year 2008 — January, March, July (2) and August
     Year 2009 — January (3), March (3), April (2), May, June, July (2), August
(2), September, October, November and December
     Year 2010 — January (3), February (3), March (2), April (3), May (3), June
(3), July (2), August (2), September (2), October (3), November (3) and December
(3)
     Year 2011 — January (3), February (3), March (2), April (3), May (3), June
(3), July (2), August (2), September (2), October (2), November (3) and December
(2)
     Year 2012 — January (3), February (3), March (2), April (3), May (3), June
(3), July (2), August (2), September (2), October (2), November (3) and December
(2)
     If there are more than one Aircraft in the Contract Delivery Month,
quantities are indicated in parenthesis above and;
     WHEREAS, Buyer and Boeing agreed to replace the term “Rollover Option” with
“Purchase Right” Aircraft and;
     WHEREAS, ***

          P.A. No. 1810
K/SWA   SA-47-2    

 

--------------------------------------------------------------------------------

 

     WHEREAS, Buyer and Boeing agreed to update Article 3, entitled “Price of
Aircraft” to incorporate pricing information of newly added Airplane Blocks and;
     WHEREAS, ***
     NOW THEREFORE, in consideration of the mutual covenants herein contained,
the parties agree to amend the Agreement as follows:
1. The Table of Contents of the Agreement is deleted in its entirety and a new
Table of Contents is attached hereto and incorporated into the Agreement by this
reference.
2. Article 3, entitled “Price of Aircraft”, paragraph 3.2 entitled “Aircraft
Basic Price,” and paragraph 3.3 entitled “Aircraft Price” are revised by adding
references to Block T-W Aircraft, Block T-W-1 Aircraft, Block T-W-1a Aircraft,
Block T-W-2 Aircraft and Block T-W-2a Aircraft. Such new pages 3-1 and 3-2 are
attached hereto and incorporated into the Agreement by this reference.
3. Table 1 is deleted in its entirety and replaced by a new Table 1 which is
attached hereto and is incorporated into the Agreement by this reference.
4. Table 2 is deleted in its entirety and replaced by a new Table 2 which is
attached hereto and is incorporated into the Agreement by this reference.
NOTE — Buyer had fifty-five (55) ‘banked’ Rollover Option Aircraft as a result
of the option exercises covered by Supplemental Agreement No. 21, 23, 24, 26,
27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45 and
46. In accordance with the terms of Letter Agreement No. 6-1162-RLL-933R20,
Buyer has converted such ‘banked’ Rollover Option Aircraft to Firm Aircraft /
Option Aircraft as part of this Supplemental Agreement.
5. ***
6. Letter Agreement No. 6-1162-RLL-933R19 entitled “Option Aircraft” is deleted
in its entirety and replaced with Letter Agreement No. 6-1162-RLL-933R20
entitled “Option Aircraft” attached hereto and is hereby incorporated into the
Agreement by this reference.

          P.A. No. 1810
K/SWA   SA-47-3    

 

--------------------------------------------------------------------------------

 

6. All references in the Letter Agreements associated with Purchase Agreement
No. 1810 shall be deemed to refer to the purchase by Buyer of three hundred
seventy (370) Model 737-7H4 Aircraft, one hundred sixteen (116) Model 737-7H4
Option Aircraft and fifty-four (54) Model 737-7H4 Purchase Right Aircraft, to
the extent such reference is not specifically addressed herein.
7. The Advance Payments for Firm Aircraft due upon signing assuming execution of
this Supplemental Agreement on or before April 28, 2006 are:
***for 79 Firm Aircraft
     The Deposit for Option Aircraft due upon signing assuming execution of this
Supplemental Agreement on or before April 28, 2006 is:
*** for 115 Option Aircraft ***
Buyer will pay the *** directly to Boeing on or before Friday, April 28, 2006.
8. As Boeing informed Buyer previously, the International Association of
Machinists and Aerospace Workers began a labor stoppage on September 2, 2005 and
it concluded on September 29, 2005 (The Strike). Due to the Strike impact,
Boeing currently forecasts one December 2007 Aircraft bearing Manufactures
Serial Number 36615 (December 2007 Aircraft) to be tendered for delivery in
January 2008. Boeing will continue to evaluate the possibility of delivering
December 2007 Aircraft in its Contract Delivery Month. If Boeing delays delivery
of December 2007 Aircraft, such delay is considered to be Excusable Delay in
accordance with Article 6 of the Agreement. Further, the Advance Payment
schedule for December 2007 Aircraft has been adjusted to reflect the current
forecast delivery month of January 2008.

          P.A. No. 1810
K/SWA   SA-47-4    

 

--------------------------------------------------------------------------------

 

The Agreement will be deemed to be supplemented to the extent herein provided
and as so supplemented will continue in full force and effect.
EXECUTED IN DUPLICATE as of the day and year first above written.

                  THE BOEING COMPANY       SOUTHWEST AIRLINES CO.
 
               
By:
  /s/ Nobuku Wiles       By:   Laura Wright
 
               
 
               
Its:
  Attorney-In-Fact       Its:   SVP Finance & CFO
 
               

          P.A. No. 1810
K/SWA   SA-47-5    

 

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

                              Page     SA           Number     Number   ARTICLES
 
 
                   
 
                1.  
Subject Matter of Sale
    1-1     SA-13    
 
                2.  
Delivery, Title and Risk of Loss
    2-1     SA-28    
 
                3.  
Price of Aircraft
    3-1     SA-47    
 
                4.  
Taxes
    4-1              
 
                5.  
Payment
    5-1              
 
                6.  
Excusable Delay
    6-1              
 
                7.  
Changes to the Detail Specification
    7-1     SA-1    
 
                8.  
Federal Aviation Requirements and Certificates and Export License
    8-1              
 
                9.  
Representatives, Inspection, Flights and Test Data
    9-1              
 
                10.  
Assignment, Resale or Lease
    10-1              
 
                11.  
Termination for Certain Events
    11-1              
 
                12.  
Product Assurance; Disclaimer and Release; Exclusion of Liabilities; Customer
Support; Indemnification and Insurance
    12-1              
 
                13.  
Buyer Furnished Equipment and Spare Parts
    13-1              
 
                14.  
Contractual Notices and Requests
    14-1              
 
                15.  
Miscellaneous
    15-1          

          P.A. No. 1810   i    

SA-47

 

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS CON’T

                      SA           Number   TABLE  
 
           
 
        1.  
Aircraft Information Table
  SA-47    
 
        2.  
Option Aircraft Information Table
  SA-47    
 
        EXHIBITS  
 
           
 
        A  
Aircraft Configuration
  SA-47    
 
        B  
Product Assurance Document
  SA-1    
 
        C  
Customer Support Document
           
 
        D  
Price Adjustments Due to Economic Fluctuations — Aircraft
           
 
        E  
Buyer Furnished Equipment Provisions Document
           
 
        F  
Defined Terms Document
           
 
           
 
        LETTER AGREEMENTS    
 
        1810-1   Waiver of Aircraft Demonstration Flight        

          P.A. No. 1810   ii    

SA-47

 

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS CON’T

                      SA           Number   RESTRICTED LETTER AGREEMENTS    
 
        6-1162-RLL-932R2  
Promotional Support
  SA-13    
 
        6-1162-RLL-933R20  
***
  SA-47    
 
        6-1162-RLL-934R3  
Disclosure of Confidential Information
  SA-14    
 
        6-1162-RLL-935R1  
Performance Guarantees
  SA-1    
 
        6-1162-NIW-890  
***
  SA-39    
 
        6-1162-RLL-936R4  
Certain Contractual Matters
  SA-4    
 
        6-1162-RLL-937  
Alternate Advance Payment Schedule
           
 
        6-1162-RLL-938  
***
           
 
        6-1162-RLL-939R1  
Certification Flight Test Aircraft
  SA-1    
 
        6-1162-RLL-940R1  
Training Matters
  SA-1    
 
        6-1162-RLL-941R2  
Other Matters
  SA-13    
 
        6-1162-RLL-942  
Open Configuration Matters
           
 
        6-1162-RLL-943R1  
Substitution Rights
  SA-6    
 
        6-1162-RLL-944  
Airframe Maintenance Material Cost Protection Program
           
 
        6-1162-RLL-945  
Comparison of 737-7H4 and 737-3H4 Block Fuel Burn
           
 
        6-1162-RLL-1855R3  
Additional Contractual Matters
  SA-4    
 
        6-1162-RLL-1856  
***
  SA-1    
 
        6-1162-RLL-1857  
Service Ready Validation Program Field Test
  SA-1    
 
        6-1162-RLL-1858R1  
Escalation Matters
  SA-4

          P.A. No. 1810   iii    

SA-47

 

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS CON’T

                      SA           Number   RESTRICTED LETTER AGREEMENTS    
 
        6-1162-RLL-2036  
Amortization of Costs for Customer Unique Changes
  SA-1    
 
        6-1162-RLL-2037  
Reconciliation of the Aircraft Basic Price
  SA-1    
 
        6-1162-RLL-2073  
Maintenance Training Matters
  SA-1    
 
        6-1162-KJJ-054R1  
Business Matters
           
 
        6-1162-KJJ-055R1  
Structural Matters
  SA-25    
 
        6-1162-KJJ-056  
Noise and Emission Matters
  SA-13    
 
        6-1162-KJJ-057  
Product Development Matters
  SA-13    
 
        6-1162-KJJ-058  
Additional Substitution Rights
  SA-13    
 
        6-1162-KJJ-150  
Flight Control Computer & Mode Control Panel Spares Matter
  SA-14    
 
        6-1162-MSA-185R3  
Delivery Change Contractual Matters
  SA-21    
 
        New Attachment A   SA-46    
 
        6-1162-JMG-669R7  
***
  SA-47    
 
        6-1162-JMG-747R1  
***
  SA-36    
 
        6-1162-CHL-217  
Rescheduled Flight Test Aircraft
  SA-32    
 
        6-1162-NIW-606R1  
***
  SA-36    
 
        6-1162-NIW-640  
Early Delivery of Two April 2004 Aircraft
  SA-35    
 
        6-1162-NIW-889  
Warranty — Exterior Color Schemes and Markings for YA143 and on
  SA-39    
 
        6-1162-NIW-1142  
***
  SA-43    
 
        6-1162-NIW-1369  
***
  SA-46

          P.A. No. 1810   iv    

SA-47

 

--------------------------------------------------------------------------------

 

Table 1 to
Purchase Agreement No. 1810
Aircraft Information Table

                                                      Aircraft Basic   Base Year
    Base Aircraft Price   Special Features   Price   Dollars
 
                               
Block A, B, C, D & E Aircraft
    * **     * **     * **   July 1992
 
                               
Block F & G Aircraft
    * **     * **     * **   July 1992
 
                               
Block H Aircraft
    * **     * **     * **   July 1992
 
                               
Block I Aircraft
    * **     * **     * **   July 1992
 
                               
Block J Aircraft
    * **     * **     * **   July 1992
 
                               
Block K Aircraft
    * **     * **     * **   July 1992
 
                               
Block K-W Aircraft
    * **     * **     * **   July 1992
 
                               
Block L Aircraft
    * **     * **     * **   July 1992
 
                               
Block T Aircraft
    * **     * **     * **   July 1999
 
                               
Block T-W Aircraft
    * **     * **     * **   July 1999
 
                               
Block T-W-1 / T-W-1a Aircraft
    * **     * **     * **   July 1999
 
                               
Block T-W-2 / T-W-2a Aircraft
    * **     * **     * **   July 1999
 
                               

Block K-W Aircraft: Block K airplanes with production winglets installation
Block T-W Aircraft: Block T airplanes with production winglets installation
Block T-W-1 / T-W-1a Aircraft: Firm Aircraft contracted to deliver from May 1,
2006 through June 2008 at the signing of SA-47 — (T-W-1a Aircraft — Advance
Payment Schedule per LA 6-1162-JGM-669)
Block T-W-2 / T-W-2a Aircraft: U-W-1 Option Aircraft which becomes Firm Aircraft
after signing of SA-47 and
Firm Aircaft contracted to deliver in July 2008 and on at the signing of SA47 —
(T-W-2a Aircraft — Advance Payment Schedule per LA 6-1162-JGM-669)

 

--------------------------------------------------------------------------------

 

Table 1 to
Purchase Agreement No. 1810
Aircraft Information Table

                                      Escalation Estimate     Delivery   Number
of   Aircraft   Adv Payment Base     Date   Aircraft   Block   Price Per A/P  
Serial Number
Dec-2000
    2     E   ***    
Jan-2001
    1     E   ***    
Feb-2001
    1     E   ***    
Mar-2001
    2     E   ***    
Jun-2001
    3     E   ***    
Sep-2001
    3     E   ***    
Oct-1998
    1     F   ***    
Nov-1998
    2     F   ***    
Dec-1998
    2     F   ***    
Mar-1999
    2     G   ***    
Jun-1999
    2     H   ***    
Jul-1999
    1     H   ***    
Aug-1999
    1     H   ***    
Sep-1999
    2     H   ***    
Oct-1999
    1     H   ***    
Mar-2000
    1     H   ***    
Apr-2000
    2     H   ***    
Sep-2000
    1     H   ***    
Oct-2000
    2     H   ***    
Mar-2001
    2     H   ***    
Apr-2001
    1     H   ***    
Oct-2001
    3     H   ***    
Nov-2001
    2     I   ***    
Dec-2001
    1     I   ***    
Jan-2002
    1     I   ***    
Mar-2002
    4     I   ***    
Apr-2002
    2     I   ***    
Dec-2002
    2     I   ***    
May-2003
    1     I   ***    
Jun-2003
    2     I   ***    
Jul-2003
    1     I   ***    
Aug-2003
    1     I   ***    
Sep-2003
    3     I   ***    
Nov-2002
    1     J   ***    
Dec-2002
    1     J   ***    
Nov-2003
    2     J   ***    
Dec-2003
    2     J   ***    
Mar-2004
    1     J   ***    
Mar-2004
    1     K   ***    
Apr-2004
    3     K   ***    

 

--------------------------------------------------------------------------------

 

Table 1 to
Purchase Agreement No. 1810
Aircraft Information Table

                                      Escalation Estimate     Delivery   Number
of   Aircraft   Adv Payment Base     Date   Aircraft   Block   Price Per A/P  
Serial Number
May-2004
    1     K   ***    
Jun-2004
    2     K   ***    
Jul-2004
    2     K   ***    
Sep-2004
    1     K-W   ***    
Oct-2004
    4     K-W   ***    
Oct-1999
    1     L   ***    
Nov-1999
    2     L   ***    
Dec-1999
    1     L   ***    
Jun-2000
    3     L   ***    
Jul-2000
    3     L   ***    
Sep-2000
    1     L   ***    
Oct-2000
    1     L   ***    
Nov-2000
    4     L   ***    
Dec-2000
    1     L   ***    
Jan-2001
    1     L   ***    
Feb-2001
    1     L   ***    
Jul-2001
    1     L   ***    
Sep-2001
    1     L   ***    
Oct-2001
    1     L   ***    
Mar-2003
    2     L   ***    
Jul-2003
    1     L   ***    
Aug-2003
    2     L   ***    
Nov-2001
    1     T   ***    
Feb-2002
    1     T   ***    
Jan-2004
    2     T   ***    
Feb-2004
    1     T   ***    
Apr-2004
    3     T   ***    
May-2004
    1     T   ***    
Jun-2004
    6     T   ***    
Jul-2004
    2     T   ***    
Aug-2004
    6     T-W   ***    
Sep-2004
    4     T-W   ***    
Oct-2004
    0     T-W   ***    
Nov-2004
    3     T-W   ***    
Dec-2004
    3     T-W   ***    
Jan-2005
    5     T-W   ***    
Feb-2005
    3     T-W   ***    
Mar-2005
    4     T-W   ***    
Apr-2005
    4     T-W   ***    
May-2005
    2     T-W   ***    
Jun-2005
    4     T-W   ***    
Jul-2005
    2     T-W   ***    
Aug-2005
    2     T-W   ***    
Sep-2005
    3     T-W   ***    

 

--------------------------------------------------------------------------------

 

Table 1 to
Purchase Agreement No. 1810
Aircraft Information Table

                                      Escalation Estimate     Delivery   Number
of   Aircraft   Adv Payment Base     Date   Aircraft   Block   Price Per A/P  
Serial Number
Oct-2005
    2     T-W   ***    
Nov-2005
    2     T-W   ***    
Dec-2005
    1     T-W   ***    
Jan-2006
    1     T-W   ***    
Feb-2006
    4     T-W   ***    
Mar-2006
    3     T-W   ***    
Apr-2006
    2     T-W   ***    
May-2006
    5     T-W-1   ***    
Jun-2006
    5     T-W-1   ***    
Jul-2006
    3     T-W-1   ***    
Aug-2006
    3     T-W-1   ***    
Sep-2006
    3     T-W-1   ***    
Oct-2006
    1     T-W-1   ***    
Nov-2006
    2     T-W-1   ***    
Dec-2006
    2     T-W-1   ***    
Jan-2007
    2     T-W-1   ***    
Feb-2007
    3     T-W-1   ***    
Mar-2007
    2     T-W-1   ***    
Apr-2007
    3     T-W-1   ***    
May-2007
    3     T-W-1   ***    
Jun-2007
    2     T-W-1   ***    
Jun-2007
    1     T-W-1a   ***   ***
Jul-2007
    2     T-W-1   ***    
Jul-2007
    1     T-W-1a   ***   ***
Aug-2007
    2     T-W-1   ***    
Aug-2007
    1     T-W-1a   ***   ***
Sep-2007
    2     T-W-1   ***    
Sep-2007
    1     T-W-1a   ***   ***
Oct-2007
    2     T-W-1   ***    
Oct-2007
    1     T-W-1a   ***   ***
Nov-2007
    2     T-W-1   ***    
Nov-2007
    1     T-W-1a   ***   ***
Dec-2007
    2     T-W-1   ***    
Dec-2007
    1     T-W-1a   ***   ***
Jan-2008
    1     T-W-1   ***    
Jan-2008
    2     T-W-1a   ***   ***
Feb-2008
    1     T-W-1   ***    
Feb-2008
    3     T-W-1a   ***   ***
Mar-2008
    1     T-W-1   ***    
Mar-2008
    2     T-W-1a   ***   ***
Apr-2008
    1     T-W-1   ***    
Apr-2008
    2     T-W-1a   ***   ***
May-2008
    1     T-W-1   ***    
May-2008
    2     T-W-1a   ***   ***

 

--------------------------------------------------------------------------------

 

Table 1 to
Purchase Agreement No. 1810
Aircraft Information Table

                                      Escalation Estimate     Delivery   Number
of   Aircraft   Adv Payment Base     Date   Aircraft   Block   Price Per A/P  
Serial Number
Jun-2008
    1     T-W-1   ***    
Jun-2008
    2     T-W-1a   ***   ***
Jul-2008
    2     T-W-2a   ***    
Aug-2008
    2     T-W-2a   ***    
Sep-2008
    2     T-W-2a   ***    
Oct-2008
    2     T-W-2a   ***    
Nov-2008
    2     T-W-2a   ***    
Dec-2008
    1     T-W-2a   ***    
Jan-2009
    1     T-W-2a   ***    
Feb-2009
    2     T-W-2a   ***    
Mar-2009
    2     T-W-2a   ***    
Apr-2009
    2     T-W-2a   ***    
May-2009
    2     T-W-2a   ***    
Jun-2009
    2     T-W-2a   ***    
Jul-2009
    2     T-W-2a   ***    
Aug-2009
    1     T-W-2a   ***    
Sep-2009
    1     T-W-2a   ***    
Oct-2009
    1     T-W-2a   ***    
Nov-2009
    1     T-W-2a   ***    
Dec-2009
    1     T-W-2a   ***    
Jan-2010
    1     T-W-2a   ***    
Feb-2010
    1     T-W-2a   ***    
Mar-2010
    1     T-W-2a   ***    
Apr-2010
    1     T-W-2a   ***    
May-2010
    1     T-W-2a   ***    
Jun-2010
    1     T-W-2a   ***    
Jul-2010
    1     T-W-2a   ***    
Aug-2010
    1     T-W-2a   ***    
Sep-2010
    1     T-W-2a   ***    
Oct-2010
    1     T-W-2a   ***    
Jan-2011
    1     T-W-2a   ***    
Feb-2011
    1     T-W-2a   ***    
Mar-2011
    1     T-W-2a   ***    
Apr-2011
    1     T-W-2a   ***    
May-2011
    1     T-W-2a   ***    
Jun-2011
    1     T-W-2a   ***    
Jul-2011
    1     T-W-2a   ***    
Aug-2011
    1     T-W-2a   ***    
Sep-2011
    1     T-W-2a   ***    
Oct-2011
    1     T-W-2a   ***    
Jan-2012
    1     T-W-2a   ***    
Feb-2012
    1     T-W-2a   ***    
Mar-2012
    1     T-W-2a   ***    
Apr-2012
    1     T-W-2a   ***    

 

--------------------------------------------------------------------------------

 

Table 1 to
Purchase Agreement No. 1810
Aircraft Information Table

                                      Escalation Estimate     Delivery   Number
of   Aircraft   Adv Payment Base     Date   Aircraft   Block   Price Per A/P  
Serial Number
May-2012
    1     T-W-2a   ***    
Jun-2012
    1     T-W-2a   ***    
Jul-2012
    1     T-W-2a   ***    
Aug-2012
    1     T-W-2a   ***    
Sep-2012
    1     T-W-2a   ***    
Oct-2012
    1     T-W-2a   ***    

 

--------------------------------------------------------------------------------

 

Table 2 to Purchase Agreement No. 1810
(Letter Agreement No. 6-1162-RLL-933R19)
Option Aircraft Information Table
Price Description of Option Aircraft:

                                      Base Aircraft   Special   Aircraft Basic  
Base Year     Price   Features   Price   Dollars
 
                               
Block U Option Aircraft
    * **     * **     * **   July 1999
(without Winglets)
                               
 
                               
Block U-W Option Aircraft
    * **     * **           July 1999
(with Winglets)
                               
 
                               
Block U-W-1 Option Aircraft
    * **     * **     * **   July 1999

             
Delivery of Purchase Right Aircraft:
  Quantity     54  
 
           
Delivery Period of Purchase Right Aircraft:
  Complete delivery not later than Dec. 31, 2014
 
           
Condition of Offer for Purchase Right Aircraft:
  Subject to Available Position        

          Remaining Option
Aircraft:   116    

 

--------------------------------------------------------------------------------

 

Table 2 to Purchase Agreement No. 1810
(Letter Agreement No. 6-1162-RLL-933R19)
Option Aircraft Information Table

                      Aircraft   Number of   Option   Adv Payment Base    
Delivery   Option   Aircraft   Price Per     Mo. & Yr.   Aircraft   Block  
Option Aircraft   Option Exercise
Jan-2008
    1     U-W-1   ***   September 1, 2006
Mar-2008
    1     U-W-1   ***   November 1, 2006
Jul-2008
    2     U-W-1   ***   March 1, 2007
Aug-2008
    1     U-W-1   ***   April 2, 2007
Dec-2008
    1     U-W-1   ***   August 1, 2007
Jan-2009
    3     U-W-1   ***   September 3, 2007
Mar-2009
    3     U-W-1   ***   November 1, 2007
Apr-2009
    2     U-W-1   ***   December 3, 2007
May-2009
    1     U-W-1   ***   January 1, 2008
Jun-2009
    1     U-W-1   ***   February 1, 2008
Jul-2009
    2     U-W-1   ***   March 3, 2008
Aug-2009
    2     U-W-1   ***   April 1, 2008
Sep-2009
    1     U-W-1   ***   May 1, 2008
Oct-2009
    1     U-W-1   ***   June 2, 2008
Nov-2009
    1     U-W-1   ***   July 1, 2008
Dec-2009
    1     U-W-1   ***   August 1, 2008
Jan-2010
    3     U-W-1   ***   September 1, 2008
Feb-2010
    3     U-W-1   ***   October 1, 2008
Mar-2010
    2     U-W-1   ***   November 3, 2008
Apr-2010
    3     U-W-1   ***   December 1, 2008
May-2010
    3     U-W-1   ***   January 1, 2009
Jun-2010
    3     U-W-1   ***   February 2, 2009
Jul-2010
    2     U-W-1   ***   March 2, 2009
Aug-2010
    2     U-W-1   ***   April 1, 2009
Sep-2010
    2     U-W-1   ***   May 1, 2009
Oct-2010
    3     U-W-1   ***   June 1, 2009
Nov-2010
    3     U-W-1   ***   July 1, 2009
Dec-2010
    3     U-W-1   ***   August 3, 2009
Jan-2011
    3     U-W-1   ***   September 1, 2009
Feb-2011
    3     U-W-1   ***   October 1, 2009
Mar-2011
    2     U-W-1   ***   November 2, 2009
Apr-2011
    3     U-W-1   ***   December 1, 2009
May-2011
    3     U-W-1   ***   January 1, 2010
Jun-2011
    3     U-W-1   ***   February 1, 2010
Jul-2011
    2     U-W-1   ***   March 1, 2010
Aug-2011
    2     U-W-1   ***   April 1, 2010
Sep-2011
    2     U-W-1   ***   May 3, 2010
Oct-2011
    2     U-W-1   ***   June 1, 2010
Nov-2011
    3     U-W-1   ***   July 1, 2010

 

--------------------------------------------------------------------------------

 

Table 2 to Purchase Agreement No. 1810
(Letter Agreement No. 6-1162-RLL-933R19)
Option Aircraft Information Table

                      Aircraft   Number of   Option   Adv Payment Base    
Delivery   Option   Aircraft   Price Per     Mo. & Yr.   Aircraft   Block  
Option Aircraft   Option Exercise
Dec-2011
    2     U-W-1   ***   August 2, 2010
Jan-2012
    3     U-W-1   ***   September 1, 2010
Feb-2012
    3     U-W-1   ***   October 1, 2010
Mar-2012
    2     U-W-1   ***   November 1, 2010
Apr-2012
    3     U-W-1   ***   December 1, 2010
May-2012
    3     U-W-1   ***   January 3, 2011
Jun-2012
    3     U-W-1   ***   February 1, 2011
Jul-2012
    2     U-W-1   ***   March 1, 2011
Aug-2012
    2     U-W-1   ***   April 1, 2011
Sep-2012
    2     U-W-1   ***   May 2, 2011
Oct-2012
    2     U-W-1   ***   June 1, 2011
Nov-2012
    3     U-W-1   ***   July 1, 2011
Dec-2012
    2     U-W-1   ***   August 1, 2011

 

--------------------------------------------------------------------------------

 

6-1162-JMG-669R7
Southwest Airlines Co.
P.O. Box 36611 — Love Field
Dallas, Texas 75235

     
Subject:
  ***

This Letter Agreement amends Purchase Agreement No. 1810 dated as of January 19,
1994 (the Agreement) between The Boeing Company (Boeing) and Southwest Airlines
Co. (Buyer) relating to Model 737 aircraft:
1) ***
2) ***
All terms used and not defined herein will have the same meaning as in the
Agreement.

1.   ***   2.   ***   3.   ***   4.   ***   5.   ***   6.   ***   7.   ***

Consistent with the spirit of the Letter dated May 4,

8.   ***

      P.A. No. 1810   SA-47 K/SWA    

 

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Southwest Airlines Co.
6-1162-JMG-669R7

9.   ***   10.   ***   11.   ***   12.   ***   13.   ***.   14.   Confidential
Treatment.

Buyer understands that certain commercial and financial information contained in
this Letter Agreement including any attachments hereto is considered by Boeing
as confidential. Buyer agrees that it will treat this Letter Agreement and the
information contained herein as confidential and will not, without the prior
written consent of Boeing, disclose this Letter Agreement or any information
contained herein to any other person or entity except as provided in Letter
Agreement No. 6-1162-RLL-934, as amended.

      P.A. No. 1810   SA-47 K/SWA    

 

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Southwest Airlines Co.
6-1162-JMG-669R7

          Very truly yours,
 
        THE BOEING COMPANY
 
       
 
       
By
  /s/ Nobuko Wiles    
 
       
 
       
Its
  Attorney-In-Fact    
 
       
 
       
 
        ACCEPTED AND AGREED TO this
 
        date: April 20, 2006
 
        SOUTHWEST AIRLINES CO.
 
       
 
       
By:
  Laura Wright    
 
       
 
       
Its
  SVP Finance and CFO    
 
       

      P.A. No. 1810   SA-47 K/SWA    

 

--------------------------------------------------------------------------------

 

Southwest Airlines Co. Attachment A to 6-1162-JMG-669R7
***

P.A. No. 1810
K/SWA   SA-47

 

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6-1162-RLL-933R20
Southwest Airlines Co.
P.O. Box 36611 — Love Field
Dallas, Texas 75235

Subject:   Letter Agreement No. 6-1162-RLL-933R20 to Purchase Agreement No. 1810
— ***

This Letter Agreement amends Purchase Agreement No. 1810 dated as of January 19,
1994 (the Agreement) between The Boeing Company (Boeing) and Southwest Airlines
Co. (Buyer) relating to Model 737-7H4 aircraft (Aircraft).
All terms used and not defined herein will have the same meaning as in the
Agreement.
In consideration of the purchase by Buyer of the Aircraft, Boeing hereby agrees
to manufacture and sell to Buyer and Buyer shall have the option to purchase
(Option or Options) the additional Model 737-7H4 aircraft as described in
paragraph 1 of Attachment A hereto and listed in Table 2 of the Agreement
(Option Aircraft) and Model 737-7H4 Purchase Right Aircraft summarized in Table
2 of the Agreement (Purchase Right Aircraft), subject to the terms and
conditions set forth below. For the avoidance of doubt, Buyer and Boeing hereby
agree to replace the term “Rollover Option Aircraft” with “Purchase Right
Aircraft” at the execution of Supplemental Agreement No. 47 to the Agreement.

1.   Delivery of Option Aircraft.

     The Option Aircraft will be delivered to Buyer during or before the months
set forth in Table 2 of the Agreement.

2.   Delivery of Purchase Right Aircraft.

     2.1 The Purchase Right Aircraft are offered subject to available position
during the period set forth in Table 2 of the Agreement. For the avoidance of
any doubt, Buyer and Boeing hereby agree that the delivery of Purchase Right
Aircraft shall be completed by not later than December 31, 2014.
     2.2 ***

P.A. No. 1810
K/SWA   SA-47

 

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Southwest Airlines Co.
6-1162-RLL-933R20 Page 2
     2.3 Base Price Adjustments for Purchase Right Aircraft which are converted
to Option Aircraft or firm Aircraft shall be in accordance with Article 2.2.5 of
Attachment A to this Letter Agreement.
     2.4 Upon conversion of a Purchase Right Aircraft into an Option Aircraft,
Buyer shall wire transfer the Deposit of *** to Boeing and Boeing and Buyer
shall agree on a delivery position for that aircraft. Table 2 of the Agreement
will be amended accordingly. In the event Buyer thereafter exercises its right
to purchase such Option Aircraft, application of the Deposit will be in
accordance with Article 4.1 herein. If the conversion is a Purchase Right
Aircraft to a firm Aircraft, Buyer shall wire transfer any advance payments due
under the Agreement.
     2.5 Buyer and Boeing will consult on a frequent basis to keep each other
informed as to Buyer’s fleet plans and Boeing’s production plans in order to
accommodate to the greatest extent reasonably possible each party’s needs in
managing the delivery schedule for Purchase Right Aircraft and will use its best
reasonable efforts to meet Buyer’s needs.

3.   Price.

     3.1 The advance payment base prices of the Option Aircraft are set forth in
Table 2 of the Agreement. The Option Aircraft pricing elements and associated
pricing terms and conditions are given in Attachment A.
     3.2 The Advance Payment Base Prices of the Option Aircraft indicated in
Table 2 do include an amount for special features in addition to those
specifically described in Attachment A but do not include any amount for items
of Buyer Furnished Equipment (BFE). An estimate for typical special features is
*** per Aircraft (expressed in 1992 STE dollars) or *** per Aircraft (expressed
in 1999 STE dollars). Table 2 in the Agreement lists the Advance Payment Base
Price per Option Aircraft.
     3.3 The Option Aircraft purchase price will be the applicable basic price
thereof at the time of Option Aircraft delivery adjusted in accordance with
Boeing’s Aircraft escalation provisions contained in the definitive agreement to
purchase the Option Aircraft. The purchase price will include the price for
Seller Purchased Equipment (SPE) if Buyer has elected to change Buyer Furnished
Equipment (BFE) to SPE.

P.A. No. 1810
K/SWA   SA-47

 

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Southwest Airlines Co.
6-1162-RLL-933R20 Page 3

4.   Option Aircraft Payment.

     4.1 In consideration of the granting of the Options as set forth herein, on
or before the date Boeing and Buyer enter into a definitive agreement to
purchase the Aircraft, Buyer will pay a deposit to Boeing of for each Option
Aircraft (Deposit). In the event Buyer exercises its Options herein, the amount
of the Deposit will be credited against the first advance payment due for such
Option Aircraft pursuant to the advance payment schedule set forth in paragraph
3 of Attachment A. The Deposits for the Option Aircraft will be refunded to
Buyer, without interest, if the parties do not enter into a definitive Agreement
for the Aircraft.
In the event that, after the parties enter into a definitive agreement to
purchase the Aircraft, Buyer does not exercise its Options to purchase the
Option Aircraft pursuant to the terms and conditions set forth herein, Boeing
will be entitled to retain the Deposits for the Option Aircraft except as
provided in paragraph 6 herein.
     4.2 Advance payments in the amount of 30% of the advance payment base price
will be payable on the Option Aircraft in accordance with paragraph 3 of
Attachment A. The remainder of the Option Aircraft purchase price is due at the
time of delivery of the Option Aircraft.

5.   Option Exercise.

     5.1 To exercise its Option, Buyer will give written or telegraphic notice
thereof to Boeing on or before sixteen (16) months prior to the first day of the
delivery month of each Option Aircraft.
In such notice Buyer will select the Option Model type, and the applicable
delivery positions. Table 2 of the Agreement lists the Option Exercise dates.
     5.2 It is understood and agreed that Boeing may accelerate the Option
exercise dates specified above if Boeing must make production decisions which
are dependent on Buyer’s decision to buy the Option Aircraft. If Boeing elects
to accelerate the Option exercise dates, Boeing will do so by giving written or
telegraphic notice thereof to Buyer. Such notice will specify the revised Option
exercise dates, which will not be earlier than 30 days after the date of
transmittal of such notice, and the Option Aircraft

P.A. No. 1810
K/SWA   SA-47

 

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Southwest Airlines Co.
6-1162-RLL-933R20 Page 4
delivery positions affected by such revision. If Buyer fails to exercise its
Option for any Option Aircraft affected by such revised dates, the Deposit
applicable to such Option Aircraft will be promptly refunded, with interest, to
Buyer. The interest rate for calculation of the interest associated with such
refund is the rate of two percent (2%) below the Citibank base rate in effect
from time to time during the period the Option deposit is held by Boeing.

6.   Contract Terms.

     It is understood that Boeing and Buyer will use their best efforts to enter
into a definitive agreement for the Option Aircraft within thirty (30) days
after Buyer exercises an Option to purchase Option Aircraft pursuant to
paragraph 5 covering the detailed terms and conditions for the sale of such
Option Aircraft.
Such definitive agreement will include the terms and conditions contained herein
together with the terms and conditions, not inconsistent herewith, contained in
Boeing’s then-current standard form of purchase agreement for the sale of Model
737-700 aircraft in effect as of the date of Option exercise and such additional
terms and conditions as may be mutually agreed upon. In the event the parties
have not entered into such an agreement within the time period contemplated
herein, either party may, exercisable by written or telegraphic notice given to
the other within thirty (30) days after such period, terminate the purchase of
such Option Aircraft.

7.   Termination of Option to Purchase.

     Either Boeing or Buyer may terminate the Options to purchase an Option
Aircraft if any of the following events are not accomplished by the respective
dates contemplated in this letter agreement, or in the Agreement, as the case
may be:
     (i) termination of the purchase of the Aircraft under the Agreement for any
reason;
     (ii) payment by Buyer of the Deposit with respect to an Option Aircraft
pursuant to paragraph 4.1 herein;
     (iii) exercise of an Option to purchase an Option Aircraft pursuant to the
terms hereof.
     Any termination of an Option to purchase by Boeing which is based on the
termination of the purchase of

P.A. No. 1810
K/SWA   SA-47

 

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Southwest Airlines Co.
6-1162-RLL-933R20 Page 5
Aircraft under the Agreement will be on a one-for-one basis, for each Aircraft
so terminated.
Any cancellation of an Option to purchase which is based on failure to make the
required Deposit or to exercise the Option to purchase shall only apply to the
Option Aircraft so canceled.
Termination of an Option to purchase provided by this letter agreement will be
caused by either party giving written notice to the other within 10 days after
the applicable date. Upon receipt of such notice, all rights and obligations of
the parties with respect to an Option Aircraft for which the Option to purchase
has been terminate will thereupon terminate.
If termination is result of a revision of an Option exercise date by Boeing
pursuant to paragraph 5.2, Boeing will promptly refund to Buyer, with interest,
any payments received from Buyer, including the Deposit, with respect to the
Option Aircraft for which the Option is terminated. If termination is for any
other reason, Boeing will promptly refund to Buyer, without interest, any
payments received from Buyer with respect to the affected Option Aircraft,
except the Deposit, which Buyer may apply to any model Boeing aircraft purchased
by Buyer from Boeing at a future date.

P.A. No. 1810
K/SWA   SA-47

 

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Southwest Airlines Co.
6-1162-RLL-933R20 Page 6
8. Confidential Treatment. Buyer understands that certain commercial and
financial information contained in this Letter Agreement including any
attachments hereto is considered by Boeing as confidential. Buyer agrees that it
will treat this Letter Agreement and the information contained herein as
confidential and will not, without the prior written consent of Boeing, disclose
this Letter Agreement or any information contained herein to any other person or
entity except as provided in Letter Agreement No. 6-1162-RLL-934, as amended.

          Very truly yours,    
 
        THE BOEING COMPANY    
 
       
By
  /s/ Nobuko Wiles    
 
       
Its
  Attorney-In-Fact    
 
       
 
        ACCEPTED AND AGREED TO this    
date:
  April 20, 2006    
 
        SOUTHWEST AIRLINES CO.    
 
       
By
  /s/ Laura Wright    
 
       
Its
  SVP Finance & CFO    
 
       
 
        Attachments    

P.A. No. 1810
K/SWA   SA-47

 

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Attachment A to
6-1162-RLL-933R20
Page 1
Model 737-7H4 Aircraft

1.   Option Aircraft Description and Changes.

     1.1 Aircraft Description. The Option Aircraft is described by Boeing Detail
Specification D6-38808-1, Dated October 30 ,1996, for Block “U” Option Aircraft
by Boeing Detail Specification D6-38808-1, Rev. A, Dated February 24, 1998, and
for Block “U-W-1” Option Aircraft by Boeing Detail Specification D6-38808-1,
Rev. G, Dated July 26, 2005.
     1.2 Changes. The Detail Specification will be revised to include:
          (1) Changes applicable to the basic Model 737-700 aircraft which are
developed by Boeing between the date of the Detail Specification and the signing
of a definitive agreement to purchase the Option Aircraft.
          (2) Changes mutually agreed upon.
          (3) Changes required to obtain a Standard Certificate of
Airworthiness.
          (4) To provide sufficient Option Aircraft manufacturing and
procurement lead time it is necessary for Boeing and Buyer to reach final
agreement on the Option Aircraft configuration, including BFE/SPE vendor
selection fifteen (15) months prior to delivery of each Option Aircraft. If such
items are not resolved by the indicated dates, Boeing reserves the right to
amend this letter agreement:
               (i) to adjust the scheduled delivery of the Option Aircraft to a
later time period and,
               (ii) to make such other changes as are appropriate and consistent
with the revised Option Aircraft deliveries.
     1.3 Effect of Changes. Changes to the Detail Specification incorporated
pursuant to the provisions of the clauses above will include the effects of such
changes upon Option Aircraft weight, balance, design and performance.
Performance guarantees for the Option Aircraft which are mutually acceptable to
the parties will be included in the definitive agreement for the Option
Aircraft.

P.A. No. 1810
K/SWA   SA-47

 

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Attachment A to
6-1162-RLL-933R20
Page 2

2.   Price Description

     2.1 Price Elements Per Aircraft. The Aircraft Basic Price detailed in Table
2 of the Agreement is added to the Estimated Escalation and Estimated Escalation
Sharing to determine the Advance Payment Base Price of the Option Aircraft (also
listed in Table 2 of the Agreement). At the signing of this Letter Agreement,
the Estimated Escalation Sharing is zero for all Option Aircraft.
     2.2 Price Adjustments For Option Aircraft Delivering From January 2008
through December 2014.
          2.2.1 Escalation Adjustments. The Advance Payment Base Price per
Option Aircraft in Table 2 is based on 4th Quarter 2005 forecast at the
execution of Letter Agreement No. 6-1162-RLL-933R20. Buyer and Boeing agree to
review and update Advance Payment Base Price of Option Aircraft as such Option
Aircraft is added to Table 2 or if Boeing and Buyer agree to incorporate a new
escalation provision into the Agreement.
          2.2.2 Base Price Adjustments for FAA Changes. The Aircraft Basic Price
of the Option Aircraft will be adjusted for any FAA mandated changes
incorporated into the Aircraft.
          2.2.3 Price Adjustments for Changes. Boeing may adjust the Aircraft
Basic Price and the Advance Payment Base Price for any changes mutually agreed
upon subsequent to the date that Buyer and Boeing enter into a definitive
agreement for the Option Aircraft.
          2.2.4 Base Price Adjustments. The Aircraft Basic Price of the Option
Aircraft will be adjusted to Boeing’s then-current prices as of the date of
execution of the definitive agreement for the Option Aircraft in accordance with
the agreement reached below. The Aircraft Basic Price starting point for Option
Aircraft delivering in 2003 is *** (July 1992 STE), for Option Aircraft
delivering in 2004 is *** (July 1992 STE), for Options delivering in 2005
through February 2006 is *** (July 1992 STE), for Block “U” Option Aircraft is
*** (July 1999 STE), for Block “U-W” Option Aircraft is *** (July 1999 STE) and
for Block “U-W-1” Option Aircraft is *** July 1999 STE). Such Aircraft Basic
Price may increase in accordance with paragraphs 2.2.1, 2.2.2, and 2.2.3. For
any other changes to the Aircraft Basic Price, Boeing may increase the Aircraft
Basic Price by a maximum of *** (July 1992 STE) for Aircraft delivering in 2005;
by a maximum of *** (July 1992 STE) per year or portion thereof starting in
January 2006 through 2009. For Block “U” Option Aircraft Boeing may increase the
Aircraft

P.A. No. 1810
K/SWA   SA-47

 

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Attachment A to
6-1162-RLL-933R20
Page 3
Basic Price by a maximum of *** (July 1999 STE) per year or portion thereof
starting in January 2008.
          2.2.6 BFE to SPE. An estimate of the total price for items of Buyer
Furnished Equipment (BFE) changed to Seller Purchased Equipment (SPE) pursuant
to the Configuration Specification is included in the Option Aircraft price
build-up. The purchase price of the Option Aircraft will be adjusted by the
price charged to Boeing for such items plus 10% of such price. If all BFE except
developmental avionics is converted to SPE, Boeing will waive the 10% fee.

P.A. No. 1810
K/SWA   SA-47

 

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Attachment A to
6-1162-RLL-933R20
Page 4

3.   Advance Payment Schedules, Prices and Adjustments.

     3.1 Buyer will pay to Boeing advance payments for the Option Aircraft on
the dates and in the amounts determined below.

          Amount Due per Aircraft     (Percentage times Due Date of Payment  
Advance Payment Base Price)
 
   
Deposit
  *** (if applicable)
 
   
18 months prior to the first
  15% (less the
day of the scheduled delivery
  Deposit if any)
month of the Aircraft
   
 
   
12 months prior to the first
  5%
day of the scheduled delivery month of the Aircraft
   
 
   
9 months prior to the first
  5%
day of the scheduled delivery month of the Aircraft
   
 
   
6 months prior to the first
  5%
day of the scheduled delivery month of the Aircraft
   
 
 
 
   
Total
  30%

Any advance payments that would be past due as of the date of signing the
definitive purchase agreement for the Option Aircraft in accordance with the
above schedule are due and payable on such date.
     3.2 Option Aircraft advance payment base prices will be increased or
decreased, as appropriate, at the time of signing of the definitive purchase
agreement for the Option Aircraft, using the then-current forecasted aircraft
escalation factors used by Boeing, to determine the amount of the advance
payments to be made by Buyer on the Option Aircraft.

P.A. No. 1810
K/SWA   SA-47