AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 30, 1998
Registration No. 333-
---------
========================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
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, Thelen 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. [ ]
---------------
CALCULATION OF REGISTRATION FEE
=========================================================================
Proposed
Title of each maximum Proposed
class of offering maximum
securities Amount to be price aggregate Registration
to be registered registered per unit offering price fee
-------------------------------------------------------------------------
DEBT
SECURITIES . . $100,000,000+ 100%* $100,000,000* $29,500+
=========================================================================
* Inserted solely for the purpose of calculating the registration fee.
+ The combined Prospectus filed herewith pursuant to Rule 429 also
relates to an additional $43,000,000 of Debt Securities registered
pursuant to Registration No. 333-15323 which remains unsold and for
which a registration fee of $13,030 has been paid.
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. 333-15323.
<PAGE>
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 jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction.
Subject to Completion, Dated September 30, 1998
PROSPECTUS
----------
$143,000,000
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 $143,000,000 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. Unless otherwise specified in the Pricing
Supplement relating to any Medium-Term Note, Interest on such
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 depositary 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 . . . $143,000,000 $178,750- $142,821,250-
$1,072,500 $141,927,500
========================================================================
(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, as amended
("Securities Act").
(4) Assuming Medium-Term Notes are issued at 100% of their principal
amount and before deducting expenses payable by the Company
estimated at $225,000, 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 , 1998
<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".
----------------------------
FORWARD-LOOKING STATEMENTS
This document does, and the documents incorporated herein by
reference may, contain forward-looking statements within the
meaning of Section 27A of the Securities Act and Section 21E of
the Securities Exchange Act of 1934, as amended ("Exchange Act").
Although the Company believes these statements are based on
reasonable assumptions, no assurance can be given that actual
results will not differ from those in the forward-looking
statements contained herein and in the incorporated documents.
The forward-looking statements contained herein and in the
incorporated documents may be affected by various uncertainties.
For a discussion of factors which may affect forward-looking
statements contained herein and in the incorporated documents,
see the Company's most recent Annual Report on Form 10-K and its
most recent Quarterly Report on Form 10-Q.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of
the 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 are hereby incorporated by reference in this
Prospectus the following documents heretofore filed with the
Securities and Exchange Commission:
(1) The Company's Annual Report on Form 10-K for the year
ended December 31, 1997.
(2) The Company's Quarterly Reports on Form 10-Q for the
quarters ended March 31 and June 30, 1998.
(3) The Company's Current Report on Form 8-K dated
February 27, 1998.
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; provided, however, that the documents enumerated
above or subsequently filed by the Company pursuant to Section 13
of the Exchange Act prior to the filing with the Commission of
the Company's most recent Annual Report on Form 10-K ("Latest
Annual Report") shall not be incorporated by reference in this
Prospectus or be a part hereof from and after the filing of the
Latest Annual Report. 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.
2
<PAGE>
THE COMPANY
The Company is principally engaged in the distribution of
natural gas to customers in western Oregon and southwestern
Washington, including the Portland metropolitan area. The
Company and its predecessors have supplied gas service to the
public since 1859. 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.
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
1998 to aggregate $90 million, and in the five-year period, 1998-
2002, to aggregate between $500 million and $550 million.
It is estimated that 50% of the funds required for utility
purposes during the 1998-2002 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 $10 million of debt securities
will mature in each of 1999 and 2000.
RATIO OF EARNINGS TO FIXED CHARGES
The ratios of earnings to fixed charges, calculated
according to the rules set forth under the Securities Act, for
the following twelve-month periods were:
TWELVE MONTHS ENDED
--------------------------------------------------------------
JUNE 30, DECEMBER 31,
-------- ---------------------------------------------------
1998 1997 1996 1995 1994 1993
---- ---- ---- ---- ---- ----
2.79 2.99 3.53 3.15 3.08 3.22
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 depositary 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 depositary as may be subsequently
designated ("Depositary"), and registered in the name of CEDE &
Co. (DTC's partnership nominee), or such other Depositary or its
nominee as may be subsequently designated.
So long as the Depositary, or its nominee, is the registered
owner of the Medium-Term Notes, such Depositary 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
Depositary 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
Depositary and, if such person is not a Direct Participant (as
3
<PAGE>
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 Depositary is at any time unwilling or unable to
continue as depositary and a successor depositary is not
appointed by the Company, individual registered Medium-Term Notes
will be issued in exchange for the Medium-Term Notes held by the
Depositary. In addition, the Company, at any time and in its sole
discretion, may determine not to have the Medium-Term Notes held
by the Depositary and, in such event, individual registered
Medium-Term Notes will be issued in exchange for the Medium-Term
Notes held by the Depositary. 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.
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).
4
<PAGE>
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
depositary 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.
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 (together, "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, interest payment
dates, record dates, issue price and Agent's commission or
discount, original issue and maturity dates, redemption or
repayment provisions, if any, and other material terms of such
Secured Note.
INTEREST
Unless otherwise specified in the Pricing Supplement
relating to any Secured Note, interest on such Secured Note will
be payable semi-annually in arrears on June 1 and December 1 of
each year and at maturity.
Unless otherwise specified in the Pricing Supplement
relating to any Secured Note, 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.
5
<PAGE>
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 Depositary 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 or as set forth in the related Pricing Supplement, 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
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.
REPAYMENT AT OPTION OF HOLDER
To the extent, if any, provided in the Pricing Supplement
relating to any Secured Note, such Secured Note will be repayable
by the Company at the option of the registered holder thereof on
the date specified in such Pricing Supplement ("Repayment Date"),
at a price equal to a percentage of the principal amount of such
Secured Note specified in such Pricing Supplement ("Repayment
Price"), plus accrued interest to the date of repayment. For any
Secured Note to be repaid, the Company must receive such Secured
Note at its office or agency in the Borough of Manhattan, The
City of New York (currently, the office of the Corporate
Trustee), within the period ("Election Period") commencing at the
opening of business and ending at the close of business on the
dates specified in the Pricing Supplement relating to such
Secured Note (provided that, if the last day of the Election
Period shall not be a business day, the Election Period shall end
at the close of business on the next succeeding business day),
together with the form entitled "Option to Elect Repayment" on
the reverse of, or otherwise accompanying, such Secured Note duly
completed. Any such election so received by the Company within
such Election Period shall be irrevocable. The repayment option
may be exercised by the registered holder of a Secured Note for
less than the entire principal amount of such Secured Note,
provided that the principal amount to be repaid is equal to
$1,000 or an integral multiple of $1,000. All questions as to
the validity, eligibility (including time of receipt) and
acceptance of any Secured Note for repayment will be determined
by the Corporate Trustee, whose determination will be final and
binding.
So long as the Depositary or the Depositary's nominee is the
registered holder of the Secured Notes, the Depositary or such
nominee will be the only entity that can exercise the repayment
option, and repayment will be made in accordance with the
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Depositary's repayment procedures in effect at the time. See
"Book-Entry System." In order to ensure that the Depositary or
its nominee will timely exercise a repayment option with respect
to a particular beneficial interest in the Secured Notes, the
Beneficial Owner of such interest must instruct the broker or
other Direct or Indirect Participant through which it holds such
interest to notify the Depositary of its election to exercise the
repayment option. In addition, the Beneficial Owner must effect
delivery of such interest at the time such notice of election is
given to the Depositary by causing the broker or other Direct or
Indirect Participant through which it holds such interest to
transfer such interest on the Depositary's records to the
Corporate Trustee. Different firms have different deadlines for
accepting instructions from their customers and, accordingly,
each Beneficial Owner should consult the broker or other Direct
or Indirect Participant through which it holds an interest in the
Secured Notes in order to ascertain the deadline by which such
instruction must be given in order for timely notice to be
delivered to the Depositary.
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 a first mortgage lien on certain gas
utility properties owned from time to time by the Company (except
as stated below), subject to (a) leases of minor portions of the
Company's property to others for uses which 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 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 June 30, 1998,
approximately $223 million of property additions (including $72
million of property additions previously certified as the basis
for the issuance of $43 million of the Secured Notes) and $125
million of retired Bonds were available for use as the basis for
the issuance of Bonds.
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
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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.)
SATISFACTION AND DISCHARGE OF MORTGAGE
The lien of the Mortgage may be canceled 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.)
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.)
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.)
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 % 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:
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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.
The Pricing Supplement relating to any Unsecured Note will
set forth the principal amount, interest rate, interest payment
dates, regular record dates, issue price and Agent's commission
or discount, original issue and maturity dates, redemption or
repayment provisions, if any, and other material terms of such
Unsecured Note.
INTEREST
Unless otherwise specified in the Pricing Supplement
relating to any Unsecured Note, interest on such Unsecured Note
will be payable semi-annually in arrears on June 1 and December 1
of each year and at maturity.
Unless otherwise specified in the Pricing Supplement
relating to any Unsecured Note, 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
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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 Depositary 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 or as set forth in the
related Pricing Supplement, 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.
REPAYMENT AT OPTION OF HOLDER
To the extent, if any, provided in the Pricing Supplement
relating to any Unsecured Note, such Unsecured Note will be
repayable by the Company at the option of the registered holder
thereof on the date specified in such Pricing Supplement
("Repayment Date"), at a price equal to a percentage of the
principal amount of such Unsecured Note specified in such Pricing
Supplement ("Repayment Price"), plus accrued interest to the date
of repayment. For any Unsecured Note to be repaid, the Company
must receive such Unsecured Note at its office or agency in the
Borough of Manhattan, The City of New York (currently, the office
of the Indenture Trustee), within the period ("Election Period")
commencing at the opening of business and ending at the close of
business on the dates specified in the Pricing Supplement
relating to such Unsecured Note (provided that, if the last day
of the Election Period shall not be a business day, the Election
Period shall end at the close of business on the next succeeding
business day), together with the form entitled "Option to Elect
Repayment" on the reverse of, or otherwise accompanying, such
Unsecured Note duly completed. Any such election so received by
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the Company within such Election Period shall be irrevocable.
The repayment option may be exercised by the registered holder of
an Unsecured Note for less than the entire principal amount of
such Unsecured Note, provided that the principal amount to be
repaid is equal to $1,000 or an integral multiple of $1,000. All
questions as to the validity, eligibility (including time of
receipt) and acceptance of any Unsecured Note for repayment will
be determined by the Indenture Trustee, whose determination will
be final and binding.
So long as the Depositary or the Depositary's nominee is the
registered holder of the Unsecured Notes, the Depositary or such
nominee will be the only entity that can exercise the repayment
option, and repayment will be made in accordance with the
Depositary's repayment procedures in effect at the time. See
"Book-Entry System." In order to ensure that the Depositary or
its nominee will timely exercise a repayment option with respect
to a particular beneficial interest in the Unsecured Notes, the
Beneficial Owner of such interest must instruct the broker or
other Direct or Indirect Participant through which it holds such
interest to notify the Depositary of its election to exercise the
repayment option. In addition, the Beneficial Owner must effect
delivery of such interest at the time such notice of election is
given to the Depositary by causing the broker or other Direct or
Indirect Participant through which it holds such interest to
transfer such interest on the Depositary's records to the
Indenture Trustee. Different firms have different deadlines for
accepting instructions from their customers and, accordingly,
each Beneficial Owner should consult the broker or other Direct
or Indirect Participant through which it holds an interest in the
Unsecured Notes in order to ascertain the deadline by which such
instruction must be given in order for timely notice to be
delivered to the Depositary.
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
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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
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.
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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.
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. 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.
13
<PAGE>
EXPERTS
The financial statements incorporated in this Prospectus by
reference to the Company's Annual Report on Form 10-K for the
year ended December 31, 1997 have been so incorporated in
reliance on the report of PricewaterhouseCoopers LLP, independent
accountants, given on the authority of said firm as experts in
auditing and accounting.
The financial statements as of and for the years ended
December 31, 1995 and 1996 incorporated in this Prospectus by
reference to the Latest Annual Report 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 under "Description of the Secured Notes--Security"
herein have been reviewed (a) insofar as Oregon law is concerned,
by Mark S. Dodson, Esquire, General Counsel of the Company; and
(b) insofar as Washington law is concerned, by Stoel Rives LLP,
Portland, Oregon, and have been set forth herein in reliance upon
the opinions of Mr. Dodson and such firm given upon their
authority as experts. The statements made as to matters of law
and legal conclusions in the documents incorporated in this
Prospectus by reference pertaining to titles to properties,
franchises and other operating rights of the Company, regulations
to which the Company is subject and any legal proceedings to
which the Company is a party, insofar as Oregon law is concerned,
have been reviewed by Mr. Dodson and such statements are included
in such documents and herein in reliance upon the opinion of Mr.
Dodson given upon his authority as an expert. As of September 21,
1998, Mr. Dodson owned 3,500 shares of the Company's common stock
and had been granted options to purchase an additional 5,000
shares.
LEGALITY
The legality of the Medium-Term Notes will be passed upon
for the Company by Mr. Dodson and by Messrs. Thelen Reid & Priest
LLP, New York, New York, and for the agents by Messrs. Simpson
Thacher & Bartlett, New York, New York. Messrs. Thelen Reid &
Priest LLP and Messrs. Simpson Thacher & Bartlett may rely upon
the opinion of Mr. Dodson as to certain legal matters arising
under Oregon law and Mr. Dodson, Messrs. Thelen Reid & Priest LLP
and Messrs. Simpson Thacher & Bartlett may rely upon the opinion of
Stoel Rives LLP as to certain legal matters arising under Washington
law. However, all matters pertaining to titles, the lien and
enforceability of the Mortgage and franchises, will be passed upon
only by Mr. Dodson, who may rely on the opinion of Stoel Rives LLP
as to certain legal matters arising under Washington law.
14
<PAGE>
=================================================================
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
Forward-Looking Statements . . . . . . . . . . . . . . . . . 2
Available Information . . . . . . . . . . . . . . . . . . . . 2
Incorporation of Certain Documents By Reference . . . . . . 2
The Company . . . . . . . . . . . . . . . . . . . . . . . . . 3
Use of Proceeds and Financing Program . . . . . . . . . . . . 3
Ratio of Earnings to Fixed Charges . . . . . . . . . . . . . 3
Book-Entry System . . . . . . . . . . . . . . . . . . . . . . 3
Description of the Secured Notes . . . . . . . . . . . . . . 5
Description of the Unsecured Notes . . . . . . . . . . . . . 9
Plan of Distribution . . . . . . . . . . . . . . . . . . . . 13
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Legality . . . . . . . . . . . . . . . . . . . . . . . . . . 14
=================================================================
=================================================================
$143,000,000
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
, 1998
------- --
=================================================================
<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 . . . . . . . . . . . . . $ 29,500
Fees of Trustees, including counsel
and authentication fees . . . . . . . 10,000
Legal fees . . . . . . . . . . . . . . 100,000
Accounting fees and expenses . . . . . 25,000
Rating Agencies' fees . . . . . . . . 45,000
Printing and engraving . . . . . . . . 10,000
Miscellaneous expense . . . . . . . . 5,500
--------
Total expenses . . . . . . . . . . . $225,000
========
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.
Reference is made to the Exhibit Index on page II-5 hereof.
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, indivi-
dually 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-2
<PAGE>
POWER OF ATTORNEY
Each director and/or officer of the registrant whose signature
appears hereinafter hereby appoints Richard G. Reiten, Bruce R.
DeBolt and John T, Hood, the Agents for Service named in this
registration statement, and each of them severally, as his
attorney-in-fact to sign in his name and behalf, in any and all
capacities stated below, and to file with the Securities and
Exchange Commission any and all amendments, including post-
effective amendments, to this registration statement, and the
registrant hereby also appoints each such Agent for Service as
its attorney-in-fact with like authority to sign and file any
such amendments in its name and behalf.
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 30th day of
September, 1998.
NORTHWEST NATURAL GAS COMPANY
By: /s/ Richard G. Reiten
------------------------------------
Richard G. Reiten
President and Chief Executive 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 September 30, 1998
---------------------- Executive
Richard G. Reiten, Officer,
President and Chief and Director
Executive Officer
/s/ Bruce R. DeBolt Principal September 30, 1998
---------------------- Financial
Bruce R. DeBolt, Officer
Senior Vice President,
Finance, and Chief
Financial Officer
/s/ D. James Wilson Principal September 30, 1998
---------------------- Accounting
D. James Wilson, Officer
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 ) September 30, 1998
----------------------- )
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 )
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) - Form of Secured Note.
4(c)* - 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(d)* - 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(e) - Form of Officers' Certificate, together with form
of fixed rate Unsecured Note, supplementing the
Officers' Certificate, dated as of June 18, 1993.
5(a) - Opinion of Mark S. Dodson, Esquire.
5(b) - Opinion of Messrs. Thelen Reid &
Priest LLP.
12* - Computation of Ratio of Earnings to Fixed Charges
(filed as Exhibit 12 to Form 10-Q for the quarter
ended June 30, 1998).
23(a) - Consent of PricewaterhouseCoopers LLP. (The
consents of Mark S. Dodson, Esquire, and of Thelen
Reid & Priest LLP are included in their opinions
filed, respectively, as Exhibits 5(a) and 5(b)).
23(b) - Consent of Deloitte & Touche LLP.
23(c) - Consent of Stoel Rives LLP.
24 - Power of Attorney (see page II-3).
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.
II-5
Northwest Natural Gas Company
$143,000,000
Medium-Term Notes, Series B
Distribution Agreement
----------------------
. , 1998
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 $143,000,000 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. 333-15323) (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 $43,000,000 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 Registra-
tion 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- . ), as amended (the "Subsequent
Registration Statement"), in respect of an additional
$100,000,000 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 "Preliminary 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 incorpor-
ated 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 refer-
ence 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 Registra-
tion 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 Inden-
tures (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, constitute 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 instru-
ment 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 ad-
versely 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
Range of Maturities amount 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 representations 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 Thelen Reid & Priest LLP, 40
West 57th Street, New York, New York:
(a) An opinion of Simpson Thacher & Bartlett, 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 law,
upon the opinion of Mark S. Dodson, Esq., General Counsel
for the Company, referred to in Section 4(b) hereof and, as
to all matters governed by Washington law, upon the opinion
of Stoel Rives LLP referred to in Section 4(d) hereof;
(b) An opinion of Mark S. Dodson, 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 gov-
erned by New York law, upon the opinion of Thelen Reid &
Priest LLP referred to in Section 4(c) hereof and, as to
certain matters governed by Washington law, upon the opinion
of Stoel Rives LLP referred to in Section 4(d) hereof;
(c) An opinion of Thelen 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 law, upon the opinion of Mark S. Dodson, Esq.,
referred to in Section 4(b) hereof and, as to all matters
governed by Washington law, upon the opinion of Stoel Rives
LLP referred to in Section 4(d) hereof;
(d) An opinion of Stoel Rives LLP, dated the
Commencement Date, in form and substance reasonably
satisfactory to such Agents, to the effect set forth in
Annex V.
(e) A letter from PricewaterhouseCoopers LLP, the
Company's independent accountants, 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 VI hereto; and
(f) 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 Prospectus,
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 de-
finitive 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 rea-
sonably 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 solici-
tation of offers to purchase Securities from the Company
(and, if so notified, such Agent shall cease such solicita-
tions 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 amendment 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 Pro-
spectus 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 effective 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 Securi-
ties 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 repre-
sentations and warranties shall be deemed to relate to the
Registration Statement and the Prospectus as amended and
supplemented relating to such Securities);
(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 satisfac-
tory 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 supplemented 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 Mark S. Dodson, Esq., General
Counsel for the Company, or his successor, dated
the date of such amendment, supplement, incor-
poration 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 14 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 Thelen 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;
(iii) a letter of Stoel Rives LLP, Portland,
Oregon, special Washington counsel for the
Company, or other special Washington 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(d) hereof to the same extent as
though it were dated the date of such letter
or, in lieu of such letter, an opinion of the
same tenor as the opinion of such counsel
referred to in Section 4(d) hereof; and
(iv) 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(f) 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(f) 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
a letter of PricewaterhouseCoopers LLP or other independent
accountants for the Company reasonably satisfactory to the
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 upon the
letter of such accountants referred to in Section 4(e)
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(e) 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 expenses 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.
(m) To advise each Agent, promptly after the Company
receives notice thereof, of the downgrading, or the issuance
of a notice of any intended or potential downgrading, of the
ratings of the Securities by either Moody's Investors
Service or Standard & Poor's Corporation.
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 or in any securities of
the Company on the Nasdaq National Market or any relevant
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
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, 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 fifth, sixth, seventh and eighth
sentences in the first paragraph, the third and last
sentences of the fourth paragraph, the sixth, seventh,
eighth and ninth paragraphs and the statements relating to
the Agents in the last 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 indemnified 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 rep-
resent 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 (i) an unconditional release of such indemnified
party from all liability on claims that are the subject
matter of such proceeding and (ii) no statement as to or an
admission of fault, culpability or failure to act by or on
behalf of an indemnified party.
(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 liabili-
ties (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 oppor-
tunity 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 indem
---------------------
nities, 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 termi-
nation 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, Atten-
tion: 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, successors 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 counterparts, each of which shall be an
original, but all of such respective counterparts shall together
constitute one and the same instrument.
<PAGE>
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 . , 1998 (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 July 10, 1998 of the Public Utility
Commission of Oregon (the "OPUC") authorizes the issuance and
sale of the Securities, provided that the Company report at least
two bid quotes for each Security issued and that the Company's
senior debt securities maintain investment grade bond ratings
from at least two nationally recognized statistical rating
organizations. The order dated June 25, 1998 of the Washington
Utilities and Transportation Commission (the "WUTC") establishes
compliance with applicable statutory provisions with respect to
the issuance and sale of the Securities. In addition, such order
of the OPUC authorizes, and such order of the WUTC establishes
compliance with applicable statutory provisions with respect to,
the issuance and sale by the Company (i) 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) and (ii) of Securities to Agents, as
principal, at 100% of the principal amount thereof less a
percentage not to exceed the commission applicable to an agency
sale of Securities of the same maturity.
As stated in the Company's Prospectus dated . , 1998,
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.
As mentioned above, the order dated July 10, 1998 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:
(i) interest rate
(ii) interest payment dates
(iii) regular record dates;
(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) whether redeemable (i) in whole or (ii) in whole
or in part;
(b) initial redemption date;
(c) redemption limitation date;
(d) each redemption price and period;
(11) Sinking fund or other retirement provisions;
(12) If repayable at the holder's option:
(a) repayment date;
(b) repayment price;
(c) election period;
(13) The name of the Selling Agent or Purchasing Agent, as
the case may be;
(14) Exact name, address and taxpayer identification number
of party to be the registered owner;
(15) Party to whom Securities are to be delivered;
(16) Denominations of certificates to be delivered at
settlement;
(17) The name of the Company's bank and the account number
for payment of the purchase price;
(18) Whether the Securities to be purchased are Secured
Notes or Unsecured Notes;
(19) 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 second day after the Trade
Date at each of the following numbers:
Merrill Lynch & Co. - Tritech Services
44B Colonial Drive
Piscataway, NJ 08854
Attn: Final Prospectus Unit/Nachman Kimerling
Facsimile No. (732) 885-2774/2775/2776;
Phone No. (732) 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
Concourse Level, N.S.C.C. Window
New York, New York 10041
Attn: Al Mitchell
Phone No. (212) 885-2403
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) Fixed Rate Securities:
(i) interest rate;
(ii) interest payment dates; and
(iii) regular record dates.
(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.
(l) Repayment 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 trade 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
trade 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 , 1998 (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:
---------------------------------------------------
Repayable at Option of Holder: Yes ___ No ___
-----------------------------
Repayment Date:
--------------
Repayment Price:
---------------
Election Period:
---------------
Documents to be Delivered as a Condition to the Closing:
-------------------------------------------------------
[(1) The opinion of counsel to the Agents referred to in
Section 5(h)]
[(2) The opinion of counsel to the Company referred to in
Section 5(i)(i)]
[(3) The opinion of counsel to the Company referred to in
Section 5(i)(ii)]
[(4) The opinion of counsel to the Company referred to in
Section 5(i)(iii)]
[(5) The accountants letter referred to in Section 5(j)]
[(6) The officers certificate referred to in Section
5(i)(iv)]
Other Provisions (including Syndicate Provisions,
if applicable):
-------------------------------------------------
<PAGE>
ANNEX III
[Letterhead of Mark S. Dodson]
. , 1998
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 . , 1998 (the
"Agreement"), between the Company and each of you, of not to
exceed $143,000,000 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. 333-15323)
(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 $43,000,000
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 April 24, 1997; (f) the
registration statement (File No. 333- . ) (the "Subsequent
Registration Statement"), filed by the Company with the SEC for
the registration under the 1933 Act of an additional $100,000,000
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 . , 1998; (g) the
combined prospectus relating to the Notes constituting a part of
the Subsequent Registration Statement in the form in which the
Subsequent Registration Statement became effective, or if such
combined prospectus has been 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 authorized to transact business 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 Mortgage constitutes a first security interest
on all of the personal properties and fixtures owned by the
Company that are described in the Mortgage and are intended
to be subject to the lien thereof, subject only to Excepted
Encumbrances (as defined in the Mortgage); and the
description in the Mortgage of such properties and fixtures
is adequate to constitute the Mortgage a security
interest thereon.
(6) The Company has good and sufficient title to all
of the real properties owned by the Company that are
described in the Mortgage and intended to be subject to the
lien thereof, subject only to Excepted Encumbrances (as
defended in the Mortgage) and to minor defects and
irregularities of the nature customarily found in properties
of like size and character; the description in the Mortgage
of such properties is adequate to constitute the Mortgage a
lien thereon; and the Mortgage is a valid first mortgage
lien on such properties, subject to the exceptions noted
above in this paragraph (6).
(7) 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 (as defined in
the Indenture) 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.
(8) The Secured Notes have been duly authorized by the
resolutions adopted by the Board of Directors on May 27,
1993, September 26, 1996, April 24, 1997 and February 26,
1998 (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.
(9) 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 (as defined in the
Indenture), Company Orders 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.
(10) 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.
(11) 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.
(12) The OPUC has issued orders authorizing, and the
WUTC has issued orders establishing compliance with
applicable statutory provisions with respect to, 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 on the terms and conditions
set forth in the Agreement.
(13) The statements of Oregon 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).
(14) 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
10, 11 and 12 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 State of Oregon and do
not hold myself out as an expert on the laws of the State of
Washington, the State of New York or Federal securities laws.
Accordingly, in rendering this opinion, I have relied, with your
consent, as to certain matters of Washington law, upon the
opinion of even date herewith addressed to you by Stoel Rives
LLP, special Washington counsel to the Company, and, 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
Thelen Reid & Priest LLP, New York, New York, counsel for the
Company. In rendering this opinion, I have made such reviews of
the laws of the State of Washington as I believe to be necessary
to satisfy myself as to questions of Washington law which are not
addressed by the opinion of Stoel Rives LLP.
You, the Trustees and, as to matters governed by the
laws of the State of Oregon, Thelen 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,
Mark S. Dodson, Esq.
<PAGE>
ANNEX IV
[Letterhead of Thelen Reid & Priest LLP]
. , 1998
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 . , 1998 (the
"Agreement"), between the Company and each of you, of not to
exceed $143,000,000 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. 333-15323) (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 $43,000,000
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 April 24, 1997; (f) the
registration statement (File No. 333- . ) (the "Subsequent
Registration Statement"), filed by the Company with the SEC for
the registration under the 1933 Act of an additional $100,000,000
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 . , 1998; (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 such combined prospectus has been 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 authorized to transact business 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 (as defined in the Indenture)
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, April 24, 1997 and February 26, 1998 (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 (each, as defined in the Indenture), Company Orders
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 has issued orders authorizing, and the
WUTC has issued orders establishing compliance with applicable
statutory provisions with respect to, 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 1933 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 1933 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 reference 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, upon the opinion of
even date herewith addressed to you by Mark S. Dodson, Esq.,
General Counsel of the Company, and, as to all matters governed
by the laws of the State of Washington, upon the opinion of Stoel
Rives LLP, special Washington counsel to the Company. We
understand that you are relying upon the opinions of Mark S.
Dodson, Esq., and Stoel Rives LLP as to all matters governed by
the laws of the State of Oregon and Washington, as the case may
be, including titles to property and franchises and the lien of
the Mortgage, upon which we do not pass.
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, Mark S. Dodson, 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,
THELEN REID & PRIEST LLP
<PAGE>
ANNEX V
[Letterhead of Stoel Rives LLP]
. , 1998
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 . , 1998 (the
"Agreement"), between the Company and each of you, of not to
exceed $143,000,000 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 special Washington counsel to the Company, we
have reviewed (a) the Mortgage; (b) the Indenture; (c) the
Agreement; and (d) the proceedings before the Washington
Utilities and Transportation Commission (the "WUTC") relating to
the 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 for forms thereof.
In preparation of this opinion, we have examined
originals or photostatic 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
certified or photostatic copies and the authenticity of the
originals of such latter documents. We have also assumed that
the Mortgage, the Indenture and the Agreement have been duly
authorized, executed and delivered by, and are legally binding
on, each of the parties thereto.
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.
Based upon the foregoing and subject to the following
qualifications, we are of the opinion that:
(1) The Company is authorized to transact business in
the State of Washington.
(2) The Mortgage constitutes a first security interest
on all of the personal properties and fixtures owned by the
Company in the State of Washington that are described in the
Mortgage and are intended to be subject to the lien thereof,
subject only to Excepted Encumbrances (as defined in the
Mortgage); and the description in the Mortgage of such
properties and fixtures is adequate to constitute the
Mortgage a security interest thereon.
(3) The Company has good and sufficient title to all
of the real properties owned by the Company in the State of
Washington that are described in the Mortgage and intended
to be subject to the lien thereof, subject only to Excepted
Encumbrances (as defined in the Mortgage) and to minor
defects and irregularities of the nature customarily found
in properties of like size and character; the description in
the Mortgage of such properties is adequate to constitute
the Mortgage a lien thereon; and the Mortgage is a valid
first mortgage lien on such properties, subject to the
exceptions noted above in this paragraph (3).
(4) 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 violate any law, rule or regulation of
the State of Washington or any political subdivision thereof
known to us to be applicable to the Company.
(5) The WUTC has issued orders dated January 22, 1997
in Docket UG-961639 and dated June 25, 1998 in Docket UG-
980812, establishing compliance with applicable statutory
provisions with respect to the issuance and sale by the
Company of the Notes; and under the laws of the State of
Washington, no further approval, authorization, consent or
other order of any public board or body 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.
This opinion is limited to the facts and law at the
date hereof. In rendering the opinions set forth in paragraphs 4
and 5 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 designated 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 and (ii) the orders of the
WUTC with respect to the Notes remain in full force and effect
and have not been modified or amended by the WUTC and the Company
complies with the terms of such orders.
We are members of the bar of the State of Washington
and do not express any opinion herein concerning any laws other
than the laws of the State of Washington.
In giving the foregoing opinions, we express no opinion
as to the securities or blue sky laws of any jurisdiction.
You, the Trustees, Mark S. Dodson, Esq., General
Counsel of the Company, Thelen Reid & Priest LLP, counsel to the
Company, and your counsel, as to matters governed by the laws of
the State of Washington, 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,
Stoel Rives LLP
<PAGE>
ANNEX VI
[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 latest period for which financial
information is available subsequent to the latest financial
statements included or incorporated by reference in the
Prospectus, there were any decreases in operating revenues,
net income and earnings available for common stock, as
compared to the corresponding period in the prior year,
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
$143,000,000
MEDIUM-TERM NOTES, SERIES B
--------, ----
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 _______, 1998 (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:
--------------------------
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 to be issued
is registered in the name of Cede & Co. or in such other name as
is 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 in as much as the registered owner hereof,
Cede & Co., has an interest herein.
Registered No. Registered Principal Amount
$
NORTHWEST NATURAL GAS COMPANY
FIRST MORTGAGE BOND
SECURED MEDIUM-TERM NOTE, SERIES B
CUSIP: Interest Payment Dates:
Issue Date: Record Dates:
Interest Rate: Redeemable: Yes No
-- --
Maturity Date: In Whole: Yes No
-- --
Repayable at
Option of Holder: In Part Yes No
-- --
Yes No Initial Redemption Date:
--- ---
Repayment Date(s): Initial Redemption Price:
Repayment Price(s): Reduction Percentage:
Election Period(s): Redemption Limitation Date:
Other Provisions:
NORTHWEST NATURAL GAS COMPANY, a corporation of the
State of Oregon (hereinafter called the "Company"), for value
received, hereby promises to pay to CEDE & Co., or registered
assigns, the principal amount specified above on the Maturity
Date specified above, at the office or agency of the Company in
the Borough of Manhattan, The City of New York, in such coin or
currency of the United States of America as at the time of
payment is legal tender for public and private debts, and to pay
to the registered owner hereof interest thereon from the Issue
Date specified above or from the most recent interest payment
date to which interest has been paid, at the Interest Rate
specified above in like coin or currency at such office or agency
on each Interest Payment Date specified above of each year,
commencing on the interest payment date next succeeding the Issue
Date, until the Company's obligation with respect to the payment
of such principal shall have been discharged; provided, however,
that if the date of this bond shall be after a record date with
respect to any interest payment date and prior to such interest
payment date, interest shall be payable to such registered holder
only from such interest payment date; and provided, further, that
(i) if the Issue Date shall be after a record date with respect
to any interest payment date and prior to the corresponding
interest payment date, this bond shall bear interest from the
Issue Date but payment of interest shall commence on the second
interest payment date succeeding the Issue Date, and (ii)
interest payable on the Maturity Date will be payable to the
person to whom such principal shall be payable.
This bond is one of an issue of bonds of the Company
issuable in series and is one of a series known as its First
Mortgage Bonds, Secured Medium-Term Notes, Series B, all bonds of
all series issued and to be issued under and equally secured
(except in so far as any sinking or other fund, established in
accordance with the provisions of the Mortgage hereinafter
mentioned, may afford additional security for the bonds of any
particular series) by a Mortgage and Deed of Trust (herein,
together with any indenture supplemental thereto, including the
supplemental indenture dated as of June 1, 1993, called the
Mortgage) dated as of July 1, 1946, executed by Portland Gas &
Coke Company (now Northwest Natural Gas Company) to Bankers Trust
Company and R.G. Page (Stanley Burg, successor), as Trustees.
Reference is made to the Mortgage for a description of the
property mortgaged and pledged, the nature and extent of the
security, the rights of the holders of the bonds and of the
Trustees in respect thereof, the duties and immunities of the
Trustees, the terms and conditions upon which the bonds are and
are to be secured, and the circumstances under which additional
bonds may be issued. With the consent of the Company and to the
extent permitted by and as provided in the Mortgage, the rights
and obligations of the Company and/or the rights of the holders
of the bonds and/or coupons and/or the terms and provisions of
the Mortgage may be modified or altered by the affirmative vote
of the holders of at least seventy per centum (70%) in principal
amount of the bonds then outstanding under the Mortgage and, if
the rights of the holders of one or more, but less than all,
series of bonds then outstanding are to be affected, then also by
affirmative vote of the holders of at least seventy per centum
(70%) in principal amount of the bonds then outstanding of each
series of bonds so to be affected (excluding in any case bonds
disqualified from voting by reason of the Company's interest
therein as provided in the Mortgage); provided that, without the
consent of the holder hereof, no such modification or alteration
shall, among other things, impair or affect the right of the
holder to receive payment of the principal of (and premium, if
any) and interest on this bond, on or after the respective due
dates expressed herein, or permit the creation of any lien equal
or prior to the lien of the Mortgage or deprive the holder of the
benefit of a lien on the mortgaged and pledged property. The
Company has the right, without any consent or other action by the
holders of any series of bonds (including this series), to amend
the Mortgage so as to change seventy per centum (70%) in the
foregoing sentence to sixty-six and two-thirds per centum (66-
2/3%).
The principal hereof may be declared or may become due
prior to the Maturity Date hereinbefore named on the conditions,
in the manner and at the time set forth in the Mortgage, upon the
occurrence of a default as in the Mortgage provided.
The transfer of this bond may be registered as
prescribed in the Mortgage by the registered owner hereof in
person, or by his duly authorized attorney, at the office or
agency of the Company in the Borough of Manhattan, The City of
New York, upon surrender for cancellation of this bond, together
with a written instrument of transfer wherever required by the
Company duly executed by the registered owner or by his duly
authorized attorney, and, thereupon, a new fully registered bond
of the same series for a like principal amount and having the
same Issue Date, Maturity Date and redemption provisions, if any,
and bearing interest at the same rate, will be issued to the
transferee in exchange herefor as provided in the Mortgage. The
Company and the Trustees may deem and treat the person in whose
name this bond is registered as the absolute owner hereof for the
purpose of receiving payment and for all other purposes and
neither the Company nor the Trustees shall be affected by any
notice to the contrary.
In the manner prescribed in the Mortgage, any bonds of
this series, upon surrender thereof, for cancellation, at the
office or agency of the Company in the Borough of Manhattan, The
City of New York, are exchangeable for a like aggregate principal
amount of bonds of the same series of other authorized
denominations which have the same Issue Date, Maturity Date and
redemption provisions, if any, and which bear interest at the
same rate.
If so specified above, this bond is subject to
redemption at any time on or after the Initial Redemption Date
specified above, as a whole or, if specified above, in part, at
the election of the Company, at the applicable redemption price
(as described below or as set forth above under "Other
Provisions") 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 bond.
Notwithstanding the foregoing, the Company may not,
prior to the Redemption Limitation Date, if any, specified above,
redeem this bond 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 bond.
If so specified above, this bond is repayable by the
Company at the option of the registered owner hereof on the
Repayment Date or Dates and at the Repayment Price or Prices
specified above, plus accrued interest to the date of repayment.
The repayment option may be exercised by the registered owner of
this bond for less than its entire principal amount, provided
that the principal amount to be repaid is equal to $1,000 or an
integral multiple of $1,000. For this bond to be repaid at the
option of the registered owner hereof, the Company must receive
this bond at its office or agency in the Borough of Manhattan,
The City of New York, no later than the close of business on the
last day of the Election Period or Periods specified above,
together with the form entitled "Option to Elect Repayment" set
forth below on, or otherwise accompanying, this bond, duly
completed. Any such election so received by the Company within
any such Period shall be irrevocable. If the last day of the
Election Period or Periods specified above shall not be a
business day, the Election Period or Periods shall end at the
close of business on the next succeeding business day.
As provided in the Mortgage, the Company shall not be
required to register transfers or make exchanges of bonds of any
series for a period of ten days next preceding any interest
payment date for bonds of such series, or next preceding any
designation of bonds of such series to be redeemed, and the
Company shall not be required to make transfers or exchanges of
any bonds designated in whole or in part for redemption.
No recourse shall be had for the payment of the
principal of or interest on this bond against any incorporator or
any past, present or future subscriber to the capital stock,
stockholder, officer or director of the Company or of any
predecessor or successor corporation, as such, either directly or
through the Company or any predecessor or successor corporation,
under any rule of law, statute or constitution or by the
enforcement of any assessment or otherwise, all such liability of
incorporators, subscribers, stockholders, officers and directors
being released by the holder or owner hereof by the acceptance of
this bond and being likewise waived and released by the terms of
the Mortgage.
This bond shall not become obligatory until Bankers
Trust Company, the Corporate Trustee under the Mortgage, or its
successor thereunder, shall have signed the form of
authentication certificate endorsed hereon.
<PAGE>
IN WITNESS WHEREOF, NORTHWEST NATURAL GAS COMPANY has
caused this bond to be signed in its corporate name by its
President or one of its Vice Presidents by his signature or a
facsimile thereof, and its corporate seal to be impressed or
imprinted hereon and attested by its Secretary or one of its
Assistant Secretaries by his signature or a facsimile thereof.
Dated:
NORTHWEST NATURAL GAS COMPANY
Attest:
[SEAL] By
---------------------------------
Senior Vice President
-----------------
Secretary
This bond is one of the bonds, of the series herein
designated, described or provided for in the within-mentioned
Mortgage.
BANKERS TRUST COMPANY,
(New York)
Corporate Trustee
By
---------------------------------
Authorized Officer
----------------------------------
FOR VALUE RECEIVED, the undersigned hereby sells,
assigns and transfers unto
------------------------------ ----------------------------
[please insert social security [name and address of
or other identifying transferee must be printed
number of assignee] or typewritten]
-----------------------------------------------------------------
-----------------------------------------------------------------
the within bond of NORTHWEST NATURAL GAS COMPANY and does hereby
irrevocably constitute and appoint
-----------------------------------------------------------------
-----------------------------------------------------------------
attorney, to transfer said bond on the books of the within-
mentioned Company, with full power of substitution in the
premises.
Dated:
-------- ----------------------------------------
<PAGE>
OPTION TO ELECT REPAYMENT
PLEASE TAKE NOTICE that the registered owners of this bond
elect to cause $ , 000 in principal amount of this
--------------
bond to be repaid on (a Repayment Date specified on
---------
this bond) at the Repayment Price specified on this bond, plus
accrued interest to the Repayment Date.
If payment by check is desired, give name and mailing
address of the registered owner:
-----------------------------------------------------------------
-----------------------------------------------------------------
If payment by wire transfer is desired, provide the
following information:
-----------------------------------------------------------------
-----------------------------------------------------------------
(name of registered owner, account number, ABA number, name and
address of bank)
Dated:
------------ ------------------------------------------
Signature of registered owners or duly
authorized agent or attorney
(If an agent or attorney signs, attach the power of attorney or
other proof of appointment or authority. All signatures must be
guaranteed by an "eligible guarantor institution" meeting the
requirements of the Corporate Trustee, which requirements include
membership or participation in the Securities Transfer Agent
Medallion Program ("STAMP") or such other "signature guarantee
program" as may be determined by the Corporate Trustee in
addition to, or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as amended. Addresses
and account information must be printed or typewritten.)
OFFICERS' CERTIFICATE
SUPPLEMENTAL TO THE OFFICERS' CERTIFICATE DATED JUNE 18, 1993
(UNDER SECTIONS 201 AND 301 OF THE INDENTURE
REFERRED TO 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, a Senior Vice
President and the 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 the 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.
4. Pursuant to Section 301 of the Indenture, the
terms of any Tranche of the Notes, to the extent not established
in the Indenture, by an indenture supplemental to the Indenture,
in the Board Resolution or herein, shall be determined by the
officers of the Company and communicated to the Trustee by a
Company Order or Orders substantially in the form attached hereto
as Exhibit 2, or determined by an officer or officers of the
Company or its agent or agents and communicated to the Trustee in
accordance with procedures, acceptable to the Trustee, specified
in such Company Order or Orders.
5. The officers and agents of the Company who,
initially, are authorized, from time-to-time, to execute and
deliver Company Orders or any documents in connection therewith
and to carry out procedures specified therein are listed on the
Incumbency Certificate, dated the date hereof, attached hereto as
Exhibit 3.
6. An Opinion of Counsel, of even date herewith,
complying with Section 303 of the Indenture, is attached hereto
as Exhibit 4.
<PAGE>
IN WITNESS WHEREOF, we have hereunto signed our names this
day of , 1998.
---- ----------
----------------------------
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: Interest Payment Dates:
Interest Commencement Date: Regular Record Dates:
Interest Rate: Redeemable: Yes No
-- --
Stated Maturity Date: In Whole: Yes No
-- --
Repayable at Option of Holder: In Part: Yes No
-- --
Yes No Initial Redemption Date:
--- ---
Repayment Date(s): Initial Redemption Price:
Repayment Price(s): Reduction Percentage:
Election Period(s): Redemption Limitation Date:
Other Provisions:
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 each
Interest Payment Date specified above in each year, commencing
(except as provided in the following sentence) with the Interest
Payment Date next succeeding 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
specified above (whether or not a Business Day) 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.
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 or as set forth above under
"Other Provisions") 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
Securities of this series and Tranche to be called for redemption
or (b) issue, register the transfer of or 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.
If so specified above, this Security is repayable by
the Company at the option of the Holder hereof on the Repayment
Date or Dates and at the Repayment Price or Prices specified
above, plus accrued interest to the date of repayment. The
repayment option may be exercised by the Holder of this Security
for less than its entire principal amount, provided that the
principal amount to be repaid is equal to $1,000 or an integral
multiple of $1,000. For this Security to be repaid at the option
of the Holder hereof, the Company must receive this Security at
its office or agency in the Borough of Manhattan, The City of New
York, no later than the close of business on the last day of the
Election Period or Periods specified above, together with the
form entitled "Option to Elect Repayment" set forth below on, or
otherwise accompanying, this Security, duly completed. Any such
election so received by the Company within any such Period shall
be irrevocable. If the last day of the Election Period or
Periods specified above shall not be a business day, the Election
Period or Periods shall end at the close of business on the next
succeeding business day.
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
$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>
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:
------------------------ ------------------------------
<PAGE>
OPTION TO ELECT REPAYMENT
PLEASE TAKE NOTICE that the registered owners of this
Security elect to cause $ ,000 in principal amount
--------------
of this Security to be repaid on (a Repayment Date
---------
specified on this Security) at the Repayment Price specified on
this Security, plus accrued interest to the Repayment Date.
If payment by check is desired, give name and mailing
address of the registered owner:
-----------------------------------------------------------------
-----------------------------------------------------------------
If payment by wire transfer is desired, provide the
following information:
-----------------------------------------------------------------
-----------------------------------------------------------------
(name of registered owner, account number, ABA number, name and
address of bank)
Dated:
-------------- ----------------------------------------
Signature of registered owners or duly
authorized agent or attorney
(If an agent or attorney signs, attach the power of attorney or
other proof of appointment or authority. All signatures must be
guaranteed by an "eligible guarantor institution" meeting the
requirements of the Trustee, which requirements include
membership or participation in the Securities Transfer Agent
Medallion Program ("STAMP") or such other "signature guarantee
program" as may be determined by the Trustee in addition to, or
in substitution for, STAMP, all in accordance with the Securities
Exchange Act of 1934, as amended. Addresses and account
information must be printed or typewritten.)
Exhibit 5(a)
[Letterhead of Mark S. Dodson, Esq.]
September 29, 1998
Northwest Natural Gas Company
220 N.W. Second Avenue
Portland, Oregon 97209
Ladies and Gentlemen:
With respect to the Registration Statement on
Form S-3 to be filed with the Securities and Exchange
Commission (the "Commission") on or about the date hereof
by Northwest Natural Gas Company (the "Company") for the
registration under the Securities Act of 1933, as amended
("Securities Act"), of $100,000,000 aggregate principal
amount of Secured Medium-Term Notes, Series B ("Secured
Notes") and Unsecured Medium-Term Notes, Series B
("Unsecured Notes") (the Secured Notes and the Unsecured
Notes are hereinafter collectively referred to as the
"Notes") to be issued by the Company, and for the
qualification under the Trust Indenture Act of 1939, as
amended ("Trust Indenture Act"), of the Company's Mortgage
and Deed of Trust, as supplemented ("Mortgage"), under
which the Secured Notes are to be issued, and the Company's
Indenture ("Indenture") under which the Unsecured Notes are
to be issued, I am of the opinion that:
1. The Company is a corporation duly organized and
validly existing under the laws of the State of Oregon.
2. All action necessary to make the Notes legally
issued and valid and binding obligations of the Company
will have been taken when:
(a) the Company's Registration Statement on
Form S-3, as it may be amended, shall have
become effective in accordance with the
applicable provisions of the Securities Act,
and a supplement or supplements to the
Prospectus constituting a part of the
Registration Statement specifying certain
details with respect to the offering or
offerings of the Notes shall have been filed
with the Commission, and the Mortgage and
the Indenture shall have been qualified
under the Trust Indenture Act; and
(b) the Notes shall have been appropriately
issued and delivered for the consideration
contemplated by, and otherwise in conformity
with, the acts, proceedings and documents
referred to above, the authorizing
resolutions of the Board of Directors of the
Company and the orders of the Public Utility
Commission of Oregon and the Washington
Utilities and Transportation Commission
relating to the Notes.
I am a member of the bar of the State of Oregon,
but not of the State of Washington. In rendering this
opinion, I have made such reviews of the laws of the State
of Washington and had such consultations with the Company's
Washington State counsel as I believe necessary to satisfy
myself as to questions of Washington law. As to all
matters of New York law, I have relied upon an opinion of
even date herewith addressed to you by Thelen Reid & Priest
LLP which is filed as Exhibit 5(b) to the Registration
Statement.
I hereby consent to the use of this opinion as an
exhibit to the Registration Statement, as it may be
amended, and consent to such references to me as may be
made in such Registration Statement and in the Prospectus.
Very truly yours,
/s/ Mark S. Dodson
Mark S. Dodson, Esq.
Exhibit 5(b)
Thelen Reid & Priest LLP
40 West 57th Street
New York, NY 10019-4097
New York, New York
September 30, 1998
Northwest Natural Gas Company
220 N.W. Second Avenue
Portland, Oregon 97209
Ladies and Gentlemen:
With respect to the Registration Statement on
Form S-3 to be filed with the Securities and Exchange
Commission (the "Commission") on or about the date hereof
by Northwest Natural Gas Company (the "Company") for the
registration under the Securities Act of 1933, as amended
("Securities Act"), of $100,000,000 aggregate principal
amount of Secured Medium-Term Notes, Series B ("Secured
Notes") and Unsecured Medium-Term Notes, Series B
("Unsecured Notes")(the Secured Notes and the Unsecured
Notes are hereinafter collectively referred to as the
"Notes") to be issued by the Company, and for the
qualification under the Trust Indenture Act of 1939, as
amended ("Trust Indenture Act"), of the Company's Mortgage
and Deed of Trust, as supplemented ("Mortgage"), under
which the Secured Notes are to be issued, and the Company's
Indenture ("Indenture") under which the Unsecured Notes are
to be issued, we are of the opinion that:
1. The Company is a corporation duly organized and
validly existing under the laws of the State of Oregon.
2. All action necessary to make the Notes legally
issued and valid and binding obligations of the Company
will have been taken when:
(a) the Company's Registration Statement on
Form S-3, as it may be amended, shall have
become effective in accordance with the
applicable provisions of the Securities Act
and a supplement or supplements to the
Prospectus constituting a part of the
Registration Statement specifying certain
details with respect to the offering or
offerings of the Notes shall have been filed
with the Commission, and the Mortgage and
the Indenture shall have been qualified
under the Trust Indenture Act; and
(b) the Notes shall have been appropriately
issued and delivered for the consideration
contemplated by, and otherwise in conformity
with, the acts, proceedings and documents
referred to above, the authorizing
resolutions of the Board of Directors of the
Company and the orders of the Public Utility
Commission of Oregon and the Washington
Utilities and Transportation Commission
relating to the Notes.
We are members of the New York Bar and do not
hold ourselves out as experts on the laws of any other
state. As to all matters of Oregon and Washington law, we
have relied upon an opinion of even date herewith addressed
to you by Mark S. Dodson, Esq., which is filed as Exhibit
5(a) to the Registration Statement.
We hereby consent to the use of this opinion as
an exhibit to the Registration Statement, as it may be
amended, and consent to such references to our firm as may
be made in such Registration Statement and in the
Prospectus. In giving the foregoing consent, we do not
thereby admit that we belong to the category of persons
whose consent is required under Section 7 of the Securities
Act, or the rules and regulations promulgated by the
Commission thereunder.
Very truly yours,
/s/ Thelen Reid & Priest LLP
THELEN REID & PRIEST LLP
Consent of Independent Accountants
-----------------------------------
We hereby consent to the incorporation by reference in the
Prospectus constituting part of this Registration Statement on
Form S-3 of our report dated February 20, 1998 appearing on page
33 of Northwest Natural Gas Company's Annual Report on Form 10-K
for the year ended December 31, 1997. We also consent to the
reference to us under the heading "Experts" in such Prospectus.
PricewaterhouseCoopers LLP
Portland, Oregon
September 29, 1998
Exhibit 23(b)
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration
Statement 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, 1997, and to the reference to us under the heading
"Experts" in the Prospectus, which is a part of this Registration
Statement.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Portland, Oregon
September 29, 1998
Exhibit (23)(c)
STOEL RIVES LLP
---------------
ATTORNEYS
Port of Portland Building
700 NE Multnomah, Suite 950
Portland, Oregon 97232-4109
September 28, 1998
Northwest Natural Gas Company
One Pacific Square
220 NW Second Avenue
Portland, Oregon 97209
Attention: Mark S. Dodson, Esq., General Counsel
We hereby authorize and consent to the reference to Stoel
Rives LLP in the section captioned "Experts" contained in the
Registration Statement of Northwest Natural Gas Company on Form S-3,
as filed on or about the date hereof.
/s/ Stoel Rives LLP
Stoel Rives LLP
- -----------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT
OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A
TRUSTEE PURSUANT TO SECTION 305(b)(2)
-----------
------------------------------
BANKERS TRUST COMPANY
(Exact name of trustee as specified in its charter)
NEW YORK 13-4941247
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification No.)
FOUR ALBANY STREET
NEW YORK, NEW YORK 10006
(Address of principal (Zip Code)
executive offices)
BANKERS TRUST COMPANY
LEGAL DEPARTMENT
130 LIBERTY STREET, 31ST FLOOR
NEW YORK, NEW YORK 10006
(212) 250-2201
(Name, address and telephone number of agent for service)
NORTHWEST NATURAL GAS COMPANY
(Exact name of obligor as specified in its charter)
OREGON 93-0256722
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
ONE PACIFIC SQUARE
220 N. W. SECOND AVENUE
PORTLAND, OREGON 97209
(Address of principal (Zip Code)
executive offices)
FIRST MORTGAGE BONDS, DESIGNATED SECURED MEDIUM-TERM NOTES, SERIES B
(Title of the Indenture Securities)
<PAGE>
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the Trustee.
(a) Name and address of each examining or supervising
authority to which it is subject.
NAME ADDRESS
---- -------
Federal Reserve Bank (2nd District) New York, NY
Federal Deposit Insurance Corporation Washington, D.C.
New York State Banking Department Albany, NY
(b) Whether it is authorized to exercise corporate trust
powers.
Yes.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
If the obligor is an affiliate of the Trustee, describe each
such affiliation.
None.
ITEM 3.-15. NOT APPLICABLE
ITEM 16. LIST OF EXHIBITS.
EXHIBIT 1 - Restated Organization Certificate of
Bankers Trust Company dated August 7, 1990,
Certificate of Amendment of the Organization
Certificate of Bankers Trust Company dated
June 21, 1995 Incorporated herein by
reference to Exhibit 1 filed with Form T-1
Statement, Registration No. 33-65171,
Certificate of Amendment of the Organization
Certificate of Bankers Trust Company dated
March 20, 1996 - Incorporated by reference
to Exhibit 1 filed with Form T-1 Statement,
Registration No. 333-25843 and Certificate
of Amendment of the Organization Certificate
of Bankers Trust Company dated June 19, 1997
-Incorporated herein by reference to Exhibit
1 filed with Form T-1 statement,
Registration No. 333-53053.
EXHIBIT 2 - Certificate of Authority to commence
business - Incorporated herein by reference
to Exhibit 2 filed with Form T-1 Statement,
Registration No. 33-21047.
EXHIBIT 3 - Authorization of the Trustee to exercise
corporate trust powers - Incorporated herein
by reference to Exhibit 2 filed with Form
T-1 Statement, Registration No. 33-21047.
EXHIBIT 4 - Existing By-Laws of Bankers Trust
Company, as amended on November 18, 1997 -
Incorporated herein by reference to Exhibit
4 filed with Form T-1 Statement,
Registration No. 333-53053.
-2-
<PAGE>
EXHIBIT 5 - Not applicable.
EXHIBIT 6 - Consent of Bankers Trust Company
required by Section 321(b) of the Act. -
Incorporated herein by reference to Exhibit
4 filed with Form T-1 Statement,
Registration No. 22-18864.
EXHIBIT 7 - The latest report of condition of Bankers Trust
Company dated as of March 31, 1998. Copy attached.
EXHIBIT 8 - Not Applicable.
EXHIBIT 9 - Not Applicable.
-3-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Bankers Trust Company, a corporation organized and
existing under the laws of the State of New York, has duly caused this statement
of eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in The City of New York, and State of New York, on the 1st day
of September, 1998.
BANKERS TRUST COMPANY
By: /s/ Vincent Chorney
-------------------------------
Vincent Chorney
Assistant Vice President
-4-
<PAGE>
Legal Title
of Bank: Bankers Trust Company Call Date: 03/31/98 ST-BK: 36-4840 FFIEC 031
Address: 130 Liberty Street Vendor ID: D CERT: 00623 Page RC-1
City, State
ZIP: New York, NY 10006 11
FDIC Certificate
No.: | 0 | 0 | 6 | 2 | 3
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR MARCH 31, 1998
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, reported the amount outstanding as of the last business day of the
quarter.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
C400
Dollar Amounts
in Thousands RCFD Bil Mil Thou
- ------------------------------------------------------------------------------------------------- ------------------------
<S> <C> <C> <C> <C> <C>
ASSETS //////////////////
1. Cash and balances due from
depository institutions (from Schedule RC-A): //////////////////
a. Noninterest-bearing balances and currency
and coin (1) ............................... 0081 1,458,000 1.a.
b. Interest-bearing balances (2) ............... 0071 2,253,000 1.b.
2. Securities: //////////////////
a. Held-to-maturity securities (from Schedule
RC-B, column A) ....................... 1754 0 2.a.
b. Available-for-sale securities (from
Schedule RC-B, column D)...................... 1773 6,444,000 2.b.
3. Federal funds sold and securities purchased under
agreements to resell................. 1350 30,836,000 3.
4. Loans and lease financing receivables: //////////////////
a. Loans and leases, net of unearned income
(from Schedule RC-C) RCFD 2122 19,993,000 ////////////////// 4.a.
b. LESS: Allowance for loan and lease losses.....RCFD 3123 647,000 ////////////////// 4.b.
c. LESS: Allocated transfer risk reserve ........RCFD 3128 0////////////////// 4.c.
d. Loans and leases, net of unearned income, //////////////////
allowance, and reserve (item 4.a minus 4.b
and 4.c) ...................................... 2125 19,346,000 4.d.
5. Trading Assets (from schedule RC-D) ................. 3545 45,690,000 5.
6. Premises and fixed assets (including capitalized
leases) ............................................ 2145 791,000 6.
7. Other real estate owned (from Schedule RC-M) ......... 2150 184,000 7.
8. Investments in unconsolidated subsidiaries and
associated companies (from Schedule RC-M) 2130 104,000 8.
9. Customers' liability to this bank on acceptances
outstanding ......................................... 2155 542,000 9.
10. Intangible assets (from Schedule RC-M) ................ 2143 81,000 10.
11. Other assets (from Schedule RC-F) ..................... 2160 5,339,000 11.
12. Total assets (sum of items 1 through 11) .............. 2170 113,068,000 12.
</TABLE>
- --------------------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE>
Legal Title
of Bank: Bankers Trust Company Call Date: 03/31/98 ST-BK: 36-4840 FFIEC 031
Address: 130 Liberty Street Vendor ID: D CERT: 00623 Page RC-2
City, State
ZIP: New York, NY 10006 12
FDIC Certificate
No.: | 0 | 0 | 6 | 2 | 3
SCHEDULE RC--CONTINUED
<TABLE>
<CAPTION>
Dollar Amounts
in Thousands ////// Bil Mil Thou
- ------------------------------------------------------------------------------------------------- ------------------------
<S> <C> <C> <C> <C> <C>
LIABILITIES ////////////////////////
13. Deposits: ///////////////////////
a. In domestic offices (sum of totals of columns
A and C from Schedule RC-E, part I) RCON 2200 26,465,000 13.a.
(1) Noninterest-bearing(1) ..................RCON 6631 3,005,000......... /////////////////////// 13.a.(1)
(2) Interest-bearing .........................RCON 6636 23,460,000......... /////////////////////// 13.a.(2)
b. In foreign offices, Edge and Agreement
subsidiaries, and IBFs (from Schedule RC-E ///////////////////////
part II) RCFN 2200 21,993,000 13.b.
(1) Noninterest-bearing ......................RCFN 6631 1,712,000 /////////////////////// 13.b.(1)
(2) Interest-bearing ...............RCFN 6636 20,281,000 /////////////////////// 13.b.(2)
14. Federal funds purchased and securities sold under
agreements to repurchase RCFD 2800 12,125,000 14.
15. a. Demand notes issued to the U.S. Treasury ....... RCON 2840 0 15.a.
b. Trading liabilities (from Schedule RC-D)........ RCFD 3548 25,701,000 15.b.
16. Other borrowed money (includes mortgage
indebtedness and obligations under capitalized
leases): ////////////////////// /
a. With a remaining maturity of one year
or less ....................................... RCFD 2332 6,773,000 16.a.
b. With a remaining maturity of more than
one year through three years.................. A547 3,754,000 16.b.
c. With a remaining maturity of more than
three years.................................... A548 2,212,000 16.c
17. Not Applicable. ///////////////////////// 17.
18. Bank's liability on acceptances executed and
outstanding ........................................ RCFD 2920 542,000 18.
19. Subordinated notes and debentures (2)................ RCFD 3200 1,308,000 19.
20. Other liabilities (from Schedule RC-G) .............. RCFD 2930 6,135,000 20.
21. Total liabilities (sum of items 13 through 20) ...... RCFD 2948 107,008,000 21.
22. Not Applicable ///////////////////////
///////////////////////// 22.
EQUITY CAPITAL ///////////////////////
23. Perpetual preferred stock and related surplus ....... RCFD 3838 1,000,000 23.
24. Common stock ........................................ RCFD 3230 1,352,000 24.
25. Surplus (exclude all surplus related to
preferred stock) ................................... RCFD 3839 544,000 25.
26. a. Undivided profits and capital reserves ......... RCFD 3632 3,583,000 26.a.
b. Net unrealized holding gains (losses) on
available-for-sale securities ................. RCFD 8434 ( 41,000) 26.b.
27. Cumulative foreign currency translation
adjustments ..................................... RCFD 3284 ( 378,000) 27.
28. Total equity capital (sum of items 23 through
27) ................................................ RCFD 3210 6,060,000 28.
29. Total liabilities and equity capital (sum of
items 21 and 28).................................... RCFD 3300 113,068,000 29
</TABLE>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the
right the number of the statement
below that best describes the most
comprehensive level of auditing work
performed for the bank by independent
external auditors as of any date Number
------------------
during 1997....................... RCFD 6724 1 M.1
--------------- ------------------
1 = Independent audit of the bank 4 = Directors' examination of the bank
conducted in accordance with performed by other external auditors
generally accepted auditing (may be required by state chartering
standards by a certified authority)
public accounting firm which
submits a report on the bank
2 = Independent audit of the 5 = Review of the bank's financial
bank's parent holding company statements by external auditors
conducted in accordance with 6 = Compilation of the bank's financial
generally accepted auditing statements by external auditors
standards by a certified public 7 = Other audit procedures (excluding
accounting firm which tax preparation work)
submits a report on the 8 = No external audit work
consolidated holding company
(but not on the bank separately)
3 = Directors' examination of the
bank conducted in accordance
with generally accepted auditing
standards by a certified public
accounting firm (may be required
by state chartering authority)
- ----------------------
(1) Including total demand deposits and noninterest-bearing time and
savings deposits.
(2) Includes limited-life preferred stock and related surplus.
-----------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM T-2
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT
OF 1939 OF AN INDIVIDUAL DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A
TRUSTEE PURSUANT TO SECTION 305(b)(2)
------------------
------------------------------
STANLEY BURG ###-##-####
(Name of Trustee) (Social Security Number)
FOUR ALBANY STREET
NEW YORK, NEW YORK 10006
(Business address: street, city, (Zip Code)
and state)
NORTHWEST NATURAL GAS COMPANY
(Exact name of obligor as specified in its charter)
OREGON 93-0256722
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
ONE PACIFIC SQUARE
220 N. W. SECOND AVENUE
PORTLAND, OREGON 97209
(Address of principal (Zip Code)
executive offices)
FIRST MORTGAGE BONDS, Designated Secured
Medium-Term Notes, Series B (Title of indenture securities)
<PAGE>
Item 1. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
Item 11. List of Exhibits.
List below all exhibits filed as part of this statement of
eligibility.
None
Pursuant to the requirements of the Trust Indenture Act of 1939, I
Stanley Burg, have signed this statement of eligibility in the City of
New York and State of New York, on September 3, 1998.
/s/ Stanley Burg
---------------------------
(Signature of Trustee)
Stanley Burg
- -----------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE
PURSUANT TO SECTION 305(b)(2)
-----------
------------------------------
BANKERS TRUST COMPANY
(Exact name of trustee as specified in its charter)
NEW YORK 13-4941247
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification No.)
FOUR ALBANY STREET
NEW YORK, NEW YORK 10006
(Address of principal (Zip Code)
executive offices)
BANKERS TRUST COMPANY
LEGAL DEPARTMENT
130 LIBERTY STREET, 31ST FLOOR
NEW YORK, NEW YORK 10006
(212) 250-2201
(Name, address and telephone number of agent for service)
NORTHWEST NATURAL GAS COMPANY
(Exact name of obligor as specified in its charter)
OREGON 93-0256722
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
ONE PACIFIC SQUARE
220 N. W. SECOND AVENUE
PORTLAND, OREGON 97209
(Address of principal (Zip Code)
executive offices)
DEBT SECURITIES, DESIGNATED UNSECURED MEDIUM-TERM NOTES, SERIES B
(Title of the Indenture Securities)
<PAGE>
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the Trustee.
(a) Name and address of each examining or supervising
authority to which it is subject.
NAME ADDRESS
---- -------
Federal Reserve Bank (2nd District) New York, NY
Federal Deposit Insurance Corporation Washington, D.C.
New York State Banking Department Albany, NY
(b) Whether it is authorized to exercise corporate trust
powers.
Yes.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
If the obligor is an affiliate of the Trustee, describe each
such affiliation.
None.
ITEM 3. -15. NOT APPLICABLE
ITEM 16. LIST OF EXHIBITS.
EXHIBIT 1 - Restated Organization Certificate of
Bankers Trust Company dated August 7, 1990,
Certificate of Amendment of the Organization
Certificate of Bankers Trust Company dated
June 21, 1995 Incorporated herein by
reference to Exhibit 1 filed with Form T-1
Statement, Registration No. 33-65171,
Certificate of Amendment of the Organization
Certificate of Bankers Trust Company dated
March 20, 1996 - Incorporated by reference
to Exhibit 1 filed with Form T-1 Statement,
Registration No. 333-25843 and Certificate
of Amendment of the Organization Certificate
of Bankers Trust Company dated June 19, 1997
-Incorporated herein by reference to Exhibit
1 filed with Form T-1 statement,
Registration No. 333-53053.
EXHIBIT 2 - Certificate of Authority to commence
business - Incorporated herein by reference
to Exhibit 2 filed with Form T-1 Statement,
Registration No. 33-21047.
EXHIBIT 3 - Authorization of the Trustee to exercise
corporate trust powers - Incorporated herein
by reference to Exhibit 2 filed with Form
T-1 Statement, Registration No. 33-21047.
EXHIBIT 4 - Existing By-Laws of Bankers Trust
Company, as amended on November 18, 1997 -
Incorporated herein by reference to Exhibit
4 filed with Form T-1 Statement,
Registration No. 333-53053.
-2-
<PAGE>
EXHIBIT 5 - Not applicable.
EXHIBIT 6 - Consent of Bankers Trust Company
required by Section 321(b) of the Act. -
Incorporated herein by reference to Exhibit
4 filed with Form T-1 Statement,
Registration No. 22-18864.
EXHIBIT 7 - The latest report of condition of Bankers Trust
Company dated as of March 31, 1998. Copy
attached.
EXHIBIT 8 - Not Applicable.
EXHIBIT 9 - Not Applicable.
-3-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Bankers Trust Company, a corporation organized and
existing under the laws of the State of New York, has duly caused this statement
of eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in The City of New York, and State of New York, on the 1st day
of September, 1998.
BANKERS TRUST COMPANY
By: /s/ Vincent Chorney
-------------------------------
Vincent Chorney
Assistant Vice President
-4-
<PAGE>
Legal Title
of Bank: Bankers Trust Company Call Date: 03/31/98 ST-BK: 36-4840 FFIEC 031
Address: 130 Liberty Street Vendor ID: D CERT: 00623 Page RC-1
City, State
ZIP: New York, NY 10006 11
FDIC Certificate
No.: | 0 | 0 | 6 | 2 | 3
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR MARCH 31, 1998
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, reported the amount outstanding as of the last business day of the
quarter.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
C400
Dollar Amounts
in Thousands RCFD Bil Mil Thou
- ------------------------------------------------------------------------------------------------- -------------------
<S> <C> <C> <C> <C> <C>
ASSETS //////////////////
1. Cash and balances due from
depository institutions (from Schedule RC-A): //////////////////
a. Noninterest-bearing balances and currency
and coin (1) ............................... 0081 1,458,000 1.a.
b. Interest-bearing balances (2) ............... 0071 2,253,000 1.b.
2. Securities: //////////////////
a. Held-to-maturity securities (from Schedule
RC-B, column A) ....................... 1754 0 2.a.
b. Available-for-sale securities (from
Schedule RC-B, column D)...................... 1773 6,444,000 2.b.
3. Federal funds sold and securities purchased under
agreements to resell................. 1350 30,836,000 3.
4. Loans and lease financing receivables: //////////////////
a. Loans and leases, net of unearned income
(from Schedule RC-C) RCFD 2122 19,993,000 ////////////////// 4.a.
b. LESS: Allowance for loan and lease losses.....RCFD 3123 647,000 ////////////////// 4.b.
c. LESS: Allocated transfer risk reserve ........RCFD 3128 0////////////////// 4.c.
d. Loans and leases, net of unearned income, //////////////////
allowance, and reserve (item 4.a minus 4.b
and 4.c) ...................................... 2125 19,346,000 4.d.
5. Trading Assets (from schedule RC-D) ................. 3545 45,690,000 5.
6. Premises and fixed assets (including capitalized
leases) ............................................. 2145 791,000 6.
7. Other real estate owned (from Schedule RC-M) ......... 2150 184,000 7.
8. Investments in unconsolidated subsidiaries and
associated companies (from Schedule RC-M) ........... 2130 104,000 8.
9. Customers' liability to this bank on acceptances
outstanding ......................................... 2155 542,000 9.
10. Intangible assets (from Schedule RC-M) ............... 2143 81,000 10.
11. Other assets (from Schedule RC-F) .................... 2160 5,339,000 11.
12. Total assets (sum of items 1 through 11) ............. 2170 113,068,000 12.
</TABLE>
- --------------------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE>
Legal Title
of Bank: Bankers Trust Company Call Date: 03/31/98 ST-BK: 36-4840 FFIEC 031
Address: 130 Liberty Street Vendor ID: D CERT: 00623 Page RC-2
City, State
ZIP: New York, NY 10006 12
FDIC Certificate
No.: | 0 | 0 | 6 | 2 | 3
SCHEDULE RC--CONTINUED
<TABLE>
<CAPTION>
Dollar Amounts
in Thousands ////// Bil Mil Thou
- ------------------------------------------------------------------------------------------------- -------------------
<S> <C> <C> <C> <C> <C>
LIABILITIES ////////////////////////
13. Deposits: ///////////////////////
a. In domestic offices (sum of totals of columns
A and C from Schedule RC-E, part I) RCON 2200 26,465,000 13.a.
(1) Noninterest-bearing(1) ..................RCON 6631 3,005,000......... /////////////////////// 13.a.(1)
(2) Interest-bearing .........................RCON 6636 23,460,000......... /////////////////////// 13.a.(2)
b. In foreign offices, Edge and Agreement
subsidiaries, and IBFs (from Schedule RC-E ///////////////////////
part II) RCFN 2200 21,993,000 13.b.
(1) Noninterest-bearing ......................RCFN 6631 1,712,000 /////////////////////// 13.b.(1)
(2) Interest-bearing ...............RCFN 6636 20,281,000 /////////////////////// 13.b.(2)
14. Federal funds purchased and securities sold under
agreements to repurchase RCFD 2800 12,125,000 14.
15. a. Demand notes issued to the U.S. Treasury ....... RCON 2840 0 15.a.
b. Trading liabilities (from Schedule RC-D)........ RCFD 3548 25,701,000 15.b.
16. Other borrowed money (includes mortgage
indebtedness and obligations under capitalized
leases): ////////////////////// /
a. With a remaining maturity of one year
or less ....................................... RCFD 2332 6,773,000 16.a.
b. With a remaining maturity of more than
one year through three years.................. A547 3,754,000 16.b.
c. With a remaining maturity of more than
three years.................................... A548 2,212,000 16.c
17. Not Applicable. ///////////////////////// 17.
18. Bank's liability on acceptances executed and
outstanding ........................................ RCFD 2920 542,000 18.
19. Subordinated notes and debentures (2)................ RCFD 3200 1,308,000 19.
20. Other liabilities (from Schedule RC-G) .............. RCFD 2930 6,135,000 20.
21. Total liabilities (sum of items 13 through 20) ...... RCFD 2948 107,008,000 21.
22. Not Applicable ///////////////////////
///////////////////////// 22.
EQUITY CAPITAL ///////////////////////
23. Perpetual preferred stock and related surplus ....... RCFD 3838 1,000,000 23.
24. Common stock ........................................ RCFD 3230 1,352,000 24.
25. Surplus (exclude all surplus related to
preferred stock) ................................... RCFD 3839 544,000 25.
26. a. Undivided profits and capital reserves ......... RCFD 3632 3,583,000 26.a.
b. Net unrealized holding gains (losses) on
available-for-sale securities ................. RCFD 8434 ( 41,000) 26.b.
27. Cumulative foreign currency translation
adjustments ..................................... RCFD 3284 ( 378,000) 27.
28. Total equity capital (sum of items 23 through
27) ................................................ RCFD 3210 6,060,000 28.
29. Total liabilities and equity capital (sum of
items 21 and 28).................................... RCFD 3300 113,068,000 29
</TABLE>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the
right the number of the statement
below that best describes the most
comprehensive level of auditing work
performed for the bank by independent
external auditors as of any date Number
------------------
during 1997....................... RCFD 6724 1 M.1
--------------- ------------------
1 = Independent audit of the bank 4 = Directors' examination of the bank
conducted in accordance with performed by other external auditors
generally accepted auditing (may be required by state chartering
standards by a certified authority)
public accounting firm which
submits a report on the bank
2 = Independent audit of the 5 = Review of the bank's financial
bank's parent holding company statements by external auditors
conducted in accordance with 6 = Compilation of the bank's financial
generally accepted auditing statements by external auditors
standards by a certified public 7 = Other audit procedures (excluding
accounting firm which tax preparation work)
submits a report on the 8 = No external audit work
consolidated holding company
(but not on the bank separately)
3 = Directors' examination of the
bank conducted in accordance
with generally accepted auditing
standards by a certified public
accounting firm (may be required
by state chartering authority)
- ----------------------
(1) Including total demand deposits and noninterest-bearing time and
savings deposits.
(2) Includes limited-life preferred stock and related surplus.
