=================================================================
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------
Form 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) February 21,
1997
- -----------------
SOUTHWESTERN ENERGY COMPANY
(Exact name of Registrant as specified in its charter)
ARKANSAS 1-8246 71-0205415
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation
or organization)
1083 Sain Street, P.O. Box 1408, Fayetteville, Arkansas
72702-1408
(Address of principal executive offices, including zip code)
(501) 521-1141
(Registrant's telephone number, including area code)
No Change
(Former Name, former address and former fiscal year;
if changed since last report)
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<PAGE>
Item 7. Financial Statements, Pro Forma Financial Statements and
Exhibits.
c) Exhibits.
Exhibit No. Description
5.1 Opinion of Cleary, Gottlieb,
Steen
and Hamilton re: Validity of the
Medium-Term Notes.
5.2 Opinion of Jeffrey L. Dangeau,
Assistant Secretary of
Southwestern
Energy Company re: Validity of
the
Medium-Term Notes.
10 Form of Distribution Agreement,
to be
dated February 21, 1997, by and
among
Southwestern Energy Company,
Morgan Stanley & Co.
Incorporated,
Merrill Lynch, Pierce, Fenner
& Smith Incorporated and
NationsBanc
Capital Markets, Inc.
12 Ratio of Earnings to Fixed
Charges
23 Consent of Arthur Andersen LLP
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly authorized.
SOUTHWESTERN ENERGY COMPANY
---------------------------
(REGISTRANT)
Date: February 21, 1997 By: /s/ Greg D. Kerley
------------------------
Greg D. Kerley
Vice President --
Treasurer
and Secretary
2
<PAGE>
Exhibit Index
Exhibit No. Description
5.1 Opinion of Cleary, Gottlieb,
Steen
and Hamilton re: Validity of the
Medium-Term Notes.
5.2 Opinion of Jeffrey L. Dangeau,
Assistant Secretary of
Southwestern
Energy Company re: Validity of
the
Medium-Term Notes.
10 Form of Distribution Agreement,
to be
dated February 21, 1997, by and
among
Southwestern Energy Company,
Morgan Stanley & Co.
Incorporated,
Merrill Lynch, Pierce, Fenner
& Smith Incorporated and
NationsBanc
Capital Markets, Inc.
12 Ratio of Earnings to Fixed
Charges
23 Consent of Arthur Andersen LLP
3
<PAGE>
[Letterhead of Cleary, Gottlieb, Steen & Hamilton]
Writer's Direct Dial: (212) 225-2420
February 21, 1997
Southwestern Energy Company
1083 Sain Street
Fayetteville, Arkansas 72703
Ladies and Gentlemen:
We have acted as special counsel for Southwestern
Energy Company, an Arkansas corporation (the "Company"), in
connection with the preparation and filing with the Securities
and Exchange Commission under the Securities Act of 1933, as
amended (the "Securities Act"), of a Registration Statement on
Form S-3 (No.33-63895)(as amended when it became effective, the
"Registration Statement") and the related prospectus (the
"Prospectus"), as supplemented by the prospectus supplement dated
February 21, 1997 (the "Prospectus Supplement"), relating to the
offering from time to time of the Company's debt securities up to
an aggregate initial public offering or purchase price of U.S.
$250,000,000 in accordance with Rule 415 under the Securities
Act, and the offering of up to $125,000,000 aggregate principal
amount of the Company's Medium-Term Notes (the "Notes"),
represented by one or more global securities (collectively, the
"Global Security"), to be issued under an indenture dated as of
December 1, 1995 (the "Indenture") between the Company and The
First National Bank of Chicago, as trustee (the "Trustee").
<PAGE>
Southwestern Energy Company, p. 2
We have participated in the preparation of the
Registration Statement, the Prospectus, the Prospectus
Supplement, the Indenture and the Global Security and we have
reviewed the originals or copies certified or otherwise
identified to our satisfaction of all such corporate records of
the Company and such other instruments and other certificates of
public officials, officers and representatives of the Company and
such other persons, and we have made such investigations of law,
as we have deemed appropriate as a basis for the opinions
expressed below. In rendering the opinions expressed below, we
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, we have assumed but not
verified the accuracy as to factual matters of each document we
have reviewed.
Based on the foregoing, it is our opinion that:
1. The Indenture has been duly authorized by all
necessary corporate action of the Company and has been duly
executed and delivered by the Company under the law of the State
of New York, and, assuming the due authorization, execution and
delivery of the Indenture by the Trustee, as to which no opinion
is expressed, the Indenture is a legal, valid, binding and
enforceable agreement of the Company.
2. The execution and delivery by the Company of the
Notes have been duly authorized by all necessary corporate action
of the Company in accordance with the provisions of the
Indenture, and when the Global Security has been duly executed
and delivered by the Company under the law of the State of New
York and authenticated by the Trustee, and the Notes have been
sold as described in the Registration Statement, the Prospectus
and the Prospectus Supplement relating to the Notes, such Notes
will constitute legal, valid, binding and enforceable obligations
of the Company.
Insofar as the foregoing opinions relate to the
legality, validity, binding effect or enforceability of any
agreement or obligation of the Company, (a) we have assumed that
the Company and each other party to such agreement or obligation
has satisfied those legal requirements that are applicable to it
to the extent necessary to make such agreement or obligation
enforceable against it (except that no such assumption is made as
to the Company regarding matters of the federal law of the United
States of America (other than matters relating to federal energy
law) or the law of the State of New York) and (b) such opinions
are subject to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally and to general principles
of equity (whether considered in a proceeding in equity or at
law).
<PAGE>
Southwestern Energy Company, p. 3
We express no opinion other than as to the federal law
of the United States of America and the law of the State of New
York.
With respect to all matters of the law of the State of Arkansas
and federal energy law, we have relied on the opinion of Jeffrey
L. Dangeau, Assistant Secretary to the Company, a copy of which
is attached hereto.
Very truly yours,
CLEARY, GOTTLIEB, STEEN & HAMILTON
By /s/ Stephen H. Shalen
--------------------------------
Stephen H. Shalen, a Partner
<PAGE>
[Letterhead of Southwestern Energy Company]
February 21, 1997
Southwestern Energy Company
1083 Sain Street
Fayetteville, Arkansas 72703
Ladies and Gentlemen:
I am attorney and Assistant Secretary of Southwestern
Energy Company, an Arkansas corporation (the "Company"), and as
such have acted as the Company's advisor in connection with the
preparation and filing with the Securities and Exchange
Commission under the Securities Act of 1933, as amended (the
"Securities Act"), of a Registration Statement on Form S-3
(No.33- 63895) (as amended when it became effective, the
"Registration Statement") and the related prospectus (the
"Prospectus"), as supplemented by the prospectus supplement dated
February 21, 1997 (the "Prospectus Supplement"), relating to the
offering from time to time of the Company's debt securities up to
an aggregate initial public offering or purchase price of U.S.
$250,000,000 in accordance with Rule 415 under the Securities
Act, and the offering from time to time of up to $125,000,000
aggregate principal amount of the Company's Medium-Term Notes
(the "Notes"), represented by one or more global securities
(collectively, the "Global Security"), to be issued under an
indenture dated as of December 1, 1995 (the "Indenture") between
the Company and The First National Bank of Chicago, as trustee
(the "Trustee").
I have participated in the preparation of the
Registration Statement, the Prospectus, the Prospectus
Supplement, the Indenture and the Global Security and have
reviewed the originals or copies certified or otherwise
identified to my satisfaction of all such corporate records of
the Company and such other instruments and other certificates of
public officials, officers and representatives of the Company and
such other persons, and I have made such investigations of law,
as I have deemed appropriate as a basis for the opinions
expressed below. In rendering the opinions expressed below, I
have assumed the authenticity of all documents submitted to me as
originals and the conformity to the originals of all documents
submitted to me as copies.
<PAGE>
Southwestern Energy Company, p. 2
Based on the foregoing, it is my opinion that:
1. The execution and delivery by the Company of the
Indenture have been duly authorized by all necessary corporate
action of the Company and the Indenture has been duly executed
and delivered by the Company under the law of the State of
Arkansas, and assuming the due authorization, execution and
delivery of the Indenture by the Trustee, as to which no opinion
is expressed, the Indenture is a legal, valid, binding and
enforceable agreement of the Company.
2. The execution and delivery by the Company of the
Notes have been duly authorized by all necessary corporate action
of the Company in accordance with the provisions of the
Indenture, and when the Global Security has been duly executed
and delivered by the Company under the law of the State of
Arkansas and authenticated by the Trustee, and the Notes have
been sold as described in the Registration Statement, the
Prospectus and the Prospectus Supplement relating to the Notes,
such Notes will constitute legal, valid, binding and enforceable
obligations of the Company.
Insofar as the foregoing opinions relate to the
legality, validity, binding effect or enforceability of any
agreement or obligation of the Company, (a) I have assumed that
the Company and each other party to such agreement or obligation
other than the Company has satisfied those legal requirements
that are applicable to it to the extent necessary to make such
agreement or obligation enforceable against it (except that no
such assumption is made as to the Company regarding matters of
the law of the State of Arkansas and the federal law of the
United States of America relating to energy matters) and (b) such
opinions are subject to applicable bankruptcy, insolvency and
similar laws affecting creditors' rights generally and to general
principles of equity (whether considered in a proceeding in
equity or at law).
In rendering this opinion, I express no opinion other
than as to the law of the State of Arkansas and the federal law
of the United States of America relating to energy matters.
Very truly yours,
/s/ Jeffrey L. Dangeau
----------------------------
Jeffrey L. Dangeau
Assistant Secretary
Southwestern Energy Company
<PAGE>
SOUTHWESTERN ENERGY COMPANY
$125,000,000
Medium-Term Notes
Due 9 Months or More from Date of Issue
DISTRIBUTION AGREEMENT
February 21, 1997
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Merrill Lynch, Pierce, Fenner & Smith Incorporated
World Financial Center
North Tower
New York, New York 10281-1311
NationsBanc Capital Markets, Inc.
NationsBanc Corporate Center
100 N. Tryon Street
Charlotte, NC 28255
Dear Sirs:
Southwestern Energy Company, an Arkansas corporation (the
"Company"),
confirms its agreement with each of you with respect to the issue
and
<PAGE>
sale from time to time by the Company of up to $125,000,000
aggregate principal amount of its medium-term notes due 9 months
or more from date of issue (the "Notes"). The Notes will be
issued under an Indenture dated as of December 1, 1995 (the
"Indenture") between the Company and The First National Bank of
Chicago, as Trustee (the "Trustee"), and will have the
maturities, interest rates, redemption provisions, if any, and
other terms as set forth in supplements to the Basic Prospectus
referred to below.
The Company hereby appoints Morgan Stanley & Co.
Incorporated ("Morgan Stanley"), Merrill Lynch, Pierce, Fenner &
Smith Incorporated and NationsBanc Capital Markets, Inc.
(individually, an "Agent" and collectively, the "Agents") as its
exclusive agents, subject to Section 11, for the purpose of
soliciting and receiving offers to purchase Notes from the
Company by others and, on the basis of the representations and
warranties herein contained, but subject to the terms and
conditions herein set forth, each Agent agrees to use its best
efforts to solicit and receive offers to purchase Notes upon
terms acceptable to the Company at such times and in such amounts
as the Company shall from time to time specify. In addition, any
Agent may also purchase Notes as principal pursuant to the terms
of a terms agreement relating to such sale (a "Terms Agreement")
in accordance with the provisions of Section 2(b) hereof.
The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement, including
a prospectus, relating to senior debt securities of the Company.
Such registration statement, including the exhibits thereto, as
amended at the Commencement Date (as hereinafter defined), is
hereinafter referred to as the "Registration Statement". The
Company proposes to file with the Commission from time to time,
pursuant to Rule 424 under the Securities Act of 1933, as amended
(the "Securities Act"), supplements to the prospectus included in
the Registration Statement that will describe certain terms of
the Notes. The prospectus in the form in which it appears in the
Registration Statement is hereinafter referred to as the "Basic
Prospectus". The term "Prospectus" means the Basic Prospectus
together with the prospectus supplement or supplements (each a
"Prospectus Supplement") specifically relating to Notes, as filed
with, or transmitted for filing to, the Commission pursuant to
Rule 424. As used herein, the terms "Basic Prospectus" and
"Prospectus" shall include in each case the documents, if any,
incorporated by reference therein. The terms "supplement,"
"amendment" and "amend" as used herein shall include all
documents deemed to be incorporated by reference in the
Prospectus that are filed subsequent to the date of the Basic
Prospectus by the Company with the Commission pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
2
<PAGE>
1. Representations and Warranties. The Company
represents
and warrants to and agrees with each Agent as of the Commencement
Date, as of each date on which an Agent solicits offers to
purchase Notes, as of each date on which the Company accepts an
offer to purchase Notes (including any purchase by an Agent
pursuant to a Terms Agreement), as of each date the Company
issues and delivers Notes and as of each date the Registration
Statement or the Basic Prospectus is amended or supplemented in
relation to the Notes (in each case the "Representation Date"),
as follows (it being understood that such representations,
warranties and agreements shall be deemed to relate to the
Registration Statement, the Basic Prospectus and the Prospectus,
each as amended or supplemented to each such date):
(a) The Registration Statement has become effective;
no
stop order suspending the effectiveness of the Registration
Statement is in effect, and no proceedings for such purpose are
pending before or threatened by the Commission.
(b) (i) Each document, if any, filed or to be filed
pursuant to the Exchange Act and incorporated by reference in the
Prospectus complied or will comply when so filed in all material
respects with the Exchange Act and the applicable rules and
regulations of the Commission thereunder, (ii) each part of the
Registration Statement, at the time such part became effective,
did not contain and each such part, as of the applicable
Representation Date, will not contain any 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, (iii) the Registration Statement and the Prospectus
comply and, as of the applicable Representation Date, will comply
in all material respects with the Securities Act and the
applicable rules and regulations of the Commission thereunder and
(iv) the Prospectus does not contain and, as of the applicable
Representation Date, will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under
which they were made, not misleading, except that (1) the
representations and warranties set forth in this Section 1(b) do
not apply (A) to statements or omissions in the Registration
Statement or the Prospectus based upon information relating to an
Agent furnished to the Company in writing by such Agent expressly
for use therein or (B) to that part of the Registration Statement
that constitutes the Statement of Eligibility (Form T-1) under
the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"), of the Trustee and (2) the representations and warranties
set forth in clauses (iii) and (iv) above, when made as of the
Commencement Date or as of any date on which an Agent solicits
offers to purchase Notes or on which the Company accepts an offer
to purchase Notes, shall be deemed not to cover information
concerning an offering of particular Notes to the extent such
information will be set forth in a supplement to the Basic
Prospectus.
3
<PAGE>
(c) The Company has been duly incorporated, is
validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as
described in the Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that
the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(d) Each subsidiary of the Company listed in Exhibit
A
(each a "Subsidiary") has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as
described in the Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that
the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(e) Each of this Agreement and any applicable
Written
Terms Agreement (as hereinafter defined) has been duly
authorized, executed and delivered by the Company.
(f) The Indenture has been duly qualified under
the Trust Indenture Act and has been duly authorized, executed
and delivered by the Company and is a valid and binding agreement
of the Company, enforceable in accordance with its terms except
as (i) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally
and (ii) rights of acceleration and the availability of equitable
remedies may be limited by equitable principles of general
applicability.
(g) The Notes have been duly authorized and, when
executed and authenticated in accordance with the provisions of
the Indenture and delivered to and paid for by the purchasers
thereof, will be entitled to the benefits of the Indenture and
will be valid and binding obligations of the Company, enforceable
in accordance with their respective terms except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency
or similar laws affecting creditors' rights generally and (ii)
rights of acceleration, if any, and the availability of equitable
remedies may be limited by equitable principles of general
applicability.
4
<PAGE>
(h) The execution and delivery by the Company of,
and
the performance by the Company of its obligations under, this
Agreement, the Notes, the Indenture and any applicable Written
Terms Agreement will not contravene any provision of applicable
law or the certificate of incorporation or by-laws of the Company
or any agreement or other instrument binding upon the Company or
any of its subsidiaries that is material to the Company and its
subsidiaries, taken as a whole, or any judgment, order or decree
of any governmental body, agency or court having jurisdiction
over the Company or any subsidiary, and no consent, approval,
authorization or order of, or qualification with, any
governmental body or agency is required for the performance by
the Company of its obligations under this Agreement, the Notes,
the Indenture and any applicable Written Terms Agreement, except
such as may be required by the securities or Blue Sky laws of the
various states in connection with the offer and sale of the
Notes.
(i) As of the applicable Representation Date, there
has not occurred any material adverse change, or any development
involving a prospective material adverse change, in the
condition,
financial or otherwise, or in the earnings, business or
operations
of the Company and its subsidiaries, taken as a whole, from that
set
forth in the Prospectus.
(j) There are no legal or governmental proceedings
pending or threatened to which the Company or any of its
subsidiaries
is a party or to which any of the properties of the Company or
any
of its subsidiaries is subject that are required to be described
in
the Registration Statement or the Prospectus and are not so
described
or any statutes, regulations, contracts or other documents that
are
required to be described in the Registration Statement or the
Prospectus
or to be filed or incorporated by reference as exhibits to the
Registration Statement that are not described, filed or
incorporated as
required.
(k) The Company is not an "investment company" or an
entity "controlled" by an "investment company" as such terms are
defined in the Investment Company Act of 1940, as amended.
(l) The Company and its subsidiaries (i) are in
compliance with any and all applicable foreign, federal, state
and local laws and regulations relating to the protection of
human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("Environmental
Laws"), (ii) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to
conduct their respective businesses and (iii) are in compliance
with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental
Laws, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of
such permits, licenses or approvals would not, singly or in
5
<PAGE>
the aggregate, have a material adverse effect on the Company and
its subsidiaries, taken as a whole.
Notwithstanding the foregoing, the representations and
warranties set forth in Section 1(b)(iii) and (iv), (g) (except
as to due authorization of the Notes) and (h), when made as of
the Commencement Date, or as of any date on which an Agent
solicits offers to purchase Notes, with respect to any Notes the
payments of principal or interest on which will be determined by
reference to one or more commodity prices, equity indices or
other factors, shall be deemed not to address the application of
the Commodity Exchange Act, as amended, or the rules, regulations
or interpretations of the Commodity Futures Trading Commission.
2. Solicitations as Agent; Purchases as Principal.
(a) Solicitations as Agent. In connection with an
Agent's actions as agent hereunder, such Agent agrees to use its
best efforts to solicit offers to purchase Notes upon the terms
and conditions set forth in the Prospectus as then amended or
supplemented.
The Company reserves the right to sell Notes directly on
its own behalf at any time, and to any person, and from time to
time to appoint additional agents to sell Notes; provided,
however, that the Company shall furnish the Agents with
reasonable advance notification of its intention to appoint any
such additional agent and that each such additional agent shall
be appointed under terms and conditions substantially identical
to this Agreement. Subject to all of the terms and conditions of
this Agreement and any Terms Agreement, the foregoing shall not
be construed to prevent the Company from selling in the United
States, at any time (subject to Section 3(i) hereof), any
securities in a firm commitment underwriting pursuant to an
underwriting agreement that does not provide for a continuous
offering of such securities.
The Company reserves the right, in its sole discretion, to
instruct the Agents to suspend at any time, for any period of
time or permanently, the solicitation of offers to purchase
Notes. The Company shall be entitled to suspend such solicitation
as to any Agent, or as to all of the Agents, as determined by the
Company. Upon receipt of at least one business day's prior notice
from the Company, the Agents will forthwith suspend solicitations
of offers to purchase Notes from the Company until such time as
the Company has advised the Agents that such solicitation may be
resumed. If the Registration Statement or Prospectus is amended
or supplemented during the period of suspension (other than by an
amendment or supplement providing solely for a change in the
interest rates, redemption provisions, amortization schedules or
maturities offered on the Notes or for a change the Agents deem
to be immaterial), no Agent shall be required to
6
<PAGE>
resume soliciting offers to purchase Notes until the Company has
delivered such certificates, opinions and letters as such Agent
may request.
The Company agrees to pay to each Agent, as consideration
for the sale of each Note resulting from a solicitation made or
an offer to purchase received by such Agent, a commission in the
form of a discount from the purchase price of such Note equal to
the percentage set forth below of the principal amount of such
Note:
Term Commission Rate
---- ---------------
From 9 months to less than 1 year .125%
From 1 year to less than 18 months .150%
From 18 months to less than 2 years .200%
From 2 years to less than 3 years .250%
From 3 years to less than 4 years .350%
From 4 years to less than 5 years .450%
From 5 years to less than 6 years .500%
From 6 years to less than 7 years .550%
From 7 years to less than 10 years .600%
From 10 years to less than 15 years .625%
From 15 years to less than 20 years .700%
From 20 years to less than 30 years .750%
30 years and beyond to be
negotiated
Each Agent shall communicate to the Company, in writing or
orally (with confirmation in writing), each offer to purchase
Notes received by such Agent as agent that in its judgment should
be considered by the Company. The Company shall have the sole
right
to accept offers to purchase Notes and may reject any offer in
whole or in part. Each Agent shall have the right to reject any
offer to purchase Notes that it considers to be unacceptable, and
any such rejection shall not be deemed a breach of its agreements
contained herein. The procedural details relating to the issue
and delivery of Notes sold by the Agents as agents and the
payment therefor shall be as set forth in the Administrative
Procedures (as hereinafter defined).
(b) Purchases as Principal. Each sale of Notes to an
Agent as principal shall be made in accordance with the terms of
this Agreement and a Terms Agreement that will provide for the
sale of such Notes to and the purchase and reoffering thereof by
such Agent. Each Terms Agreement will take the form of either
(i) a written agreement between such Agent and the Company,
which may be substantially in the form of Exhibit B hereto
(a "Written Terms Agreement"), or (ii) an oral agreement
between such Agent and the Company confirmed in writing
7
<PAGE>
by such Agent and the Company with respect to such information
(as applicable) as is specified in Exhibit B.
An Agent's commitment to purchase Notes pursuant to a Terms
Agreement shall be deemed to have been made on the basis of the
representations and warranties of the Company herein contained
and shall be subject to the terms and conditions herein set
forth.
Each Terms Agreement shall specify the principal amount of Notes
to be purchased by such Agent pursuant thereto, the maturity date
of such Notes, the price to be paid to the Company for such
Notes, the interest rate and interest rate formula, if any,
applicable to such Notes and any other terms of such Notes. Each
such Terms Agreement may also specify any requirements for
officers' certificates, opinions of counsel and letters from the
independent public accountants of the Company pursuant to Section
4 hereof.
Each Terms Agreement shall specify the time and place of
delivery of and payment for such Notes. Unless otherwise
specified in a Terms Agreement, the procedural details relating
to the issue and delivery of Notes purchased by an Agent as
principal and the payment therefor shall be as set forth in the
Administrative Procedures. Each date of delivery of and payment
for Notes to be purchased by an Agent pursuant to a Terms
Agreement is referred to herein as a "Settlement Date".
Unless otherwise specified in a Terms Agreement relating to
any Notes, if you are purchasing such Notes as principal, you may
not resell such Notes through a selling or dealer group. Any such
resales may be at a discount, which shall not exceed the amount
set forth in the Prospectus Supplement relating to such Notes.
(c) Administrative Procedures. The Agents and the
Company agree to perform the respective duties and obligations
specifically provided to be performed in the Medium-Term Notes
Administrative Procedures (attached hereto as Exhibit C) (the
"Administrative Procedures"), as amended from time to time. The
Administrative Procedures may be amended only by written
agreement of the Company and the Agents.
(d) Delivery. The documents required to be delivered
by
Section 4 of this Agreement as a condition precedent to each
Agent's obligation to begin soliciting offers to purchase Notes
as an agent of the Company shall be delivered at the office of
Davis Polk & Wardwell, counsel for the Agents, not later than
2:00 p.m., New York time, on the date hereof, or at such other
time and/or place as the Agents and the Company may agree upon in
writing, but in no event later than the day prior to the earlier
of
(i) the date on which the Agents begin soliciting offers to
purchase
Notes and (ii) the first date on which the Company accepts any
8
<PAGE>
offer by an Agent to purchase Notes pursuant to a Terms
Agreement. The date of delivery of such documents is referred to
herein as the "Commencement Date".
(e) Obligations Several. The Company acknowledges
that the
obligations of the Agents under this Agreement are several and
not joint.
3. Agreements. The Company agrees with each Agent that:
(a) Prior to the termination of the offering of the
Notes pursuant to this Agreement or any Terms Agreement, the
Company will not file any Prospectus Supplement relating to the
Notes or any amendment to the Registration Statement unless the
Company has previously furnished to the Agents copies thereof for
their review and will not file any such proposed supplement or
amendment to which the Agents reasonably object; provided,
however, that (i) the foregoing requirement shall not apply to
any of the Company's periodic filings with the Commission
required to be filed pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act, copies of which filings the Company
will cause to be delivered to the Agents promptly after being
transmitted for filing with the Commission and (ii) any
Prospectus Supplement that merely sets forth the terms or a
description of particular Notes shall only be reviewed and
approved by the Agent or Agents offering such Notes. Subject to
the foregoing sentence, the Company will promptly cause each
Prospectus Supplement to be filed with or transmitted for filing
to the Commission in accordance with Rule 424(b) under the
Securities Act. The Company will promptly advise the Agents by
telephone (with confirmation in writing) (i) of the filing of any
amendment or supplement to the Basic Prospectus (except that
notice of the filing of an amendment or supplement to the Basic
Prospectus that merely sets forth the terms or a description of
particular Notes shall only be given to the Agent or Agents
offering such Notes), (ii) of the filing and effectiveness of any
amendment to the Registration Statement, (iii) of any request by
the Commission for any amendment to the Registration Statement or
any amendment or supplement to the Basic Prospectus or for any
additional information, (iv) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration
Statement or the institution or threatening of any proceeding for
that purpose and (v) of the receipt by the Company of any
notification with respect to the suspension of the qualification
of the Notes for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose. The Company will
use its best efforts to prevent the issuance of any such stop
order or notice of suspension of qualification and, if issued, to
obtain as soon as possible the withdrawal thereof. If the Basic
Prospectus is amended or supplemented as a result of the filing
under the Exchange Act of any document incorporated by reference
in the Prospectus, no Agent shall be obligated to solicit offers
to purchase Notes so long as it is not reasonably satisfied with
such document.
9
<PAGE>
(b) If, at any time when a prospectus relating to
the
Notes is required to be delivered under the Securities Act, any
event occurs or condition exists as a result of which the
Prospectus, as then amended or supplemented, would include an
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 when the Prospectus, as then amended
or supplemented, is delivered to a purchaser, not misleading, or
if it is necessary at any time to amend or supplement the
Prospectus, as then amended or supplemented, to comply with
applicable law, the Company will immediately notify the Agents by
telephone (with confirmation in writing) to suspend solicitation
of offers to purchase Notes and, if so notified by the Company,
the Agents shall forthwith suspend such solicitation and cease
using the Prospectus, as then amended or supplemented. In
accordance with paragraph (a) above, if the Company shall decide
to amend or supplement the Registration Statement or Prospectus,
as then amended or supplemented, it shall so advise the Agents
promptly by telephone (with confirmation in writing) and, at its
expense, shall prepare and cause to be filed promptly with the
Commission an amendment or supplement to the Registration
Statement or Prospectus, as then amended or supplemented, that
will correct such statement or omission or effect such compliance
and will supply such amended or supplemented Prospectus to the
Agents in such quantities as they may reasonably request. Upon
the filing with the Commission of such amendment or supplement to
the Prospectus or upon the effectiveness of an amendment to the
Registration Statement, the Agents will resume the solicitation
of offers to purchase Notes hereunder. Notwithstanding any other
provision of this Section 3(b), until the distribution of any
Notes an Agent may own as principal has been completed, if any
event described above in this paragraph (b) occurs, the Company
will, at its own expense, forthwith prepare and cause to be filed
promptly with the Commission an amendment or supplement to the
Registration Statement or Prospectus, as then amended or
supplemented, will supply such amended or supplemented Prospectus
to such Agent in such quantities as it may reasonably request and
shall furnish to such Agent such documents, certificates,
opinions and letters as it may reasonably request in connection
with the preparation and filing of such amendment or supplement.
(c) The Company will make generally available to its
security holders and to the Agents as soon as practicable earning
statements that satisfy the provisions of Section 11(a) of the
Securities Act and the rules and regulations of the Commission
thereunder covering twelve month periods beginning, in each case,
not later than the first day of the Company's fiscal quarter next
following the date of this Agreement. If such fiscal quarter is
the last fiscal quarter of the Company's fiscal year, such
earning statement shall be made available not later than 120 days
after the close of the period covered thereby and in all other
cases
10
<PAGE>
shall be made available not later than 60 days after the close of
the period covered thereby.
(d) The Company will furnish to each Agent, without
charge, a conformed copy of the Registration Statement, including
exhibits and all amendments thereto, and as many copies of the
Prospectus, any documents incorporated by reference therein and
any supplements and amendments thereto as such Agent may
reasonably request.
(e) The Company will endeavor to qualify the Notes
for
offer and sale under the securities or Blue Sky laws of such
jurisdictions as the Agents shall reasonably request and to
maintain such qualifications for as long as the Agents shall
reasonably request; provided that in connection therewith the
Company shall not be required to file a general consent to
service of process in any jurisdiction or qualify to do business
in any jurisdiction where it is not so qualified.
(f) The Company shall furnish to the Agents such
relevant documents and certificates of officers of the Company
relating to the business, operations and affairs of the Company,
the Registration Statement, the Basic Prospectus, any amendments
or supplements thereto, the Indenture, the Notes, this Agreement,
the Administrative Procedures, any Terms Agreement and the
performance by the Company of its obligations hereunder or
thereunder as the Agents may from time to time and at any time
prior to the termination of this Agreement (except as otherwise
provided in Section 8 hereof) reasonably request.
(g) The Company shall notify the Agents promptly in
writing of any downgrading, or of its receipt of any notice of
any intended or potential downgrading or of any review for
possible change that does not indicate the direction of the
possible change, 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 Securities Act.
(h) The Company will, whether or not any sale of
Notes
is consummated, pay the following expenses incident to the
performance of its obligations under this Agreement and any Terms
Agreement: (i) the preparation and filing of the Registration
Statement and the Prospectus and all amendments and supplements
thereto, (ii) the preparation, issuance and delivery of the
Notes, (iii) the reasonable fees and disbursements of the
Company's counsel and accountants and of the Trustee and its
counsel, (iv) the qualification of the Notes under securities or
Blue Sky laws in accordance with the provisions of Section 3(e),
including filing fees and the fees and disbursements of counsel
for the Agents in connection therewith and in connection with
the preparation of any Blue Sky or Legal Investment Memoranda,
(v) the printing and delivery to the Agents in
11
<PAGE>
quantities as hereinabove stated of copies of the Registration
Statement and all amendments thereto and of the Prospectus and
any amendments or supplements thereto, (vi) the printing and
delivery to the Agents of copies of any Blue Sky or Legal
Investment Memoranda, (vii) any fees charged by rating agencies
for the rating of the Notes, (viii) any expenses incurred by the
Company in connection with a "road show" presentation to
potential investors, (ix) the reasonable fees and disbursements
of counsel for the Agents incurred in connection with the
offering and sale of the Notes, including any opinions to be
rendered by such counsel hereunder, and (x) such other costs and
expenses as shall be agreed between the Company and the Agents.
(i) During the period beginning the date of any
Terms
Agreement and continuing to and including the Settlement Date
with respect to such Terms Agreement, the Company will not,
without such Agent's prior written consent (which consent shall
not be unreasonably withheld or delayed), offer, sell, contract
to sell or otherwise dispose of any debt securities of the
Company or warrants to purchase debt securities of the Company
substantially similar to such Notes (other than (i) the Notes
that are to be sold pursuant to such Terms Agreement, (ii) Notes
previously agreed to be sold by the Company and (iii) commercial
paper issued in the ordinary course of business), except as may
otherwise be provided in such Terms Agreement.
4. Conditions of the Obligations of the Agents. Each
Agent's obligation to solicit offers to purchase Notes as agent
of the Company and each Agent's obligation to purchase Notes
pursuant to any Terms Agreement will be subject to the accuracy
of the representations and warranties on the part of the Company
herein, to the accuracy of the statements of the Company's
officers made in each certificate furnished pursuant to the
provisions hereof and to the performance and observance by the
Company of all covenants and agreements herein contained on its
part to be performed and observed (in the case of an Agent's
obligation to solicit offers to purchase Notes, at the time of
such solicitation, and, in the case of an Agent's obligation to
purchase Notes, at the time the Company accepts the offer to
purchase such Notes and at the time of issuance and delivery) and
(in each case) to the following additional conditions precedent
when and as specified:
(a) Prior to such solicitation or purchase, as the
case
may be:
(i) there shall not have occurred any change, or
any
development involving a prospective change, in the
condition, financial or otherwise, or in the
earnings,
business or operations of the Company and its
subsidiaries,
taken as a whole, from that set forth in the
Prospectus,
as amended or supplemented at the time of
12
<PAGE>
such solicitation or at the time such offer to
purchase was made,
that, in the judgment of the relevant Agent, is
material and
adverse and that makes it, in the judgment of such
Agent,
impracticable to market the Notes on the terms and
in the manner
contemplated in the Prospectus, as so amended or
supplemented;
(ii) there shall not have occurred any (A)
suspension or
material limitation of trading generally on or by,
as the case
may be, any of the New York Stock Exchange, the
American Stock
Exchange, the National Association of Securities
Dealers, Inc.,
the Chicago Board Options Exchange, the Chicago
Mercantile
Exchange or the Chicago Board of Trade, (B)
suspension of trading
of any securities of the Company on any exchange or
in any
over-the-counter market, (C) declaration of a
general moratorium
on commercial banking activities in New York by
either Federal or
New York State authorities or (D) any outbreak or
escalation of
hostilities or any change in financial markets or
any calamity or
crisis that, in the judgment of the relevant Agent,
is material
and adverse and, in the case of any of the events
described in
clauses (ii)(A) through (D), such event, singly or
together with
any other such event, makes it, in the judgment of
such Agent,
impracticable to market the Notes on the terms and
in the manner
contemplated in the Prospectus, as amended or
supplemented at the
time of such solicitation or at the time such offer
to purchase
was made; and
(iii) there shall not have occurred any
downgrading, nor shall
any notice have been given of any intended or
potential
downgrading or of any review for a possible change
that does not
indicate the direction of the possible change, 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
Securities Act;
(A) except, in each case described in paragraph (i), (ii) or
(iii) above, as disclosed to the relevant Agent in writing by the
Company prior to such solicitation or, in the case of a purchase
of Notes, as disclosed to the relevant Agent before the offer to
purchase such Notes was made or (B) unless in each case described
in paragraph (i), (ii) or (iii) above, the relevant event shall
have occurred and been known to the relevant Agent before such
solicitation or, in the case of a purchase of Notes, before the
offer to purchase such Notes was made.
(b) On the Commencement Date and on each Settlement
Date, the relevant Agents shall have received:
13
<PAGE>
(i) the opinion, dated as of such date, of Jeffrey
L. Dangeau,
Assistant Secretary for the Company, to the effect that:
(A) the Company and each Subsidiary has been
duly
incorporated, is validly existing as a corporation
in good
standing under the laws of the jurisdiction of its
incorporation,
has the corporate power and authority to own its
property and to
conduct its business as described in the Prospectus
and is duly
qualified to transact business and is in good
standing in each
jurisdiction in which the conduct of its business or
its
ownership or leasing of property requires such
qualification,
except to the extent that the failure to be so
qualified or be in
good standing would not have a material adverse
effect on the
Company and its subsidiaries, taken as a whole;
(B) each of this Agreement and any applicable
Written Terms
Agreement has been duly authorized by all necessary
corporate
action of the Company;
(C) the Indenture has been duly authorized by
all
necessary corporate action of the Company;
(D) the Notes have been duly authorized by all
necessary corporate action of the Company;
(E) the issuance and sale of the Notes to the
relevant
Agents pursuant to this Agreement, the Indenture and
any
applicable Written Terms Agreement (a) do not
require any
consent, approval, authorization, registration or
qualification
of or with any governmental authority of the State
of Arkansas
(except as to any consent, approval, authorization,
registration
or qualification that may be required under Arkansas
securities
or Blue Sky laws) and (b) do not result in a breach
or violation
of any of the terms and provisions of, or constitute
a default
under, any of the agreements of the Company
identified in Exhibit
D hereto, the Certificate of Incorporation or
By-Laws of the
Company, or any judgment, order or decree of any
governmental
body, agency or court having jurisdiction over the
Company or any
Subsidiary;
(F) the statements set forth (A) in Part II
of the
Registration Statement under Item 15, (B) in "Item 3
- -- Legal
14
<PAGE>
Proceedings" of the Company's most recent annual
report on Form
10-K incorporated by reference in the Prospectus,
(C) in "Item 1
-- Legal Proceedings" and "Item 5" of Part II of the
Company's
quarterly reports on Form 10-Q and (D) in "Item 5 --
Other
Matters" of the Company's current reports on Form
8-K, if any,
filed since such annual report, in each case insofar
as such
statements constitute summaries of the legal
matters, documents,
or proceedings referred to therein, fairly present
the
information called for with respect to such legal
matters,
documents and proceedings and fairly summarize the
matters
referred to therein; and
(G) after due inquiry, such counsel does not
know of any
legal or governmental proceedings pending or
threatened to which
the Company or any of its subsidiaries is a party or
to which any
of the properties of the Company or any of its
subsidiaries is
subject that are required to be described in the
Registration
Statement or the Prospectus and are not so described
or of any
statutes, regulations, contracts or other documents
that are
required to be described in the Registration
Statement or the
Prospectus or to be filed or incorporated by
reference as
exhibits to the Registration Statement that are not
described,
filed or incorporated as required.
(ii) The opinion, dated as of such date, of
Cleary,
Gottlieb, Steen & Hamilton, outside counsel for the
Company, to
the effect that:
(A) each of this Agreement and any applicable
Written Terms
Agreement has been duly executed and delivered by
the Company
under the law of the State of New York;
(B) the Indenture has been duly executed and
delivered by
the Company, duly qualified under the Trust
Indenture Act and,
assuming due authorization thereof by the Company,
is a valid,
binding and enforceable agreement of the Company;
(C) the Notes, when executed and
authenticated in
accordance with the provisions of the Indenture and
delivered
to and paid for by the purchasers in accordance with
the terms
of this Agreement and any applicable Written Terms
Agreement,
and assuming due authorization thereof by the
Company, will be
15
<PAGE>
entitled to the benefits of the Indenture and will
be valid,
binding and enforceable obligations of the Company;
(D) the issuance and sale of the Notes to the
Agents
pursuant to this Agreement and any applicable
Written Terms
Agreement, and the execution and delivery by the
Company of, and
the performance by the Company of its obligations
under this
Agreement, any applicable Written Terms Agreement,
the Indenture
and the Notes do not require any consent, approval,
authorization, registration or qualification of or
with any
governmental authority of the United States or the
State of New
York except such as have been obtained or effected
under the
Securities Act and the Trust Indenture Act (provided
that such
counsel need express no opinion as to any consent,
approval,
authorization, registration or qualification that
may be required
under state securities or Blue Sky laws);
(E) the statements set forth in the
Prospectus under the
captions "Description of Debt Securities" and
"Description of
Notes", insofar as such statements purport to
summarize certain
documents referred to therein, fairly present the
information
called for with respect to such documents and fairly
summarize
the matters referred to therein;
(F) the disclosure under the caption "United
States
Federal Income Taxation" in the Prospectus
Supplement
presents a fair summary of the principal U.S.
federal income tax
considerations relevant to United States holders of
Notes;
(G) such counsel shall deliver a letter
substantially to
the effect that (1) each document, if any, filed
pursuant to the
Exchange Act and incorporated by reference in the
Prospectus
(except for financial statements and schedules
included therein
as to which such counsel need not express any
opinion) as of the
respective date of its filing, appears on its face
to have been
appropriately responsive in all material respects to
the
requirements of the Exchange Act and the applicable
rules and
regulations of the Commission thereunder, (2) no
information has
come to such counsel's attention that has caused
such counsel to
believe that (except for financial statements and
schedules and
other financial and statistical data as to which
such counsel
need not express any belief and except for that part
of the
Registration Statement that constitutes the Form T-1
16
<PAGE>
heretofore referred to) each part of the
Registration Statement,
when such part became effective, contained and, as
of the date
such opinion is delivered, contains any untrue
statement of a
material fact or omitted or omits to state a
material fact
required to be stated therein or necessary to make
the statements
therein not misleading, (3) the Registration
Statement (except
for financial statements and schedules and other
financial and
statistical data included therein as to which such
counsel need
not express any opinion) at the time it became
effective and the
Prospectus (except as aforesaid) as of the date such
opinion is
delivered, appear on their face to be appropriately
responsive in
all material respects with the requirements of the
Securities Act
and the applicable rules and regulations of the
Commission
thereunder and (4) no information has come to such
counsel's
attention that has caused such counsel to believe
that (except
for financial statements and schedules and other
financial and
statistical data as to which such counsel need not
express any
belief) the Prospectus as of the date such opinion
is delivered
contains any untrue statement of a material fact or
omits 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.
(iii) The opinion, dated as of such date, of
Davis Polk &
Wardwell, counsel for the Agents, covering the matter in
subparagraphs (A), (B), (C) and (E) (but only as to the
statements in the Prospectus, as then amended or
supplemented,
under the captions "Description of Notes" and "Plan of
Distribution"), and clauses (2), (3) and (4) of
subparagraph (G)
in paragraph (b)(ii) above.
Notwithstanding the foregoing, the opinions described in
subparagraphs (C), (D), (E) and (G)(2) and (4) of paragraph
(b)(ii) above, when contained in an opinion delivered on the
Commencement Date, shall be deemed not to address the application
of the Commodity Exchange Act, as amended, or the rules,
regulations or interpretations of the Commodity Futures Trading
Commission to Notes the payments of principal or interest on
which will be determined by reference to one or more commodity
prices, equity indices or other factors.
With respect to subparagraph (G) of paragraph (b)(ii)
above, Cleary, Gottlieb, Steen & Hamilton and Davis Polk &
Wardwell may state that their beliefs are based upon their
participation in the preparation of the Registration Statement
and Prospectus and any amendments or supplements thereto (but not
including documents incorporated therein by reference) and their
review of documents
17
<PAGE>
incorporated therein by reference and their review and discussion
of the contents thereof (including documents incorporated by
reference), but are without independent check or verification,
except as specified.
The opinions of Jeffrey L. Dangeau and Cleary, Gottlieb,
Steen & Hamilton described in paragraphs (b)(i) and (b)(ii) above
shall be rendered to the Agents at the request of the Company and
shall so state therein. All of the opinions described above,
insofar as they relate to the validity, binding effect or
enforceability of any agreement or obligation of the Company, may
state that they are being rendered subject to applicable
bankruptcy, insolvency or similar laws affecting creditors'
rights generally and to equitable principles of general
applicability (whether considered in a proceeding in equity or at
law), and Cleary, Gottlieb, Steen & Hamilton and Davis Polk &
Wardwell may rely as to matters governed by the laws of Arkansas
on the opinion of Jeffrey L. Dangeau.
(c) On the Commencement Date and on each Settlement
Date, the relevant Agents shall have received a certificate,
dated the Commencement Date or such Settlement Date, as the case
may be, and signed by an executive officer of the Company, to the
effect that, to the best of his or her knowledge after due
inquiry, the events contemplated in subparagraph (a)(iii) above
had not occurred and to the effect that the representations and
warranties of the Company contained in this Agreement are true
and correct as of such date and that the Company has complied
with all of the agreements and satisfied all of the conditions on
its part to be performed or satisfied on or before such date.
The officer signing and delivering such certificate may
rely upon the best of his knowledge as to proceedings threatened.
(d) On the Commencement Date and on each Settlement
Date, the Company's independent public accountants, shall have
furnished to the relevant Agents a letter or letters, dated the
Commencement Date or such Settlement Date, as the case may be, in
form and substance satisfactory to such Agents containing
statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to
the financial statements and certain financial information
contained in or incorporated by reference into the Prospectus, as
then amended or supplemented.
(e) On the Commencement Date and on each Settlement
Date, the Company shall have furnished to the relevant Agents
such
appropriate further information, certificates and documents as
they may reasonably request.
(f) On the date on which the Company agrees to sell
the Notes hereunder, the Company will give the Agent or Agents
involved in such sale an opportunity to discuss the condition,
financial or otherwise, the earnings, business or operations of
the
Company and its subsidiaries with the appropriate officers of the
Company.
5. Additional Agreements of the Company. [Reserved.]
18
<PAGE>
6. Indemnity and Contribution. The Company agrees to
indemnify and hold harmless each Agent and each person, if any,
who controls any Agent within the meaning of either Section 15 of
the Securities Act or Section 20 of the Exchange Act from and
against any and all losses, claims, damages and liabilities
(including, without limitation, any legal or other expenses
reasonably incurred by any Agent 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 the Prospectus (as amended or supplemented
if the Company shall have furnished any amendments or supplements
thereto), 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, except
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 information relating to such
Agent furnished to the Company in writing by such Agent expressly
for use therein.
(b) Each Agent agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its
officers who sign the Registration Statement and each person, if
any, who controls the Company within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange
Act to the same extent as the foregoing indemnity from the
Company to such Agent, but only with reference to information
relating to such Agent or its distribution arrangements furnished
to the Company in writing by such Agent expressly for use in the
Registration Statement or the Prospectus or any amendments or
supplements thereto.
(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 and the
indemnifying party, upon request of the indemnified party, shall
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 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 or (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.
19
<PAGE>
It is understood that the indemnifying party shall not, in
respect of the legal expenses of any indemnified party 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. Such firm shall be designated in
writing by Morgan Stanley or, if Morgan Stanley is not an
indemnified party and is not reasonably likely to become an
indemnified party, by the Agents that are indemnified parties, 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 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 60 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. 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 includes an unconditional release
of such indemnified party from all liability on claims that are
the subject matter of such proceeding.
(d) To the extent the indemnification provided for
in
paragraph (a) or (b) of this Section 6 is unavailable to an
indemnified party or insufficient in respect of any losses,
claims, damages or liabilities referred to therein in connection
with any offering of Notes, then each 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 each Agent on the other hand from the offering of
such Notes 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 each Agent 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
20
<PAGE>
considerations. The relative benefits received by the Company on
the one hand and each Agent on the other hand in connection with
the offering of such Notes shall be deemed to be in the same
respective proportions as the total net proceeds from the
offering of such Notes (before deducting expenses) received by
the Company and the total discounts and commissions received by
each Agent in respect thereof bear to the aggregate public
offering price of such Notes. The relative fault of the Company
on the one hand and each Agent 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 by such Agent and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
Each Agent's obligation to contribute pursuant to this Section 6
shall be several in the proportion that the principal amount of
the Notes the sale of which by or through such Agent gave rise to
such losses, claims, damages or liabilities bears to the
aggregate principal amount of the Notes the sale of which by or
through any Agent gave rise to such losses, claims, damages or
liabilities, and not joint.
(e) The Company and the Agents agree that it would
not
be just or equitable if contribution pursuant to this Section 6
were determined by pro rata allocation (even if the Agents 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) of this Section 6.
The amount paid or payable by an indemnified party as a result of
the losses, claims, damages and liabilities referred to in
paragraph (d) of this Section 6 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 6, no Agent
shall be required to contribute any amount in excess of the
amount by which the total price at which the Notes referred to in
paragraph (d) of this Section 6 that were offered and sold to the
public through such Agent exceeds the amount of any damages that
such Agent 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 Securities Act) shall
be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The remedies provided for in
this Section 6 are not exclusive and shall not limit any rights
or remedies which may otherwise be available to any indemnified
party at law or in equity.
(f) The indemnity and contribution provisions
contained
in this Section 6, and the representations, warranties and other
statements of the Company, its officers and the Agents set forth
in or made pursuant to this Agreement or any Terms Agreement will
remain in full force and effect regardless
21
<PAGE>
of (i) any termination of this Agreement or any such Terms
Agreement, (ii) any investigation made by or on behalf of any
Agent or any person controlling any Agent or by or on behalf of
the Company, its officers or directors or any person controlling
the Company and (iii) acceptance of and payment for any of the
Notes.
7. Position of the Agents. In acting under this Agreement
and in connection with the sale of any Notes by the Company
(other than Notes sold to an Agent pursuant to a Terms
Agreement), each Agent is acting solely as agent of the Company
and does not assume any obligation towards or relationship of
agency or trust with any purchaser of Notes. An Agent shall make
its best efforts to assist the Company in obtaining performance
by each purchaser whose offer to purchase Notes has been
solicited by such Agent and accepted by the Company, but such
Agent shall not have any liability to the Company in the event
any such purchase is not consummated for any reason. If the
Company shall default in its obligations to deliver Notes to a
purchaser whose offer it has accepted, the Company shall hold the
relevant Agent harmless against any loss, claim, damage or
liability arising from or as a result of such default and shall,
in particular, pay to such Agent the commission it would have
received had such sale been consummated.
8. Termination. This Agreement may be terminated at any
time by the Company or, as to any Agent, by the Company or such
Agent upon the giving of written notice of such termination to
the other parties hereto, but without prejudice to any rights,
obligations or liabilities of any party hereto accrued or
incurred prior to such termination. The termination of this
Agreement shall not require termination of any Terms Agreement,
and the termination of any such Terms Agreement shall not require
termination of this Agreement. If this Agreement is terminated,
the provisions of the third paragraph of Section 2(a), Section
2(e), the last sentence of Section 3(b) and Sections 3(c), 3(h),
6, 7, 9, 11 and 14 shall survive; provided that if at the time of
termination an offer to purchase Notes has been accepted by the
Company but the time of delivery to the purchaser or its agent of
such Notes has not occurred, the provisions of Sections 2(b),
2(c), 3(a), 3(e), 3(f), 3(g), 3(i), 4 and 5 shall also survive
until such delivery has been made.
9. Notices. All communications hereunder will be in
writing
and effective only on receipt, and, if sent to Morgan Stanley,
will be mailed, delivered or telefaxed and confirmed to Morgan
Stanley at 1585 Broadway, New York, New York 10036, Attention:
Manager, Credit Department (telefax number: 212-761-0687), with a
copy to 1585 Broadway, New York, New York 10036, Attention:
Managing Director, Debt Syndicate (telefax number: 212-761-0785),
or, if sent to Merrill Lynch, Pierce, Fenner & Smith
Incorporated, will be mailed, delivered or telefaxed and
confirmed to Merrill Lynch, Pierce, Fenner & Smith
22
<PAGE>
Incorporated, 250 Vesey Street, 11th Floor, New York, New York
10281, Attention: Product Management - MTN (telefax number
212-449-2234), or, if sent to NationsBanc Capital Markets, Inc.
will be mailed, delivered or telefaxed and confirmed to
NationsBanc Capital Markets, Inc., NationsBanc Corporate Center,
100 North Tryon Street, NC1-007-07-01, Charlotte, North Carolina
28255, Attention: Lynn McConnell (telefax number 704-388-9939),
or, if sent to the Company, will be mailed, delivered or
telefaxed and confirmed to the Company at 1083 Sain Street, P.O.
Box 1408, Fayetteville, AR 72702-1408, Attention:
Treasurer (telefax number (501) 521-1147).
10. Successors. This Agreement and any Terms Agreement
will
inure to the benefit of and be binding upon the parties hereto
and their respective successors and the officers, directors and
controlling persons referred to in Section 6, and no other person
will have any right or obligation hereunder. No purchaser of
Notes shall be deemed to be a party hereto by reason merely of
such purchase.
11. Amendments. This Agreement may be amended or
supplemented if, but only if, such amendment or supplement is in
writing and is signed by the Company and each Agent; provided
that the Company may from time to time, on seven days prior
written notice to the Agents but without the consent of any
Agent, amend this Agreement to add as a party hereto one or more
additional firms registered under the Exchange Act, whereupon
each such firm shall become an Agent hereunder on the same terms
and conditions as the other Agents that are parties hereto. The
Agents shall sign any amendment or supplement giving effect to
the addition of any such firm as an Agent under this Agreement.
12. Counterparts. This Agreement may be signed in two or
more counterparts, each of which shall be an original, with the
same effect as if the signatures thereto and hereto were upon the
same instrument.
13. Applicable Law. This Agreement shall be governed by
and
construed in accordance with the internal laws of the State of
New York.
14. Headings. The headings of the sections of this
Agreement have
been inserted for convenience of reference only and shall not be
deemed a
part of this Agreement.
23
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate
hereof, whereupon this letter and your acceptance shall represent
a binding agreement between the Company and you.
Very truly yours,
SOUTHWESTERN ENERGY
COMPANY
By
------------------------
Title:
The foregoing Agreement is hereby
confirmed and accepted as of
the date first above written.
MORGAN STANLEY & CO. INCORPORATED
By
---------------------------------
Title:
MERRILL LYNCH, PIERCE,
FENNER & SMITH INCORPORATED
By
---------------------------------
Title:
NATIONSBANC CAPITAL MARKETS, INC.
By
---------------------------------
Title:
30
<PAGE>
EXHIBIT A
Subsidiaries
Southwestern Energy Company
Arkansas Western Gas Company
Southwestern Energy Production Company
SEECO, Inc.
A-1
<PAGE>
EXHIBIT B
SOUTHWESTERN ENERGY COMPANY
MEDIUM-TERM NOTES
TERMS AGREEMENT
_________________, 19__
Southwestern Energy Company
1083 Sain Street
P.O. Box 1408
Fayetteville AR 72702-1408
Attention: Treasurer
Re: Distribution Agreement dated February 20, 1997
(the "Distribution Agreement")
We agree to purchase your Medium-Term Notes having the
following terms:
[We agree to purchase, severally and not jointly, the
principal amount of Notes set forth below opposite our names:
Principal Amount
Name of Notes
---- ----------------
Morgan Stanley & Co. Incorporated...........
[Insert syndicate list]1....................
Total..........................
- --------
1 Delete if the transaction will not be syndicated.
B-1
<PAGE>
The Notes shall have the following terms:
All Notes: Fixed Rate Notes: Floating Rate Notes:
Principal amount: Interest Rate: Base rate:
Purchase price: Applicability of Index maturity:
modified payment
Price to public: upon acceleration: Spread:
Settlement date
and time: If yes, state
issue price: Spread multiplier:
Place of delivery: Amortization Alternate rate event
schedule: spread:
Maturity date:
Initial accrual period Initial interest rate:
OID:
Initial interest reset
date:
Total amount of OID: Interest reset dates:
Original yield to maturity: Interest reset period:
Optional repayment Maximum interest
date(s): rate:
Optional redemption Minimum interest
date(s): rate:
Initial redemption date: Interest payment
period:
Initial redemption
percentage: Interest payment
dates:
Annual redemption
percentage decrease: Calculation agent:
Other terms:
B-2
<PAGE>
The provisions of Sections 1, 2(b) and 2(c) and 3 through
6, 9, 10, 11 and 14 of the Distribution Agreement and the related
definitions are incorporated by reference herein and shall be
deemed to have the same force and effect as if set forth in full
herein.
[If on the Settlement Date any one or more of the Agents
shall fail or refuse to purchase Notes that it has or they have
agreed to purchase on such date, and the aggregate amount of
Notes which such defaulting Agent or Agents agreed but failed or
refused to purchase is not more than one-tenth of the aggregate
amount of the Notes to be purchased on such date, the other
Agents shall be obligated severally in the proportions that the
amount of Notes set forth opposite their respective names above
bears to the aggregate amount of Notes set forth opposite the
names of all such non-defaulting Agents, or in such other
proportions as _____________ may specify, to purchase the Notes
which such defaulting Agent or Agents agreed but failed or
refused to purchase on such date; provided that in no event shall
the amount of Notes that any Agent has agreed to purchase
pursuant to this Agreement be increased pursuant to this
paragraph by an amount in excess of one-ninth of such amount of
Notes without the written consent of such Agent. If on the
Settlement Date any Agent or Agents shall fail or refuse to
purchase Notes and the aggregate amount of Notes with respect to
which such default occurs is more than one-tenth of the aggregate
amount of Notes to be purchased on such date, and arrangements
satisfactory to ___________ and the Company for the purchase of
such Notes are not made within 36 hours after such default, this
Agreement shall terminate without liability on the part of any
non-defaulting Agent or the Company. In any such case either
___________ or the Company shall have the right to postpone the
Settlement Date but in no event for longer than seven days, in
order that the required changes, if any, in the Registration
Statement and in the Prospectus or in any other documents or
arrangements may be effected. Any action taken under this
paragraph shall not relieve any defaulting Agent from liability
in respect of any default of such Agent under this Agreement.]2
This Agreement is subject to termination on the terms
incorporated by reference herein. If this Agreement is so
terminated,
the provisions of Sections 3(h), 6, 9, 11 and 14 of the
Distribution
Agreement shall survive for the purposes of this Agreement.
- --------
2 Delete if the transaction will not be syndicated.
B-3
<PAGE>
The following information, opinions, certificates, letters
and documents referred to in Section 4 of the Distribution
Agreement will be required:
- ----------------
[NAME OF RELEVANT
AGENT(S)]
By
------------------------
Title:
Accepted:
[NAME OF ISSUER]
By
------------------------
Title:
B-4
<PAGE>
EXHIBIT C
SOUTHWESTERN ENERGY COMPANY
MEDIUM-TERM NOTES
Administrative Procedures
----------------------------------
Explained below are the administrative procedures and
specific terms of the offering of Medium-Term Notes (the
"Notes"), on a continuous basis by Southwestern Energy Company
(the "Company") pursuant to the Distribution Agreement dated
February 20, 1997 (the "Distribution Agreement") among the
Company, Morgan Stanley & Co. Incorporated, Merrill Lynch,
Pierce, Fenner & Smith Incorporated and NationsBanc Capital
Markets, Inc. (collectively, the "Agents"). The Notes will be
issued under the Indenture dated as of December 1, 1995 (the
"Indenture") between the Company and The First National Bank of
Chicago, as Trustee (the "Trustee"). In the Distribution
Agreement, the Agents have agreed to solicit purchases of the
Notes, and the administrative procedures explained below will
govern the issuance and settlement of any Notes sold through an
Agent, as agent of the Company. An Agent, as principal, may also
purchase Notes for its own account, and if requested by such
Agent, the Company and such Agent will enter into a terms
agreement (a "Terms Agreement"), as contemplated by the
Distribution Agreement. The administrative procedures explained
below will govern the issuance and settlement of any Notes
purchased by an Agent, as principal, unless otherwise specified
in the applicable Terms Agreement.
Unless otherwise specified in the applicable Pricing
Supplement (as hereinafter defined), The First National Bank of
Chicago will be the Registrar, Authenticating Agent and Paying
Agent for the Notes and will perform the duties specified herein.
Each Note will be represented by either a Global Security (as
defined below) delivered to the Paying Agent, as agent for The
Depository Trust Company ("DTC"), and recorded in the book-entry
system maintained by DTC (a "Book-Entry Note") or a certificate
delivered to the holder thereof or a person designated by such
holder (a "Certificated Note"). Except as established pursuant to
the Indenture, an owner of a Book-Entry Note will not be entitled
to receive a Certificated Note.
C-1
<PAGE>
Book-Entry Notes will be issued in accordance with the
administrative procedures set forth in Part I hereof as they may
subsequently be amended as the result of changes in DTC's
operating procedures. Certificated Notes will be issued in
accordance with the administrative procedures set forth in Part
II hereof. Unless otherwise defined herein, terms defined in the
Indenture, the Notes or any pricing supplement relating to the
Notes (a "Pricing Supplement") shall be used therein as therein
defined.
The Company will advise the Agents in writing of the
employees of the Company with whom the Agents are to communicate
regarding offers to purchase Notes and the related settlement
details.
PART I: ADMINISTRATIVE PROCEDURES FOR BOOK-ENTRY NOTES
In connection with the qualification of the Book-Entry
Notes for eligibility in the book-entry system maintained by DTC,
the Paying Agent will perform the custodial, document control and
administrative functions described below, in accordance with its
respective obligations under a Letter of Representation from the
Company and the Paying Agent to DTC, dated February 20, 1997 and
a Medium-Term Note Certificate Agreement between the Paying Agent
and DTC, dated as of May 28, 1989 (the "MTN Certificate
Agreement"), and its obligations as a participant in DTC,
including DTC's Same-Day Funds Settlement System ("SDFS").
Issuance: On any date of settlement (as defined under
"Settlement" below) for one or more Book-Entry
Notes, the Company will issue a single global
security in
fully registered form without coupons (a "Global
Security") representing all such Notes that have the
same Original Issue Date, Maturity Date and other
terms. Each Global Security will be dated and
issued as
of the date of its authentication by the Paying
Agent.
Each Global Security will bear an "Interest Accrual
Date", which will be (i) with respect to an original
Global Security (or any portion thereof), its
original
issuance date and (ii) with respect to any Global
Security (or any portion thereof) issued
subsequently
upon exchange of a Global Security, or in lieu of a
destroyed, lost or stolen Global Security, the most
recent Interest Payment Date to which interest has
been
paid or duly provided for on the predecessor Global
Security (or if no such payment or provision has
been
made, the original issuance date of the predecessor
C-2
<PAGE>
Global Security), regardless of the date of
authentication of such subsequently issued Global
Security. No Global Security will represent any
Certificated Note.
Denomi-
nations: Book-Entry Notes will be issued in principal amounts
of
$1,000 or any amount in excess thereof that is an
integral multiple of $1,000.
Preparation
of Pricing
Supplement: If any offer to purchase a Book-Entry Note
is accepted by or on behalf of the Company, the
Company will prepare a "Pricing Supplement"
reflecting the
terms of such Note. The Company will, as soon as
possible,
deliver such number of copies of such Pricing
Supplement to
the relevant Agent as such Agent shall request and
one copy to
the Paying Agent.
In each instance that a Pricing Supplement is
prepared, the relevant Agent will affix the
Pricing Supplement to Offering Circulars prior
to their use. Outdated Pricing Supplements, and
the Offering Circulars to which they are
attached (other than those retained for files),
will be destroyed.
Settlement: The receipt by the Company of immediately available
funds
in payment for a Book-Entry Note and the
authentication
and issuance of the Global Security representing
such
Note shall constitute "settlement" with respect to
such
Note. All offers accepted by the Company will be
settled
on the third Business Day next succeeding the date
of
acceptance pursuant to the timetable for settlement
set
forth below, unless the Company and the purchaser
agree
to settlement on another day, which shall be no
earlier
than the next Business Day.
Settlement Settlement Procedures with regard to each
Procedures: Book-Entry Note sold by the Company to or through an
Agent (unless otherwise specified pursuant to a
Terms
Agreement) shall be as follows:
A. The relevant Agent will advise the Company by
telephone that such Note is a Book-Entry Note and of
the following settlement information:
C-3
<PAGE>
1. Principal amount.
2. Maturity Date.
3. In the case of a Fixed Rate Book-Entry
Note, the Interest Rate, when such Note
will pay interest, whether such Note is
an Amortizing Note, and, if so, the
amortization schedule, or, in the case of
a Floating Rate Book-Entry Note, the
Initial Interest Rate (if known at such
time), Interest Payment Date(s), Interest
Payment Period, Calculation Agent, Base
Rate, Index Maturity, Interest Reset
Period, Initial Interest Reset Date,
Interest Reset Dates, Spread or Spread
Multiplier (if any), Minimum Interest
Rate (if any), Maximum Interest Rate (if
any) and the Alternate Rate Event Spread
(if any).
4. Redemption or repayment provisions
(if any).
5. Settlement date and time (Original
Issue
Date).
6. Interest Accrual Date.
7. Price.
8. Agent's commission (if any)
determined as
provided in the Distribution Agreement.
9. Whether the Note is an Original Issue
Discount Note (an "OID Note"), and if it
is an OID Note, the total amount of OID,
the yield to maturity, the initial
accrual period OID and the applicability
of Modified Payment upon Acceleration
(and, if so, the Issue Price).
10. Whether the Note is an Indexed Note,
and if
it is an Indexed Note, the specified
index and
other particulars applicable thereto.
C-4
<PAGE>
11. Whether the Note is a Renewable
Note, and
if it is a Renewable Note, the Initial
Maturity
Date and the Final Maturity Date.
12. Whether the Company has the option to
extend the Original Maturity Date of the
Note, and, if so, the Final Maturity Date
of such Note.
13. Whether the Company has the option
to
reset the Interest Rate, the Spread or
the Spread
Multiplier of the Note.
14. Any other applicable terms.
B. The Company will advise the Paying Agent by
telephone or electronic transmission (confirmed
in writing at any time on the same date) of the
information set forth in Settlement Procedure
"A" above. The Paying Agent will then assign a
CUSIP number to the Global Security
representing such Note and will notify the
Company and the relevant Agent of such CUSIP
number by telephone as soon as practicable.
C. The Paying Agent will enter a pending
deposit message through DTC's Participant
Terminal System, providing the following
settlement information to DTC, the relevant
Agent and Standard & Poor's Corporation:
1. The information set forth in
Settlement
Procedure "A".
2. The Initial Interest Payment Date for
such Note, the number of days by which
such date succeeds the related DTC Record
Date (which in the case of Floating Rate
Notes which reset daily or weekly, shall
be the date five calendar days
immediately preceding the applicable
Interest Payment Date and, in the case of
all other Notes, shall be the Record Date
as defined in the Note) and, if known,
the amount of interest payable on such
Initial Interest Payment Date.
C-5
<PAGE>
3. The CUSIP number of the Global
Security
representing such Note.
4. Whether such Global Security will
represent any other Book-Entry Note (to
the extent known at such time).
5. Whether such Note is an Amortizing
Note (by an appropriate notation in the
comments field of DTC's Participant
Terminal System).
6. The number of participant accounts to
be
maintained by DTC on behalf of the
relevant
Agent and the Paying Agent.
D. The Paying Agent will complete and
authenticate the
Global Security representing such Note.
E. DTC will credit such Note to the Paying
Agent's
participant account at DTC.
F. The Paying Agent will enter an SDFS deliver
order through DTC's Participant Terminal System
instructing DTC to (i) debit such Note to the
Paying Agent's participant account and credit
such Note to the relevant Agent's participant
account and (ii) debit such Agent's settlement
account and credit the Paying Agent settlement
account for an amount equal to the price of
such Note less such Agent's commission (if
any). The entry of such a deliver order shall
constitute a representation and warranty by the
Paying Agent to DTC that (a) the Global
Security representing such Book-Entry Note has
been issued and authenticated and (b) the
Paying Agent is holding such Global Security
pursuant to the MTN Certificate Agreement.
G. Unless the relevant Agent is the end
purchaser of such Note, such Agent will enter
an SDFS deliver order through DTC's Participant
Terminal System instructing DTC (i) to debit
such Note to such Agent's participant account
and credit such Note to the participant
accounts of the participants with respect to
such Note and (ii) to debit the settlement
accounts of such participants and
C-6
<PAGE>
credit the settlement account of such Agent for
an amount equal to the price of such Note.
H. Transfers of funds in accordance with SDFS
deliver orders described in Settlement
Procedures "F" and "G" will be settled in
accordance with SDFS operating procedures in
effect on the settlement date.
I. The Paying Agent will credit to the account
of the Company maintained at McIlroy Bank and
Trust (Account Number 6405902), New York, New
York, in immediately available funds the amount
transferred to the Paying Agent in accordance
with Settlement Procedure "F".
J. Unless the relevant Agent is the end
purchaser of such Note, such Agent will confirm
the purchase of such Note to the purchaser
either by transmitting to the Participants with
respect to such Note a confirmation order or
orders through DTC's institutional delivery
system or by mailing a written confirmation to
such purchaser.
Settlement
Procedures
Timetable: For sales by the Company of Book-Entry Notes
to or through an Agent (unless otherwise
specified pursuant to a Terms Agreement) for
settlement
on the first Business Day after the sale date,
Settlement
Procedures "A" through "J" set forth above
shall be
completed as soon as possible but not later
than the
respective times in New York City set forth
below:
Settlement
Procedure Time
---------- ----
A 11:00 A.M. on sale date
B 12:00 Noon on sale date
C 2:00 P.M. on sale date
D 9:00 A.M. on settlement date
E 10:00 A.M. on settlement date
F-G 2:00 P.M. on settlement date
H 4:45 P.M. on settlement date
I-J 5:00 P.M. on settlement date
C-7
<PAGE>
If a sale is to be settled more than one
Business Day after the sale date, Settlement
Procedures "A", "B" and "C" shall be completed
as soon as practicable but no later than 11:00
A.M., 12:00 Noon and 2:00 P.M., respectively,
on the first Business Day after the sale date.
If the Initial Interest Rate for a Floating
Rate Book-Entry Note has not been determined at
the time that Settlement Procedure "A" is
completed, Settlement Procedures "B" and "C"
shall be completed as soon as such rate has
been determined but no later than 12:00 Noon
and 2:00 P.M., respectively, on the first
Business Day before the settlement date.
Settlement Procedure "H" is subject to
extension in accordance with any extension of
Fedwire closing deadlines and in the other
events specified in the SDFS operating
procedures in effect on the settlement date.
If settlement of a Book-Entry Note is
rescheduled or cancelled, the Paying Agent,
after receiving notice from the Company or the
relevant Agent, will deliver to DTC, through
DTC's Participant Terminal System, a
cancellation message to such effect by no later
than 2:00 P.M. on the Business Day immediately
preceding the scheduled settlement date.
Failure
to Settle: If the Paying Agent fails to enter an SDFS
deliver order
with respect to a Book-Entry Note pursuant to
Settlement
Procedure "F", the Paying Agent may deliver to
DTC,
through DTC's Participant Terminal System, as
soon as
practicable a withdrawal message instructing
DTC to debit
such Note to the Paying Agent's participant
account,
provided that the Paying Agent's participant
account
contains a principal amount of the Global
Security
representing such Note that is at least equal
to the
principal amount to be debited. If a withdrawal
message
is processed with respect to all the Book-Entry
Notes
represented by a Global Security, the Paying
Agent will
mark such Global Security "cancelled", make
appropriate
entries in the Paying Agent's records and send
such
cancelled Global Security to the Company. The
CUSIP
number assigned to such Global Security shall,
in
accordance with the procedures of the CUSIP
Service
Bureau of Standard & Poor's
C-8
<PAGE>
Corporation, be cancelled and not immediately
reassigned.
If a withdrawal message is processed with
respect to one
or more, but not all, of the Book-Entry Notes
represented
by a Global Security, the Paying Agent will
exchange such
Global Security for two Global Securities, one
of which
shall represent such Book-Entry Note or Notes
and shall
be cancelled immediately after issuance and the
other of
which shall represent the remaining Book-Entry
Notes
previously represented by the surrendered
Global Security
and shall bear the CUSIP number of the
surrendered Global
Security.
If the purchase price for any Book-Entry Note
is not timely paid to the participants with
respect to such Note by the beneficial
purchaser thereof (or a person, including an
indirect participant in DTC, acting on behalf
of such purchaser), such participants and, in
turn, the relevant Agent may enter SDFS deliver
orders through DTC's Participant Terminal
System reversing the orders entered pursuant to
Settlement Procedures "F" and "G",
respectively. Thereafter, the Paying Agent will
deliver the withdrawal message and take the
related actions described in the preceding
paragraph.
Notwithstanding the foregoing, upon any failure
to settle with respect to a Book-Entry Note,
DTC may take any actions in accordance with its
SDFS operating procedures then in effect.
In the event of a failure to settle with
respect to one or more, but not all, of the
Book-Entry Notes to have been represented by a
Global Security, the Paying Agent will provide,
in accordance with Settlement Procedures "D"
and "F", for the authentication and issuance of
a Global Security representing the Book-Entry
Notes to be represented by such Global Security
and will make appropriate entries in its
records.
C-9
<PAGE>
PART II: ADMINISTRATION PROCEDURES FOR CERTIFICATED NOTES
The Paying Agent will serve as Registrar in connection with
the Certificated Notes.
Issuance: Each Certificated Note will be dated and issued as
of the
date of its authentication by the Paying Agent.
Each
Certificated Note will bear an Original Issue Date,
which will be (i) with respect to an original
Certificated
Note (or any portion thereof), its original issuance
date
(which will be the settlement date) and (ii) with
respect
to any Certificated Note (or portion thereof) issued
subsequently upon transfer or exchange of a
Certificated
Note or in lieu of a destroyed, lost or stolen
Certificated
Note, the original issuance date of the predecessor
Certificated Note, regardless of the date of
authentication of such subsequently issued
Certificated
Note.
Preparation If any offer to purchase a Certificated Note is
of Pricing accepted by or on behalf of the Company, the Company
Supplement: will prepare a Pricing Supplement reflecting the
terms of
such Note. The Company will, as soon as possible,
deliver
the number of copies of such Pricing Supplement to
the
relevant Agent as such Agent shall request.
In each instance that a Pricing Supplement is
prepared, the relevant Agent will affix the
Pricing Supplement to Offering Circulars prior
to their use. Outdated Pricing Supplements, and
the Offering Circulars to which they are
attached (other than those retained for files),
will be destroyed.
Settlement: The receipt by the Company of immediately available
funds
in exchange for an authenticated Certificated Note
delivered to the relevant Agent and such Agent's
delivery
of such Note against receipt of immediately available
funds shall constitute "settlement" with respect to
such
Note. All offers accepted by the Company will be
settled
on the third Business Day next succeeding the date of
acceptance pursuant to the timetable for settlement
set
forth below, unless the Company and the
C-10
<PAGE>
purchaser agree to settlement on another date, which
date
shall be no earlier than the next Business Day.
Settlement Settlement Procedures with regard to each
Procedures: Certificated Note sold by the Company to or through
an
Agent (unless otherwise specified pursuant to a Terms
Agreement) shall be as follows:
A. The relevant Agent will advise the Company by
telephone that such Note is a Certificated Note and
of
the following settlement information:
1. Name in which such Note is to be registered
("Registered Owner").
2. Address of the Registered Owner and address
for payment of principal and interest.
3. Taxpayer identification number of the
Registered Owner (if available).
4. Principal amount.
5. Maturity Date.
6. In the case of a Fixed Rate
Certificated Note, the Interest Rate,
when such Note will pay interest and
whether such Note is an Amortizing Note
and, if so, the amortization schedule,
or, in the case of a Floating Rate
Certificated Note, the Initial Interest
Rate (if known at such time), Interest
Payment Date(s), Interest Payment Period,
Calculation Agent, Base Rate, Index
Maturity, Interest Reset Period, Initial
Interest Reset Date, Interest Reset
Dates, Spread or Spread Multiplier (if
any), Minimum Interest Rate (if any),
Maximum Interest Rate (if any) and the
Alternate Rate Event Spread (if any).
7. Redemption or repayment provisions (if
any).
8. Settlement date and time (Original Issue
Date).
C-11
<PAGE>
9. Interest Accrual Date.
10. Price.
11. Agent's commission (if any) determined as
provided in the Distribution Agreement.
12. Whether the Note is an OID Note, and
if it is an OID Note, the total amount of
OID, the yield to maturity, the initial
accrual period OID and the applicability
of Modified Payment upon Acceleration
(and if so, the Issue Price).
13. Whether the Note is an Indexed Note, and
if
it is an Indexed Note, the specified index and
other particulars applicable thereto.
14. Whether the Note is a Renewable Note, and
if it is a Renewable Note, the Initial Maturity
Date and the Final Maturity Date.
15. Whether the Company has the option to
extend the Original Maturity Date of the
Note, and, if so, the Final Maturity Date
of such Note.
16. Whether the Company has the option to
reset the Interest Rate, the Spread or the
Spread
Multiplier of the Note.
17. Any other applicable terms.
B. The Company will advise the Paying Agent by
telephone or electronic transmission (confirmed
in writing at any time on the same date) of the
information set forth in Settlement Procedure
"A" above.
C. The Company will have delivered to the
Paying Agent a pre-printed four-ply packet for
such Note, which packet will contain the
following documents in forms that have been
approved by the Company, the relevant Agent and
the Paying Agent:
1. Note with customer confirmation.
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<PAGE>
2. Stub One - For the Paying Agent.
3. Stub Two - For the relevant Agent.
4. Stub Three - For the Company.
D. The Paying Agent will complete such Note and
authenticate such Note and deliver it (with the
confirmation) and Stubs One and Two to the
relevant Agent, and such Agent will acknowledge
receipt of the Note by stamping or otherwise
marking Stub One and returning it to the Paying
Agent. Such delivery will be made only against
such acknowledgment of receipt and evidence
that instructions have been given by such Agent
for payment to the account of the Company at
McIlroy Bank and Trust (Account Number
640592), New York, New York, or to such
other account as the Company shall have
specified to such Agent and the Paying Agent,
in immediately available funds, of an amount
equal to the price of such Note less such
Agent's commission (if any). In the event that
the instructions given by such Agent for
payment to the account of the Company are
revoked and the Agent has advanced funds to the
Company, the Company will as promptly as
possible wire transfer to the account of such
Agent an amount of immediately available funds
equal to the amount of such payment made.
E. Unless the relevant Agent is the end
purchaser of such Note, such Agent will deliver
such Note (with confirmation) to the customer
against payment in immediately available funds.
Such Agent will obtain the acknowledgment of
receipt of such Note by retaining Stub Two.
F. The Paying Agent will send Stub Three to the
Company by first-class mail.
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<PAGE>
Settlement For sales by the Company of Certificated
Procedures Notes to or through an Agent (unless otherwise
Timetable: specified pursuant to a Terms Agreement), Settlement
Procedures "A" through "F" set forth above shall be
completed on or before the respective times in New
York City set forth below:
Settlement
Procedure Time
---------- ----
A 2:00 P.M. on day before
settlement date
B 3:00 P.M. on day before
settlement date
C-D 2:15 P.M. on settlement
date
E 3:00 P.M. on settlement
date
F 5:00 P.M. on settlement
date
Failure If a purchaser fails to accept delivery of
to Settle: and make payment for any Certificated Note, the
relevant Agent will notify the Company and the
Paying Agent by telephone and return such Note to
the Paying Agent. If funds have been advanced by the
relevant Agent for the purchase of such Note, upon
receipt of such notice, the Company will immediately
wire transfer to the account of such Agent an amount
equal to the price of such Note less such Agent's
commission in respect of such Note (if any). Such
wire transfer will be made on the settlement date,
if possible, and in any event not later than the
Business Day following the settlement date. If the
failure shall have occurred for any reason other
than a default by such Agent in the performance of
its obligations hereunder and under the Distribution
Agreement, then the Company will reimburse such
Agent or the Paying Agent, as appropriate, on an
equitable basis for its loss of the use of the funds
(if any) during the period when they were credited
to the account of the Company. Immediately upon
receipt of the Certificated Note in respect of which
such failure occurred, the Paying Agent will mark
such
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<PAGE>
Note "cancelled", make appropriate entries in the
Paying Agent records and send such Note to the
Company.
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<PAGE>
EXHIBIT D
Agreements of the Company
1. The agreements or forms of agreements set forth in exhibits
10.1, 10.2, 10.3, 10.4, 10.5, 10.6, 10.7, 10.8, 10.9, 10.10,
10.11, 10.12, 10.13, 10.14, 10.15, 10.16 and 10.17 to the
Company's Form 10-K for the fiscal year ended December 31,
1995.
2. Credit Agreement dated as of February 28, 1994 between
Southwestern Energy Company and The First National Bank of
Chicago, as amended on October 5, 1995 and October 25, 1996.
3. Credit Agreement dated as of April 29, 1994 between
Southwestern Energy Company and NationsBank of Texas, N.A., as
amended on August 21, 1995, October 16, 1995, and October 31,
1996.
D-1
<PAGE>
RATIO OF EARNINGS TO FIXED CHARGES
The table sets forth the ratio of earnings to fixed charges
of the
Company and its consolidated subsidiaries of the periods
indicated.
Year Ended
December 31,
- -----------------------------------------------------
1996 1995 1994 1993
1992
---- ---- ---- ----
----
Ratio of earnings
to fixed charges 2.3x 1.9x 3.6x 4.0x
3.1x
In the calculation of the ratio of earnings to fixed
charges, "earnings"
consists of income before income taxes, adjusted to add back
fixed charges
(excluding capitalized interest relating to oil and gas
properties), the
amortization of interest previously capitalized on oil and gas
properties, and
the Company's 47.93% ownership share of the fixed charges of
NOARK. "Fixed
charges" consists of interest on borrowings (including
capitalized interest),
amortization of debt discount and expense, a portion of rental
expense
determined to be representative of the interest factor, and the
Company's 60%
guaranty of the fixed charges of NOARK. A statement setting
forth the
computation of the unaudited ratio of earnings to fixed charges
is filed as an
exhibit to the registration statement of which this Prospectus
Supplement is a
part.
<PAGE>
EXHIBIT 12
SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
($ in 000's)
Year Ended December 31
- ---------------------------------------------------------
1996 1995 1994 1993
1992 1991
---- ---- ---- ----
- ---- ----
Income before
income taxes $30,937 $18,794 $40,853 $46,882
$35,584 $32,222
Add:
Fixed charges,
Southwestern 17,336 13,773 10,616 10,702
11,636 11,398
Fixed charges,
NOARK (1) 3,802 3,740 3,642 3,312
901 13
Amortization
of capitalized
interest 931 825 813 677
470 341
Deduct:
Interest
capitalized on
oil and gas
properties 4,083 2,305 1,562 1,441
1,491 1,404
------- ------- ------- -------
- ------- -------
Earnings for
computation $48,922 $34,828 $54,362 $60,132
$47,100 $42,570
======= ======= ======= =======
======= =======
Fixed charges:
Southwestern:
Interest on
indebtedness $16,652 $13,398 $10,285 $10,399
$11,335 $11,155
Amortization
of debt
discount
and expense 533 225 180 174
144 85
Portion of
rents
representative
of interest 150 150 150 129
156 158
------- ------- ------- -------
- ------- -------
Total fixed
charges,
Southwestern 17,336 13,773 10,615 10,702
11,635 11,398
NOARK (2) 4,296 4,682 4,605 4,199
3,661 371
------- ------- ------- -------
- ------- -------
Total fixed
charges $21,631 $18,455 $15,220 $14,901
$15,296 $11,769
======= ======= ======= =======
======= =======
Ratio of earnings
to fixed charges 2.3 1.9 3.6 4.0
3.1 3.6
======= ======= ======= =======
======= =======
(1) Represents Southwestern's ownership share of interest on
indebtedness
and amortization of debt expense of the NOARK Pipeline
System, Limited
Partnership ("NOARK").
(2) Represents Southwestern's 60% guaranty of NOARK's interest on
indebtedness and amortization of debt expense.
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement of our
report dated February 5, 1996 incorporated by reference in
Southwestern Energy Company's Form 10-K for the year ended
December 31, 1995, and to all references to our Firm, included in
this prospectus supplement dated February 21, 1997 to the
Registration Statement File No. 33-63895.
/s/ Arthur Andersen LLP
Tulsa, Oklahoma
February 21, 1997
<PAGE>
