<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended MARCH 31, 1994
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-9971
BURLINGTON RESOURCES INC.
(Exact name of registrant as specified in its charter)
Delaware 91-1413284
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
5051 Westheimer, Houston, Texas 77056
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (713) 831-1600
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----------- -----------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding
----- -----------
Common Stock, par value $.01 per share
as of March 31, 1994 129,716,665
<PAGE> 2
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements
BURLINGTON RESOURCES INC.
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
FIRST QUARTER
--------------------
1994 1993
-------- --------
(In Thousands, Except Share Amounts)
Revenues....................................... $320,323 $316,466
Costs and Expenses............................. 251,144 250,083
-------- --------
Operating Income............................... 69,179 66,383
Interest Expense............................... 18,056 19,801
Other Income (Expense) - Net................... (2,280) 45
-------- --------
Income from Continuing Operations
Before Income Taxes......................... 48,843 46,627
Provision for Income Taxes..................... 1,123 1,399
-------- --------
Income from Continuing Operations.............. 47,720 45,228
Income from Discontinued Operations -
Net of Income Taxes........................ - 633
-------- --------
Net Income..................................... $ 47,720 $ 45,861
======== ========
Earnings per Common share:
Continuing Operations......................... $ 0.37 $ 0.35
Discontinued Operations....................... - -
-------- --------
Total......................................... $ 0.37 $ 0.35
======== ========
See Accompanying Notes to Consolidated Financial Statements.
- 2 -
<PAGE> 3
BURLINGTON RESOURCES INC.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
March 31, December 31,
1994 1993
-------- -----------
(In Thousands)
<S> <C> <C>
ASSETS
Current Assets:
Cash and Short-term Investments ................................ $ 18,032 $ 19,784
Accounts Receivable ............................................ 221,631 218,361
Inventories .................................................... 25,419 23,954
Other Current Assets ........................................... 22,001 14,572
----------- -----------
287,083 276,671
----------- -----------
Oil & Gas Properties (Successful Efforts Method) ................ 5,132,523 5,027,312
Other Properties ................................................ 534,356 540,342
----------- -----------
5,666,879 5,567,654
Accumulated Depreciation, Depletion and Amortization ........... 1,694,147 1,631,941
----------- -----------
Properties - Net .............................................. 3,972,732 3,935,713
----------- -----------
Other Assets .................................................... 209,604 235,336
----------- -----------
Total Assets ................................................. $ 4,469,419 $ 4,447,720
=========== ===========
LIABILITIES
Current Liabilities:
Accounts Payable ............................................... $ 204,179 $ 202,565
Taxes Payable .................................................. 73,060 58,372
Other Current Liabilities ...................................... 24,363 38,680
----------- -----------
301,602 299,617
----------- -----------
Long-term Debt .................................................. 816,542 819,071
----------- -----------
Deferred Income Taxes ........................................... 556,459 566,758
----------- -----------
Other Liabilities and Deferred Credits .......................... 155,632 154,216
----------- -----------
Commitments and Contingent Liabilities
STOCKHOLDERS' EQUITY
Common Stock, Par Value, $ .01 Per Share
(Authorized 325,000,000 Shares; Issued 150,000,000 Shares) ..... 1,500 1,500
Paid-in Capital ................................................. 2,936,819 2,936,934
Retained Earnings ............................................... 497,553 467,667
----------- -----------
3,435,872 3,406,101
Cost of Treasury Stock
(1994, 20,283,335 Shares; 1993, 20,316,521 Shares) ............. 796,688 798,043
----------- -----------
Common Stockholders' Equity ..................................... 2,639,184 2,608,058
----------- -----------
Total Liabilities and Common Stockholders' Equity ............ $ 4,469,419 $ 4,447,720
=========== ===========
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
- 3 -
<PAGE> 4
BURLINGTON RESOURCES INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS
------------------------------
1994 1993
-------- --------
(In Thousands)
<S> <C> <C>
Cash Flows From Continuing Operating Activities:
Income from Continuing Operations......................... $ 47,720 $ 45,228
Adjustments to Reconcile Income to Net Cash Provided By
Continuing Operating Activities:
Depreciation, Depletion and Amortization................. 74,888 71,227
Deferred Income Taxes.................................... (10,306) (10,431)
Exploration Costs........................................ 7,518 4,827
Working Capital Changes:
Accounts Receivable..................................... (3,270) 15,701
Inventories............................................. (1,465) 2,797
Other Current Assets.................................... (7,429) 67,866
Accounts Payable........................................ 1,614 (4,125)
Taxes Payable........................................... 14,688 (6,481)
Other Current Liabilities............................... (14,317) (24,289)
Other.................................................... 35,411 (28,963)
-------- --------
Net Cash Provided By Continuing Operating Activities. 145,052 133,357
-------- --------
Cash Flows From Continuing Investing Activities:
Additions to Properties................................... (125,955) (82,202)
Other..................................................... 2,029 49,504
-------- --------
Net Cash Used In Continuing Investing Activities..... (123,926) (32,698)
-------- --------
Cash Flows From Continuing Financing Activities:
Reduction in Long-term Debt............................... (2,575) (67,872)
Dividends Paid............................................ (17,919) (16,144)
Treasury Stock Transactions - Net......................... 1,696 32,041
Other..................................................... (11,891) (18,691)
-------- --------
Net Cash Used In Continuing Financing Activities..... (30,689) (70,666)
-------- --------
Increase (Decrease) in Cash and Short-term Investments
From Continuing Operations................................ (9,563) 29,993
Cash Provided By (Used In) Discontinued Operations......... 7,811 (10,876)
Cash and Short-term Investments:
Beginning of Year......................................... 19,784 31,729
-------- --------
End of Period............................................. $ 18,032 $ 50,846
======== ========
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
- 4 -
<PAGE> 5
BURLINGTON RESOURCES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
The 1993 Annual Report on Form 10-K of Burlington Resources Inc. (the
"Company") includes a summary of significant accounting policies and should
be read in conjunction with this Form 10-Q. The statements for the periods
presented herein are unaudited, condensed and do not contain all
information required by generally accepted accounting principles to be
included in a full set of financial statements. In the opinion of
management, all material adjustments necessary to present fairly the
results of operations have been included. All such adjustments are of a
normal, recurring nature. The results of operations for any interim period
are not necessarily indicative of the results of operations for the entire
year.
Earnings per common share is based on the weighted average number of common
shares outstanding on a year to date basis. The weighted average number of
common shares outstanding was 131 million and 130 million for the first
three months of 1994 and 1993, respectively.
2. SUBSEQUENT EVENT
On April 26, 1994, the Company acquired Maxus Energy Corporation's
("Maxus") 87.1 percent interest in Diamond Shamrock Offshore Partners
Limited Partnership (the "Partnership"), including the general partner's
interests in the Partnership. The Company also announced its intention to
acquire the remaining 12.9 percent of the Partnership in a transaction
expected to close in July 1994. In a separate transaction, the Company
purchased an additional offshore property and one onshore property from
Maxus. The aggregate net purchase price, including the remaining 12.9
percent of the Partnership, is $375 million. The proved and probable
reserves acquired by the Company are approximately 375 BCFE of natural
gas, located on approximately 100,000 developed and 200,000 undeveloped
acres. The acquired properties currently produce approximately 95 MMCF
per day of natural gas and 4 thousand barrels of oil per day from
49 structures of which approximately 50 percent are operated by the
Partnership or Maxus.
- 5 -
<PAGE> 6
ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Financial Condition and Liquidity
The total long-term debt to capital (total long-term debt and stockholders'
equity) ratio at March 31, 1994, and December 31, 1993, was 24 percent. The
Company has a $900 million revolving credit facility that expires in June 1996.
As of March 31, 1994, there were no borrowings outstanding under this credit
facility although borrowing capacity is reduced by outstanding commercial
paper. At March 31, 1994, the Company had outstanding commercial paper
borrowings of $68 million at an average interest rate of 3.45 percent.
In April 1994, the Company anticipates issuing $300 million of debt securities
under a shelf registration statement filed with the Securities and Exchange
Commission. The net proceeds will be used for general corporate purposes,
including acquisition of oil and gas properties, repayment of commercial paper
and other capital expenditures. Upon issuing these debt securities, the
Company will have $200 million of capacity remaining under the shelf
registration statement. If $300 million of debt securities had been issued at
March 31, 1994, the Company's total long-term debt to capital ratio would have
been 30 percent.
Net cash provided by continuing operating activities for the first three months
of 1994 was $145 million compared to $133 million for the first three months of
1993. The increase is primarily due to higher operating income and lower
interest payments.
The Company is involved in certain environmental proceedings and other related
matters. Although it is possible that new information or future developments
could require the Company to reassess its potential exposure related to these
matters, the Company believes, based upon available information, the resolution
of these issues will not have a materially adverse effect on the consolidated
financial position or results of operations of the Company.
Capital Expenditures
Capital expenditures during the first three months of 1994 totaled $126 million
compared to $82 million for the first three months of 1993. On April 26, 1994,
the Company acquired Maxus Energy Corporation's ("Maxus") 87.1 percent interest
in Diamond Shamrock Offshore Partners Limited Partnership (the "Partnership"),
including the general partner's interests in the Partnership. The Company also
announced its intention to acquire the remaining 12.9 percent of the
Partnership in a transaction expected to close in July 1994. In a separate
transaction, the Company purchased an additional offshore property and one
onshore property from Maxus. The aggregate net purchase price, including the
remaining 12.9 percent of the Partnership, is $375 million.
- 6 -
<PAGE> 7
The proved and probable reserves acquired by the Company are approximately 375
BCFE of natural gas. The acquired properties currently produce approximately 95
MMCF per day of natural gas and 4 thousand barrels of oil per day. The natural
gas and oil are produced from 49 structures of which approximately 50 percent
are operated by the Partnership or Maxus.
Capital expenditures for 1994, including $375 million for the Maxus
acquisition and the remaining Partnership interest, are projected to be
approximately $845 million and will consist primarily of reserve acquisitions,
spending for development of oil and gas properties and processing plant and
pipeline expenditures. Capital expenditures will be funded from internal cash
flow supplemented, as needed, by external financing.
Dividends
On April 7, 1994, the Board of Directors declared a common stock quarterly
dividend of $0.1375 per share, payable July 1, 1994.
Results of Continuing Operations - First Quarter 1994 Compared to First Quarter
1993
Income from Continuing Operations for the first quarter of 1994 was $48
million, $0.37 per share, compared to $45 million, $0.35 per share, in 1993.
Operating income increased to $69 million compared to $66 million in 1993.
Revenues were $320 million for the first quarter of 1994 compared to $316
million in 1993. Average natural gas sales prices increased 13 percent in 1994
to an average of $1.79 per MCF which increased revenues $18 million. Gas sales
volumes improved 9 percent to 998 MMCF per day which increased revenues $12
million. Gas sales volumes increased primarily due to continued development of
the Company's oil and gas properties and producing property acquisitions.
Intrastate natural gas sales increased $6 million primarily due to higher sales
volumes and prices. Processing and transportation revenues increased $5
million. The revenue increases were partially offset by a $23 million decrease
in NGL revenues primarily due to lower sales volumes and prices along
with a 23 percent decline in 1994 oil prices to $13.89 per barrel which
decreased revenues $16 million.
Costs and expenses were $251 million in 1994 compared to $250 million in 1993.
The increase was primarily due to a 9 percent improvement in 1994 production
levels which increased production and processing related expenses $13 million.
Intrastate natural gas and NGL product purchases decreased $15 million.
- 7 -
<PAGE> 8
PART II - OTHER INFORMATION
ITEM 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of Stockholders was held on March 17, 1994.
The following were nominated and elected to serve as Directors of
Burlington Resources Inc. for a term of one year or until their
successors shall have been duly elected and qualified:
<TABLE>
<CAPTION>
Nominee For Withheld
------- --- --------
<S> <C> <C>
J. V. Byrne 103,786,166 606,077
S. P. Gilbert 103,779,189 613,054
J. F. McDonald 103,859,670 532,573
T. H. O'Leary 103,843,561 548,682
D. M. Roberts 103,858,586 533,657
W. Scott, Jr. 103,840,307 551,936
W. E. Wall 103,731,631 660,612
</TABLE>
The Burlington Resources Inc. 1993 Stock Incentive Plan was
presented and adopted in accordance with the following vote:
<TABLE>
<CAPTION>
Broker
For Against Abstain Non-votes
--- ------- ------- ---------
<S> <C> <C> <C>
76,586,097 15,425,703 807,046 11,573,397
</TABLE>
A stockholder proposal was not voted upon at the Annual Meeting
because the proponent was not present to present the proposal.
ITEM 6. Exhibits and Reports on Form 8-K
A. Exhibits
The following exhibits are filed as part of this report.
Exhibits incorporated by reference are designated with an asterisk.
Exhibit Nature of Exhibit
------- -----------------
4.1 The Company and its subsidiaries either
have filed with the Securities and
Exchange Commission or upon request will
furnish a copy of any instrument with
respect to long-term debt of the Company.
- 8 -
<PAGE> 9
Exhibit Nature of Exhibit
------- -----------------
11.1 Earnings per share computation.
12.1 Ratio of Earnings to Fixed Charges.
99.1 Form of Underwriting Agreement relating
to certain securities to be offered
pursuant to Registration Statements on
Form S-3 No. 33-47154 and 33-50077.
99.2 Opinion of Andrews & Kurth L.L.P. relating
to certain securities to be offered
pursuant to Registration Statements on
Form S-3 No. 33-47154 and 33-50077.
99.3 Consent of Andrews & Kurth L.L.P.
regarding use of opinion in Registration
Statements on Form S-3 No. 33-47154
and 33-50077 (included in Exhibit 99.2).
B. Reports on Form 8-K
During the quarter covered by this report there were no reports
filed on Form 8-K.
Items 1, 2, 3, and 5 of Part II are not applicable and have been omitted.
- 9 -
<PAGE> 10
Pursuant to the requirements of Section 13 (or 15(d)) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
BURLINGTON RESOURCES INC.
(Registrant)
By /s/ JOHN E. HAGALE
John E. Hagale
Senior Vice President and
Chief Financial Officer
By /s/ HAYS R. WARDEN
Hays R. Warden
Vice President & Controller
Date: April 28, 1994
- 10 -
<PAGE> 1
BURLINGTON RESOURCES INC.
EARNINGS PER SHARE COMPUTATION
EXHIBIT 11.1
(UNAUDITED)
<TABLE>
<CAPTION>
FIRST QUARTER
-----------------------------------------------
1994 1993
---------------------- ---------------------
Earnings Shares Earnings Shares
-------- ------- -------- -------
(In Thousands, Except per Share Amounts)
<S> <C> <C> <C> <C>
Primary earnings per common share:
Net earnings available for common stock and
weighted average number of common
shares outstanding.............................................. $ 47,720 129,707 $ 45,861 129,087
Stock options assumed exercised-net............................... - 812 - 1,226
-------- ------- -------- -------
Total net earnings and primary common shares...................... $ 47,720 130,519 $ 45,861 130,313
======== ======= ======== =======
Primary earnings per common share................................. $ 0.37 $ 0.35
======== ========
Fully diluted earnings per common share:
Net earnings available for common stock and
weighted average number of common
shares outstanding.............................................. $ 47,720 129,707 $ 45,861 129,087
Stock options assumed excercised-net.............................. - 812 - 1,431
-------- ------- -------- -------
Total net earnings and fully diluted common shares................ $ 47,720 130,519 $ 45,861 130,518
======== ======= ======== =======
Fully diluted earnings per common share........................... $ 0.37 $ 0.35
======== ========
</TABLE>
<PAGE> 1
BURLINGTON RESOURCES INC.
RATIO OF EARNINGS TO FIXED CHARGES
EXHIBIT 12.1
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------------
1994 1993
-------- ------
(In Thousands, Except Ratio Amounts)
<S> <C> <C>
Earnings:
Income from Continuing Operations
Before Income Taxes........................................ $ 48,843 46,627
Add:
Interest and fixed charges................................. 18,056 19,801
Portion of rent under long-term operating
leases representative of an interest factor.............. 1,123 1,180
-------- ------
Total Earnings Available for Fixed Charges................... $ 68,022 67,608
======== ======
Fixed Charges:
Interest and fixed charges................................... $ 18,056 19,801
Portion of rent under long-term operating
leases representative of an interest factor................ 1,123 1,180
Capitalized interest......................................... 345 780
-------- ------
Total Fixed Charges.......................................... $ 19,524 21,761
======== ======
Ratio of Earnings to Fixed Charges............................. 3.48 x 3.11 x
======== ======
</TABLE>
<PAGE> 1
UNDERWRITING AGREEMENT
April , 1994
Burlington Resources Inc.
5051 Westheimer (Suite 1400)
Houston, Texas 77056
Dear Sirs:
We (the "Manager" or the "Underwriter") understand that Burlington
Resources Inc., a Delaware corporation (the "Company"), proposes to issue and
sell $300,000,000 aggregate principal amount of % Notes Due 1999 (the "Debt
Securities"). The Debt Securities are also referred to herein as the "Offered
Securities". The Debt Securities will be issued pursuant to the provisions of
an Indenture dated as of April 1, 1992 (the "Indenture"), between the Company
and Citibank, N.A., as Trustee (the "Trustee").
Subject to the terms and conditions set forth or incorporated by
reference herein, the Company hereby agrees to sell and we agree to purchase
the respective principal amounts of Debt Securities set forth above at a
purchase price equal to % of the principal amount of the Debt Securities,
plus, in each case, accrued interest, if any, from May 1, 1994, to the date of
payment and delivery.
We will pay for the Offered Securities upon delivery thereof at the
offices of Cravath, Swaine & Moore, Worldwide Plaza, 825 Eighth Avenue, New
York, New York 10019 at 10:00 a.m. (New York time) on May , 1994, or at such
other time, not later than 5:00 p.m. (New York time) on May , 1994, as shall
be designated by us. The time and date of such payment and delivery are
hereinafter referred to as the Closing Date.
The Offered Securities shall have the terms set forth in the Prospectus
dated April , 1994, and the
<PAGE> 2
2
Prospectus Supplement dated April , 1994, including the following:
Maturity Date: May 1, 1999
Interest Rate: %
Redemption Provisions: None
Interest Payment Dates: Each May 1 and November 1, commencing November 1,
1994
Form and Denomination: Registered form only in denominations of $1,000 and
integral multiples thereof
Other Terms: None
All provisions contained in the document entitled Burlington Resources
Inc. Underwriting Agreement Standard Provisions (Debt Securities) dated
April , 1994, a copy of which is attached hereto, are herein incorporated by
reference in their entirety and shall be deemed to be a part of this Agreement
to the same extent as if such provisions had been set forth in full herein,
except that if any term defined in such document is otherwise defined herein,
the definition set forth herein shall control. For all purposes of the
Standard Provisions, Morgan Stanley & Co. Incorporated is serving as sole
Manager and Underwriter, and all notices shall be given to it at 1251 Avenue of
the Americas, New York, New York 10020.
Please confirm your agreement by having an authorized officer sign a
copy of this Agreement in the space set forth below.
Very truly yours,
MORGAN STANLEY & CO. INCORPORATED
By:
_________________________________
Name:
Title:
<PAGE> 3
3
Accepted:
BURLINGTON RESOURCES INC.
By:
____________________________
Name:
Title:
<PAGE> 4
BURLINGTON RESOURCES INC.
UNDERWRITING AGREEMENT
STANDARD PROVISIONS
(DEBT SECURITIES)
April , 1994
From time to time, Burlington Resources Inc., a Delaware corporation
(the "Company"), may enter into one or more underwriting agreements that
provide for the sale of designated securities to the several underwriters named
therein. The standard provisions set forth herein may be incorporated by
reference in any such underwriting agreement (an "Underwriting Agreement").
The Underwriting Agreement, including the provisions incorporated therein by
reference, is herein referred to as "this Agreement". Terms defined in the
Underwriting Agreement are used herein as therein defined.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement, including a prospectus, relating to the
Debt Securities and has filed with, or transmitted for filing to, or will file
with the Commission a prospectus supplement (the "Prospectus Supplement")
specifically relating to the Offered Securities pursuant to and in accordance
with Rule 424 under the Securities Act of 1933, as amended (the "Securities
Act"). The term "Registration Statement" means the registration statement,
including the exhibits thereto, as amended to the date of this Agreement. The
term "Basic Prospectus" means the prospectus included in the Registration
Statement. The term "Prospectus" means the Basic Prospectus together with the
Prospectus Supplement. The term "preliminary prospectus" means a preliminary
prospectus supplement specifically relating to the Offered Securities, together
with the Basic Prospectus. As used herein, the terms "Basic Prospectus",
"Prospectus" and "preliminary prospectus" shall include in each case the
documents, if any, incorporated by reference therein. The terms "supplement"
and "amendment" or "amend" as used herein shall include all documents deemed to
be incorporated by
<PAGE> 5
2
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").
1. Representations and Warranties. The Company represents and
warrants to each of the Underwriters that:
(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, to the best of the
Company's knowledge, 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, when such part became effective, did not
contain, and each such part, as amended or supplemented, if applicable, 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 amended or supplemented, if applicable, 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 amended or supplemented, if applicable, 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 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
any Underwriter furnished to the Company in writing by such Underwriter through
the Managers expressly for use therein or (B) to that part of the Registration
Statement that constitutes the Statement of Eligibility and Qualification (Form
T-1) under the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"), of the Trustee.
(c) The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, has the corporate power
and authority to
<PAGE> 6
3
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 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) This Agreement 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 Offered Securities 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 Underwriters in accordance with the terms
of the Underwriting Agreement, will be entitled to the benefits of the
Indenture and will be valid and binding obligations of the Company, in each
case 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 and the
availability of equitable remedies may be limited by equitable principles of
general applicability.
<PAGE> 7
4
(h) The execution and delivery by the Company of, and the performance
by the Company of its obligations under, this Agreement, the Indenture and the
Offered Securities 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 or
affiliates that is material to the Company and its subsidiaries, taken as a
whole, or any judgment or decree of any governmental 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 Indenture or the Offered Securities, 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 Offered Securities.
(i) There has not occurred any material adverse change in, or any
adverse development which materially affects, 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) All descriptions in the Registration Statement, preliminary
prospectus and Prospectus of statutes, regulations, legal or governmental
proceedings, contracts and other documents are accurate in all material
respects and fairly present in all material respects the information required
to be shown; and there are no legal or governmental proceedings pending or, to
the best of the Company's knowledge, threatened to which the Company or any of
its subsidiaries is a party or to which any of the properties of any of them is
subject which are required to be described in the Registration Statement or the
Prospectus or any amendments or supplements thereto 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 as
exhibits to the Registration Statement that are not described or filed as
required.
(k) The Company is not, nor is it directly or indirectly controlled by
or acting on behalf of any person which is, (i) an "investment company" within
the meaning of the Investment Company Act of 1940, as amended, and the rules
and regulations promulgated by the Commission there-
<PAGE> 8
5
under or (ii) a "holding company" within the meaning of, or subject to
regulation under, the Public Utility Holding Company Act of 1935, as amended,
and the rules and regulations promulgated by the Commission thereunder.
2. Public Offering. The Company is advised by the Managers that the
Underwriters propose to make a public offering of their respective portions of
the Offered Securities as soon after this Agreement has been entered into as in
the Managers' judgment is advisable. The terms of the public offering of the
Offered Securities are set forth in the Prospectus.
3. Purchase and Delivery. Except as otherwise provided in this
Section 3, payment for the Offered Securities shall be made by certified or
official bank check or checks payable to the order of the Company in New York
Clearing House funds at the time and place set forth in the Underwriting
Agreement, upon delivery to the Managers for the respective accounts of the
several Underwriters of the Offered Securities, registered in such names and in
such denominations as the Managers shall request in writing not less than two
full business days prior to the date of delivery, with any transfer taxes
payable in connection with the transfer of the Offered Securities to the
Underwriters duly paid.
4. Conditions to Closing. The several obligations of the Underwriters
hereunder are subject to the following conditions:
(a) Subsequent to the execution and delivery of the
Underwriting Agreement and prior to the Closing Date,
(i) 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;
and
(ii) there shall not have occurred any change, or any
development involving a prospective
<PAGE> 9
6
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 that, in the judgment of the Managers, is material
and adverse and that makes it, in the judgment of the Managers,
impracticable to market the Offered Securities on the terms and
in the manner contemplated in the Prospectus.
(b) The Managers shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer
of the Company, to the effect set forth in clause (a)(i) above and to
the effect that the representations and warranties of the Company
contained in this Agreement are true and correct as of the Closing 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 the Closing Date.
The officer signing and delivering such certificate may rely
upon the best of his knowledge as to proceedings threatened.
(c) The Managers shall have received on the Closing Date (i)
an opinion of Andrews & Kurth L.L.P., special counsel to the Company,
addressing the matters set forth in paragraphs (i), (ii), (iv), (v),
(vi), (vii), (viii), (ix) (items (a), (b) and (c)), (x), (xi) and (xii)
of Exhibit A attached hereto, and (ii) an opinion of the Senior Vice
President, Law or Vice President, Law of the Company, addressing the
matters set forth in paragraphs (iii), (viii), (ix) (items (d) and
(e)), (x), (xi) and (xii) of Exhibit A.
(d) The Managers shall have received on the Closing Date an
opinion of Cravath, Swaine & Moore, special counsel for the
Underwriters, dated the Closing Date, to the effect set forth in
Exhibit B.
(e) The Managers shall have received on each of the date
hereof and the Closing Date a letter, dated such date, in form and
substance reasonably satisfactory to the Managers, from Coopers &
Lybrand, independent accountants for the Company, containing statements
and information of the type ordinarily included in accountants'
"comfort letters" with respect
<PAGE> 10
7
to the financial statements and certain financial information contained
in or incorporated by reference into the Prospectus.
5. Covenants of the Company. In further consideration of the
agreements of the Underwriters contained herein, the Company covenants as
follows:
(a) To furnish the Managers, without charge, a signed copy of
the Registration Statement (including exhibits thereto) and for
delivery to each other Underwriter a conformed copy of the Registration
Statement (without exhibits thereto) and, during the period mentioned
in paragraph (c) below, as many copies of the Prospectus, any documents
incorporated by reference therein and any supplements and amendments
thereto or to the Registration Statement as the Managers may reasonably
request.
(b) Before amending or supplementing the Registration
Statement or the Prospectus with respect to the Offered Securities, to
furnish to the Managers a copy of each such proposed amendment or
supplement and not to file any such proposed amendment or supplement to
which the Managers reasonably object.
(c) If, during such period after the first date of the public
offering of the Offered Securities as in the opinion of counsel for the
Underwriters the Prospectus is required by law to be delivered in
connection with sales by an Underwriter or dealer, any event shall
occur or condition exist as a result of which it is necessary to amend
or supplement the Prospectus in order to make the statements therein,
in the light of the circumstances when the Prospectus is delivered to a
purchaser, not misleading, or if, in the opinion of counsel for the
Underwriters, it is necessary to amend or supplement the Prospectus to
comply with law, forthwith to prepare, file with the Commission and
furnish, at its own expense, to the Underwriters, and to the dealers
(whose names and addresses the Managers will furnish to the Company) to
which Offered Securities may have been sold by the Managers on behalf
of the Underwriters and to any other dealer upon request, either
amendments or supplements to the Prospectus so that the statements in
the Prospectus as so amended or supplemented will not, in the light of
the circumstances when the Prospectus is delivered to a
<PAGE> 11
8
purchaser, be misleading or so that the Prospectus, as so amended or
supplemented, will comply with law.
(d) To endeavor to qualify the Offered Securities for offer
and sale under the securities or Blue Sky laws of such jurisdictions as
the Managers shall reasonably request and to pay all expenses
(including fees and disbursements of counsel) in connection with such
qualification and in connection with (i) the determination of the
eligibility of the Offered Securities for investment under the laws of
such jurisdictions as the Managers may designate and (ii) any review of
the offering of the Offered Securities by the National Association of
Securities Dealers, Inc.
(e) To make generally available to the Company's security
holders and to the Managers as soon as practicable an earnings
statement covering a twelve month period beginning on the first day of
the first full fiscal quarter after the date of this Agreement, which
earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act and the rules and regulations of the Commission
thereunder.
(f) During the period beginning on the date of the
Underwriting Agreement and continuing to and including the Closing
Date, not to offer, sell, contract to sell or otherwise dispose of any
debt securities of the Company substantially similar to the Offered
Securities (other than the Offered Securities) without the prior
written consent of the Managers.
6. Indemnification and Contribution. The Company agrees to indemnify
and hold harmless each Underwriter and each person, if any, who controls such
Underwriter 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 Underwriter or any such controlling person
in connection with defending or investigating any such action or claim) caused
by any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or any amendment thereof, any
preliminary prospectus 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
<PAGE> 12
9
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 any Underwriter furnished to the Company in writing by such
Underwriter through the Managers expressly for use therein.
Each Underwriter 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 Underwriter, but only with reference to information relating to such
Underwriter furnished to the Company by such Underwriter in writing through the
Managers expressly for use in the Registration Statement, any preliminary
prospectus, the Prospectus or any amendments or supplements thereto.
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 of the two preceding paragraphs, 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. 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
<PAGE> 13
10
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 the Managers,
in the case of parties indemnified pursuant to the second preceding paragraph,
and by the Company, in the case of parties indemnified pursuant to the first
preceding paragraph. 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 third sentence 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 30 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.
If the indemnification provided for in the first or second paragraph in
this Section 6 is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, 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 the Underwriters on the
other hand from the offering of the Offered Securities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not
<PAGE> 14
11
only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and of the Underwriters on the
other hand in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other hand in connection with the offering of the
Offered Securities shall be deemed to be in the same respective proportions as
the net proceeds from the offering of such Offered Securities (before deducting
expenses) received by the Company and the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth in the
table on the cover of the Prospectus Supplement, bear to the aggregate public
offering price of the Offered Securities. The relative fault of the Company on
the one hand and of the Underwriters on the other hand shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The
Underwriters' respective obligations to contribute pursuant to this Section 6
are several in proportion to the respective principal amounts of Offered
Securities purchased by each of such Underwriters and not joint.
The Company and the Underwriters 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 Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph 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 Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Offered Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages that such
Underwriter has other-
<PAGE> 15
12
wise 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.
The indemnity and contribution provisions contained in this Section 6
and the representations and warranties of the Company contained herein shall
remain operative and in full force and effect regardless of (i) any termination
of this Agreement, (ii) any investigation made by or on behalf of any
Underwriter or any person controlling any Underwriter or by or on behalf of the
Company, its directors or officers or any person controlling the Company and
(iii) acceptance of and payment for any of the Offered Securities.
7. Termination. This Agreement shall be subject to termination, by
notice given by the Managers to the Company, if (a) after the execution and
delivery of the Underwriting Agreement and prior to the Closing Date (i)
trading generally shall have been suspended or materially limited on or by, as
the case may be, any of the New York Stock Exchange, the American Stock
Exchange or the National Association of Securities Dealers, Inc., (ii) trading
of any securities of the Company shall have been suspended on any exchange or
in any over-the-counter market, (iii) a general moratorium on commercial
banking activities in New York shall have been declared by either Federal or
New York State authorities, or (iv) there shall have occurred any outbreak or
escalation of hostilities or any change in financial markets or any calamity or
crisis that, in the judgment of the Managers, is material and adverse and (b)
in the case of any of the events specified in clauses (a) (i) through (iv),
such event, singly or together with any other such event, makes it, in the
judgment of the Managers, impracticable to market the Offered Securities on the
terms and in the manner contemplated in the Prospectus.
8. Defaulting Underwriters. [Applicable only if there is more than
one Underwriter of the Offered Securities.] If, on the Closing Date, any one
or more of the Underwriters shall fail or refuse to purchase Offered Securities
of any series that it has or they have agreed to
<PAGE> 16
13
purchase hereunder on such date, and the aggregate amount of Offered Securities
of such series which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase is not more than one-tenth of the aggregate
amount of the Offered Securities of such series to be purchased on such date,
the other Underwriters shall be obligated severally in the proportions that the
amount of Offered Securities of such series set forth opposite their respective
names above bears to the aggregate amount of Offered Securities of such series
set forth opposite the names of all such nondefaulting Underwriters, or in such
other proportions as the Managers may specify, to purchase the Offered
Securities which such defaulting Underwriter or Underwriters agreed but failed
or refused to purchase on such date; provided that in no event shall the amount
of Offered Securities of any series that any Underwriter has agreed to purchase
pursuant to this Agreement be increased pursuant to this Section 8 by an amount
in excess of one-ninth of such amount of Offered Securities without the written
consent of such Underwriter. If, on the Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Offered Securities of any series
and the aggregate amount of Offered Securities with respect to which such
default occurs is more than one-tenth of the aggregate amount of Offered
Securities of such series to be purchased on such date, and arrangements
satisfactory to the Managers and the Company for the purchase of such Offered
Securities are not made within 36 hours after such default, this Agreement
shall terminate with respect to such series of Offered Securities without
liability on the part of any non-defaulting Underwriter or the Company. In any
such case either the Manager or the Company shall have the right to postpone
the Closing 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 Underwriter from
liability in respect of any default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for
<PAGE> 17
14
all out-of-pocket expenses (including the fees and disbursements of their
counsel) reasonably incurred by such Underwriters in connection with this
Agreement or the offering of the Offered Securities.
9. Miscellaneous. The Underwriting Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto were upon the same instrument.
This Agreement shall be governed by and construed in accordance with
the internal laws of the State of New York.
10. 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.
11. Notices. All references herein and in the Underwriting Agreement
to the Managers when made in connection with any notice to or communication by
or with such Managers shall, if there is more than one manager, be deemed to be
to the Lead Manager, as designated in the Underwriting Agreement, and all
notices shall be given to such Lead Manager at the address set forth therein.
<PAGE> 18
Exhibit A
Opinion of
Counsel for the Company
The opinion of counsel for the Company to be delivered pursuant to
Section 4(c) of the Underwriting Agreement shall be to the effect that:
(i) the Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware;
(ii) the Company 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;
(iii) each subsidiary of 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;
(iv) the Underwriting Agreement has been duly authorized,
executed and delivered by the Company;
(v) the Indenture has been duly qualified under the Trust
Indenture Act and has been duly authorized,
<PAGE> 19
2
executed and delivered by the Company and is a valid and binding
agreement of the Company, enforceable in accordance with its
terms except as (a) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (b) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability;
(vi) the Offered Securities 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 Underwriters in
accordance with the terms of the Underwriting Agreement, will be
entitled to the benefits of the Indenture and will be valid and binding
obligations of the Company, in each case enforceable in accordance with
their respective terms except as (a) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting creditors'
rights generally and (b) rights of acceleration, if any, and the
availability of equitable remedies may be limited by equitable
principles of general applicability;
(vii) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, the Underwriting
Agreement, the Indenture and the Offered Securities will not contravene
any provisions of applicable law or the certificate of incorporation or
by-laws of the Company.
(viii) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, the Underwriting
Agreement, the Indenture and the Offered Securities will not contravene
any agreement or other instrument binding upon the Company or any of
its subsidiaries or affiliates 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 of the United States or any
jurisdiction therein or, to the best of such counsel's knowledge, any
other jurisdiction 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 the Underwriting
Agreement, the Indenture or the Offered Securities except such as may
<PAGE> 20
3
be required by the securities or Blue Sky laws of the various
states in connection with the offer and sale of the Offered Securities;
(ix) the statements (a) in the Prospectus Supplement under the
captions "Certain Terms of the Debt Securities" and "Underwriting", (b)
in the Basic Prospectus under the captions "Description of Debt
Securities" and "Plan of Distribution", (c) in the Registration
Statement under Item 15, (d) in "Item 3 - Legal Proceedings" of the
Company's most recent annual report on Form 10-K incorporated by
reference in the Prospectus and (e) in "Item 1 - Legal Proceedings" of
Part II of the Company's quarterly reports on Form 10-Q, 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;
(x) 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 as exhibits to the
Registration Statement that are not described or filed as required;
(xi) the Company is not, nor is it directly or indirectly
controlled by or acting on behalf of any person which is, (i) an
"investment company" within the meaning of the Investment Company Act
of 1940, as amended, and the rules and regulations promulgated by the
Commission thereunder or (ii) a "holding company" within the meaning
of, or subject to regulation under, the Public Utility Holding Company
Act of 1935, as amended, and the rules and regulations promulgated by
the Commission thereunder.
(xii) such counsel (a) is of the opinion that each document, if
any, filed pursuant to the Exchange Act
<PAGE> 21
4
and incorporated by reference in the Prospectus (except for financial
statements and schedules and other financial or statistical
information included therein as to which such counsel need not express
any opinion) complied when so filed as to form in all material respects
with the Exchange Act and the applicable rules and regulations of the
Commission thereunder, (b) believes that (except for financial
statements and schedules and other financial or statistical information
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
heretofore referred to) each part of the Registration Statement, when
such part became effective, did not, and as of the date such opinion is
delivered, does 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, (c) is of the
opinion that the Registration Statement and Prospectus (except for
financial statements and schedules and other financial or statistical
information included therein as to which such counsel need not express
any opinion) comply as to form in all material respects with the
Securities Act and the applicable rules and regulations of the
Commission thereunder and (d) believes that (except for financial
statements and schedules and other financial or statistical information
as to which such counsel need not express any belief) the Prospectus as
of the date such opinion is delivered does not contain any untrue
statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
With respect to paragraph (xii) above, such counsel may state that its
opinion and belief are based upon its participation in the preparation of the
Registration Statement and Prospectus and any amendments or supplements thereto
and documents incorporated therein by reference and review and discussion of
the contents thereof, but are without independent check or verification, except
as specified.
<PAGE> 22
Exhibit B
Opinion of Cravath, Swaine & Moore,
Counsel for the Underwriters
The opinion of Cravath, Swaine & Moore, counsel for the Underwriters,
to be delivered pursuant to Section 4(d) of the Underwriting Agreement shall be
to the effect that:
(i) the Underwriting Agreement has been duly authorized,
executed and delivered by the Company;
(ii) the Indenture has been duly authorized, executed and
delivered, has been duly qualified under the Trust Indenture Act of
1939, as amended, and constitutes a legal, valid and binding obligation
of the Company, enforceable against the Company in accordance with its
terms, subject to applicable bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and other laws affecting
creditors' rights generally from time to time in effect and, as to the
enforceability of obligations, to general principles of equity,
regardless of whether such enforceability is considered in a proceeding
in equity or at law;
(iii) the Offered Securities 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 Underwriters in
accordance with the terms of the Underwriting Agreement, will
constitute legal, valid and binding obligations of the Company,
entitled to the benefits of the Indenture, and conform to the
description thereof contained in the Prospectus;
(iv) the Registration Statement became effective under the
Securities Act, and to the best knowledge of such counsel, no stop
order suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose have been initiated or
are pending or contemplated under the Securities Act; and
<PAGE> 23
2
(v) such counsel (1) believes that (except for financial
statements and related schedules and other financial 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 heretofore
referred to) each part of the Registration Statement, when such part
became effective, did 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, (2) is of the
opinion that the Registration Statement and Prospectus (except for
financial statements and related schedules and other financial data
included therein as to which such counsel need not express any opinion)
comply as to form in all material respects with the Securities Act and
the applicable rules and regulations of the Commission thereunder and
(3) believes that (except for financial statements and related
schedules and other financial data as to which such counsel need not
express any belief) the Prospectus as of the date such opinion is
delivered does not contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
With respect to clause (v) above, such counsel may state that their
opinion and belief are based upon their participation in the preparation of the
Registration Statement and the Prospectus and any amendments or supplements
thereto (other than the documents incorporated by reference) and upon review
and discussion of the contents thereof (including documents incorporated by
reference) but are without independent check or verification, except as
specified.
Such counsel may rely, to the extent its opinions are based upon
matters governed by the laws of other jurisdictions, upon the opinion of other
counsel admitted to the bar in such jurisdictions.
<PAGE> 1
ANDREWS & KURTH
L.L.P.
ATTORNEYS
OTHER OFFICES: TEXAS COMMERCE TOWER
WASHINGTON, D.C. HOUSTON, TEXAS 77002 TELEPHONE: (713) 220-4200
DALLAS TELECOPIER: (713) 220-4285
LOS ANGELES TELEX: 79-1208
NEW YORK
April 27, 1994
Burlington Resources Inc.
5051 Westheimer, Suite 1400
Houston, Texas 77056
Gentlemen:
We have acted as special counsel to Burlington Resources Inc.
(the "Company"), in connection with the Company's Registration Statements on
Form S-3 (File Nos. 33-47154 and 33-50077) (collectively, the "Registration
Statement") relating to registration under the Securities Act of 1933, as
amended (the "Act"), of the offering and sale of up to $500,000,000 principal
amount of the Company's Debt Securities. Capitalized terms used herein and not
otherwise defined shall have the meanings assigned to them in the Registration
Statement. The opinion set forth below is being delivered in connection with
the offer and sale of $300,000,000 principal amount of Notes due 1999 (the
"Notes") pursuant to Rule 415 under the Act pursuant to a Prospectus
Supplement.
As the basis for the opinion hereinafter expressed, we have
examined such statutes, regulations, corporate records and documents,
certificates of corporate and public officials and other instruments as we have
deemed necessary or advisable for the purposes of this opinion. In such
examination, we have assumed the authenticity of all documents submitted to us
as originals and the conformity with the original documents of all documents
submitted to us as copies.
Based on the foregoing and on such legal considerations as we
deem relevant, we are of the opinion that the Notes have been duly and validly
authorized by all necessary corporate action by the Company, and assuming due
execution and delivery of the Indenture, the due execution and authentication
of the Notes as specified in the Indenture and delivery of the Notes against
payment therefor, the Notes will constitute valid and legally binding
obligations of the Company, subject to any applicable bankruptcy, insolvency,
fraudulent transfer, reorganization,
<PAGE> 2
ANDREWS & KURTH
L.L.P.
Burlington Resources Inc.
Page Two
moratorium and other laws of general applicability relating to or affecting
creditors' rights and to general equitable principles.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement and to the use of our name under the heading "Legal
Matters" in the Registration Statement.
Very truly yours,
/s/ ANDREWS AND KURTH L.L.P.
