1
ENRON CORP.
SECURITIES
UNDERWRITING AGREEMENT
STANDARD PROVISIONS
September 15, 1997
Enron Corp., an Oregon corporation (the "Company"), proposes to issue
and sell from time to time certain of its securities, including its debt
securities ("Debt Securities") and its equity securities ("Equity Securities")
registered under the Securities Act of 1933, as amended (the "Securities Act"),
as set forth in Section 3. The Debt Securities are to be issued under an
indenture, dated as of November 1, 1985, as supplemented and amended (the
"Indenture"), between the Company and Xxxxxx Trust and Savings Bank, as Trustee
(the "Trustee").
From time to time, the Company may enter into one or more underwriting
agreements that provide for the sale of certain of the Debt Securities or
Equity Securities to the underwriter or several underwriters named therein (the
"Underwriters"). The standard provisions set forth herein may be incorporated
by reference in any such underwriting agreement (an "Underwriting Agreement").
The Underwriting Agreement, including the provisions hereof incorporated
therein by reference, is herein referred to as this "Agreement."
1. Sale and Purchase of the Securities. On the basis of the
representations, warranties and agreements herein contained, the Company
proposes to issue and sell (i) the Debt Securities in one or more series, which
series may vary as to their terms (including, but not limited to, interest
rate, maturity, any redemption provisions and any sinking fund requirements),
all of such terms for any particular series being determined at the time of
sale, or (ii) Equity Securities in one or more class or series, which series
may vary as to their terms (including, but not limited to voting rights,
dividends and conversion), all of such terms for a particular series being
determined at the time of sale. All or a portion of particular series of the
Debt Securities or of particular classes or series of the Equity Securities
will be purchased by the Underwriters for resale upon terms of offering
determined at the time of sale. The securities so to be purchased in any such
offering are hereinafter referred to as the "Purchased Securities," and any
firm or firms acting as representatives of such Underwriters are hereinafter
referred to as the "Representatives." If with respect to the Purchased
Securities such Representatives are acting on behalf of the Underwriters,
references herein to the Underwriters (or a majority in interest thereof) or
the Representatives in the alternative shall be deemed to refer only to the
Representatives. The term "Underwriters' Securities" means Debt Securities
which are Purchased Securities other than Contract Securities. The term
"Contract Securities" means Debt Securities which are Purchased Securities, if
any, to be purchased pursuant to delayed delivery contracts referred to below.
2
If this Agreement provides for sales of Debt Securities pursuant to
delayed delivery contracts, the Company hereby authorizes the Underwriters to
solicit offers to purchase Contract Securities on the terms and subject to the
conditions set forth in the Prospectus (as hereinafter defined) pursuant to
delayed delivery contracts substantially in the form of Schedule I attached
hereto (the "Delayed Delivery Contracts") but with such changes therein as the
Company may authorize or approve. Delayed Delivery Contracts are to be with
institutional investors approved by the Company and of the types set forth in
the Prospectus. On the Closing Date (as hereinafter defined), the Company will
pay the Underwriters in immediately available funds the fee set forth in the
Underwriting Agreement in respect of the principal amount of Contract
Securities. The Underwriters will not have any responsibility in respect of
the validity or the performance of any Delayed Delivery Contracts.
If the Company executes and delivers Delayed Delivery Contracts with
institutional investors, the Contract Securities shall be deducted from the
Debt Securities to be purchased by the several Underwriters and the aggregate
principal amount of Debt Securities to be purchased by each Underwriter shall
be reduced pro rata in proportion to the principal amount of Debt Securities
set forth opposite each Underwriter's name in the Underwriting Agreement,
except to the extent that the Representatives, if any, determine that such
reduction shall be otherwise and so advise the Company.
The obligations of the Underwriters under this Agreement are several
and not joint.
2. Payment and Delivery. Delivery by the Company of the
Purchased Securities or, if this Agreement provides for sales of Debt
Securities pursuant to delayed delivery contracts, the Underwriters'
Securities, and payment by the Underwriters therefor in immediately available
funds shall take place at the office, on the date or dates and at the time or
times specified in this Agreement, each of which date and time may be postponed
for not more than ten business days by agreement between a majority in interest
of the Underwriters or the Representatives and the Company (each such date and
time of delivery and payment for the Purchased Securities or, if this Agreement
provides for sales of Debt Securities pursuant to delayed delivery contracts,
the Underwriters' Securities, is hereinafter referred to as the "Closing
Date").
The Purchased Securities or, if this Agreement provides for sales of
Debt Securities pursuant to delayed delivery contracts, the Underwriters'
Securities, shall be registered in such names and shall be in such
denominations as the Underwriters or Representatives shall request at least one
full business day prior to the Closing Date and, if requested, shall be made
available to the Underwriters or Representatives for checking and packaging at
least one full business day prior to the Closing Date.
3. Registration Statement and Prospectus; Public Offering. The
Company has filed with the Securities and Exchange Commission (the
"Commission"), pursuant to the Securities Act
-2-
3
and the rules and regulations adopted by the Commission thereunder (the
"Rules"), a registration statement or statements on Form S-3, including a
prospectus, relating to the Debt Securities and the Equity Securities, and such
registration statement has or such registration statements have become
effective. Such registration statement or statements referred to in the first
paragraph of the Underwriting Agreement, including financial statements,
exhibits and Incorporated Documents (as hereinafter defined), as amended to the
date of this Agreement, is or are hereinafter referred to as the "Registration
Statement," and the prospectus or prospectuses included in the Registration
Statement or deemed, pursuant to Rule 429 under the Securities Act, to relate
to the Registration Statement, as proposed to be supplemented by a prospectus
supplement (including any preliminary prospectus supplement) relating to any
Purchased Securities to be filed pursuant to Rule 424 under the Securities Act,
is or are hereinafter referred to as the "Prospectus." Any reference herein to
the Registration Statement or Prospectus shall be deemed to include all
documents incorporated, or deemed to be incorporated, therein by reference
pursuant to the requirements of Item 12 of Form S-3 under the Securities Act
(the "Incorporated Documents"). For purposes of this Agreement, all references
to the Registration Statement, any preliminary prospectus, the Prospectus or
any amendment or supplement to any of the foregoing shall be deemed to include
the copy filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval system (XXXXX), which XXXXX copy is substantially
identical to the other copies of such material, except to the extent permitted
by Regulation S-T.
The Company understands, and if this Agreement provides for sales by
one or more Selling Stockholders, each Selling Stockholder understands, that
the Underwriters propose to make a public offering of their respective portions
of the Purchased Securities, as set forth in and pursuant to the Prospectus
relating thereto.
4. Representations and Warranties.
(a) The Company represents and warrants to each
Underwriter that:
(i) The Company has reasonable grounds to believe
that it meets the requirements for the use of Form S-3 under
the Securities Act.
(ii) The Registration Statement, at the time it
became effective, and the prospectus contained therein,
complied, and on the date of the Underwriting Agreement and
the Closing Date and when any post-effective amendment to the
Registration Statement becomes effective or any supplement to
such prospectus is filed with the Commission, the Registration
Statement, the Prospectus and any such amendment or
supplement, respectively, will comply, in all material
respects with the requirements of the Securities Act and the
Rules; the Incorporated Documents
-3-
4
complied and will comply in all material respects with the
requirements of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and the rules and regulations
adopted by the Commission thereunder; the Indenture complied
and will comply in all material respects with the requirements
of the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"); and each part of the Registration Statement
and any amendment thereto, at the time it became effective,
and the Prospectus and any amendment or supplement thereto, at
the time it was filed with the Commission pursuant to Rule 424
under the Securities Act, when such part became effective, did
not and will not contain an untrue statement of a material
fact or omit to a state a material fact required to be stated
therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not
misleading, except that this representation and warranty does
not apply to (i) statements or omissions in the Registration
Statement or Prospectus (or in amendments or supplements
thereto) made in reliance upon information furnished in
writing to the Company by any Underwriter or the
Representatives on behalf of any Underwriter or by any Selling
Stockholder expressly for use therein, or (ii) that part of
the Registration Statement which shall constitute the
Statement of Eligibility and Qualification of the Trustee,
under the Trust Indenture Act on Form T-1, except statements
or omissions in such Statement made in reliance upon
information furnished in writing to the Trustee on behalf of
the Company for use therein.
(iii) There are no contracts, agreements or
understandings between the Company and any person granting
such person the right to require the Company to include any
securities owned or to be owned by such person in the
securities registered pursuant to the Registration Statement.
(b) If this Agreement provides for sales by one or more
Selling Stockholders, each Selling Stockholder severally represents
and warrants to each Underwriter that such Selling Stockholder has (i)
good and valid title to, and full right, power and authority to
convert, convertible securities of the Company which are convertible
into at least the number of shares of Purchased Securities to be sold
by it pursuant to this Agreement; and immediately after the execution
of this Agreement such Selling Stockholder will convert into Purchased
Securities at least such number of convertible securities; and upon
such conversion and on each Closing Date such Selling Stockholder will
have good and valid title to the shares of the Purchased Securities to
be sold by such Selling Stockholder or (ii) has and on each Closing
Date will have good and valid title to the shares of Purchased
Securities to be sold by such Selling Stockholder. Such Selling
Stockholder has full right, power and authority to enter into this
Agreement and to sell, assign, transfer and deliver the shares of the
Purchased Securities to be sold by such Selling Stockholder hereunder;
and upon the
-4-
5
delivery of and payment for the Purchased Securities hereunder the
several Underwriters will acquire good and valid title to the shares
of the Purchased Securities to be sold by such Selling Stockholder.
5. Conditions of the Underwriters' Obligations. The obligations
of the Underwriters hereunder to purchase and pay for the Purchased Securities
or, if this Agreement provides for sales of Debt Securities pursuant to delayed
delivery contracts, the Underwriters' Securities, are subject to the following
conditions:
(a) Within 24 hours after the execution of the
Underwriting Agreement by the Company (or at such later time
acceptable to the Representatives, or if there are none, such firm as
may be designated by a majority in interest of the Underwriters) and
on the Closing Date, the Representatives or such designated firm shall
have received from the independent accountants of the Company who have
certified the financial statements of the Company and its subsidiaries
included or incorporated by reference in the Registration Statement
signed letters dated the respective dates of delivery, in form and
substance satisfactory to the Representatives or such designated firm
and stating to the effect set forth in Schedules II-A and II-B hereto,
respectively.
(b) No stop order suspending the effectiveness of the
Registration Statement under the Securities Act shall be in effect and
no proceedings for such purpose shall be pending before or threatened
by the Commission and any requests for additional information on the
part of the Commission (to be included in the Registration Statement
or the Prospectus or otherwise) shall have been complied with to the
reasonable satisfaction of the Underwriters or the Representatives.
(c) Subsequent to the execution of this Agreement, there
shall not have been any change in the capital stock or long-term debt
of the Company or any material adverse change in the general affairs,
management, financial position or results of operations of the Company
and its subsidiaries taken as a whole, whether or not arising in the
ordinary course of business, in each case other than as set forth in
or contemplated by the Registration Statement and Prospectus, if in
the reasonable judgment of a majority in interest of the Underwriters
or of the Representatives any such change makes it impracticable or
inadvisable to consummate the sale and delivery of the Purchased
Securities or, if this Agreement provides for sales of Debt Securities
pursuant to delayed delivery contracts, the Underwriters' Securities,
by the Underwriters as contemplated in the Prospectus.
(d) The representations and warranties of the Company
contained herein shall be true and correct on and as of the Closing
Date and the Company shall have performed all
-5-
6
covenants and agreements herein contained to be performed on its part
at or prior to the Closing Date.
(e) The Underwriters or Representatives shall have
received on the Closing Date a certificate, dated the Closing Date, of
the Chief Executive Officer, the President, any Executive Vice
President, any Senior Vice President or the Vice President and
Treasurer of the Company, which shall certify that (i) no order
suspending the effectiveness of the Registration Statement or the
qualification of the Indenture has been issued and, to the knowledge
of such officer, no proceedings for such purpose are pending before or
threatened by the Commission, (ii) the representations and warranties
of the Company contained herein are true and correct on and as of the
Closing Date, and (iii) the Company has performed all covenants and
agreements herein contained to be performed on its part at or prior to
the Closing Date.
(f) The Underwriters or the Representatives shall have
received on the Closing Date from Xxxxx X. Xxxxxxx, Xx., Esq., Senior
Vice President and General Counsel of the Company, an opinion, dated
the Closing Date, substantially to the effect as set forth in Schedule
III hereto. In rendering such opinion, Mr. Xxxxxxx xxx rely upon
Xxxxxxxxx & Xxxxxxxxx, L.L.P. as to matters of New York law.
(g) The Underwriters or the Representatives shall have
received on the Closing Date from Xxxxxxxxx & Xxxxxxxxx, L.L.P.,
counsel for the Underwriters, an opinion, dated the Closing Date, with
respect to the Company, the Indenture, the Purchased Securities or, if
this Agreement provides for sales of Debt Securities pursuant to
delayed delivery contracts, the Underwriters' Securities, the
Registration Statement and Prospectus and this Agreement. The Company
and, if this Agreement provides for sales by Selling Stockholders,
each Selling Stockholder shall have furnished to counsel for the
Underwriters such documents as they may reasonably request for the
purpose of enabling them to render such opinions.
(h) Subsequent to the date of the Underwriting Agreement,
no downgrading shall have occurred in the rating accorded the
Company's debt securities or preferred stock by any "nationally
recognized statistical rating organization," as that term is defined
by the Commission for purposes of Rule 436(g)(2) under the Securities
Act, nor shall there have been any public announcement that any such
organization has under surveillance or review its ratings of any debt
securities or preferred stock of the Company (other than an
announcement with positive implication of a possible upgrading, and no
implication of a possible downgrading of such rating).
-6-
7
(i) If this Agreement provides for sales by Selling
Stockholders, the Underwriters or Representatives shall have received
on the Closing Date a certificate, dated the Closing Date, of the
President or any Vice President of each Selling Stockholder, which
shall certify that (i) the representations and warranties of such
Selling Stockholder contained herein are true and correct on and as of
the Closing Date, and (ii) such Selling Stockholder has performed all
covenants and agreements herein contained to be performed on its part
at or prior to the Closing Date.
(j) If this Agreement provides for sales by Selling
Stockholders, the Underwriters or Representatives shall have received
on the Closing Date from counsel for each Selling Stockholder, an
opinion, dated the Closing Date, substantially to the effect as set
forth in Schedule V hereto.
6. Covenants. The Company and, if this Agreement provides for
sales by Selling Stockholders, each Selling Stockholder as to paragraphs (a),
(c), (h), (k), (l) and (m), covenants and agrees with the several Underwriters
as follows:
(a) To advise the Underwriters or the Representatives
promptly of any amendment or supplement of the Registration Statement
or the Prospectus which is proposed to be filed and not to effect such
amendment or supplement in a form to which the Underwriters or the
Representatives reasonably object.
(b) To furnish to each of the Underwriters or the
Representatives and to the counsel for the Underwriters, one copy of
the Registration Statement filed pursuant to XXXXX, including exhibits
and Incorporated Documents, relating to the Debt Securities and the
Equity Securities in the form it became effective and of all
amendments thereto, including exhibits; and to each such firm and
counsel, copies of each preliminary prospectus supplement and
Prospectus and any amendment or supplement thereto relating to the
Debt Securities and the Equity Securities.
(c) As soon as it is advised thereof, to advise the
Underwriters or the Representatives (i) of the initiation or
threatening by the Commission of any proceedings for the issuance of
any order suspending the effectiveness of the Registration Statement
or the qualification of the Indenture or preventing or suspending the
use of any preliminary prospectus supplement, (ii) of receipt by it or
any representative or attorney of it of any other communication from
the Commission relating to the Company, any Selling Stockholders, the
Registration Statement or the Prospectus, or (iii) suspension of
qualification of the Purchased Securities for offering or sale in any
jurisdiction. The Company will make every reasonable effort to
prevent the issuance of an order suspending the effectiveness of the
-7-
8
Registration Statement or the qualification of the Indenture, and if
any such order is issued, to obtain as soon as possible the lifting
thereof.
(d) To deliver to the Underwriters or the
Representatives, without charge, as many conformed copies of the
Indenture, the Registration Statement (excluding exhibits but
including the Incorporated Documents), each preliminary prospectus
supplement, the Prospectus and all amendments and supplements to such
documents as the Underwriters or the Representatives may reasonably
request.
(e) During such period as a prospectus is required by law
to be delivered by an Underwriter or dealer, to deliver, without
charge, to Underwriters and dealers, at such office or offices as the
Underwriters or the Representatives may designate, as many copies of
the Prospectus and any amendment or supplement thereto as the
Underwriters or the Representatives may reasonably request.
(f) During the period in which copies of the Prospectus
are to be delivered as provided in paragraph (e) above, if any event
occurs 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 light of the circumstances under which they
were made, not misleading, or if for any reason it shall be necessary
during such same period to file any document which will be deemed an
Incorporated Document in order to comply with the Exchange Act and the
rules and regulations thereunder, forthwith to prepare, submit to the
Underwriters or the Representatives, file with the Commission and
deliver, without charge to the Underwriters either (i) amendments or
supplements to the Prospectus so that the statements in the
Prospectus, as so amended or supplemented, will not be misleading or
(ii) documents which will effect such compliance. Delivery by
Underwriters of any such amendments or supplements to the Prospectus
or documents shall not constitute a waiver of any of the conditions
set forth in Section 5 hereof.
(g) To make generally available to the Company's security
holders, as soon as practicable, an earnings statement which satisfies
the provisions of Section 11(a) of the Securities Act.
(h) To cooperate with the Underwriters or the
Representatives in qualifying the Purchased Securities for offer and
sale under the securities or "blue sky" laws of such jurisdictions as
the Underwriters or the Representatives may reasonably request;
provided that in no event shall the Company nor any Selling
Stockholder be obligated to qualify to do business in any jurisdiction
where it is not now so qualified, to take any action which would
-8-
9
subject it to service of process in suits, other than those arising
out of the offering or sale of the Purchased Securities, in any
jurisdiction where it is not now so subject, qualify in any
jurisdiction as a broker-dealer or subject itself to any taxing
authority where it is not now so subject.
(i) Unless otherwise specified, to endeavor to obtain as
promptly as practicable the listing of the Purchased Securities on the
New York Stock Exchange and, if the Purchased Securities are of a
class or series of securities which is already listed on the New York
Stock Exchange or any other stock exchange, to effect the listing of
the Purchased Securities on such stock exchanges prior to the Closing
Date.
(j) During the period of five years from the date hereof,
to supply to the Representatives, if any, and to each other
Underwriter who may so request in writing, copies of such financial
statements and other periodic and special reports as the Company may
from time to time distribute generally to its lenders or to the
holders of any class of its securities registered under Section 12 of
the Exchange Act and to furnish to the Underwriters or the
Representatives a copy of each annual or other report it shall be
required to file with the Commission.
(k) To pay all of its own expenses incurred in connection
with the performance of its obligations under this Agreement, and the
Company will pay, or reimburse if paid by the Underwriters or the
Representatives, whether or not the transactions contemplated hereby
are consummated or this Agreement is terminated, all reasonable costs
and expenses incident to the performance of the obligations of the
Company under this Agreement, including those relating to (i) the
preparation, printing and filing of the Registration Statement and
exhibits thereto, each preliminary prospectus, any preliminary
prospectus supplement, the Prospectus, all amendments and supplements
to the Registration Statement and the Prospectus, the printing of the
Indenture and the printing or typing of the Underwriting Agreement
(including any Agreement Among Underwriters), (ii) the issuance,
preparation and delivery of the Purchased Securities to the
Underwriters, and if applicable, those entering into delayed delivery
contracts with the Company, including the costs and expenses of any
Trustee, Registrar, Transfer Agent and any agent thereof, including
any fees and disbursements of counsel therefor, (iii) the registration
or qualification of the Purchased Securities for offer and sale under
the securities or "blue sky" laws of the various jurisdictions
referred to in paragraph (h) above, including the fees and
disbursements of counsel for the Underwriters in connection therewith
and the preparation and printing or typing of legal investment and
preliminary and supplementary "blue sky" memoranda, (iv) the
furnishing to the Underwriters and the Representatives, if any, of
copies of the Prospectus and all amendments or supplements to the
Prospectus, and of the several documents required by this Section to
-9-
10
be so furnished, including costs of shipping and mailing, (v) the
listing of the Purchased Securities on any securities exchange, (vi)
the rating of the Purchased Securities by rating agencies, and (vii)
the furnishing to the Underwriters and the Representatives, if any, of
copies of all reports and information required by paragraph (j) above,
including costs of shipping and mailing. If a separate agreement
exists between the Company and any Selling Stockholder which allocates
such costs and expenses in a manner different from that set forth
above, such agreement shall control as between the Company and such
Selling Stockholder only, but such agreement shall not modify the
obligations of the Company and the Selling Stockholder to the
Underwriters to cause the payment of costs and expenses as set forth
above.
(l) During the period beginning on the date of the
Underwriting Agreement and continuing to the date specified in the
Underwriting Agreement, not to offer, sell, contract to sell or
otherwise dispose of any securities of the Company substantially
similar to the Purchased Securities, without the prior written consent
of a majority in interest of the Underwriters or the Representatives.
(m) If this Agreement provides for sales by Selling
Stockholders, each Selling Stockholder agrees to deliver to the
Underwriters or the Representatives on or prior to the Closing Date a
properly completed and executed United States Treasury Department Form
W-9 (or other applicable form or statement specified by Treasury
Department regulations in lieu thereof).
7. Indemnification.
(a) The Company will indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act, as follows:
(i) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact contained in
the Registration Statement (or any amendment thereto), or the omission
or alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto), or the omission
or alleged omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading;
-10-
11
(ii) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or of any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue
statement or omission; provided that (subject to Section 7(e) below)
any such settlement is effected with the written consent of the
Company; and
(iii) against any and all expense whatsoever, as
incurred (including, subject to Section 7(d) hereof, the fees and
disbursements of counsel chosen by the Underwriters), reasonably
incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based
upon any such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is not paid
under (i) or (ii) above; provided, however, that the indemnity set
forth in this Section 7(a) shall not apply to any loss, liability,
claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to
the Company by or on behalf of any Underwriter expressly for use in
the Registration Statement (or any amendment thereto), or any
preliminary prospectus or the Prospectus (or any amendment or
supplement thereto). The foregoing indemnity with respect to any
untrue statement or alleged untrue statement contained in or omission
or alleged omission from a preliminary prospectus shall not inure to
the benefit of the Underwriter (or any person controlling such
Underwriter) from whom the person asserting any loss, liability,
claim, damage or expense purchased any of the Purchased Securities
which are the subject thereof if the Company shall sustain the burden
of proving that such person was not sent or given a copy of the
Prospectus (or the Prospectus as amended or supplemented) at or prior
to the written confirmation of the sale of such Purchased Securities
to such person and the untrue statement contained in or omission from
such preliminary prospectus was corrected in the Prospectus (or the
Prospectus as amended or supplemented) and the Company had previously
furnished copies thereof to such Underwriter.
(b) If this Agreement provides for sales by Selling
Stockholders, each of the Selling Stockholders severally will
indemnify and hold harmless each Underwriter and each person, if any,
who controls any Underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, to the same extent
as the foregoing indemnity from the Company to each Underwriter, but
only insofar as losses, liabilities claims, damages, expenses or
actions arise out of or are based upon any untrue statement or
omission or alleged untrue statement or omission which was made in the
Registration
-11-
12
Statement, the prospectus or any amendment or supplement thereto, in
reliance on and in conformity with information furnished in writing to
the Company by such Selling Stockholder expressly for use therein.
(c) Each Underwriter, severally in proportion to its
respective purchase obligation and not jointly, agrees to indemnify
and hold harmless the Company, directors of the Company, the officers
of the Company who signed the Registration Statement, and each person,
if any, who controls the Company within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act, against any and
all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred,
but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or
any amendment thereto), or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon
and in conformity with written information furnished to the Company by
or on behalf of such Underwriter expressly for use in the Registration
Statement (or any amendment thereto) or such preliminary prospectus or
the Prospectus (or any amendment or supplement thereto).
(d) Each indemnified party shall give notice as promptly
as reasonably practicable to each indemnifying party of any action
commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the
extent it is not materially prejudiced as a result thereof and in any
event shall not relieve it from any liability which it may have
otherwise than on account of this indemnity agreement. In the case of
parties indemnified pursuant to Section 7(a) above, counsel to the
indemnified parties shall be selected by the Underwriters, and, in the
case of parties indemnified pursuant to Section 7(c) above, counsel to
the indemnified parties shall be selected by the Company, provided
that if it so elects within a reasonable time after receipt of such
notice, an indemnifying party, jointly with any other indemnifying
parties receiving such notice, may assume the defense of such action
with counsel chosen by it and approved by the indemnified parties
defendant in such action, unless such indemnified parties reasonably
object to such assumption on the ground that there may be legal
defenses available to them which are different from or in addition to
those available to such indemnifying party. If an indemnifying party
assumes the defense of such action, the indemnifying parties shall not
be liable for any fees and expenses of counsel for the indemnified
parties incurred thereafter in connection with such action. An
indemnifying party may participate at its own expense in the defense
of any such action; provided, however, that counsel to the
indemnifying party shall not (except with the consent of the
indemnified party) also be counsel to the indemnified party. In no
event shall the indemnifying parties be liable for fees and expenses
-12-
13
of more than one counsel (in addition to any local counsel) separate
from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or
circumstances. No indemnifying party shall, without the prior written
consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 7
or Section 8 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified
party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to
act by or on behalf of any indemnified party.
(e) If at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for
reasonable fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature
contemplated by Section 7(a)(ii) effected without its written consent
if (i) such settlement is entered into more than 45 days after receipt
by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered
into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of
such settlement. Notwithstanding the immediately preceding sentence,
if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and
expenses of counsel, an indemnifying party shall not be liable for any
settlement of the nature contemplated by Section 7(a)(ii) effected
without its consent if such indemnifying party (i) reimburses such
indemnified party in accordance with such request to the extent it
considers such request to be reasonable and (ii) provides written
notice to the indemnified party substantiating the unpaid balance as
unreasonable, in each case prior to the date of such settlement.
8. Contribution.
If the indemnification provided for in Section 7 hereof is for any
reason unavailable to or insufficient to hold harmless an indemnified party in
respect of any losses, liabilities, claims, damages or expenses referred to
therein, then each indemnifying party shall contribute to the aggregate amount
of such losses, liabilities, claims, damages and expenses incurred by such
indemnified party, as incurred, (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company or the Selling
Stockholder, if any (taking into account the portion of the
-13-
14
proceeds of the offering received by each), on the one hand and the
Underwriters on the other hand from the offering of the Purchased Securities
pursuant to this Agreement or (ii) if the allocation provided by clause (i) is
not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Company and the Selling Stockholder, if any, on the
one hand and of the Underwriters on the other hand in connection with the
statements or omissions which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Selling Stockholder, if
any, on the one hand and the Underwriters on the other hand in connection with
the offering of the Purchased Securities pursuant to this Agreement shall be
deemed to be in the same respective proportions as the total net proceeds from
the offering of the Purchased Securities pursuant to this Agreement (before
deducting expenses but after deducting the total underwriting commission
received by the Underwriters) received by the Company and the Selling
Stockholder, if any, and the total underwriting commission received by the
Underwriters, in each case as set forth on the cover of the Prospectus, bear to
the aggregate initial public offering price of the Purchased Securities as set
forth on such cover. The relative fault of the Company and the Selling
Stockholder, if any, on the one hand and the Underwriters on the other hand
shall be determined by reference to, among other things, whether any such
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the
Company and the Selling Stockholder, if any, or by the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company, the Selling
Stockholder, if any, and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 8 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of
the equitable considerations referred to above in this Section 8. The
aggregate amount of losses, liabilities, claims, damages and expenses incurred
by an indemnified party and referred to above in this Section 8 shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged
untrue statement or omission or alleged omission. Notwithstanding the
provisions of this Section 8, no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which the
Purchased Securities underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such Underwriter
has otherwise been required to pay by reason of any such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 8,
each person, if any, who controls an Underwriter within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act shall have the same
rights to contribution
-14-
15
as such Underwriter; each director of the Company, each officer of the Company
who signed the Registration Statement, and each person, if any, who controls
the Company within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act shall have the same rights to contribution as the
Company; and if this Agreement provides for sales by Selling Stockholders, each
person, if any, who controls a Selling Stockholder within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act shall have
the same rights to contribution as such Selling Stockholder. The Underwriters'
respective obligations to contribute pursuant to this Section 8 are several in
proportion to their respective underwriting obligations and not joint.
9. Termination. This Agreement may be terminated by a
majority in interest of the Underwriters or by the Representatives by notifying
the Company at any time
(a) at or prior to the Closing Date if, in the judgment
of such Underwriters or the Representatives, sale and delivery of the
Purchased Securities or, if this Agreement provides for the sale of
Debt Securities pursuant to delayed delivery contracts, the
Underwriters' Securities, as contemplated in the Prospectus is
rendered impracticable or inadvisable because (i) additional material
governmental restrictions, not in force and effect on the date hereof,
shall have been imposed upon trading in securities generally or
minimum or maximum prices shall have been generally established on the
New York Stock Exchange or on the American Stock Exchange, or trading
in securities generally shall have been suspended or materially
limited on either such Exchange or a general banking moratorium shall
have been established by Federal or New York authorities, (ii) any
event shall have occurred or shall exist which makes untrue or
incorrect in any material respect any statement or information
contained in the Registration Statement or Prospectus or which is not
reflected in the Registration Statement or Prospectus but should be
reflected therein in order to make the statements or information
contained therein not misleading in any material respect, or (iii) any
material adverse change shall have occurred in the financial markets
in the United States or elsewhere or a war or outbreak of hostilities
involving the United States or other calamity or crisis shall have
occurred or shall have escalated to such an extent as to affect
adversely the marketability of the Purchased Securities or, if this
Agreement provides for the sale of Debt Securities pursuant to delayed
delivery contracts, the Underwriters' Securities, or
(b) at or prior to the Closing Date, if any of the
conditions specified in Section 5 hereof shall not have been fulfilled
when and as required by this Agreement.
If this Agreement is terminated pursuant to any of the provisions
hereof, except as otherwise provided herein, the Company shall not be under any
liability to any Underwriter or any Selling Stockholder and no Underwriter
shall be under any liability to the Company or any Selling
-15-
16
Stockholder, except that (a) if this Agreement is terminated by the
Underwriters or the Representatives because of any failure or refusal on the
part of the Company or any Selling Stockholder to comply with the terms or to
fulfill any of the conditions of this Agreement, the Company and each Selling
Stockholder, will reimburse the Underwriters for all reasonable out-of-pocket
expenses (including the fees and disbursement of their counsel) reasonably
incurred by them and (b) no Underwriter who shall have failed or refused to
purchase the Purchased Securities or, if this Agreement provides for sales of
Debt Securities pursuant to delayed delivery contracts, the Underwriters'
Securities, agreed to be purchased by it hereunder, without some reason
sufficient hereunder to justify its cancellation or termination of its
obligations hereunder, shall be relieved of liability to the Company, any
Selling Stockholder or the other Underwriters for damages occasioned by its
default.
10. Default of Underwriters. If one or more of the Underwriters
shall fail (other than for a reason sufficient to justify the termination of
this Agreement) to purchase on the Closing Date the principal amount of
Purchased Securities or, if this Agreement provides for sales of Debt
Securities pursuant to delayed delivery contracts, the Underwriters'
Securities, agreed to be purchased by such Underwriter or Underwriters, the
Representatives, or if there are none, such firm as may be designated by a
majority in interest of the Underwriters may find one or more substitute
underwriters to purchase such Purchased Securities or, if this Agreement
provides for sales of Debt Securities pursuant to delayed delivery contracts,
the Underwriters' Securities, or make such other arrangements as they may deem
advisable or one or more of the remaining Underwriters may agree to purchase
such Purchased Securities or, if this Agreement provides for sales of Debt
Securities pursuant to delayed delivery contracts, the Underwriters'
Securities, in such proportions as may be approved by the Representatives or
such designated firm, in each case upon the terms herein set forth. If no such
arrangements have been made within 24 hours after the Closing Date, and
(a) the aggregate principal amount or number of shares,
as the case may be, of Purchased Securities or, if this Agreement
provides for sales of Debt Securities pursuant to delayed delivery
contracts, the Underwriters' Securities, to be purchased by the
defaulting Underwriter or Underwriters shall not exceed 10% of the
total principal amount or number of shares, as the case may be, of
Purchased Securities or, if this Agreement provides for sales of Debt
Securities pursuant to delayed delivery contracts, the Underwriters'
Securities, each of the non-defaulting Underwriters shall be obligated
to purchase such Purchased Securities or, if this Agreement provides
for sales of Debt Securities pursuant to delayed delivery contracts,
the Underwriters' Securities, on the terms herein set forth in
proportion to their respective obligations hereunder, or
(b) the aggregate principal amount or number of shares,
as the case may be, of Purchased Securities or, if this Agreement
provides for sales of Debt Securities pursuant to
-16-
17
delayed delivery contracts, the Underwriters' Securities, to be
purchased by the defaulting Underwriter or Underwriters shall exceed
10% of the total principal amount or number of shares, as the case may
be, of Purchased Securities or, if this Agreement provides for sales
of Debt Securities pursuant to delayed delivery contracts, the
Underwriters' Securities, the Company shall be entitled to an
additional period of 24 hours within which to find one or more
substitute underwriters satisfactory to the Representatives, or if
there are none, to such designated firm to purchase such Purchased
Securities or, if this Agreement provides for sales of Debt Securities
pursuant to delayed delivery contracts, the Underwriters' Securities,
upon the terms set forth herein.
In any such case, either the Representatives, or if there are none,
such designated firm or the Company shall have the right to postpone the
Closing Date for a period of not more than seven business days in order that
necessary changes and arrangements may be effected. If the aggregate principal
amount or number of shares, as the case may be, of the Purchased Securities or,
if this Agreement provides for sales of Debt Securities pursuant to delayed
delivery contracts, the Underwriters' Securities, to be purchased by such
defaulting Underwriters shall exceed 10% of the total principal amount or
number of shares, as the case may be, of Purchased Securities or, if this
Agreement provides for sales of Debt Securities pursuant to delayed delivery
contracts, the Underwriters' Securities, and neither the non- faulting
Underwriters nor the Company shall make arrangements pursuant to this Section
10 within the period stated for the purchase of the Purchased Securities or, if
this Agreement provides for sales of Debt Securities pursuant to delayed
delivery contracts, the Underwriters' Securities, which the defaulting
Underwriter or Underwriters agreed to purchase, this Agreement shall terminate
without liability on the part of any non-defaulting Underwriter and without
liability on the part of the Company or any Selling Stockholder, except, in
each case, as provided in Section 6(k), 7, 8 and 9 hereof. The provisions of
this Section 10 shall not in any way affect the liability of any defaulting
Underwriter to the Company, any Selling Stockholder or the non-defaulting
Underwriters arising to of such default. A substitute underwriter hereunder
shall become an Underwriter for all purposes of this Agreement.
11. Miscellaneous. The reimbursement, indemnification and
contribution agreements contained in Sections 6(k), 7 and 8 hereof and the
representations, warranties, covenants and agreements of the Company and any
Selling Stockholder in this Agreement shall remain in full force and effect
regardless of (a) any termination of this Agreement, (b) any investigation (or
any statement as to the results thereof) made by or on behalf of any
Underwriter or any officer, director or controlling person, or by or on behalf
of the Company or any officer, director or controlling person, or by or on
behalf of any Selling Stockholder or any officer, director or controlling
person, and (c) delivery of and payment for Purchased Securities under this
Agreement.
-17-
18
This Agreement has been and is made solely for the benefit of the
Underwriters, any Selling Stockholder and the Company and their respective
successors and assigns, and, to the extent expressed herein, for the benefit of
persons controlling any of the Underwriters, any Selling Stockholder or the
Company, directors and officers of the Company, and their respective successors
and assigns, and no other person, partnership, association or corporation shall
acquire or have any right under or by virtue of this Agreement. The term
"successors and assigns" shall not include any purchaser of Purchased
Securities, Underwriters' Securities or Contract Securities merely because of
such purchase.
In dealings hereunder, the Representatives, if designated, shall act
on behalf of each of the Underwriters, and the parties hereto shall be entitled
to act and rely upon any statement, request, notice or agreement on behalf of
any Underwriter made or given by such firm as the Representatives may designate
to the Company.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.
-18-
19
SCHEDULE I
DELAYED DELIVERY CONTRACT
__________, 199__
Ladies and Gentlemen:
The undersigned hereby agrees to purchase from Enron Corp., an Oregon
corporation (the "Company"), and the Company agrees to sell to the undersigned
_______________________________________________________________________________
________________________________________________________________________________
_________________________________________ _____________________
$________________ principal amount of the Company's [state title of issue] (the
"Securities"), offered by the Company's Prospectus dated _________, 199__ and
Prospectus Supplement dated __________, 199__, receipt of copies of which are
hereby acknowledged, at a purchase price equal to __% of the principal amount
thereof plus accrued interest from ____________, 199__ to the date or dates for
payment and delivery thereof and on the further terms and conditions set forth
in this contract. The undersigned does not contemplate selling Securities prior
to making payment therefor.
The undersigned will purchase from the Company Securities in the
principal amounts and on the delivery date or dates set forth below:
Principal Plus Accrued
Delivery Date Amount Interest From:
------------- ------ --------------
$
$
$
Each such date on which Securities are to be purchased hereunder is hereinafter
referred to as a "Delivery Date".
Payment for the Securities which the undersigned has agreed to
purchase on each Delivery Date shall be made to the Company or its order by
certified or official bank check in New York Clearing House funds (available on
the next business day) at the office of _____________, New York, New York, at
10:00 a.m. (New York time) on the Delivery Date, upon delivery to the
undersigned of the Securities to be purchased by the undersigned on the
Delivery Date, in such denominations and registered in such names as the
undersigned may designate by written or telegraphic communication addressed to
the Company not less than five full business days prior to the Delivery Date.
If no such request is received, the Securities will be registered in the name
of the
20
undersigned and issued in a denomination equal to the aggregate principal
amount of Securities to be purchased by the Delivery Date.
By the execution hereof, the undersigned represents and warrants to
the Company that (i) all necessary corporate action for the due execution and
delivery of this contract and payment for and purchase of the Securities has
been taken by it, (ii) no further authorization or approval of any governmental
or other regulatory authority is required for such execution, delivery, payment
or purchase, and (iii) its investment in the Securities is not, as of the date
hereof, prohibited under the laws of any jurisdiction to which the undersigned
is subject and which govern such investment.
The obligation of the undersigned to take delivery of and make payment
for the Securities on the Delivery Date shall be subject to the conditions that
(1) the purchase of Securities to be made by the undersigned shall not at the
time of delivery be prohibited under the laws of the jurisdiction to which the
undersigned is subject and (2) the Company shall have sold, and delivery shall
have taken place to the underwriters (the "Underwriters") named in the
Prospectus Supplement referred to above, of such part of the Securities as is
to be sold to them. Promptly after completion of sale and delivery to the
Underwriters, the Company will mail or deliver to the undersigned at its
address set forth below notice to such effect, accompanied by a copy of the
opinion of counsel for the Company delivered to the Underwriters in connection
therewith.
Failure to take delivery of and make payment for Securities by any
purchaser under any other delayed delivery contract shall not relieve the
undersigned of its obligations under this contract.
This contract will inure to the benefit of and be binding upon the
parties hereto and their respective successors, but will not be assignable by
either party hereto without the written consent of the other.
It is understood that acceptance of this contract and other similar
contracts is in the Company's sole discretion and, without limiting the
foregoing, need not be on a first-come, first-served basis.
If this contract is acceptable to the Company, it is requested that
the Company sign the form of acceptance below and mail or deliver one of the
counterparts hereof to the undersigned at its address set forth below. This
will become a binding contract, as of the date first above written, between the
Company and the undersigned when such counterpart is so mailed or delivered.
THIS CONTRACT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
-2-
21
Yours very truly,
------------------------------------
(Purchaser)
By:
------------------------------------
Name:
Title:
Accepted:
ENRON CORP.
By:
-------------------
Name:
Title:
------------------------------------
------------------------------------
(Address)
PURCHASER -- PLEASE COMPLETE AT TIME OF SIGNING
The name, telephone number and department of the representative of the
Purchaser with whom details of delivery on the Delivery Date may be discussed
are as follows: (Please print.)
Telephone Number
Name (Including Area Code) Dept.
---- --------------------- -----
-3-
22
SCHEDULE II-A
[FORM OF FIRST LETTER OF ACCOUNTANTS
TO BE DELIVERED PURSUANT TO SECTION 5(a)]
(i) They are independent public accountants within the meaning of the
Securities Act and the Exchange Act and the respective applicable published
rules and regulations thereunder and the answer to item 10 of Form S-3 set
forth in the Registration Statement is correct insofar as it relates to them;
(ii) In their opinion the audited financial statements and financial
statement schedules included or incorporated in the Prospectus and reported on
by them comply as to form in all material respects with the applicable
accounting requirements of the Exchange Act and the published rules and
regulations thereunder;
(iii) On the basis of a reading of the unaudited financial statements,
the unaudited notes to the audited financial statements and the supplementary
financial information incorporated in the Prospectus and of the latest
unaudited financial statements made available by the Company and its
subsidiaries; carrying out certain specified procedures (but not an examination
in accordance with generally accepted auditing standards) which would not
necessarily reveal matters of significance with respect to the comments set
forth in such letter; a reading of the minutes of the meetings of the
stockholders, directors and executive committees of the Company and certain of
its subsidiaries; and inquiries of certain officials of the Company who have
responsibility for financial and accounting matters of the Company and its
subsidiaries as to transactions and events subsequent to the date of the latest
audited financial statements incorporated in the Prospectus, nothing came to
their attention which caused them to believe that:
(1) the unaudited notes to the audited financial statements and
the supplementary financial information incorporated in the Prospectus
do not comply as to form in all material respects with the applicable
accounting requirements of the Exchange Act and with the published
rules and regulations of the Commission thereunder; or
(2) the unaudited financial statements included or incorporated in
the Prospectus do not comply as to form in all material respects with
the applicable accounting requirements of the Exchange Act and with
the published rules and regulations thereunder; and said unaudited
financial statements are not presented in conformity with generally
accepted accounting principles applied on a basis substantially
consistent with that of the audited financial statements incorporated
in the Prospectus; and
23
(iv) They have performed certain other specified procedures as
a result of which they determined that certain information (if any)
specified by the Representatives or, if there are none, such firm as
may be designated by a majority in interest of the Underwriters, of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company) incorporated in the
Prospectus, agrees with the accounting records of the Company and its
subsidiaries, excluding any questions of legal interpretation.
-2-
24
SCHEDULE II-B
[FORM OF SECOND LETTER TO ACCOUNTANTS
TO BE DELIVERED PURSUANT TO SECTION 5(a)]
(i) On the basis of a reading of the latest unaudited financial
statements made available by the Company and its subsidiaries; carrying out
certain specified procedures (but not an examination in accordance with
generally accepted auditing standards) which would not necessarily reveal
matters of significance with respect to the commitments set forth in such
letter; a reading of the minutes of the meetings of the stockholders, directors
and executive committees of the Company and certain of its subsidiaries; and
inquiries of certain officials of the Company who have responsibility for
financial and accounting matters of the Company and its subsidiaries as to
transactions and events subsequent to the date of the latest financial
statements included or incorporated in the Prospectus, nothing came to their
attention which caused them to believe that: (a) with respect to the period
subsequent to the date of the latest consolidated balance sheet included or
incorporated in the Prospectus, there were, at a subsequent specified date not
more than five business days prior to the Closing Date, any change in the
capital stock or increases in short-term debt or long-term debt of the Company
and consolidated subsidiaries or any decreases in the consolidated net current
assets or net assets as compared with the amounts shown on the latest
consolidated balance sheet included or incorporated in the Prospectus; or (b)
for the period from the date of the latest financial statements included or
incorporated in the Prospectus to such specified date there were any decreases,
as compared with the corresponding period in the preceding year, in
consolidated operating revenues, net income or earnings per common share,
except in all instances for changes or decreases which the Prospectus discloses
have occurred or may occur or which are set forth in such letter; and
(ii) They have performed certain other specified procedures as a
result of which they determined that certain information (if any) specified by
the Representatives or, if, there are none, such firm as may be designated by a
majority in interest of the Underwriters, of an accounting, financial or
statistical nature (which is limited to accounting, financial or statistical
information derived from the general accounting records of the Company)
included in the Prospectus and not covered by their first letter delivered
pursuant to Section 5(a), agrees with the accounting records of the Company and
its subsidiaries, excluding any questions of legal interpretations.
25
SCHEDULE III
[FORM OF OPINION OF XXXXX X. XXXXXXX, XX., ESQ.,
TO BE DELIVERED PURSUANT TO SECTION 5(f)]
(i) The Company is a corporation duly incorporated and validly
existing in good standing under the laws of the State of Oregon and has full
corporate power and authority to own its properties and to conduct its business
as such business is described in the Prospectus;
(ii) Each of the Company's material subsidiaries is a corporation duly
incorporated and validly existing in good standing under the laws of its
jurisdiction of incorporation, and has full corporate power and authority to
own its properties and to conduct its business as such business is described in
the Prospectus;
(iii) The Underwriting Agreement has been duly authorized, executed
and delivered by the Company;
(iv) The Indenture has been duly authorized and validly executed,
acknowledged and delivered by the Company and, assuming due authorization,
execution and delivery by the Trustee, constitutes a valid and binding
agreement of the Company enforceable in accordance with its terms, subject, as
to enforcement, to bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or similar laws relating to or affecting creditors' rights
generally and to general equity principles;
(v) In the event any of the Purchased Securities are to be purchased
pursuant to Delayed Delivery Contracts, each of such Delayed Delivery Contracts
has been duly authorized, executed and delivered by the Company and, assuming
due authorization, execution and delivery by the purchaser named therein,
constitutes a valid and binding agreement of the Company enforceable in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer or similar laws
relating to or affecting creditors' rights generally and to general equity
principles;
(vi) In the event any of the Purchased Securities are Debt Securities,
the Purchased Securities are in the form contemplated by the Indenture and have
been duly authorized by all necessary corporate action on the part of the
Company; the Purchased Securities or, if this Agreement provides for sales of
Debt Securities pursuant to delayed delivery contracts, the Underwriters'
Securities, when executed and authenticated as specified in the Indenture
(which facts, such counsel may state, such counsel has not determined by an
inspection of individual Purchased Securities or, if this Agreement provides
for sales of Debt Securities pursuant to Delayed Delivery Contracts, the
Underwriters' Securities) and issued and delivered against payment pursuant to
the Underwriting Agreement, will
26
be valid and binding obligations of the Company entitled to the benefits of the
Indenture and enforceable against the Company in accordance with their
respective terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting creditors'
rights generally and to general equity principles; the Contract Securities, if
any, when executed, authenticated, issued and delivered pursuant to the
Indenture and delayed delivery contracts, if any, will be valid and binding
obligations of the Company entitled to the benefits of the Indenture and
enforceable against the Company in accordance with their terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium or similar
laws relating to or affecting creditors' rights generally and to general equity
principles.
(vii) In the event any of the Purchased Securities are Equity
Securities, the shares of Purchased Securities delivered on such Closing Date
and all other outstanding shares of the [Title of Securities] of the Company
have been duly authorized and validly issued, are fully paid and nonassessable,
conform to the description thereof contained in the Prospectus, are listed on
the New York, Midwest and Pacific Stock Exchanges and registered under the
Exchange Act; and the stockholders of the Company have no preemptive rights
with respect to the Purchased Securities;
(viii) The Indenture, the Purchased Securities and the Delayed
Delivery Contracts, if any, conform in all material respects to the
descriptions thereof in the Prospectus;
(ix) The Indenture has been qualified under the Trust Indenture Act;
(x) The Registration Statement has become effective under the
Securities Act and, to such counsel's knowledge and information, no stop order
suspending the effectiveness of the Registration Statement has been issued
under the Securities Act and no proceedings therefor have been initiated or
threatened by the Commission;
(xi) The Registration Statement and the Prospectus and any further
amendments and supplements thereto made by the Company prior to the Closing
Date (except for the reports of experts pertaining to natural resource reserves
and the financial statements and other financial data included therein, as to
which such counsel need express no opinion, and exclusive of the documents
incorporated by reference therein) comply as to form in all material respects
with the requirements of the Securities Act and the Trust Indenture Act and the
rules and regulations thereunder;
(xii) Each document filed with the Commission pursuant to the Exchange
Act (except for the reports of experts pertaining to natural resource reserves
and the financial statements and other financial data included in the
Prospectus, as to which such counsel need express no opinion) which is
incorporated by reference in the Prospectus complied as to form, when so filed,
in all material respects with the requirements of the particular form of the
Commission upon which it was filed;
-2-
27
(xiii) The execution and delivery of the Underwriting Agreement, each
of the Delayed Delivery Contracts, if any, and the Indenture and the
consummation of the transactions therein contemplated and the compliance with
the terms of the Underwriting Agreement, each of the Delayed Delivery
Contracts, if any, and the Indenture do not and will not conflict with, violate
or result in a breach of any of the terms or provisions of, or constitute a
default under, the Restated Certificate of Incorporation, as amended, or
By-laws, as amended, of the Company or any material subsidiary, or any
indenture, mortgage or, to such counsel's knowledge, other agreement to which
the Company or any such subsidiary is a party or by which any of the property
or assets of any of them is subject, or any existing applicable law, rule,
regulation, judgment, order or decree of any domestic government, governmental
instrumentality or court known to such counsel and having jurisdiction over the
Company or any such subsidiary or any of their respective properties;
(xiv) To such counsel's knowledge, no action, suit or proceeding at
law or in equity, or before or by any federal, state or other commission, board
or administrative agency, is pending or threatened against the Company or any
of the Company's material subsidiaries which would be required to be described
in the Prospectus and is not described as required;
(xv) The Company is not an "investment company" within the meaning of
the Investment Company Act of 1940, as amended; and
(xvi) The Company is not subject to, or is exempt from, regulation as
a "holding company" under the Public Utility Holding Company Act of 1935, as
amended.
Such counsel's opinion shall also state that: Members of such
counsel's legal staff, acting under such counsel's direction and supervision,
have participated in the preparation of the Registration Statement and the
Prospectus and discussed with management of the Company and representatives of
its accountants the contents of the Registration Statement and the Prospectus.
Although such counsel has not independently verified, and is not passing upon
and does not assume any responsibility for, the accuracy, completeness or
fairness of the statements contained therein, nothing has come to such
counsel's attention that has caused him to believe that the Registration
Statement (except for the reports of experts pertaining to natural resource
reserves and the financial statements and other financial data included in the
Registration Statement, as to which such counsel need express no belief)
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 the Prospectus (except for the reports of experts
pertaining to natural resource reserves and the financial statements and other
financial data included in the Prospectus, as to which such counsel need
express no belief), at the date of the prospectus supplement relating to the
Purchased Securities filed pursuant to Rule 424 under the Securities Act or at
the Closing Date contained or contains an untrue statement of a material fact
or omitted or omits to state a material fact necessary in order to
-3-
28
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
In rendering the opinion expressed in paragraph (xiv) above, such
counsel may state that such counsel has only reviewed the files and records of
the Company and consulted with certain senior officers of the Company.
In rendering the opinion expressed in paragraphs (iii) and (v) above,
such counsel may rely, as to all matters of New York law, upon the opinion of
Xxxxxxxxx & Xxxxxxxxx, L.L.P. dated the Closing Date and delivered pursuant to
Section 5(g) of the Underwriting Agreement.
-4-
29
SCHEDULE IV
[FORM OF OPINION OF COUNSEL FOR
SELLING STOCKHOLDERS TO BE DELIVERED
PURSUANT TO SECTION 5(j)]
(i) Each Selling Stockholder had good and valid title to the
shares of Purchased Securities sold by such Selling Stockholder free and clear
of all liens, encumbrances, equities or claims and had full right, power and
authority to sell, assign, transfer and deliver such shares of Purchased
Securities; and the several Underwriters have acquired good and valid title to
the shares of Purchased Securities purchased by them from each Selling
Stockholder pursuant to the Underwriting Agreement free and clear of all liens,
encumbrances, equities or claims;
(ii) No consent, approval, authorization or order of, or filing
with, any governmental agency or body or any court is required to be obtained
or made by any Selling Stockholder for the consummation of the transactions
contemplated by the Underwriting Agreement in connection with the sale of the
shares of Purchased Securities sold by each Selling Stockholder, except such as
have been obtained and made under the Securities Act and such as may be
required under state securities laws;
(iii) The execution, delivery and performance of the Underwriting
Agreement and the consummation of the transactions herein contemplated will not
result in a breach or violation of any of the terms and provisions of, or
constitute a default under, any statute, any rule, regulation or order of any
governmental agency or body or any court having jurisdiction over any Selling
Stockholder or any of their properties or any agreement or instrument to which
any Selling Stockholder is a party or by which any Selling Stockholder is bound
or to which any of the properties of any Selling Stockholder is subject, or the
charter or by-laws of any Selling Stockholder which is a corporation; and
(iv) The Underwriting Agreement has been duly authorized, executed
and delivered by each Selling Stockholder.
