EXHIBIT 1
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Northwest Natural Gas Company
$165,000,000
Medium-Term Notes, Series B
Distribution Agreement
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__________, 1996
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
North Tower
New York, New York 10281
PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
Dear Sirs:
Northwest Natural Gas Company, an Oregon corporation (the
"Company"), proposes to issue and sell from time-to-time not to exceed
$165,000,000 of its First Mortgage Bonds, designated Secured Medium-
Term Notes, Series B (the "Secured Notes"), and its Unsecured Medium-
Term Notes, Series B (the "Unsecured Notes", and, together with the
Secured Notes, the "Securities"). The Secured Notes will be issued
under the Company's Mortgage and Deed of Trust, dated as of July 1,
1946, to Bankers Trust Company (the "Mortgage Trustee" or the
"Trustee") and R.G. Page (Stanley Burg, successor), as trustees, as
supplemented (such Mortgage and Deed of Trust as supplemented being
hereinafter referred to as the "Mortgage" or the "Indenture"). The
Unsecured Notes will be issued under an indenture, dated as of June 1,
1991 (the "Note Indenture" or the "Indenture"), between the Company
and Bankers Trust Company, as trustee (the "Indenture Trustee" or the
"Trustee"). The Securities shall have the maturities, interest rates,
if any, redemption provisions and other terms set forth in the
Prospectus referred to below, as it may be amended or supplemented
from time-to-time. The Securities will be issued, and the terms
thereof established, from time-to-time, by the Company in accordance
with the respective Indentures.
The Company represents, warrants, covenants and agrees with
each of you and with each other person which shall become a party to
this agreement (individually, an "Agent", and collectively, the
"Agents") and each Agent, severally and not jointly, covenants and
agrees with the Company as follows:
1. Representations and Warranties of the Company.
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The Company represents and warrants to each Agent that:
(a) The Company is a corporation duly organized and validly
existing in good standing under the laws of the State of Oregon,
and is qualified to do business and is in good standing as a
foreign corporation in the State of Washington, with power
(corporate and other) to own its properties and conduct its
business as described in the Prospectus referred to below.
(b) An initial registration statement on Form S-3
(Registration No. 33-64014) (the "Initial Registration
Statement") in respect of $150,000,000 aggregate principal amount
of the Company's First Mortgage Bonds designated Secured Medium-
Term Notes Series B, and Unsecured Medium-Term Notes Series B (of
which $15,000,000 remain unsold on the date hereof) has been
filed with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the
"Act"), in the form heretofore delivered (excluding the exhibits
thereto but including the documents incorporated by reference in
the prospectus included therein) to such Agent, and such Initial
Registration Statement in such form has been declared effective
by the Commission and no stop order suspending its effectiveness
has been issued and no proceeding for that purpose has been
initiated or threatened by the Commission. A subsequent
registration statement on Form S-3 (Registration No. 333-
___________) (the "Subsequent Registration Statement") in respect
of an additional $150,000,000 aggregate principal amount of the
Securities has been filed with the Commission under the Act, in
the form heretofore delivered or to be delivered (excluding the
exhibits thereto but including the documents incorporated by
reference in the prospectus included therein) to such Agent, and
such Subsequent Registration Statement in such form has been
declared effective by the Commission and no stop order suspending
its effectiveness has been issued and no proceeding for that
purpose has been initiated or threatened by the Commission (any
preliminary prospectus included in the Subsequent Registration
Statement being hereinafter called a "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 incorporated
therein by reference as of the date of such Preliminary
Prospectus or Prospectus; any reference to any amendment or
supplement to any Preliminary Prospectus or Prospectus, including
any supplement to the Prospectus that sets forth only the terms
of a particular issue of the Securities (a "Pricing Supplement"),
shall be deemed to refer to and include the documents filed by
the Company under the Exchange Act and incorporated therein by
reference as of the date of such amendment or Pricing Supplement;
and any reference to the Prospectus as amended or supplemented
shall be deemed to refer to and include the Prospectus as then
amended or supplemented (including the applicable Pricing
Supplement) in relation to a particular issue of Securities, in
the form filed with the Commission pursuant to Rule 424(b) under
the Act, including any documents filed by the Company under the
Exchange Act and incorporated therein by reference as of the date
of such amendment or supplement.
(c) The documents incorporated by reference in the
Prospectus, when filed with the Commission or, if later, when
they became effective, conformed in all material respects with
the requirements of the Act or the Exchange Act, as applicable,
and the applicable rules and regulations of the Commission there-
under; 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
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Company makes no representations or warranties as to information
contained in or omitted from the Prospectus as amended or
supplemented in reliance upon and in conformity with information
furnished in writing to the Company by any Agent specifically for
use therein;
(d) The Initial Registration Statement and the Subsequent
Registration Statement when each became effective conformed, and
the Prospectus conforms, and any amendment or supplement thereto
will conform, in all material respects, with the provisions of
the Act and the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"), and the rules and regulations of the
Commission thereunder; and the Initial Registration Statement and
the Subsequent Registration Statement when each became effective
did not, the Prospectus does not (and on each of the dates
referred to in clause (i) of Section 6 will not) and any
amendment or supplement to the Prospectus, as of its date and on
each of the dates referred to in clause (i) of Section 6, will
not, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary
to make the statements therein not misleading; provided, however,
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that the Company makes no representations or warranties as to
information contained in or omitted from any such document in
reliance upon and in conformity with information furnished in
writing to the Company by any Agent specifically for use therein;
(e) Except as set forth in or contemplated by the
Prospectus, since the date as of which information is given in
the Prospectus (i) there has not been any material adverse change
in the condition of the Company and its subsidiaries taken as a
whole, financial or otherwise, (ii) there has not been any
transaction entered into by the Company or any of its
subsidiaries which is material to the Company and its
subsidiaries taken as a whole, other than transactions in the
ordinary course of business, and (iii) neither the Company nor
any of its subsidiaries has incurred any contingent obligation
which is material to the Company and its subsidiaries taken as a
whole;
(f) The Securities have been duly authorized, and, when
issued pursuant to their respective Indentures and delivered
pursuant to this Agreement and any Terms Agreement (as defined in
Section 3 hereof), will have been duly executed, authenticated,
issued and delivered, will constitute valid and legally binding
obligations of the Company, enforceable in accordance with their
terms, except as their enforceability may be limited by laws and
principles of equity relating to or affecting generally the
enforcement of creditors' rights, including without limitation,
bankruptcy and insolvency laws, and will be entitled to the
benefits provided by their respective Indentures (which will be
substantially in the form filed as exhibits to the Subsequent
Registration Statement); the Indentures have been duly authorized
and qualified under the Trust Indenture Act, 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 instrument to which the Company is a party or by
which the Company is bound or to which any of the property of the
Company is subject, nor will such action result in any violation
of the provisions of any statute or the Restated Articles of
Incorporation, as amended, or the Bylaws, as amended, of the
Company or any order, rule or regulation of any court or any
regulatory authority or other governmental agency or body having
jurisdiction over the Company or any of its properties; and no
consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body
is required for the solicitation of offers to purchase Securities
and the issue and sale of the Securities or the consummation by
the Company of the other transactions contemplated by the
Indentures, this Agreement or any Terms Agreement, except such as
have been obtained at or prior to the Commencement Date (as
defined in Section 4 hereof), will have been obtained under the
Act, the Trust Indenture Act and the public utility laws of the
States of Oregon and Washington and such as may be required under
state securities or Blue Sky laws in connection with the
solicitation by such Agent of offers to purchase Securities from
the Company and with purchases of Securities by such Agent as
principal, as the case may be, in each case in the manner
contemplated hereby; provided, however, that further
authorization must be obtained by the Company under the public
utility laws of the States of Oregon and Washington prior to any
sale of any Security to an Agent, as principal; and
(h) Other than as set forth or contemplated in the
Prospectus, there are no legal or governmental proceedings
pending to which the Company is a party or to which any property
of the Company is subject, which, if determined adversely to the
Company, would individually or in the aggregate have a material
adverse effect on the consolidated financial position,
stockholders' equity or consolidated results of operations of the
Company, and, to the best of the Company's knowledge, no such
proceedings are threatened.
2. Obligations of the Agents and the Company.
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(a) Subject to the terms and conditions hereof and to the
reservation by the Company of the right to sell Securities
directly on its own behalf, the Company hereby (i) appoints each
of Merrill Lynch & Co., Merrill Lynch, Pierce Fenner & Smith
Incorporated and PaineWebber Incorporated as an agent of the
Company for the purpose of soliciting and receiving offers to
purchase Securities from the Company and (ii) reserves the right,
from time to time, to appoint additional agents for the purpose
of soliciting and receiving offers to purchase Securities from
the Company; provided that each such additional agent shall be
required to become a party to this Agreement and undertake the
obligations of an Agent hereunder pursuant to an Additional Agent
Appointment Agreement ("Additional Agent Appointment Agreement")
substantially in the form of Exhibit 1 hereto.
(b) On the basis of the representations and warranties
herein, and subject to the terms and conditions hereof, each of
the Agents, as agent of the Company, severally and not jointly,
agrees to use its reasonable best efforts to solicit and receive
offers to purchase particular issues of the Securities from the
Company upon the terms and conditions set forth in the Prospectus
as amended or supplemented with respect thereto. Each Agent will
promptly advise the Company by telephone or other appropriate
means of all reasonable offers to purchase Securities, other than
those rejected by such Agent. The Company shall not, without the
consent of each Agent, which consent shall not unreasonably be
withheld, solicit or accept offers to purchase, or sell, any debt
securities with a maturity, at the time of original issuance, of
from nine months to 30 years, except (i) pursuant to this
Agreement, (ii) pursuant to a private placement not constituting
a public offering under the Act, or (iii) in connection with a
firm commitment underwriting pursuant to an underwriting
agreement that does not provide for a continuous offering.
However, the Company, subject to Section 5(f) hereof, reserves
the right to sell, and may solicit and accept offers to purchase,
Securities directly on its own behalf, and, in the case of any
such sale not resulting from a solicitation made by an Agent, no
commission will be payable with respect to such sale.
(c) Procedural details relating to the issue and delivery
of Securities, the solicitation of offers to purchase Securities
and the payment therefor, unless an Agent and the Company shall
otherwise agree, shall be as set forth in the Administrative
Procedure attached hereto as Annex I (the "Administrative
Procedure"). The provisions of the Administrative Procedure
shall apply to all transactions contemplated hereunder other than
those made pursuant to a Terms Agreement. Each Agent and the
Company shall perform the respective duties and obligations
specifically provided to be performed by each of them in the
Administrative Procedure. The Company will furnish to the
Trustees a copy of the Administrative Procedure as from time to
time in effect.
(d) The Company reserves the right, in its sole discretion,
to instruct the Agents to suspend, at any time, for any period of
time or permanently, the solicitation of offers to purchase the
Securities. As soon as practicable, but in any event not later
than one business day after receipt of notice from the Company,
the Agents will suspend solicitation of offers to purchase
Securities from the Company until such time as the Company has
advised the Agents that such solicitation may be resumed.
(e) The Company agrees to pay each Agent a commission, at
the time of settlement (each a "Settlement Date") of any sale of
a Security by the Company as a result of a solicitation made by
such Agent, in an amount equal to the following applicable
percentage of the principal amount of such Security sold:
Commission
(percentage of
aggregate
principal amount
Range of Maturities of Securities sold)
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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.
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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.
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At 11:00 a.m., New York City time, on the date of this Agreement or at
such later date and time as may be agreed upon between the Agents and
the Company not later than the day prior to the earlier of the day on
which the solicitation of offers to purchase Securities is to begin or
on which any Terms Agreement shall be executed (such time and date
being referred to herein as the "Commencement Date"), the Agents shall
be furnished at the offices of Reid & Priest LLP, 40 West 57th Street,
New York, New York:
(a) An opinion of Simpson Thacher & Bartlett (a partnership
which includes professional corporations), counsel to the Agents,
dated the Commencement Date, with respect to such matters as such
Agents may reasonably request, which opinion may rely, as to all
matters governed by Oregon and Washington law, upon the opinion
of Bruce B. Samson, Esq., General Counsel for the Company,
referred to in Section 4(b) hereof;
(b) An opinion of Bruce B. Samson, Esq., dated the
Commencement Date, in form and substance reasonably satisfactory
to such Agents, to the effect set forth in Annex III, which
opinion may rely, as to all matters governed by New York law,
upon the opinion of Reid & Priest LLP referred to in Section 4(c)
hereof;
(c) An opinion of Reid & Priest LLP, dated the Commencement
Date, in form and substance reasonably satisfactory to such
Agents, to the effect set forth in Annex IV, which opinion may
rely, as to all matters governed by Oregon and Washington law,
upon the opinion of Bruce B. Samson, Esq., referred to in Section
4(b) hereof;
(d) A letter from 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 V hereto; and
(e) A certificate of the President or any Vice President of
the Company, dated the Commencement Date, in form reasonably
satisfactory to such Agents, (i) as to the accuracy of the
representations and warranties of the Company herein at and as of
the Commencement Date, (ii) as to the performance by the Company
in all material respects of all of its obligations hereunder to
be performed at or prior to the Commencement Date, (iii) as to
the matters set forth in Section 1(e) hereof, (iv) as to the
absence of any stop order of the Commission suspending the
effectiveness of the Registration Statement or any pending or
contemplated proceedings for such purpose, (v) as to the full
force and effect of the authorizing orders of the Public Utility
Commission of Oregon and the Washington Utilities and
Transportation Commission referred to in Section 7(a) hereof, and
(vi) as to such other matters as such Agents may reasonably
request.
5. Covenants of the Company.
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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 disap-
prove 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 suspen-
sion 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
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Company shall not be required to qualify as a foreign corporation
or to file a general consent to service of process in any juris-
diction, or to comply with any other requirement reasonably
deemed by the Company to be unduly burdensome;
(c) To furnish such Agent with copies of the Registration
Statement, each amendment thereto, the Prospectus and each
amendment or supplement thereto, other than any Pricing
Supplement (except as provided in the Administrative Procedure),
in the form in which it is filed with the Commission pursuant to
Rule 424(b) under the Act, and with copies of the documents
incorporated by reference therein (other than exhibits
incorporated by reference in the Registration Statement), each in
such quantities as such Agent may reasonably request from time-
to-time; and, if the delivery of a prospectus is required at any
time in connection with the offering or sale of the Securities to
or through an Agent pursuant to this Agreement and if, at such
time, any event shall have occurred as a result of which the
Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading, or, if for any other reason it shall be necessary
during such period to amend or supplement the Prospectus or to
file under the Exchange Act any document incorporated by
reference in the Prospectus in order to comply with the Act, the
Exchange Act or the Trust Indenture Act, to notify such Agent and
request such Agent, in its capacity as agent of the Company, to
suspend solicitation of offers to purchase Securities from the
Company (and, if so notified, such Agent shall cease such
solicitations as soon as practicable, but in any event not later
than one business day later); and if the Company shall decide to
amend or supplement the Registration Statement or the Prospectus,
to so advise such Agent promptly by telephone (confirmed in
writing) and to prepare and cause to be filed promptly with the
Commission an amendment or supplement to the Registration
Statement or the Prospectus or to file any document incorporated
by reference in the Prospectus that will correct such statement
or omission or effect such compliance; provided that, (i) should
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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 Securities relating to such acceptance or
as of the Time of Delivery relating to such sale, as the case may
be, as though made as of such date (except that such 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 satisfactory to the Company, the Company shall furnish
to such counsel such papers and information as they may
reasonably request to enable them to furnish to such Agent a
letter in form reasonably satisfactory to such Agent, to the
effect that such Agent may rely on the opinion of such counsel
referred to in Section 4(a) hereof, to the same extent as though
it was dated the date of such letter (except that the statements
in such opinion shall be deemed to relate to the Registration
Statement and the Prospectus as amended and supplemented to the
date of such letter), or in lieu of such a letter, an opinion of
the same tenor as the opinion of such counsel referred to in
Section 4(a) hereof, but modified to relate to the Registration
Statement and the Prospectus as amended and 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 Bruce B. Samson, Esq., General Counsel
for the Company, or his successor, dated the date of
such amendment, supplement, incorporation or Time of
Delivery relating to such sale, as the case may be, in
form reasonably satisfactory to such Agent, to the
effect that such Agent may rely on the opinion of such
counsel referred to in Section 4(b) hereof to the same
extent as though it were dated the date of such letter
(except that the statements in such opinion shall be
deemed to relate to the Registration Statement and the
Prospectus as amended and supplemented to the date of
such letter, excluding all documents filed by the
Company under the Exchange Act and incorporated by
reference into the Registration Statement and
Prospectus during or prior to the fiscal year which is
the subject of the Company's most recent Annual Report
on Form 10-K) or, in lieu of such a letter, an opinion
of the same tenor as the opinion of such counsel
referred to in Section 4(b) hereof, but modified to
relate to the Registration Statement and the Prospectus
as so amended and supplemented to such date;
(ii) a letter of Reid & Priest LLP, New York, New York,
counsel for the Company, or other counsel for the
Company reasonably satisfactory to such Agent, dated
the date of such amendment, supplement, incorporation
or Time of Delivery relating to such sale, as the case
may be, in form reasonably satisfactory to such Agent,
to the effect that such Agent may rely on the opinion
of such counsel referred to in Section 4(c) hereof to
the same extent as though it were dated the date of
such letter (except that the statements in such opinion
shall be deemed to relate to the Registration Statement
and the Prospectus as amended and supplemented to the
date of such letter, excluding, in the case of the
statements in the paragraph next following paragraph 10
of such opinion, all documents filed by the Company
under the Exchange Act and incorporated by reference
into the Registration Statement and the Prospectus
during or prior to the fiscal year which is the subject
of the Company's most recent Annual Report on Form 10-
K) or, in lieu of such letter, an opinion of the same
tenor as the opinion of such counsel referred to in
Section 4(c) hereof, but modified to relate to the
Registration Statement and the Prospectus as so amended
and supplemented to such date; and
(iii) a certificate executed by the President or any Vice
President of the Company, dated the date of such
supplement, amendment, incorporation or Time of
Delivery relating to such sale, as the case may be, in
such form as shall be reasonably satisfactory to such
Agent, to the effect that the statements contained in
the certificate referred to in Section 4(e) hereof are
true and correct at such date as though made as of such
date (except that such statements shall be deemed to
relate to the Registration Statement and the Prospectus
as amended and supplemented to such date) or, in lieu
of such certificate, a certificate of the same tenor as
the certificate referred to in Section 4(e) hereof, but
modified to relate to the Registration Statement and
the Prospectus as amended and supplemented to such
date; and
(j) That each time that (x) the Registration Statement or
the Prospectus shall be amended or supplemented to include
additional financial information (unless waived by the Agents),
and (y) the Company sells Securities to such Agent as principal
pursuant to a Terms Agreement or other agreement and such Terms
Agreement or other agreement specifies the delivery of a letter
under this Section 5(j) as a condition to the purchase of
Securities pursuant to such Terms Agreement or other agreement,
and subject to compliance with the requirements of SAS issued by
the American Institute of Certified Public Accountants, the
Company shall furnish or cause to be furnished to such Agent a
letter of Deloitte & Touche 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(d) hereof to the same extent as though it were dated
the date of such subsequent letter (except the statements in such
former letter shall be deemed to relate to the financial
statements included or incorporated in the Registration Statement
and Prospectus as amended and supplemented to the date of such
latter letter), or, in lieu of such latter letter, a letter of
the same tenor as the letter referred to in Section 4(d) hereof,
but modified to relate to the Registration Statement and the
Prospectus as amended or supplemented to the date of such letter,
with such changes as may be necessary to reflect changes in the
financial statements and other information derived from the
accounting records of the Company, to the extent such financial
statements and other information are available as of a date not
more than five business days prior to the date of such letter;
(k) To offer to any person who has agreed to purchase
Securities as the result of an offer to purchase solicited by
such Agent, as agent, the right to refuse to purchase and pay for
such Securities if, at the Settlement Date for such Securities,
any condition set forth in Section 6 hereof shall not have been
satisfied (it being understood that the judgment of such person
with respect to the impracticability or inadvisability of such
purchase of Securities shall be substituted, for purposes of this
Section 5(k), for the judgment of such Agent with respect
thereto); and
(l) To pay or cause to be paid the following: (i) the fees
and expenses of the Company's counsel and accountants in
connection with the registration of the Securities under the Act
and all other expenses in connection with the preparation,
printing and filing of the Registration Statement, any
Preliminary Prospectus, the Prospectus and any Pricing Supple-
ments and all other amendments and supplements thereto and the
mailing and delivering of copies thereof to such Agent; (ii) the
fees and expenses of counsel for the Agents in connection with
the establishment of the program contemplated hereby, any
opinions to be rendered by such counsel hereunder and the
transactions contemplated hereunder; (iii) the cost of preparing
this Agreement, any Terms Agreement and any other documents
approved by the Company in connection with the offering,
purchase, sale and delivery of the Securities; (iv) the fees, not
to exceed $5,000, and expenses of counsel for the Agents in
connection with the qualification of the Securities for offering
and sale under state securities laws as provided in Section 5(b)
hereof and the preparation of any blue sky and legal investment
memoranda; (v) any fees charged by securities rating services for
rating the Securities; (vi) any filing fees incident to any
required review by the National Association of Securities
Dealers, Inc. of the terms of the sale of the Securities; (vii)
the cost of preparing the Securities; (viii) the fees and
expenses of the Trustees and any agent of any Trustee and any
transfer or paying agent of the Company and the fees and
disbursements of counsel for any Trustee or any such agent in
connection with any Indenture and the Securities; (ix) any
advertising expenses connected with the solicitation of offers to
purchase and the sale of Securities so long as such advertising
expenses have been approved by the Company; and (x) all other
costs and expenses incident to the performance of the Company's
obligations hereunder which are not otherwise specifically
provided for in this Section; provided, however, that, except as
provided in Sections 8 and 9 hereof, such Agent shall pay all
other expenses it incurs, including any expenses that may be
incurred by it or for its account pursuant to the proviso of
Section 5(c) hereof.
6. Conditions to Agents' Obligations. The obligation of an
---------------------------------
Agent, as agent of the Company, at any time (each a "Solicitation
Time"), to solicit offers to purchase the Securities and the
obligation of an Agent to purchase Securities as principal, pursuant
to a Terms Agreement or otherwise, shall be subject, in such Agent's
discretion, to the conditions that: (i) all of the representations
and warranties of the Company herein (and, in the case of an
obligation of an Agent under a Terms Agreement or other agreement with
an Agent to purchase Securities as principal, in or incorporated in
such agreement by reference) were true and correct (A) on the Com-
mencement 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 Solicita-
tion Time or such Time of Delivery, as the case may be, the Company
shall have performed all of its obligations hereunder theretofore to
be performed, (iii) all requests for additional information on the
part of the Commission shall have been complied with to the reasonable
satisfaction of such Agent, (iv) there shall be in full force and
effect orders of the Public Utility Commission of Oregon and the
Washington Utilities and Transportation Commission which are
acceptable to the Agents and which permit the issuance and sale of the
Securities substantially in accordance with the terms and conditions
of this Agreement, (v) no stop order suspending the effectiveness of
the Registration Statement shall have been issued and no proceedings
for that purpose shall be pending before, or to the knowledge of the
Company contemplated by, the Commission, and (vi) there shall not have
occurred: (A) a suspension or material limitation of trading in
securities generally on the New York Stock Exchange; (B) a general
moratorium on commercial banking activities in New York declared by
either Federal or New York State authorities; (C) an engagement by the
United States in hostilities or any escalation of hostilities, the
effect of which, in the judgment of such Agent, makes it impracticable
or inadvisable to proceed with the solicitation of offers to purchase
Securities or the purchase of Securities from the Company as principal
on the terms and in the manner contemplated by this Agreement and, if
applicable, any Terms Agreement or other agreement; or (D) any down-
grading, 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 reli-
ance 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.
(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 represent the indemnified parties, and
after notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party
under such Section for any legal expenses of other counsel or any
other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. Each indemnified party
may also participate at its own expense in the defense of any
such action. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement
of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity
could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the
subject matter of such proceeding.
(d) If the indemnification provided for in Section 8(a) or
Section 8(b) hereof is unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, claims,
damages or liabilities (or actions in respect thereof) referred
to therein, then each indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of
such losses, claims, damages or liabilities (or actions in
respect thereof) in such proportion as is appropriate to reflect
any relevant equitable considerations including the relative
fault of the Company on the one hand and each Agent on the other
in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities (or actions in
respect thereof), and relative benefit of the Company on the one
hand and each Agent on the other. Relative fault shall be
determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact required to
be stated therein or necessary in order to make the statements
therein not misleading relates to information supplied by the
Company on the one hand or by any Agent on the other and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The relative benefits received by the Company on the one hand and
each Agent on the other shall be deemed to be in the same
proportion as the total net proceeds from the sale of Securities
(before deducting expenses) received by the Company bear to the
total commissions or discounts received by such Agent in respect
thereof. The Company and each Agent agree that it would not be
just and equitable if contribution pursuant to this Section 8(d)
were determined (i) with respect only to any losses, claims,
damages or liabilities referred to in Section 8(a) hereof, by per
capita allocation (even if all Agents were treated as one entity
for such purpose) or (ii) by any method of allocation which does
not take account of the equitable considerations referred to
above in this Section 8(d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in
this Section 8(d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connec-
tion with investigating or defending any such action or claim.
No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such
fraudulent misrepresentation. The obligations of each of the
Agents under this Section 8(d) to contribute are several and are
not joint.
(e) The obligations of the Company under this Section 8
shall be in addition to any liability which the Company may
otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any Agent within
the meaning of the Act. The obligations of each Agent under this
Section 8 shall be in addition to any liability which such Agent
may otherwise have and shall extend, upon the same terms and
conditions, to each director of the Company, to each officer of
the Company who has signed the Registration Statement and to each
person, if any, who controls the Company within the meaning of
the Act.
9. Nonperformance. Each Agent, in soliciting offers to
--------------
purchase Securities from the Company and in performing the other
obligations of such Agent hereunder (other than in respect of any
purchase by an Agent as principal pursuant to a Terms Agreement or
otherwise), is acting solely as agent for the Company and not as
principal. Each Agent will make reasonable efforts to assist the
Company in obtaining performance by each purchaser whose offer to
purchase Securities from the Company was solicited by such Agent and
has been accepted by the Company, but such Agent shall not have any
liability to the Company in the event such purchase is not consummated
for any reason. If the Company shall default on its obligation to
deliver Securities to a purchaser whose offer it has accepted, the
Company shall (i) hold each Agent harmless against any loss, claim or
damage arising from or as a result of such default by the Company and
(ii) notwithstanding such default, pay to the Agent that solicited
such offer any commission to which it would be entitled in connection
with such sale.
10. Survival of Agreement. The respective indemnities,
---------------------
agreements, representations, warranties and other statements by any
Agent and the Company set forth in or made pursuant to this Agreement
shall remain in full force and effect regardless of any investigation
(or any statement as to the results thereof) made by or on behalf of
any Agent or any controlling person of any Agent or the Company, or
any officer or director or any controlling person of the Company, and
shall survive each delivery of and payment for any of the Securities.
11. Suspension or Termination. The provisions of this
-------------------------
Agreement relating to the solicitation of offers to purchase
Securities from the Company may be suspended or terminated at any time
by the Company as to any Agent or by any Agent as to such Agent upon
the giving of written notice of such suspension or termination to such
Agent or the Company, as the case may be. In the event of such
suspension or termination with respect to any Agent, this Agreement
shall remain in full force and effect with respect to (i) any Agent as
to which such suspension or termination has not occurred, (ii) the
rights and obligations of any party which have previously accrued or
which relate to Securities which are already issued, agreed to be
issued or the subject of a pending offer at the time of such
suspension or termination, (iii) Sections 2(e), 5(d), 5(e), 5(l), 8, 9
and 10 hereof, and (iv) the obligations of the Company to amend or
supplement the Prospectus, so long as any Agent continues to hold
Securities as principal.
12. Notices. Except as otherwise specifically provided
-------
herein or in the Administrative Procedure, all statements, requests,
notices and advices hereunder shall be in writing or by telephone, if
promptly confirmed in writing, and if to Merrill Lynch & Co., Merrill
Lynch, Pierce, Fenner & Smith Incorporated, shall be sufficient in all
respects when delivered or sent by facsimile transmission or
registered mail to World Financial Center, North Tower, New York, New
York 10281, 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.
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:
ANNEX I
Northwest Natural Gas Company
Administrative Procedure
------------------------
This Administrative Procedure relates to the Securities
defined in the Distribution Agreement, dated ___________, 1996 (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 _________, 1996 of the Public Utility
Commission of Oregon (the "OPUC") provides, among other things, that
the authority contained therein is valid through _________, 199_, and
the order dated ________, 1996 of the Washington Utilities and
Transportation Commission (the "WUTC") provides that the Company is
authorized to issue and sell Securities not later than ________, 199_.
In addition, such orders of the OPUC and the WUTC authorize the
issuance and sale by the Company only of Securities bearing interest
at fixed rates, established within the maximum all-in spreads over
Benchmark Treasury Yields for various maturities (determined in
accordance with said orders as of the time the commitment to purchase
any Securities is received by the Company and the Agent).
As stated in the Company's Prospectus dated November __,
1996, 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.
Further authorization must be obtained under the public
utility laws of the States of Oregon and Washington prior to any sale
of any Security to any Agent, as principal.
Procedure for Rate Changes:
--------------------------
When a decision has been reached to change the interest rate
on or other variable terms with respect to any Securities being
offered for sale, the Company will promptly advise the Agents and the
Agents will forthwith suspend solicitation of offers to purchase such
Securities. The Agent will telephone the Company with recommendations
as to the changed interest rates or other variable terms. At such
time as the Company advises the Agents of the new interest rates or
other variable terms, the Agent may resume solicitation of offers to
purchase such Securities. Until such time only "indications of
interest" may be recorded.
Acceptance or Rejection of Offers by Company:
--------------------------------------------
Each Agent will promptly advise the Company by telephone or
other appropriate means of all reasonable offers to purchase
Securities, other than those rejected by such Agent. Each Agent, in
its discretion reasonably exercised, may reject any offer received by
it, in whole or in part. Each Agent also may make offers to the
Company to purchase Securities as a Purchasing Agent. The Company, in
its sole discretion, may accept any offer to purchase Securities and
may reject any such offer, in whole or in part.
The Company will promptly notify the Selling Agent or
Purchasing Agent, as the case may be, of its acceptance or rejection
of an offer to purchase Securities. If the Company accepts an offer
to purchase Securities, it will confirm such acceptance in writing to
the Selling Agent or Purchasing Agent, as the case may be.
The order dated _________, 1996 of the OPUC requires that,
for each issuance of Securities, the Company seek and report to the
OPUC at least one other bid quote in addition to the bid that is
accepted.
Settlement:
----------
The receipt of immediately available funds by the Company in
payment for a Security and the authentication and delivery of such
Security will, with respect to such Security, constitute "Settlement."
All offers solicited by a Selling Agent or made by a
Purchasing Agent and accepted by the Company will be settled on a date
(the "Settlement Date") which shall be the third business day after
the date of acceptance of such offer, unless the Company and the
purchaser shall agree to settle (a) on any other business day after
the acceptance of such offer or (b) with respect to an offer accepted
by the Company prior to 10:00 a.m., New York City time, on the date of
such acceptance.
Settlement Procedures:
---------------------
A. After the acceptance of an offer by the Company, the Selling
Agent or Purchasing Agent, as the case may be, will communicate the
following details of the terms of such offer (the "Sale Information")
to the Company by telephone (confirmed in writing) or by facsimile
transmission or other acceptable written means:
(1) Principal amount of Securities to be purchased;
(2) Issue Price ("Issue Price" shall mean (i) in the case of a
sale in which an Agent shall act as a Selling Agent, the
price to the purchaser or (ii) in the case of a sale to an
Agent as Purchasing Agent, that Purchasing Agent's
reoffering price);
(3) Selling Agent's commission or, if applicable, Purchasing
Agent's discount (spread between the reoffering price and
Purchasing Agent's purchase price);
(4) Net proceeds to the Company: (2) minus (3);
(5) Method of and specified funds for payment of purchase price:
(6) (a) Fixed rate Securities: interest rate;
(b) Floating rate Securities:
(i) interest rate basis
(ii) initial interest rate
(iii) spread or spread multiplier, if any
(iv) interest rate reset dates
(v) interest rate reset period
(vi) interest payment dates
(vii) initial interest payment date
(viii) interest payment period
(ix) regular record dates
(x) index maturity
(xi) calculation agent
(xii) maximum and minimum interest rates, if any
(xiii) calculation date
(xiv) interest determination dates;
(7) (a) Trade Date;
(b) Interest Commencement Date (Settlement Date unless
otherwise noted; "Issue Date" on Secured Notes);
Time of delivery;
(8) Closing location;
(9) Maturity date;
(10) If redeemable at the Company's option:
(a) initial redemption date;
(b) redemption limitation date;
(c) each redemption price and period;
(11) Sinking fund or other retirement provisions;
(12) The name of the Selling Agent or Purchasing Agent, as the
case may be;
(13) Exact name, address and taxpayer identification number of
party to be the registered owner;
(14) Party to whom Securities are to be delivered;
(15) Denominations of certificates to be delivered at settlement;
(16) The name of the Company's bank and the account number for
payment of the purchase price;
(17) Whether the Securities to be purchased are Secured Notes or
Unsecured Notes;
(a) Any other significant terms of the Securities or their offer
or sale.
B. After receiving such settlement information from the Agent,
the Company will advise the Trustee of the above settlement
information. The Company will prepare a Pricing Supplement to the
Prospectus and deliver copies to the Agent and will cause the Trustee
to issue, authenticate and deliver Securities.
If an identical Pricing Supplement has not been Previously
filed with the Securities and Exchange Commission (the "SEC"), the
Company will arrange to have transmitted promptly via EDGAR one copy
of the Pricing Supplement (with the appropriate paragraph under Rule
424(b) and the Registration No. inscribed in the upper right corner)
to the SEC, within the applicable time period provided in Rule 424(b).
One copy of the Pricing Supplement (with a copy of the cover letter
sent to the SEC if a filing with the SEC is required) will be sent by
facsimile to the Agents as soon as practicable but in no event later
than 12:00 noon on the day after the Trade Date at each of the
following numbers:
Merrill Lynch & Co. - Tritech Services
40 Colonial Drive
Piscataway, NJ 08854
Attn: Final Prospectus Unit/Nachman Kimerling
Facsimile No. (908) 885-2774/2775/2776;
Phone No. (908) 865-2768
and
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Merrill Lynch World Headquarters
World Financial Center, North Tower
10th Floor
New York, NY 10281-1310
Attn: MTN Product Management
Facsimile No. (212) 449-2234; Phone No. (212) 449-7476
and
PaineWebber Incorporated
1285 Avenue of the Americas
11th Floor
New York, NY 10019
Attn: Corporate Bond Department
Facsimile No. (212) 247-0371; Phone No. (212) 713-2960
The Company shall supply the Agents as soon as practicable
but in no event later than the Settlement Date with an adequate supply
of Prospectuses and Pricing Supplements at the above addresses.
In addition, the Company will make any filings with the
OPUC and WUTC.
Suspension of Solicitation; Amendment or Settlement:
---------------------------------------------------
Subject to its representations, warranties and covenants
contained in the Distribution Agreement, the Company may instruct the
Agents to suspend solicitation of purchases at any time. Upon receipt
of such instructions, the Agents will forthwith suspend solicitation
of offers to purchase from the Company until such time as the Company
has advised them that solicitation of offers to purchase may be
resumed. If the Company decides to amend or supplement the Prospectus
(other than to change interest rates or other variable terms with
respect to the offering of the Securities), it will promptly advise
the Agents and will furnish the Agents and their counsel with copies
of the proposed amendment or supplement.
In the event that at the time the solicitation of offers to
purchase from the Company is suspended (other than to change interest
rates or other variable terms) there shall be any orders outstanding
which have not been settled, the Company will promptly advise the
Agents and the Trustee whether such orders may be settled and whether
copies of the Prospectus as theretofore amended and/or supplemented as
in effect at the time of the suspension may be delivered in connection
with the settlement of such orders. The Company will have the sole
responsibility for such decision and for any arrangements which may be
made in the event that the Company determines that such orders may not
be settled or that copies of such Prospectus may not be so delivered.
Delivery of Confirmation and Prospectus to Purchaser by Selling
---------------------------------------------------------------
Agent:
-----
The Selling Agent will deliver to the purchaser of a
Security a written confirmation of the sale and delivery and Payment
instructions. In addition, the Selling Agent will deliver to such
purchaser or its agent the Prospectus as amended or supplemented
(including the Pricing Supplement) relating to such Security prior to
delivery to such purchaser or its agent of, or together with, the
earlier to be delivered of (a) the confirmation of sale or (b) the
Security.
Instruction from Company to Trustee for Preparation of Securities:
-----------------------------------------------------------------
After receiving the Sale Information from the Selling Agent
or Purchasing Agent, as the case may be, the Company will communicate
such Sale Information to the Mortgage Trustee or the Indenture
Trustee, as the case may be, by telephone (confirmed in writing, by
facsimile transmission or by other acceptable written means).
The Company will instruct such Trustee by telephone
(confirmed in writing, by facsimile transmission or by other
acceptable written means) to authenticate and deliver the Securities
no later than 2:15 p.m., New York City time, on the Settlement Date.
Such instruction will be given by the Company prior to 3:00 p.m., New
York City time, on the business day prior to the Settlement Date,
unless the Settlement Date is the date of acceptance by the Company of
the offer to purchase Securities, in which case such instruction will
be given by the Company to the Trustee by 10:00 a.m., New York City
time, on the Settlement Date.
Procedures for Book-Entry Securities:
------------------------------------
In connection with Securities issued in book-entry form and
maintained in the book-entry system of The Depository Trust Company
("DTC"), (i) the Company and the Trustee shall act in accordance with
the letters of representation (relating to the Secured Notes and the
Unsecured Notes, respectively) from the Company and the Trustee to
DTC, as the same may be amended, supplemented or otherwise modified
from time to time, and (ii) the Trustee shall act in accordance with
one or more Medium-Term Note Certificate Agreements, relating to the
Securities, between the Trustee and DTC, as the same may be amended,
supplemented or otherwise modified from time to time, and in
accordance with its obligations as a participant in DTC.
The beneficial owner of a Security issued in book-entry form
(or one or more indirect participants in DTC designated by such owner)
will designate one or more participants in DTC (with respect to such
Security issued in book-entry form, the "Participants") to act as
agent for such beneficial owner in connection with the book-entry
system maintained by DTC, and DTC will record in book-entry form, in
accordance with instructions provided by such Participants, a credit
balance with respect to such Security issued in book-entry form in the
account of such Participants. The ownership interest of such
beneficial owner in such Security issued in book-entry form will be
recorded through the records of such Participants or through the
separate records of such Participants and one or more indirect
participants in DTC.
Transfers of a Book-Entry Security will be accomplished by
book entries made by DTC and, in turn, by Participants (and in certain
cases, one or more indirect participants in DTC) acting on behalf of
beneficial transferors and transferees of such Book-Entry Security.
Beneficial interests in the Securities may be purchased,
owned and transferred only in denominations of $1,000 or any integral
multiple of $1,000.
Preparation and Delivery of Securities by Trustee and Receipt of
--------------------------------------------------------------------
Payment Therefor:
-----------------
Certificated Securities
-----------------------
The Company will instruct the Mortgage Trustee or the
Indenture Trustee, as the case may be, to:
(i) Prepare each Security and appropriate receipts that
will serve as the documentary control of the
transaction.
(ii) In the case of a sale of Securities to a purchaser
solicited by a Selling Agent, by 2:15 p.m., New York
City time, on the Settlement Date, deliver the
Securities to such Selling Agent, at the address listed
below, for the benefit of the purchaser of such
Securities against delivery by such Selling Agent of a
receipt therefor. (On the Settlement Date, such
Selling Agent will deliver payment for such Securities
in immediately available funds to the Company's account
at a bank designated by the Company and included as a
part of the Sale Information provided by the Selling
Agent in an amount equal to the net proceeds to the
Company; provided that the Selling Agent reserves the
right to withhold payment for which it shall not have
received funds from the purchaser.)
(iii) In the case of a sale of Securities to a Purchasing
Agent, by 2:15 p.m., New York City time, on the
Settlement Date, deliver the Securities to such
Purchasing Agent, at the address listed below, against
delivery of payment therefor. (On the Settlement Date,
such Purchasing Agent will deliver payment for such
Securities in immediately available funds to the
Company's account at a bank designated by the Company
and included as a part of the Sale Information provided
by the Purchasing Agent in an amount equal to the net
proceeds to the Company.)
(iv) Complete the 4-ply Security and deliver three copies
thereof as follows:
1. Security with Agent's customer confirmation.
2. Copy 1 - for Trustee.
3. Copy 2 - for Agent.
4. Copy 3 - for Company.
(v) With respect to each sale, deliver the Securities and
Copies 1 and 2 thereof to the appropriate Agent at the
following address:
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
55 Water Street
Third Floor Level, N.S.C.C. Window
New York, New York 10041
Attn: Al Mitchell
or
PaineWebber Incorporated,
1285 Avenue of the Americas
11th Floor
New York, New York 10019
Attn: Corporate Bond Department
as the case may be, or to any other Agent as directed
by such Agent. (The Agent will acknowledge receipt of
the Security, will keep Copy 2 and will return Copy 1
to the Trustee. Delivery of the Security by the Trustee
will be made only against such acknowledgment of
receipt. Prior to the first settlement date, the
Trustee or the Company shall have sent a letter to
Merrill Lynch Clearance Operations, PaineWebber
Incorporated or any other Agent, as the case may be,
containing standard wire instructions for the net
proceeds of each Security, addressed as follows:
Merrill Lynch, Pierce, Fenner & Smith Incorporated
World Financial Center
North Tower
New York, New York 10281
or
PaineWebber Incorporated
1285 Avenue of the Americas
11th Floor
New York, New York 10019
Attn: Corporate Bond Department
as the case may be, or as directed by such other
Agent.)
(vi) Send Copy 3 to the Company.
Book-Entry Securities
---------------------
A. The Company will assign a CUSIP number to the Book-Entry
Security representing such Security and then advise the Trustee by
electronic transmission of the Sale Information received from the
Agent, such CUSIP number and the name of such Agent.
B. The Trustee will communicate to DTC and the Agent through
DTC's Participant Terminal System, a pending deposit message
specifying the following settlement information:
(1) The following Sale Information with respect to each
Security:
(a) Taxpayer identification number of the purchaser.
(b) Principal amount of the Security.
(c) Interest rate.
(d) Floating Rate Securities:
(i) interest rate basis;
(ii) initial interest rate;
(iii) spread or spread multiplier, if any;
(iv) interest rate reset dates;
(v) interest rate reset period;
(vi) interest payment dates;
(vii) interest payment period;
(viii) regular record dates;
(ix) index maturity;
(x) calculation agent;
(xi) maximum and minimum interest rates, if any;
(xii) calculation date; and
(xiii) interest determination dates.
(e) Issue price.
(f) Trade date.
(g) Interest Commencement Date, which shall be the
Settlement Date unless otherwise noted ("Issue Date" on
Secured Notes).
(h) Maturity date.
(i) Net proceeds to the Company.
(j) Agent's commission.
(k) Redemption provisions, if any.
(2) Identification numbers of the participant accounts
maintained by DTC on behalf of the Trustee and the Agent.
(3) Identification as a Fixed Rate Book-Entry Security or
Floating Rate Book-Entry Security.
(4) Initial Interest Payment Date for such Security, number of
days by which such date succeeds the related record date for
DTC purposes (or, in the case of Floating Rate Securities
which reset daily or weekly, the date five calendar days
preceding the Interest Payment Date) and, if then
calculable, the amount of interest payable on such Interest
Payment Date (which amount shall have been confirmed by the
Trustee).
(5) CUSIP number of the Book-Entry Security representing such
Security.
(6) Whether such Book-Entry Security represents any other
Securities issued or to be issued in book-entry form.
C. The Company will complete and deliver to the Trustee a
Book-Entry Security representing such Security in a form that has been
approved by the Company, the Agents and the Trustee.
D. The Trustee will authenticate the Book-Entry Security
representing such Security.
E. DTC will credit such Security to the participant account of
the Trustee maintained by DTC.
F. The Trustee will enter a Same-Day Funds Settlement System
("SDFS") deliver order through DTC's Participant Terminal System
instructing DTC (i) to debit such Security to the Trustee's
participant account and credit such Security to the participant
account, maintained by DTC, of the Agent which presented to the
Company the offer to purchase such Security which was accepted by the
Company (the "Presenting Agent") and (ii) to debit the settlement
account of the Presenting Agent and credit the settlement account of
the Trustee maintained by DTC, in an amount equal to the price of such
Security less such Agent's commission.
G. The Presenting Agent will enter an SDFS deliver order
through DTC's Participant Terminal System instructing DTC (i) to debit
such Security to the Presenting Agent's participant account and credit
such Security to the participant account of the Participants
maintained by DTC and (ii) to debit the settlement accounts of such
Participants and credit the settlement account of the Presenting Agent
maintained by DTC, in an amount equal to the initial public offering
price of such Security.
H. Transfer of funds in accordance with SDFS deliver orders
described in Settlement Procedures F and G will be settled in
accordance with SDFS operating procedures in effect on the Settlement
Date.
I. The Trustee will credit to an account of the Company
maintained at the Trustee funds available for immediate use in the
amount transferred to the Trustee in accordance with Settlement
Procedure F.
J. The Trustee will send a copy of the Book-Entry Security by
first class mail to the Company together with a statement setting
forth the principal amount of Securities Outstanding as of the related
Settlement Date after giving effect to such transaction and all other
offers to purchase Securities of which the Company has advised the
Trustee but which have not yet been settled.
K. The Agent will confirm the purchase of such Security to the
purchaser either by transmitting to the Participant with respect to
such Security a confirmation order through DTC's Participant Terminal
System or by mailing a written confirmation to such purchaser.
L. Settlement Procedures Timetable:
(1) For orders of Securities accepted by the Company,
Settlement Procedures A through K shall be completed as
soon as possible but not later than the respective
times (New York City time) set forth below:
Settlement
Procedure Time
--------- ----
A 11:00 a.m. on the trade date
B 2:00 p.m. on the trade date
C 3:00 p.m. on the Business
Day before Settlement Date
D 9:00 a.m. on Settlement
Date
E 10:00 a.m. on Settlement
Date
F-G No later than 2:00 p.m. on
Settlement Date
H 4:45 p.m. on Settlement
Date
I-K 5:00 p.m. on Settlement
Date
(2) If a sale is to be settled more than one Business Day after
sale date, Settlement Procedures A and B may, if necessary,
be completed at any time prior to the specified times on the
first Business Day after such sale date. In connection with
a sale which is to be settled more than one Business Day
after the trade date, if the initial interest rate for a
Floating Rate Security is not known at the time that the
Sale Information is given by the Presenting Agent to the
Company, Settlement Procedures A and B shall be completed as
soon as such rates have been determined, but no later than
11:00 a.m. and 2:00 p.m., New York City time, respectively,
on the second Business Day before the Settlement Date.
Settlement Procedure H is subject to extension in accordance
with any extension of Fedwire closing deadlines and in the
other events specified in the SDFS operating procedures in
effect on the Settlement Date.
(3) If settlement of a Security issued in book-entry form is
rescheduled or canceled, the Trustee will deliver to DTC,
through DTC's Participant Terminal System, a cancellation
message of 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.
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
_________, 1996 (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]
Schedule to Annex II
Title of Purchased Securities:
-----------------------------
Aggregate Principal Amount: $
--------------------------
Price to Public:
---------------
Purchase Price by [Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner
& Smith
-----------------
Incorporated] [PaineWebber Incorporated] [Name of other Agent]:
% of the principal amount of the Purchased Securities [,
plus accrued interest from to ] [and accrued
amortization of discount from to ]
Method of and Specified Funds for Payment of Purchase Price:
-----------------------------------------------------------
[By certified or official bank check or checks, payable to
the order of the Company, in [[New York Clearing House] [immediately
available] funds]
[By wire transfer to a bank account specified by the Company
in [next day] [immediately available] funds]
Indenture: [Mortgage] [Note Indenture]
---------
Interest Commencement Date which shall be the Settlement Date unless
--------------------------------------------------------------------
otherwise noted ("Issue Date" on Secured Notes):
-----------------------------------------------
Time of Delivery:
----------------
Closing Location:
----------------
Stated Maturity Date:
--------------------
Interest Rate or Rates (or Method of Determining Interest):
----------------------------------------------------------
Interest Payment Dates: [months and dates]
----------------------
Initial Interest Payment Date:
-----------------------------
Regular Record Dates:
--------------------
Redeemable at Company's Option: Yes ___ No ___
------------------------------
In Whole: Yes___ No___
In Part: Yes___ No___
Initial Redemption Date:
-----------------------
Redemption Limitation Date:
--------------------------
Initial Redemption Price:
------------------------
Reduction Percentage:
--------------------
Sinking Fund or Other Retirement Provisions, if any:
---------------------------------------------------
Documents to be Delivered as a Condition to the Closing:
-------------------------------------------------------
[(1) The opinion of counsel to the Agents referred to in Section
4(a)]
[(2) The opinion of counsel to the Company referred to in Section
4(b)]
[(3) The opinion of counsel to the Company referred to in Section
4(c)]
[(4) The accountants letter referred to in Section 4(d)]
[(5) The officers certificate referred to in Section 4(e)]
Other Provisions (including Syndicate Provisions,
-------------------------------------------------
if applicable):
--------------
ANNEX III
___________, 1996
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 ____________, 1996 (the "Agreement"),
between the Company and each of you, of not to exceed $165,000,000 in
aggregate principal amount of (i) the Company's First Mortgage Bonds,
designated Secured Medium-Term Notes, Series B (the "Secured Notes")
to be issued under the Company's Mortgage and Deed of Trust, dated as
of July 1, 1946, to Bankers Trust Company (the "Corporate Trustee")
and R.G. Page (Stanley Burg, successor), as trustees, as supplemented
by twenty supplemental indentures (such Mortgage and Deed of Trust, as
so supplemented, being hereinafter called the "Mortgage"), and (ii)
the Company's Unsecured Medium-Term Notes, Series B (the "Unsecured
Notes"), to be issued under the Company's Indenture, dated as of June
1, 1991 (the "Indenture"), to Bankers Trust Company, as trustee (the
"Indenture Trustee") (the Secured Notes and the Unsecured Notes being
hereinafter collectively referred to as the "Notes"), and the
appointment of each of you as agents of the Company pursuant to the
Agreement for the purposes of soliciting and receiving offers to
purchase Notes, as agents, and purchasing Notes, as principals, from
the Company, please be advised that, as General Counsel of the
Company, I have participated in the preparation of or reviewed (a) the
Restated Articles of Incorporation, as amended, and Bylaws, as
amended, of the Company; (b) the Mortgage; (c) the Indenture; (d) the
Agreement; (e) the registration statement (File No. 33-64014) (the
"Initial Registration Statement"), filed by the Company with the
Securities and Exchange Commission (the "SEC") for the registration
under the Securities Act of 1933, as amended (the "1933 Act"), of
$150,000,000 of the Notes, of which $15,000,000 remain unsold, and for
the qualification under the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act"), of the Mortgage and the Indenture, which
Initial Registration Statement became effective on June 17, 1993; (f)
the registration statement (File No. 333-_______) (the "Subsequent
Registration Statement"), filed by the Company with the SEC for the
registration under the 1933 Act of an additional $150,000,000 of the
Notes, and for the qualification under the Trust Indenture Act of the
Mortgage and the Indenture, which Subsequent Registration Statement
became effective on __________, 1996; (g) the combined prospectus
relating to the Notes constituting a part of the Subsequent
Registration Statement in the form in which it became effective, or if
amended or supplemented subsequent to such effectiveness, as so
amended and supplemented, including the documents incorporated therein
by reference pursuant to Item 12 of Form S-3 (the "Prospectus"); (h)
the proceedings before the Public Utility Commission of Oregon and the
Washington Utilities and Transportation Commission relating to the
issuance and sale of the Notes; and (i) the records of various
corporate and other proceedings relating to the authorization,
issuance and sale of the Notes. I have also examined such other
documents and satisfied myself as to such other matters as I have
deemed necessary in order to render this opinion. I have not examined
the Notes, except specimens thereof.
In preparation of this opinion, I have examined originals or
photostatic certified copies of such certificates, agreements,
documents and other papers, and have made such inquiries and
investigations of law, as I deemed appropriate and necessary for the
opinion hereinafter set forth. In my examination, I have assumed the
authenticity of all documents submitted to me as certified or
photostatic copies and the authenticity of the originals of such
latter documents. As to certain matters of fact material to the
opinion expressed herein, I have relied upon certificates of various
corporate officers of the Company and public officials. I assume the
accuracy of the material and factual matters contained therein.
I am of the opinion that:
1. The Company is a validly organized and existing
corporation in good standing under the laws of the State of
Oregon, is qualified to do business and is in good standing in
the State of Washington, and has power (corporate and other) to
own its properties and conduct its business as described in the
Prospectus.
2. The Company holds valid and subsisting franchises,
licenses, permits and consents, free from burdensome restrictions
and adequate for the conduct of its business, as and to the
extent set forth in the Prospectus.
3. The Agreement has been duly and validly authorized,
executed and delivered by the Company.
4. The Mortgage and the Indenture have been duly and
validly authorized by all necessary corporate action, have been
duly and validly executed and delivered, and are valid and
binding instruments enforceable in accordance with their terms,
subject, as to enforcement, to laws and principles of equity
relating to or affecting generally the enforcement of creditors
rights, including, without limitation, bankruptcy and insolvency.
5. The Company has good and sufficient title to all the
properties described in, and as subject to the lien of, the
Mortgage and now owned by it, subject only to excepted
encumbrances as defined in the Mortgage and to minor defects and
irregularities customarily found in properties of like size and
character, which, in my opinion, do not materially impair the use
of the property affected thereby in the operation of the business
of the Company; the description in the Mortgage of such
properties is adequate to constitute the Mortgage a lien thereon;
and the Mortgage constitutes a valid, direct first mortgage lien
on such properties, which include substantially all of the
permanent physical properties and franchises of the Company
(other than those expressly excepted), subject only to the
exceptions enumerated above in this paragraph.
6. The form of the Secured Notes has been duly authorized
and has been established in conformity with the provisions of the
Mortgage; the form of the Unsecured Notes bearing interest at a
fixed rate, has been duly authorized and has been established in
conformity with the provisions of the Indenture; and the form of
the Unsecured Notes, bearing interest at a variable rate or not
bearing interest, when set forth in a Company Order or Orders or
established by procedures acceptable to the Indenture Trustee
specified in a Company Order or Orders, will have been duly
authorized and will have been established in conformity with the
provisions of the Indenture.
7. The Secured Notes have been duly authorized by the
resolutions adopted by the Board of Directors on May 27, 1993,
and September 26, 1996 (the "Board Resolutions"), and when the
terms of the Secured Notes shall have been determined as
contemplated by and in accordance with the Mortgage, the Board
Resolutions and written orders or instructions evidencing
determinations by Officers of the Company, such terms will have
been duly authorized by the Company and will have been
established in conformity with the terms of the Mortgage.
8. The Unsecured Notes have been duly authorized by the
Board Resolutions, and when the terms of the Unsecured Notes
shall have been determined as contemplated by and in accordance
with the Indenture, the Board Resolutions and, to the extent
required by the Indenture and the Board Resolutions, by Officers'
Certificates, Company Orders (each, as defined in the Indenture)
and procedures acceptable to the Indenture Trustee specified in
such Company Orders, such terms will have been duly authorized by
the Company and will have been established in conformity with the
terms of the Indenture.
9. The Notes, when (a) executed by the Company, (b)
completed, authenticated and delivered by the Corporate Trustee
or the Indenture Trustee, as the case may be, (c) issued and
delivered by the Company and (d) paid for, all as contemplated by
and in accordance with the Mortgage, in the case of Secured
Notes, the Indenture, in the case of Unsecured Notes, the Board
Resolutions, and (to the extent required by the Mortgage or the
Indenture and the Board Resolutions) Officers' Certificates,
Company Orders, procedures acceptable to the Indenture Trustee
specified in such Company Orders, written orders or instructions
evidencing determinations by the officers of the Company, the
Agreement, the Administrative Procedure (as defined in the
Agreement), and Terms Agreements (as defined in the Agreement),
if any, will be duly issued under the Mortgage or the Indenture,
as the case may be, and will constitute valid and legally binding
obligations of the Company, entitled to the benefits provided by
the Mortgage or the Indenture, as the case may be, and
enforceable in accordance with their terms, subject, as to
enforcement, to laws and principles of equity relating to or
affecting generally the enforcement of creditors' rights,
including, without limitation, bankruptcy and insolvency, and, in
the case of the Secured Notes, entitled to the benefit of the
security afforded by the Mortgage; provided, however, that
further authorization must be obtained by the Company under the
public utility laws of the States of Oregon and Washington prior
to any sale of any Note by the Company to either of you, as
principal.
10. The issuance and sale of the Notes, the compliance by
the Company with all of the provisions of the Notes, the
Mortgage, the Indenture and the Agreement and the consummation of
the transactions contemplated by the Agreement will not result in
a breach or violation of any of the terms and provisions of, or
constitute a default under, any statute, any indenture, mortgage,
deed of trust or other agreement or instrument known to me to
which the Company is a party or by which it is bound or to which
any of the property of the Company is subject, the Company's
Restated Articles of Incorporation, as amended, or Bylaws, as
amended, or any order, rule or regulation known to me of any
court or governmental agency or body having jurisdiction over
the Company or any of its properties; provided, however, that
further authorization must be obtained by the Company under the
public utility laws of the States of Oregon and Washington prior
to any sale of any Note by the Company to either of you, as
principal.
11. The Public Utility Commission of Oregon and the
Washington Utilities and Transportation Commission have issued
orders authorizing the issuance and sale by the Company of the
Notes; and no further approval, authorization, consent or other
order of any public board or body (other than in connection or in
compliance with the provisions of the securities or blue sky laws
of any jurisdiction) is legally required for the issuance and
sale of the Notes through each of you, as agent, on the terms and
conditions set forth in the Agreement.
12. The statements of Oregon, Washington and Federal law
(other than the 1933 Act, the Securities Exchange Act of 1934 and
the Trust Indenture Act), and legal conclusions based thereon,
contained in, or in the documents incorporated by reference in,
the Prospectus have been reviewed by me and are correct (except
to the extent that any statement contained in a document
incorporated or deemed to be incorporated by reference in the
Prospectus may be deemed to be modified or superseded in the
Prospectus or in any other subsequently filed document which also
is or is deemed to be incorporated by reference in the
Prospectus).
13. Except as described in the Prospectus, there are no
pending material legal or governmental proceedings and, to my
knowledge, no material threatened legal or governmental
proceedings, to which the Company is a party or of which any of
the property of the Company is subject, other than ordinary
routine litigation incidental to the kind of business conducted
by the Company.
In the course of the preparation by the Company of the
Initial and the Subsequent Registration Statements and the Prospectus,
I had conferences with certain officers and employees of the Company,
but I have made no independent verification of the accuracy or
completeness of the representations and statements made to me by such
person or the information included by the Company in either of such
Registration Statements and the Prospectus, and take no responsibility
therefor, except as forth in paragraph 12 hereof. However, my
examination of such Registration Statements and the Prospectus and my
discussions in the above-mentioned conferences did not disclose to me
any information which gives me reason to believe that, when each of
the Initial and Subsequent Registration Statements became effective,
it contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading, or that, as of the date of
this opinion, the Prospectus includes an untrue statement of a
material fact or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, that I do not express
any belief as to the financial statements or other financial or
statistical data contained in such Registration Statements or the
Prospectus, or as to the Forms T-1 or T-2, or as to any information
contained therein furnished to the Company in writing by any of you
expressly for use therein.
I am a member of the bar of the States of Oregon and
Washington and do not hold myself out as an expert on the laws of the
State of New York or Federal securities laws. Accordingly, in
rendering this opinion, I have relied, with your consent, as to all
matters governed by the laws of the State of New York, the 1933 Act,
the Securities Exchange Act of 1934 and the Trust Indenture Act, upon
the opinion of even date herewith addressed to you by Reid & Priest
LLP, New York, New York, counsel for the Company. I have read such
opinion and concur in the conclusions expressed therein insofar as
such conclusions involve questions of Oregon and Washington law.
You, the Trustees and, as to matters governed by the laws of
the State of Oregon and the State of Washington, Reid & Priest LLP and
your counsel may rely upon this opinion in connection with the
issuance and sale of the Notes. Neither you nor any of them may rely
upon this opinion for any other purpose, and no other person may rely
upon this opinion for any purpose without, in each case, my prior
written consent.
Very truly yours,
Bruce B. Samson, Esq.
A N N E X I V
___________, 1996
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 ____________, 1996 (the "Agreement"),
between the Company and each of you, of not to exceed $165,000,000 in
aggregate principal amount of (i) the Company's First Mortgage Bonds,
designated Secured Medium-Term Notes, Series B (the "Secured Notes"),
to be issued under the Company's Mortgage and Deed of Trust, dated as
of July 1, 1946, to Bankers Trust Company (the "Corporate Trustee")
and R.G. Page (Stanley Burg, successor), as trustees, as supplemented
by twenty supplemental indentures (such Mortgage and Deed of Trust, as
so supplemented, being hereinafter called the "Mortgage"), and (ii)
the Company's Unsecured Medium-Term Notes, Series B (the "Unsecured
Notes"), to be issued under the Company's Indenture, dated as of June
1, 1991 (the "Indenture"), to Bankers Trust Company, as trustee (the
"Indenture Trustee") (the Secured Notes and the Unsecured Notes being
hereinafter collectively referred to as the "Notes"), and the
appointment of each of you as agents of the Company pursuant to the
Agreement for the purposes of soliciting and receiving offers to
purchase Notes, as agents, and purchasing Notes, as principals, from
the Company, please be advised that, as counsel to the Company, we
have participated in the preparation of or reviewed (a) the Restated
Articles of Incorporation, as amended, and Bylaws, as amended, of the
Company; (b) the Mortgage; (c) the Indenture; (d) the Agreement; (e)
the registration statement (File No. 33-64014) (the "Initial
Registration Statement"), filed by the Company with the Securities and
Exchange Commission (the "SEC") for the registration under the
Securities Act of 1933, as amended (the "1933 Act"), of $150,000,000
of the Notes, of which $15,000,000 remain unsold, and for the
qualification under the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"), of the Mortgage and the Indenture, which
Initial Registration Statement became effective on June 17, 1993; (f)
the registration statement (File No. 333-_______) (the "Subsequent
Registration Statement"), filed by the Company with the SEC for the
registration under the 1933 Act of an additional $150,000,000 of the
Notes, and for the qualification under the Trust Indenture Act of the
Mortgage and the Indenture, which Subsequent Registration Statement
became effective on ___________, 1996; (g) the combined prospectus
relating to the Notes constituting a part of the Subsequent
Registration Statement in the form in which it became effective, or if
amended or supplemented subsequent to such effectiveness, as so
amended or supplemented, including the documents incorporated therein
by reference pursuant to Item 12 of Form S-3 (the "Prospectus"); (h)
the records of the proceedings before the Public Utility Commission of
Oregon and the Washington Utilities and Transportation Commission
relating to the issuance and sale of the Notes; and (i) the records of
various corporate and other proceedings relating to the authorization,
issuance and sale of the Notes. We have also examined such other
documents and satisfied ourselves as to such other matters as we have
deemed necessary in order to render this opinion. We have not
examined the Notes, except specimens thereof.
In the preparation of this opinion, we have examined
originals or photostatic or certified copies of such certificates,
agreements, documents and other papers, and have made such inquiries
and investigations of law, as we deemed appropriate and necessary for
the opinion hereinafter set forth. In our examination, we have
assumed the authenticity of all documents submitted to us as
originals, the conformity to original documents of all documents
submitted to us as certified or photostatic copies and the
authenticity of the originals of such latter documents. As to certain
matters of fact material to the opinion expressed herein, we have
relied upon certificates of various corporate officers of the Company
and public officials. We assume the accuracy of the material and
factual matters contained therein.
We are of the opinion that:
1. The Company is a validly organized and existing
corporation in good standing under the laws of the State Of Oregon,
and is qualified to do business and is in good standing in the State
of Washington.
2. The Agreement has been duly and validly authorized,
executed and delivered by the Company.
3. The Mortgage and the Indenture have been duly and
validly authorized by all necessary corporate action, have been duly
and validly executed and delivered, have been duly qualified under the
Trust Indenture Act, and are valid and binding instruments enforceable
in accordance with their terms, subject, as to enforcement, to laws
and principles of equity relating to or affecting generally the
enforcement of creditors' rights, including, without limitation,
bankruptcy and insolvency.
4. The form of the Secured Notes has been duly authorized
and has been established in conformity with the provisions of the
Mortgage and conforms to the description thereof contained in the
Prospectus; the form of the Unsecured Notes, bearing interest at a
fixed rate, has been duly authorized and has been established in
conformity with the provisions of the Indenture and conforms to the
description thereof contained in the Prospectus; and the form of the
Unsecured Notes, bearing interest at a variable rate or not bearing
interest, when set forth in a Company Order or Orders or established
by procedures acceptable to the Indenture Trustee specified in a
Company Order or Orders, will have been duly authorized and will have
been established in conformity with the provisions of the Indenture.
5. The Secured Notes have been duly authorized by the
resolutions adopted by the Board of Directors on May 27, 1993, and
September 26, 1996 (the "Board Resolutions"), and when the terms of
the Secured Notes shall have been determined as contemplated by and in
accordance with the Mortgage, the Board Resolutions and written orders
or instructions evidencing determinations by Officers of the Company,
such terms will have been duly authorized by the Company and will have
been established in conformity with the terms of the Mortgage.
6. The Unsecured Notes have been duly authorized by the
Board Resolutions, and when the terms of the Unsecured Notes shall
have been determined as contemplated by and in accordance with the
Indenture, the Board Resolutions and, to the extent required by the
Indenture and the Board Resolutions, by Officers' Certificates,
Company Orders (each, as defined in the Indenture) and procedures
acceptable to the Indenture Trustee specified in such Company Orders,
such terms will have been duly authorized by the Company and will have
been established in conformity with the terms of the Indenture.
7. The Notes, when (a) executed by the Company, (b)
completed, authenticated and delivered by the Corporate Trustee or the
Indenture Trustee, as the case may be, (c) issued and delivered by the
Company and (d) paid for, all as contemplated by and in accordance
with the Mortgage, in the case of the Secured Notes, the Indenture, in
the case of Unsecured Notes, the Board Resolutions, and (to the extent
required by the Mortgage or the Indenture and the Board Resolutions)
Officers' Certificates, Company Orders, procedures acceptable to the
Indenture Trustee specified in such Company Orders, written orders or
instructions evidencing determinations by the officers of the Company,
the Agreement, the Administrative Procedure (as defined in the
Agreement) and Terms Agreements (as defined in the Agreement), if any,
will be duly issued under the Mortgage or the Indenture, as the case
may be, and will constitute valid and legally binding obligations of
the Company, entitled to the benefits provided by the Mortgage or the
Indenture, as the case may be, and enforceable in accordance with
their terms, subject, as to enforcement, to laws and principles of
equity relating to or affecting generally the enforcement of
creditors' rights, including, without limitation, bankruptcy and
insolvency, and, in the case of the Secured Notes, entitled to the
benefit of the security afforded by the Mortgage; provided, however,
that further authorization must be obtained by the Company under the
public utility laws of the States of Oregon and Washington prior to
any sale of any Note by the Company to either of you, as principal.
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 Public Utility Commission of Oregon and the
Washington Utilities and Transportation Commission have issued orders
authorizing the issuance and sale by the Company of the Notes; and no
further approval, authorization, consent or other order of any public
board or body (other than in connection or in compliance with the
provisions of the securities or blue sky laws of any jurisdiction) is
legally required for the issuance and sale of the Notes through each
of you, as agent, on the terms and conditions set forth in the
Agreement.
10. Both the Initial and Subsequent Registration Statements
have become effective under the Act, and, to the best of our
knowledge, no stop order suspending the effectiveness thereof has been
issued and no proceedings for that purpose are pending before or have
been proposed by the SEC; the Mortgage and the Indenture have been
duly qualified under the Trust Indenture Act; each of the Initial and
Subsequent Registration Statements at the time it became effective
complied, and the Prospectus (excluding the documents incorporated
therein by reference) as of the date of this opinion complies, as to
form, in all material respects with the requirements of the Act, the
Trust Indenture Act (except with respect to the Forms T-1 and Form T-
2, upon which we do not pass) and the rules and regulations of the SEC
thereunder; and the documents incorporated by 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.
We are members of the bar of the State of New York and do
not hold ourselves out as experts on the laws of the State of Oregon
or the State of Washington. Accordingly, in rendering this opinion, we
have relied, with your consent, as to all matters governed by the laws
of the State of Oregon and the State of Washington (including titles
to property and franchises and the lien of the Mortgage, upon which we
do not pass), upon the opinion of even date herewith addressed to you
by Bruce B. Samson, Esq., General Counsel of the Company. We have
read such opinion, which is in form satisfactory to us, and concur in
the conclusions expressed therein insofar as such conclusions involve
questions of the laws of the State of New York, the 1933 Act, the
Exchange Act and the Trust Indenture Act.
You, the Trustees, and as to matters governed by the laws of
the State of New York and the 1933 Act, the Exchange Act and the Trust
Indenture Act, Bruce B. Samson, Esq., may rely upon this opinion in
connection with the issuance and sale of the Notes. Neither you nor
any of them may rely upon this opinion for any other purpose, and no
other person may rely upon this opinion for any purpose without, in
each case, our prior written consent.
Very truly yours,
REID & PRIEST LLP
ANNEX V
[Contents of Letter of Deloitte & Touche LLP]
The letter of Deloitte & Touche LLP will state in effect
that:
1. They are independent public accountants with respect to
the Company within the meaning of the Act and the applicable published
Rules and Regulations;
2. In their opinion, the financial statements examined by
them and incorporated by reference in the Registration Statement
comply as to form in all material respects with the applicable
accounting requirements of the Exchange Act and the published rules
and regulations thereunder;
3. On the basis of limited procedures, not constituting an
examination made in accordance with generally accepted auditing
standards, including a reading of the latest available interim
financial statements of the Company, if any, a reading of the minute
books of the Company since December 31, 19__, inquiries of officials
of the Company responsible for financial and accounting matters and
such other inquiries and procedures as may be specified in such
letter, nothing came to their attention that caused them to believe
that:
(a)(1) the latest interim consolidated financial
statements included or incorporated by reference in the
Registration Statement do not comply as to form in all material
respects with the applicable accounting requirements of the
Exchange Act and the published rules and regulations thereunder
as they apply to Form 10-Q or (2) said interim consolidated
financial statements are not in conformity with generally
accepted accounting principles applied on a basis substantially
consistent with that of the audited consolidated financial
statements incorporated by reference in the Registration
Statement;
(b) at the date of the latest available interim
balance sheet of the Company and at a subsequent specified date
not more than five days prior to the Time of Delivery, there has
been any change in the capital stock (except for (I) shares of
the Company's Common Stock issued under the Company's Dividend
Reinvestment Plan, 1985 Stock Option Plan or Employee Stock
Purchase Plan, (II) shares of Common Stock issued upon the
conversion of shares of the Company's Convertible Debentures, and
(III) shares of Preferred Stock purchased or redeemed pursuant to
or in anticipation of sinking and purchase funds with respect to
the Company's Preferred Stock) or any increase in the long-term
debt of the Company, or any decrease in net assets, in each case
as compared with amounts shown in the balance sheet as of the
date of the latest financial statements incorporated by reference
in the Registration Statement, except in each case for changes,
increases or decreases which the Registration Statement discloses
have occurred or may occur, which were occasioned by the
declaration of dividends or which are described in such letter;
or
(c) for the 12-month period for which the latest
unaudited financial statements are available, there were any
decreases, as compared with the latest 12-month period for which
financial statements are incorporated by reference in the
Prospectus, in operating revenues, net income and earnings
available for common stock, except in each case for decreases
which the Registration Statement discloses have occurred or may
occur, which were occasioned by the declaration of dividends or
which are described in such letter; and
4. They have performed certain other specified procedures
with respect to certain amounts and percentages set forth in the
Registration Statement or in the documents incorporated by reference
therein, as have been requested by your counsel and approved by the
Company, and have found them to be in agreement with the records of
the Company and the computations to be arithmetically correct.
EXHIBIT 1
NORTHWEST NATURAL GAS COMPANY
$165,000,000
MEDIUM-TERM NOTES, SERIES B
________, 199_
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
North Tower
New York, New York 10281
PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
[Insert Names of Additional Existing Agents, if any]
[Insert Name of New Agent]
Dear Sirs:
Reference is hereby made to the Distribution Agreement, dated
_______, 1996 (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: ___________________