AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 22, 1997
Registration No. 333-15323
==========================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------
NORTHWEST NATURAL GAS COMPANY
(Exact name of registrant as specified in its charter)
OREGON 93-0256722
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
One Pacific Square, 220 N.W. Second Avenue, Portland, Oregon 97209
503-226-4211
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
-------------------
RICHARD G. REITEN
President
and Chief Executive Officer
One Pacific Square, 220 N.W. Second Avenue
Portland, Oregon 97209
503-226-4211
BRUCE R. DeBOLT JOHN T. HOOD, Esq.
Senior Vice President, Finance, Reid & Priest LLP
and Chief Financial Officer 40 West 57th Street
One Pacific Square, 220 N.W. Second Avenue New York, New York 10019
Portland, Oregon 97209 212-603-2000
503-226-4211
(Names, addresses, including zip codes, and telephone numbers, including
area codes, of agents for service)
-------------------
Approximate date of commencement of proposed sale to the
public: From time to time after this Registration Statement
becomes effective as determined by market conditions.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans,
please check the following box. [ ]
If any of the securities being registered on this Form are to
be offered on a delayed or continuous basis pursuant to Rule 415
under the Securities Act of 1933, other than securities offered
only in connection with dividend or interest reinvestment plans,
check the following box. [X]
If this form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please
check the following box and list the Securities Act registration
statement number of the earlier effective registration statement
for the same offering. [ ]_______________________
If this form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following box and
list the Securities Act registration statement number of the
earlier effective registration statement for the same offering.
[ ]_______________________
If delivery of the prospectus is expected to be made pursuant
to Rule 434, please check the following box. [ ]
________________
The registrant hereby amends this registration statement on
such date or dates as may be necessary to delay its effective
date until the registrant shall file a further amendment which
specifically states that this registration statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until the registration
statement shall become effective on such date as the Commission,
acting pursuant to said Section 8(a), may determine.
=================================================================
Pursuant to Rule 429, the combined Prospectus filed herewith
also relates to Registration No. 33-64014.
<PAGE>
Subject to Completion, Dated April 22, 1997
PROSPECTUS
----------
$165,000,000
NORTHWEST NATURAL GAS COMPANY
SECURED MEDIUM-TERM NOTES, SERIES B
(SERIES OF FIRST MORTGAGE BONDS)
AND
UNSECURED MEDIUM-TERM NOTES, SERIES B
Due from Nine Months to 30 Years from Date of Issue
---------------
Northwest Natural Gas Company ("Company") may offer from time
to time up to $165,000,000 aggregate principal amount of its debt
securities ("Medium-Term Notes"), consisting of its First
Mortgage Bonds, designated Secured Medium-Term Notes, Series B
("Secured Notes"), and its Unsecured Medium-Term Notes, Series B
("Unsecured Notes"). The principal amounts, interest rates,
issue prices and agents' commissions, original issue and maturity
dates, redemption provisions, if any, and other material terms of
the Medium-Term Notes will be established by the Company from
time to time and will be set forth in supplements hereto
("Pricing Supplements"). The Medium-Term Notes will have
maturities from nine months to 30 years from their respective
dates of issue. Interest on each Medium-Term Note will accrue
from its date of issue and will be payable semi-annually in
arrears on each June 1 and December 1, and at maturity. The
Medium-Term Notes will not be subject to redemption prior to
their stated maturity unless otherwise specified in the
applicable Pricing Supplement.
The Medium-Term Notes will be initially registered in the name
of CEDE & Co. as registered owner and nominee for The Depository
Trust Company, New York, New York ("DTC"). DTC will act as a
securities depository for the Medium-Term Notes of each issue.
Sales of Medium-Term Notes will be made only in book-entry form
in denominations of $1,000 or any amount in excess thereof that
is an integral multiple of $1,000 and, except under the limited
circumstances described herein, beneficial owners of interests in
the Medium-Term Notes will not receive certificates representing
their interests in the Medium-Term Notes. Payments of principal,
premium, if any, and interest will be made through DTC and its
Participants and disbursements of such payments to purchasers
will be the responsibility of such Participants.
For further information with respect to the Medium-Term Notes,
see "Book-Entry System", "Description of the Secured Notes", and
"Description of the Unsecured Notes" herein and the applicable
Pricing Supplement.
---------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS OR ANY SUPPLEMENT HERETO. ANY
REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
=========================================================================
PRICE TO AGENTS' PROCEEDS TO
PUBLIC(1) COMMISSIONS(2)(3) COMPANY(2)(4)
-------------------------------------------------------------------------
Per Note. . 100% .125%-.750% 99.875%-99.250%
-------------------------------------------------------------------------
Total . . . $165,000,000 $206,250- $164,793,750-
$1,237,500 $163,762,500
=========================================================================
(1) Unless otherwise specified in the applicable Pricing
Supplement, Medium-Term Notes will be issued at 100% of
their principal amount.
(2) The Company will pay commissions to any agents engaged by
the Company ("Agents"), including Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated and
PaineWebber Incorporated, in the form of discounts, ranging
from .125% to .750% of the principal amount of any Medium-
Term Note, depending upon maturity, and may sell Medium-
Term Notes to any Agent, as principal. Unless otherwise
indicated in the applicable Pricing Supplement, a Medium-
Term Note sold to an Agent, as principal, will be purchased
by such Agent at a price equal to 100% of the principal
amount thereof less a percentage equal to the commission
applicable to an agency sale of a Medium-Term Note of
identical maturity, and may be resold by such Agent to
investors and other purchasers at varying prices related to
prevailing market prices at the time of resale as
determined by such Agent, or, if so agreed, at a fixed
public offering price. No commission will be payable on
any sales made directly by the Company.
(3) The Company has agreed to indemnify the Agents against
certain liabilities under the Securities Act of 1933.
(4) Assuming Medium-Term Notes are issued at 100% of their
principal amount and before deducting expenses payable by
the Company estimated at $252,000, including reimbursement
of certain expenses of the Agents.
----------------
The Medium-Term Notes are being offered on a continuing basis
by the Company through the Agents, which have agreed to use their
best efforts to solicit purchases of the Medium-Term Notes.
Medium-Term Notes may also be sold to any Agent, as principal,
for resale to investors and other purchasers at varying prices
related to prevailing market prices at the time of resale, as
determined by such Agent, or, if so agreed, at a fixed public
offering price. The Company reserves the right to sell Medium-
Term Notes directly to investors on its own behalf. The Medium-
Term Notes will not be listed on any securities exchange, and
there can be no assurance that the Medium-Term Notes offered by
this Prospectus will be sold or that there will be a secondary
market for the Medium-Term Notes. The Company reserves the right
to withdraw, cancel or modify the offer made hereby without
notice. The Company or any Agent may reject, in whole or in
part, any offer to purchase Medium-Term Notes. See "Plan of
Distribution".
----------------
MERRILL LYNCH & CO. PAINEWEBBER INCORPORATED
----------------
The date of this Prospectus is April __, 1997
Information contained herein is subject to completion or
amendment. A registration statement relating to these securities
has been filed with the Securities and Exchange Commission.
These securities may not be sold nor may offers to buy be
accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell
or the solicitation of an offer to buy nor shall there be any
sale of these securities in any State in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such State.
<PAGE>
IN CONNECTION WITH CERTAIN TYPES OF OFFERS AND SALES OF
MEDIUM-TERM NOTES, CERTAIN PERSONS PARTICIPATING IN THE OFFERING
OF SUCH MEDIUM-TERM NOTES MAY ENGAGE IN TRANSACTIONS THAT
STABILIZE OR MAINTAIN OR OTHERWISE AFFECT THE PRICE OF SUCH
MEDIUM-TERM NOTES. SUCH TRANSACTIONS MAY INCLUDE BIDS OR
PURCHASES FOR THE PURPOSE OF PEGGING, FIXING OR MAINTAINING THE
PRICE OF THE MEDIUM-TERM NOTES, THE PURCHASE OF MEDIUM-TERM NOTES
TO COVER SYNDICATE SHORT POSITIONS AND THE IMPOSITION OF PENALTY
BIDS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "PLAN OF
DISTRIBUTION".
AVAILABLE INFORMATION
The Company is subject to the informational requirements of
the Securities Exchange Act of 1934, as amended ("Exchange Act"),
and, in accordance therewith, files reports and other information
with the Securities and Exchange Commission ("Commission").
Reports, proxy statements and other information filed by the
Company can be inspected and copied at the public reference
facilities of the Commission, Room 1024, Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549, as well as at the
following regional offices: Seven World Trade Center, Suite 1300,
New York, New York 10048, and 500 West Madison Street, Suite
1400, Chicago, Illinois 60661. Copies of such material can be
obtained from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. The Commission maintains a Web site (http://www.sec.gov)
that contains reports, proxy statements and other information
filed electronically by the Company.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
There is hereby incorporated by reference in this Prospectus
the following document heretofore filed with the Securities and
Exchange Commission:
The Company's Annual Report on Form 10-K, as amended by its
Form 10-K/A, for the year ended December 31, 1996.
All documents filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of
this Prospectus and prior to the termination of this offering
shall be deemed to be incorporated by reference into this
Prospectus. Any statement contained in a document incorporated
or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded, for purposes of this Prospectus, to
the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part
of this Prospectus.
The Company hereby undertakes to provide, without charge, to
each person to whom a copy of this Prospectus shall have been
delivered, upon written or oral request of such person, a copy of
any or all of the documents which have been incorporated in this
Prospectus by reference, other than exhibits to such documents,
unless such exhibits shall have been specifically incorporated by
reference into such documents. Requests for such copies should
be directed to C.J. Rue, Secretary, Northwest Natural Gas
Company, One Pacific Square, 220 N.W. Second Avenue, Portland,
Oregon 97209, telephone 503-226-4211.
THE COMPANY
The Company's executive offices are located at One Pacific
Square, 220 N.W. Second Avenue, Portland, Oregon 97209. Its
telephone number is 503-226-4211. The Company and its
predecessors have supplied gas service to the public since 1859.
The Company is principally engaged in the distribution of natural
gas to customers in western Oregon and southwestern Washington,
including the Portland metropolitan area.
USE OF PROCEEDS AND FINANCING PROGRAM
The net proceeds to be received by the Company from the sale
of the Medium-Term Notes will be added to the general funds of
the Company and used for corporate purposes, primarily to fund,
in part, the Company's ongoing utility construction program.
The Company expects its utility construction expenditures in
1997 to aggregate $110 million, and in the five-year period,
1997-2001, to aggregate between $500 million and $550 million.
It is estimated that 50% of the funds required for utility
purposes during the 1997-2001 period will be internally generated
and that the balance, as well as substantially all of the funds
required for the refunding of maturing and higher-cost debt, will
be raised through the sale of equity and debt securities,
including the Medium-Term Notes, in such amounts and at such
times as the Company's cash requirements and market conditions
shall determine. Approximately $25 million, $15 million and $10
million of debt securities will mature in 1997, 1998 and 1999,
respectively.
2
<PAGE>
RATIO OF EARNINGS TO FIXED CHARGES
The ratios of earnings to fixed charges, calculated
according to the rules set forth under the Securities Act of
1933, as amended, for the following twelve-month periods were:
TWELVE MONTHS ENDED
-----------------------------------------------------------------
DECEMBER 31,
-----------------------------------------------------------------
1996 1995 1994 1993 1992
-----------------------------------------------------------------
3.53 3.15 3.08 3.22 1.81
Earnings consist of net income to which has been added taxes
on income and fixed charges. Fixed charges consist of interest
on all indebtedness, amortization of debt expense and discount or
premium, and the estimated interest portion of rentals charged to
income.
BOOK-ENTRY SYSTEM
DTC will act as securities depository for the Medium-Term
Notes of each issue. Except under the circumstances described
below, the Medium-Term Notes will be issued in the form of one or
more fully registered notes that will be deposited with, or on
behalf of, DTC or such other depository as may be subsequently
designated ("Depository"), and registered in the name of CEDE &
Co. (DTC's partnership nominee), or such other Depository or its
nominee as may be subsequently designated.
So long as the Depository, or its nominee, is the registered
owner of the Medium-Term Notes, such Depository or such nominee,
as the case may be, will be considered the owner of such
Medium-Term Notes for all purposes under the Mortgage or the
Indenture (each as defined below), as the case may be, including
notices and voting. Payments of principal of, and premium, if
any, and interest on, the Medium-Term Notes will be made to the
Depository or its nominee, as the case may be, as the registered
owner of such Medium-Term Notes. Except as set forth below,
owners of beneficial interests in Medium-Term Notes will not be
entitled to have any individual Medium-Term Notes registered in
their names, will not receive or be entitled to receive physical
delivery of any such Medium-Term Notes and will not be considered
the owners of Medium-Term Notes under the Mortgage or the
Indenture. Accordingly, each person holding a beneficial
interest in a Medium-Term Note must rely on the procedures of the
Depository and, if such person is not a Direct Participant (as
hereinafter defined), on procedures of the Direct Participant
through which such person holds its interest, to exercise any of
the rights of the registered owner of such Medium-Term Note.
If the Depository is at any time unwilling or unable to
continue as depository and a successor depository is not
appointed by the Company, individual registered Medium-Term Notes
will be issued in exchange for the Medium-Term Notes held by the
Depository. In addition, the Company, at any time and in its sole
discretion, may determine not to have the Medium-Term Notes held
by the Depository and, in such event, individual registered
Medium-Term Notes will be issued in exchange for the Medium-Term
Notes held by the Depository. In any such instance, an owner of
a beneficial interest in the Medium-Term Notes will be entitled
to physical delivery of individual Medium-Term Notes equal in
principal amount to such beneficial interest and to have such
Medium-Term Notes registered in its name. Individual Medium-Term
Notes so issued will be issued as registered Medium-Term Notes in
denominations of $1,000 or any amount in excess thereof that is
an integral multiple of $1,000.
The following is based solely on information furnished by
DTC:
DTC is a limited-purpose trust company organized under the
New York Banking Law, a "banking organization" within the meaning
of the New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the New
York Uniform Commercial Code, and a "clearing agency" registered
pursuant to the provisions of Section 17A of the Exchange Act.
DTC holds securities that its participants ("Participants")
deposit with DTC. DTC also facilitates the settlement among
Participants of securities transactions, such as transfers and
pledges, in deposited securities through electronic computerized
book-entry changes in Participants' accounts, thereby eliminating
the need for physical movement of securities certificates.
3
<PAGE>
Direct Participants include securities brokers and dealers,
banks, trust companies, clearing corporations, and certain other
organizations ("Direct Participants"). DTC is owned by a number
of its Direct Participants and by The New York Stock Exchange,
Inc., the American Stock Exchange, Inc., and the National
Association of Securities Dealers, Inc. Access to the DTC system
is also available to others such as securities brokers and
dealers, banks, and trust companies that clear through or
maintain a custodial relationship with a Direct Participant,
either directly or indirectly ("Indirect Participants"). The
rules applicable to DTC and its Participants are on file with the
Commission.
Purchases of the Medium-Term Notes under the DTC system must
be made by or through Direct Participants, which will receive a
credit for the Medium-Term Notes on DTC's records. The ownership
interest of each actual purchaser of each Medium-Term Note
("Beneficial Owner") is in turn to be recorded on the Direct and
Indirect Participants' records. Beneficial Owners will not
receive written confirmation from DTC of their purchase, but
Beneficial Owners are expected to receive written confirmation
providing details of the transaction, as well as periodic
statements of their holdings, from the Direct or Indirect
Participant through which the Beneficial Owner entered into the
transaction. Transfers of ownership interests in the Medium-Term
Notes are to be accomplished by entries made on the books of
Participants acting on behalf of Beneficial Owners. Beneficial
Owners will not receive certificates representing their ownership
interests in the Medium-Term Notes, except in the event that use
of the book-entry system for the Medium-Term Notes is
discontinued.
To facilitate subsequent transfers, all Medium-Term Notes
deposited by Participants with DTC are registered in the name of
CEDE & Co. The deposit of Medium-Term Notes with DTC and their
registration in the name of CEDE & Co. effect no change in
beneficial ownership. DTC has no knowledge of the actual
Beneficial Owners of the Medium-Term Notes; DTC's records reflect
only the identity of the Direct Participants to whose accounts
such Medium-Term Notes are credited, which may or may not be the
Beneficial Owners. The Participants will remain responsible for
keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to
Direct Participants, by Direct Participants to Indirect
Participants, and by Direct Participants and Indirect
Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
If the Medium-Term Notes of any issue are redeemable prior
to the maturity date, redemption notices shall be sent to CEDE &
Co. If less than all of the Medium-Term Notes of any issue are
being redeemed, DTC's practice is to determine by lot the amount
of the interest of each Direct Participant in such issue to be
redeemed.
Neither DTC nor CEDE & Co. will consent or vote with respect
to the Medium-Term Notes. Under its usual procedures, DTC mails
an Omnibus Proxy to the Company as soon as possible after the
record date. The Omnibus Proxy assigns CEDE & Co.'s consenting or
voting rights to those Direct Participants to whose accounts the
Medium-Term Notes are credited on the record date (identified in
a listing attached to the Omnibus Proxy).
Principal and interest payments on the Medium-Term Notes
will be made to DTC. DTC's practice is to credit Direct
Participants' accounts on the date on which interest is payable
in accordance with their respective holdings shown on DTC's
records, unless DTC has reason to believe that it will not
receive payment on such payment date. Payments by Participants to
Beneficial Owners will be governed by standing instructions and
customary practices, as is the case with securities held for the
accounts of customers in bearer form or registered in "street
name", and will be the responsibility of such Participant and not
of DTC, the Mortgage Trustees (as defined below), the Indenture
Trustee (as defined below) or the Company, subject to any
statutory or regulatory requirements as may be in effect from
time to time. Payment of principal and interest to DTC is the
responsibility of the Company and the Corporate Trustee (as
defined below) or the Indenture Trustee, as the case may be.
Disbursement of such payments to Direct Participants shall be the
responsibility of DTC, and disbursement of such payments to the
Beneficial Owners shall be the responsibility of Direct and
Indirect Participants.
DTC may discontinue providing services as securities
depository with respect to the Medium-Term Notes at any time by
giving reasonable notice to the Company, the Mortgage Trustees
and the Indenture Trustee.
----------------
None of the Company or the Mortgage Trustees or the
Indenture Trustee will have any responsibility or liability for
any aspect of the records relating to or payments made on account
of beneficial interests in the Medium-Term Notes or for
maintaining, supervising or reviewing any records relating to
such beneficial interests.
4
<PAGE>
DESCRIPTION OF THE SECURED NOTES
GENERAL
The Secured Notes, which comprise a series of the Company's
First Mortgage Bonds ("Bonds"), are to be issued under the
Company's Mortgage and Deed of Trust, dated as of July 1, 1946,
to Bankers Trust Company ("Corporate Trustee") and R.G. Page
(Stanley Burg, successor), as trustees ("Mortgage Trustees"), as
supplemented by twenty supplemental indentures, all of which are
collectively referred to as the "Mortgage".
The statements herein concerning the Secured Notes and the
Mortgage are merely an outline and do not purport to be complete.
They make use of terms defined in the Mortgage and are qualified
in their entirety by express reference to the cited Sections and
Articles. They may be changed with respect to any Secured Note by
the applicable Pricing Supplement, which should be read in
conjunction with this description.
The Secured Notes will be offered on a continuing basis and
each Secured Note will mature on such date, not less than nine
months or more than 30 years from its date of issue, as selected
by the purchaser and agreed to by the Company.
The Pricing Supplement relating to each Secured Note will
set forth the principal amount, interest rate, issue price and
Agent's commission, original issue and maturity dates, redemption
provisions, if any, and other material terms of such Secured
Note.
INTEREST
Interest on each Secured Note will be payable semi-annually
in arrears on June 1 and December 1 of each year and at maturity.
Interest payable on any interest payment date for any
Secured Note will be payable to the person in whose name such
Secured Note is registered on the record date with respect to
such interest payment date, which shall be the May 15 or November
15 (whether or not a business day), as the case may be, next
preceding such interest payment date; provided that, (i) if the
original issue date of any Secured Note is after a record date
and before the corresponding interest payment date, such Secured
Note shall bear interest from the original issue date, but
payment of interest shall commence on the second interest payment
date succeeding the original issue date, and (ii) interest
payable on the maturity date will be payable to the person to
whom the principal thereof shall be payable.
Unless otherwise indicated in the applicable Pricing
Supplement, interest on the Secured Notes will be computed on the
basis of a 360-day year consisting of twelve 30-day months.
FORM, EXCHANGE AND PAYMENT
The Secured Notes will be issued in fully registered
form in denominations of $1,000 or any amount in excess thereof
that is an integral multiple of $1,000. The Secured Notes will be
exchangeable at the office of Bankers Trust Company in New York
City, without charge other than taxes or other governmental
charges incident thereto. Principal, premium, if any, and
interest will be payable at such office. (See Twentieth
Supplemental, Sec. 1.01.) Notwithstanding the foregoing, for so
long as the Secured Notes shall be held by the Depository or its
nominee, owners of beneficial interests in the Secured Notes will
not be entitled to have any individual Secured Notes registered
in their names, and transfers of beneficial interests and
payments of principal, premium, if any, and interest will be made
as described herein under "Book-Entry System".
REDEMPTION
To the extent, if any, provided in the Pricing Supplement
relating to any Secured Note, such Secured Note will be
redeemable, on 30 days' notice, in whole or in part, at any time
on or after the initial redemption date, if any, fixed at the
time of sale and set forth in the applicable Pricing Supplement.
On or after the initial redemption date, such Secured Note will
be redeemable in whole or in part, at the option of the Company
at a redemption price determined in accordance with the following
paragraph, plus accrued interest to the date fixed for
redemption.
The redemption price for each Secured Note subject to
redemption shall, for the twelve-month period commencing on the
initial redemption date, be equal to a certain percentage of the
principal amount of such Secured Note and thereafter, shall
decline for the twelve-month period commencing on each
anniversary of the initial redemption date by a percentage of
5
<PAGE>
principal amount ("Reduction Percentage") until the redemption
price shall be 100% of the principal amount. The initial
redemption date and price and any Reduction Percentage with
respect to each Secured Note subject to redemption will be fixed
at the time of sale and set forth in the applicable Pricing
Supplement.
If so specified in the Pricing Supplement relating to any
Secured Note, the Company may not, prior to the redemption
limitation date, if any, set forth in such Pricing Supplement,
redeem such Secured Note as contemplated above as a part of, or
in anticipation of, any refunding operation by the application,
directly or indirectly, of moneys borrowed having an effective
interest cost to the Company (calculated in accordance with
generally accepted financial practice) of less than the effective
interest cost to the Company (similarly calculated) of such
Secured Note.
If, at the time the notice of redemption shall be given, the
redemption money shall not be on deposit with the Corporate
Trustee, the redemption may be made subject to the receipt of
such money before the date fixed for redemption, and such notice
shall be of no effect unless such money shall be so received.
Unless otherwise indicated in the applicable Pricing
Supplement, the Secured Notes will not be subject to any sinking
fund.
PROVISIONS FOR MAINTENANCE OF PROPERTY
While the Mortgage contains provisions for the maintenance
of the Mortgaged and Pledged Property, the Mortgage does not
permit redemption of Bonds pursuant to these provisions.
SECURITY
The Secured Notes together with all other Bonds now or
hereafter issued under the Mortgage will be secured by the
Mortgage, which constitutes, in the opinion of Bruce B. Samson,
Esq., General Counsel of the Company, a first mortgage lien on
all of the gas plants, distribution systems and other materially
important physical properties of the Company (except as stated
below), subject to (a) leases of minor portions of the Company's
property to others for uses which, in the opinion of such
Counsel, do not interfere with the Company's business, (b) leases
of certain property of the Company not used in its gas utility
business or the gas by-product business, (c) excepted
encumbrances, and (d) minor defects and encumbrances customarily
found in properties of like size and character which, in the
opinion of such Counsel, do not impair the use of such properties
by the Company. There are excepted from the lien all cash and
securities; certain equipment, apparatus, materials or supplies;
aircraft, automobiles and other vehicles; receivables, contracts,
leases and operating agreements; timber, minerals, mineral rights
and royalties; and all natural gas and oil production property.
The Mortgage contains provisions subjecting after-acquired
property (subject to pre-existing liens) to the lien thereof,
subject to limitations in the case of consolidation, merger or
sale of substantially all of the Company's assets. (See
Mortgage, Art. XVI.)
The Mortgage provides that the Mortgage Trustees shall have
a lien upon the mortgaged property, prior to that of the Bonds,
for the payment of their reasonable compensation and expenses and
for indemnity against certain liabilities. (See Mortgage, Sec.
96).
ISSUANCE OF ADDITIONAL BONDS
Bonds may be issued from time to time on the basis of (1)
60% of property additions, after adjustments to offset
retirements (see "Modification of the Mortgage -- Issuance of
Additional Bonds" below); (2) retirement of Bonds or qualified
lien bonds; or (3) deposit of cash. With certain exceptions in
the case of (2) above, the issuance of Bonds is subject to
adjusted net earnings before income taxes for 12 consecutive
months out of the preceding 15 months being at least twice the
annual interest requirements on all Bonds at the time
outstanding, including the additional issue, and all indebtedness
of prior rank.
Property additions generally include gas, electric, steam or
hot water property or gas by-product property acquired after
March 31, 1946, but may not include securities, airplanes,
automobiles or other vehicles, or natural gas transmission lines
or natural gas and oil production property. As of December 31,
1996, approximately $373 million of property additions and $93
million of retired Bonds were available for use as the basis for
the issuance of Bonds.
6
<PAGE>
The Mortgage contains certain restrictions upon the issuance
of Bonds against property subject to liens.
The Secured Notes will be issued against property additions
and retired Bonds.
(See Mortgage, Secs. 4-7, 20-30 and 46, and Third
Supplemental, Secs. 3 and 4.)
RELEASE AND SUBSTITUTION OF PROPERTY
Property may be released against (1) deposit of cash or, to
a limited extent, purchase money mortgages, (2) property
additions, or (3) waiver of the right to issue Bonds without
applying any earnings test. Cash so deposited and cash deposited
against the issuance of additional bonds may be withdrawn upon
the bases stated in (2) and (3) above. When property released is
not funded property, property additions used to effect the
release may again, in certain cases, become available as credits
under the Mortgage, and the waiver of the right to issue Bonds to
effect the release may, in certain cases, cease to be effective
as such a waiver. Similar provisions are in effect as to cash
proceeds of such property. The Mortgage contains special
provisions with respect to qualified lien bonds pledged and the
disposition of moneys received on pledged prior lien bonds. (See
Mortgage, Secs. 5, 31, 32, 37, 46 to 50, 59 to 61, 100 and 118.)
DEFAULTS AND NOTICE THEREOF
Defaults are: default in payment of principal, default for
60 days in payment of interest or of installments of funds for
retirement of Bonds; certain defaults with respect to qualified
lien bonds; certain events in bankruptcy, insolvency or
reorganization; and default for 90 days after notice in the case
of a breach of any other covenant. The Mortgage Trustees may
withhold notice of default (except in payment of principal,
interest or any fund for the retirement of Bonds) if they think
it in the interest of the Bondholders. (See Mortgage, Secs. 65
and 66.)
Holders of 25% of the Bonds may declare the principal and
the interest due on default, but a majority may annul such
declaration if such default has been cured. No holder of Bonds
may enforce the lien of the Mortgage without giving the Mortgage
Trustees written notice of a default and unless holders of 25% of
the Bonds have requested the Mortgage Trustees to act and offered
them reasonable opportunity to act and the Mortgage Trustees have
failed to act. The Mortgage Trustees are not required to risk
their funds or incur personal liability if there is reasonable
ground for believing that the repayment is not reasonably
assured. Holders of a majority of the Bonds may direct the time,
method and place of conducting any proceedings for any remedy
available to the Mortgage Trustees, or exercising any trust or
power conferred upon the Mortgage Trustees, but the Mortgage
Trustees are not required to follow such direction if not
sufficiently indemnified for expenditures. (See Mortgage, Secs.
67, 71, 80 and 94.)
SATISFACTION AND DISCHARGE OF MORTGAGE
The lien of the Mortgage may be cancelled and discharged
whenever all indebtedness secured by the Mortgage has been paid.
Bonds, or any portion of the principal amount thereof, will,
prior to the maturity thereof, be deemed to have been paid for
purposes of satisfying the lien of the Mortgage and shall not be
deemed to be outstanding for any other purpose of the Mortgage if
there shall have been deposited with the Corporate Trustee either
(i) moneys in the necessary amount or (ii) (a) direct obligations
of the government of the United States of America or (b)
obligations guaranteed by the government of the United States of
America or (c) securities that are backed by obligations of the
government of the United States of America as collateral under an
arrangement by which the interest and principal payments on the
collateral generally flow immediately through to the holder of
the security, which in any case are not subject to redemption
prior to maturity by anyone other than the holders, the principal
of and the interest on which when due, and without any regard to
reinvestment thereof, shall be sufficient to pay when due the
principal of, premium, if any, and interest due and to become due
on said Bonds or portions thereof on the redemption date or
maturity date thereof, as the case may be. (See Mortgage, Sec.
106 and Thirteenth Supplemental, Sec. 3.02.)
EVIDENCE TO BE FURNISHED TO THE MORTGAGE TRUSTEES
Compliance with Mortgage provisions is evidenced by written
statements of the Company's officers or persons selected by the
Company. In certain major matters the accountant, engineer,
appraiser or other expert must be independent. Various
certificates and other papers, including an annual certificate
with reference to compliance with the terms of the Mortgage and
absence of defaults, are required to be filed annually and upon
the occurrence of certain events. (See Mortgage, Secs. 38-46.)
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MODIFICATION OF THE MORTGAGE
The rights of the Bondholders may be modified with the
consent of 70% of the Bonds and, if less than all series of Bonds
are affected, the consent also of 70% of Bonds of each series
affected. The Company has the right, without any consent or
other action by holders of any series of Bonds, to substitute
66 2/3% for 70%. In general, no modification of the terms of
payment of principal and interest, affecting the lien of the
Mortgage or reducing the percentage required for modification
(except as provided above) will be effective against any
Bondholder without his consent. (See Mortgage, Art. XIX and
Ninth Supplemental, Sec.6.)
The Company has reserved the right to amend the Mortgage,
without any consent or other action by holders of the Bonds of
the Nineteenth Series or of Bonds of any subsequently created
series (including the Secured Notes), in the following respects:
Release and Substitution of Property
To permit the release of property at the lesser of its cost
or its fair value at the time that such property became funded
property, rather than at its fair value at the time of its
release; and to facilitate the release of unfunded property.
(See Mortgage, Secs. 3, 59 and 60 and Eighteenth Supplemental,
Sec. 2.03.)
Issuance of Additional Bonds
To clarify that (i) for purposes of determining annual
interest requirements, interest on Bonds or other indebtedness
bearing interest at a variable interest rate shall be computed at
the average of the interest rates borne by such Bonds or other
indebtedness during the period of calculation or, if such Bonds
or other indebtedness shall have been issued after such period or
shall be the subject of pending applications, interest shall be
computed at the initial rate borne upon issuance, and (ii) no
extraordinary items shall be included in operating expenses or
deducted from revenues or other income in calculating adjusted
net earnings (See Mortgage, Sec. 7.); and to revise the basis for
the issuance of additional Bonds from 60% of property additions,
after adjustments to offset retirements, to 70%. (See Mortgage,
Secs. 25, 26, 59 and 61 and Eighteenth Supplemental, Secs. 2.01
and 2.02.)
THE CORPORATE TRUSTEE
Bankers Trust Company also serves as the Indenture Trustee
under the Indenture under which the Unsecured Notes are issued.
DESCRIPTION OF THE UNSECURED NOTES
GENERAL
The Unsecured Notes are to be issued under an Indenture,
dated as of June 1, 1991 ("Indenture"), between the Company and
Bankers Trust Company, as trustee ("Indenture Trustee").
The statements herein concerning the Unsecured Notes and the
Indenture are merely an outline and do not purport to be
complete. They make use of terms defined in the Indenture and
are qualified in their entirety by express reference to the cited
Sections and Articles. They may be changed with respect to any
Unsecured Note by the applicable Pricing Supplement, which should
be read in conjunction with this description.
The Indenture provides that debt securities (including the
Unsecured Notes and including both interest bearing and original
issue discount securities) may be issued thereunder, without
limitation as to aggregate principal amount. (See Indenture, Sec.
301.) All debt securities heretofore or hereafter issued under
the Indenture (including the Unsecured Notes) are collectively
referred to as the "Indenture Securities". The Indenture does not
limit the amount of other debt, secured or unsecured, which may
be issued by the Company. The Unsecured Notes will rank pari
passu with all other unsecured and unsubordinated indebtedness of
the Company. Substantially all of the gas plants, distribution
systems and other materially important physical properties of the
Company are subject to the lien of the Mortgage securing the
Company's Bonds. (See "Description of the Secured Notes--Security
and--Issuance of Additional Bonds", above.)
The Unsecured Notes will be offered on a continuing basis,
and each Unsecured Note will mature on such date, not less than
nine months nor more than 30 years from its date of issue, as
selected by the purchaser and agreed to by the Company.
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<PAGE>
The Pricing Supplement relating to any Unsecured Note will
set forth the principal amount, interest rate, issue price and
Agent's commission, original issue and maturity dates, redemption
provisions, if any, and other material terms of such Unsecured
Note.
INTEREST
Interest on each Unsecured Note will be payable
semi-annually in arrears on June 1 and December 1 of each year
and at maturity.
Interest payable on any interest payment date for any
Unsecured Note will be payable to the person in whose name such
Unsecured Note is registered on the record date with respect to
such interest payment date, which shall be the May 15 or November
15 (whether or not a business day), as the case may be, next
preceding such interest payment date; provided that, (i) if the
original issue date of any Unsecured Note is after a record date
and before the corresponding interest payment date, such
Unsecured Note will bear interest from the original issue date
but payment of interest shall commence on the second interest
payment date succeeding the original issue date, and (ii)
interest payable on the maturity date will be payable to the
person to whom the principal thereof shall be payable.
Unless otherwise indicated in the applicable Pricing
Supplement, interest on the Unsecured Notes will be computed on
the basis of a 360-day year consisting of twelve 30-day months.
FORM, EXCHANGE AND PAYMENT
The Unsecured Notes will be issued in fully registered form
in denominations of $1,000 or any amount in excess thereof that
is an integral multiple of $1,000. The Unsecured Notes will be
exchangeable at the office of Bankers Trust Company in New York
City, without charge other than taxes or other governmental
charges incident thereto. Principal, premium, if any, and
interest will be payable at such office. Notwithstanding the
foregoing, for so long as the Unsecured Notes shall be held by
the Depository or its nominee, owners of beneficial interests in
the Unsecured Notes will not be entitled to have any individual
Unsecured Notes registered in their names, and transfers of
beneficial interests and payments of principal, premium, if any,
and interest will be made as described herein under "Book-Entry
System".
REDEMPTION
To the extent, if any, provided in the Pricing Supplement
relating to any Unsecured Note, such Unsecured Note will be
redeemable, on not less than 30 days' notice, in whole or in
part, at any time on or after the initial redemption date, if
any, fixed at the time of sale and set forth in the applicable
Pricing Supplement. On or after the initial redemption date,
such Unsecured Note will be redeemable in whole or in part, at
the option of the Company, at a redemption price determined in
accordance with the following paragraph, plus accrued interest to
the date fixed for redemption.
The redemption price for each Unsecured Note subject to
redemption shall, for the twelve-month period commencing on the
initial redemption date, be equal to a certain percentage of the
principal amount of such Unsecured Note and, thereafter, shall
decline for the twelve-month period commencing on each
anniversary of the initial redemption date by a percentage of
principal amount ("Reduction Percentage") until the redemption
price shall be 100% of the principal amount. The initial
redemption price and date and any Reduction Percentage with
respect to each Unsecured Note subject to redemption will be
fixed at the time of sale and set forth in the applicable Pricing
Supplement.
If so specified in the Pricing Supplement relating to any
Unsecured Note, the Company may not, prior to the redemption
limitation date, if any, set forth in such Pricing Supplement,
redeem such Unsecured Note as contemplated above as a part of, or
in anticipation of, any refunding operation by the application,
directly or indirectly, of moneys borrowed having an effective
interest cost to the Company (calculated in accordance with
generally accepted financial practice) of less than the effective
interest cost to the Company (similarly calculated) of such
Unsecured Note.
If, at the time the notice of redemption shall be given, the
redemption money shall not be on deposit with the Indenture
Trustee, the redemption shall be made subject to the receipt of
such money on or before the date fixed for redemption, and such
notice shall be of no effect unless such money shall be so
received. (See Indenture, Art. Four.)
Unless otherwise indicated in the applicable Pricing
Supplement, the Unsecured Notes will not be subject to any
sinking fund.
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<PAGE>
DEFEASANCE
The principal amount of any Unsecured Notes issued under the
Indenture will be deemed to have been paid for purposes of the
Indenture and the entire indebtedness of the Company in respect
thereof will be deemed to have been satisfied and discharged, if
there shall have been irrevocably deposited with the Indenture
Trustee, in trust: (a) money in an amount which will be
sufficient, or (b) in the case of a deposit made prior to the
maturity of the Unsecured Notes, Government Obligations (as
defined herein), which do not contain provisions permitting the
redemption or other prepayment thereof at the option of the
issuer thereof, the principal of and the interest on which when
due, without any regard to reinvestment thereof, will provide
moneys which, together with the money, if any, deposited with or
held by the Indenture Trustee, will be sufficient, or (c) a
combination of (a) and (b) which will be sufficient, to pay when
due the principal of and premium, if any, and interest, if any,
due and to become due on the Unsecured Notes that are
outstanding. For this purpose, Government Obligations include
direct obligations of, or obligations unconditionally guaranteed
by, the United States of America entitled to the benefit of the
full faith and credit thereof and certificates, depositary
receipts or other instruments which evidence a direct ownership
interest in such obligations or in any specific interest or
principal payments due in respect thereof. (See Indenture, Secs.
101, 701.)
If the Company shall make any deposit of money and/or
Government Obligations with respect to the Unsecured Notes, or
any portion of the principal amount thereof, prior to the
Maturity or redemption of such Unsecured Notes or such portion of
the principal amount thereof, for the satisfaction or discharge
of the indebtedness of the Company in respect to such Unsecured
Notes or such portion thereof as contemplated by Section 701 of
the Indenture, the Company shall deliver to the Indenture Trustee
either (a) an instrument wherein the Company, notwithstanding
such satisfaction and discharge, shall assume the obligation
(which shall be absolute and unconditional) to irrevocably
deposit with the Indenture Trustee such additional sums of money,
if any, or additional Government Obligations, if any, or any
combination thereof, at such time or times, as shall be
necessary, together with the money and/or Government Obligations
theretofore so deposited, to pay when due the principal of and
premium, if any, and interest due and to become due on such
Unsecured Notes or such portions thereof, all in accordance with
and subject to the provisions of said Section 701; provided,
however, that such instrument may state that the obligation of
the Company to make additional deposits as aforesaid shall be
subject to the delivery to the Company by the Indenture Trustee
of a notice asserting the amount of such deficiency accompanied
by an opinion of an independent public accountant of nationally
recognized standing, selected by the Indenture Trustee, showing
the calculation thereof, or (b) an opinion of Counsel to the
effect that the Holders of such Unsecured Notes, or such portions
of the principal amount thereof, will not recognize income, gain
or loss for United States federal income tax purposes as a result
of such satisfaction and discharge and will be subject to United
States federal income tax on the same amounts, at the same times
and in the same manner as if such satisfaction and discharge had
not been effected.
In the event that the Company shall elect to deliver to the
Indenture Trustee an instrument as described in clause (a) of the
preceding paragraph in connection with any such deposit of money
and/or Government Obligations with the Indenture Trustee, under
current applicable United States federal income tax regulations,
the Holders of such Unsecured Notes, or such portions thereof,
will not recognize income, gain or loss for United States federal
income tax purposes as a result of such satisfaction and
discharge and will be subject to United States federal income tax
on the same amounts, at the same times and in the same manner as
if such deposit had not been effected. There can be no assurance
that such United States federal income tax regulations will not
change such that, as a result of such deposit and delivery by the
Company of such instrument, Holders may recognize income, gain or
loss for United States federal income tax purposes and may not be
subject to United States federal income tax on the same amounts,
at the same times and in the same manner as if such deposit had
not been effected.
EVENTS OF DEFAULT AND NOTICE THEREOF
Events of Default are: default for three Business Days in
payment of principal; default for 60 days in payment of interest;
certain events in bankruptcy, insolvency or reorganization;
default for 90 days after notice in the case of a breach of any
other covenant; and any other Event of Default specified with
respect to the Indenture Securities of a particular series. No
Event of Default with respect to a series of Indenture Securities
necessarily constitutes an Event of Default with respect to the
Indenture Securities of any other series. The Indenture Trustee
may withhold notice of default (except in payment of principal,
interest or any funds for the retirement of Indenture Securities)
if it, in good faith, determines that withholding of such notice
is in the interest of the Holders of the Indenture Securities.
(See Indenture, Secs. 801 and 903.)
Either the Indenture Trustee or the Holders of not less than
33% in principal amount (or such lesser amount as may be provided
in the case of discount Indenture Securities) of the outstanding
Indenture Securities of all defaulted series, considered as one
class, may declare the principal and interest on such series due
on default, but the Company may annul such default by effecting
its cure and paying overdue interest and principal. No Holder of
10
<PAGE>
Indenture Securities may enforce the Indenture without having
given the Indenture Trustee written notice of default, and unless
the Holders of a majority of the Indenture Securities of all
defaulted series, considered as one class, shall have requested
the Indenture Trustee to act and offered reasonable indemnity,
and for 60 days the Indenture Trustee shall have failed to act.
But, each Holder has an absolute right to receive payment of
principal and interest when due and to institute suit for the
enforcement of such payment. The Indenture Trustee is not
required to risk its funds or incur any financial liability if it
shall have reasonable grounds for believing that repayment is not
reasonably assured. The Holders of a majority of the Indenture
Securities of all defaulted series, considered as one class, may
direct the time, method and place of conducting any proceedings
for any remedy available to the Indenture Trustee, or exercising
any trust or power conferred on the Indenture Trustee, with
respect to the Indenture Securities of such series, but the
Indenture Trustee is not required to follow such direction if not
sufficiently indemnified and the Indenture Trustee may take any
other action it deems proper which is not inconsistent with such
direction. (See Indenture, Secs. 802, 807, 808, 812 and 902.)
EVIDENCE TO BE FURNISHED TO THE INDENTURE TRUSTEE
Compliance with Indenture provisions will be evidenced by
written statements of the Company's officers. An annual
certificate with reference to compliance with the covenants and
conditions of the Indenture and the absence of defaults is
required to be filed with the Indenture Trustee. (See Indenture,
Sec.1004.)
MODIFICATION OF THE INDENTURE
The rights of the Holders of the Indenture Securities may be
modified with the consent of the Holders of a majority of the
Indenture Securities of all series or Tranches, as defined below,
affected, considered as one class. However, certain specified
rights of the Holders of Indenture Securities may be modified
without the consent of the Holders if such modification would not
be deemed adversely to affect their interests in any material
respect. In general, no modification of the terms of payment of
principal and interest, no reduction of the percentage in
principal amount of the Indenture Securities outstanding under
such series required to consent to any supplemental indenture or
waiver under the Indenture, no reduction of such percentage
necessary for quorum and voting, and no modification of certain
of the provisions in the Indenture relating to supplemental
indentures, waivers of certain covenants and waivers of past
defaults is effective against any Holder of Indenture Securities
without his consent. "Tranche" means a group of Indenture
Securities which are of the same series and have identical terms
except as to principal amount and/or date of issuance. (See
Indenture, Art. Twelve.)
THE INDENTURE TRUSTEE
Bankers Trust Company also serves as the Corporate Trustee
under the Mortgage under which the Secured Notes are issued.
PLAN OF DISTRIBUTION
The Medium-Term Notes are being offered on a continuing
basis for sale by the Company through the Agents which have
agreed to use their best efforts to solicit purchases of the
Medium-Term Notes. The initial Agents are Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated and
PaineWebber Incorporated. Should the Company designate other
persons to act as Agents, the names of such persons will be
disclosed in a Pricing Supplement. The Company will pay each
Agent a commission which, depending on the maturity of the
Medium-Term Notes, will range from .125% to .750% of the
principal amount of any Medium-Term Note sold through such Agent.
The Company may also sell Medium-Term Notes to any Agent, as
principal, at a discount from the principal amount thereof, and
the Agent may later resell such Medium-Term Notes to investors
and other purchasers at varying prices related to prevailing
market prices at the time of resale as determined by such Agent
or, if so agreed, at a fixed public offering price. In the case
of sales to any Agent as principal, such Agent may utilize a
selling or dealer group in connection with resales. An Agent may
sell Medium-Term Notes it has purchased as principal to any
dealer at a discount and, unless otherwise specified in the
applicable Pricing Supplement, such discount allowed to any
dealer will not be in excess of the discount to be received by
such Agent from the Company. After the initial public offering
of Medium-Term Notes to be resold to investors and other
purchasers, the public offering price (in the case of a fixed
price public offering), concession and discount may be changed.
The Medium-Term Notes also may be sold by the Company directly to
purchasers. No commission will be payable to the Agents on
Medium-Term Notes sold directly by the Company.
The Company reserves the right to withdraw, cancel or modify
the offer made hereby without notice and may reject, in whole or
in part, offers to purchase Medium-Term Notes whether placed
directly with the Company or through one of the Agents. Each
Agent will have the right, in its discretion reasonably
exercised, to reject any offer to purchase Medium-Term Notes
received by it, in whole or in part.
11
<PAGE>
Payment of the purchase price of the Medium-Term Notes will
be required to be made in immediately available funds in New York
City on the date of settlement.
No Medium-Term Note will have an established trading market
when issued. The Medium-Term Notes will not be listed on any
securities exchange. Each of the Agents may from time to time
purchase and sell Medium-Term Notes in the secondary market, but
is not obligated to do so. There can be no assurance that there
will be a secondary market for the Medium-Term Notes or liquidity
in the secondary market if one develops. From time to time, each
of the Agents may make a market in the Medium-Term Notes.
The Agents may be deemed to be "underwriters" within the
meaning of the Securities Act of 1933, as amended. The Company
has agreed to indemnify each of the Agents against, or to make
contributions relating to, certain liabilities, including
liabilities under such Act. The Company has agreed to reimburse
each of the Agents for certain expenses. Each of the Agents may
engage in transactions with, or perform services for, the Company
in the ordinary course of business.
In connection with certain types of offers and sales of
Medium-Term Notes, rules of the Securities and Exchange
Commission permit the Agents to engage in certain transactions
that stabilize the price of such Medium-Term Notes. Such
transactions consist of bids or purchases for the purpose of
pegging, fixing or maintaining the price of the Medium-Term
Notes.
If the Agents create a short position in any Medium-Term
Notes in connection with certain types of offers and sales, i.e.,
if they sell more Medium-Term Notes than are set forth in the
applicable Pricing Supplement, the Agents may reduce that short
position by purchasing Medium-Term Notes in the open market.
In connection with certain types of offers and sales, the
Agents may also impose a penalty bid on certain Agents and
selling group members. This means that if the Agents purchase
Medium-Term Notes in the open market to reduce the Agents' short
position or to stabilize the price of the Medium-Term Notes, they
may reclaim the amount of selling concession from the Agents and
selling group members who sold these Medium-Term Notes as part of
the offering.
In general, purchases of a security for the purpose of
stabilization or to reduce a short position could cause the price
of the security to be higher than it might be in the absence of
such purchases. The imposition of a penalty bid might also have
an effect on the price of a security to the extent that it were
to discourage resales of the security.
Neither the Company nor any Agent makes any representation
or prediction as to the direction or magnitude of any effect that
the transactions described above may have on the price of the
Medium-Term Notes. In addition, neither the Company nor any
Agent makes any representation that the Agents will engage in
such transactions or that such transactions, once commenced, will
not be discontinued without notice.
EXPERTS
The financial statements incorporated in this Prospectus by
reference from the Company's Annual Report on Form 10-K for the
year ended December 31, 1996 have been audited by Deloitte &
Touche LLP, independent auditors, as stated in their report,
which is incorporated herein by reference, and have been so
incorporated in reliance upon the report of such firm given upon
their authority as experts in accounting and auditing.
The statements made as to matters of law and legal
conclusions in the documents incorporated in this Prospectus by
reference and under "Description of the Secured Notes" herein
have been reviewed by Bruce B. Samson, Esquire, Portland, Oregon.
Mr. Samson is General Counsel of the Company. These statements
and conclusions are set forth in reliance upon the opinion of Mr.
Samson given upon his authority as an expert. The statements
made as to matters of law and legal conclusions under
"Description of the Unsecured Notes" herein have been reviewed by
Messrs. Reid & Priest LLP, New York, New York. These statements
and conclusions are set forth in reliance upon the opinion of
Messrs. Reid & Priest LLP given upon their authority as experts.
As of December 31, 1996, Mr. Samson owned 8,780 shares of the
Company's common stock (including approximately 2,687 shares held
in Company's Retirement K Savings Plan at December 31, 1996) and
has been granted options to purchase 6,091 shares at a price of
$16.59, 3,000 shares at a price of $24.00 per share and 7,500
shares at a price of $20.92 per share, the market prices of the
shares on the dates of such grants as adjusted to reflect a 3-
for-2 split of the Company's Common Stock. Mr. Samson's shares,
including the underlying shares subject to options granted to
him, had a fair market value at December 31, 1996 of
approximately $608,900.
12
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LEGALITY
The legality of the Medium-Term Notes will be passed upon
for the Company by Mr. Samson and by Messrs. Reid & Priest LLP,
New York, New York, and for the agents by Messrs. Simpson Thacher
& Bartlett (a partnership which includes professional
corporations), New York, New York. However, all matters
pertaining to titles, the lien and enforceability of the
Mortgage, franchises and all other matters of Oregon and
Washington law, will be passed upon only by Mr. Samson.
13
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=================================================================
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED
IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OF
ANY SECURITIES OTHER THAN THOSE TO WHICH IT RELATES OR AN OFFER
TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, TO ANY PERSON IN
ANY JURISDICTION WHERE SUCH AN OFFER OR SOLICITATION WOULD BE
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE
MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS
OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
TABLE OF CONTENTS
Available Information . . . . . . . . . . . . . . . . . . . . 2
Incorporation of Certain Documents by Reference . . . . . . . 2
The Company . . . . . . . . . . . . . . . . . . . . . . . . . 2
Use of Proceeds and Financing Program . . . . . . . . . . . . 2
Ratio of Earnings to Fixed Charges . . . . . . . . . . . . . 3
Book-Entry System . . . . . . . . . . . . . . . . . . . . . . 3
Description of the Secured Notes . . . . . . . . . . . . . . 5
Description of the Unsecured Notes . . . . . . . . . . . . . 8
Plan of Distribution . . . . . . . . . . . . . . . . . . . . 11
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Legality . . . . . . . . . . . . . . . . . . . . . . . . . . 13
=================================================================
=================================================================
$165,000,000
NORTHWEST
NATURAL GAS COMPANY
SECURED MEDIUM-TERM NOTES,
SERIES B
(SERIES OF FIRST MORTGAGE BONDS)
AND
UNSECURED MEDIUM-TERM NOTES,
SERIES B
Due from Nine Months to 30 Years
from Date of Issue
-----------------------
P R O S P E C T U S
-----------------------
MERRILL LYNCH & CO.
PAINEWEBBER INCORPORATED
April __, 1997
=================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
(ESTIMATED, EXCEPT SEC FILING FEE).
Filing Fee-Securities and Exchange
Commission . . . . . . . . . . . . . . . . . . $ 45,455
Fees of Trustees, including counsel
and authentication fees . . . . . . . . . . . . 10,000
Legal fees . . . . . . . . . . . . . . . . . . . 100,000
Accounting fees and expenses . . . . . . . . . . 15,000
Rating Agencies' fees . . . . . . . . . . . . . 60,000
Printing and engraving . . . . . . . . . . . . . 10,000
Miscellaneous expense . . . . . . . . . . . . . 11,545
--------
Total expenses . . . . . . . . . . . . . . . . $252,000
========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Oregon Business Corporation Act (the "Act") provides, in
general, that a director or officer of a corporation who has been
or is threatened to be made a defendant in a legal proceeding
because that person is or was a director or officer of the
corporation:
(1) shall be indemnified by the corporation for all expenses of
such litigation when the director or officer is wholly successful
on the merits or otherwise;
(2) may be indemnified by the corporation for the expenses,
judgments, fines and amounts paid in settlement of such
litigation (other than a derivative lawsuit) if he or she acted
in good faith and in a manner reasonably believed to be in, or at
least not opposed to, the best interests of the corporation (and,
in the case of a criminal proceeding, had no reasonable cause to
believe the conduct was unlawful); and
(3) may be indemnified by the corporation for expenses of a
derivative lawsuit (a suit by a shareholder alleging a breach by
a director or officer of a duty owed to the corporation) if he or
she acted in good faith and in a manner reasonably believed to be
in, or at least not opposed to, the best interests of the
corporation, provided the director or officer is not adjudged
liable to the corporation.
The Act also authorizes the advancement of litigation expenses to
a director or officer upon receipt of a written affirmation of
the director's or officer's good faith belief that the standard
of conduct in Section (2) or (3) above has been met and an
undertaking by such director or officer to repay such expenses if
it is ultimately determined that he or she did not meet that
standard and, therefore, is not entitled to be indemnified. The
Act also provides that the indemnification provided thereunder
shall not be deemed exclusive of any other rights to which those
indemnified may be entitled under any bylaw, agreement, vote of
shareholders or disinterested directors or otherwise.
The Company's Bylaws provide that the Company shall indemnify
directors and officers to the fullest extent permitted under the
Act, thus making mandatory the discretionary indemnification
authorized by the Act.
The Company's Restated Articles of Incorporation provide that the
Company shall indemnify its officers and directors to the fullest
extent permitted by law, which may be broader than the
indemnification authorized by the Act.
The Company's shareholders have approved and the Company has
entered into indemnity agreements with its directors and officers
which provide for indemnity to the fullest extent permitted by
law and also alter or clarify the statutory indemnity in the
following respects:
(1) prompt advancement of litigation expenses is provided if the
director or officer makes the required affirmation and
undertaking;
(2) the director or officer is permitted to enforce the
indemnity obligation in court and the burden is on the Company to
prove that the director or officer is not entitled to
indemnification;
II-1
<PAGE>
(3) indemnity is explicitly provided for judgments and
settlements in derivative actions;
(4) prompt indemnification is provided unless a determination is
made that the director or officer is not entitled to
indemnification; and
(5) partial indemnification is permitted if the director or
officer is not entitled to full indemnification.
The Company maintains in effect a policy of insurance providing
for reimbursement to the Company of payments made to directors
and officers as indemnity for damages, judgments, settlements,
costs and expenses incurred by them which the Company may be
required or permitted to make according to applicable law, common
or statutory, or under provisions of its Restated Articles of
Incorporation, Bylaws or agreements effective under such laws.
ITEM 16. LIST OF EXHIBITS.
1 - Form of Distribution Agreement.
4(a)* - Copy of Mortgage and Deed of Trust, dated as of
July 1, 1946, to Bankers Trust Company and R.G.
Page (to whom Stanley Burg is now successor),
Trustees (filed as Exhibit 7(j) in File No. 2-
6494), together with Indentures supplemental
thereto Nos. 1 through 14, dated, respectively, as
of June 1, 1949, March 1, 1954, April 1, 1956,
February 1, 1959, July 1, 1961, January 1, 1964,
March 1, 1966, December 1, 1969, April 1, 1971,
January 1, 1975, December 1, 1975, July 1, 1981,
June 1, 1985, and November 1, 1985 (filed as
Exhibit 4(d) in File No. 33-1929); No. 15, dated
as of July 1, 1986 (filed as Exhibit (4)(c) in
File No. 33-24168); Nos. 16, 17 and 18, dated,
respectively, as of November 1, 1988, October 1,
1989 and July 1, 1990 (filed as Exhibit (4)(c) in
File No. 33-40482); No. 19, dated as of June 1,
1991 (filed as Exhibit 4(c) in File No. 33-64014;
and No. 20, dated as of June 1, 1993 (filed as
Exhibit 4(c) in File No. 33-53795).
4(b)* - Copy of Indenture, dated as of June 1, 1991, to
Bankers Trust Company, Trustee, relating to the
Unsecured Notes (filed as Exhibit 4(e) in File No.
33-64014).
4(c)* - Copy of Officers' Certificate, dated as of June
18, 1993, establishing series of Unsecured Notes
and Form of Instructions for both Secured and
Unsecured Notes (filed as Exhibit 4(f) to Form 10-
K for the year ended December 31, 1993).
4(d) - Form of Officers' Certificate supplementing the
Officers' Certificate, dated as of June 18, 1993,
establishing series of Unsecured Notes.
5(a)** - Opinion of Bruce B. Samson, Esquire.
5(b)** - Opinion of Messrs. Reid & Priest
LLP.
12* - Computation of Ratio of Earnings to Fixed Charges
(filed as Exhibit 12 to Form 10-K for the year
ended December 31, 1996).
23 - Consent of Deloitte & Touche LLP. (The consents
of Bruce B. Samson, Esquire, and of Reid & Priest
LLP are included in their opinions filed,
respectively, as Exhibits 5(a) and 5(b)).
24** - Power of Attorney
25(a)** - Statement of Eligibility of the Corporate Mortgage
Trustee on Form T-1.
25(b)** - Statement of Eligibility of the Individual
Mortgage Trustee on Form T-2.
25(c)** - Statement of Eligibility of the Indenture Trustee
on Form T-1.
---------------------------------
* Incorporated herein by reference as indicated.
** Previously filed.
II-2
<PAGE>
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in the
registration statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
provided, however, that the undertakings set forth in paragraphs
(i) and (ii) above do not apply if the registration statement is
on Form S-3 and the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to section 13
or section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this registration statement.
(2) That, for the purpose of determining liability under the
Securities Act of 1933, each such post-effective amendment that
contains a form of prospectus shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
The undersigned registrant hereby undertakes, that for purposes
of determining any liability under the Securities Act of 1933,
each filing of the registrant's annual report pursuant to section
13(a) or 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the
securities offered therein and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the registrant pursuant to the
provisions described under Item 15 of this registration
statement, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indem-
nification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final
adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
S-3 and has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in
the City of Portland, and State of Oregon on the twenty-second
day of April, 1997.
NORTHWEST NATURAL GAS COMPANY
By: /s/ Bruce R. DeBolt
---------------------------------
Bruce R. DeBolt
Senior Vice President, Finance,
and Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following
persons in the capacities and on the date indicated.
Signature Title Date
--------- ----- ----
/s/ Richard G. Reiten* Principal Executive Officer, April 22, 1997
----------------------- and Director
Richard G. Reiten,
President and Chief
Executive Officer
/s/ Bruce R. DeBolt Principal Financial April 22, 1997
----------------------- Officer
Bruce R. DeBolt,
Senior Vice President,
Finance, and Chief
Financial Officer
/s/ D. James Wilson* Principal Accounting April 22, 1997
----------------------- Officer
D. James Wilson,
Treasurer and Controller
/s/ Mary Arnstad* Director )
----------------------- )
Mary Arnstad )
)
/s/ Thomas E. Dewey, Jr.* Director )
----------------------- )
Thomas E. Dewey, Jr. )
)
/s/ Tod R. Hamachek* Director )
----------------------- )
Tod R. Hamachek )
)
/s/ Richard B. Keller* Director )
----------------------- )
Richard B. Keller )
)
/s/ Wayne D. Kuni* Director )
----------------------- )
Wayne D. Kuni )
)
/s/ Randall C. Pape* Director ) April 22, 1997
----------------------- )
Randall C. Pape )
)
/s/ Robert L. Ridgley* Director )
----------------------- )
Robert L. Ridgley )
)
/s/ Dwight A. Sangrey* Director )
----------------------- )
Dwight A. Sangrey )
)
/s/ Melody C. Teppola* Director )
----------------------- )
Melody C. Teppola )
)
/s/ Russell F. Tromley* Director )
----------------------- )
Russell F. Tromley )
)
/s/ Benjamin R. Whiteley* Director )
----------------------- )
Benjamin R. Whiteley )
By:* /s/ Bruce R. DeBolt
-------------------------------
Bruce R. DeBolt
Attorney-in-fact
II-4
<PAGE>
INDEX TO EXHIBITS
Exhibit
-------
1 Form of Distribution Agreement
4(a)* Copy of Mortgage and Deed of Trust, dated as of July 1, 1946, to
Bankers Trust Company and R.G. Page (to whom Stanley Burg is now
successor), Trustees (filed as Exhibit 7(j) in File No. 2-6494),
together with Indentures supplemental thereto (Nos. 1 through 14,
dated, respectively, as of June 1, 1949, March 1, 1954, April 1,
1956, February 1, 1959, July 1, 1961, January 1, 1964, March 1,
1966, December 1, 1969, April 1, 1971, January 1, 1975, December
1, 1975, July 1, 1981, June 1, 1985, and November 1, 1985 (filed
as Exhibit 4(d) in File No. 33-1929); No. 15, dated as of July 1,
1986 (filed as Exhibit (4)(c) in File No. 33-24168); Nos. 16, 17
and 18, dated, respectively, as of November 1, 1988, October 1,
1989 and July 1, 1990 (filed as Exhibit (4)(c) in File No. 33-
40482); No. 19, dated as of June 1, 1991 (filed as Exhibit 4(c) in
File No. 33-64014; and No. 20, dated as of June 1, 1993 (filed as
Exhibit 4(c) in File No. 33-53795).
4(b)* Copy of Indenture, dated as of June 1, 1991, to Bankers Trust
Company, Trustee, relating to the Unsecured Notes (filed as
Exhibit 4(e) in File No. 33-64014).
4(c)* Copy of Officers' Certificate, dated as of June 18, 1993,
establishing series of Unsecured Notes and Form of Instructions
for both Secured and Unsecured Notes (filed as Exhibit 4(f) to
Form 10-K for the year ended December 31, 1993).
4(d) Form of Officers' Certificate supplementing the Officers'
Certificate, dated as of June 18, 1993, establishing series of
Unsecured Notes.
5(a)** Opinion of Bruce B. Samson, Esquire
5(b)** Opinion of Messrs. Reid & Priest LLP
12* Computation of Ratio of Earnings to Fixed Charges (filed
as Exhibit 12 to Form 10-K for the year ended December
31, 1996).
23 Consent of Deloitte & Touche LLP. (The consents of Bruce
B. Samson, Esquire, and of Reid & Priest LLP are included
in their opinions filed, respectively, as Exhibits 5(a)
and 5(b)).
24** Power of Attorney
25(a)** Statement of Eligibility of the Corporate Mortgage Trustee
Form T-1.
25(b)** Statement of Eligibility of the Individual Mortgage Trustee on
Form T-2.
25(c)** Statement of Eligibility of the Indenture Trustee on Form T-1.
----------------------------------
* Incorporated herein by reference as indicated.
** Previously filed.
Exhibit 1
Northwest Natural Gas Company
$165,000,000
Medium-Term Notes, Series B
Distribution Agreement
----------------------
, 1997
----------
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
North Tower
New York, New York 10281
PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
Dear Sirs:
Northwest Natural Gas Company, an Oregon corporation (the
"Company"), proposes to issue and sell from time-to-time not to exceed
$165,000,000 of its First Mortgage Bonds, designated Secured Medium-Term
Notes, Series B (the "Secured Notes"), and its Unsecured Medium-Term Notes,
Series B (the "Unsecured Notes", and, together with the Secured Notes, the
"Securities"). The Secured Notes will be issued under the Company's
Mortgage and Deed of Trust, dated as of July 1, 1946, to Bankers Trust
Company (the "Mortgage Trustee" or the "Trustee") and R.G. Page (Stanley
Burg, successor), as trustees, as supplemented (such Mortgage and Deed of
Trust as supplemented being hereinafter referred to as the "Mortgage" or
the "Indenture"). The Unsecured Notes will be issued under an indenture,
dated as of June 1, 1991 (the "Note Indenture" or the "Indenture"), between
the Company and Bankers Trust Company, as trustee (the "Indenture Trustee"
or the "Trustee"). The Securities shall have the maturities, interest
rates, if any, redemption provisions and other terms set forth in the
Prospectus referred to below, as it may be amended or supplemented from
time-to-time. The Securities will be issued, and the terms thereof
established, from time-to-time, by the Company in accordance with the
respective Indentures.
The Company represents, warrants, covenants and agrees with each
of you and with each other person which shall become a party to this
agreement (individually, an "Agent", and collectively, the "Agents") and
each Agent, severally and not jointly, covenants and agrees with the
Company as follows:
1. Representations and Warranties of the Company. The Company
---------------------------------------------
represents and warrants to each Agent that:
(a) The Company is a corporation duly organized and validly
existing in good standing under the laws of the State of Oregon, and
is qualified to do business and is in good standing as a foreign
corporation in the State of Washington, with power (corporate and
other) to own its properties and conduct its business as described in
the Prospectus referred to below.
(b) An initial registration statement on Form S-3 (Registration
No. 33-64014) (the "Initial Registration Statement") in respect of
$150,000,000 aggregate principal amount of the Company's First
Mortgage Bonds designated Secured Medium-Term Notes Series B, and
Unsecured Medium-Term Notes Series B (of which $15,000,000 remain
unsold on the date hereof) has been filed with the Securities and
Exchange Commission (the "Commission") under the Securities Act of
1933, as amended (the "Act"), in the form heretofore delivered
(excluding the exhibits thereto but including the documents
incorporated by reference in the prospectus included therein) to such
Agent, and such Initial Registration Statement in such form has been
declared effective by the Commission and no stop order suspending its
effectiveness has been issued and no proceeding for that purpose has
been initiated or threatened by the Commission. A subsequent
registration statement on Form S-3 (Registration No. 333-15323), as
amended (the "Subsequent Registration Statement"), in respect of an
additional $150,000,000 aggregate principal amount of the Securities
has been filed with the Commission under the Act, in the form
heretofore delivered or to be delivered (excluding the exhibits
thereto but including the documents incorporated by reference in the
prospectus included therein) to such Agent, and such Subsequent
Registration Statement in such form has been declared effective by the
Commission and no stop order suspending its effectiveness has been
issued and no proceeding for that purpose has been initiated or
threatened by the Commission (any preliminary prospectus included in
the Subsequent Registration Statement being hereinafter called a "Pre-
liminary Prospectus"). The Initial Registration Statement and the
Subsequent Registration Statement, including all exhibits thereto but
excluding Forms T-1 and T-2, as amended at the time each became
effective, are hereinafter called the "Registration Statement"; the
combined prospectus included as a part of the Subsequent Registration
Statement (including, if applicable, any prospectus supplement)
relating to the Securities, in the form in which it most recently has
been filed with the Commission on or prior to the date of this
Agreement, is hereinafter called the "Prospectus"; any reference
herein to any Preliminary Prospectus or the Prospectus shall be deemed
to refer to and include the documents filed by the Company under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated therein by reference as of the date of such Preliminary
Prospectus or Prospectus; any reference to any amendment or supplement
to any Preliminary Prospectus or Prospectus, including any supplement
to the Prospectus that sets forth only the terms of a particular issue
of the Securities (a "Pricing Supplement"), shall be deemed to refer
to and include the documents filed by the Company under the Exchange
Act and incorporated therein by reference as of the date of such
amendment or Pricing Supplement; and any reference to the Prospectus
as amended or supplemented shall be deemed to refer to and include the
Prospectus as then amended or supplemented (including the applicable
Pricing Supplement) in relation to a particular issue of Securities,
in the form filed with the Commission pursuant to Rule 424(b) under
the Act, including any documents filed by the Company under the
Exchange Act and incorporated therein by reference as of the date of
such amendment or supplement.
(c) The documents incorporated by reference in the Prospectus,
when filed with the Commission or, if later, when they became
effective, conformed in all material respects with the requirements of
the Act or the Exchange Act, as applicable, and the applicable rules
and regulations of the Commission thereunder; none of such documents
when so filed or when such documents became effective, as the case may
be, included 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, in the light of the circumstances under
which they were made, not misleading; any future documents so filed or
incorporated by reference in the Prospectus, or any amendment or
supplement thereto, when filed with the Commission or, if later, when
effective, will conform in all material respects with the applicable
requirements of the Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder, and when such
documents are filed or become effective, as the case may be, they 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, in the light of the circumstances under which they
were made, not misleading; provided, however, that the Company makes
-------- -------
no representations or warranties as to information contained in or
omitted from the Prospectus as amended or supplemented in reliance
upon and in conformity with information furnished in writing to the
Company by any Agent specifically for use therein;
(d) The Initial Registration Statement and the Subsequent
Registration Statement when each became effective conformed, and the
Prospectus conforms, and any amendment or supplement thereto will
conform, in all material respects, with the provisions 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
the Initial Registration Statement and the Subsequent Registration
Statement when each became effective did not, the Prospectus does not
(and on each of the dates referred to in clause (i) of Section 6 will
not) and any amendment or supplement to the Prospectus, as of its date
and on each of the dates referred to in clause (i) of Section 6, 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 the Company
-------- -------
makes no representations or warranties as to information contained in
or omitted from any such document in reliance upon and in conformity
with information furnished in writing to the Company by any Agent
specifically for use therein;
(e) Except as set forth in or contemplated by the Prospectus,
since the date as of which information is given in the Prospectus (i)
there has not been any material adverse change in the condition of the
Company and its subsidiaries taken as a whole, financial or otherwise,
(ii) there has not been any transaction entered into by the Company or
any of its subsidiaries which is material to the Company and its
subsidiaries taken as a whole, other than transactions in the ordinary
course of business, and (iii) neither the Company nor any of its
subsidiaries has incurred any contingent obligation which is material
to the Company and its subsidiaries taken as a whole;
(f) The Securities have been duly authorized, and, when issued
pursuant to their respective Indentures and delivered pursuant to this
Agreement and any Terms Agreement (as defined in Section 3 hereof),
will have been duly executed, authenticated, issued and delivered,
will constitute valid and legally binding obligations of the Company,
enforceable in accordance with their terms, except as their
enforceability may be limited by laws and principles of equity
relating to or affecting generally the enforcement of creditors'
rights, including without limitation, bankruptcy and insolvency laws,
and will be entitled to the benefits provided by their respective
Indentures (which will be substantially in the form filed as exhibits
to the Subsequent Registration Statement); the Indentures have been
duly authorized and qualified under the Trust Indenture Act, consti-
tute valid and legally binding instruments, enforceable in accordance
with their terms, except as their enforceability may be limited by
laws and principles of equity relating to or affecting generally the
enforcement of creditors' rights, including without limitation,
bankruptcy and insolvency laws; and the Indentures conform, and the
Securities of each issue, when issued, will conform, in all material
respects, to the descriptions thereof in the Prospectus as amended or
supplemented with respect to such issue;
(g) The issue and sale of the Securities, the compliance by the
Company with all of the provisions of the Securities, the Indentures,
this Agreement and any Terms Agreement, and the consummation by the
Company of the transactions herein and therein contemplated will not
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
is a party or by which the Company is bound or to which any of the
property of the Company is subject, nor will such action result in any
violation of the provisions of any statute or the Restated Articles of
Incorporation, as amended, or the Bylaws, as amended, of the Company
or any order, rule or regulation of any court or any regulatory
authority or other governmental agency or body having jurisdiction
over the Company or any of its properties; and no consent, approval,
authorization, order, registration or qualification of or with any
court or governmental agency or body is required for the solicitation
of offers to purchase Securities and the issue and sale of the
Securities or the consummation by the Company of the other
transactions contemplated by the Indentures, this Agreement or any
Terms Agreement, except such as have been obtained at or prior to the
Commencement Date (as defined in Section 4 hereof), will have been
obtained under the Act, the Trust Indenture Act and the public utility
laws of the States of Oregon and Washington and such as may be
required under state securities or Blue Sky laws in connection with
the solicitation by such Agent of offers to purchase Securities from
the Company and with purchases of Securities by such Agent as
principal, as the case may be, in each case in the manner contemplated
hereby; and
(h) Other than as set forth or contemplated in the Prospectus,
there are no legal or governmental proceedings pending to which the
Company is a party or to which any property of the Company is subject,
which, if determined adversely to the Company, would individually or
in the aggregate have a material adverse effect on the consolidated
financial position, stockholders' equity or consolidated results of
operations of the Company, and, to the best of the Company's
knowledge, no such proceedings are threatened.
2. Obligations of the Agents and the Company.
-----------------------------------------
(a) Subject to the terms and conditions hereof and to the
reservation by the Company of the right to sell Securities directly on
its own behalf, the Company hereby (i) appoints each of Merrill Lynch
& Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated and
PaineWebber Incorporated as an agent of the Company for the purpose of
soliciting and receiving offers to purchase Securities from the
Company and (ii) reserves the right, from time to time, to appoint
additional agents for the purpose of soliciting and receiving offers
to purchase Securities from the Company; provided that each such
additional agent shall be required to become a party to this Agreement
and undertake the obligations of an Agent hereunder pursuant to an
Additional Agent Appointment Agreement ("Additional Agent Appointment
Agreement") substantially in the form of Exhibit 1 hereto.
(b) On the basis of the representations and warranties herein,
and subject to the terms and conditions hereof, each of the Agents, as
agent of the Company, severally and not jointly, agrees to use its
reasonable best efforts to solicit and receive offers to purchase
particular issues of the Securities from the Company upon the terms
and conditions set forth in the Prospectus as amended or supplemented
with respect thereto. Each Agent will promptly advise the Company by
telephone or other appropriate means of all reasonable offers to
purchase Securities, other than those rejected by such Agent. The
Company shall not, without the consent of each Agent, which consent
shall not unreasonably be withheld, solicit or accept offers to
purchase, or sell, any debt securities with a maturity, at the time of
original issuance, of from nine months to 30 years, except (i)
pursuant to this Agreement, (ii) pursuant to a private placement not
constituting a public offering under the Act, or (iii) in connection
with a firm commitment underwriting pursuant to an underwriting
agreement that does not provide for a continuous offering. However,
the Company, subject to Section 5(f) hereof, reserves the right to
sell, and may solicit and accept offers to purchase, Securities
directly on its own behalf, and, in the case of any such sale not
resulting from a solicitation made by an Agent, no commission will be
payable with respect to such sale.
(c) Procedural details relating to the issue and delivery of
Securities, the solicitation of offers to purchase Securities and the
payment therefor, unless an Agent and the Company shall otherwise
agree, shall be as set forth in the Administrative Procedure attached
hereto as Annex I (the "Administrative Procedure"). The provisions of
the Administrative Procedure shall apply to all transactions
contemplated hereunder other than those made pursuant to a Terms
Agreement. Each Agent and the Company shall perform the respective
duties and obligations specifically provided to be performed by each
of them in the Administrative Procedure. The Company will furnish to
the Trustees a copy of the Administrative Procedure as from time to
time in effect.
(d) The Company reserves the right, in its sole discretion, to
instruct the Agents to suspend, at any time, for any period of time or
permanently, the solicitation of offers to purchase the Securities.
As soon as practicable, but in any event not later than one business
day after receipt of notice from the Company, the Agents will suspend
solicitation of offers to purchase Securities from the Company until
such time as the Company has advised the Agents that such solicitation
may be resumed.
(e) The Company agrees to pay each Agent a commission, at the
time of settlement (each a "Settlement Date") of any sale of a
Security by the Company as a result of a solicitation made by such
Agent, in an amount equal to the following applicable percentage of
the principal amount of such Security sold:
Commission
(percentage of
aggregate
principal amount
Range of Maturities of Securities sold)
------------------- -------------------
From 9 months to less than 1 year .125%
From 1 year to less than 18 months .150%
From 18 months to less than 2 years .200%
From 2 years to less than 3 years .250%
From 3 years to less than 4 years .350%
From 4 years to less than 5 years .450%
From 5 years to less than 6 years .500%
From 6 years to less than 7 years .550%
From 7 years to less than 10 years .600%
From 10 years to less than 15 years .625%
From 15 years to less than 20 years .675%
From 20 years to 30 years .750%
3. Sales to Agents as Principal. Each sale of Securities to an
----------------------------
Agent, as principal, shall be made in accordance with the terms of this
Agreement and (unless the Company and such Agent shall otherwise agree) a
separate agreement (each a "Terms Agreement"), which will provide for the
sale of such Securities to, and the purchase thereof by, such Agent, as
principal. A Terms Agreement may be either (i) a written agreement
substantially in the form of Annex II hereto, or (ii) an oral agreement
between either Agent and the Company confirmed in writing by such Agent. A
Terms Agreement may also specify certain provisions relating to the
reoffering of such Securities by such Agent. Each Terms Agreement shall
specify the principal amount of Securities to be purchased by an Agent
pursuant thereto, the price to be paid to the Company for such Securities,
any provisions relating to the rights of, and defaults by, any underwriters
acting together with such Agent in the reoffering of the Securities, the
time and date of delivery of and payment for such Securities (each, a "Time
of Delivery") and place of delivery of such Securities, and any
requirements for opinions of counsel, accountants' letters and officers'
certificates pursuant to Section 5 hereof. Each purchase of Securities,
unless otherwise agreed shall be at a discount equivalent to the commission
payable to an Agent, acting as agent, with respect to a sale of Securities
of identical maturity, as set forth in Section 2(e) hereof). The Agent may
engage the services of any other broker or dealer in connection with the
resale of the Securities purchased as principal and may allow any portion
of the discount received in connection with such purchase from the Company
to be paid to such brokers and dealers. The commitment of an Agent to
purchase Securities as principal, whether pursuant to a Terms Agreement or
otherwise, shall be deemed to have been made on the basis of the represen-
tations and warranties of the Company herein contained and, to the extent
not otherwise agreed upon in a Terms Agreement or otherwise, shall be
subject to the terms and conditions herein set forth.
4. Commencement. At 11:00 a.m., New York City time, on the
------------
date of this Agreement or at such later date and time as may be agreed upon
between the Agents and the Company not later than the day prior to the
earlier of the day on which the solicitation of offers to purchase
Securities is to begin or on which any Terms Agreement shall be executed
(such time and date being referred to herein as the "Commencement Date"),
the Agents shall be furnished at the offices of Reid & Priest LLP, 40 West
57th Street, New York, New York:
(a) An opinion of Simpson Thacher & Bartlett (a partnership
which includes professional corporations), counsel to the Agents,
dated the Commencement Date, with respect to such matters as such
Agents may reasonably request, which opinion may rely, as to all
matters governed by Oregon and Washington law, upon the opinion of
Bruce B. Samson, Esq., General Counsel for the Company, referred to in
Section 4(b) hereof;
(b) An opinion of Bruce B. Samson, Esq., dated the Commencement
Date, in form and substance reasonably satisfactory to such Agents, to
the effect set forth in Annex III, which opinion may rely, as to all
matters governed by New York law, upon the opinion of Reid & Priest
LLP referred to in Section 4(c) hereof;
(c) An opinion of Reid & Priest LLP, dated the Commencement
Date, in form and substance reasonably satisfactory to such Agents, to
the effect set forth in Annex IV, which opinion may rely, as to all
matters governed by Oregon and Washington law, upon the opinion of
Bruce B. Samson, Esq., referred to in Section 4(b) hereof;
(d) A letter from each of the Company's current and former
independent accountants with respect to periods during which each was
the Company's independent accountant, dated the Commencement Date, in
form and substance reasonably satisfactory to such Agents and subject
to compliance with the requirements of Statements on Auditing
Standards issued by the American Institute of Certified Public
Accountants ("SAS"), to the effect set forth in Annex V hereto; and
(e) A certificate of the President or any Vice President of the
Company, dated the Commencement Date, in form reasonably satisfactory
to such Agents, (i) as to the accuracy of the representations and
warranties of the Company herein at and as of the Commencement Date,
(ii) as to the performance by the Company in all material respects of
all of its obligations hereunder to be performed at or prior to the
Commencement Date, (iii) as to the matters set forth in Section 1(e)
hereof, (iv) as to the absence of any stop order of the Commission
suspending the effectiveness of the Registration Statement or any
pending or contemplated proceedings for such purpose, (v) as to the
full force and effect of the authorizing orders of the Public Utility
Commission of Oregon and the Washington Utilities and Transportation
Commission referred to in Section 7(a) hereof, and (vi) as to such
other matters as such Agents may reasonably request.
5. Covenants of the Company. The Company covenants and agrees
------------------------
with each Agent:
(a) (i) To make no amendment or supplement to the Registration
Statement or the Prospectus (other than a Pricing Supplement) (A)
prior to the Commencement Date, which any Agent shall reasonably
disapprove by notice to the Company promptly after receipt of the
proposed form thereof or (B) after the date of any agreement by such
Agent, pursuant to a Terms Agreement or otherwise, to purchase
Securities as principal and prior to the related Time of Delivery
which such Agent shall reasonably disapprove by notice to the Company
promptly after receipt of the proposed form thereof; (ii) to prepare,
with respect to each particular issue of Securities to be sold through
or to such Agent pursuant to this Agreement, a Terms Agreement or
otherwise, a Pricing Supplement with respect to such Securities in a
form reasonably satisfactory to such Agent and to file such Pricing
Supplement in accordance with Rule 424(b) under the Act; (iii) to make
no amendment or supplement to the Registration Statement or Pro-
spectus, other than a Pricing Supplement, without affording such Agent
a reasonable opportunity for review thereof and comment thereon; (iv)
to timely file all reports and any definitive proxy or information
statements 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 the Securities, and during such same period to
advise such Agent, promptly after the Company receives notice thereof,
of the time when any amendment to the Registration Statement has been
filed or has become effective or any supplement to the Prospectus or
any amended Prospectus (other than any Pricing Supplement that relates
to Securities not purchased through or by such Agent) 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 the 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
amendment or supplement of the Registration Statement or Prospectus or
for additional information; (v) to promptly make every reasonable
effort to comply with all requests of the Commission for additional
information; and (vi) in the event of the issuance of any such stop
order or of any such order preventing or suspending the use of any
such prospectus or suspending any such qualification, to use its best
efforts to obtain its withdrawal;
(b) From time-to-time, to take such action as such Agent
reasonably may request to qualify the Securities for offering and sale
under the securities laws of such jurisdictions as may be approved by
the Company and to comply with such laws so as to permit the
continuance of sales and dealings therein for as long as may be
necessary to complete the distribution or sale of the Securities;
provided, however, 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, or to comply with
any other requirement reasonably deemed by the Company to be unduly
burdensome; provided, further, that the provisions of this subsection
-------- -------
(b) shall not apply so long as the Securities are "covered securities"
within the meaning of Section 18 of the Act and any rules and
regulations thereunder;
(c) To furnish such Agent with copies of the Registration
Statement, each amendment thereto, the Prospectus and each amendment
or supplement thereto, other than any Pricing Supplement (except as
provided in the Administrative Procedure), in the form in which it is
filed with the Commission pursuant to Rule 424(b) under the Act, and
with copies of the documents incorporated by reference therein (other
than exhibits incorporated by reference in the Registration
Statement), each in such quantities as such Agent may reasonably
request from time-to-time; and, if the delivery of a prospectus is
required at any time in connection with the offering or sale of the
Securities to or through an Agent pursuant to this Agreement 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, not misleading, or, if for
any other reason it shall be necessary during such 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 Indenture Act, to
notify such Agent and request such Agent, in its capacity as agent of
the Company, to suspend solicitation of offers to purchase Securities
from the Company (and, if so notified, such Agent shall cease such
solicitations as soon as practicable, but in any event not later than
one business day later); and if the Company shall decide to amend or
supplement the Registration Statement or the Prospectus, to so advise
such Agent promptly by telephone (confirmed in writing) and to prepare
and cause to be filed promptly with the Commission an amendment or
supplement to the Registration Statement or the Prospectus or to file
any document incorporated by reference in the Prospectus that will
correct such statement or omission or effect such compliance; provided
--------
that, (i) should such event relate solely to activities of any Agent
----
(except any termination of any Agent's services hereunder), such Agent
shall assume the expense of preparing and furnishing any such amend-
ment or supplement; (ii) if, during such period, such Agent shall
continue to own Securities purchased from the Company as principal or
such Agent otherwise shall be required to deliver a prospectus in
respect of transactions in the Securities, the Company shall promptly
prepare and file with the Commission such an amendment or supplement;
and (iii) if such Agent shall be required to deliver a prospectus in
connection with sales of any Securities purchased by it as principal
at any time nine months or more after the date of such purchase and
(A) there shall be, as a result of such purchase, no Securities
remaining to be sold under the Registration Statement or (B) the
Company, pursuant to Section 2(d) hereof, shall have instructed the
Agents, during such nine month period, to suspend permanently the
solicitation of offers to purchase the Securities, such Agent shall
assume the expense of preparing and furnishing any such amendment or
supplement in connection with the sales of any Securities purchased by
such Agent as principal. (For the purposes of this Section 5(c), the
Company shall be entitled to assume that a Prospectus shall no longer
be required to be delivered under the Act from and after the date six
months from the date of the purchase by an Agent as principal of the
particular issuance of Securities to which it relates, unless it shall
have received notice from such Agent to the contrary);
(d) To make generally available to its security holders as soon
as practicable, but in any event not later than eighteen months after
(i) the effective date of the Registration Statement, (ii) the effec-
tive date of each post-effective amendment to the Registration
Statement, and (iii) the date of each filing by the Company with the
Commission of an Annual Report on Form 10-K that is incorporated by
reference in the Registration Statement, an earning statement of the
Company and its subsidiaries (which need not be audited) in accordance
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);
(e) For the period ending five years from the date any
Securities are sold by the Company pursuant to an offer solicited by
such Agent under this Agreement, to furnish to such Agent copies of
all reports or other communications (financial or other) furnished to
stockholders, and deliver to such Agent (i) as soon as they are
available, copies of any reports and financial statements furnished to
or filed with the Commission pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act, (ii) copies of all registration statements
filed under the Act (other than those in respect of shareholder or
employee plans), and (iii) such additional information concerning the
business and financial condition of the Company as such Agent may from
time to time reasonably request (such financial statements to be on a
consolidated basis to the extent the accounts of the Company and its
subsidiaries are consolidated in reports furnished to its stockholders
generally or to the Commission);
(f) That, from the date of any Terms Agreement or other
agreement with such Agent to purchase Securities as principal and to
and including the earlier of (i) the termination of the trading
restrictions for the Securities purchased thereunder, as notified to
the Company by such Agent and (ii) the related Time of Delivery, the
Company, without the prior written consent of such Agent, will not
offer, sell, contract to sell or otherwise dispose of any debt
securities of the Company in a public offering which both have a
maturity of from nine months to 30 years and are substantially similar
to the Securities;
(g) That each acceptance by the Company of an offer to purchase
Securities procured by such Agent, as agent, and each agreement by the
Company, pursuant to a Terms Agreement or otherwise, to sell
Securities to such Agent, as principal, shall be deemed to be an
affirmation to such Agent that the representations and warranties of
the Company contained in or made pursuant to this Agreement are true
and correct as of the date of such acceptance or agreement, as the
case may be, as though made as of such date, and an undertaking that
such representations and warranties will be true and correct as of the
Settlement Date for the Securities relating to such acceptance or as
of the Time of Delivery relating to such sale, as the case may be, as
though made as of such date (except that such representations and
warranties shall be deemed to relate to the Registration Statement and
the Prospectus as amended and supplemented relating to such Securi-
ties);
(h) That, reasonably in advance of (i) each date as of which an
Agent reasonably requests an opinion or opinions of Simpson Thacher &
Bartlett, counsel to the Agents, or other counsel to the Agents
reasonably satisfactory to the Company, or (ii) each time that the
Company sells Securities to such Agent as principal pursuant to a
Terms Agreement or other agreement and such Agent requests an opinion
or opinions by Simpson Thacher & Bartlett, counsel to the Agents, or
other counsel to the Agents reasonably satisfactory to the Company,
the Company shall furnish to such counsel such papers and information
as they may reasonably request to enable them to furnish to such Agent
a letter in form reasonably satisfactory to such Agent, to the effect
that such Agent may rely on the opinion of such counsel referred to in
Section 4(a) hereof, to the same extent as though it was dated the
date of such letter (except that the statements in such opinion shall
be deemed to relate to the Registration Statement and the Prospectus
as amended and supplemented to the date of such letter), or in lieu of
such a letter, an opinion of the same tenor as the opinion of such
counsel referred to in Section 4(a) hereof, but modified to relate to
the Registration Statement and the Prospectus as amended and supple-
mented to such date;
(i) That each time that (x) the Registration Statement or the
Prospectus shall be amended or supplemented (other than by a Pricing
Supplement or by an amendment or supplement providing solely for a
change in the interest rates of the Securities or similar changes and,
unless the Agents shall otherwise specify, other than by an amendment
or supplement which relates exclusively to an offering of debt
securities other than the Securities), (y) a document incorporated by
reference in the Prospectus as amended or supplemented (other than a
Current Report on Form 8-K, unless the Agents shall otherwise specify)
shall be filed under the Act or Exchange Act (unless waived by the
Agents), and (z) the Company sells Securities to such Agent, as
principal, pursuant to a Terms Agreement or other agreement and such
Terms Agreement or other agreement specifies the delivery of an
opinion, letter or certificate under this Section 5(i) as a condition
to the purchase of Securities pursuant to such Terms Agreement or
other agreement, the Company shall furnish or cause to be furnished to
such Agent:
(i) a letter from Bruce B. Samson, Esq., General Counsel for the
Company, or his successor, dated the date of such amendment,
supplement, incorporation or Time of Delivery relating to
such sale, as the case may be, in form reasonably
satisfactory to such Agent, to the effect that such Agent
may rely on the opinion of such counsel referred to in
Section 4(b) hereof to the same extent as though it were
dated the date of such letter (except that the statements in
such opinion shall be deemed to relate to the Registration
Statement and the Prospectus as amended and supplemented to
the date of such letter, excluding, in the case of the
statements in the paragraph next following paragraph 13 of
such opinion, all documents filed by the Company under the
Exchange Act and incorporated by reference into the
Registration Statement and Prospectus during or prior to the
fiscal year which is the subject of the Company's most
recent Annual Report on Form 10-K) or, in lieu of such a
letter, an opinion of the same tenor as the opinion of such
counsel referred to in Section 4(b) hereof, but modified to
relate to the Registration Statement and the Prospectus as
so amended and supplemented to such date;
(ii) a letter of Reid & Priest LLP, New York, New York, counsel
for the Company, or other counsel for the Company reasonably
satisfactory to such Agent, dated the date of such
amendment, supplement, incorporation or Time of Delivery
relating to such sale, as the case may be, in form
reasonably satisfactory to such Agent, to the effect that
such Agent may rely on the opinion of such counsel referred
to in Section 4(c) hereof to the same extent as though it
were dated the date of such letter (except that the
statements in such opinion shall be deemed to relate to the
Registration Statement and the Prospectus as amended and
supplemented to the date of such letter, excluding, in the
case of the statements in the paragraph next following
paragraph 10 of such opinion, all documents filed by the
Company under the Exchange Act and incorporated by reference
into the Registration Statement and the Prospectus during or
prior to the fiscal year which is the subject of the
Company's most recent Annual Report on Form 10-K) or, in
lieu of such letter, an opinion of the same tenor as the
opinion of such counsel referred to in Section 4(c) hereof,
but modified to relate to the Registration Statement and the
Prospectus as so amended and supplemented to such date; and
(iii) a certificate executed by the President or any Vice
President of the Company, dated the date of such supplement,
amendment, incorporation or Time of Delivery relating to
such sale, as the case may be, in such form as shall be
reasonably satisfactory to such Agent, to the effect that
the statements contained in the certificate referred to in
Section 4(e) hereof are true and correct at such date as
though made as of such date (except that such statements
shall be deemed to relate to the Registration Statement and
the Prospectus as amended and supplemented to such date) or,
in lieu of such certificate, a certificate of the same tenor
as the certificate referred to in Section 4(e) hereof, but
modified to relate to the Registration Statement and the
Prospectus as amended and supplemented to such date; and
(j) That each time that (x) the Registration Statement or the
Prospectus shall be amended or supplemented to include additional
financial information (unless waived by the Agents), and (y) the
Company sells Securities to such Agent as principal pursuant to a
Terms Agreement or other agreement and such Terms Agreement or other
agreement specifies the delivery of a letter under this Section 5(j)
as a condition to the purchase of Securities pursuant to such Terms
Agreement or other agreement, and subject to compliance with the
requirements of SAS issued by the American Institute of Certified
Public Accountants, the Company shall furnish or cause to be furnished
to such Agent letters of Deloitte & Touche LLP, Price Waterhouse LLP
or other independent accountants for the Company reasonably
satisfactory to the Agent, each with respect to periods during which
such firm was the independent accountant for the Company, dated the
date of such amendment, supplement, incorporation or Time of Delivery
relating to such sale, as the case may be, in form reasonably
satisfactory to such Agent, to the effect that such Agent may rely
upon the letter of such accountants referred to in Section 4(d) hereof
to the same extent as though it were dated the date of such subsequent
letter (except the statements in such former letter shall be deemed to
relate to the financial statements included or incorporated in the
Registration Statement and Prospectus as amended and supplemented to
the date of such latter letter), or, in lieu of such latter letter, a
letter of the same tenor as the letter referred to in Section 4(d)
hereof, but modified to relate to the Registration Statement and the
Prospectus as amended or supplemented to the date of such letter, with
such changes as may be necessary to reflect changes in the financial
statements and other information derived from the accounting records
of the Company, to the extent such financial statements and other
information are available as of a date not more than five business
days prior to the date of such letter;
(k) To offer to any person who has agreed to purchase Securities
as the result of an offer to purchase solicited by such Agent, as
agent, the right to refuse to purchase and pay for such Securities if,
at the Settlement Date for such Securities, any condition set forth in
Section 6 hereof shall not have been satisfied (it being understood
that the judgment of such person with respect to the impracticability
or inadvisability of such purchase of Securities shall be substituted,
for purposes of this Section 5(k), for the judgment of such Agent with
respect thereto); and
(l) To pay or cause to be paid the following: (i) the fees and
expenses of the Company's counsel and accountants in connection with
the registration of the Securities under the Act and all other expen-
ses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus, the Prospectus and
any Pricing Supplements and all other amendments and supplements
thereto and the mailing and delivering of copies thereof to such
Agent; (ii) the fees and expenses of counsel for the Agents in
connection with the establishment of the program contemplated hereby,
any opinions to be rendered by such counsel hereunder and the
transactions contemplated hereunder; (iii) the cost of preparing this
Agreement, any Terms Agreement and any other documents approved by the
Company in connection with the offering, purchase, sale and delivery
of the Securities; (iv) the fees, not to exceed $5,000, and expenses
of counsel for the Agents in connection with the qualification of the
Securities for offering and sale under state securities laws as
provided in Section 5(b) hereof and the preparation of any blue sky
and legal investment memoranda; (v) any fees charged by securities
rating services for rating the Securities; (vi) any filing fees
incident to any required review by the National Association of
Securities Dealers, Inc. of the terms of the sale of the Securities;
(vii) the cost of preparing the Securities; (viii) the fees and
expenses of the Trustees and any agent of any Trustee and any transfer
or paying agent of the Company and the fees and disbursements of
counsel for any Trustee or any such agent in connection with any
Indenture and the Securities; (ix) any advertising expenses connected
with the solicitation of offers to purchase and the sale of Securities
so long as such advertising expenses have been approved by the
Company; and (x) all other costs and expenses incident to the
performance of the Company's obligations hereunder which are not
otherwise specifically provided for in this Section; provided,
however, that, except as provided in Sections 8 and 9 hereof, such
Agent shall pay all other expenses it incurs, including any expenses
that may be incurred by it or for its account pursuant to the proviso
of Section 5(c) hereof.
6. Conditions to Agents' Obligations. The obligation of an
---------------------------------
Agent, as agent of the Company, at any time (each a "Solicitation Time"),
to solicit offers to purchase the Securities and the obligation of an Agent
to purchase Securities as principal, pursuant to a Terms Agreement or
otherwise, shall be subject, in such Agent's discretion, to the conditions
that: (i) all of the representations and warranties of the Company herein
(and, in the case of an obligation of an Agent under a Terms Agreement or
other agreement with an Agent to purchase Securities as principal, in or
incorporated in such agreement by reference) were true and correct (A) on
the Commencement Date; (B) each time that the Registration Statement or the
Prospectus shall be amended or supplemented, (C) each time a document
incorporated by reference in the Prospectus as amended or supplemented
shall be filed by the Company under the Act or Exchange Act, (D) at the
date of each acceptance by the Company of an offer to purchase Securities
procured by such Agent, as agent, and each agreement by the Company,
pursuant to a Terms Agreement or otherwise, to sell Securities to an Agent,
as principal, (E) at each Settlement Date, and (F) at each Time of Delivery
of Securities so to be purchased by such Agent, as principal, as the case
may be, (ii) prior to such Solicitation Time or such Time of Delivery, as
the case may be, the Company shall have performed all of its obligations
hereunder theretofore to be performed, (iii) all requests for additional
information on the part of the Commission shall have been complied with to
the reasonable satisfaction of such Agent, (iv) there shall be in full
force and effect orders of the Public Utility Commission of Oregon and the
Washington Utilities and Transportation Commission which are acceptable to
the Agents and which permit the issuance and sale of the Securities
substantially in accordance with the terms and conditions of this
Agreement, (v) no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall be pending before, or to the knowledge of the Company
contemplated by, the Commission, and (vi) there shall not have occurred:
(A) a suspension or material limitation of trading in securities generally
on the New York Stock Exchange; (B) a general moratorium on commercial
banking activities in New York declared by either Federal or New York State
authorities; (C) an engagement by the United States in hostilities or any
escalation of hostilities, the effect of which, in the judgment of such
Agent, makes it impracticable or inadvisable to proceed with the
solicitation of offers to purchase Securities or the purchase of Securities
from the Company as principal on the terms and in the manner contemplated
by this Agreement and, if applicable, any Terms Agreement or other
agreement; or (D) any downgrading, or any notice shall have been given of
any intended or potential downgrading, of the Securities by either Moody's
Investors Service or Standard & Poor's Corporation. In addition to the
foregoing, the obligation of an Agent to purchase Securities as principal,
pursuant to a Terms Agreement or other agreement, shall be subject, in such
Agent's discretion, to the further condition that there shall not have
been, since the date of such Terms Agreement or other agreement or since
the respective dates as of which information is given in the Registration
Statement, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of
the Company and its subsidiaries considered as one enterprise, whether or
not arising in the ordinary course of business.
7. Conditions to Company's Obligations.
------------------------------------
(a) The obligation of the Company to sell and deliver any
Security pursuant hereto, to a Terms Agreement or otherwise shall be
subject to the condition that, after the acceptance by the Company of
an offer to purchase such Security procured by an Agent, as agent, or
the agreement by the Company, pursuant to a Terms Agreement or
otherwise, to sell such Security to an Agent, as principal, and prior
to the Time of Delivery or the Settlement Date, as the case may be,
with respect to such purchase or sale, neither the Public Utility
Commission of Oregon nor the Washington Utilities and Transportation
Commission shall have issued an order revoking its then existing order
permitting the issuance and sale of the Securities through each Agent,
as agent, on the terms set forth herein or to each Agent, as
principal, pursuant to a Terms Agreement or other agreement.
(b) If the condition specified in Section 7(a) hereof shall not
have been fulfilled, the obligation of the Company to sell Securities
hereunder or under a Terms Agreement or other agreement may be
terminated by the Company; and neither the Company nor any Agent shall
have any liability to the other, except for (i) the obligation of the
Company to pay certain expenses to the extent provided for in Section
5(l) hereof, (ii) the obligation of the Company to pay commissions and
hold the Agents harmless as provided in Section 9 hereof (and, for
purposes of said Section 9, such a failure of such condition to be
fulfilled shall be considered a default by the Company on its
obligation to deliver such Securities), and (iii) any liability under
Section 8 hereof.
8. Indemnification.
---------------
(a) The Company will indemnify and hold harmless each Agent
against any losses, claims, damages or liabilities, joint or several,
to which such Agent 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 the
Registration Statement, any Preliminary Prospectus, the Prospectus or
the Prospectus as amended or supplemented, 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 such Agent for
any legal or other expenses reasonably incurred by it, as incurred, in
connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the Company shall
-------- -------
not be liable in any such case to the extent that any such loss,
claim, damage or liability or action in respect thereof arises out of
or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in the Registration Statement, any
Preliminary Prospectus, the Prospectus or the Prospectus as amended or
supplemented in reliance upon and in conformity with written
information furnished to the Company by such Agent specifically for
use therein; and provided, further, that the indemnity agreement
contained in this Section 8(a) shall not inure to the benefit of any
Agent on account of any losses, claims, damages or liabilities or
actions in respect thereof arising solely from the sale of Securities
by or through such Agent pursuant to a Terms Agreement or otherwise to
any person if a copy of the Prospectus as then amended and
supplemented with respect to such Securities shall not have been sent
or given to such person with or prior to written confirmation of the
sale involved (assuming that the Company shall have previously
furnished such documents to such Agent in a timely fashion), and if
the Prospectus (as so amended or supplemented) would have cured the
defect giving rise to such losses, claims, damages or liabilities.
(b) Each Agent 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 the Registration
Statement, any Preliminary Prospectus, the Prospectus or the Pros-
pectus as amended or supplemented, 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 omission was made in the Registration Statement,
any Preliminary Prospectus, the Prospectus or the Prospectus as
amended or supplemented in reliance upon and in conformity with
written information furnished to the Company by such Agent
specifically for use therein, and will reimburse the Company for any
legal or other expenses incurred by the Company, as incurred, in
connection with investigating or defending any such loss, claim,
damage or liability or action. Each Agent hereby furnishes to the
Company in writing expressly for use in the Registration Statement,
any Preliminary Prospectus, the Prospectus and the Prospectus as
amended or supplemented (i) the second sentence in the last paragraph
on the cover page of the Prospectus relating to the offerings of
Medium-Term Notes by the Agents, as principal, (ii) the legend on the
inside cover page relating to stabilizing transactions by the Agents,
and (iii) under "Plan of Distribution," the fourth and seventh
sentences in the first paragraph, the second and last sentences of the
fourth paragraph, the seventh paragraph and the eighth paragraph.
(c) Promptly after receipt by an indemnified party under Section
8(a) or Section 8(b) 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 Section, 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 Section. 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 satisfactory to such indemni-
fied party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party); provided, however, in no
-------- -------
event shall such indemnifying parties be obligated to retain more than
one counsel (and necessary local counsel), in addition to counsel for
such indemnifying parties, to represent the indemnified parties, 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 Section 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.
Each indemnified party may also participate at its own expense in the
defense of any such action. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement
of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such
settlement includes an unconditional release of such indemnified party
from all liability on claims that are the subject matter of such
proceeding.
(d) If the indemnification provided for in Section 8(a) or
Section 8(b) hereof is unavailable to or insufficient to hold harmless
an indemnified party 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
by 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 any relevant equitable considerations
including the relative fault of the Company on the one hand and each
Agent on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), and relative benefit of the Company on
the one hand and each Agent on the other. 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 required to be stated therein or
necessary in order to make the statements therein not misleading
relates to information supplied by the Company on the one hand or by
any Agent on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such
statement or omission. The relative benefits received by the Company
on the one hand and each Agent on the other shall be deemed to be in
the same proportion as the total net proceeds from the sale of
Securities (before deducting expenses) received by the Company bear to
the total commissions or discounts received by such Agent in respect
thereof. The Company and each Agent agree that it would not be just
and equitable if contribution pursuant to this Section 8(d) were
determined (i) with respect only to any losses, claims, damages or
liabilities referred to in Section 8(a) hereof, by per capita
allocation (even if all Agents were treated as one entity for such
purpose) or (ii) by any method of allocation which does not take
account of the equitable considerations referred to above in this
Section 8(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 Section 8(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. 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 each of the
Agents under this Section 8(d) to contribute are several and are 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 Agent within the meaning of the Act. The
obligations of each Agent under this Section 8 shall be in addition to
any liability which such Agent may otherwise have and shall extend,
upon the same terms and conditions, to each director of the Company,
to each officer of the Company who has signed the Registration
Statement and to each person, if any, who controls the Company within
the meaning of the Act.
9. Nonperformance. Each Agent, in soliciting offers to
--------------
purchase Securities from the Company and in performing the other
obligations of such Agent hereunder (other than in respect of any purchase
by an Agent as principal pursuant to a Terms Agreement or otherwise), is
acting solely as agent for the Company and not as principal. Each Agent
will make reasonable efforts to assist the Company in obtaining performance
by each purchaser whose offer to purchase Securities from the Company was
solicited by such Agent and has been accepted by the Company, but such
Agent shall not have any liability to the Company in the event such
purchase is not consummated for any reason. If the Company shall default
on its obligation to deliver Securities to a purchaser whose offer it has
accepted, the Company shall (i) hold each Agent harmless against any loss,
claim or damage arising from or as a result of such default by the Company
and (ii) notwithstanding such default, pay to the Agent that solicited such
offer any commission to which it would be entitled in connection with such
sale.
10. Survival of Agreement. The respective indemnities,
---------------------
agreements, representations, warranties and other statements by any Agent
and the Company set forth in or made pursuant to this Agreement shall
remain in full force and effect regardless of any investigation (or any
statement as to the results thereof) made by or on behalf of any Agent or
any controlling person of any Agent or the Company, or any officer or
director or any controlling person of the Company, and shall survive each
delivery of and payment for any of the Securities.
11. Suspension or Termination. The provisions of this Agreement
-------------------------
relating to the solicitation of offers to purchase Securities from the
Company may be suspended or terminated at any time by the Company as to any
Agent or by any Agent as to such Agent upon the giving of written notice of
such suspension or termination to such Agent or the Company, as the case
may be. In the event of such suspension or termination with respect to any
Agent, this Agreement shall remain in full force and effect with respect to
(i) any Agent as to which such suspension or termination has not occurred,
(ii) the rights and obligations of any party which have previously accrued
or which relate to Securities which are already issued, agreed to be issued
or the subject of a pending offer at the time of such suspension or
termination, (iii) Sections 2(e), 5(d), 5(e), 5(l), 8, 9 and 10 hereof, and
(iv) the obligations of the Company to amend or supplement the Prospectus,
so long as any Agent continues to hold Securities as principal.
12. Notices. Except as otherwise specifically provided herein
-------
or in the Administrative Procedure, all statements, requests, notices and
advices hereunder shall be in writing or by telephone, if promptly
confirmed in writing, and if to Merrill Lynch & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated, shall be sufficient in all respects when
delivered or sent by facsimile transmission or registered mail to World
Financial Center, North Tower, New York, New York 10281, Attn: MTN Product
Management, Facsimile Transmission No. 212-449-2234, Telephone No. 212-449-
7476 and if to PaineWebber Incorporated, shall be sufficient in all
respects when delivered or sent by facsimile transmission or registered
mail to 1285 Avenue of the Americas, 11th Floor, New York, New York 10019,
Facsimile Transmission No. 212-247-0371, Attn: David G. Zahka; if to the
Company, shall be sufficient in all respects when delivered or sent by
facsimile transmission or registered mail to One Pacific Square, 220 N.W.
Second Avenue, Portland, Oregon 97209, Attention: Chief Financial Officer,
with a copy to the General Counsel, Facsimile Transmission No. 503-220-
2584, Telephone No. 503-220-2406; and if to any additional Agent, as set
forth in the Additional Agent Appointment Agreement relating to such Agent.
13. Benefit of Agreement. This Agreement, any Additional Agent
--------------------
Appointment Agreement and any Terms Agreement shall be binding upon, and
inure solely to the benefit of, each Agent a party hereto and thereto and
the Company, and to the extent provided in Section 8 and Section 10 hereof,
the officers and directors of the Company and any person who controls any
Agent or the Company, and their respective personal representatives, suc-
cessors and assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement, any Additional Agent Appointment
Agreement or any Terms Agreement. No purchaser of any of the Securities
through or from any Agent hereunder shall be deemed a successor or assign
by reason of such purchase.
14. Timing. Time shall be of the essence in this Agreement, any
------
Additional Agent Appointment Agreement and any Terms Agreement. As used
herein, the term "business day" shall mean any day when banks in New York
City are not authorized or obligated by law or executive order to remain
closed.
15. Governing Law. This Agreement, any Additional Agent
-------------
Appointment Agreement and any Terms Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
16. Descriptive Headings. The descriptive headings of the
--------------------
several paragraphs of this Agreement are inserted for convenience only and
do not constitute a part of this Agreement.
17. Execution in Counterparts. This Agreement, any Additional
-------------------------
Agent Appointment Agreement and any Terms Agreement may be executed by any
one or more of the parties hereto and thereto in any number of counter-
parts, each of which shall be an original, but all of 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 three counterparts hereof, whereupon this letter and
the acceptance by each of you hereof shall constitute a binding agreement
between the Company and each of you in accordance with its terms.
Very truly yours,
NORTHWEST NATURAL GAS COMPANY
By:
----------------------------
Senior Vice President,
Finance, and Chief Financial
Officer
Accepted in New York, New York,
as of the date hereof:
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
By:
-------------------------
Title:
PAINEWEBBER INCORPORATED
By:
------------------------------
Title:
<PAGE>
ANNEX I
Northwest Natural Gas Company
Administrative Procedure
------------------------
This Administrative Procedure relates to the Securities defined
in the Distribution Agreement, dated , 1997 (the "Distribution
-----------
Agreement"), amongst Northwest Natural Gas Company (the "Company"), on the
one hand, and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, PaineWebber Incorporated, and each other person which shall
become a party thereto (each, an "Agent" and, together, the "Agents"), on
the other. Defined terms used herein and not defined herein shall have the
meanings given such terms in the Distribution Agreement or the Indentures.
An Agent, in relation to a purchase of a Security by a purchaser solicited
by such Agent, is referred to herein as the "Selling Agent" and, in
relation to a purchase of a Security by such Agent as principal other than
pursuant to a Terms Agreement, as the "Purchasing Agent". As used herein,
the term "business day" shall mean any day when banks in New York City are
not authorized or obligated by law or executive order to remain closed.
The procedures to be followed with respect to the settlement of
sales of Securities directly by the Company to purchasers solicited by an
Agent, as agent, are set forth below. The terms and settlement details
related to a purchase of Securities by an Agent, as principal, from the
Company will be set forth in a Terms Agreement, pursuant to the
Distribution Agreement, unless the Company and such Agent otherwise shall
agree.
The Company will advise each Agent in writing of those persons
with whom such Agent is to communicate regarding offers to purchase
Securities and the related settlement details.
The order dated February 4, 1997 of the Public Utility Commission
of Oregon (the "OPUC") provides, among other things, that the authority
contained therein is valid so long as the Company's senior debt securities
maintain investment grade bond ratings from at least two nationally
recognized statistical rating organizations. The order dated January 22,
1997 of the Washington Utilities and Transportation Commission (the "WUTC")
confirms that the Company is authorized to issue and sell the Securities.
In addition, such order of the OPUC authorizes, and such order of the WUTC
confirms the authorization of, the issuance and sale by the Company only of
Securities bearing interest at fixed rates, established within the maximum
all-in spreads over Benchmark Treasury Yields for various maturities
(determined in accordance with said orders as of the time the commitment to
purchase any Securities is received by the Company and the Agent).
As stated in the Company's Prospectus dated , 1997, if
--------
the terms of any Security, as determined by the Company, provide that such
Security will be redeemable at the option of the company, such Security
will be made redeemable in whole or in part.
Procedure for Rate Changes:
--------------------------
When a decision has been reached to change the interest rate on
or other variable terms with respect to any Securities being offered for
sale, the Company will promptly advise the Agents and the Agents will
forthwith suspend solicitation of offers to purchase such Securities. The
Agent will telephone the Company with recommendations as to the changed
interest rates or other variable terms. At such time as the Company
advises the Agents of the new interest rates or other variable terms, the
Agent may resume solicitation of offers to purchase such Securities. Until
such time only "indications of interest" may be recorded.
Acceptance or Rejection of Offers by Company:
--------------------------------------------
Each Agent will promptly advise the Company by telephone or other
appropriate means of all reasonable offers to purchase Securities, other
than those rejected by such Agent. Each Agent, in its discretion
reasonably exercised, may reject any offer received by it, in whole or in
part. Each Agent also may make offers to the Company to purchase
Securities as a Purchasing Agent. The Company, in its sole discretion, may
accept any offer to purchase Securities and may reject any such offer, in
whole or in part.
The Company will promptly notify the Selling Agent or Purchasing
Agent, as the case may be, of its acceptance or rejection of an offer to
purchase Securities. If the Company accepts an offer to purchase
Securities, it will confirm such acceptance in writing to the Selling Agent
or Purchasing Agent, as the case may be.
The order dated February 4, 1997 of the OPUC requires that, for
each issuance of Securities, the Company seek and report to the OPUC at
least one other bid quote in addition to the bid that is accepted.
Settlement:
----------
The receipt of immediately available funds by the Company in
payment for a Security and the authentication and delivery of such Security
will, with respect to such Security, constitute "Settlement."
All offers solicited by a Selling Agent or made by a Purchasing
Agent and accepted by the Company will be settled on a date (the
"Settlement Date") which shall be the third business day after the date of
acceptance of such offer, unless the Company and the purchaser shall agree
to settle (a) on any other business day after the acceptance of such offer
or (b) with respect to an offer accepted by the Company prior to 10:00
a.m., New York City time, on the date of such acceptance.
Settlement Procedures:
---------------------
A. After the acceptance of an offer by the Company, the Selling
Agent or Purchasing Agent, as the case may be, will communicate the
following details of the terms of such offer (the "Sale Information") to
the Company by telephone (confirmed in writing) or by facsimile
transmission or other acceptable written means:
(1) Principal amount of Securities to be purchased;
(2) Issue Price ("Issue Price" shall mean (i) in the case of a sale
in which an Agent shall act as a Selling Agent, the price to the
purchaser or (ii) in the case of a sale to an Agent as Purchasing
Agent, that Purchasing Agent's reoffering price);
(3) Selling Agent's commission or, if applicable, Purchasing Agent's
discount (spread between the reoffering price and Purchasing
Agent's purchase price);
(4) Net proceeds to the Company: (2) minus (3);
(5) Method of and specified funds for payment of purchase price:
(6) (a) Fixed rate Securities: interest rate;
(b) Floating rate Securities:
(i) interest rate basis
(ii) initial interest rate
(iii) spread or spread multiplier, if any
(iv) interest rate reset dates
(v) interest rate reset period
(vi) interest payment dates
(vii) initial interest payment date
(viii) interest payment period
(ix) regular record dates
(x) index maturity
(xi) calculation agent
(xii) maximum and minimum interest rates, if any
(xiii) calculation date
(xiv) interest determination dates;
(7) (a) Trade Date;
(b) Interest Commencement Date (Settlement Date unless otherwise
noted; "Issue Date" on Secured Notes);
Time of delivery;
(8) Closing location;
(9) Maturity date;
(10) If redeemable at the Company's option:
(a) initial redemption date;
(b) redemption limitation date;
(c) each redemption price and period;
(11) Sinking fund or other retirement provisions;
(12) The name of the Selling Agent or Purchasing Agent, as the case
may be;
(13) Exact name, address and taxpayer identification number of party
to be the registered owner;
(14) Party to whom Securities are to be delivered;
(15) Denominations of certificates to be delivered at settlement;
(16) The name of the Company's bank and the account number for payment
of the purchase price;
(17) Whether the Securities to be purchased are Secured Notes or
Unsecured Notes;
(18) Any other significant terms of the Securities or their offer or
sale.
B. After receiving such settlement information from the Agent, the
Company will advise the Trustee of the above settlement information. The
Company will prepare a Pricing Supplement to the Prospectus and deliver
copies to the Agent and will cause the Trustee to issue, authenticate and
deliver Securities.
If an identical Pricing Supplement has not been Previously filed
with the Securities and Exchange Commission (the "SEC"), the Company will
arrange to have transmitted promptly via EDGAR one copy of the Pricing
Supplement (with the appropriate paragraph under Rule 424(b) and the
Registration No. inscribed in the upper right corner) to the SEC, within
the applicable time period provided in Rule 424(b).
One copy of the Pricing Supplement (with a copy of the cover letter sent to
the SEC if a filing with the SEC is required) will be sent by facsimile to
the Agents as soon as practicable but in no event later than 12:00 noon on
the day after the Trade Date at each of the following numbers:
Merrill Lynch & Co. - Tritech Services
40 Colonial Drive
Piscataway, NJ 08854
Attn: Final Prospectus Unit/Nachman Kimerling
Facsimile No. (908) 885-2774/2775/2776;
Phone No. (908) 865-2768
and
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Merrill Lynch World Headquarters
World Financial Center, North Tower
10th Floor
New York, NY 10281-1310
Attn: MTN Product Management
Facsimile No. (212) 449-2234; Phone No. (212) 449-7476
and
PaineWebber Incorporated
1285 Avenue of the Americas
11th Floor
New York, NY 10019
Attn: Corporate Bond Department
Facsimile No. (212) 247-0371; Phone No. (212) 713-2960
The Company shall supply the Agents as soon as practicable but in
no event later than the Settlement Date with an adequate supply of
Prospectuses and Pricing Supplements at the above addresses.
In addition, the Company will make any required filings with the
OPUC and WUTC in respect of the Securities that are issued.
Suspension of Solicitation; Amendment or Settlement:
---------------------------------------------------
Subject to its representations, warranties and covenants
contained in the Distribution Agreement, the Company may instruct the
Agents to suspend solicitation of purchases at any time. Upon receipt of
such instructions, the Agents will forthwith suspend solicitation of offers
to purchase from the Company until such time as the Company has advised
them that solicitation of offers to purchase may be resumed. If the
Company decides to amend or supplement the Prospectus (other than to change
interest rates or other variable terms with respect to the offering of the
Securities), it will promptly advise the Agents and will furnish the Agents
and their counsel with copies of the proposed amendment or supplement.
In the event that at the time the solicitation of offers to
purchase from the Company is suspended (other than to change interest rates
or other variable terms) there shall be any orders outstanding which have
not been settled, the Company will promptly advise the Agents and the
Trustee whether such orders may be settled and whether copies of the
Prospectus as theretofore amended and/or supplemented as in effect at the
time of the suspension may be delivered in connection with the settlement
of such orders. The Company will have the sole responsibility for such
decision and for any arrangements which may be made in the event that the
Company determines that such orders may not be settled or that copies of
such Prospectus may not be so delivered.
Delivery of Confirmation and Prospectus to Purchaser by Selling
---------------------------------------------------------------
Agent:
-----
The Selling Agent will deliver to the purchaser of a Security a
written confirmation of the sale and delivery and Payment instructions. In
addition, the Selling Agent will deliver to such purchaser or its agent the
Prospectus as amended or supplemented (including the Pricing Supplement)
relating to such Security prior to delivery to such purchaser or its agent
of, or together with, the earlier to be delivered of (a) the confirmation
of sale or (b) the Security.
Instruction from Company to Trustee for Preparation of Securities:
-----------------------------------------------------------------
After receiving the Sale Information from the Selling Agent or
Purchasing Agent, as the case may be, the Company will communicate such
Sale Information to the Mortgage Trustee or the Indenture Trustee, as the
case may be, by telephone (confirmed in writing, by facsimile transmission
or by other acceptable written means).
The Company will instruct such Trustee by telephone (confirmed in
writing, by facsimile transmission or by other acceptable written means) to
authenticate and deliver the Securities no later than 2:15 p.m., New York
City time, on the Settlement Date. Such instruction will be given by the
Company prior to 3:00 p.m., New York City time, on the business day prior
to the Settlement Date, unless the Settlement Date is the date of
acceptance by the Company of the offer to purchase Securities, in which
case such instruction will be given by the Company to the Trustee by 10:00
a.m., New York City time, on the Settlement Date.
Procedures for Book-Entry Securities:
------------------------------------
In connection with Securities issued in book-entry form and
maintained in the book-entry system of The Depository Trust Company
("DTC"), (i) the Company and the Trustee shall act in accordance with the
letters of representation (relating to the Secured Notes and the Unsecured
Notes, respectively) from the Company and the Trustee to DTC, as the same
may be amended, supplemented or otherwise modified from time to time, and
(ii) the Trustee shall act in accordance with one or more Medium-Term Note
Certificate Agreements, relating to the Securities, between the Trustee and
DTC, as the same may be amended, supplemented or otherwise modified from
time to time, and in accordance with its obligations as a participant in
DTC.
The beneficial owner of a Security issued in book-entry form (or
one or more indirect participants in DTC designated by such owner) will
designate one or more participants in DTC (with respect to such Security
issued in book-entry form, the "Participants") to act as agent for such
beneficial owner in connection with the book-entry system maintained by
DTC, and DTC will record in book-entry form, in accordance with
instructions provided by such Participants, a credit balance with respect
to such Security issued in book-entry form in the account of such
Participants. The ownership interest of such beneficial owner in such
Security issued in book-entry form will be recorded through the records of
such Participants or through the separate records of such Participants and
one or more indirect participants in DTC.
Transfers of a Book-Entry Security will be accomplished by book
entries made by DTC and, in turn, by Participants (and in certain cases,
one or more indirect participants in DTC) acting on behalf of beneficial
transferors and transferees of such Book-Entry Security.
Beneficial interests in the Securities may be purchased, owned
and transferred only in denominations of $1,000 or any integral multiple of
$1,000.
Preparation and Delivery of Securities by Trustee and Receipt of Payment
------------------------------------------------------------------------
Therefor:
--------
Certificated Securities
-----------------------
The Company will instruct the Mortgage Trustee or the Indenture
Trustee, as the case may be, to:
(i) Prepare each Security and appropriate receipts that will
serve as the documentary control of the transaction.
(ii) In the case of a sale of Securities to a purchaser solicited
by a Selling Agent, by 2:15 p.m., New York City time, on the
Settlement Date, deliver the Securities to such Selling
Agent, at the address listed below, for the benefit of the
purchaser of such Securities against delivery by such
Selling Agent of a receipt therefor. (On the Settlement
Date, such Selling Agent will deliver payment for such
Securities in immediately available funds to the Company's
account at a bank designated by the Company and included as
a part of the Sale Information provided by the Selling Agent
in an amount equal to the net proceeds to the Company;
provided that the Selling Agent reserves the right to
withhold payment for which it shall not have received funds
from the purchaser.)
(iii) In the case of a sale of Securities to a Purchasing Agent,
by 2:15 p.m., New York City time, on the Settlement Date,
deliver the Securities to such Purchasing Agent, at the
address listed below, against delivery of payment therefor.
(On the Settlement Date, such Purchasing Agent will deliver
payment for such Securities in immediately available funds
to the Company's account at a bank designated by the Company
and included as a part of the Sale Information provided by
the Purchasing Agent in an amount equal to the net proceeds
to the Company.)
(iv) Complete the 4-ply Security and deliver three copies thereof
as follows:
1. Security with Agent's customer confirmation.
2. Copy 1 - for Trustee.
3. Copy 2 - for Agent.
4. Copy 3 - for Company.
(v) With respect to each sale, deliver the Securities and Copies
1 and 2 thereof to the appropriate Agent at the following
address:
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
55 Water Street
Third Floor Level, N.S.C.C. Window
New York, New York 10041
Attn: Al Mitchell
or
PaineWebber Incorporated,
1285 Avenue of the Americas
11th Floor
New York, New York 10019
Attn: Corporate Bond Department
as the case may be, or to any other Agent as directed by
such Agent. (The Agent will acknowledge receipt of the
Security, will keep Copy 2 and will return Copy 1 to the
Trustee. Delivery of the Security by the Trustee will be
made only against such acknowledgment of receipt. Prior to
the first settlement date, the Trustee or the Company shall
have sent a letter to Merrill Lynch Clearance Operations,
PaineWebber Incorporated or any other Agent, as the case may
be, containing standard wire instructions for the net
proceeds of each Security, addressed as follows:
Merrill Lynch, Pierce, Fenner & Smith Incorporated
World Financial Center
North Tower
New York, New York 10281
or
PaineWebber Incorporated
1285 Avenue of the Americas
11th Floor
New York, New York 10019
Attn: Corporate Bond Department
as the case may be, or as directed by such other Agent.)
(vi) Send Copy 3 to the Company.
Book-Entry Securities
---------------------
A. The Company will assign a CUSIP number to the Book-Entry Security
representing such Security and then advise the Trustee by electronic
transmission of the Sale Information received from the Agent, such CUSIP
number and the name of such Agent.
B. The Trustee will communicate to DTC and the Agent through DTC's
Participant Terminal System, a pending deposit message specifying the
following settlement information:
(1) The following Sale Information with respect to each Security:
(a) Taxpayer identification number of the purchaser.
(b) Principal amount of the Security.
(c) Interest rate.
(d) Floating Rate Securities:
(i) interest rate basis;
(ii) initial interest rate;
(iii) spread or spread multiplier, if any;
(iv) interest rate reset dates;
(v) interest rate reset period;
(vi) interest payment dates;
(vii) interest payment period;
(viii) regular record dates;
(ix) index maturity;
(x) calculation agent;
(xi) maximum and minimum interest rates, if any;
(xii) calculation date; and
(xiii) interest determination dates.
(e) Issue price.
(f) Trade date.
(g) Interest Commencement Date, which shall be the Settlement
Date unless otherwise noted ("Issue Date" on Secured Notes).
(h) Maturity date.
(i) Net proceeds to the Company.
(j) Agent's commission.
(k) Redemption provisions, if any.
(2) Identification numbers of the participant accounts maintained by
DTC on behalf of the Trustee and the Agent.
(3) Identification as a Fixed Rate Book-Entry Security or Floating
Rate Book-Entry Security.
(4) Initial Interest Payment Date for such Security, number of days
by which such date succeeds the related record date for DTC
purposes (or, in the case of Floating Rate Securities which reset
daily or weekly, the date five calendar days preceding the
Interest Payment Date) and, if then calculable, the amount of
interest payable on such Interest Payment Date (which amount
shall have been confirmed by the Trustee).
(5) CUSIP number of the Book-Entry Security representing such
Security.
(6) Whether such Book-Entry Security represents any other Securities
issued or to be issued in book-entry form.
C. The Company will complete and deliver to the Trustee a Book-Entry
Security representing such Security in a form that has been approved by the
Company, the Agents and the Trustee.
D. The Trustee will authenticate the Book-Entry Security
representing such Security.
E. DTC will credit such Security to the participant account of the
Trustee maintained by DTC.
F. The Trustee will enter a Same-Day Funds Settlement System
("SDFS") deliver order through DTC's Participant Terminal System
instructing DTC (i) to debit such Security to the Trustee's participant
account and credit such Security to the participant account, maintained by
DTC, of the Agent which presented to the Company the offer to purchase such
Security which was accepted by the Company (the "Presenting Agent") and
(ii) to debit the settlement account of the Presenting Agent and credit the
settlement account of the Trustee maintained by DTC, in an amount equal to
the price of such Security less such Agent's commission.
G. The Presenting Agent will enter an SDFS deliver order through
DTC's Participant Terminal System instructing DTC (i) to debit such
Security to the Presenting Agent's participant account and credit such
Security to the participant account of the Participants maintained by DTC
and (ii) to debit the settlement accounts of such Participants and credit
the settlement account of the Presenting Agent maintained by DTC, in an
amount equal to the initial public offering price of such Security.
H. Transfer of funds in accordance with SDFS deliver orders
described in Settlement Procedures F and G will be settled in accordance
with SDFS operating procedures in effect on the Settlement Date.
I. The Trustee will credit to an account of the Company maintained
at the Trustee funds available for immediate use in the amount transferred
to the Trustee in accordance with Settlement Procedure F.
J. The Trustee will send a copy of the Book-Entry Security by first
class mail to the Company together with a statement setting forth the
principal amount of Securities Outstanding as of the related Settlement
Date after giving effect to such transaction and all other offers to
purchase Securities of which the Company has advised the Trustee but which
have not yet been settled.
K. The Agent will confirm the purchase of such Security to the
purchaser either by transmitting to the Participant with respect to such
Security a confirmation order through DTC's Participant Terminal System or
by mailing a written confirmation to such purchaser.
L. Settlement Procedures Timetable:
(1) For orders of Securities accepted by the Company, Settlement
Procedures A through K shall be completed as soon as
possible but not later than the respective times (New York
City time) set forth below:
Settlement
Procedure Time
--------- ----
A 11:00 a.m. on the trade date
B 2:00 p.m. on the trade date
C 3:00 p.m. on the Business
Day before Settlement Date
D 9:00 a.m. on Settlement Date
E 10:00 a.m. on Settlement Date
F-G No later than 2:00 p.m. on
Settlement Date
H 4:45 p.m. on Settlement Date
I-K 5:00 p.m. on Settlement Date
(2) If a sale is to be settled more than one Business Day after sale
date, Settlement Procedures A and B may, if necessary, be
completed at any time prior to the specified times on the first
Business Day after such sale date. In connection with a sale
which is to be settled more than one Business Day after the trade
date, if the initial interest rate for a Floating Rate Security
is not known at the time that the Sale Information is given by
the Presenting Agent to the Company, Settlement Procedures A and
B shall be completed as soon as such rates have been determined,
but no later than 11:00 a.m. and 2:00 p.m., New York City time,
respectively, on the second Business Day before the Settlement
Date. Settlement Procedure H is subject to extension in
accordance with any extension of Fedwire closing deadlines and in
the other events specified in the SDFS operating procedures in
effect on the Settlement Date.
(3) If settlement of a Security issued in book-entry form is
rescheduled or canceled, the Trustee will deliver to DTC, through
DTC's Participant Terminal System, a cancellation message to such
effect by no later than 2:00 p.m., New York City time, on the
Business Day immediately preceding the scheduled Settlement Date.
Failure of Purchaser to Pay Selling Agent:
-----------------------------------------
Certificated Securities
-----------------------
If a purchaser shall fail to make payment to the Selling Agent
for any Security, the net proceeds to the Company which, theretofore, shall
have been paid by the Selling Agent to the Company, the Selling Agent will
promptly notify the Mortgage Trustee or the Indenture Trustee, as the case
may be, and the Company of such failure by telephone, promptly confirmed in
writing or by facsimile transmission or by other acceptable written means.
The Selling Agent promptly will return such Security to such Trustee.
Promptly upon receipt of such Security by such Trustee, the Company will
return to the Selling Agent an amount equal to the amount previously paid
to the Company in respect of such Security. Such Trustee will cancel any
Security in respect of which such a failure shall occur, make appropriate
entries in its records and, unless otherwise instructed by the Company,
destroy such Security.
Book-Entry Securities
---------------------
If the Trustee fails to enter an SDFS deliver order with respect
to a Book-Entry Security issued in book-entry form pursuant to paragraph F
above, the Trustee may deliver to DTC, through DTC's Participant Terminal
System, as soon as practicable a withdrawal message instructing DTC to
debit such Security to the participant account of the Trustee maintained at
DTC. DTC will process the withdrawal message, provided that such
participant account contains a principal amount of the Book-Entry Security
representing such Security that is at least equal to the principal amount
to be debited. If withdrawal messages are processed with respect to all
the Securities represented by a Book-Entry Security, the Trustee will mark
such Book-Entry Security "canceled", make appropriate entries in its
records and send such canceled Book-Entry Security to the Company. The
CUSIP number assigned to such Book-Entry Security shall, in accordance with
CUSIP Service Bureau procedures, be canceled and not immediately
reassigned. If withdrawal messages are processed with respect to a portion
of the Securities represented by a Book-Entry Security, the Trustee will
exchange such Book-Entry Security for two Book-Entry Securities, one of
which shall represent the Book-Entry Securities for which withdrawal
messages are processed and shall be canceled immediately after issuance,
and the other of which shall represent the other Securities previously
represented by the surrendered Book-Entry Security and shall bear the
CUSIP number of the surrendered Book-Entry Security.
If the purchase price for any Book-Entry Security is not timely
paid to the Participants with respect to such Security by the beneficial
purchaser thereof (or a person, including an indirect participant in DTC
acting on behalf of such purchaser), such Participants and, in turn, the
related Agent may enter SDFS deliver orders through DTC's Participant
Terminal System reversing the orders entered pursuant to paragraphs F and G
above, respectively. Thereafter, the Trustee will deliver the withdrawal
message and take the related actions described in the preceding paragraph.
If such failure shall have occurred for any reason other than default by
the applicable Agent to perform its obligations hereunder or under the
Distribution Agreement, the Company will reimburse such Agent on an
equitable basis for its loss of the use of funds during the period when the
funds were credited to the account of the Company.
Notwithstanding the foregoing, upon any failure to settle with
respect to a Book-Entry Security, DTC may take any actions in accordance
with its SDFS operating procedures then in effect. In the event of a
failure to settle with respect to a Security that was to have been
represented by a Book-Entry Security also representing other Securities,
the Trustee will provide, in accordance with paragraphs C and D above, for
the authentication and issuance of a Book-Entry Security representing such
remaining Securities and will make appropriate entries in its records.
<PAGE>
ANNEX II
Northwest Natural Gas Company
Medium-Term Notes
Terms Agreement
---------------
[Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
North Tower
New York, New York 10281]
[PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019]
[Name of additional Agents, if any]
Dear Sirs:
Subject to the terms and conditions set forth herein and, to the
extent provided below, in the Distribution Agreement, dated , 1997
---------
(the "Distribution Agreement"), amongst Northwest Natural Gas Company (the
"Company"), on the one hand, and Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, PaineWebber Incorporated and each
other person which shall become a party to the Distribution Agreement (each
an "Agent" and, together, the "Agents"), on the other, the Company proposes
to issue and sell to [Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated] [PaineWebber Incorporated] [Name of other Agent] the
Securities (as defined in the Distribution Agreement) specified in the
Schedule hereto (the "Purchased Securities"), at the time, place and
purchase price and upon the terms and conditions set forth in such
Schedule. Each of the provisions of the Distribution Agreement not
specifically related to the solicitation by the Agents, as agents of the
Company, of offers to purchase Securities is incorporated herein by
reference, and shall be deemed to be part of this Terms Agreement to the
same extent as if such provisions had been set forth herein.
Each of the representations and warranties set forth in the
Distribution Agreement shall be deemed to have been made by the Company at
and as of the date of this Terms Agreement, except that each such
representation and warranty which makes reference to the Prospectus shall
be deemed to be a representation and warranty as of the date of the
Distribution Agreement in relation to the Prospectus (as therein defined),
and also a representation and warranty as of the date of this Terms
Agreement in relation to the Prospectus as amended and supplemented with
respect to the Purchased Securities.
A supplement to the Prospectus relating to the Purchased
Securities, in the form heretofore delivered to and approved by you, is now
proposed to be filed with the Commission in accordance with Rule 424(b)
under the Act.
Subject to the terms and conditions set forth herein and to those
of the Distribution Agreement incorporated herein by reference, the Company
agrees to issue and sell to [Merrill Lynch & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated] [PaineWebber Incorporated] [Name of other
Agent] and [Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated] [PaineWebber Incorporated] [Name of other Agent] agrees to
purchase from the Company the Purchased Securities, at the time and place,
in the principal amount and at the purchase price set forth in the Schedule
hereto.
If the foregoing is in accordance with your understanding, please
sign and return to us three counterparts hereof, whereupon this letter,
including those provisions of the Distribution Agreement incorporated
herein by reference, shall constitute a binding agreement between you and
the Company.
NORTHWEST NATURAL GAS COMPANY
By:
-----------------------------------
Title:
Accepted in New York, New York,
as of the date hereof:
[MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
By:
------------------------------------------
Title: ]
[PAINEWEBBER INCORPORATED
By:
------------------------------------------
Title: ]
[Name of other Agent, if any]
<PAGE>
Schedule to Annex II
Title of Purchased Securities:
-----------------------------
Aggregate Principal Amount: $
--------------------------
Price to Public:
---------------
Purchase Price by [Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
-----------------
Smith Incorporated] [PaineWebber Incorporated] [Name of other Agent]:
% of the principal amount of the Purchased Securities [, plus
accrued interest from to ] [and accrued amortization of
discount from to ]
Method of and 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: [Mortgage] [Note Indenture]
---------
Interest Commencement Date which shall be the Settlement Date unless
--------------------------------------------------------------------
otherwise noted ("Issue Date" on Secured Notes):
-----------------------------------------------
Time of Delivery:
----------------
Closing Location:
----------------
Stated Maturity Date:
--------------------
Interest Rate or Rates (or Method of Determining Interest):
----------------------------------------------------------
Interest Payment Dates: [months and dates]
----------------------
Initial Interest Payment Date:
-----------------------------
Regular Record Dates:
--------------------
Redeemable at Company's Option: Yes ___ No ___
------------------------------
In Whole: Yes No
--- ---
In Part: Yes No
--- ---
Initial Redemption Date:
-----------------------
Redemption Limitation Date:
--------------------------
Initial Redemption Price:
------------------------
Reduction Percentage:
--------------------
Sinking Fund or Other Retirement Provisions, if any:
---------------------------------------------------
Documents to be Delivered as a Condition to the Closing:
-------------------------------------------------------
[(1) The opinion of counsel to the Agents referred to in Section 4(a)]
[(2) The opinion of counsel to the Company referred to in Section
4(b)]
[(3) The opinion of counsel to the Company referred to in Section
4(c)]
[(4) The accountants letter referred to in Section 4(d)]
[(5) The officers certificate referred to in Section 4(e)]
Other Provisions (including Syndicate Provisions,
-------------------------------------------------
if applicable):
--------------
<PAGE>
ANNEX III
, 1997
-----------
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner
& Smith Incorporated
World Financial Center
North Tower
New York, New York 10281
PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
Dear Sirs:
With reference to the issuance and sale from time-to-time by
Northwest Natural Gas Company (the "Company"), pursuant to the Distribution
Agreement, dated , 1997 (the "Agreement"), between the Company
------------
and each of you, of not to exceed $165,000,000 in aggregate principal
amount of (i) the Company's First Mortgage Bonds, designated Secured
Medium-Term Notes, Series B (the "Secured Notes") to be issued under the
Company's Mortgage and Deed of Trust, dated as of July 1, 1946, to Bankers
Trust Company (the "Corporate Trustee") and R.G. Page (Stanley Burg,
successor), as trustees, as supplemented by twenty supplemental indentures
(such Mortgage and Deed of Trust, as so supplemented, being hereinafter
called the "Mortgage"), and (ii) the Company's Unsecured Medium-Term Notes,
Series B (the "Unsecured Notes"), to be issued under the Company's
Indenture, dated as of June 1, 1991 (the "Indenture"), to Bankers Trust
Company, as trustee (the "Indenture Trustee") (the Secured Notes and the
Unsecured Notes being hereinafter collectively referred to as the "Notes"),
and the appointment of each of you as agents of the Company pursuant to the
Agreement for the purposes of soliciting and receiving offers to purchase
Notes, as agents, and purchasing Notes, as principals, from the Company,
please be advised that, as General Counsel of the Company, I have
participated in the preparation of or reviewed (a) the Restated Articles of
Incorporation, as amended, and Bylaws, as amended, of the Company; (b) the
Mortgage; (c) the Indenture; (d) the Agreement; (e) the registration
statement (File No. 33-64014) (the "Initial Registration Statement"), filed
by the Company with the Securities and Exchange Commission (the "SEC") for
the registration under the Securities Act of 1933, as amended (the "1933
Act"), of $150,000,000 of the Notes, of which $15,000,000 remain unsold,
and for the qualification under the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act"), of the Mortgage and the Indenture, which
Initial Registration Statement became effective on June 17, 1993; (f) the
registration statement (File No. 333-15323) (the "Subsequent Registration
Statement"), filed by the Company with the SEC for the registration under
the 1933 Act of an additional $150,000,000 of the Notes, and for the
qualification under the Trust Indenture Act of the Mortgage and the
Indenture, which Subsequent Registration Statement became effective on
, 1997; (g) the combined prospectus relating to the Notes
----------
constituting a part of the Subsequent Registration Statement in the form in
which it became effective, or if amended or supplemented subsequent to such
effectiveness, as so amended and supplemented, including the documents
incorporated therein by reference pursuant to Item 12 of Form S-3 (the
"Prospectus"); (h) the proceedings before the Public Utility Commission of
Oregon (the "OPUC") and the Washington Utilities and Transportation
Commission (the "WUTC") relating to the issuance and sale of the Notes; and
(i) the records of various corporate and other proceedings relating to the
authorization, issuance and sale of the Notes. I have also examined such
other documents and satisfied myself as to such other matters as I have
deemed necessary in order to render this opinion. I have not examined the
Notes, except specimens thereof.
In preparation of this opinion, I have examined originals or
photostatic certified copies of such certificates, agreements, documents
and other papers, and have made such inquiries and investigations of law,
as I deemed appropriate and necessary for the opinion hereinafter set
forth. In my examination, I have assumed the authenticity of all documents
submitted to me as certified or photostatic copies and the authenticity of
the originals of such latter documents. As to certain matters of fact
material to the opinion expressed herein, I have relied upon certificates
of various corporate officers of the Company and public officials. I assume
the accuracy of the material and factual matters contained therein.
I am of the opinion that:
1. The Company is a validly organized and existing corporation
in good standing under the laws of the State of Oregon, is qualified
to do business and is in good standing in the State of Washington, and
has power (corporate and other) to own its properties and conduct its
business as described in the Prospectus.
2. The Company holds valid and subsisting franchises, licenses,
permits and consents, free from burdensome restrictions and adequate
for the conduct of its business, as and to the extent set forth in the
Prospectus.
3. The Agreement has been duly and validly authorized, executed
and delivered by the Company.
4. The Mortgage and the Indenture have been duly and validly
authorized by all necessary corporate action, have been duly and
validly executed and delivered, and are valid and binding instruments
enforceable in accordance with their terms, subject, as to
enforcement, to laws and principles of equity relating to or affecting
generally the enforcement of creditors rights, including, without
limitation, bankruptcy and insolvency.
5. The Company has good and sufficient title to all the
properties described in, and as subject to the lien of, the Mortgage
and now owned by it, subject only to excepted encumbrances as defined
in the Mortgage and to minor defects and irregularities customarily
found in properties of like size and character, which, in my opinion,
do not materially impair the use of the property affected thereby in
the operation of the business of the Company; the description in the
Mortgage of such properties is adequate to constitute the Mortgage a
lien thereon; and the Mortgage constitutes a valid, direct first
mortgage lien on such properties, which include substantially all of
the permanent physical properties and franchises of the Company (other
than those expressly excepted), subject only to the exceptions
enumerated above in this paragraph.
6. The form of the Secured Notes has been duly authorized and
has been established in conformity with the provisions of the
Mortgage; the form of the Unsecured Notes bearing interest at a fixed
rate, has been duly authorized and has been established in conformity
with the provisions of the Indenture; and the form of the Unsecured
Notes, bearing interest at a variable rate or not bearing interest,
when set forth in a Company Order or Orders or established by
procedures acceptable to the Indenture Trustee specified in a Company
Order or Orders, will have been duly authorized and will have been
established in conformity with the provisions of the Indenture.
7. The Secured Notes have been duly authorized by the
resolutions adopted by the Board of Directors on May 27, 1993,
September 26, 1996 and April 24, 1997 (the "Board Resolutions"), and
when the terms of the Secured Notes shall have been determined as
contemplated by and in accordance with the Mortgage, the Board
Resolutions and written orders or instructions evidencing
determinations by Officers of the Company, such terms will have been
duly authorized by the Company and will have been established in
conformity with the terms of the Mortgage.
8. The Unsecured Notes have been duly authorized by the Board
Resolutions, and when the terms of the Unsecured Notes shall have been
determined as contemplated by and in accordance with the Indenture,
the Board Resolutions and, to the extent required by the Indenture and
the Board Resolutions, by Officers' Certificates, Company Orders
(each, as defined in the Indenture) and procedures acceptable to the
Indenture Trustee specified in such Company Orders, such terms will
have been duly authorized by the Company and will have been
established in conformity with the terms of the Indenture.
9. The Notes, when (a) executed by the Company, (b) completed,
authenticated and delivered by the Corporate Trustee or the Indenture
Trustee, as the case may be, (c) issued and delivered by the Company
and (d) paid for, all as contemplated by and in accordance with the
Mortgage, in the case of Secured Notes, the Indenture, in the case of
Unsecured Notes, the Board Resolutions, and (to the extent required by
the Mortgage or the Indenture and the Board Resolutions) Officers'
Certificates, Company Orders, procedures acceptable to the Indenture
Trustee specified in such Company Orders, written orders or
instructions evidencing determinations by the officers of the Company,
the Agreement, the Administrative Procedure (as defined in the
Agreement), and Terms Agreements (as defined in the Agreement), if
any, will be duly issued under the Mortgage or the Indenture, as the
case may be, and will constitute valid and legally binding obligations
of the Company, entitled to the benefits provided by the Mortgage or
the Indenture, as the case may be, and enforceable in accordance with
their terms, subject, as to enforcement, to laws and principles of
equity relating to or affecting generally the enforcement of
creditors' rights, including, without limitation, bankruptcy and
insolvency, and, in the case of the Secured Notes, entitled to the
benefit of the security afforded by the Mortgage.
10. The issuance and sale of the Notes, the compliance by the
Company with all of the provisions of the Notes, the Mortgage, the
Indenture and the Agreement and the consummation of the transactions
contemplated by the Agreement will not result in a breach or violation
of any of the terms and provisions of, or constitute a default under,
any statute, any indenture, mortgage, deed of trust or other agreement
or instrument known to me to which the Company is a party or by which
it is bound or to which any of the property of the Company is subject,
the Company's Restated Articles of Incorporation, as amended, or
Bylaws, as amended, or any order, rule or regulation known to me of
any court or governmental agency or body having jurisdiction over the
Company or any of its properties.
11. The OPUC and the WUTC have issued orders authorizing the
issuance and sale by the Company of the Notes; and no further
approval, authorization, consent or other order of any public board or
body (other than in connection or in compliance with the provisions of
the securities or blue sky laws of any jurisdiction) is legally
required for the issuance and sale of the Notes through each of you,
as agent, on the terms and conditions set forth in the Agreement.
12. The statements of Oregon, Washington and Federal law (other
than the 1933 Act, the Securities Exchange Act of 1934 and the Trust
Indenture Act), and legal conclusions based thereon, contained in, or
in the documents incorporated by reference in, the Prospectus have
been reviewed by me and are correct (except to the extent that any
statement contained in a document incorporated or deemed to be
incorporated by reference in the Prospectus may be deemed to be
modified or superseded in the Prospectus or in any other subsequently
filed document which also is or is deemed to be incorporated by
reference in the Prospectus).
13. Except as described in the Prospectus, there are no pending
material legal or governmental proceedings and, to my knowledge, no
material threatened legal or governmental proceedings, to which the
Company is a party or of which any of the property of the Company is
subject, other than ordinary routine litigation incidental to the kind
of business conducted by the Company.
In the course of the preparation by the Company of the Initial
and the Subsequent Registration Statements and the Prospectus, I had
conferences with certain officers and employees of the Company, but I have
made no independent verification of the accuracy or completeness of the
representations and statements made to me by such person or the information
included by the Company in either of such Registration Statements and the
Prospectus, and take no responsibility therefor, except as forth in
paragraph 12 hereof. However, my examination of such Registration
Statements and the Prospectus and my discussions in the above-mentioned
conferences did not disclose to me any information which gives me reason to
believe that, when each of the Initial and Subsequent Registration
Statements became effective, it 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 the
date of this opinion, the Prospectus includes an untrue statement of a
material fact or omits to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading; provided, that I do not express any belief as to
the financial statements or other financial or statistical data contained
in such Registration Statements or the Prospectus, or as to the Forms T-1
or T-2, or as to any information contained therein furnished to the Company
in writing by any of you expressly for use therein.
This opinion is limited to the facts and law at the date hereof.
In rendering the opinions set forth in paragraphs 9, 10 and 11 above, I
have necessarily assumed that, at the time of any issuance, sale and
delivery of a Note (i) the Board of Directors of the Company (or any
committee thereof acting pursuant to authority properly delegated to such
committee by the Board of Directors) has not taken any action to rescind or
otherwise reduce its prior authorization of the issuance of the Notes and
an officer of the Company, as stated in the resolutions of the Board of
Directors (or any such committee) relating to the Notes, has executed and
delivered such Notes, (ii) the orders of the OPUC and the WUTC with respect
to the Notes remain in full force and effect and have not been modified or
amended by the OPUC or the WUTC, respectively, and the Company complies
with the terms of such orders and (iii) the orders of the SEC with respect
to the Initial Registration Statement, the Subsequent Registration
Statement, the Mortgage and the Indenture remain in full force and effect
and have not been modified or amended by the SEC.
I am a member of the bar of the States of Oregon and Washington
and do not hold myself out as an expert on the laws of the State of New
York or Federal securities laws. Accordingly, in rendering this opinion, I
have relied, with your consent, as to all matters governed by the laws of
the State of New York, the 1933 Act, the Securities Exchange Act of 1934
and the Trust Indenture Act, upon the opinion of even date herewith
addressed to you by Reid & Priest LLP, New York, New York, counsel for the
Company. I have read such opinion and concur in the conclusions expressed
therein insofar as such conclusions involve questions of Oregon and
Washington law.
You, the Trustees and, as to matters governed by the laws of the
State of Oregon and the State of Washington, Reid & Priest LLP and your
counsel may rely upon this opinion in connection with the issuance and sale
of the Notes. Neither you nor any of them may rely upon this opinion for
any other purpose, and no other person may rely upon this opinion for any
purpose without, in each case, my prior written consent.
Very truly yours,
Bruce B. Samson, Esq.
<PAGE>
A N N E X I V
, 1997
-----------
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner
& Smith Incorporated
World Financial Center
North Tower
New York, New York 10281
PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
Dear Sirs:
With reference to the issuance and sale from time-to-time by
Northwest Natural Gas Company (the "Company"), pursuant to the Distribution
Agreement, dated , 1997 (the "Agreement"), between the Company
------------
and each of you, of not to exceed $165,000,000 in aggregate principal
amount of (i) the Company's First Mortgage Bonds, designated Secured
Medium-Term Notes, Series B (the "Secured Notes"), to be issued under the
Company's Mortgage and Deed of Trust, dated as of July 1, 1946, to Bankers
Trust Company (the "Corporate Trustee") and R.G. Page (Stanley Burg,
successor), as trustees, as supplemented by twenty supplemental indentures
(such Mortgage and Deed of Trust, as so supplemented, being hereinafter
called the "Mortgage"), and (ii) the Company's Unsecured Medium-Term Notes,
Series B (the "Unsecured Notes"), to be issued under the Company's
Indenture, dated as of June 1, 1991 (the "Indenture"), to Bankers Trust
Company, as trustee (the "Indenture Trustee") (the Secured Notes and the
Unsecured Notes being hereinafter collectively referred to as the "Notes"),
and the appointment of each of you as agents of the Company pursuant to the
Agreement for the purposes of soliciting and receiving offers to purchase
Notes, as agents, and purchasing Notes, as principals, from the Company,
please be advised that, as counsel to the Company, we have participated in
the preparation of or reviewed (a) the Restated Articles of Incorporation,
as amended, and Bylaws, as amended, of the Company; (b) the Mortgage; (c)
the Indenture; (d) the Agreement; (e) the registration statement (File No.
33-64014) (the "Initial Registration Statement"), filed by the Company with
the Securities and Exchange Commission (the "SEC") for the registration
under the Securities Act of 1933, as amended (the "1933 Act"), of
$150,000,000 of the Notes, of which $15,000,000 remain unsold, and for the
qualification under the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), of the Mortgage and the Indenture, which Initial
Registration Statement became effective on June 17, 1993; (f) the
registration statement (File No. 333-15323) (the "Subsequent Registration
Statement"), filed by the Company with the SEC for the registration under
the 1933 Act of an additional $150,000,000 of the Notes, and for the
qualification under the Trust Indenture Act of the Mortgage and the
Indenture, which Subsequent Registration Statement became effective on
, 1997; (g) the combined prospectus relating to the Notes
-----------
constituting a part of the Subsequent Registration Statement in the form in
which it became effective, or if amended or supplemented subsequent to such
effectiveness, as so amended or supplemented, including the documents
incorporated therein by reference pursuant to Item 12 of Form S-3 (the
"Prospectus"); (h) the records of the proceedings before the Public Utility
Commission of Oregon (the "OPUC") and the Washington Utilities and
Transportation Commission (the "WUTC") relating to the issuance and sale of
the Notes; and (i) the records of various corporate and other proceedings
relating to the authorization, issuance and sale of the Notes. We have
also examined such other documents and satisfied ourselves as to such other
matters as we have deemed necessary in order to render this opinion. We
have not examined the Notes, except specimens thereof.
In the preparation of this opinion, we have examined originals or
photostatic or certified copies of such certificates, agreements, documents
and other papers, and have made such inquiries and investigations of law,
as we deemed appropriate and necessary for the opinion hereinafter set
forth. In our examination, we have assumed the authenticity of all
documents submitted to us as originals, the conformity to original
documents of all documents submitted to us as certified or photostatic
copies and the authenticity of the originals of such latter documents. As
to certain matters of fact material to the opinion expressed herein, we
have relied upon certificates of various corporate officers of the Company
and public officials. We assume the accuracy of the material and factual
matters contained therein.
We are of the opinion that:
1. The Company is a validly organized and existing corporation
in good standing under the laws of the State Of Oregon, and is qualified to
do business and is in good standing in the State of Washington.
2. The Agreement has been duly and validly authorized, executed
and delivered by the Company.
3. The Mortgage and the Indenture have been duly and validly
authorized by all necessary corporate action, have been duly and validly
executed and delivered, have been duly qualified under the Trust Indenture
Act, and are valid and binding instruments enforceable in accordance with
their terms, subject, as to enforcement, to laws and principles of equity
relating to or affecting generally the enforcement of creditors' rights,
including, without limitation, bankruptcy and insolvency.
4. The form of the Secured Notes has been duly authorized and
has been established in conformity with the provisions of the Mortgage and
conforms to the description thereof contained in the Prospectus; the form
of the Unsecured Notes, bearing interest at a fixed rate, has been duly
authorized and has been established in conformity with the provisions of
the Indenture and conforms to the description thereof contained in the
Prospectus; and the form of the Unsecured Notes, bearing interest at a
variable rate or not bearing interest, when set forth in a Company Order or
Orders or established by procedures acceptable to the Indenture Trustee
specified in a Company Order or Orders, will have been duly authorized and
will have been established in conformity with the provisions of the
Indenture.
5. The Secured Notes have been duly authorized by the
resolutions adopted by the Board of Directors on May 27, 1993, September
26, 1996 and April 24, 1997 (the "Board Resolutions"), and when the terms
of the Secured Notes shall have been determined as contemplated by and in
accordance with the Mortgage, the Board Resolutions and written orders or
instructions evidencing determinations by Officers of the Company, such
terms will have been duly authorized by the Company and will have been
established in conformity with the terms of the Mortgage.
6. The Unsecured Notes have been duly authorized by the Board
Resolutions, and when the terms of the Unsecured Notes shall have been
determined as contemplated by and in accordance with the Indenture, the
Board Resolutions and, to the extent required by the Indenture and the
Board Resolutions, by Officers' Certificates, Company Orders (each, as
defined in the Indenture) and procedures acceptable to the Indenture
Trustee specified in such Company Orders, such terms will have been duly
authorized by the Company and will have been established in conformity with
the terms of the Indenture.
7. The Notes, when (a) executed by the Company, (b) completed,
authenticated and delivered by the Corporate Trustee or the Indenture
Trustee, as the case may be, (c) issued and delivered by the Company and
(d) paid for, all as contemplated by and in accordance with the Mortgage,
in the case of the Secured Notes, the Indenture, in the case of Unsecured
Notes, the Board Resolutions, and (to the extent required by the Mortgage
or the Indenture and the Board Resolutions) Officers' Certificates, Company
Orders, procedures acceptable to the Indenture Trustee specified in such
Company Orders, written orders or instructions evidencing determinations by
the officers of the Company, the Agreement, the Administrative Procedure
(as defined in the Agreement) and Terms Agreements (as defined in the
Agreement), if any, will be duly issued under the Mortgage or the
Indenture, as the case may be, and will constitute valid and legally
binding obligations of the Company, entitled to the benefits provided by
the Mortgage or the Indenture, as the case may be, and enforceable in
accordance with their terms, subject, as to enforcement, to laws and
principles of equity relating to or affecting generally the enforcement of
creditors' rights, including, without limitation, bankruptcy and
insolvency, and, in the case of the Secured Notes, entitled to the benefit
of the security afforded by the Mortgage.
8. The issuance and sale of the Notes, the compliance by the
Company with all of the provisions of the Notes, the Mortgage, the
Indenture and the Agreement and the consummation of the transactions
contemplated by the Agreement will not result in a breach or violation of
any of the terms and provisions of, or constitute a default under, the
Mortgage and the Indenture or the Company's Restated Articles of
Incorporation, as amended, or Bylaws, as amended.
9. The OPUC and the WUTC have issued orders authorizing the
issuance and sale by the Company of the Notes; and no further approval,
authorization, consent or other order of any public board or body (other
than in connection or in compliance with the provisions of the securities
or blue sky laws of any jurisdiction) is legally required for the issuance
and sale of the Notes through each of you, as agent, on the terms and
conditions set forth in the Agreement.
10. Both the Initial and Subsequent Registration Statements have
become effective under the Act, and, to the best of our knowledge, no stop
order suspending the effectiveness thereof has been issued and no
proceedings for that purpose are pending before or have been proposed by
the SEC; the Mortgage and the Indenture have been duly qualified under the
Trust Indenture Act; each of the Initial and Subsequent Registration
Statements at the time it became effective complied, and the Prospectus
(excluding the documents incorporated therein by reference) as of the date
of this opinion complies, as to form, in all material respects with the
requirements of the Act, the Trust Indenture Act (except with respect to
the Forms T-1 and Form T-2, upon which we do not pass) and the rules and
regulations of the SEC thereunder; and the documents incorporated by refer-
ence in the Prospectus pursuant to Item 12 of Form S-3 (other than the
financial statements and other financial or statistical data contained
therein, upon which we express no opinion), as of their respective dates of
filing, complied as to form in all material respects with the requirements
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and the rules and regulations of the SEC thereunder.
In the course of the preparation by the Company of the Initial
and the Subsequent Registration Statements and the Prospectus, we had
conferences with certain officers and employees of the Company, with the
General Counsel for the Company and with you and your counsel, but we made
no independent verification of the accuracy or completeness of the
representations and statements made to us by such persons or the
information included by the Company in either of such Registration
Statements and the Prospectus and take no responsibility therefor, except
insofar as set forth in paragraph 4 hereof. In passing upon the forms of
such Registration Statements and the Prospectus we have, therefore, assumed
the accuracy and completeness of such representations, statements and
information, except as aforesaid. However, our examination of such
Registration Statements and the Prospectus and our discussions in the
above-mentioned conferences did not disclose to us any information which
gives us reason to believe that, when each of the Initial and the
Subsequent Registration Statements became effective, it 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 the date of this opinion, the Prospectus
includes an untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, that we do not express any belief as to the financial statements
or other financial or statistical data contained in such Registration
Statements or the Prospectus, or as to the Forms T-1 or T-2, or as to any
information contained therein furnished to the Company in writing by any of
you expressly for use therein.
This opinion is limited to the facts and law at the date hereof.
In rendering the opinions set forth in paragraphs 7 and 9 above, we have
necessarily assumed that, at the time of any issuance, sale and delivery of
a Note (i) the Board of Directors of the Company (or any committee thereof
acting pursuant to authority properly delegated to such committee by the
Board of Directors) has not taken any action to rescind or otherwise reduce
its prior authorization of the issuance of the Notes and an officer of the
Company, as stated in the resolutions of the Board of Directors (or any
such committee) relating to the Notes, has executed and delivered such
Notes, (ii) the orders of the OPUC and the WUTC with respect to the Notes
remain in full force and effect and have not been modified or amended by
the OPUC or the WUTC, respectively, and the Company complies with the terms
of such orders and (iii) the orders of the SEC with respect to the Initial
Registration Statement, the Subsequent Registration Statement, the Mortgage
and the Indenture remain in full force and effect and have not been
modified or amended by the SEC.
We are members of the bar of the State of New York and do not
hold ourselves out as experts on the laws of the State of Oregon or the
State of Washington. Accordingly, in rendering this opinion, we have
relied, with your consent, as to all matters governed by the laws of the
State of Oregon and the State of Washington (including titles to property
and franchises and the lien of the Mortgage, upon which we do not pass),
upon the opinion of even date herewith addressed to you by Bruce B. Samson,
Esq., General Counsel of the Company. We have read such opinion, which is
in form satisfactory to us, and concur in the conclusions expressed therein
insofar as such conclusions involve questions of the laws of the State of
New York, the 1933 Act, the Exchange Act and the Trust Indenture Act.
You, the Trustees, and as to matters governed by the laws of the
State of New York and the 1933 Act, the Exchange Act and the Trust
Indenture Act, Bruce B. Samson, Esq., may rely upon this opinion in
connection with the issuance and sale of the Notes. Neither you nor any of
them may rely upon this opinion for any other purpose, and no other person
may rely upon this opinion for any purpose without, in each case, our prior
written consent.
Very truly yours,
REID & PRIEST LLP
<PAGE>
ANNEX V
[Contents of Letter of Independent Public Accountants]
The letter of each independent public accountant will state in
effect that, for the periods during which such firm was the independent
public accountant for the Company:
1. They are independent public accountants with respect to the
Company within the meaning of the Act and the applicable published Rules
and Regulations;
2. In their opinion, the financial statements examined 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 Exchange Act and the published rules and regulations thereunder;
3. On the basis of limited procedures, not constituting an
examination made in accordance with generally accepted auditing standards,
including a reading of the latest available interim financial statements of
the Company, if any, a reading of the minute books of the Company since
December 31, 19__, inquiries of officials of the Company responsible for
financial and accounting matters and such other inquiries and procedures as
may be specified in such letter, nothing came to their attention that
caused them to believe that:
(a)(1) the latest interim consolidated financial statements
included or 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 and the published rules
and regulations thereunder as they apply to Form 10-Q or (2) said
interim consolidated financial statements are not in conformity with
generally accepted accounting principles applied on a basis
substantially consistent with that of the audited consolidated
financial statements incorporated by reference in the Registration
Statement;
(b) at the date of the latest available interim balance
sheet of the Company and at a subsequent specified date not more than
five days prior to the Time of Delivery, there has been any change in
the capital stock (except for (I) shares of the Company's Common Stock
issued under the Company's Dividend Reinvestment Plan, 1985 Stock
Option Plan or Employee Stock Purchase Plan, (II) shares of Common
Stock issued upon the conversion of shares of the Company's
Convertible Debentures, and (III) shares of Preferred Stock purchased
or redeemed pursuant to or in anticipation of sinking and purchase
funds with respect to the Company's Preferred Stock) or any increase
in the long-term debt of the Company, or any decrease in net assets,
in each case as compared with amounts shown in the balance sheet as of
the date of the latest financial statements incorporated by reference
in the Registration Statement, except in each case for changes,
increases or decreases which the Registration Statement discloses have
occurred or may occur, which were occasioned by the declaration of
dividends or which are described in such letter; or
(c) for the 12-month period for which the latest unaudited
financial statements are available, there were any decreases, as
compared with the latest 12-month period for which financial
statements are incorporated by reference in the Prospectus, in
operating revenues, net income and earnings available for common
stock, except in each case for decreases which the Registration
Statement discloses have occurred or may occur, which were occasioned
by the declaration of dividends or which are described in such letter;
and
4. They have performed certain other specified procedures with
respect to certain amounts and percentages set forth in the Registration
Statement or in the documents incorporated by reference therein, as have
been requested by your counsel and approved by the Company, and have found
them to be in agreement with the records of the Company and the
computations to be arithmetically correct.
<PAGE>
EXHIBIT 1
NORTHWEST NATURAL GAS COMPANY
$165,000,000
MEDIUM-TERM NOTES, SERIES B
, 199
-------- -
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
North Tower
New York, New York 10281
PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
[Insert Names of Additional Existing Agents, if any]
[Insert Name of New Agent]
Dear Sirs:
Reference is hereby made to the Distribution Agreement, dated ,
-------
1997 (the "Distribution Agreement"), a copy of which has previously been
delivered to you, between Northwest Natural Gas Company, an Oregon
corporation (the "Company"), and each of Merrill Lynch, Pierce, Fenner &
Smith Incorporated, PaineWebber Incorporated and [Insert Names of
Additional Existing Agents, if any], with respect to the issue and sale by
the Company of its First Mortgage Bonds, designated Secured Medium-Term
Notes, Series B, and its Unsecured Medium-term Notes, Series B
(collectively, the "Securities"). Capitalized terms used herein without
definition shall have the meanings assigned to them in the Distribution
Agreement.
Subject to the terms and conditions set forth in the Distribution
Agreement, the Company hereby appoints [Insert Name of New Agent] as agent
of the Company for the purpose of soliciting and receiving offers to
purchase the Securities. In connection with such appointment, [Insert Name
of New Agent] is hereby entitled to the benefits and subject to the duties
of an Agent under the terms and conditions of the Distribution Agreement
(including the Administrative Procedures) and by its execution hereof is
hereby made a party to the Distribution Agreement. In connection with such
appointment, [Insert Name of New Agent] shall receive as of the date
hereof: [To be agreed upon by the Company and the New Agent]
Any communication under the Distribution Agreement will be made in
accordance with Section 12 of the Distribution Agreement, and if to [Insert
Name of New Agent] shall be sufficient in all respects when delivered or
sent by facsimile transmission or registered mail to [Insert Address of
New Agent], attention: [Insert Name], facsimile transmission number [Insert
New Agent Number].
This Agreement may be executed in any number of counterparts, each of
which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
If the foregoing correctly sets forth our agreement, please indicate
your acceptance hereof in the space provided for that purpose below.
Very truly yours,
Northwest Natural Gas Company
By:
----------------------------
Title: Senior Vice President, Finance
and Chief Financial Officer
The foregoing Agreement is hereby
confirmed and accepted as of the
date hereof.
[INSERT NAME OF NEW AGENT]
By:
------------------------
Title:
-------------------
Exhibit 4(d)
OFFICERS' CERTIFICATE
SUPPLEMENTAL TO THE OFFICERS' CERTIFICATE DATED JUNE 18, 1993
(UNDER SECTIONS 201 AND 301 OF THE INDENTURE
REFERRED HEREIN OF NORTHWEST NATURAL GAS COMPANY)
Pursuant to Sections 201 and 301 of the Indenture,
dated as of June 1, 1991 (the "Indenture"), from Northwest
Natural Gas Company (the "Company") to Bankers Trust Company, as
trustee (the "Trustee"), and pursuant to the resolutions of the
Company's Board of Directors, dated May 27, 1993 (the "Board
Resolution"), we, Bruce R. DeBolt and C. J. Rue, the Senior Vice
President and Secretary, respectively, of the Company do hereby
certify that:
1. The terms of the Company's Unsecured Medium-Term
Notes, Series B (the "Notes") have been established pursuant to
Sections 201 and 301 of the Indenture in the Officers'
Certificate dated June 18, 1993, unless otherwise provided in
subsequent Officers' Certificates;
2. The Notes shall, in the case of Notes bearing
interest at a fixed rate, be in substantially the form set forth
in Exhibit 1 hereto; and
3. Pursuant to the Board Resolution, the following
additional terms are hereby added for the benefit of the Holders
of the Notes:
If the Company shall make any deposit of money
and/or Government Obligations with respect to the Notes, or
any portion of the principal amount thereof, prior to the
Maturity or redemption of such Notes or such portion of the
principal amount thereof, for the satisfaction or discharge
of the indebtedness of the Company in respect to such Notes
or such portion thereof as contemplated by Section 701 of
the Indenture, the Company shall deliver to the Trustee
either:
(A) an instrument wherein the Company,
notwithstanding such satisfaction and discharge, shall
assume the obligation (which shall be absolute and
unconditional) to irrevocably deposit with the Trustee such
additional sums of money, if any, or additional Government
Obligations (meeting requirements of Section 701 of the
Indenture), if any, or any combination thereof, at such time
or times, as shall be necessary, together with the money
and/or Government Obligations theretofore so deposited, to
pay when due the principal of and premium, if any, and
interest due and to become due on such Notes or such
portions thereof, all in accordance with and subject to the
provisions of said Section 701; provided, however, that such
instrument may state that the obligation of the Company to
make additional deposits as aforesaid shall be subject to
the delivery to the Company by the Trustee of a notice
asserting the amount of such deficiency accompanied by an
opinion of an independent public accountant of nationally
recognized standing, selected by the Trustee, showing the
calculation thereof; or
(B) an Opinion of Counsel to the effect that the
Holders of such Notes, or such portions of the principal
amount thereof, will not recognize income, gain or loss for
United States federal income tax purposes as a result of
such satisfaction and discharge and will be subject to
United States federal income tax on the same amounts, at the
same times and in the same manner as if such satisfaction
and discharge had not been effected.
IN WITNESS WHEREOF, we have hereunto signed our names this
___ day of ____, 1997.
____________________________
Senior Vice President
____________________________
Secretary
<PAGE>
Exhibit 1 to
Officers' Certificate
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to Issuer or its agent for registration of
transfer, exchange, or payment, and any certificate issued is
registered in the name of Cede & Co. or in such other name
as requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as
is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.
Registered No. Registered Principal Amount
$
NORTHWEST NATURAL GAS COMPANY
UNSECURED MEDIUM-TERM NOTE, SERIES B
CUSIP: Redeemable: Yes No
-- --
Interest Commencement Date: In Whole: Yes No
-- --
Interest Rate: In Part: Yes No
-- --
Stated Maturity Date: Initial Redemption Date:
Other Provisions: Redemption Limitation Date:
Initial Redemption Price:
Reduction Percentage:
NORTHWEST NATURAL GAS COMPANY, a corporation duly
organized and existing under the laws of the State of Oregon
(herein called the "Company", which term includes any successor
corporation under the Indenture referred to on the reverse
hereof), for value received, hereby promises to pay to CEDE &
Co., or registered assigns, the principal amount specified above
on the Stated Maturity Date specified above, and to pay interest
thereon from the Interest Commencement Date specified above or
from the most recent Interest Payment Date to which interest has
been paid or duly provided for, semi-annually in arrears on June
1 and December 1 in each year, commencing (except as provided in
the following sentence) with the Interest Payment Date next suc-
ceeding the Interest Commencement Date specified above, at the
Interest Rate per annum specified above, until the principal
hereof shall have been paid or duly provided for. The interest
so payable, and punctually paid or duly provided for, on any
Interest Payment Date, as provided in such Indenture, shall be
paid to the Person in whose name this Security (or one or more
Predecessor Securities) shall have been registered at the close
of business on the Regular Record Date with respect to such
Interest Payment Date, which shall be the May 15 or November 15
(whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date; provided, however, that, if
the Interest Commencement Date of this Security shall be after a
Regular Record Date and before the corresponding Interest Payment
Date, payment of interest shall commence on the second Interest
Payment Date succeeding such Interest Commencement Date and shall
be paid to the Person in whose name this Security was registered
on the Regular Record Date for such second Interest Payment Date;
and provided, further, that interest payable on the Stated
Maturity Date specified above shall be paid to the Person to whom
principal shall be paid. Any such interest not so punctually
paid or duly provided for shall forthwith cease to be payable to
the Holder on such Regular Record Date and shall be paid as
provided in said Indenture.
<PAGE>
-2-
Payment of the principal of, and premium, if any, and
interest on, this Security shall be made at the office or agency
of the Company maintained for such purpose in the Borough of
Manhattan, The City of New York, New York, in such coin or
currency of the United States of America as at the time of
payment shall be legal tender for payment of public and private
debts; provided, however, that, at the option of the Company,
payment of interest may be made by check mailed to the address of
the Person entitled thereto as such address shall appear in the
Security Register; and provided further, that payment of
principal, and premium, if any, and interest, payable on the
Stated Maturity Date specified above or upon redemption, at the
request of the Holder, will be made at said office or agency in
immediately available funds upon presentation of this Security.
This Security is one of a duly authorized issue of
securities of the Company (herein called the "Securities"),
issued and issuable in one or more series under an Indenture,
dated as of June 1, 1991 (such Indenture, as originally executed
and delivered and as thereafter supplemented and amended,
together with any constituent instruments establishing the terms
of particular Securities, being herein called the "Indenture"),
from the Company to Bankers Trust Company, as trustee (herein
called the "Trustee", which term includes any successor trustee
under the Indenture), to which Indenture reference is hereby made
for a statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Company, the Trustee and
the Holders of the Securities and of the terms upon which the
Securities have been, and will be, authenticated and delivered.
The acceptance of this Security shall be deemed to constitute the
consent and agreement by the Holder hereof to all of the terms
and provisions of the Indenture. This Security is one of the
series designated on the face hereof.
If any Interest Payment Date, any Redemption Date or
the Stated Maturity Date shall not be a Business Day, payment of
the amounts due on this Security on such date may be made on the
next succeeding Business Day; and no interest shall accrue on
such amounts for the period from and after such Interest Payment
Date, Redemption Date or Stated Maturity Date, as the case may be.
If so specified above, this Security is subject to
redemption at any time on or after the Initial Redemption Date
specified above, as a whole or, if so specified, in part, at the
election of the Company, at the applicable redemption price (as
described in the following sentence) plus accrued interest to the
date fixed for redemption. Such redemption price shall be the
Initial Redemption Price specified above for the twelve-month
period commencing on the Initial Redemption Date and shall
decline for the twelve-month period commencing on each
anniversary of the Initial Redemption Date by a percentage of
principal amount equal to the Reduction Percentage specified
above until such redemption price is 100% of the principal amount
of this Security to be redeemed.
Notwithstanding the foregoing, the Company may not,
prior to the Redemption Limitation Date, if any, specified above,
redeem this Security as contemplated above as a part of, or in
anticipation of, any refunding operation by the application,
directly or indirectly, of moneys borrowed having an effective
interest cost to the Company (calculated in accordance with
generally accepted financial practice) of less than the effective
interest cost to the Company (similarly calculated) of this
Security.
Notice of redemption shall be given by mail to Holders
of Securities, not less than 30 days nor more than 90 days prior
to the date fixed for redemption, all as provided in the
Indenture. As provided in the Indenture, notice of redemption as
aforesaid may state that such redemption shall be conditional
upon the receipt by the Trustee of money sufficient to pay the
Redemption Price of, and interest, if any, on, this Security on
or prior to the date fixed for such redemption. A notice of
redemption so conditioned shall be of no force or effect if such
money is not so received; and, in such event, the Company shall
not be required to redeem this Security.
The Company shall not be required to (a) register the
transfer of or exchange Securities of this series and Tranche
during a period of 15 days immediately preceding the selection of
<PAGE>
-3-
Securities of this series and Tranche to be called for redemption
or (b) issue, register the transfer of to exchange any
Security so selected for redemption, in whole or in part, except
the unredeemed portion of any Security being redeemed in part.
In the event of redemption of this Security in part
only, a new Security or Securities of this series and Tranche of
authorized denominations, of like tenor and in aggregate
principal amount equal to the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the surrender of
this Security.
The Indenture contains provisions for defeasance at any
time of the entire indebtedness of this Security upon compliance
with certain conditions set forth in the Indenture.
If an Event of Default with respect to Securities of
this series shall occur and be continuing, the principal of the
Securities of this series may be declared due and payable in the
manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as
therein provided, the Trustee to enter into one or more
supplemental indentures for the purpose of adding any provisions
to, or changing in any manner or eliminating any of the
provisions of, the Indenture with the consent of the Holders of
not less than a majority in aggregate principal amount of the
Securities of all series then Outstanding under the Indenture,
considered as one class; provided, however, that if there shall
be Securities of more than one series Outstanding under the
Indenture and if a proposed supplemental indenture shall directly
affect the rights of the Holders of Securities of one or more,
but less than all, of such series, then the consent only of the
Holders of a majority in aggregate principal amount of the
Outstanding Securities of all series so directly affected,
considered as one class, shall be required; and provided,
further, that if the Securities of any series shall have been
issued in more than one Tranche and if the proposed supplemental
indenture shall directly affect the rights of the Holders of
Securities of one or more, but less than all, of such Tranches,
then the consent only of the Holders of a majority in aggregate
principal amount of the Outstanding Securities of all Tranches so
directly affected, considered as one class, shall be required.
The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Securities of
any series then Outstanding, on behalf of the Holders of all
Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be
conclusive and binding upon such Holder and upon all future
Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange therefor or in
lieu hereof, whether or not notation of such consent or waiver is
made upon this Security.
No reference herein to the Indenture and no provision
of this Security or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional,
to pay the principal of, and premium, if any, and interest, on,
this Security at the times, place and rate, in the coin or
currency, and in the manner, herein prescribed.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is
registrable in the Security Register, upon surrender of this
Security for registration of transfer at the Corporate Trust
Office of the Trustee or such other office or agency as may be
designated by the Company for such purpose in the Borough of
Manhattan, The City of New York, New York, duly endorsed by, or
accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly
executed by, the Holder hereof or his attorney duly authorized in
writing, and, thereupon, one or more new Securities of this
series and Tranche of authorized denominations and of like tenor
and aggregate principal amount will be issued to the designated
transferee or transferees.
The Securities of this series are issuable only as
Registered Securities, without coupons, in denominations of
<PAGE>
-4-
$1,000 and any amount in excess thereof that is an integral
multiple of $1,000. As provided in the Indenture and subject to
certain limitations therein set forth, Securities of this series
and Tranche are exchangeable for a like aggregate principal
amount of Securities of the same series and Tranche, of any
authorized denominations, requested by the Holder surrendering
the same, and of like tenor upon surrender of the Security or
Securities to be exchanged at the Corporate Trust Office of the
Trustee or such other office or agency as may be designated by
the Company for such purpose in the Borough of Manhattan, The
City of New York, New York.
No service charge shall be made for any such
registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
Prior to due presentment of this Security for registra-
tion of transfer, the Company, the Trustee and any agent of the
Company or the Trustee may treat the Person in whose name this
Security is registered as the absolute owner hereof for all
purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by
notice to the contrary.
The Indenture and the Securities shall be governed by
and construed in accordance with the laws of the State of New
York.
All terms used in this Security which are defined in
the Indenture shall have the meanings assigned to them in the
Indenture.
As provided in the Indenture, no recourse shall be had
for the payment of the principal of, or premium, if any, or
interest on, any Securities, or any part thereof, or for any
claim based thereon or otherwise in respect thereof, or of the
indebtedness represented thereby, or upon any obligation,
covenant or agreement under the Indenture, against any
incorporator, stockholder, officer or director, as such, past,
present or future, of the Company or of any predecessor or
successor corporation (either directly or through the Company or
a predecessor or successor corporation), whether by virtue of any
constitutional provision, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise; it being
expressly agreed and understood that the Indenture and all the
Securities are solely corporate obligations, and that no personal
liability whatsoever shall attach to, or be incurred by, any
incorporator, stockholder, officer or director, as such, past,
present or future of the Company or of any predecessor or
successor corporation (either directly or through the Company or
a predecessor or successor corporation), because of the
indebtedness thereby authorized or under or by reason of any of
the obligations, covenants or agreements contained in the
Indenture or in any of the Securities or to be implied herefrom
or therefrom, and that any such personal liability is hereby
expressly waived and released as a condition of, and as part of
the consideration for, the execution of the Indenture and the
issuance of the Securities.
Unless the certificate of authentication hereon has
been executed by the Trustee by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose.
<PAGE>
-5-
IN WITNESS WHEREOF, the Company has caused this instru-
ment to be duly executed under its corporate seal as of the date
of authentication set forth below.
NORTHWEST NATURAL GAS COMPANY
By:
----------------------------------
[SEAL]
Attest:
--------------------------
This is one of the Securities of the series designated
in accordance with, and referred to in, the within-mentioned
Indenture.
Date of Authentication:
Bankers Trust Company
as Trustee
By:
------------------------------
Authorized Signatory
-------------------------
FOR VALUE RECEIVED, the undersigned hereby sells,
assigns and transfers unto
------------------------------
[please insert social security
or other identifying number of
assignee]
---------------------------------------------------------------
[name and address of transferee must be printed or typewritten]
---------------------------------------------------------------
the within Security of NORTHWEST NATURAL GAS COMPANY and does
hereby irrevocably constitute and appoint
---------------------------------------------------------------
attorney, to transfer said Security on the books of the within-
mentioned Company, with full power or substitution in the
premises.
Dated:
------------------------ ----------------------------
Exhibit 23
DELOITTE &
TOUCHE LLP
------------- ---------------------------------------------------------
Suite 3900 Telephone: (503) 222-1341
111 S.W. Fifth Avenue Facsimile: (503) 224-2172
Portland, Oregon 97204-3698
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Amendment
No. 1 to Registration Statement No. 333-15323 of Northwest
Natural Gas Company on Form S-3 of our report dated February
12, 1997, appearing in the Annual Report on Form 10-K of
Northwest Natural Gas Company for the year ended December 31,
1996, and to the reference to us under the heading "Experts" in
the Prospectus, which is part of such Registration Statement.
/s/ Deloitte & Touche LLP
April 22, 1997
