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XXXXXXXXXX XXXXXXXX XXXXX XX XXXXXXXXXXX
XXXX SECURITIES
UNDERWRITING AGREEMENT
November __, 1995
[To the Representatives of the
several Underwriters named in
the respective Pricing Agreements
hereinafter described.]
Dear Sirs:
From time to time Burlington Northern Santa Fe Corporation, a Delaware
corporation (the "Company"), proposes to enter into one or more Pricing
Agreements in the form of Annex I hereto, with such additions and deletions as
the parties thereto may determine, and, subject to the terms and conditions
stated herein and therein, to issue and sell to the firms named in Schedule I
to the applicable Pricing Agreement (such firms constituting the "Underwriters"
with respect to such Pricing Agreement and the securities specified therein)
certain of its debt securities (the "Securities") specified in Schedule II to
such Pricing Agreement (with respect to such Pricing Agreement, the "Designated
Securities").
The terms and rights of any particular issuance of Designated Securities
shall be as specified in the Pricing Agreement relating thereto and in or
pursuant to the indenture (the "Indenture") identified in such Pricing
Agreement.
1. Particular sales of Designated Securities may be made from time to
time to the Underwriters of such Securities, for whom the firms designated as
representatives of the Underwriters of such Securities in the Pricing Agreement
relating thereto will act as representatives (the "Representatives"). The term
"Representatives" also refers to a single firm acting as sole representative of
the Underwriters and to Underwriters who act without any firm being designated
as their representative. This Underwriting Agreement shall not be construed as
an obligation of the Company to sell any of the Securities or as an obligation
of any of the Underwriters to purchase the Securities. The obligation of the
Company to issue and sell any of the Securities and the obligation of any of
the Underwriters to purchase any of the Securities shall be evidenced by the
Pricing Agreement with respect to the Designated Securities specified therein.
Each Pricing Agreement shall specify the aggregate principal amount of such
Designated Securities, the initial public offering price of such Designated
Securities, the
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purchase price to the Underwriters of such Designated Securities, the names of
the Underwriters of such Designated Securities, the names of the
Representatives of such Underwriters and the principal amount of such
Designated Securities to be purchased by each Underwriter and shall set forth
the date, time and manner of delivery of such Designated Securities and payment
therefor. The Pricing Agreement shall also specify (to the extent not set
forth in the Indenture and the registration statement and prospectus with
respect thereto) the terms of such Designated Securities. A Pricing Agreement
shall be in the form of an executed writing (which may be in counterparts), and
may be evidenced by an exchange of telegraphic communications or any other
rapid transmission device designed to produce a written record of
communications transmitted. The obligations of the Underwriters under this
Agreement and each Pricing Agreement shall be several and not joint.
2. The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(a) A registration statement in respect of the Securities has
been filed with the Securities and Exchange Commission (the "Commission");
such registration statement and any post-effective amendment thereto, each
in the form heretofore delivered or to be delivered to the Representatives
and, excluding exhibits to such registration statement, but including all
documents incorporated by reference in the prospectus contained therein, to
the Representatives for each of the other Underwriters, have been declared
effective by the Commission in such form; no other document with respect to
such registration statement or document incorporated by reference therein
has heretofore been filed or transmitted for filing with the Commission;
and no stop order suspending the effectiveness of such registration
statement has been issued and no proceeding for that purpose has been
initiated or threatened by the Commission (any preliminary prospectus
included in such registration statement or filed with the Commission
pursuant to Rule 424(a) of the rules and regulations of the Commission
under the Securities Act of 1933, as amended (the "Act"), or any
preliminary prospectus supplement used in connection with a particular
offering of Securities, being hereinafter called a "Preliminary
Prospectus"; the various parts of such registration statement, including
all exhibits thereto and the documents incorporated by reference in the
prospectus contained in the registration statement at the time such part of
the registration statement became effective but excluding Form T-1, each as
amended at the time such part of the registration statement becomes
effective, being hereinafter called the "Registration Statement"; the
prospectus relating to the Securities (but excluding any supplement thereto
relating to Designated Securities), in the form in which it has most
recently been filed, or transmitted for filing, with the Commission on or
before the date of this Agreement or the Pricing Agreement (if this
Agreement and the Pricing Agreement are not signed at the same time), being
hereinafter called the "Prospectus"; any reference herein to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to the
applicable form under the Act, to the extent filed on or before the date
of such reference; any reference to any amendment or supplement to any
Preliminary Prospectus or the Prospectus shall be
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deemed to refer to and include any documents filed after the date
of such Preliminary Prospectus or Prospectus, as the case may be, under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated by reference in such Preliminary Prospectus or Prospectus, as
the case may be; any reference to any to the Registration Statement shall be
deemed to refer to and include any annual report of the Company filed
pursuant to Section 13(a) or 15(d) of the Exchange Act after the effective
date of the Registration Statement that is incorporated by reference in the
Registration Statement; and any reference to the Prospectus as amended or
supplemented shall be deemed to refer to the Prospectus as amended or
supplemented in relation to the applicable Designated Securities in the form
in which it is filed with the Commission pursuant to Rule 424(b) under the
Act in accordance with Section 5(a) hereof, including any documents
incorporated by reference therein as of the date of such filing);
(b) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the Act and the rules and regulations of
the Commission thereunder, and did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter of
Designated Securities through the Representatives expressly for use
therein;
(c) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the case
may be, conformed in all material respects to the requirements of the Act
or the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder, and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; and any further documents so filed and incorporated by
reference in the Prospectus or any further amendment or supplement thereto,
when such documents become effective or are filed with the Commission, as
the case may be, will conform in all material respects to the requirements
of the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder and will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading; provided, however, that this representation and warranty shall
not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter of Designated Securities through the Representatives expressly
for use in the Prospectus as amended or supplemented relating to such
Securities;
(d) The Registration Statement and the Prospectus conform, and
any further amendments or supplements to the Registration Statement or the
Prospectus will conform,
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in all material respects to the requirements of the Act and the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act") and the
rules and regulations of the Commission thereunder and do not and will
not, as of the applicable effective date as to the Registration Statement
and any amendment thereto and as of the applicable filing date as to the
Prospectus and any amendment or supplement thereto, contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading; provided, however, that this representation and warranty shall
not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter of Designated Securities through the Representatives expressly
for use in the Prospectus as amended or supplemented relating to such
Securities;
(e) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, which is material to the
Company and its subsidiaries taken as a whole, otherwise than as set forth
or contemplated in the Prospectus; and, since the respective dates as of
which information is given in the Registration Statement and the
Prospectus, there has not been any change in the capital stock (other than
increases in the stock of the Company as the result of the issuance of
shares pursuant to any of the Company's stock option plans) or any material
change in long-term debt of the Company and its subsidiaries or any
material adverse change, or any development that the Company has a
reasonable cause to believe involves a prospective material adverse change,
in the business, financial position, shareholders' equity or results of
operations of the Company and its subsidiaries taken as a whole, otherwise
than as set forth or contemplated in the Prospectus;
(f) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus, and has
been duly qualified as a foreign corporation for the transaction of
business and is in good standing in each jurisdiction in which the conduct
of its business or the ownership or leasing of its property requires such
qualification, except where failure to qualify would not in the aggregate
have a material adverse effect upon the Company and its subsidiaries taken
as a whole; and each of Burlington Northern Inc., Burlington Northern
Railroad Company, Santa Fe Pacific Corporation and The Xxxxxxxx, Topeka and
Santa Fe Railway Company (each hereinafter referred to as a "Significant
Subsidiary" or collectively as the "Significant Subsidiaries") has been
duly incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation;
(g) The Company has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of capital stock of the
Company have been duly
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and validly authorized and issued, are fully paid and non-assessable;
and all of the issued shares of capital stock of each Significant
Subsidiary of the Company have been duly and validly authorized and
issued, are fully paid and non-assessable and except as set forth in the
Prospectus are owned directly or indirectly by the Company, free and clear
of all liens, encumbrances, equities or claims;
(h) The Securities have been duly authorized, and, when
Designated Securities are issued and delivered pursuant to this Agreement
and the Pricing Agreement with respect to such Designated Securities, such
Designated Securities will have been duly executed, authenticated, issued
and delivered and will constitute valid and legally binding obligations of
the Company entitled to the benefits provided by the Indenture, which will
be substantially in the form filed as an exhibit to the Registration
Statement; assuming the due authorization and execution by the Trustee, the
Indenture has been duly authorized and duly qualified under the Trust
Indenture Act and, at the Time of Delivery for such Designated Securities
(as defined in Section 4 hereof), the Indenture will constitute a valid and
legally binding instrument, enforceable in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting creditors'
rights and to general equity principles; and the Indenture conforms and the
Designated Securities will conform, to the descriptions thereof contained
in the Prospectus as amended or supplemented with respect to such
Designated Securities;
(i) The issue and sale of the Securities and the compliance by
the Company with all of the provisions of the Securities, the Indenture,
this Agreement and any Pricing Agreement and the consummation of the
transactions herein and therein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject except for such conflicts,
breaches, violations or defaults that will not individually or in the
aggregate have a material adverse effect on the business, financial
position, shareholders' equity or results of operations of the Company and
its subsidiaries taken as a whole, nor will such action result in any
violation of the provisions of the Certificate of Incorporation or By-laws
of the Company or any statute or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over the Company or any
of its subsidiaries or any of their properties except for such violations
(other than with respect to the Company's Certificate of Incorporation or
By-laws) that will not individually or in the aggregate have a material
adverse effect on the business, financial position, shareholders' equity or
results of operations of the Company and its subsidiaries taken as a whole;
and no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the issue and sale of the Securities or the consummation by
the Company of the transactions contemplated by this Agreement or any
Pricing Agreement or the Indenture, except such
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as have been, or will have been prior to the Time of Delivery, obtained
under the Act and the Trust Indenture Act and such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Securities by the Underwriters;
(j) Other than as set forth in the Prospectus, there are no legal
or governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any of
its subsidiaries is the subject which the Company has reasonable cause to
believe will individually or in the aggregate have a material adverse effect
on the financial position, shareholders' equity or results of operations of
the Company and its subsidiaries taken as a whole; and, to the best of the
Company's knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others; and
(k) Price Waterhouse and Coopers & Xxxxxxx, who have certified
certain financial statements of the Company and its subsidiaries, are
independent public accountants as required by the Act and the rules and
regulations of the Commission thereunder.
3. Upon the execution of the Pricing Agreement applicable to any
Designated Securities and authorization by the Representatives of the release
of such Designated Securities, the several Underwriters propose to offer such
Designated Securities for sale upon the terms and conditions set forth in the
Prospectus as amended or supplemented.
4. Designated Securities to be purchased by each Underwriter pursuant
to the Pricing Agreement relating thereto, in definitive form to the extent
practicable, and in such authorized denominations and registered in such names
as the Representatives may request upon at least forty-eight hours' prior
notice to the Company, shall be delivered by or on behalf of the Company to the
Representatives for the account of such Underwriter, against payment by such
Underwriter or on its behalf of the purchase price therefor by certified or
official bank check or checks or such funds as may be designated in the Pricing
Agreement, payable to the order of the Company in the funds specified in such
Pricing Agreement, all at the place and time and date specified in such Pricing
Agreement or at such other place and time and date as the Representatives and
the Company may agree upon in writing, such time and date being herein called
the "Time of Delivery" for such Securities.
5. The Company agrees with each of the Underwriters of any Designated
Securities:
(a) To prepare the Prospectus as amended and supplemented in
relation to the applicable Designated Securities in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b) under
the Act not later than the Commission's close of business on the second
business day following the execution and delivery of the Pricing Agreement
relating to the applicable Designated Securities or, if applicable, such
earlier time as may be required by Rule 424(b); to make no further
amendment or any
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supplement to the Registration Statement or Prospectus as amended or
supplemented after the date of the Pricing Agreement relating to such
Securities and prior to the Time of Delivery for such Securities without
giving you advance notice thereof and an opportunity to comment thereon; to
advise the Representatives promptly of any such amendment or supplement
after such Time of Delivery and furnish the Representatives with copies
thereof; to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), required to be filed by the Company
with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act for so long as the delivery of a prospectus is required in
connection with the offering or sale of such Securities, and during such
same period to advise the Representatives, promptly after it receives
notice thereof, of the time when any amendment to the Registration
Statement has been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed with the Commission, of
the issuance by the Commission of any stop order or of any order preventing
or suspending the use of any prospectus relating to the Securities, of the
suspension of the qualification of such Securities for offering or sale in
any jurisdiction, of the initiation or threatening of any proceeding for
any such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or Prospectus or for additional
information; and, in the event of the issuance of any such stop order or of
any such order preventing or suspending the use of any prospectus relating
to the Securities or suspending any such qualification, to use promptly its
best efforts to obtain its withdrawal;
(b) Promptly from time to time take such action as the
Representatives may reasonably request to qualify such Securities for
offering and sale under the securities laws of such jurisdictions in the
United States as the Representatives may request and to comply with such
laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution
of such Securities, provided that in connection therewith the Company shall
not be required to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction;
(c) To furnish the Underwriters with copies of the Prospectus as
amended or supplemented in such quantities as the Representatives may from
time to time reasonably request, and, if the delivery of a prospectus is
required at any time prior to the expiration of nine months after the date
of the Prospectus as amended or supplemented in connection with the
offering or sale of the Securities and if at such time any event shall have
occurred 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 in order to make the statements
therein, in the light of the circumstances under which they were made when
such Prospectus is delivered, not misleading, or, if for any other reason
it shall be necessary during such same period to amend or supplement the
Prospectus or to file under the Exchange Act any document incorporated by
reference in the Prospectus in order to comply with the Act, the Exchange
Act or the Trust
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Indenture Act, to notify the Representatives and upon their request to file
such document and to prepare and furnish without charge to each Underwriter
and to any dealer in securities as many copies as the Representatives may
from time to time reasonably request of an amended Prospectus or a
supplement to the Prospectus which will correct such statement or omission
or effect such compliance and in case any Underwriter is required to
deliver a prospectus in connection with sales of any of the Securities at
any time nine months or more after the date of the Prospectus as amended or
supplemented, upon your request but at the expense of such Underwriter, to
prepare and deliver to such Underwriter as many copies as you may request
of an amended or supplemented Prospectus complying with Section 10(a)(3) of
the Act;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)),
an earning statement of the Company and its subsidiaries (which need not be
audited) complying with Section 11(a) of the Act and the rules and
regulations of the Commission thereunder (including at the option of the
Company Rule 158); and
(e) During the period beginning from the date of the Pricing
Agreement for such Designated Securities and continuing to and including
the Time of Delivery for such Designated Securities, not to offer, sell,
contract to sell or otherwise dispose of any debt securities of the Company
which mature more than one year after such Time of Delivery and which are
substantially similar to such Designated Securities, without the prior
written consent of the Representatives.
6. The Company covenants and agrees with the several Underwriters that
the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Securities under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or
reproducing this Agreement, any Pricing Agreement, any Indenture, and the Blue
Sky Memorandum and any other documents in connection with the offering,
purchase, sale and delivery of the Securities; (iii) all expenses in connection
with the qualification of the Securities for offering and sale under state
securities laws as provided in Section 5(b) hereof, including the reasonable
fees and disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky survey; (iv) any fees charged
by securities rating services for rating the Securities; (v) the cost of
preparing the Securities; (vi) the fees and expenses of any Trustee and any
agent of any Trustee and the fees and disbursements of counsel for any Trustee
in connection with any Indenture and the Securities (to the extent the Trustee
does not pay such fees); and (vii) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section. It is understood, however, that, except as
provided in this Section, Section 8 and Section 11 hereof, the Underwriters
will pay all of their own costs
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and expenses, including the fees of their counsel, transfer taxes on resale of
any of the Securities by them, and any advertising expenses connected with any
offers they may make.
7. The obligations of the Underwriters of any Designated Securities
under the Pricing Agreement relating to such Designated Securities shall be
subject, in the discretion of the Representatives, to the condition that all
representations and warranties and other statements of the Company in or
incorporated by reference in the Pricing Agreement relating to such Designated
Securities are, at and as of the Time of Delivery for such Designated
Securities, true and correct in all material respects, the condition that the
Company shall have performed all of its obligations hereunder theretofore to be
performed and the following additional conditions:
(a) The Prospectus as amended or supplemented in relation to the
applicable Designated Securities shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed for
such filing by the rules and regulations under the Act and in accordance
with Section 5(c) hereof; no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and no
proceeding for that purpose shall have been initiated or threatened by the
Commission; and all requests for additional information on the part of the
Commission shall have been complied with to the Representatives' reasonable
satisfaction;
(b) Xxxxxxxx & Xxxxxxxx, counsel for the Underwriters, using
reasonable efforts, shall have furnished to the Representatives such
opinion or opinions, dated the Time of Delivery for such Designated
Securities, with respect to the incorporation of the Company, the validity
of the Securities being delivered at such Time of Delivery, the
Registration Statement, the Prospectus, and other related matters as the
Representatives may reasonably request, and such counsel shall have
received such papers and information as they may reasonably request to
enable them to pass upon such matters;
(c) Xxxxx, Xxxxx & Xxxxx, counsel for the Company, shall have
furnished to the Representatives their written opinion, which may be
subject to reasonable and customary assumptions, qualifications and
limitations and shall be dated such Time of Delivery, in form and substance
reasonably satisfactory to the Representatives, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Delaware, with corporate power and authority to own its
properties and conduct its business as described in the Prospectus
as amended or supplemented;
(ii) The Company has an authorized capitalization as set
forth in the Prospectus as amended or supplemented, and all of the
issued shares of capital stock of the Company have been duly and
validly authorized and issued and are fully paid and non-
assessable;
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(iii) The Company has been duly qualified as a foreign
corporation for the transaction of business and is in good standing
in each jurisdiction in which the conduct of its business or the
ownership or leasing of property requires such qualification, except
where failure to qualify would not in the aggregate have a material
adverse effect upon the Company and its subsidiaries taken as a
whole;
(iv) Each Significant Subsidiary of the Company has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation; and
all of the issued shares of capital stock of each such subsidiary
have been duly and validly authorized and issued, are fully paid and
non-assessable, and (except for directors' qualifying shares and
except as otherwise set forth in the Prospectus) are owned directly
or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims;
(v) To such counsel's knowledge and other than as set
forth in the Prospectus, there are no legal or governmental
proceedings pending to which the Company or any of its subsidiaries
is a party or of which any property of the Company or any of its
subsidiaries is the subject which the Company has reasonable cause
to believe will individually or in the aggregate have a material
adverse effect on the financial position, shareholders' equity or
results of operations of the Company and its subsidiaries, taken as
a whole; and, to such counsel's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened
by others;
(vi) This Agreement and the Pricing Agreement with respect
to the Designated Securities have been duly authorized, executed and
delivered by the Company;
(vii) The Designated Securities have been duly authorized,
executed, authenticated, issued and delivered and constitute valid
and legally binding obligations of the Company entitled to the
benefits provided by the Indenture, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and similar laws of general
applicability relating to or affecting creditors' rights and to
general equity principles; and the Designated Securities and the
Indenture conform to the descriptions thereof in the Prospectus as
amended or supplemented;
(viii) Assuming due authorization and execution by the
Trustee, the Indenture has been duly authorized, executed and
delivered by the parties thereto and constitutes a valid and legally
binding instrument, enforceable in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to
or affecting creditors' rights and to general equity principles; and
the Indenture has been duly qualified under the Trust Indenture Act;
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(ix) Assuming due authorization and execution by the
Trustee, the issue and sale of the Designated Securities and the
compliance by the Company with all of the provisions of this
Agreement and the Pricing Agreement with respect to the Designated
Securities and the consummation of the transactions herein and
therein contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to such counsel to
which the Company or any of its subsidiaries is a party or by which
the Company or any of its subsidiaries is bound or to which any of
the property or assets of the Company or any of its subsidiaries is
subject, the effects of which would, in the aggregate, be materially
adverse to the Company and its subsidiaries taken as a whole, nor
will such action result in any violation of the provisions of the
Certificate of Incorporation or By-laws of the Company or any
statute, order, rule or regulation known to such counsel of any
court or governmental agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their properties;
(x) No consent, approval authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of
the Designated Securities or the consummation by the Company of the
transactions contemplated by this Agreement or such Pricing
Agreement or the Indenture with respect to the Designated
Securities, except as have been obtained under the Act and the Trust
Indenture Act, and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution of the Securities by the Underwriters;
(xi) The documents incorporated by reference in the
Prospectus as amended or supplemented (other than the financial
statements and other financial data therein, as to which such
counsel need express no opinion or belief), when they became
effective or were filed with the Commission, as the case may be,
appear to have complied as to form in all material respects with the
requirements of the Act, or the Exchange Act, as applicable, and the
rules and regulation of the Commission thereunder; and such counsel
shall also state that no facts have come to their attention that
lead them to believe that any of such documents, when such documents
became effective or were so filed, as the case may be, contained, in
the case of a registration statement which became effective under
the Act, an untrue statement of a material fact, or omitted to state
a material fact required to be stated therein or necessary to make
the statements therein not misleading, or, in the case of other
documents which were filed under the Act or the Exchange Act with
the Commission, an untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made when such documents were so filed, not misleading; and
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(xii) The Registration Statement and the Prospectus as
amended or supplemented and any further amendments and
supplements thereto made by the Company prior to the Time of
Delivery for the Designated Securities (other than the financial
statements and other financial data therein, as to which such
counsel need express no opinion or belief) appear to comply as to
form in all material respects with the requirements of the Act and
the rules and regulations thereunder; such counsel shall also state
that no facts have come to their attention that lead them to
believe that, as of its effective date, the Registration Statement
or any further amendment thereto made by the Company prior to the
Time of Delivery (other than the financial statements and other
financial data therein, as to which such counsel need express no
opinion or belief) contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that, as
of its date, the Prospectus as amended or supplemented or any
further amendment or supplement thereto made by the Company prior to
the Time of Delivery (other than the financial statements and other
financial data therein, as to which such counsel need express no
opinion or belief) contained an untrue statement of a material fact
or omitted to state a material fact necessary to make the statements
therein, in light of the circumstances in which they were made, not
misleading or that, as of the Time of Delivery, either the
Registration Statement or the Prospectus as amended or supplemented
or any other amendment or supplement thereto made by the Company
prior to such Time of Delivery (other than the financial statements
and other financial data therein, as to which such counsel need
express no opinion or belief) contains an untrue statement of a
material fact or omits to state a material fact necessary to make
the statements therein, in light of the circumstances in which they
were made, not misleading, and they do not know of any amendment to
the Registration Statement required to be filed or any contracts or
other documents of a character required to be filed as an exhibit to
the Registration Statement or required to be incorporated by
reference into the Prospectus as amended or supplemented or required
to be described in the Registration Statement or the Prospectus as
amended or supplemented which are not filed or incorporated by
reference or described as required.
In rendering such opinion, such counsel may state that they express no
opinion as to the laws of any jurisdiction other than the federal laws of the
United States and the General Corporation Law of the State of Delaware and
shall be entitled to rely in respect of the opinion in this clause upon
opinions of local counsel believed to be reputable or counsel employed by the
Company, and in respect of matters of fact, upon certificates of officers of
the Company or its transfer agent;
(d) On the date of the Pricing Agreement for such Designated
Securities and at the Time of Delivery for such Designated Securities, the
independent accountants of the Company who have certified the financial
statements of the Company and its subsidiaries included or incorporated by
reference in the Registration Statement shall
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13
have furnished to the Representatives a letter, dated the date of the
Pricing Agreement for such Designated Securities and a letter dated such
Time of Delivery, respectively, to the effect set forth in Annex II hereto,
and with respect to such letter dated such Time of Delivery, as to such
other matters as the Representatives may reasonably request and in form and
substance satisfactory to the Representatives;
(e) (i) Neither the Company nor any of its subsidiaries shall
have sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus as amended or
supplemented any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or
from any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Prospectus as amended or
supplemented, and (ii) since the respective dates as of which information
is given in the Prospectus as amended or supplemented there shall not have
been any change in the capital stock or long-term debt of the Company or
any of its subsidiaries or any change, or any development involving a
prospective change, in the business, financial position, shareholders'
equity or results of operations of the Company and its subsidiaries,
otherwise than as set forth or contemplated in the Prospectus as amended or
supplemented, the effect of which, in any such case described in Clause (i)
or (ii), is in the reasonable judgment of the Representatives so material
and adverse as to make it impracticable or inadvisable to proceed with the
public offering or the delivery of the Designated Securities on the terms
and in the manner contemplated in the Prospectus as amended or
supplemented;
(f) On or after the date of the Pricing Agreement relating to the
Designated Securities (i) no downgrading shall have occurred in the rating
accorded the Company's debt securities by any "nationally recognized
statistical rating organization," as that term is defined by the Commission
for purposes of Rule 436(g)(2) under the Act and (ii) no such organization
shall have publicly announced that it has under surveillance or review,
with possible negative implications, its rating of any of the Company's
debt securities;
(g) On or after the date of the Pricing Agreement relating to the
Designated Securities there shall not have occurred any of the following:
(i) a suspension or material limitation in trading in securities generally
on the New York Stock Exchange; (ii) a general moratorium on commercial
banking activities in New York declared by either Federal or New York State
authorities; or (iii) the outbreak or escalation of hostilities involving
the United States or the declaration by the United States of a National
Emergency or war, if the effect of any such event specified in this clause
(iii) in the reasonable judgment of the Representatives makes it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Designated Securities on the terms and in the manner
contemplated by the Prospectus as amended and supplemented; and
(h) The Company shall have furnished or caused to be furnished to
the Representatives at the Time of Delivery of the Designated Securities a
certificate or
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certificates of officers of the Company satisfactory to the Representatives
as to the accuracy in all material respects of the representations and
warranties of the Company herein at and as of such Time of Delivery, as to
the performance by the Company of all of its obligations hereunder to be
performed at or prior to such Time of Delivery, and as to the matters set
forth in subsections (a) and (e) of this Section.
8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities to which such Underwriter
may become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, any preliminary prospectus supplement,
the Registration Statement, the Prospectus as amended or supplemented and any
other prospectus relating to the Securities prepared by the Company, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse each Underwriter for any legal or other expenses reasonably incurred
by such Underwriter in connection with investigating or defending any such
action or claim as such expenses are incurred; provided, however, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement
or alleged untrue statement or omission or alleged omission made in any
Preliminary Prospectus, Prospectus or the Registration Statement, or any such
amendment or supplement thereto, in reliance upon and in conformity with
written information furnished to the Company by any Underwriter of Designated
Securities through the Representatives expressly for use in the Prospectus as
amended or supplemented relating to such Securities, and provided, further,
that the Company shall not be liable to any Underwriter under the indemnity
agreement in this subsection (a) with respect to any Preliminary Prospectus,
any preliminary prospectus supplement, or with respect to any Prospectus as
amended or supplemented, to the extent that any such loss, claim, damage or
liability of such Underwriter results from the fact that such Underwriter sold
Securities to a person to whom there was not sent or given, at or prior to the
written confirmation of such sale, a copy of the Prospectus as then amended or
supplemented (excluding documents incorporated by reference) if the Company has
previously furnished copies thereof to such Underwriter.
(b) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, any preliminary prospectus
supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Securities, or any
amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged
-14-
15
omission was made in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as
amended or supplemented and any other prospectus relating to the
Securities, or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by such
Underwriter through the Representatives expressly for use therein; and will
reimburse the Company for any legal or other expenses reasonably incurred
by the Company in connection with investigating or defending any such
action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action,
such indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify the
indemnifying party in writing of the commencement thereof; but the omission
so to notify the indemnifying party shall not relieve it from any liability
which it may have to any indemnified party otherwise than under such
subsection. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified party who shall
not, except with the consent of the indemnified party, be counsel to the
indemnifying party, and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such
subsection for any legal expenses of other counsel or any other expenses,
in each case subsequently incurred by such indemnified party, in connection
with the defense thereof other than reasonable costs of investigation.
Notwithstanding the foregoing, in no event shall more than one such
separate counsel in each jurisdiction where an action is commenced be
retained for all indemnified Parties together and neither the indemnified
Party nor the indemnifying Party, in the instance where the indemnifying
Party has assumed the defense of the indemnified Party, shall settle any
action, proceeding or investigation with respect to the indemnified Party
without the written consent of the other, which consent shall not be
unreasonably withheld.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable to such
indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriters of the Designated Securities on the other
from the offering of the Designated Securities to which such loss, claim,
damage or liability (or action in respect thereof) relates. If, however,
the allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the indemnified party failed to give the
notice required under subsection (c) above, then each indemnifying party
shall contribute to such amount paid or payable by such indemnified party
in such proportion as is appropriate to reflect not only such relative
benefits but also the relative fault of the Company on the one hand and the
Underwriters of the Designated Securities on the other in connection with
the statements or omissions which resulted in
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16
such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and such
Underwriters on the other shall be deemed to be in the same proportion as
the total net proceeds from such offering (before deducting expenses)
received by the Company to the total underwriting discounts and
commissions received by such Underwriters. The relative fault 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 on the one hand or such Underwriters on the other and the parties'
relative intent, prejudice resulting from any failure to give notice of any
action under sub-section (c), knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company
and the Underwriters agree that it would not be just and equitable if
contribution pursuant to this subsection (d) 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 which does not take account
of the equitable considerations referred to above in this subsection (d).
The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (d) shall be deemed to include 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 subsection (d), no Underwriter shall
be required to contribute any amount in excess of the amount by which the
total price at which the applicable Designated Securities underwritten by
it and distributed to the public were offered to the public exceeds the
amount of any damages which such Underwriter has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.
The obligations of the Underwriters of Designated Securities in this
subsection (d) to contribute are several in proportion to their respective
underwriting obligations with respect to such Securities and not joint.
(e) The obligations of the Company under this Section 8 shall be
in addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act; and the obligations
of the Underwriters under this Section 8 shall be in addition to any
liability which the respective Underwriters may otherwise have and shall
extend, upon the same terms and conditions, to each officer and director of
the Company and to each person, if any, who controls the Company within the
meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to
purchase the Designated Securities which it has agreed to purchase under the
Pricing Agreement relating to such Designated Securities, the Representatives
may in their discretion arrange for themselves or another party or other
parties to purchase such Designated Securities on the terms contained herein.
If within thirty-six hours after such default by any Underwriter the
Representatives do not arrange for the purchase of such Designated Securities,
then the Company shall be entitled to a further period of thirty-six hours
within which to procure another party or other parties reasonably satisfactory
to the representatives to purchase such Designated Securities on such
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terms. In the event that, within the respective prescribed period, the
Representatives notify the Company that they have so arranged for the purchase
of such Designated Securities, or the Company notifies the Representatives that
it has so arranged for the purchase of such Designated Securities, the
Representatives or the Company shall have the right to postpone the Time of
Delivery for such Designated Securities for a period of not more than seven
days, in order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus as amended or supplemented, or in any
other documents or arrangements, and the Company agrees to file promptly any
amendments or supplements to the Registration Statement or the Prospectus which
in the opinion of the Representatives may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to the Pricing Agreement with respect to such Designated Securities.
(b) If, after giving effect to any arrangements for the purchase
of the Designated Securities of a defaulting Underwriter or Underwriters by
the Representatives and the Company as provided in subsection (a) above,
the aggregate principal amount of such Designated Securities which remains
unpurchased does not exceed one-eleventh of the aggregate principal amount
of the Designated Securities, then the Company shall have the right to
require each non-defaulting Underwriter to purchase the principal amount of
Designated Securities which such Underwriter agreed to purchase under the
Pricing Agreement relating to such Designated Securities and, in addition,
to require each non-defaulting Underwriter to purchase its pro rata share
(based on the principal amount of Designated Securities which such
Underwriter agreed to purchase under such Pricing Agreement) of the
Designated Securities of such defaulting Underwriter or Underwriters for
which such arrangements have not been made; but nothing herein shall
relieve a defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase
of the Designated Securities of a defaulting Underwriter or Underwriters by
the Representatives and the Company as provided in subsection (a) above,
the aggregate principal amount of Designated Securities which remains
unpurchased exceeds one-eleventh of the aggregate principal amount of the
Designated Securities, as referred to in subsection (b) above, or if the
Company shall not exercise the right described in subsection (b) above to
require non-defaulting Underwriters to purchase Designated Securities of a
defaulting Underwriter or Underwriters, then the Pricing Agreement relating
to such Designated Securities shall thereupon terminate, without liability
on the part of any non-defaulting Underwriter or the Company, except for
the expenses to be borne by the Company and the Underwriters as provided in
Section 6 hereof and the indemnity and contribution agreements in Section 8
hereof; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Underwriters, as set forth
in this Agreement or made by or on behalf of them, respectively, pursuant to
this Agreement, shall remain in full force and
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effect, regardless of any investigation (or any statement as to the results
thereof) made by or on behalf of any Underwriter or any controlling person
of any Underwriter, or the Company, or any officer or director or controlling
person of the Company, and shall survive delivery of and payment for the
Securities.
11. If any Pricing Agreement shall be terminated pursuant to
Section 9 hereof or as the result of the failure to satisfy the condition set
forth in Section 7(g) hereof, the Company shall not then be under any liability
to any Underwriter with respect to the Designated Securities covered by such
Pricing Agreement except as provided in Section 6 and Section 8 hereof; but, if
for any other reason Designated Securities are not delivered by or on behalf of
the Company as provided herein, the Company will reimburse the Underwriters
through the Representatives for all reasonable out-of-pocket expenses approved
in writing by the Representatives, including reasonable fees and disbursements
of counsel, incurred by the Underwriters in making preparations for the
purchase, sale and delivery of such Designated Securities, but the Company
shall then be under no further liability to any Underwriter with respect to
such Designated Securities except as provided in Section 6 and Section 8
hereof.
12. In all dealings hereunder, the Representatives of the
Underwriters of Designated Securities shall act on behalf of each of such
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by such Representatives jointly or by such of the Representatives, if
any, as may be designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex
or facsimile transmission to the address of the Representatives as set forth in
the Pricing Agreement; and if to the Company, shall be delivered or sent by
mail, telex or facsimile transmission to the address of the Company set forth
in the Registration Statement: Attention: Corporate Secretary; provided,
however, that any notice to an Underwriter pursuant to Section 8(c) hereof
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its Underwriters' Questionnaire or
telex constituting such Questionnaire, which address will be supplied to the
Company by the Representatives upon request. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
13. This Agreement and each Pricing Agreement shall be binding
upon, and inure solely to the benefit of, the Underwriters, the Company and, to
the extent provided in Section 8 and Section 10 hereof, the officers and
directors of the Company and each person who controls the Company or any
Underwriter, and their respective heirs, executors, administrators, successors
and assigns, and no other person shall acquire or have any right under or by
virtue of this Agreement or any such Pricing Agreement. No purchaser of any of
the Securities from any Underwriter shall be deemed a successor or assign by
reason merely of such purchase.
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14. Time shall be of the essence of each Pricing Agreement. As used
herein, "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. This Agreement and each Pricing Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
16. This Agreement and each Pricing Agreement may be executed by any
one or more of the parties hereto and thereto in any number of counterparts,
each of which shall be deemed to be an original, but all such respective
counterparts shall together constitute one and the same instrument.
If the foregoing is in accordance with your understanding, please sign and
return to us [one for the Issuer and each of the Representatives plus one for
each counsel] counterparts hereof.
Very truly yours,
BURLINGTON NORTHERN SANTA FE
CORPORATION
By:_______________________
Name:
Title:
Accepted as of the date hereof:
[Name[s] of Co-Representative[s]]
By:_____________________________
Name:
Title:
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ANNEX I
PRICING AGREEMENT
__________________, 19__
[
Underwriters
]
As Representatives of the several
Underwriters named in Schedule I hereto
Dear Sirs:
Burlington Northern Santa Fe Corporation, a Delaware corporation (the
"Company"), proposes, subject to the terms and conditions stated herein and in
the Underwriting Agreement, dated __________, 199_ (the "Underwriting
Agreement"), between the Company on the one hand and [_____________] as
Co-Representatives, on the other hand, to issue and sell to the Underwriters
named in Schedule I hereto (the "Underwriters") the Securities specified in
Schedule II hereto (the "Designated Securities"). Each of the provisions of
the Underwriting Agreement is incorporated herein by reference in its 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; and each of the
representations and warranties set forth therein shall be deemed to have been
made at and as of the date of this Pricing Agreement, except that each
representation and warranty which refers to the Prospectus in Section 2 of the
Underwriting Agreement shall be deemed to be a representation or warranty as of
the date of the Underwriting Agreement in relation to the Prospectus (as
therein defined), and also a representation and warranty as of the date of this
Pricing Agreement in relation to the Prospectus as amended supplemented
relating to the Designated Securities which are the subject of this Pricing
Agreement. Each reference to the Representatives herein and in the provisions
of the Underwriting Agreement so incorporated by reference shall be deemed to
refer to you. Unless otherwise defined herein, terms defined in the
Underwriting Agreement are used herein as therein defined. The Representatives
designated to act on behalf of the Representatives and on behalf of each of the
Underwriters of the Designated Securities pursuant to Section 12 of the
Underwriting Agreement and the address of the Representatives referred to in
such Section 12 are set forth at the end of Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
21
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, the Company agrees to
issue and sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Company, at the time
and place and at the purchase price to the Underwriters set forth in Schedule
II hereto, the principal amount of Designated Securities set forth opposite the
name of such Underwriter in Schedule I hereto.
If the foregoing is in accordance with your understanding, please sign
and return to us seven counterparts hereof, and upon acceptance hereof by you,
on behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement between each of the
Underwriters and the Company. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is or will be pursuant to the
authority set forth in a form of Agreement among Underwriters, the form of
which shall be submitted to the Company for examination upon request, but
without warranty on the part of the Representatives as to the authority of the
signers thereof.
Very truly yours,
BURLINGTON NORTHERN SANTA FE
CORPORATION
By: __________________________
Name:
Title:
Accepted as of the date hereof:
By: __________________________
Name:
Title:
On behalf of each of the Underwriters
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ANNEX II
DESCRIPTION OF COMFORT LETTER OF
COOPERS & XXXXXXX AND PRICE WATERHOUSE
I. Coopers & Xxxxxxx L.L.P. shall deliver to the Underwriters a letter
with respect to the Company and with respect to Burlington Northern Inc.
("BNI") to the effect that:
A. They are independent accountants with respect to the Company and
BNI within the meaning of the Act and the applicable published rules
and regulations thereunder.
AII-1
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B. In their opinion, the consolidated financial statements and financial
statement schedule of BNI audited by them and incorporated by
reference in the Registration Statement comply as to form in all
material respects with the applicable accounting requirements of the
Act and the Securities Exchange Act of 1934 (the "Exchange Act") and
the published rules and regulations thereunder with respect to
registration statements on Form S-3.
C. They have not audited any financial statements of BNI as of any date
or for any date or for any period subsequent to December 31, 1994;
although they have conducted an audit for the year ended December 31,
1994, the purpose (and therefore the scope) of such audit was to
enable them to express their opinion on the consolidated financial
statements as of December 31, 1994 and for the year then ended, but
not on the financial statements for any interim period within such
year. Therefore, they are unable to and do not express any opinion
on the unaudited consolidated balance sheets and the unaudited
consolidated statements of operations and of cash flows incorporated
by reference in the Registration Statement or on the financial
position, results of operations or cash flows as of any date or for
any period subsequent to December 31, 1994.
D. BNSF was incorporated in Delaware on December 16, 1994, for the
purpose of effecting a business combination between BNI and Santa Fe
Pacific Corporation (SFP) under the Holding Company Structure.
Under the Holding Company Structure, BNSF created two subsidiaries.
One such subsidiary merged with and into BNI, and the other such
subsidiary merged with and into SFP. Each holder of one share of BNI
common stock received one share of BNSF common stock and each holder
of one share of SFP common stock received 0.41143945 shares of BNSF
common stock. The rights of each stockholder of BNSF are
substantially identical to the rights of a stockholder of BNI, and the
Holding Company Structure has the same economic effect with respect
to the stockholders of BNI and SFP as would a direct merger of BNI
and SFP. As a result of the merger, BNI became a wholly-owned
subsidiary of the Company.
E. They have not audited any financial statements of BNSF. The BNSF
unaudited consolidated statements of income for the three-month and
nine-month periods ended September 30, 1995 and 1994, and cash flows
for the nine-month periods ended September 30, 1995 and 1994
included in the Company's Quarterly Report on Form 10-Q for the
quarterly period ended September 30, 1995, reflect BNI's historical
results for such periods and SFP's results from September 22, 1995
(the effective date of the Merger) through September 30, 1995. The
unaudited consolidated balance sheets of BNSF included in the
Company's Quarterly Report on Form 10-Q reflects (i) BNI historical
amounts at December 31, 1994 and (ii) BNI historical amounts plus
assets and liabilities of SFP at September 30, 1995, including the
fair value write-up of SFP resulting from the application of
purchase accounting. They are unable to and do not express any
opinion on the unaudited consolidated balance sheet of BNSF as of
September 30, 1995, the unaudited consolidated statements of income
and cash flows for the three-month and nine-month periods ended
September 30, 1995 and 1994, included in the Company's Quarterly
Report on Form 10-Q for the quarterly periods ended September 30,
1995, incorporated by reference in the Registration Statement.
F. For purposes of this letter, they have read certain minutes of
meetings of the Board of Directors of the Company and BNI and have
carried out other procedures to a date within three business days
of the date of the related Pricing Agreement (the "Cut-Off Date")
as follows:
1. With respect to the three-month periods ended March 31, 1995
and 1994 and the three-month and six-month periods ended June
30, 1995 and 1994 of BNI, and the three-month and nine-month
periods ended September 30, 1995 and 1994 of both the Company
and BNI, they have:
(i) performed the procedures specified by the American
Institute of Certified Public Accountants for a review
of interim financial information as described in SAS
No. 71, Interim Financial Information, on the
unaudited consolidated balance sheets and the
unaudited consolidated statements of operations and of
cash flows for the periods included in BNI's Quarterly
Report on Form 10-Q for the quarterly periods ended
March 31, 1995, June 30, 1995, and September 30, 1995
and included in the Company's Quarterly Report on Form
10-Q for the quarterly period ended September 30, 1995,
all incorporated by reference in the Registration
Statement.
(ii) inquired of certain officials of the Company and BNI who
have responsibility for financial and accounting
matters whether the unaudited consolidated financial
statements referred to in 1(i) comply as to form in
all material respects with the applicable accounting
requirements of the Exchange Act as it applies to Form
10-Q and the related published rules and regulations
thereunder.
2. With respect to the period from October 1, 1995 to October 31,
1995, they have:
(i) read the unaudited consolidated financial statements of
both the Company and BNI for October of both 1995 and
1994, furnished to us by the Company (these unaudited
consolidated financial statements did not include
footnotes), officials of the Company having advised us
that no such financial statements as of any date or for
any period subsequent to October 31, 1995 were
available.
(ii) inquired of certain officials of both the Company and
BNI who have responsibility for financial and accounting
matters whether the unaudited consolidated financial
statements referred to in 2(i) are stated on a basis
substantially consistent with that of the audited
consolidated financial statements of BNI incorporated
by reference in the Registration Statement.
G. Nothing came to their attention as a result of the foregoing
procedures that caused them to believe that:
1. (i) any material modifications should be made to the
unaudited consolidated financial statements described
in F(1)(i), incorporated by reference in the
Registration Statement, for them to be in conformity
with generally accepted accounting principles.
(ii) the unaudited consolidated financial statements
described in F(1)(i), incorporated by reference in
the Registration Statement, do not comply as to form
in all material respects with the applicable accounting
requirements of the Exchange Act as it applies to Form
10-Q and the related published rules and regulations
thereunder.
2. (i) at October 31, 1995, there was any change in the common
stock, long-term debt including current portion and
commercial paper, net current liabilities or
stockholders' equity of the Company as compared with
amounts shown in the September 30, 1995 unaudited
consolidated balance sheet, incorporated by reference
in the Registration Statement, except in all instances
for changes that the Registration Statement discloses
have occurred or may occur.
(ii) for the period from October 1, 1995 to October 31,
1995, there were any changes, as compared to the
corresponding period in the preceding year, in
revenues, net income or earnings per common share of
the Company, except in all instances for changes that
the Registration Statement discloses have occurred or
may occur.
3. (i) at October 31, 1995, there was any change in the common
stock and additional paid-in capital, long-term
debt including current portion and commercial paper,
net current liabilities or stockholder's equity of BNI
as compared with amounts shown in the September 30,
1995 unaudited consolidated balance sheet, incorporated
by reference in the Registration Statement, except in
all instances for changes that the Registration
Statement discloses have occurred or may occur.
(ii) for the period from October 1, 1995 to October 31,
1995, there were any changes, as compared to the
corresponding period in the preceding year, in
revenues or net income of BNI, except in all instances
for changes that the Registration Statement discloses
have occurred or may occur.
AII-2
24
H. They have made inquiries of certain officials of BNI who have
responsibility for financial and accounting matters as to whether at
the Cut-Off Date there was any change in capital stock or increase in
long-term debt of BNI as compared with amounts shown on the most
recent unaudited consolidated balance sheet information incorporated
by reference in the Registration Statement. On the basis of these
inquiries and their reading of the minutes as described in F, nothing
came to their attention that caused them to believe that there was
any such change or increase, except in all instances for changes
which the Registration Statement discloses have occurred or may
occur except as described in their letter.
I. They also performed the following procedures:
1. read the unaudited pro forma combined balance sheets and the
related unaudited pro forma combined statements of operations
incorporated by reference in the Registration Statement.
2. inquired of certain officials of the Company and BNI
and of certain officials of Santa Fe Pacific Corporation who
have responsibility for financial and accounting matters
about: (a) the basis for their determination of the pro forma
adjustments; and (b) whether the unaudited pro forma combined
financial statements referred to in (1) comply as to form in
all material respects with the applicable accounting
requirements of Rule 11-02 of Regulation S-X.
3. compared the historical financial information for BNI in the
pro forma combined financial statements incorporated by
reference in the registration statement with the historical
financial information for BNI in the audited consolidated
financial statements described in the introductory paragraph
AII-3
25
of this letter or to amounts in the unaudited consolidated
financial statements described in F(1)(i) to the extent such
amounts are included in or can be derived from such statements,
and found them to be in agreement.
4. proved the arithmetic accuracy of the application of the
pro forma adjustments to the historical amounts in the
unaudited pro forma combined financial statements.
J. Nothing came to their attention as a result of such procedures that
caused them to believe that such unaudited pro forma combined
financial statements do not comply as to form in all material
respects with the applicable accounting requirements of Rule 11-02 of
Regulation S-X and that the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of
those statements.
K. For the purposes of this letter, they have also read the items
identified by the Underwriters on the attached copy of the
documents forming part of the Registration Statement and have
performed specified procedures which were applied as indicated to the
items identified on the attached copy of such documents.
II. Price Waterhouse LLP shall deliver to the Underwriters a letter with
respect to the Company and Santa Fe Pacific Corporation ("SFP") to the
effect that:
A. They are independent accountants with respect to the Company and SFP
within the meaning of the Act and the applicable published rules and
regulations thereunder.
B. In their opinion, the consolidated financial statements audited by
them and incorporated by reference in the Registration Statement
comply as to form in all material respects with the applicable
accounting requirements of the Act and the Securities Exchange Act
of 1934 (the "Exchange Act") and the published rule and regulations
thereunder with respect to registration statements on Form S-3.
C. They have not audited any financial statements of SFP as of any date
or for any period subsequent to December 31, 1994; although they
have conducted an audit for the year ended December 31, 1994, the
purpose (and therefore the scope) of such audit was to enable them to
express their opinion on the consolidated financial statements as of
December 31, 1994 and for the year then ended, but not on the
financial statements for any interim period within such year.
Therefore, they are unable to and do not express any opinion on the
unaudited consolidated statements of operations and of cash flows
incorporated by reference in the Registration Statement or on the
financial position, results of operations or cash flows as of any
date or for any period subsequent to December 31, 1994.
AII-4
26
D. With respect to the three-month periods ended March 31, 1995 and 1994, the
three- and six- month periods ended June 30, 1995 and 1994 and the period
from January 1, 1995 through September 21, 1995, they have read the
minutes of specified meetings of the Board of Directors of SFP and
have carried out other procedures to a date within three business days
prior to the date of the related Pricing Agreement (the "Cut-Off Date") as
follows:
1. performed the procedures specified by the American Institute
of Certified Public Accountants for a review of interim financial
information as described in SAS No. 71, Interim Financial Information,
on the unaudited consolidated balance sheets and the unaudited
consolidated statements of operations and of cash flows for the
periods included in SFP's quarterly reports on Form 10-Q for the
quarters ended March 31 and June 30, 1995 incorporated by reference in
the Registration Statement and read the unaudited consolidated
statement of operations for the period from January 1, 1995 through
September 21, 1995; and
2. inquired of certain officials of SFP who have responsibility
for financial and accounting matters whether the unaudited
consolidated financial statements incorporated by reference in the
Registration Statement comply as to form in all material respects with
the applicable accounting requirements of the Exchange Act as it
applies to Form 10-Q and the published rules and regulations
thereunder and whether the unaudited consolidated statement for the
period January 1, 1995 through September 21, 1995 is stated on the
basis substantially consistent with that of the corresponding amounts
in the audited consolidated financial statements incorporated by
reference in the Registration Statement.
E. Nothing came to their attention as a result of the foregoing procedures
that caused them to believe that:
1. (i) the unaudited consolidated financial statements described in D(1)
above, incorporated by reference in the Registration Statement, do
not comply as to form in all material respects with the applicable
accounting requirements of the Exchange Act as it applies to Form
10-Q and the published rules and regulations thereunder or (ii) any
material modifications should be made to the unaudited consolidated
financial statements described in D(1) for them to be in conformity
with generally accepted accounting principles; or
2. the unaudited consolidated statement of operations for the period
January 1, 1995 through September 21, 1995 was not stated on a basis
substantially consistent with that of the corresponding amounts in the
AII-5
27
audited financial statements incorporated by reference in the
Registration Statement; or
3. for the period from January 1, 1995 to September 21, 1995, there were
any decreases, as compared with the corresponding period in the
preceding year, in revenues or in the total or per-share amounts
of income from continuing operations or of net income, except in all
instances for changes or decreases which the Registration Statement
discloses have occurred or may occur.
F. They also performed the following procedures:
1. read the unaudited pro forma combined statements of operations
incorporated by reference in the Registration Statement.
2. inquired of certain officials of the Company and SFP who have
responsibility for financial and accounting matters about (a) the
basis for their determination of the pro forma adjustments; and (b)
whether the unaudited pro forma combined financial statements referred
to in (1) comply as to form in all material respect with the
applicable accounting requirements of Rule 11-02 of Regulation S-X.
3. compared the historical financial information for SFP in the pro
forma combined statements of operations incorporated by reference in
the Registration Statement with the historical financial information
for SFP in the audited consolidated financial statements described in
the introductory paragraph of their letter or to amounts in the
unaudited consolidated statement of operations for the period
January 1, 1995 through September 21, 1995 described in D(1) to the
extent such amounts are included in or can be derived from such
statements, and found them to be in agreement.
4. proved the arithmetic accuracy of the application of the pro forma
adjustments to the historical amounts in the unaudited pro
forma combined statements of operations.
G. Nothing came to their attention as a result of such procedures that
caused them to believe that such unaudited pro forma combined statements of
operations does not comply as to form in all material respects with the
applicable accounting requirements of Rule 11-02 of Regulation S-X and that
the pro forma adjustments have not been properly applied to the historical
amounts in the compilation of those statements.
H. For purposes of this letter, they have also read the items identified by
the Underwriters on the attached copy of the documents forming part of the
AII-6
28
Registration Statement and have performed specific procedures which were
applied as indicated to the items identified on the attached copy of such
documents.
AII-7
29
SCHEDULE I
Principal
Amount of
Designated
Securities
to be
Purchased
-----------
[ ] $
[Names of Underwriters] $
---------
Total . . . . . . . . . . . . . . . $
=========
30
SCHEDULE II
Title of Designated Securities:
[ %] [Floating Rate] [Zero Coupon] [Notes]
[Debentures] due
Aggregate principal amount:
[$]
Price to Public:
___% of the principal amount of the Designated Securities, plus
accrued interest from ______________ to _____________ [and accrued
amortization, if any, from ________________ to ____________]
Purchase Price by Underwriters:
__% of the principal amount of the Designated Securities, plus accrued
interest from __________ to _________ [and accrued amortization, if any, from
____________ to ____________]
Specified funds for payment of purchase price:
[By certified or official bank check or checks, payable to the order of
the Company in [[New York] [Clearing House] [immediately available] [funds]
[By wire transfer to a bank account specified by the Company in [next day]
[immediately available funds]
Indenture:
Indenture dated ____________, 19__, between the Company and
_________________, as Trustee
Maturity:
Interest Rate:
[__%] [Zero Coupon] [See Floating Rate Provisions]
SII-1
31
Interest Payment Dates:
[months and dates]
Redemption Provisions:
[No provisions for redemption]
[The Designated Securities may be redeemed, otherwise than through the
sinking fund, in whole or in part at the option of the Company, in the amount
of [$] or an integral multiple thereof,
[on or after ______________, at the following redemption prices (expressed in
percentages of principal amount.) (f [redeemed on or before _____________,
___% and if] redeemed during the 12-month period beginning ___________,
Redemption
Year Price
---- -----
and thereafter at 100% of their principal amount, together in each case
with accrued interest to the redemption date.]
[on any interest payment date falling in or after ______________, __________,
at the election of the Company, at a redemption price equal to the
principal amount thereof, plus accrued interest to the date of redemption.]
[Other possible redemption provisions, such as mandatory redemption upon
occurrence of certain events or redemption for changes in tax law]
[Restriction on refunding]
Sinking Fund Provisions:
[No sinking fund provisions]
[The Designated Securities are entitled to the benefit of a sinking fund to
retire [$] principal amount of Designated Securities on __________ in each of
the years __________ through ______ at 100% of their principal amount plus
accrued interest][, together with [cumulative]
SII-2
32
[noncumulative] redemptions at the option of the Company to retire an
additional [$] principal amount of Designated Securities in the years ______
through ______ at 100% of their principal amount plus accrued interest].
[If Securities are extendable debt Securities, insert --
Extendable provisions:
Securities are repayable on ________, [insert date and years], at the option
of the holder, at their principal amount with accrued interest. Initial
annual interest rate will be ________%, and thereafter annual interest rate
will be adjusted on ___________, _______ and ___________ to a rate not less
than __% of the effective annual interest rate on U.S. Treasury obligations
with ___________-year maturity date].]
[If Securities are Floating Rate debt Securities, insert --
Floating rate provisions:
Initial annual interest rate will be __% through ________ and thereafter
will be adjusted [monthly] [on each _____________, ________________, and
____________] [to an annual rate of __% above the average rate for _____-year
[month] [securities] [certificates of deposit] issued by ________ and
________ [insert names of banks].] [and the annual interest rate [thereafter]
[from __________ through ___________] will be the interest yield equivalent
of the weekly average per annum market discount rate for _____-month Treasury
bills plus __% of Interest Differential (the excess, if any, of (i) then
current weekly average per annum secondary market yield for _____-month
certificates of deposit over (ii) then current interest yield equivalent of
the weekly average per annum market discount rate for ____-month Treasury
bills); [from _________ and thereafter the rate will be the then current
interest yield equivalent plus ___% of Interest Differential].]
Defeasance provisions:
Terms of Delivery:
Closing Location:
SII-3
33
Names and addresses of Representatives:
Designated Representatives:
Address for Notices, etc.:
[Other Terms]:
SII-4
