-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GutoOE318oZM1xQ3t/OgyS33Lv1YzRi67/SelHw89aWYmEY6hgmv3dOzTP45B09K LChzZqYZm9sLvdjey1HJxg== 0000950120-96-000244.txt : 19961104 0000950120-96-000244.hdr.sgml : 19961104 ACCESSION NUMBER: 0000950120-96-000244 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 9 FILED AS OF DATE: 19961101 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: NORTHWEST NATURAL GAS CO CENTRAL INDEX KEY: 0000073020 STANDARD INDUSTRIAL CLASSIFICATION: NATURAL GAS DISTRIBUTION [4924] IRS NUMBER: 930256722 STATE OF INCORPORATION: OR FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-15323 FILM NUMBER: 96651750 BUSINESS ADDRESS: STREET 1: 220 NW SECOND AVE CITY: PORTLAND STATE: OR ZIP: 97209 BUSINESS PHONE: 5032264211 S-3 1 FORM S-3 OF NORTHWEST NATURAL GAS COMPANY AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 1, 1996 Registration No. 333-_____ =========================================================================== SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------------- FORM S-3 REGISTRATION STATEMENT Under THE SECURITIES ACT OF 1933 ---------------------- NORTHWEST NATURAL GAS COMPANY (Exact name of registrant as specified in its charter) OREGON 93-0256722 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) One Pacific Square, 220 N.W. Second Avenue, Portland, Oregon 97209 503-226-4211 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) ---------------------- RICHARD G. REITEN President and Chief Operating Officer One Pacific Square, 220 N.W. Second Avenue Portland, Oregon 97209 503-226-4211 BRUCE R. DeBOLT JOHN T. HOOD, Esq. Senior Vice President, Finance, Reid & Priest LLP and Chief Financial Officer 40 West 57th Street One Pacific Square, 220 N.W. Second Avenue New York, New York 10019 Portland, Oregon 97209 212-603-2000 503-226-4211 (Names, addresses, including zip codes, and telephone numbers, including area codes, of agents for service) ---------------------- Approximate date of commencement of proposed sale to the public: From time to time after this Registration Statement becomes effective as determined by market conditions. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [ ] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [X] If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] __________________ If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] ____________________ If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ] ---------------------- CALCULATION OF REGISTRATION FEE ======================================================================= Proposed Proposed Title of each maximum maximum class of offering aggregate securities to Amount to be price per offering Registration be registered registered unit price fee ------------------------------------------------------------------------ Debt Securities $150,000,000+ 100%* $150,000,000* $45,455+ ======================================================================== * Inserted solely for the purpose of calculating the registration fee. + The combined Prospectus filed herewith pursuant to Rule 429 also relates to an additional $15,000,000 of Debt Securities registered pursuant to Registration No. 33-64014 which remains unsold and for which a registration fee of $4,688 has been paid. ---------------------- The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Commis- sion, acting pursuant to said Section 8(a), may determine. =========================================================================== Pursuant to Rule 429, the combined Prospectus filed herewith also relates to Registration No. 33-64014. PROSPECTUS ---------- $165,000,000 NORTHWEST NATURAL GAS COMPANY SECURED MEDIUM-TERM NOTES, SERIES B (SERIES OF FIRST MORTGAGE BONDS) AND UNSECURED MEDIUM-TERM NOTES, SERIES B Due from Nine Months to 30 Years from Date of Issue ---------------------- Northwest Natural Gas Company ("Company") may offer from time to time up to $165,000,000 aggregate principal amount of its debt securities ("Medium- Term Notes"), consisting of its First Mortgage Bonds, designated Secured Medium-Term Notes, Series B ("Secured Notes"), and its Unsecured Medium- Term Notes, Series B ("Unsecured Notes"). The principal amounts, interest rates, issue prices and agents' commissions, original issue and maturity dates, redemption provisions, if any, and other material terms of the Medium-Term Notes will be established by the Company from time to time and will be set forth in supplements hereto ("Pricing Supplements"). The Medium-Term Notes will have maturities from nine months to 30 years from their respective dates of issue. Interest on each Medium-Term Note will accrue from its date of issue and will be payable semi-annually in arrears on each June 1 and December 1, and at maturity. The Medium-Term Notes will not be subject to redemption prior to their stated maturity unless otherwise specified in the applicable Pricing Supplement. The Medium-Term Notes will be initially registered in the name of CEDE & Co. as registered owner and nominee for The Depository Trust Company, New York, New York ("DTC"). DTC will act as a securities depository for the Medium-Term Notes of each issue. Sales of Medium-Term Notes will be made only in book-entry form in denominations of $1,000 or any amount in excess thereof that is an integral multiple of $1,000 and, except under the limited circumstances described herein, beneficial owners of interests in the Medium-Term Notes will not receive certificates representing their interests in the Medium-Term Notes. Payments of principal, premium, if any, and interest will be made through DTC and its Participants and disbursements of such payments to purchasers will be the responsibility of such Participants. For further information with respect to the Medium-Term Notes, see "Book-Entry System", "Description of the Secured Notes", and "Description of the Unsecured Notes" herein and the applicable Pricing Supplement. ---------------------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS OR ANY SUPPLEMENT HERETO. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ============= =============== ====================== =================== PRICE TO AGENTS' PROCEEDS TO PUBLIC(1) COMMISSIONS(2)(3) COMPANY(2)(4) ------------- --------------- ---------------------- ------------------- Per Note . 100% .125%-.750% 99.875%-99.250% ------------- --------------- ---------------------- ------------------- Total . . . $165,000,000 $206,250-$1,237,500 $164,793,750- $163,762,500 ============= =============== ====================== =================== (1) Unless otherwise specified in the applicable Pricing Supplement, Medium-Term Notes will be issued at 100% of their principal amount. (2) The Company will pay commissions to any agents engaged by the Company ("Agents"), including Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated and PaineWebber Incorporated, in the form of discounts, ranging from .125% to .750% of the principal amount of any Medium-Term Note, depending upon maturity, and may sell Medium- Term Notes to any Agent, as principal. Unless otherwise indicated in the applicable Pricing Supplement, a Medium-Term Note sold to an Agent, as principal, will be purchased by such Agent at a price equal to 100% of the principal amount thereof less a percentage equal to the commission applicable to an agency sale of a Medium-Term Note of identical maturity, and may be resold by such Agent to investors and other purchasers at varying prices related to prevailing market prices at the time of resale as determined by such Agent, or, if so agreed, at a fixed public offering price. No commission will be payable on any sales made directly by the Company. (3) The Company has agreed to indemnify the Agents against certain liabilities under the Securities Act of 1933. (4) Assuming Medium-Term Notes are issued at 100% of their principal amount and before deducting expenses payable by the Company estimated at $252,000, including reimbursement of certain expenses of the Agents. ---------------------- The Medium-Term Notes are being offered on a continuing basis by the Company through the Agents, which have agreed to use their best efforts to solicit purchases of the Medium-Term Notes. Medium-Term Notes may also be sold to any Agent, as principal, for resale to investors and other purchasers at varying prices related to prevailing market prices at the time of resale, as determined by such Agent, or, if so agreed, at a fixed public offering price. The Company reserves the right to sell Medium-Term Notes directly to investors on its own behalf. The Medium-Term Notes will not be listed on any securities exchange, and there can be no assurance that the Medium-Term Notes offered by this Prospectus will be sold or that there will be a secondary market for the Medium-Term Notes. The Company reserves the right to withdraw, cancel or modify the offer made hereby without notice. The Company or any Agent may reject, in whole or in part, any offer to purchase Medium-Term Notes. See "Plan of Distribution". ---------------------- MERRILL LYNCH & CO. PAINEWEBBER INCORPORATED ---------------------- The date of this Prospectus is November __, 1996 AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended ("Exchange Act"), and, in accordance therewith, files reports and other information with the Securities and Exchange Commission ("Commission"). Reports, proxy statements and other information filed by the Company can be inspected and copied at the public reference facilities of the Commission, Room 1024, Judiciary Plaza, 450 Fifth Street, N.W. Washington, D.C. 20549, as well as at the following regional offices: Seven World Trade Center, Suite 1300, New York, New York 10048, and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material can be obtained from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The Commission maintains a Web site (http://www.sec.gov) that contains reports, proxy statements and other information filed electronically by the Company. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE There are hereby incorporated by reference in this Prospectus the following documents heretofore filed with the Securities and Exchange Commission: (1) The Company's Annual Report on Form 10-K for the year ended December 31, 1995. (2) The Company's Quarterly Reports on Form 10-Q for the quarters ended March 31 and June 30, 1996. (3) The Company's Current Report on Form 8-K dated February 27, 1996. All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to the termination of this offering shall be deemed to be incorporated by reference into this Prospectus. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded, for purposes of this Prospectus, to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. The Company hereby undertakes to provide, without charge, to each person to whom a copy of this Prospectus shall have been delivered, upon written or oral request of such person, a copy of any or all of the documents which have been incorporated in this Prospectus by reference, other than exhibits to such documents, unless such exhibits shall have been specifically incorporated by reference into such documents. Requests for such copies should be directed to C.J. Rue, Secretary, Northwest Natural Gas Company, One Pacific Square, 220 N.W. Second Avenue, Portland, Oregon 97209, telephone 503-226-4211. THE COMPANY The Company's executive offices are located at One Pacific Square, 220 N.W. Second Avenue, Portland, Oregon 97209. Its telephone number is 503-226-4211. The Company and its predecessors have supplied gas service to the public since 1859. The Company is principally engaged in the distribution of natural gas to customers in western Oregon and southwestern Washington, including the Portland metropolitan area. USE OF PROCEEDS AND FINANCING PROGRAM The net proceeds to be received by the Company from the sale of the Medium-Term Notes will be added to the general funds of the Company and used for corporate purposes, primarily to fund, in part, the Company's ongoing utility construction program. The Company expects its utility construction expenditures in 1996 to aggregate $92 million, and in the five-year period, 1996-2000, to aggregate between $500 million and $550 million. It is estimated that 50% or more of the funds required for utility purposes during the 1996-2000 period will be internally generated and that the balance, as well as substantially all of the funds required for the refunding of maturing and higher-cost debt, will be raised through the sale of equity and debt securities, including the Medium-Term Notes, in such amounts and at such times as the Company's cash requirements and market conditions shall determine. Approximately $21 million of debt securities matured in 1996 and approximately $25 million and $15 million will mature in 1997 and 1998, respectively. RATIO OF EARNINGS TO FIXED CHARGES The ratios of earnings to fixed charges, calculated according to the rules set forth under the Securities Act of 1933, as amended, for the following twelve-month periods were: TWELVE MONTHS ENDED ------------------------------------------------------------------- JUNE 30, DECEMBER 31, -------- ---------------------------------------------------- 1996 1995 1994 1993 1992 1991 ---- ---- ---- ---- ---- ---- 3.54 3.15 3.08 3.22 1.81 1.59 Earnings consist of net income to which has been added taxes on income and fixed charges. Fixed charges consist of interest on all indebtedness, amortization of debt expense and discount or premium, and the estimated interest portion of rentals charged to income. BOOK-ENTRY SYSTEM DTC will act as securities depository for the Medium-Term Notes of each issue. Except under the circumstances described below, the Medium-Term Notes will be issued in the form of one or more fully registered notes that will be deposited with, or on behalf of, DTC or such other depository as may be subsequently designated ("Depository"), and registered in the name of CEDE & Co. (DTC's partnership nominee), or such other Depository or its nominee as may be subsequently designated. So long as the Depository, or its nominee, is the registered owner of the Medium-Term Notes, such Depository or such nominee, as the case may be, will be considered the owner of such Medium-Term Notes for all purposes under the Mortgage or the Indenture (each as defined below), as the case may be, including notices and voting. Payments of principal of, and premium, if any, and interest on, the Medium-Term Notes will be made to the Depository or its nominee, as the case may be, as the registered owner of such Medium-Term Notes. Except as set forth below, owners of beneficial interests in Medium-Term Notes will not be entitled to have any individual Medium-Term Notes registered in their names, will not receive or be entitled to receive physical delivery of any such Medium-Term Notes and will not be considered the owners of Medium-Term Notes under the Mortgage or the Indenture. Accordingly, each person holding a beneficial interest in a Medium-Term Note must rely on the procedures of the Depository and, if such person is not a Direct Participant (as hereinafter defined), on procedures of the Direct Participant through which such person holds its interest, to exercise any of the rights of the registered owner of such Medium-Term Note. If the Depository is at any time unwilling or unable to continue as depository and a successor depository is not appointed by the Company, individual registered Medium-Term Notes will be issued in exchange for the Medium-Term Notes held by the Depository. In addition, the Company, at any time and in its sole discretion, may determine not to have the Medium-Term Notes held by the Depository and, in such event, individual registered Medium-Term Notes will be issued in exchange for the Medium-Term Notes held by the Depository. In any such instance, an owner of a beneficial interest in the Medium- Term Notes will be entitled to physical delivery of individual Medium- Term Notes equal in principal amount to such beneficial interest and to have such Medium-Term Notes registered in its name. Individual Medium-Term Notes so issued will be issued as registered Medium-Term Notes in denominations of $1,000 or any amount in excess thereof that is an integral multiple of $1,000. The following is based solely on information furnished by DTC: DTC is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Exchange Act. DTC holds securities that its participants ("Participants") deposit with DTC. DTC also facilitates the settlement among Participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in Participants' accounts, thereby eliminating the need for physical movement of securities certificates. Direct Participants include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations ("Direct Participants"). DTC is owned by a number of its Direct Participants and by The New York Stock Exchange, Inc., the American Stock Exchange, Inc., and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as securities brokers and dealers, banks, and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). The rules applicable to DTC and its Participants are on file with the Commission. Purchases of the Medium-Term Notes under the DTC system must be made by or through Direct Participants, which will receive a credit for the Medium-Term Notes on DTC's records. The ownership interest of each actual purchaser of each Medium-Term Note ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase, but Beneficial Owners are expected to receive written confirmation providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Medium-Term Notes are to be accomplished by entries made on the books of Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Medium-Term Notes, except in the event that use of the book- entry system for the Medium-Term Notes is discontinued. To facilitate subsequent transfers, all Medium-Term Notes deposited by Participants with DTC are registered in the name of CEDE & Co. The deposit of Medium-Term Notes with DTC and their registration in the name of CEDE & Co. effect no change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Medium-Term Notes; DTC's records reflect only the identity of the Direct Participants to whose accounts such Medium-Term Notes are credited, which may or may not be the Beneficial Owners. The Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. If the Medium-Term Notes of any issue are redeemable prior to the maturity date, redemption notices shall be sent to CEDE & Co. If less than all of the Medium-Term Notes of any issue are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. Neither DTC nor CEDE & Co. will consent or vote with respect to the Medium-Term Notes. Under its usual procedures, DTC mails an Omnibus Proxy to the Company as soon as possible after the record date. The Omnibus Proxy assigns CEDE & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Medium-Term Notes are credited on the record date (identified in a listing attached to the Omnibus Proxy). Principal and interest payments on the Medium-Term Notes will be made to DTC. DTC's practice is to credit Direct Participants' accounts on the date on which interest is payable in accordance with their respective holdings shown on DTC's records, unless DTC has reason to believe that it will not receive payment on such payment date. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name", and will be the responsibility of such Participant and not of DTC, the Mortgage Trustees (as defined below), the Indenture Trustee (as defined below) or the Company, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest to DTC is the responsibility of the Company and the Corporate Trustee (as defined below) or the Indenture Trustee, as the case may be. Disbursement of such payments to Direct Participants shall be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants. DTC may discontinue providing services as securities depository with respect to the Medium-Term Notes at any time by giving reasonable notice to the Company, the Mortgage Trustees and the Indenture Trustee. ---------------------- None of the Company or the Mortgage Trustees or the Indenture Trustee will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial interests in the Medium-Term Notes or for maintaining, supervising or reviewing any records relating to such beneficial interests. DESCRIPTION OF THE SECURED NOTES GENERAL The Secured Notes, which comprise a series of the Company's First Mortgage Bonds ("Bonds"), are to be issued under the Company's Mortgage and Deed of Trust, dated as of July 1, 1946, to Bankers Trust Company ("Corporate Trustee") and R.G. Page (Stanley Burg, successor), as trustees ("Mortgage Trustees"), as supplemented by twenty supplemental indentures, all of which are collectively referred to as the "Mortgage". The statements herein concerning the Secured Notes and the Mortgage are merely an outline and do not purport to be complete. They make use of terms defined in the Mortgage and are qualified in their entirety by express reference to the cited Sections and Articles. They may be changed with respect to any Secured Note by the applicable Pricing Supplement, which should be read in conjunction with this description. The Secured Notes will be offered on a continuing basis and each Secured Note will mature on such date, not less than nine months or more than 30 years from its date of issue, as selected by the purchaser and agreed to by the Company. The Pricing Supplement relating to each Secured Note will set forth the principal amount, interest rate, issue price and Agent's commission, original issue and maturity dates, redemption provisions, if any, and other material terms of such Secured Note. INTEREST Interest on each Secured Note will be payable semi-annually in arrears on June 1 and December 1 of each year and at maturity. Interest payable on any interest payment date for any Secured Note will be payable to the person in whose name such Secured Note is registered on the record date with respect to such interest payment date, which shall be the May 15 or November 15 (whether or not a business day), as the case may be, next preceding such interest payment date; provided that, (i) if the original issue date of any Secured Note is after a record date and before the corresponding interest payment date, such Secured Note shall bear interest from the original issue date, but payment of interest shall commence on the second interest payment date succeeding the original issue date, and (ii) interest payable on the maturity date will be payable to the person to whom the principal thereof shall be payable. Unless otherwise indicated in the applicable Pricing Supplement, interest on the Secured Notes will be computed on the basis of a 360-day year consisting of twelve 30-day months. FORM, EXCHANGE AND PAYMENT The Secured Notes will be issued in fully registered form in denominations of $1,000 or any amount in excess thereof that is an integral multiple of $1,000. The Secured Notes will be exchangeable at the office of Bankers Trust Company in New York City, without charge other than taxes or other governmental charges incident thereto. Principal, premium, if any, and interest will be payable at such office. (See Twentieth Supplemental, Sec. 1.01.) Notwithstanding the foregoing, for so long as the Secured Notes shall be held by the Depository or its nominee, owners of beneficial interests in the Secured Notes will not be entitled to have any individual Secured Notes registered in their names, and transfers of beneficial interests and payments of principal, premium, if any, and interest will be made as described herein under "Book-Entry System". REDEMPTION To the extent, if any, provided in the Pricing Supplement relating to any Secured Note, such Secured Note will be redeemable, on 30 days' notice, in whole or in part, at any time on or after the initial redemption date, if any, fixed at the time of sale and set forth in the applicable Pricing Supplement. On or after the initial redemption date, such Secured Note will be redeemable in whole or in part, at the option of the Company at a redemption price determined in accordance with the following paragraph, plus accrued interest to the date fixed for redemption. The redemption price for each Secured Note subject to redemption shall, for the twelve-month period commencing on the initial redemption date, be equal to a certain percentage of the principal amount of such Secured Note and thereafter, shall decline for the twelve-month period commencing on each anniversary of the initial redemption date by a percentage of principal amount ("Reduction Percentage") until the redemption price shall be 100% of the principal amount. The initial redemption date and price and any Reduction Percentage with respect to each Secured Note subject to redemption will be fixed at the time of sale and set forth in the applicable Pricing Supplement. If so specified in the Pricing Supplement relating to any Secured Note, the Company may not, prior to the redemption limitation date, if any, set forth in such Pricing Supplement, redeem such Secured Note as contemplated above as a part of, or in anticipation of, any refunding operation by the application, directly or indirectly, of moneys borrowed having an effective interest cost to the Company (calculated in accordance with generally accepted financial practice) of less than the effective interest cost to the Company (similarly calculated) of such Secured Note. If, at the time the notice of redemption shall be given, the redemption money shall not be on deposit with the Corporate Trustee, the redemption may be made subject to the receipt of such money before the date fixed for redemption, and such notice shall be of no effect unless such money shall be so received. Unless otherwise indicated in the applicable Pricing Supplement, the Secured Notes will not be subject to any sinking fund. PROVISIONS FOR MAINTENANCE OF PROPERTY While the Mortgage contains provisions for the maintenance of the Mortgaged and Pledged Property, the Mortgage does not permit redemption of Bonds pursuant to these provisions. SECURITY The Secured Notes together with all other Bonds now or hereafter issued under the Mortgage will be secured by the Mortgage, which constitutes, in the opinion of Bruce B. Samson, Esq., General Counsel of the Company, a first mortgage lien on all of the gas plants, distribution systems and other materially important physical properties of the Company (except as stated below), subject to (a) leases of minor portions of the Company's property to others for uses which, in the opinion of such Counsel, do not interfere with the Company's business, (b) leases of certain property of the Company not used in its gas utility business or the gas by-product business, (c) excepted encumbrances, and (d) minor defects and encumbrances customarily found in properties of like size and character which, in the opinion of such Counsel, do not impair the use of such properties by the Company. There are excepted from the lien all cash and securities; certain equipment, apparatus, materials or supplies; aircraft, automobiles and other vehicles; receivables, contracts, leases and operating agreements; timber, minerals, mineral rights and royalties and all natural gas and oil production property. The Mortgage contains provisions subjecting after-acquired property (subject to pre-existing liens) to the lien thereof, subject to limitations in the case of consolidation, merger or sale of substantially all of the Company's assets. (See Mortgage, Art. XVI.) The Mortgage provides that the Mortgage Trustees shall have a lien upon the mortgaged property, prior to that of the Bonds, for the payment of their reasonable compensation and expenses and for indemnity against certain liabilities. (See Mortgage, Sec. 96). ISSUANCE OF ADDITIONAL BONDS Bonds may be issued from time to time on the basis of (1) 60% of property additions, after adjustments to offset retirements (see "Modification of the Mortgage -- Issuance of Additional Bonds" below); (2) retirement of Bonds or qualified lien bonds; or (3) deposit of cash. With certain exceptions in the case of (2) above, the issuance of Bonds is subject to adjusted net earnings before income taxes for 12 consecutive months out of the preceding 15 months being at least twice the annual interest requirements on all Bonds at the time outstanding, including the additional issue, and all indebtedness of prior rank. Property additions generally include gas, electric, steam or hot water property or gas by-product property acquired after March 31, 1946, but may not include securities, airplanes, automobiles or other vehicles, or natural gas transmission lines or natural gas and oil production property. As of June 30, 1996, approximately $341 million of property additions and $93 million of retired Bonds were available for use as the basis for the issuance of Bonds. The Mortgage contains certain restrictions upon the issuance of Bonds against property subject to liens. The Secured Notes will be issued against property additions and retired Bonds. (See Mortgage, Secs. 4-7, 20-30 and 46, and Third Supplemental, Secs. 3 and 4.) RELEASE AND SUBSTITUTION OF PROPERTY Property may be released against (1) deposit of cash or, to a limited extent, purchase money mortgages, (2) property additions, or (3) waiver of the right to issue Bonds without applying any earnings test. Cash so deposited and cash deposited against the issuance of additional bonds may be withdrawn upon the bases stated in (2) and (3) above. When property released is not funded property, property additions used to effect the release may again, in certain cases, become available as credits under the Mortgage, and the waiver of the right to issue Bonds to effect the release may, in certain cases, cease to be effective as such a waiver. Similar provisions are in effect as to cash proceeds of such property. The Mortgage contains special provisions with respect to qualified lien bonds pledged and the disposition of moneys received on pledged prior lien bonds. (See Mortgage, Secs. 5, 31, 32, 37, 46 to 50, 59 to 61, 100 and 118.) DEFAULTS AND NOTICE THEREOF Defaults are: default in payment of principal, default for 60 days in payment of interest or of installments of funds for retirement of Bonds; certain defaults with respect to qualified lien bonds; certain events in bankruptcy, insolvency or reorganization; and default for 90 days after notice in the case of a breach of any other covenant. The Mortgage Trustees may withhold notice of default (except in payment of principal, interest or any fund for the retirement of Bonds) if they think it in the interest of the Bondholders. (See Mortgage, Secs. 65 and 66). Holders of 25% of the Bonds may declare the principal and the interest due on default, but a majority may annul such declaration if such default has been cured. No holder of Bonds may enforce the lien of the Mortgage without giving the Mortgage Trustees written notice of a default and unless holders of 25% of the Bonds have requested the Mortgage Trustees to act and offered them reasonable opportunity to act and the Mortgage Trustees have failed to act. The Mortgage Trustees are not required to risk their funds or incur personal liability if there is reasonable ground for believing that the repayment is not reasonably assured. Holders of a majority of the Bonds may direct the time, method and place of conducting any proceedings for any remedy available to the Mortgage Trustees, or exercising any trust or power conferred upon the Mortgage Trustees, but the Mortgage Trustees are not required to follow such direction if not sufficiently indemnified for expenditures. (See Mortgage, Secs. 67, 71, 80 and 94.) EVIDENCE TO BE FURNISHED TO THE MORTGAGE TRUSTEES Compliance with Mortgage provisions is evidenced by written statements of the Company's officers or persons selected by the Company. In certain major matters the accountant, engineer, appraiser or other expert must be independent. Various certificates and other papers, including an annual certificate with reference to compliance with the terms of the Mortgage and absence of defaults, are required to be filed annually and upon the occurrence of certain events. (See Mortgage, Secs. 38-46.) MODIFICATION OF THE MORTGAGE The rights of the Bondholders may be modified with the consent of 70% of the Bonds and, if less than all series of Bonds are affected, the consent also of 70% of Bonds of each series affected. The Company has the right, without any consent or other action by holders of any series of Bonds, to substitute 66 % for 70%. In general, no modification of the terms of payment of principal and interest, affecting the lien of the Mortgage or reducing the percentage required for modification (except as provided above) will be effective against any Bondholder without his consent. (See Mortgage, Art. XIX and Ninth Supplemental, Sec.6.) The Company has reserved the right to amend the Mortgage, without any consent or other action by holders of the Bonds of the Nineteenth Series or of Bonds of any subsequently created series (including the Secured Notes), in the following respects: Release and Substitution of Property To permit the release of property at the lesser of its cost or its fair value at the time that such property became funded property, rather than at its fair value at the time of its release; and to facilitate the release of unfunded property. (See Mortgage, Secs. 3, 59 and 60 and Eighteenth Supplemental, Sec. 2.03.) Issuance of Additional Bonds To clarify that (i) for purposes of determining annual interest requirements, interest on Bonds or other indebtedness bearing interest at a variable interest rate shall be computed at the average of the interest rates borne by such Bonds or other indebtedness during the period of calculation or, if such Bonds or other indebtedness shall have been issued after such period or shall be the subject of pending applications, interest shall be computed at the initial rate borne upon issuance, and (ii) no extraordinary items shall be included in operating expenses or deducted from revenues or other income in calculating adjusted net earnings (See Mortgage, Sec. 7); and to revise the basis for the issuance of additional Bonds from 60% of property additions, after adjustments to offset retirements, to 70%. (See Mortgage, Secs. 25, 26, 59 and 61 and Eighteenth Supplemental, Secs. 2.01 and 2.02) THE CORPORATE TRUSTEE Bankers Trust Company also serves as the Indenture Trustee under the Indenture under which the Unsecured Notes are issued. DESCRIPTION OF THE UNSECURED NOTES GENERAL The Unsecured Notes are to be issued under an Indenture, dated as of June 1, 1991 ("Indenture"), between the Company and Bankers Trust Company, as trustee ("Indenture Trustee"). The statements herein concerning the Unsecured Notes and the Indenture are merely an outline and do not purport to be complete. They make use of terms defined in the Indenture and are qualified in their entirety by express reference to the cited Sections and Articles. They may be changed with respect to any Unsecured Note by the applicable Pricing Supplement, which should be read in conjunction with this description. The Indenture provides that debt securities (including the Unsecured Notes and including both interest bearing and original issue discount securities) may be issued thereunder, without limitation as to aggregate principal amount. (See Indenture, Sec. 301.) All debt securities heretofore or hereafter issued under the Indenture (including the Unsecured Notes) are collectively referred to as the "Indenture Securities". The Indenture does not limit the amount of other debt, secured or unsecured, which may be issued by the Company. The Unsecured Notes will rank pari passu with all other unsecured and unsubordinated indebtedness of the Company. Substantially all of the gas plants, distribution systems and other materially important physical properties of the Company are subject to the lien of the Mortgage securing the Company's Bonds. (See "Description of the Secured Notes Security and Issuance of Additional Bonds", above.) The Unsecured Notes will be offered on a continuing basis, and each Unsecured Note will mature on such date, not less than nine months nor more than 30 years from its date of issue, as selected by the purchaser and agreed to by the Company. The Pricing Supplement relating to any Unsecured Note will set forth the principal amount, interest rate, issue price and Agent's commission, original issue and maturity dates, redemption provisions, if any, and other material terms of such Unsecured Note. INTEREST Interest on each Unsecured Note will be payable semi-annually in arrears on June 1 and December 1 of each year and at maturity. Interest payable on any interest payment date for any Unsecured Note will be payable to the person in whose name such Unsecured Note is registered on the record date with respect to such interest payment date, which shall be the May 15 or November 15 (whether or not a business day), as the case may be, next preceding such interest payment date; provided that, (i) if the original issue date of any Unsecured Note is after a record date and before the corresponding interest payment date, such Unsecured Note will bear interest from the original issue date but payment of interest shall commence on the second interest payment date succeeding the original issue date, and (ii) interest payable on the maturity date will be payable to the person to whom the principal thereof shall be payable. Unless otherwise indicated in the applicable Pricing Supplement, interest on the Unsecured Notes will be computed on the basis of a 360-day year consisting of twelve 30-day months. FORM, EXCHANGE AND PAYMENT The Unsecured Notes will be issued in fully registered form in denominations of $1,000 or any amount in excess thereof that is an integral multiple of $1,000. The Unsecured Notes will be exchangeable at the office of Bankers Trust Company in New York City, without charge other than taxes or other governmental charges incident thereto. Principal, premium, if any, and interest will be payable at such office. Notwithstanding the foregoing, for so long as the Unsecured Notes shall be held by the Depository or its nominee, owners of beneficial interests in the Unsecured Notes will not be entitled to have any individual Unsecured Notes registered in their names, and transfers of beneficial interests and payments of principal, premium, if any, and interest will be made as described herein under "Book-Entry System". REDEMPTION To the extent, if any, provided in the Pricing Supplement relating to any Unsecured Note, such Unsecured Note will be redeemable, on not less than 30 days' notice, in whole or in part, at any time on or after the initial redemption date, if any, fixed at the time of sale and set forth in the applicable Pricing Supplement. On or after the initial redemption date, such Unsecured Note will be redeemable in whole or in part, at the option of the Company, at a redemption price determined in accordance with the following paragraph, plus accrued interest to the date fixed for redemption. The redemption price for each Unsecured Note subject to redemption shall, for the twelve-month period commencing on the initial redemption date, be equal to a certain percentage of the principal amount of such Unsecured Note and, thereafter, shall decline for the twelve-month period commencing on each anniversary of the initial redemption date by a percentage of principal amount ("Reduction Percentage") until the redemption price shall be 100% of the principal amount. The initial redemption price and date and any Reduction Percentage with respect to each Unsecured Note subject to redemption will be fixed at the time of sale and set forth in the applicable Pricing Supplement. If so specified in the Pricing Supplement relating to any Unsecured Note, the Company may not, prior to the redemption limitation date, if any, set forth in such Pricing Supplement, redeem such Unsecured Note as contemplated above as a part of, or in anticipation of, any refunding operation by the application, directly or indirectly, of moneys borrowed having an effective interest cost to the Company (calculated in accordance with generally accepted financial practice) of less than the effective interest cost to the Company (similarly calculated) of such Unsecured Note. If, at the time the notice of redemption shall be given, the redemption money shall not be on deposit with the Indenture Trustee, the redemption shall be made subject to the receipt of such money on or before the date fixed for redemption, and such notice shall be of no effect unless such money shall be so received. (See Indenture, Art. Four.) Unless otherwise indicated in the applicable Pricing Supplement, the Unsecured Notes will not be subject to any sinking fund. EVENTS OF DEFAULT AND NOTICE THEREOF Events of Default are: default for three Business Days in payment of principal; default for 60 days in payment of interest; certain events in bankruptcy, insolvency or reorganization; default for 90 days after notice in the case of a breach of any other covenant; and any other Event of Default specified with respect to the Indenture Securities of a particular series. No Event of Default with respect to a series of Indenture Securities necessarily constitutes an Event of Default with respect to the Indenture Securities of any other series. The Indenture Trustee may withhold notice of default (except in payment of principal, interest or any funds for the retirement of Indenture Securities) if it, in good faith, determines that withholding of such notice is in the interest of the Holders of the Indenture Securities. (See Indenture, Secs. 801 and 903.) Either the Indenture Trustee or the Holders of not less than 33% in principal amount (or such lesser amount as may be provided in the case of discount Indenture Securities) of the outstanding Indenture Securities of all defaulted series, considered as one class, may declare the principal and interest on such series due on default, but the Company may annul such default by effecting its cure and paying overdue interest and principal. No Holder of Indenture Securities may enforce the Indenture without having given the Indenture Trustee written notice of default, and unless the Holders of a majority of the Indenture Securities of all defaulted series, considered as one class, shall have requested the Indenture Trustee to act and offered reasonable indemnity, and for 60 days the Indenture Trustee shall have failed to act. But, each Holder has an absolute right to receive payment of principal and interest when due and to institute suit for the enforcement of such payment. The Indenture Trustee is not required to risk its funds or incur any financial liability if it shall have reasonable grounds for believing that repayment is not reasonably assured. The Holders of a majority of the Indenture Securities of all defaulted series, considered as one class, may direct the time, method and place of conducting any proceedings for any remedy available to the Indenture Trustee, or exercising any trust or power conferred on the Indenture Trustee, with respect to the Indenture Securities of such series, but the Indenture Trustee is not required to follow such direction if not sufficiently indemnified and the Indenture Trustee may take any other action it deems proper which is not inconsistent with such direction. (See Indenture, Secs. 802, 807, 808, 812 and 902.) EVIDENCE TO BE FURNISHED TO THE INDENTURE TRUSTEE Compliance with Indenture provisions will be evidenced by written statements of the Company's officers. An annual certificate with reference to compliance with the covenants and conditions of the Indenture and the absence of defaults is required to be filed with the Indenture Trustee. (See Indenture, Sec.1004.) MODIFICATION OF THE INDENTURE The rights of the Holders of the Indenture Securities may be modified with the consent of the Holders of a majority of the Indenture Securities of all series or Tranches, as defined below, affected, considered as one class. However, certain specified rights of the Holders of Indenture Securities may be modified without the consent of the Holders if such modification would not be deemed adversely to affect their interests in any material respect. In general, no modification of the terms of payment of principal and interest, no reduction of the percentage in principal amount of the Indenture Securities outstanding under such series required to consent to any supplemental indenture or waiver under the Indenture, no reduction of such percentage necessary for quorum and voting, and no modification of certain of the provisions in the Indenture relating to supplemental indentures, waivers of certain covenants and waivers of past defaults is effective against any Holder of Indenture Securities without his consent. "Tranche" means a group of Indenture Securities which are of the same series and have identical terms except as to principal amount and/or date of issuance. (See Indenture, Art. Twelve.) THE INDENTURE TRUSTEE Bankers Trust Company also serves as the Corporate Trustee under the Mortgage under which the Secured Notes are issued. PLAN OF DISTRIBUTION The Medium-Term Notes are being offered on a continuing basis for sale by the Company through the Agents which have agreed to use their best efforts to solicit purchases of the Medium-Term Notes. The initial Agents are Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated and PaineWebber Incorporated. Should the Company designate other persons to act as Agents, the names of such persons will be disclosed in a Pricing Supplement. The Company will pay each Agent a commission which, depending on the maturity of the Medium-Term Notes, will range from .125% to .750% of the principal amount of any Medium-Term Note sold through such Agent. The Company may also sell Medium-Term Notes to any Agent, as principal, at a discount from the principal amount thereof, and the Agent may later resell such Medium- Term Notes to investors and other purchasers at varying prices related to prevailing market prices at the time of resale as determined by such Agent or, if so agreed, at a fixed public offering price. In the case of sales to any Agent as principal, such Agent may utilize a selling or dealer group in connection with resales. An Agent may sell Medium-Term Notes it has purchased as principal to any dealer at a discount and, unless otherwise specified in the applicable Pricing Supplement, such discount allowed to any dealer will not be in excess of the discount to be received by such Agent from the Company. After the initial public offering of Medium-Term Notes to be resold to investors and other purchasers, the public offering price (in the case of a fixed price public offering), concession and discount may be changed. The Medium-Term Notes also may be sold by the Company directly to purchasers. No commission will be payable to the Agents on Medium-Term Notes sold directly by the Company. The Company reserves the right to withdraw, cancel or modify the offer made hereby without notice and may reject, in whole or in part, offers to purchase Medium-Term Notes whether placed directly with the Company or through one of the Agents. Each Agent will have the right, in its discretion reasonably exercised, to reject any offer to purchase Medium-Term Notes received by it, in whole or in part. Payment of the purchase price of the Medium-Term Notes will be required to be made in immediately available funds in New York City on the date of settlement. No Medium-Term Note will have an established trading market when issued. The Medium-Term Notes will not be listed on any securities exchange. Each of the Agents may from time to time purchase and sell Medium-Term Notes in the secondary market, but is not obligated to do so, and there can be no assurance that there will be a secondary market for the Medium-Term Notes or liquidity in the secondary market if one develops. From time to time, each of the Agents may make a market in the Medium-Term Notes. The Agents may be deemed to be "underwriters" within the meaning of the Securities Act of 1933, as amended. The Company has agreed to indemnify each of the Agents against, or to make contributions relating to, certain liabilities, including liabilities under such Act. The Company has agreed to reimburse each of the Agents for certain expenses. Each of the Agents may engage in transactions with, or perform services for, the Company in the ordinary course of business. EXPERTS The financial statements incorporated in this Prospectus by reference from the Company's Annual Report on Form 10-K have been audited by Deloitte & Touche LLP, independent auditors, as stated in their report, which is incorporated herein by reference, and have been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. With respect to the unaudited interim financial information which is incorporated herein by reference from the Company's Quarterly Reports on Form 10-Q since the Company's latest Annual Report on Form 10-K, which is incorporated herein by reference, Deloitte & Touche LLP have applied limited procedures in accordance with professional standards for review of such information. However, as stated in their reports included in the Company's Quarterly Reports on Form 10-Q for such quarterly periods, and incorporated herein by reference, they did not audit and they do not express an opinion on that interim financial information. Accordingly, the degree of reliance on their reports on such information should be restricted in light of the limited nature of the review procedures applied. Deloitte & Touche LLP are not subject to the liability provisions of Section 11 of the Securities Act of 1933 for their reports on the unaudited interim financial information because such reports are not "reports" or a "part" of the registration statement prepared or certified by an accountant within the meaning of Sections 7 and 11 of such Act. The statements made as to matters of law and legal conclusions in the documents incorporated in this Prospectus by reference and under "Description of the Secured Notes" herein have been reviewed by Bruce B. Samson, Esquire, Portland, Oregon. Mr. Samson is General Counsel of the Company. These statements and conclusions are set forth in reliance upon the opinion of Mr. Samson given upon his authority as an expert. The statements made as to matters of law and legal conclusions under "Description of the Unsecured Notes" herein have been reviewed by Messrs. Reid & Priest LLP, New York, New York. These statements and conclusions are set forth in reliance upon the opinion of Messrs. Reid & Priest LLP given upon their authority as experts. As of September 30, 1996, Mr. Samson owned 8,700 shares of the Company's common stock (including approximately 2,612 shares held in Company's Retirement K Savings Plan at June 30, 1996) and has been granted options to purchase 6,091 shares at a price of $16.59, 3,000 shares at a price of $24.00 per share and 7,500 shares at a price of $20.92 per share, the market prices of the shares on the dates of such grants as adjusted to reflect a 3-for-2 split of the Company's Common Stock. Mr. Samson's shares, including the underlying shares subject to options granted to him, have a current fair market value of approximately $632,000. LEGALITY The legality of the Medium-Term Notes will be passed upon for the Company by Mr. Samson and by Messrs. Reid & Priest LLP, New York, New York, and for the agents by Messrs. Simpson Thacher & Bartlett (a partnership which includes professional corporations), New York, New York. However, all matters pertaining to titles, the lien and enforceability of the Mortgage, franchises and all other matters of Oregon and Washington law, will be passed upon only by Mr. Samson. ===================================== ============================= NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OF ANY SECURITIES OTHER THAN THOSE TO WHICH IT RELATES OR AN OFFER TO SELL, OR A $165,000,000 SOLICITATION OF AN OFFER TO BUY, TO ANY PERSON IN ANY JURISDICTION WHERE SUCH AN OFFER OR SOLICITATION WOULD BE UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE NORTHWEST HEREOF. NATURAL GAS COMPANY TABLE OF CONTENTS SECURED MEDIUM-TERM NOTES, Available Information . . . . . 2 SERIES B (SERIES OF FIRST MORTGAGE BONDS) Incorporation of Certain AND Documents by Reference . . . 2 UNSECURED MEDIUM-TERM NOTES, SERIES B The Company . . . . . . . . . . 2 Due from Nine Months to Use of Proceeds and 30 Years from Date of Issue Financing Program . . . . . . 2 Ratio of Earnings to . . . . . ------------------- Fixed Charges . . . . . . . . 3 P R O S P E C T U S ------------------- Book-Entry System . . . . . . . 3 Description of the Secured Notes . . . . . . . . 5 MERRILL LYNCH & CO. Description of the PAINEWEBBER INCORPORATED Unsecured Notes . . . . . . . 8 Plan of Distribution . . . . . 10 Experts . . . . . . . . . . . . 10 Legality . . . . . . . . . . . 11 November __, 1996 =================================== =================================== PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION (ESTIMATED, EXCEPT SEC FILING FEE). Filing Fee-Securities and Exchange Commission . . . . . . . . . . . . . $ 45,455 Fees of Trustees, including counsel and authentication fees . . . . . . . 10,000 Legal fees . . . . . . . . . . . . . . 100,000 Accounting fees and expenses . . . . . 15,000 Rating Agencies' fees . . . . . . . . 60,000 Printing and engraving . . . . . . . . 10,000 Miscellaneous expense . . . . . . . . 11,545 -------- Total expenses . . . . . . . . . . . $252,000 ======== ITEM 15. INDEMDEMNIFICATION OF DIRECTORS AND OFFICERS. The Oregon Business Corporation Act (the "Act") provides, in general, that a director or officer of a corporation who has been or is threatened to be made a defendant in a legal proceeding because that person is or was a director or officer of the corporation: (1) shall be indemnified by the corporation for all expenses of such litigation when the director or officer is wholly successful on the merits or otherwise; (2) may be indemnified by the corporation for the expenses, judgments, fines and amounts paid in settlement of such litigation (other than a derivative lawsuit) if he or she acted in good faith and in a manner reasonably believed to be in, or at least not opposed to, the best interests of the corporation (and, in the case of a criminal proceeding, had no reasonable cause to believe the conduct was unlawful); and (3) may be indemnified by the corporation for expenses of a derivative lawsuit (a suit by a shareholder alleging a breach by a director or officer of a duty owed to the corporation) if he or she acted in good faith and in a manner reasonably believed to be in, or at least not opposed to, the best interests of the corporation, pro- vided the director or officer is not adjudged liable to the corporation. The Act also authorizes the advancement of litigation expenses to a director or officer upon receipt of a written affirmation of the director's or officer's good faith belief that the standard of conduct in Section (2) or (3) above has been met and an undertaking by such director or officer to repay such expenses if it is ultimately determined that he or she did not meet that standard and, therefore, is not entitled to be indemnified. The Act also provides that the indemnification provided thereunder shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any bylaw, agreement, vote of shareholders or disinterested directors or otherwise. The Company's Bylaws provide that the Company shall indemnify directors and officers to the fullest extent permitted under the Act, thus making mandatory the discretionary indemnification authorized by the Act. The Company's Restated Articles of Incorporation provide that the Company shall indemnify its officers and directors to the fullest extent permitted by law, which may be broader than the indemnification authorized by the Act. The Company's shareholders have approved and the Company has entered into indemnity agreements with its directors and officers which provide for indemnity to the fullest extent permitted by law and also alter or clarify the statutory indemnity in the following respects: (1) prompt advancement of litigation expenses is provided if the director or officer makes the required affirmation and undertaking; (2) the director or officer is permitted to enforce the indemnity obligation in court and the burden is on the Company to prove that the director or officer is not entitled to indemnification; (3) indemnity is explicitly provided for judgments and settlements in derivative actions; (4) prompt indemnification is provided unless a determination is made that the director or officer is not entitled to indemnification; and (5) partial indemnification is permitted if the director or officer is not entitled to full indemnification. The Company maintains in effect a policy of insurance providing for reimbursement to the Company of payments made to directors and officers as indemnity for damages, judgments, settlements, costs and expenses incurred by them which the Company may be required or permitted to make according to applicable law, common or statutory, or under provisions of its Restated Articles of Incorporation, Bylaws or agreements effective under such laws. ITEM 16. LIST OF EXHIBITS. 1 - Form of Distribution Agreement. 4(a)* - Copy of Mortgage and Deed of Trust, dated as of July 1, 1946, to Bankers Trust Company and R.G. Page (to whom Stanley Burg is now successor), Trustees (filed as Exhibit 7(j) in File No. 2-6494), together with Indentures supplemental thereto Nos. 1 through 14, dated, respectively, as of June 1, 1949, March 1, 1954, April 1, 1956, February 1, 1959, July 1, 1961, January 1, 1964, March 1, 1966, December 1, 1969, April 1, 1971, January 1, 1975, December 1, 1975, July 1, 1981, June 1, 1985, and November 1, 1985 (filed as Exhibit 4(d) in File No. 33-1929); No. 15, dated as of July 1, 1986 (filed as Exhibit (4)(c) in File No. 33-24168); Nos. 16, 17 and 18, dated, respectively, as of November 1, 1988, October 1, 1989 and July 1, 1990 (filed as Exhibit (4)(c) in File No. 33-40482); No. 19, dated as of June 1, 1991 (filed as Exhibit 4(c) in File No. 33- 64014; and No. 20, dated as of June 1, 1993 (filed as Exhibit 4(c) in File No. 33-53795). 4(b)* - Copy of Indenture, dated as of June 1, 1991, to Bankers Trust Company, Trustee, relating to the Unsecured Notes (filed as Exhibit 4(e) in File No. 33-64014). 4(c)* - Form of Officers' Certificate establishing series of Unsecured Notes and Form of Instructions for both Secured and Unsecured Notes (filed as Exhibit 4(f) in File No. 33-64014). 5(a) - Opinion of Bruce B. Samson, Esquire. 5(b) - Opinion of Messrs. Reid & Priest LLP. 12* - Computation of Ratio of Earnings to Fixed Charges (filed as Exhibit 12 to Form 10-Q for the quarter ended June 30, 1996). 15 - Letter of Deloitte & Touche LLP dated October 31, 1996 regarding unaudited interim financial information. 23 - Consent of Deloitte & Touche LLP. (The consents of Bruce B. Samson, Esquire, and of Reid & Priest LLP are included in their opinions filed, respectively, as Exhibits 5(a) and 5(b)). 24 - Power of Attorney (see page II-3). 25(a) - Statement of Eligibility of the Corporate Mortgage Trustee on Form T-1. 25(b) - Statement of Eligibility of the Individual Mortgage Trustee on Form T-2. 25(c) - Statement of Eligibility of the Indenture Trustee on Form T-1. ----------------------------- * Incorporated herein by reference as indicated. ITEM 17. UNDERTAKINGS. The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, indivi- dually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; provided, however, that the undertakings set forth in paragraphs (i) and (ii) above do not apply if the registration statement is on Form S-3 and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in this registration statement. (2) That, for the purpose of determining liability under the Securities Act of 1933, each such post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. The undersigned registrant hereby undertakes, that for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to section 13(a) or 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions described under Item 15 of this registration statement, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appro- priate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue. POWER OF ATTORNEY Each director and/or officer of the registrant whose signature appears hereinafter hereby appoints Richard G. Reiten, Bruce R. DeBolt and John T. Hood, the Agents for Service named in this registration statement, and each of them severally, as his attorney-in-fact to sign in his name and behalf, in any and all capacities stated below, and to file with the Securities and Exchange Commission, any and all amendments, including post-effective amendments, to this registration statement, and the registrant hereby also appoints each such Agent for Service as its attorney-in-fact with like authority to sign and file any such amendments in its name and behalf. SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Portland, and State of Oregon on the 31st day of October, 1996. NORTHWEST NATURAL GAS COMPANY By /s/ Richard G. Reiten ---------------------------- Richard G. Reiten, President and Chief Operating Officer, and Director Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed below by the following persons in the capacities and on the date indicated. Signature Title Date --------- ------ ------ /s/ Robert L. Ridgley Principal Executive ------------------------- Officer and Director October 31, 1996 Robert L. Ridgley, Chief Executive Officer /s/ Richard G. Reiten Director October 31, 1996 ------------------------ Richard G. Reiten, President and Chief Operating Officer /s/ Bruce R. DeBolt Principal Financial ------------------------- Officer October 31, 1996 Bruce R. DeBolt, Senior Vice President, Finance, and Chief Financial Officer /s/ D. James Wilson Principal Accounting ------------------------- Officer October 31, 1996 D. James Wilson, Treasurer and Controller /s/ Mary Arnstad ------------------------ Director ) Mary Arnstad ) ) /s/ Thomas E. Dewey, Jr ) ------------------------- Director ) Thomas E. Dewey, Jr. ) ) October 31, 1996 /s/ Tod R. Hamachek ) ---------------------- Director ) Tod R. Hamachek ) ) /s/ Richard B. Keller ) ---------------------- Director ) Richard B. Keller ) ) /s/ Wayne D. Kuni ) ---------------------- Director ) Wayne D. Kuni ) ) /s/ Randall C. Pape ) ---------------------- Director ) Randall C. Pape ) ) /s/ Dwight A. Sangrey ) ---------------------- Director ) Dwight A. Sangrey ) ) /s/ Melody C. Teppola ) ---------------------- Director ) Melody C. Teppola ) ) /s/ Russell F. Tromley ) ---------------------- Director ) Russell F. Tromley ) ) /s/ Benjamin R. Whiteley ) ---------------------- Director ) Benjamin R. Whiteley ) INDEX TO EXHIBITS Exhibit ------- 1 Form of Distribution Agreement 4(a)* Copy of Mortgage and Deed of Trust, dated as of July 1, 1946, to Bankers Trust Company and R.G. Page (to whom Stanley Burg is now successor), Trustees (filed as Exhibit 7(j) in File No. 2-6494), together with Indentures supplemental thereto (Nos. 1 through 14, dated, respectively, as of June 1, 1949, March 1, 1954, April 1, 1956, February 1, 1959, July 1, 1961, January 1, 1964, March 1, 1966, December 1, 1969, April 1, 1971, January 1, 1975, December 1, 1975, July 1, 1981, June 1, 1985, and November 1, 1985 (filed as Exhibit 4(d) in File No. 33-1929); No. 15, dated as of July 1, 1986 (filed as Exhibit (4)(c) in File No. 33-24168); Nos. 16, 17 and 18, dated, respectively, as of November 1, 1988, October 1, 1989 and July 1, 1990 (filed as Exhibit (4)(c) in File No. 33-40482); No. 19, dated as of June 1, 1991 (filed as Exhibit 4(c) in File No. 33-64014; and No. 20, dated as of June 1, 1993 (filed as Exhibit 4(c) in File No. 33-53795). 4(b)* Copy of Indenture, dated as of June 1, 1991, to Bankers Trust Company, Trustee, relating to the Unsecured Notes (filed as Exhibit 4(e) in File No. 33-64014). 4(c)* Form of Officers' Certificate establishing series of Unsecured Notes and Form of Instructions for both Secured and Unsecured Notes (filed as Exhibit 4(f) in File No. 33-64014). 5(a) Opinion of Bruce B. Samson, Esquire 5(b) Opinion of Messrs. Reid & Priest LLP 12* Computation of Ratio of Earnings to Fixed Charges (filed as Exhibit 12 to Form 10-Q for the quarter ended June 30, 1996). 15 Letter of Deloitte & Touche LLP dated October 31, 1996 regarding unaudited interim financial information. 23 Consent of Deloitte & Touche LLP. (The consents of Bruce B. Samson, Esquire, and of Reid & Priest LLP are included in their opinions filed, respectively, as Exhibits 5(a) and 5(b)). 24 Power of Attorney (see page II-3). 25(a) Statement of Eligibility of the Corporate Mortgage Trustee Form T-1. 25(b) Statement of Eligibility of the Individual Mortgage Trustee on Form T-2. 25(c) Statement of Eligibility of the Indenture Trustee on Form T-1. ----------------------------------- * Previously Filed EX-1 2 EXHIBIT 1 - FORM OF DISTRIBUTION AGREEMENT EXHIBIT 1 ---------- Northwest Natural Gas Company $165,000,000 Medium-Term Notes, Series B Distribution Agreement ---------------------- __________, 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. --------------------------------------------- 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 -------- -------- Company makes no representations or warranties as to information contained in or omitted from the Prospectus as amended or supplemented in reliance upon and in conformity with information furnished in writing to the Company by any Agent specifically for use therein; (d) The Initial Registration Statement and the Subsequent Registration Statement when each became effective conformed, and the Prospectus conforms, and any amendment or supplement thereto will conform, in all material respects, with the provisions of the Act and the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), and the rules and regulations of the Commission thereunder; and the Initial Registration Statement and the Subsequent Registration Statement when each became effective did not, the Prospectus does not (and on each of the dates referred to in clause (i) of Section 6 will not) and any amendment or supplement to the Prospectus, as of its date and on each of the dates referred to in clause (i) of Section 6, will not, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, -------- ------- that the Company makes no representations or warranties as to information contained in or omitted from any such document in reliance upon and in conformity with information furnished in writing to the Company by any Agent specifically for use therein; (e) Except as set forth in or contemplated by the Prospectus, since the date as of which information is given in the Prospectus (i) there has not been any material adverse change in the condition of the Company and its subsidiaries taken as a whole, financial or otherwise, (ii) there has not been any transaction entered into by the Company or any of its subsidiaries which is material to the Company and its subsidiaries taken as a whole, other than transactions in the ordinary course of business, and (iii) neither the Company nor any of its subsidiaries has incurred any contingent obligation which is material to the Company and its subsidiaries taken as a whole; (f) The Securities have been duly authorized, and, when issued pursuant to their respective Indentures and delivered pursuant to this Agreement and any Terms Agreement (as defined in Section 3 hereof), will have been duly executed, authenticated, issued and delivered, will constitute valid and legally binding obligations of the Company, enforceable in accordance with their terms, except as their enforceability may be limited by laws and principles of equity relating to or affecting generally the enforcement of creditors' rights, including without limitation, bankruptcy and insolvency laws, and will be entitled to the benefits provided by their respective Indentures (which will be substantially in the form filed as exhibits to the Subsequent Registration Statement); the Indentures have been duly authorized and qualified under the Trust Indenture Act, 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. ----------------------------------------- (a) Subject to the terms and conditions hereof and to the reservation by the Company of the right to sell Securities directly on its own behalf, the Company hereby (i) appoints each of Merrill Lynch & Co., Merrill Lynch, Pierce Fenner & Smith Incorporated and PaineWebber Incorporated as an agent of the Company for the purpose of soliciting and receiving offers to purchase Securities from the Company and (ii) reserves the right, from time to time, to appoint additional agents for the purpose of soliciting and receiving offers to purchase Securities from the Company; provided that each such additional agent shall be required to become a party to this Agreement and undertake the obligations of an Agent hereunder pursuant to an Additional Agent Appointment Agreement ("Additional Agent Appointment Agreement") substantially in the form of Exhibit 1 hereto. (b) On the basis of the representations and warranties herein, and subject to the terms and conditions hereof, each of the Agents, as agent of the Company, severally and not jointly, agrees to use its reasonable best efforts to solicit and receive offers to purchase particular issues of the Securities from the Company upon the terms and conditions set forth in the Prospectus as amended or supplemented with respect thereto. Each Agent will promptly advise the Company by telephone or other appropriate means of all reasonable offers to purchase Securities, other than those rejected by such Agent. The Company shall not, without the consent of each Agent, which consent shall not unreasonably be withheld, solicit or accept offers to purchase, or sell, any debt securities with a maturity, at the time of original issuance, of from nine months to 30 years, except (i) pursuant to this Agreement, (ii) pursuant to a private placement not constituting a public offering under the Act, or (iii) in connection with a firm commitment underwriting pursuant to an underwriting agreement that does not provide for a continuous offering. However, the Company, subject to Section 5(f) hereof, reserves the right to sell, and may solicit and accept offers to purchase, Securities directly on its own behalf, and, in the case of any such sale not resulting from a solicitation made by an Agent, no commission will be payable with respect to such sale. (c) Procedural details relating to the issue and delivery of Securities, the solicitation of offers to purchase Securities and the payment therefor, unless an Agent and the Company shall otherwise agree, shall be as set forth in the Administrative Procedure attached hereto as Annex I (the "Administrative Procedure"). The provisions of the Administrative Procedure shall apply to all transactions contemplated hereunder other than those made pursuant to a Terms Agreement. Each Agent and the Company shall perform the respective duties and obligations specifically provided to be performed by each of them in the Administrative Procedure. The Company will furnish to the Trustees a copy of the Administrative Procedure as from time to time in effect. (d) The Company reserves the right, in its sole discretion, to instruct the Agents to suspend, at any time, for any period of time or permanently, the solicitation of offers to purchase the Securities. As soon as practicable, but in any event not later than one business day after receipt of notice from the Company, the Agents will suspend solicitation of offers to purchase Securities from the Company until such time as the Company has advised the Agents that such solicitation may be resumed. (e) The Company agrees to pay each Agent a commission, at the time of settlement (each a "Settlement Date") of any sale of a Security by the Company as a result of a solicitation made by such Agent, in an amount equal to the following applicable percentage of the principal amount of such Security sold: Commission (percentage of aggregate principal amount Range of Maturities of Securities sold) ------------------- ------------------- From 9 months to less than 1 year .125% From 1 year to less than 18 months .150% From 18 months to less than 2 years .200% From 2 years to less than 3 years .250% From 3 years to less than 4 years .350% From 4 years to less than 5 years .450% From 5 years to less than 6 years .500% From 6 years to less than 7 years .550% From 7 years to less than 10 years .600% From 10 years to less than 15 years .625% From 15 years to less than 20 years .675% From 20 years to 30 years .750% 3. Sales to Agents as Principal. ---------------------------- Each sale of Securities to an Agent, as principal, shall be made in accordance with the terms of this Agreement and (unless the Company and such Agent shall otherwise agree) a separate agreement (each a "Terms Agreement"), which will provide for the sale of such Securities to, and the purchase thereof by, such Agent, as principal. A Terms Agreement may be either (i) a written agreement substantially in the form of Annex II hereto, or (ii) an oral agreement between either Agent and the Company confirmed in writing by such Agent. A Terms Agreement may also specify certain provisions relating to the reoffering of such Securities by such Agent. Each Terms Agreement shall specify the principal amount of Securities to be purchased by an Agent pursuant thereto, the price to be paid to the Company for such Securities, any provisions relating to the rights of, and defaults by, any underwriters acting together with such Agent in the reoffering of the Securities, the time and date of delivery of and payment for such Securities (each, a "Time of Delivery") and place of delivery of such Securities, and any requirements for opinions of counsel, accountants' letters and officers' certificates pursuant to Section 5 hereof. Each purchase of Securities, unless otherwise agreed shall be at a discount equivalent to the commission payable to an Agent, acting as agent, with respect to a sale of Securities of identical maturity, as set forth in Section 2(e) hereof). The Agent may engage the services of any other broker or dealer in connection with the resale of the Securities purchased as principal and may allow any portion of the discount received in connection with such purchase from the Company to be paid to such brokers and dealers. The commitment of an Agent to purchase Securities as principal, whether pursuant to a Terms Agreement or otherwise, shall be deemed to have been made on the basis of the representations and warranties of the Company herein contained and, to the extent not otherwise agreed upon in a Terms Agreement or otherwise, shall be subject to the terms and conditions herein set forth. 4. Commencement. ------------ At 11:00 a.m., New York City time, on the date of this Agreement or at such later date and time as may be agreed upon between the Agents and the Company not later than the day prior to the earlier of the day on which the solicitation of offers to purchase Securities is to begin or on which any Terms Agreement shall be executed (such time and date being referred to herein as the "Commencement Date"), the Agents shall be furnished at the offices of 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. ------------------------ 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 -------- ------- 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 -------- ---- 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: ___________________ EX-5 3 EXHIBIT 5(A) OPINION OF BRUCE SAMSON Exhibit 5(a) BRUCE B. SAMSON Attorney at Law 220 N.W. Second Avenue Portland, Oregon 97209 October 31, 1996 Northwest Natural Gas Company 220 N.W. Second Avenue Portland, Oregon 97209 Ladies and Gentlemen: With respect to the Registration Statement on Form S-3 to be filed with the Securities and Exchange Commission (the "Commission") on or about the date hereof by Northwest Natural Gas Company (the "Company") for the registration under the Securities Act of 1933, as amended, of $150,000,000 aggregate principal amount of Secured Medium-Term Notes, Series B ("Secured Notes") and Unsecured Medium-Term Notes, Series B ("Unsecured Notes")(the Secured Notes and the Unsecured Notes are hereinafter collectively referred to as the "Notes") to be issued by the Company, and for the qualification under the Trust Indenture Act of 1939, as amended, of the Company's Mortgage and Deed of Trust, as supplemented ("Mortgage"), under which the Secured Notes are to be issued, and the Company's Indenture ("Indenture") under which the Unsecured Notes are to be issued, I am of the opinion that: 1. The Company is a corporation duly organized and validly existing under the laws of the State of Oregon. 2. All action necessary to make the Notes legally issued and valid and binding obligations of the Company will have been taken when: (a) the Company's Registration Statement on Form S-3, as it may be amended, shall have become effective in accordance with the applicable provisions of the Securities Act of 1933, as amended, and a supplement or supplements to the Prospectus constituting a part of the Registration Statement specifying certain details with respect to the offering or offerings of the Notes shall have been filed with the Commission, and the Mortgage and the Indenture shall have been qualified under the Trust Indenture Act of 1939, as amended; (b) an appropriate order or orders shall have been issued by each of the Public Utility Commission of Oregon and the Washington Utilities and Transportation Commission authorizing the issuance and sale by the Company of the Notes; and (c) the Notes shall have been appropriately issued and delivered for the consideration contemplated by, and otherwise in conformity with, the acts, proceedings and documents referred to above. 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 any other states. As to all matters of New York law, I have relied upon an opinion of even date herewith addressed to you by Reid & Priest LLP which is filed as Exhibit 5(b) to the Registration Statement. I hereby consent to the use of this opinion as an exhibit to the Registration Statement, as it may be amended, and consent to such references to me as may be made in such Registration Statement and in the Prospectus. Very truly yours, /s/ Bruce B. Samson Bruce B. Samson, Esq. EX-5 4 EXHIBIT 5(B) OPINION OF REID & PRIEST Exhibit 5(b) REID & PRIEST LLP 40 WEST 57TH STREET NEW YORK, N. Y. 10019-4097 TELEPHONE 212 603-2000 FAX 212 603-2001 October 31, 1996 Northwest Natural Gas Company 220 N.W. Second Avenue Portland, Oregon 97209 Ladies and Gentlemen: With respect to the Registration Statement on Form S-3 to be filed with the Securities and Exchange Commission (the "Commission") on or about the date hereof by Northwest Natural Gas Company (the "Company") for the registration under the Securities Act of 1933, as amended, of $150,000,000 aggregate principal amount of Secured Medium-Term Notes, Series B ("Secured Notes") and Unsecured Medium-Term Notes, Series B ("Unsecured Notes")(the Secured Notes and the Unsecured Notes are hereinafter collectively referred to as the "Notes") to be issued by the Company, and for the qualification under the Trust Indenture Act of 1939, as amended, of the Company's Mortgage and Deed of Trust, as supplemented ("Mortgage"), under which the Secured Notes are to be issued, and the Company's Indenture ("Indenture") under which the Unsecured Notes are to be issued, we are of the opinion that: 1. The Company is a corporation duly organized and validly existing under the laws of the State of Oregon. 2. All action necessary to make the Notes legally issued and valid and binding obligations of the Company will have been taken when: (a) the Company's Registration Statement on Form S-3, as it may be amended, shall have become effective in accordance with the applicable provisions of the Securities Act of 1933, as amended, and a supplement or supplements to the Prospectus constituting a part of the Registration Statement specifying certain details with respect to the offering or offerings of the Notes shall have been filed with the Commission, and the Mortgage and the Indenture shall have been qualified under the Trust Indenture Act of 1939, as amended; (b) an appropriate order or orders shall have been issued by each of the Public Utility Commission of Oregon and the Washington Utilities and Transportation Commission authorizing the issuance and sale by the Company of the Notes; and (c) the Notes shall have been appropriately issued and delivered for the consideration contemplated by, and otherwise in conformity with, the acts, proceedings and documents referred to above. We are members of the New York Bar and do not hold ourselves out as experts on the laws of any other state. As to all matters of Oregon and Washington law, we have relied upon an opinion of even date herewith addressed to you by Bruce B. Samson, Esq., which is filed as Exhibit 5(a) to the Registration Statement. We hereby consent to the use of this opinion as an exhibit to the Registration Statement, as it may be amended, and consent to such references to our firm as may be made in such Registration Statement and in the Prospectus. Very truly yours, /s/ Reid & Priest LLP REID & PRIEST LLP EX-15 5 LETTER OF DELOITTE & TOUCHE EXHIBIT 15 October 31, 1996 Northwest Natural Gas Company 220 N.W. Second Avenue Portland, Oregon 97209 We have made a review, in accordance with standards established by the American Institute of Certified Public Accountants, of the unaudited interim financial information of Northwest Natural Gas Company and subsidiaries for the periods ended March 31, 1996 and 1995 and June 30, 1996 and 1995, as indicated in our reports dated May 3, 1996 and July 25, 1996, respectively; because we did not perform an audit, we expressed no opinion on that information. We are aware that our reports referred to above, which were included in your quarterly reports on Form 10-Q for the quarters ended March 31, 1996 and June 30, 1996, are being used in this Registration Statement. We also are aware that the aforementioned reports, pursuant to Rule 436(c) under the Securities Act of 1933, are not considered a part of the Registration Statement prepared or certified by an accountant or a report prepared or certified by an accountant within the meaning of Sections 7 and 11 of that Act. /s/ Deloitte & Touceh LLP DELOITTE & TOUCHE LLP EX-23 6 EXHIBIT 23 - CONSENT OF DELOITTE & TOUCHE EXHIBIT 23 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in this Registration Statement of Northwest Natural Gas Company and subsidiaries on Form S-3 of our report dated February 20, 1996, appearing in the Annual Report on Form 10-K of Northwest Natural Gas Company for the year ended December 31, 1995 and to the reference to us under the heading "Experts" in the Prospectus, which is part of this Registration Statement. /s/ Deloitte & Touche LLP DELOITTE & TOUCHE LLP October 31, 1996 EX-25 7 EX 25(A) T-1 OF BANKERS TRUST RE: FIRST MORTGAGE EXHIBIT 25(a) ----------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------------- FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)___________ ================================================== BANKERS TRUST COMPANY (Exact name of trustee as specified in its charter) NEW YORK 13-4941247 (Jurisdiction of Incorporation or (I.R.S. Employer organization if not a U.S. national bank) Identification no.) FOUR ALBANY STREET NEW YORK, NEW YORK 10006 (Address of principal (Zip Code) executive offices) BANKERS TRUST COMPANY LEGAL DEPARTMENT 130 LIBERTY STREET, 31ST FLOOR NEW YORK, NEW YORK 10006 (212) 250-2201 (Name, address and telephone number of agent for service) ================================================== NORTHWEST NATURAL GAS COMPANY (Exact name of obligor as specified in its charter) OREGON 93-0256722 (State or other jurisdiction of (I.R.S. employer Incorporation or organization) Identification no.) ONE PACIFIC SQUARE 220 N.W. SECOND AVENUE PORTLAND, OREGON 97209 (Address of principal executive offices) (Zip Code) FIRST MORTGAGE BONDS (Title of the indenture securities) ITEM 1. GENERAL INFORMATION. Furnish the following information as to the trustee. (a) Name and address of each examining or supervising authority to which it is subject. NAME ADDRESS ---- ------- Federal Reserve Bank (2nd District) New York, NY Federal Deposit Insurance Corporation Washington, D.C. New York State Banking Department Albany, NY (b) Whether it is authorized to exercise corporate trust powers. Yes. ITEM 2. AFFILIATIONS WITH OBLIGOR. If the obligor is an affiliate of the Trustee, describe each such affiliation. None. ITEM 3.-15. NOT APPLICABLE ITEM 16. LIST OF EXHIBITS. EXHIBIT 1 - Restated Organization Certificate of Bankers Trust Company dated August 7, 1990 incorporated herein by reference to Exhibit 1 filed with Form T-1 Statement, Registration No. 33-65171, and Certificate of Amendment of the Organization Certificate of Bankers Trust Company dated March 21, 1996, copy attached. EXHIBIT 2 - Certificate of Authority to commence business - Incorporated herein by reference to Exhibit 2 filed with Form T-1 Statement, Registration No. 33-21047. EXHIBIT 3 - Authorization of the Trustee to exercise corporate trust powers - Incorporated herein by reference to Exhibit 2 filed with Form T-1 Statement, Registration No. 33-21047. EXHIBIT 4 - Existing By-Laws of Bankers Trust Company, dated as amended on October 19, 1995. - Incorporated herein by reference to Exhibit 4 filed with Form T-1 Statement, Registration No. 33-65171. EXHIBIT 5 - Not applicable. EXHIBIT 6 - Consent of Bankers Trust Company required by Section 321(b) of the Act. - Incorporated herein by reference to Exhibit 4 filed with Form T-1 Statement, Registration No. 22-18864. EXHIBIT 7 - A copy of the latest report of condition of Bankers Trust Company dated as of June 30, 1996. EXHIBIT 8 - Not Applicable. EXHIBIT 9 - Not Applicable. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the trustee, Bankers Trust Company, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 30th day of October, 1996. BANKERS TRUST COMPANY By: /s/ James C. McDonough ------------------------ James C. McDonough Assistant Vice President Legal Title of Bank: Bankers Trust Company Address: 130 Liberty Street City, STate ZIP: New York, NY 10006 FDIC Certificate No: 00623 Call Date: 6/30/96 ST-BK: 36-4840 FFIEC 031 Vendor ID: D CERT: 00623 Page RC-1 11 CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL AND STATE-CHARTERED SAVINGS BANKS JUNE 30, 1996 All schedules are to be reported in thousands of dollars. Unless otherwise indicated, reported the amount outstanding as of the last business day of the quarter.
SCHEDULE RC--BALANCE SHEET Dollar Amounts in Thousands RCFD Bil Mil Thou --------------------------- ---------- ------------- ASSETS 1. Cash and balances due from depository institutions (from Schedule RC-A): a. Noninterest-bearing balances and currency and coin . . . . . 0081 1,631,000 b. Interest-bearing balances . 0071 2,066,000 2. Securities: a. Held-to-maturity securities (from Schedule RC-B, column A) 1754 0 b. Available-for-sale securities (from Schedule RC-B, column D) 1773 3,761,000 3. Federal funds sold and securities purchased under agreements to resell in domestic offices of the bank and of its Edge and Agreement subsidiaries, and in IBFs: a. Federal funds sold . . . . . . 0276 5,162,000 b. Securities purchased under agreements to resell . . . . . 0277 4,192,000 4. Loans and lease financing receivables: a. Loans and leases, net of unearned income (from Schedule RC-C) . . . . . . . . RCFD 2122 24,849,000 b. LESS: Allowance for loan and lease losses . . . . RCFD 3123 923,000 c. LESS: Allocated transfer risk reserve . . . . . . . RCFD 3128 0 d. Loans and leases, net of unearned income, allowance, and reserve (item 4.a minus 4.b and 4.c) . . . . . . . . . . . . . 2125 23,926,000 5. Assets held in trading accounts . 3545 33,052,000 6. Premises and fixed assets (including capitalized leases) . . 2145 858,000 7. Other real estate owned (from Schedule RC-M) . . . . . . . . . . 2150 216,000 8. Investments in unconsolidated subsidiaries and associated companies (from Schedule RC-M) . . 2130 271,000 9. Customers' liability to this bank on acceptances outstanding . . . . 2155 572,000 10. Intangible assets (from Schedule RC-M) . . . . . . . . . . . . . . 2143 18,000 11. Other assets (from Schedule RC-F) 2160 7,612,000 12. Total assets (sum of items 1 through 11) . . . . . . . . . . . 2170 83,337,000 ------------------------
Includes cash items in process of collection and unposted debits. Includes time certificates of deposit not held in trading accounts.
SCHEDULE RC--CONTINUED Dollar Amounts in Thousands Bil Mil Thou --------------------------- ------------ LIABILITIES 13. Deposits: a. In domestic offices (sum of totals of columns A and C from Schedule RC-E, part I) (1) Noninterest-bearing RCON 6631 3,569,000 RCON 2200 9,040,000 (2) Interest-bearing . . RCON 6636 5,471,000 b. In foreign offices, Edge and Agreement subsidiaries, and IBFs (from Schedule RC-E part II) RCFN 2200 19,648,000 (1) Noninterest-bearing RCFN 6631 494,000 (2) Interest-bearing . . RCFN 6636 19,154,000 14. Federal funds purchased and securities sold under agreements to repurchase in domestic offices of the bank and of its Edge and Agreement subsidiaries, and in IBFs: a. Federal funds purchased . . . . . . RCFD 0278 2,564,000 b. Securities sold under agreements to repurchase . . . . . . . . . . . . . RCFD 0279 790,000 15. a. Demand notes issued to the U.S. Treasury . . . . . . . . . . . . . . RCON 2840 0 b. Trading liabilities . . . . . . . . RCFD 3548 18,177,000 16. Other borrowed money: a. With original maturity of one year or less . . . . . . . . . . . . . . . . RCFD 2332 16,421,000 b. With original maturity of more than one year . . . . . . . . . . . . . . RCFD 2333 3,388,000 17. Mortgage indebtedness and obligations under capitalized leases . . . . . . . RCFD 2910 31,000 18. Bank's liability on acceptances executed and outstanding . . . . . . . . . . . . RCFD 2920 572,000 19. Subordinated notes and debentures . . . RCFD 3200 1,227,000 20. Other liabilities (from Schedule RC-G) RCFD 2930 6,911,000 21. Total liabilities (sum of items 13 through 20) . . . . . . . . . . . . . . RCFD 2948 78,769,000 22. Limited-life preferred stock and related surplus . . . . . . . . . . . . . . . . RCFD 3282 0 EQUITY CAPITAL 23. Perpetual preferred stock and related surplus . . . . . . . . . . . . . . . . RCFD 3838 500,000 24. Common stock . . . . . . . . . . . . . RCFD 3230 1,002,000 25. Surplus (exclude all surplus related to preferred stock) . . . . . . . . . . . RCFD 3839 528,000 26. a. Undivided profits and capital reserves . . . . . . . . . . . . . . RCFD 3632 2,915,000 b. Net unrealized holding gains (losses) on available-for-sale securities . . RCFD 8434 (5,000) 27. Cumulative foreign currency translation adjustments . . . . . . . . . . . . . . RCFD 3284 (372,000) 28. Total equity capital (sum of items 23 through 27) . . . . . . . . . . . . . . RCFD 3210 4,568,000 29. Total liabilities, limited-life preferred stock, and equity capital (sum of items 21, 22, and 28) . . . . . . . RCFD 3300 83,337,000
Memorandum To be reported only with the March Report of Condition. 1. Indicate in the box at the right the number of the statement below that best describes the most comprehensive level of auditing work performed for the bank by independent external auditors as of any date during Number 1995...................................RCFD 6724 N/A 1 = Independent audit of the bank conducted in accordance with generally accepted auditing standards by a certified public accounting firm which submits a report on the bank 2 = Independent audit of the bank's parent holding company conducted in accordance with generally accepted auditing standards by a certified public accounting firm which submits a report on the consolidated holding company (but not on the bank separately) 3 = Directors' examination of the bank conducted in accordance with generally accepted auditing standards by a certified public accounting firm (may be required by state chartering authority) 4 = Directors' examination of the bank performed by other external auditors (may be required by state chartering authority) 5 = Review of the bank's financial statements by external auditors 6 = Compilation of the bank's financial statements by external auditors 7 = Other audit procedures (excluding tax preparation work) 8 = No external audit work ------------------------ (1) Including total demand deposits and noninterest-bearing time and savings deposits. STATE OF NEW YORK, BANKING DEPARTMENT I, PETER M. PHILBIN, Deputy Superintendent of Bank of the State of New York, DO HEREBY APPROVE the annexed Certificate entitled "CERTIFICATE OF AMENDMENT OF THE ORGANIZATION CERTIFICATE OF BANKERS TRUST COMPANY UNDER SECTION 8005 OF THE BANKING LAW," dated March 20, 1996, providing for an increase in authorized capital stock from $1,351,666,670 consisting of 85,166,667 shares with a par value of $10 each designated as Common Stock and 500 shares with a par value of $1,000,000 each designated as Series Preferred Stock to $1,501,666,670 consisting of 100,166,667 shares with a par value of $10 each designated as Common Stock and 500 shares with a par value of $1,000,000 each designated as Series Preferred Stock. WITNESS, MY HAND AND OFFICIAL SEAL OF THE BANKING DEPARTMENT AT THE CITY OF NEW YORK, THIS 21ST DAY OF MARCH IN THE YEAR OF OUR LORD ONE ---- ----- THOUSAND NINE HUNDRED AND NINETY-SIX. /s/ Peter M. Philbin ------------------------------ Deputy Superintendent of Banks CERTIFICATE OF AMENDMENT OF THE ORGANIZATION CERTIFICATE OF BANKERS TRUST Under Section 8005 of the Banking Law _____________________________ We, James T. Byrne, Jr. and Lea Lahtinen, being respectively a Managing Director and an Assistant Secretary of Bankers Trust Company, do hereby certify: 1. The name of the corporation is Bankers Trust Company. 2. The organization certificate of said corporation was filed by the Superintendent of Banks on the 5th of March, 1903. 3. The organization certificate as heretofore amended is hereby amended to increase the aggregate number of shares which the corporation shall have authority to issue and to increase the amount of its authorized capital stock in conformity therewith. 4. Article III of the organization certificate with reference to the authorized capital stock, the number of shares into which the capital stock shall be divided, the par value of the shares and the capital stock outstanding, which reads as follows: "III. The amount of capital stock which the corporation is hereafter to have is One Billion, Three Hundred Fifty One Million, Six Hundred Sixty-Six Thousand, Six Hundred Seventy Dollars ($1,351,666,670), divided into Eighty-Five Million, One Hundred Sixty-Six Thousand, Six Hundred Sixty-Seven (85,166,667) shares with a par value of $10 each designated as Common Stock and 500 shares with a par value of One Million Dollars ($1,000,000) each designated as Series Preferred Stock." is hereby amended to read as follows: "III. The amount of capital stock which the corporation is hereafter to have is One Billion, Five Hundred One Million, Six Hundred Sixty-Six Thousand, Six Hundred Seventy Dollars ($1,501,666,670), divided into One Hundred Million, One Hundred Sixty Six Thousand, Six Hundred Sixty-Seven (100,166,667) shares with a par value of $10 each designated as Common Stock and 500 shares with a par value of One Million Dollars ($1,000,000) each designated as Series Preferred Stock." 6. The foregoing amendment of the organization certificate was authorized by unanimous written consent signed by the holder of all outstanding shares entitled to vote thereon. IN WITNESS WHEREOF, we have made and subscribed this certificate this 20th day of March , 1996. /s/ James T. Byrne, Jr. ------------------- James T. Byrne, Jr. Managing Director /s/ Lea Lahtinen ------------ Lea Lahtinen Assistant Secretary State of New York ) ) ss: County of New York ) Lea Lahtinen, being fully sworn, deposes and says that she is an Assistant Secretary of Bankers Trust Company, the corporation described in the foregoing certificate; that she has read the foregoing certificate and knows the contents thereof, and that the statements herein contained are true. /s/ Lea Lahtinen ------------ Lea Lahtinen Sworn to before me this 20th day of March, 1996. /s/ Sandra L. West -------------- Notary Public SANDRA L. WEST Notary Public State of New York Counterpart filed in the No. 31-4942101 Office of the Superintendent of Qualified in New York County Banks, State of New York, Commission Expires This 21st day of March, 1996 September 19, 1996 EX-25 8 EX 25(B) - T-2 OF STANLEY BURG EXHIBIT 25(b) ----------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------------- FORM T-2 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF AN INDIVIDUAL DESIGNATED TO ACT AS TRUSTEE ================================================== STANLEY BURG ###-##-#### (Name of Trustee) (Social Security number FOUR ALBANY STREET NEW YORK, NEW YORK 10006 (Address of principal (Zip Code) executive offices) Bankers Trust Company Legal Department 130 Liberty Street, 31st Floor New York, New York 10006 (212) 250-2201 (Name, address and telephone number of agent for service) ================================================== NORTHWEST NATURAL GAS COMPANY (Exact name of obligor as specified in its charter) OREGON 93-0256722 (State or other jurisdiction of (I.R.S. employer Incorporation or organization) Identification no.) ONE PACIFIC SQUARE 220 N.W. SECOND AVENUE PORTLAND, OREGON 97209 (Address of principal executive offices) (Zip Code) FIRST MORTGAGE BONDS (Title of the indenture securities) ITEM 1. AFFILIATIONS WITH OBLIGOR. If the obligor is an affiliate of the Trustee, describe each such affiliation. None. ITEM 2. -10. NOT APPLICABLE ITEM 11. LIST OF EXHIBITS. List below all exhibits filed as a part of this statement of eligibility and qualification. None. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939, I, Stanley Burg, have signed this statement of eligibility in The City of New York, and State of New York, on the 30th day of October, 1996. By: /s/ Stanley Burg ----------------------- Stanley Burg (Signature of the trustee) EX-25 9 EX 25(C) - T-1 OF BANKERS TRUST RE: DEBT SECURITIE EXHIBIT 25(c) ----------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------------- FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)___________ ================================================== BANKERS TRUST COMPANY (Exact name of trustee as specified in its charter) NEW YORK 13-4941247 (Jurisdiction of Incorporation or (I.R.S. Employer organization if not a U.S. national bank) Identification no.) FOUR ALBANY STREET NEW YORK, NEW YORK 10006 (Address of principal (Zip Code) executive offices) BANKERS TRUST COMPANY LEGAL DEPARTMENT 130 LIBERTY STREET, 31ST FLOOR NEW YORK, NEW YORK 10006 (212) 250-2201 (Name, address and telephone number of agent for service) ================================================== NORTHWEST NATURAL GAS COMPANY (Exact name of obligor as specified in its charter) OREGON 93-0256722 (State or other jurisdiction of (I.R.S. employer Incorporation or organization) Identification no.) ONE PACIFIC SQUARE 220 N.W. SECOND AVENUE PORTLAND, OREGON 97209 (Address of principal executive offices) (Zip Code) DEBT SECURITIES (Title of the indenture securities) ITEM 1. GENERAL INFORMATION. Furnish the following information as to the trustee. (a) Name and address of each examining or supervising authority to which it is subject. NAME ADDRESS ---- ------- Federal Reserve Bank (2nd District) New York, NY Federal Deposit Insurance Corporation Washington, D.C. New York State Banking Department Albany, NY (b) Whether it is authorized to exercise corporate trust powers. Yes. ITEM 2. AFFILIATIONS WITH OBLIGOR. If the obligor is an affiliate of the Trustee, describe each such affiliation. None. ITEM 3.-15. NOT APPLICABLE ITEM 16. LIST OF EXHIBITS. EXHIBIT 1 - Restated Organization Certificate of Bankers Trust Company dated August 7, 1990 incorporated herein by reference to Exhibit 1 filed with Form T-1 Statement, Registration No. 33-65171, and Certificate of Amendment of the Organization Certificate of Bankers Trust Company dated March 21, 1996, copy attached. EXHIBIT 2 - Certificate of Authority to commence business - Incorporated herein by reference to Exhibit 2 filed with Form T-1 Statement, Registration No. 33-21047. EXHIBIT 3 - Authorization of the Trustee to exercise corporate trust powers - Incorporated herein by reference to Exhibit 2 filed with Form T-1 Statement, Registration No. 33-21047. EXHIBIT 4 - Existing By-Laws of Bankers Trust Company, dated as amended on October 19, 1995. - Incorporated herein by reference to Exhibit 4 filed with Form T-1 Statement, Registration No. 33-65171. EXHIBIT 5 - Not applicable. EXHIBIT 6 - Consent of Bankers Trust Company required by Section 321(b) of the Act. - Incorporated herein by reference to Exhibit 4 filed with Form T-1 Statement, Registration No. 22-18864. EXHIBIT 7 - A copy of the latest report of condition of Bankers Trust Company dated as of June 30, 1996. EXHIBIT 8 - Not Applicable. EXHIBIT 9 - Not Applicable. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the trustee, Bankers Trust Company, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 30th day of October, 1996. BANKERS TRUST COMPANY By: /s/ James C. McDonough ------------------------ James C. McDonough Assistant Vice President Legal Title of Bank: Bankers Trust Company Address: 130 Liberty Street City, STate ZIP: New York, NY 10006 FDIC Certificate No: 00623 Call Date: 6/30/96 ST-BK: 36-4840 FFIEC 031 Vendor ID: D CERT: 00623 Page RC-1 11 CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL AND STATE-CHARTERED SAVINGS BANKS JUNE 30, 1996 All schedules are to be reported in thousands of dollars. Unless otherwise indicated, reported the amount outstanding as of the last business day of the quarter.
SCHEDULE RC--BALANCE SHEET Dollar Amounts in Thousands RCFD Bil Mil Thou --------------------------- ---------- ------------- ASSETS 1. Cash and balances due from depository institutions (from Schedule RC-A): a. Noninterest-bearing balances and currency and coin . . . . . 0081 1,631,000 b. Interest-bearing balances . 0071 2,066,000 2. Securities: a. Held-to-maturity securities (from Schedule RC-B, column A) 1754 0 b. Available-for-sale securities (from Schedule RC-B, column D) 1773 3,761,000 3. Federal funds sold and securities purchased under agreements to resell in domestic offices of the bank and of its Edge and Agreement subsidiaries, and in IBFs: a. Federal funds sold . . . . . . 0276 5,162,000 b. Securities purchased under agreements to resell . . . . . 0277 4,192,000 4. Loans and lease financing receivables: a. Loans and leases, net of unearned income (from Schedule RC-C) . . . . . . . . RCFD 2122 24,849,000 b. LESS: Allowance for loan and lease losses . . . . RCFD 3123 923,000 c. LESS: Allocated transfer risk reserve . . . . . . . RCFD 3128 0 d. Loans and leases, net of unearned income, allowance, and reserve (item 4.a minus 4.b and 4.c) . . . . . . . . . . . . . 2125 23,926,000 5. Assets held in trading accounts . 3545 33,052,000 6. Premises and fixed assets (including capitalized leases) . . 2145 858,000 7. Other real estate owned (from Schedule RC-M) . . . . . . . . . . 2150 216,000 8. Investments in unconsolidated subsidiaries and associated companies (from Schedule RC-M) . . 2130 271,000 9. Customers' liability to this bank on acceptances outstanding . . . . 2155 572,000 10. Intangible assets (from Schedule RC-M) . . . . . . . . . . . . . . 2143 18,000 11. Other assets (from Schedule RC-F) 2160 7,612,000 12. Total assets (sum of items 1 through 11) . . . . . . . . . . . 2170 83,337,000 ------------------------
Includes cash items in process of collection and unposted debits. Includes time certificates of deposit not held in trading accounts.
SCHEDULE RC--CONTINUED Dollar Amounts in Thousands Bil Mil Thou --------------------------- ------------ LIABILITIES 13. Deposits: a. In domestic offices (sum of totals of columns A and C from Schedule RC-E, part I) (1) Noninterest-bearing RCON 6631 3,569,000 RCON 2200 9,040,000 (2) Interest-bearing . . RCON 6636 5,471,000 b. In foreign offices, Edge and Agreement subsidiaries, and IBFs (from Schedule RC-E part II) RCFN 2200 19,648,000 (1) Noninterest-bearing RCFN 6631 494,000 (2) Interest-bearing . . RCFN 6636 19,154,000 14. Federal funds purchased and securities sold under agreements to repurchase in domestic offices of the bank and of its Edge and Agreement subsidiaries, and in IBFs: a. Federal funds purchased . . . . . . RCFD 0278 2,564,000 b. Securities sold under agreements to repurchase . . . . . . . . . . . . . RCFD 0279 790,000 15. a. Demand notes issued to the U.S. Treasury . . . . . . . . . . . . . . RCON 2840 0 b. Trading liabilities . . . . . . . . RCFD 3548 18,177,000 16. Other borrowed money: a. With original maturity of one year or less . . . . . . . . . . . . . . . . RCFD 2332 16,421,000 b. With original maturity of more than one year . . . . . . . . . . . . . . RCFD 2333 3,388,000 17. Mortgage indebtedness and obligations under capitalized leases . . . . . . . RCFD 2910 31,000 18. Bank's liability on acceptances executed and outstanding . . . . . . . . . . . . RCFD 2920 572,000 19. Subordinated notes and debentures . . . RCFD 3200 1,227,000 20. Other liabilities (from Schedule RC-G) RCFD 2930 6,911,000 21. Total liabilities (sum of items 13 through 20) . . . . . . . . . . . . . . RCFD 2948 78,769,000 22. Limited-life preferred stock and related surplus . . . . . . . . . . . . . . . . RCFD 3282 0 EQUITY CAPITAL 23. Perpetual preferred stock and related surplus . . . . . . . . . . . . . . . . RCFD 3838 500,000 24. Common stock . . . . . . . . . . . . . RCFD 3230 1,002,000 25. Surplus (exclude all surplus related to preferred stock) . . . . . . . . . . . RCFD 3839 528,000 26. a. Undivided profits and capital reserves . . . . . . . . . . . . . . RCFD 3632 2,915,000 b. Net unrealized holding gains (losses) on available-for-sale securities . . RCFD 8434 (5,000) 27. Cumulative foreign currency translation adjustments . . . . . . . . . . . . . . RCFD 3284 (372,000) 28. Total equity capital (sum of items 23 through 27) . . . . . . . . . . . . . . RCFD 3210 4,568,000 29. Total liabilities, limited-life preferred stock, and equity capital (sum of items 21, 22, and 28) . . . . . . . RCFD 3300 83,337,000
Memorandum To be reported only with the March Report of Condition. 1. Indicate in the box at the right the number of the statement below that best describes the most comprehensive level of auditing work performed for the bank by independent external auditors as of any date during Number 1995...................................RCFD 6724 N/A 1 = Independent audit of the bank conducted in accordance with generally accepted auditing standards by a certified public accounting firm which submits a report on the bank 2 = Independent audit of the bank's parent holding company conducted in accordance with generally accepted auditing standards by a certified public accounting firm which submits a report on the consolidated holding company (but not on the bank separately) 3 = Directors' examination of the bank conducted in accordance with generally accepted auditing standards by a certified public accounting firm (may be required by state chartering authority) 4 = Directors' examination of the bank performed by other external auditors (may be required by state chartering authority) 5 = Review of the bank's financial statements by external auditors 6 = Compilation of the bank's financial statements by external auditors 7 = Other audit procedures (excluding tax preparation work) 8 = No external audit work ------------------------ (1) Including total demand deposits and noninterest-bearing time and savings deposits. STATE OF NEW YORK, BANKING DEPARTMENT I, PETER M. PHILBIN, Deputy Superintendent of Bank of the State of New York, DO HEREBY APPROVE the annexed Certificate entitled "CERTIFICATE OF AMENDMENT OF THE ORGANIZATION CERTIFICATE OF BANKERS TRUST COMPANY UNDER SECTION 8005 OF THE BANKING LAW," dated March 20, 1996, providing for an increase in authorized capital stock from $1,351,666,670 consisting of 85,166,667 shares with a par value of $10 each designated as Common Stock and 500 shares with a par value of $1,000,000 each designated as Series Preferred Stock to $1,501,666,670 consisting of 100,166,667 shares with a par value of $10 each designated as Common Stock and 500 shares with a par value of $1,000,000 each designated as Series Preferred Stock. WITNESS, MY HAND AND OFFICIAL SEAL OF THE BANKING DEPARTMENT AT THE CITY OF NEW YORK, THIS 21ST DAY OF MARCH IN THE YEAR OF OUR LORD ONE ---- ----- THOUSAND NINE HUNDRED AND NINETY-SIX. /s/ Peter M. Philbin ------------------------------ Deputy Superintendent of Banks CERTIFICATE OF AMENDMENT OF THE ORGANIZATION CERTIFICATE OF BANKERS TRUST Under Section 8005 of the Banking Law _____________________________ We, James T. Byrne, Jr. and Lea Lahtinen, being respectively a Managing Director and an Assistant Secretary of Bankers Trust Company, do hereby certify: 1. The name of the corporation is Bankers Trust Company. 2. The organization certificate of said corporation was filed by the Superintendent of Banks on the 5th of March, 1903. 3. The organization certificate as heretofore amended is hereby amended to increase the aggregate number of shares which the corporation shall have authority to issue and to increase the amount of its authorized capital stock in conformity therewith. 4. Article III of the organization certificate with reference to the authorized capital stock, the number of shares into which the capital stock shall be divided, the par value of the shares and the capital stock outstanding, which reads as follows: "III. The amount of capital stock which the corporation is hereafter to have is One Billion, Three Hundred Fifty One Million, Six Hundred Sixty-Six Thousand, Six Hundred Seventy Dollars ($1,351,666,670), divided into Eighty-Five Million, One Hundred Sixty-Six Thousand, Six Hundred Sixty-Seven (85,166,667) shares with a par value of $10 each designated as Common Stock and 500 shares with a par value of One Million Dollars ($1,000,000) each designated as Series Preferred Stock." is hereby amended to read as follows: "III. The amount of capital stock which the corporation is hereafter to have is One Billion, Five Hundred One Million, Six Hundred Sixty-Six Thousand, Six Hundred Seventy Dollars ($1,501,666,670), divided into One Hundred Million, One Hundred Sixty Six Thousand, Six Hundred Sixty-Seven (100,166,667) shares with a par value of $10 each designated as Common Stock and 500 shares with a par value of One Million Dollars ($1,000,000) each designated as Series Preferred Stock." 6. The foregoing amendment of the organization certificate was authorized by unanimous written consent signed by the holder of all outstanding shares entitled to vote thereon. IN WITNESS WHEREOF, we have made and subscribed this certificate this 20th day of March , 1996. /s/ James T. Byrne, Jr. ------------------- James T. Byrne, Jr. Managing Director /s/ Lea Lahtinen ------------ Lea Lahtinen Assistant Secretary State of New York ) ) ss: County of New York ) Lea Lahtinen, being fully sworn, deposes and says that she is an Assistant Secretary of Bankers Trust Company, the corporation described in the foregoing certificate; that she has read the foregoing certificate and knows the contents thereof, and that the statements herein contained are true. /s/ Lea Lahtinen ------------ Lea Lahtinen Sworn to before me this 20th day of March, 1996. /s/ Sandra L. West -------------- Notary Public SANDRA L. WEST Notary Public State of New York Counterpart filed in the No. 31-4942101 Office of the Superintendent of Qualified in New York County Banks, State of New York, Commission Expires This 21st day of March, 1996 September 19, 1996 -----END PRIVACY-ENHANCED MESSAGE-----