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EXHIBIT 1.2
ENRON OIL & GAS COMPANY
Certificate of Senior Vice President and Chief Financial Officer
I, Walter C. Wilson, Senior Vice President and Chief Financial Officer
of Enron Oil & Gas Company, a Delaware corporation (the "Company"), do hereby
establish the terms of certain debt securities of the Company under the
Indenture, dated as of September 1, 1991 (the "Indenture"), between the Company
and Chase Bank of Texas, National Association (formerly Texas Commerce Bank
National Association), as Trustee, as follows:
1. The title of the securities shall be "6.00% Notes Due
2008" (the "Notes");
2. The Notes need not be issued at the same time and
this series may be reopened, without the consent of the holders of the
Notes. The aggregate principal amount of Notes to be issued on December
14, 1998 shall be $175,000,000(the "December Notes"); additional Notes
may be authorized by the subsequent execution of a Certificate or
Certificates of the Chairman of the Board, the President, Vice
Chairman, Chief Financial Officer, Treasurer, Assistant Treasurer or
any other officer of the Company as may be so authorized from time to
time, in accordance with the Indenture;
3. The final maturity of the principal of the Notes
shall be December 15, 2008;
4. The Notes shall bear interest at the rate of 6.00%
per annum, which interest shall accrue from December 14, 1998, or from
the most recent Interest Payment Date (as defined in the Indenture) to
which interest has been paid or duly provided for, which dates shall be
June 15 and December 15 of each year, and such interest shall be
payable semi-annually on June 15 and December 15 of each year,
commencing June 15, 1999, to holders of record at the close of business
on June 1 or December 1, respectively, next preceding each such
Interest Payment Date;
5. The principal of, and interest on, the Notes shall be
payable at the office or agency of the Company maintained for that
purpose in Dallas, Texas, or at the option of the holder of the Note,
at the office or agency of the Company maintained for that purpose in
the Borough of Manhattan, The City of New York, State of New York;
provided, however, that at the option of the Company payment of
interest may be made by check mailed to the address of the person
entitled thereto as such address shall appear in the Security Register
(as defined in the Indenture);
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6. The Company may, at its option, redeem some or all of
the Notes at any time prior to maturity at a redemption price equal to
the greater of:
o 100% of the principal amount of the Notes, or
o the sum of the present values of the remaining
scheduled payments of principal and interest on the
Notes to be redeemed discounted to the redemption
date on a semiannual basis (assuming a 360-day year
consisting of twelve 30-day months) at the applicable
Treasury Rate plus 20 basis points, plus accrued and
unpaid interest on the principal amount to the date
of redemption.
"Treasury Rate" means, with respect to any redemption
date, the rate per annum equal to the semi-annual equivalent
yield to maturity of the Comparable Treasury Issue, at a price
equal to the Comparable Treasury Price.
"Comparable Treasury Issue" means the United States
Treasury security selected by an Independent Investment Banker
as having a maturity comparable to the remaining term of the
Notes to be redeemed that would be utilized, at the time of
selection and in accordance with customary financial practice,
in pricing new issues of corporate debt securities of
comparable maturity to the remaining term of the Notes.
"Comparable Treasury Price" means, with respect to
any redemption date, (1) the average of the bid and asked
prices for the Comparable Treasury Issue (expressed in each
case as a percentage of its principal amount) on the third
business day preceding such redemption date, as set forth in
the daily statistical release (or any successor release)
published by the Federal Reserve Bank of New York and
designated "Composite 3:30 p.m. Quotations for U.S. Government
Securities" or (2) if such release (or any successor release)
is not published or does not contain such prices on such
business day, (A) the average of the Reference Treasury Dealer
Quotations for such redemption date, after excluding the
highest and lowest such Reference Treasury Dealer Quotations,
or (B) if the Trustee obtains fewer than four such Reference
Treasury Dealer Quotations, the average of all such
quotations.
"Independent Investment Banker" means an independent
investment banking institution of banking institution of
national standing appointed by the Trustee.
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"Reference Treasury Dealer" means at least four
primary U.S. Government securities dealers as the Company or
the Trustee shall select.
"Reference Treasury Dealer Quotations" means, with
respect to each Reference Treasury Dealer and any redemption
date, the average, as determined by the Trustee, of the bid
and asked prices for the Comparable Treasury Issue (expressed
in each case as a percentage of its principal amount) quoted
in writing to the Trustee by such Reference Treasury Dealer at
5:00 p.m. on the third business day preceding such redemption
date.
Holders of the Notes to be redeemed will receive
notice thereof by first-class mail at least 30 and not more
than 60 days prior to the date fixed for redemption.
7. Chase Bank of Texas, National Association (formerly
Texas Commerce Bank National Association) is appointed to be trustee
for the Notes, and Chase Bank of Texas, National Association, and any
other banking institution hereafter selected by the officers of the
Company, are appointed agents of the Company (a) where the Notes may be
presented for registration of transfer or exchange, (b) where notices
and demands to or upon the Company in respect of the Notes or the
Indenture may be made or served and (c) where the Notes may be
presented for payment of principal and interest;
8. The December Notes shall be issued upon original
issuance in the form of a single book-entry Global Security (as defined
in the Indenture), and the Depository (as defined in the Indenture)
shall be The Depository Trust Company, New York, New York; the December
Notes in the form of Exhibit A attached hereto are hereby approved, and
the form of additional Notes, if any, shall be as provided in
subsequent Certificate or Certificates of the Chairman of the Board,
the President, Vice Chairman, Chief Financial Officer, Treasurer,
Assistant Treasurer or any other officer of the Company as may be so
authorized from time to time, in accordance with the Indenture;
9. The price to be received by the Company from the
Underwriter for the Notes shall be 98.801%, plus accrued interest, if
any, from December 14, 1998.
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IN WITNESS WHEREOF, I have hereunto signed my name this 9th day of
December, 1998.
/s/ W. C. Wilson
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Walter C. Wilson
Senior Vice President and
Chief Financial Officer
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EXHIBIT A
THIS SECURITY IS A BOOK-ENTRY GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY
OR A NOMINEE OF A DEPOSITORY. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE ONLY
IN THE LIMITED CIRCUMSTANCES DESCRIBED BELOW, AND NO TRANSFER OF THIS SECURITY
(OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITORY TO A
NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR
ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE OF
THE DEPOSITORY TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITORY) MAY BE REGISTERED EXCEPT IN SUCH LIMITED CIRCUMSTANCES.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
ENRON OIL & GAS COMPANY
6.00% Notes due December 15, 2008
No. BE-5 CUSIP No. 293562 AE 4
ENRON OIL & GAS COMPANY, a corporation duly organized and existing
under the laws of Delaware (herein called the "Company", which term includes any
successor Person under the Indenture hereinafter referred to), for value
received, hereby promises to pay to Cede & Co., or registered assigns, the
principal sum of ONE HUNDRED SEVENTY-FIVE MILLION DOLLARS ($175,000,000) on
December 15, 2008, and to pay interest thereon from December 14, 1998 or from
the most recent Interest Payment Date to which interest has been paid or duly
provided for, semiannually in arrears on June 15 and December 15 in each year,
commencing June 15, 1999, at the rate of 6.00% per annum, until the principal
hereof is paid or made available for payment.
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The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in such Indenture, be paid to the Person
in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the June 1 or December 1 (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date. Any such
interest not so punctually paid or duly provided for will forthwith cease to be
payable to the Holder on such Regular Record Date and may either be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Securities of this series not less than 10 days prior to
such Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Securities of this series may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in said Indenture.
Payment of the principal of (and premium, if any) and interest on this
Security will be made at the office or agency of the Company maintained for that
purpose pursuant to the Indenture hereinafter referred to in Dallas, Texas, in
such immediately available funds of the United States of America as at the time
of payment are legal tender for payment of public and private debts.
Reference is hereby made to the further provisions of this Security set
forth below, which further provisions shall for all purposes have the same
effect as if set forth in this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to below by manual signature of an authorized officer, this
Security shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: December 14, 1998
ENRON OIL & GAS COMPANY
By:
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Title:
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ATTEST:
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Secretary
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TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION
as Trustee
By
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Authorized Signatory
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This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of September 1, 1991 (herein called the
"Indenture"), between the Company and Chase Bank of Texas, National Association
(formerly named Texas Commerce Bank National Association), as Trustee (herein
called the "Trustee", which term includes any successor trustee under the
Indenture), to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights, limitation of rights,
duties and immunities thereunder of the Company, the Trustee and the Holders of
the Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is a Book-Entry Security.
The Company, at is option, may at any time redeem all or any portion of
the Securities of this series, at a redemption price equal to the greater of (i)
100% of their principal amount, or (ii) the sum of the present values of the
remaining scheduled payments of principal and interest thereon discounted to the
date of redemption on a semi-annual basis (assuming a 360-day year consisting of
twelve 30-day months) at the applicable Treasury Rate plus 20 basis points, plus
accrued and unpaid interest to the date of redemption.
"Treasury Rate" means, with respect to any redemption date applicable
to the Securities of this series, the rate per annum equal to the semi-annual
equivalent yield to maturity of the Comparable Treasury Issue, at a price equal
to the applicable Comparable Treasury Price.
"Comparable Treasury Issue" means, with respect to the Securities of
this series, the United States Treasury security selected by an Independent
Investment Banker as having a maturity comparable to the remaining term of the
Securities of this series that would be utilized, at the time of selection and
in accordance with customary financial practice, in pricing new issues of
corporate debt securities of comparable maturity to the remaining term of the
Securities of this series.
"Comparable Treasury Price" means, with respect to any redemption date
applicable to the Securities of this series, (1) the average of the bid and
asked prices for the Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) on the third business day preceding such
redemption date, as set forth in the daily statistical release (or any successor
release) published by the Federal Reserve Bank of New York and designated
"Composite 3:30 p.m. Quotations for U.S. Government Securities" or (2) if such
release (or any successor release) is not published or does not contain such
prices on such business day, (A) the average of the Reference Treasury Dealer
Quotations for such redemption date, after excluding the highest and lowest such
Reference Treasury Dealer Quotations, or (B) if the Trustee obtains fewer than
four such Reference Treasury Dealer Quotations, the average of all such
quotations.
"Independent Investment Banker" means, with respect to the Securities
of this series, an independent investment banking institution of national
standing appointed by the Trustee.
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"Reference Treasury Dealer" means, with respect to the Securities of
this series, at least four primary U.S. Government securities dealers as the
Company or the Trustee shall select.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date for the Securities of this
series, the average, as determined by the Trustee, of the bid and asked prices
for the Comparable Treasury Issue for the Securities of this series (expressed
in each case as a percentage of its principal amount) quoted in writing to the
Trustee by such Reference Treasury Dealer at 5:00 p.m. on the third business day
preceding such redemption date.
Holders of the Securities of this series to be redeemed will receive
notice thereof by first-class mail at least 30 and not more than 60 days prior
to the date fixed for redemption.
The Securities of this series shall not be subject to a sinking fund
requirement.
The Indenture contains provisions for defeasance at any time of the
entire indebtedness of the Company on this Security upon compliance by the
Company with certain conditions set forth therein, which provisions apply to
this Security.
If an Event of Default with respect to the Securities of this series
shall occur and be continuing, the unpaid principal of the Securities of this
series may be declared due and payable in the manner and with the effect
provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of more than 50% in principal amount of the Securities at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all the Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange hereof or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.
As set forth in, and subject to, the provisions of the Indenture, no
Holder of any Security of this series shall have any right to institute any
proceeding with respect to the Indenture or for any remedy thereunder, unless
such Holder shall have previously given to the Trustee written notice of a
continuing Event of Default with respect to the Securities of this series, the
Holders of not less than 25% in principal amount of the
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Outstanding Securities of this series shall have made written request, and
offered reasonable indemnity, to the Trustee to institute such proceeding as
trustee, and the Trustee shall not have received from the Holders of a majority
in principal amount of the Outstanding Securities of this series a direction
inconsistent with such request, and the Trustee shall have failed to institute
such proceeding within 60 days; provided, however, that such limitations shall
not apply to a suit instituted by the Holder hereof for the enforcement of
payment of the principal of (or premium, if any) or interest on this Security on
or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall, without the consent of the Holder, alter or impair
the right of the Holders, which is absolute and unconditional, to receive
payment of the principal of (and premium, if any) and interest on this Security
at the times, place and rate, and in the coin or currency, herein prescribed,
except for Section 113 of the Indenture (which limits interest to the maximum
amount permissible by law), the provisions of which are incorporated herein by
reference.
This Security shall be exchangeable for Securities of this series
registered in the names of Persons other than the Depository with respect to
such series or its nominee only as provided in this paragraph. This Security
shall be so exchangeable if (x) such Depository notifies the Company that it is
unwilling or unable to continue as Depository for this Security or if at any
time such Depository ceases to be a clearing agency registered as such under the
Securities Exchange Act of 1934, (y) the Company executes and delivers to the
Trustee a written order providing that this Security shall be so exchangeable or
(z) there shall have occurred and be continuing an Event of Default with respect
to the Securities of this series. Securities so issued in exchange for this
Security shall be of the same series and of like tenor, in authorized
denominations and in the aggregate having the same unpaid principal amount as
this Security and registered in such names as such Depository shall direct.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of (and
premium, if any) and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or its
attorney duly authorized in writing, and thereupon one or more new Securities of
this series, and of like tenor, of authorized denominations and for the same
aggregate unpaid principal amount, shall be issued to the designated transferee
or transferees.
No service charge shall be made for any such exchange or registration
of transfer, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose
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name this Security is registered as the owner hereof for all purposes, whether
or not this Security be overdue, and neither the Company, the Trustee nor any
such agent shall be affected by notice to the contrary.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused a CUSIP number to be
printed on this Security as a convenience to the Holder hereof. No
representation is made as to the accuracy of such number and reliance may be
placed only on the other identifying information printed hereon.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
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ASSIGNMENT FORM
I or we assign and transfer this Security to
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(Print or type name, address and zip code of assignee or transferee)
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(Insert Social Security or other identifying number of assignee or transferee)
and irrevocably appoint
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as agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
Dated: Signed:
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(Sign exactly as name appears above
or on the other side of this Security)
Signature Guarantee:
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Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor
program reasonably acceptable to the Trustee)