0000950147-01-501701.txt : 20011010
0000950147-01-501701.hdr.sgml : 20011010
ACCESSION NUMBER: 0000950147-01-501701
CONFORMED SUBMISSION TYPE: 8-K
PUBLIC DOCUMENT COUNT: 4
CONFORMED PERIOD OF REPORT: 20011002
ITEM INFORMATION: Financial statements and exhibits
FILED AS OF DATE: 20011004
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: ARIZONA PUBLIC SERVICE CO
CENTRAL INDEX KEY: 0000007286
STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931]
IRS NUMBER: 860011170
STATE OF INCORPORATION: AZ
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 8-K
SEC ACT: 1934 Act
SEC FILE NUMBER: 001-04473
FILM NUMBER: 1751998
BUSINESS ADDRESS:
STREET 1: 400 N FIFTH ST
STREET 2: P O BOX 53999
CITY: PHOENIX
STATE: AZ
ZIP: 85004
BUSINESS PHONE: 6022501000
8-K
1
e-7566.txt
CURRENT REPORT DATED 10/02/2001
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 2, 2001
ARIZONA PUBLIC SERVICE COMPANY
(Exact name of registrant as specified in its charter)
Arizona 1-4473 86-0011170
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification Number)
400 North Fifth Street, P.O. Box 53999, Phoenix, Arizona 85004
(Address of principal executive offices) (Zip Code)
(602) 250-1000
(Registrant's telephone number, including area code)
NONE
(Former name or former address, if changed since last report)
ITEM 7. FINANCIAL STATEMENT, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits.
The Registrant hereby files the following Exhibits to its Registration
Statements on Form S-3 (Nos. 333-94277 and 333-63994), which were declared
effective on January 21, 2000 and July 11, 2001, respectively.
Exhibit No. Description
----------- -----------
1.1 Underwriting Agreement and related Terms Agreement, each dated
October 2, 2001, in connection with the offering of $400,000,000
of 6.375% Notes Due 2011.
4.1 Fifth Supplemental Indenture dated as of October 1, 2011,
relating to the issuance of $400,000,000 of 6.375% Notes Due
2011.
4.2 Specimen of Note of 6.375% Notes Due 2011.
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ARIZONA PUBLIC SERVICE COMPANY
(Registrant)
Dated: October 3, 2001 By Barbara M. Gomez
-------------------------------------
Barbara M. Gomez
Treasurer
3
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
1.1 Underwriting Agreement and related Terms Agreement, each dated
October 2, 2001, in connection with the offering of $400,000,000
of 6.375% Notes Due 2011.
4.1 Fifth Supplemental Indenture dated as of October 1, 2011,
relating to the issuance of $400,000,000 of 6.375% Notes Due
2011.
4.2 Specimen of Note of 6.375% Notes Due 2011.
EX-1.1
3
ex1-1.txt
UNDERWRITING AND RELATED TERMS AGREEMENT
Exhibit 1.1
ARIZONA PUBLIC SERVICE COMPANY
SECURITIES
UNDERWRITING AGREEMENT
October 2, 2001
Credit Suisse First Boston Corporation
J.P. Morgan Securities Inc.
Banc of America Securities LLC
Salomon Smith Barney Inc.
Banc One Capital Markets, Inc.
Barclays Capital, Inc.
c/o J.P. Morgan Securities Inc.,
270 Park Avenue, 8th Floor,
New York, N.Y. 10017
Dear Sir or Madam:
1. INTRODUCTION. Arizona Public Service Company, an Arizona corporation
(the "Company"), proposes to issue and sell from time to time up to $725,000,000
in aggregate principal amount of its unsecured debentures, notes or other
evidences of indebtedness (the "Securities") registered under the registration
statements referred to in Section 2(a). The Securities will be issued under the
Indenture, dated as of January 15, 1998, between the Company and The Chase
Manhattan Bank, as Trustee, (the "Indenture"), as amended and supplemented by
one or more Supplemental Indentures between the Company and the Trustee (each, a
"Supplemental Indenture") (the Indenture as amended and supplemented by such
Supplemental Indentures being sometimes hereinafter referred to as the
"Indenture"). The Securities will be issued in one or more series, which series
may vary as to interest rates, maturities, redemption provisions, selling
prices, and other terms, with all such terms for any particular issue of the
Securities being determined at the time of sale. Particular issues of the
Securities may be sold from time to time to one or more of the firms to whom
this Agreement is addressed, and to such other purchasers as the Company shall
designate and as shall agree in writing to comply with the terms and conditions
of this Agreement, for resale in accordance with the terms of offering
determined at the time of sale. The Securities involved in any such offering are
hereinafter referred to as the "Purchased Securities," the party or parties that
agree to purchase the same are hereinafter referred to as the "Underwriters" of
such Purchased Securities, and the representative or representatives of the
Underwriters, if any, specified in a Terms Agreement referred to in Section 3
are hereinafter referred to as the "Representatives."
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. In connection with each
offering of the Purchased Securities, the Company represents and warrants to,
and agrees with, the Underwriters that:
(a) A registration statement (No. 333-94277) relating to $225,000,000
of the Securities or the Company's first mortgage bonds (the "Bonds") and a
registration statement (No. 333-63994) relating to $500,000,000 of the
Securities or the Bonds (including a combined prospectus relating to up to
$725,000,000 of the Securities or Bonds) were filed with the Securities and
Exchange Commission (the "Commission") and have become effective. Such
registration statements, as each is amended at the time of the Terms
Agreement referred to in Section 3 relating to the Purchased Securities,
are hereinafter referred to as the "First Registration Statement" and the
"Second Registration Statement," respectively, and, together with any
related 462(b) registration statement or amendment thereto, are hereinafter
referred to collectively as the "Registration Statements" and such
prospectus, as supplemented as contemplated by Section 3 to reflect the
terms of the Purchased Securities and terms of offering thereof, including
all material incorporated by reference therein, is hereinafter referred to
as the "Prospectus."
(b) Each part of the Registration Statements relating to the
Securities, when such part became effective, conformed in all material
respects to the requirements of the Securities Act of 1933 (the "Act"), the
Trust Indenture Act of 1939 (the "Trust Indenture Act") and the rules and
regulations (the "Rules and Regulations") of the Commission and did not
include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading, and on the date of each Prospectus
Supplement referred to in Section 3, the Registration Statements and the
Prospectus will conform in all material respects to the requirements of the
Act, the Trust Indenture Act and the Rules and Regulations, and at such
date none of such documents will include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading; provided, however,
that the foregoing does not apply to (i) statements in or omissions from
any such documents based upon written information furnished to the Company
by any Underwriter specifically for use therein or (ii) that part of the
Registration Statements that consists of the Statement of Eligibility and
Qualification (Form T-1) under the Trust Indenture Act of 1939 of The Chase
Manhattan Bank, as Trustee under the Indenture.
(c) An order of the Arizona Corporation Commission shall have been
granted authorizing the execution and delivery of the Supplemental
Indenture relating to the Purchased Securities and the issuance and sale of
the Purchased Securities on the terms and conditions herein and in the
Prospectus and the Terms Agreement referred to in Section 3 relating to the
Purchased Securities, and the approval or consent of no other public body
or authority is necessary to the execution and delivery of such
Supplemental Indenture or the validity of the issuance and sale of the
Purchased Securities, except as may be required under state securities or
blue sky laws.
2
(d) The Company holds such valid franchises, certificates of
convenience and necessity, licenses, and permits as are necessary with
respect to the maintenance and operation of its property and business as
now conducted, except that (i) the Company from time to time makes minor
extensions of its system prior to the time a related franchise,
certificate, license, or permit is procured, (ii) from time to time
communities already being served by the Company become incorporated and
considerable time may elapse before a franchise is procured, (iii) certain
franchises may have expired prior to the renegotiation thereof, (iv) the
Company may not have obtained certain permits or variances relating to the
environmental requirements described in any of its Form 10-K Report, its
Form 10-Q Reports, and/or its Form 8-K Reports incorporated by reference in
the Registration Statements, (v) certain minor defects and exceptions may
exist which, individually and in the aggregate, are not deemed material,
and (vi) the Company does not make any representation regarding the
geographical scope of any franchise, certificate, license, or permit that
is not specific as to its geographical scope.
(e) The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
United States Investment Company Act of 1940, as amended (the "1940 Act").
3. PURCHASE AND OFFERING. The obligation of the Underwriters to purchase,
and the obligation of the Company to sell, the Purchased Securities will be
evidenced by an exchange of facsimile transmission or other written
communications (the "Terms Agreement") at the time the Company determines to
sell the Purchased Securities. The Terms Agreement shall specify (by
incorporation by reference or otherwise) the party or parties that will be
Underwriters, the principal amount to be purchased by each, the purchase price
to be paid by the Underwriters, any compensation or commissions to be paid to
Underwriters, the offering price, and the terms of the Purchased Securities not
already specified in the Indenture, including, but not limited to, interest
rates, maturity, redemption provisions, and sinking fund requirements, if any.
The Terms Agreement shall also specify (by incorporation by reference or
otherwise) the time and date of delivery and payment (the "Closing Date"), the
place of delivery and payment, and any details of the terms of offering that
should be reflected in the prospectus supplement relating to the offering of the
Purchased Securities (the "Prospectus Supplement"). It is understood that the
Underwriters will offer the Purchased Securities for sale as set forth in the
Prospectus. The obligations of the Underwriters to purchase the Purchased
Securities shall be several and not joint. Except as may otherwise be set forth
in the Terms Agreement, the Purchased Securities will be in definitive form and
in such denominations and registered in such names as the Underwriters may
request.
4. COVENANTS OF THE COMPANY. In connection with each offering of Purchased
Securities, the Company covenants and agrees with the several Underwriters that:
(a) The Company will advise the Underwriters or the Representatives
promptly of any proposed amendment or supplementation of the First
Registration Statement, the Second Registration Statement, or the
Prospectus. The Company will also advise the Underwriters or the
Representatives of the institution by the Commission of any stop order
proceedings in respect of the First Registration Statement, the Second
Registration
3
Statement, or of any part thereof, and will use its best efforts to prevent
the issuance of any such stop order and to obtain as soon as possible its
lifting, if issued.
(b) If, at any time when a prospectus relating to the Purchased
Securities is required to be delivered under the Act, 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 to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time to amend or supplement the First Registration
Statement, the Second Registration Statement, or the Prospectus to comply
with the Act, the Company promptly will notify the Representatives of such
event and will prepare and file with the Commission an amendment or
supplement that will correct such statement or omission or an amendment
that will effect such compliance. Neither the Representatives' consent to,
nor the Underwriters' delivery of, any such amendment or supplement shall
constitute a waiver of any of the conditions set forth in Section 5 hereof.
(c) As soon as practicable, but not later than 18 months, after the
date of the Terms Agreement relating to the Purchased Securities, the
Company will make generally available to its security holders an earning
statement or statements (which need not be audited) covering a period of at
least 12 months beginning after the effective date of the Second
Registration Statement (as defined in Rule 158(c) under the Act), which
will satisfy the provisions of Section 11(a) of the Act and the rules and
regulations thereunder.
(d) The Company will furnish to the Underwriters or the
Representatives such copies of the Registration Statements (including one
copy of the Second Registration Statement for each Representative, or for
each Underwriter if there are no Representatives, and for the counsel for
the Underwriters, which is signed and includes all exhibits), any related
preliminary prospectus supplements and the Prospectus, including all
amendments or supplements to such documents, as may be reasonably
requested.
(e) The Company will arrange or cooperate in arrangements for the
qualification of the Purchased Securities for sale and the determination of
their eligibility for investment under the laws of such jurisdictions as
the Underwriters or the Representatives designate and will continue such
qualifications in effect so long as required for the distribution of the
Purchased Securities, provided that the Company shall not be required to
qualify as a foreign corporation in any State, to consent to service of
process in any State other than with respect to claims arising out of the
offering or sale of the Purchased Securities, or to meet other requirements
deemed by it to be unduly burdensome.
(f) During the period of five years after the date of the Terms
Agreement relating to the Purchased Securities, the Company will furnish to
the Underwriters or the Representatives thereunder, and, upon request, each
of the other Underwriters, (i) as soon as practicable after the end of each
fiscal year, a balance sheet and statements of income and retained earnings
of the Company as at the end of and for such year, all in reasonable detail
and certified by independent public accountants, and (ii) (A) as soon as
practicable after the
4
end of each quarterly fiscal period (except for the last quarterly fiscal
period of each fiscal year), a balance sheet and statement of income of the
Company as at the end of and for such period, all in reasonable detail and
certified by a principal financial or accounting officer of the Company,
(B) as soon as available, a copy of each report of the Company filed with
the Commission, and (C) from time to time, such other information
concerning the Company as may reasonably be requested. So long as the
Company has active subsidiaries, such financial statements will be on a
consolidated basis to the extent the accounts of the Company and its
subsidiaries are consolidated.
(g) The Company will pay all expenses incident to the performance of
its obligations under this Agreement, and will reimburse the Underwriters
for any reasonable expenses (including reasonable fees and disbursements of
counsel) incurred by them in connection with the qualification of the
Purchased Securities with respect to which the Terms Agreement relating to
the Purchased Securities has been entered for sale, and the determination
of their eligibility for investment, under the laws of such jurisdictions
as the Representatives or, if there are no Representatives, the
Underwriters designate, and the printing of memoranda relating thereto, and
for any fees charged by investment rating agencies for the rating of the
Purchased Securities.
(h) Except for the issuance of commercial paper in the ordinary course
of business, the Company will not offer or sell any other of its Securities
for a period beginning at the time of execution of the Terms Agreement
relating to the Purchased Securities and ending on the Closing Date
relating thereto without prior consent of the Underwriter or the
Representatives.
5. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The obligations of
the Underwriters to purchase and pay for the Purchased Securities will be
subject to the accuracy of the representations and warranties on the part of the
Company herein, to the accuracy of the statements of Company officers made
pursuant to the provisions hereof, to the performance by the Company of its
obligations hereunder, and to the following additional conditions precedent:
(a) The Underwriters or the Representatives shall have received a
letter from Deloitte & Touche LLP, dated the date of the Terms Agreement,
confirming that they are independent certified public accountants within
the meaning of the Act and the applicable published Rules and Regulations
thereunder, and stating in effect that (i) in their opinion the financial
statements and schedules of the Company audited by them and incorporated by
reference in the Registration Statements comply as to form in all material
respects with the applicable accounting requirements of the Securities
Exchange Act of 1934 (the "1934 Act") and the published Rules and
Regulations thereunder and (ii) on the basis of a reading of the latest
available interim financial statements of the Company, inquiries of
officials of the Company responsible for financial and accounting matters,
and other specified procedures, nothing came to their attention that caused
them to believe that (A) the unaudited financial statements incorporated by
reference, if any, in the Registration Statements do not comply as to form
in all material respects with the applicable accounting requirements of the
1934 Act and the published Rules and Regulations thereunder or are not
5
stated on a basis substantially consistent with that of the audited
financial statements incorporated by reference in the Registration
Statements, (B) at the date of the most recent available unaudited
financial statements and at a specified date not more than five days prior
to the date of this Agreement, there was any increase in the amounts of
common stock, redeemable preferred stock, or non-redeemable preferred stock
of the Company or any increase, exceeding $10,000,000, in long-term debt of
the Company or, at the date of the most recent available unaudited
financial statements there was any decrease in net assets as compared with
amounts shown in the most recent financial statements incorporated by
reference in the Registration Statements, or (C) for the twelve-month
period ended at the date of the most recent available unaudited financial
statements there were any decreases, exceeding 3%, as compared with the
twelve-month period ended at the date of the most recent financial
statements incorporated by reference in the Registration Statements, in the
amounts of total revenues or net income, except in all cases for increases
or decreases which result from the declaration or payment of dividends, or
which the Registration Statements (including any material incorporated by
reference therein) disclose have occurred or may occur, or which are
described in such letter.
(b) No stop order suspending the effectiveness of the First
Registration Statement, the Second Registration Statement, or any part
thereof shall have been issued and no proceedings for that purpose shall
have been instituted or, to the knowledge of the Company or the
Underwriters, shall be contemplated by the Commission.
(c) Subsequent to the execution of the Terms Agreement relating to the
Purchased Securities, (i) there shall not have occurred any change, or any
development involving a prospective change, in or affecting particularly
the business or properties of the Company or its subsidiaries which, in the
judgment of a majority in interest of the Underwriters under such Terms
Agreement, including any Representatives, materially impairs the investment
quality of the Purchased Securities, (ii) there shall not have occurred a
suspension or material limitation in trading in securities generally on the
New York Stock Exchange or any suspension of trading of any securities of
the Company on any exchange or in the over-the-counter market, (iii) there
shall not have occurred a general moratorium on commercial banking
activities in New York declared by either Federal or New York State
authorities, (iv) no rating of any of the Company's debt securities shall
have been lowered and there shall have been no public announcement that any
such debt securities have been placed on CreditWatch, Watchlist, or under
any similar surveillance or review, in each case with negative
implications, by any recognized rating agency, and (v) there shall not have
occurred any outbreak or escalation of major hostilities in which the
United States is involved, any declaration of war by Congress or any other
substantial national or international calamity or emergency if, in the
judgment of a majority in interest of the Underwriters under such Terms
Agreement, including any Representatives, the effect of any such outbreak,
escalation, declaration, calamity or emergency makes it impractical or
inadvisable to proceed with completion of the sale of and payment for the
Purchased Securities.
6
(d) The Underwriters or the Representatives shall have received an
opinion of Snell & Wilmer L.L.P., counsel for the Company, dated the
relevant Closing Date, to the effect that:
(i) The Company is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Arizona
and has full corporate power and authority to carry on its business as
presently conducted; and the Company is duly qualified as a foreign
corporation to do business and is in good standing in the States of
New Mexico, California, Oregon, Washington, Montana, Wyoming, and
Texas, the only other jurisdictions in which it owns or leases
substantial properties or in which the conduct of its business
requires such qualification;
(ii) The Purchased Securities have been duly authorized,
executed, authenticated, issued, and delivered, constitute valid and
legally binding obligations of the Company entitled to the benefits
provided by the Indenture (except as the same may be limited by (A)
general principles of equity or by bankruptcy, insolvency,
reorganization, arrangement, moratorium, or other laws or equitable
principles relating to or affecting the enforcement of creditors'
rights generally and (B) the qualification that certain waivers,
procedures, remedies, and other provisions of the Purchased Securities
and the Indenture may be unenforceable under or limited by the law of
the State of Arizona; however, such law does not in such counsel's
opinion substantially prevent the practical realization of the
benefits intended by such documents) and conform to the description
thereof in the Prospectus;
(iii) The Indenture has been duly authorized, executed, and
delivered, has been duly qualified under the Trust Indenture Act, and
constitutes a valid and binding instrument enforceable in accordance
with its terms except as the same may be limited by (A) general
principles of equity or by bankruptcy, insolvency, reorganization,
arrangement, moratorium, or other laws or equitable principles
relating to or affecting the enforcement of creditors' rights
generally and (B) the qualification that certain waivers, procedures,
remedies, and other provisions of the Purchased Securities and the
Indenture may be unenforceable under or limited by the law of the
State of Arizona; however, such law does not in such counsel's opinion
substantially prevent the practical realization of the benefits
intended by such documents;
(iv) With certain exceptions, a public service corporation is
required to obtain certificates of convenience and necessity from the
Arizona Corporation Commission under A.R.S. Section 40-281.A for
construction of its lines, plant, services, or systems, or any
extensions thereof, within the State of Arizona, and to obtain
franchises or similar consents or permits from counties and
incorporated municipalities under A.R.S. Section 40-283.A for the
construction, operation, and maintenance of transmission lines within
the State of Arizona; to the best of such counsel's knowledge after
due inquiry, the Company holds such valid franchises, certificates of
convenience and necessity, consents, and permits pursuant to such
7
statutory provisions as are necessary with respect to the maintenance
and operation of its property and business as now conducted, except
that (A) the Company from time to time makes minor extensions of its
system prior to the time a related franchise, certificate, license, or
permit is procured, (B) from time to time communities already being
served by the Company become incorporated and considerable time may
elapse before a franchise is procured, (C) certain franchises may have
expired prior to the renegotiation thereof, (D) certain minor defects
and exceptions may exist which, individually and in the aggregate, are
not deemed material, and (E) such counsel need not be required to
express any opinion regarding the geographical scope of any franchise,
certificate, license, or permit that is not specific as to its
geographical scope;
(v) The issuance and sale of the Purchased Securities on the
terms and conditions set forth or contemplated herein and in the
Prospectus and the Terms Agreement relating to the Purchased
Securities and the execution and delivery of the Supplemental
Indenture relating to the Purchased Securities have been duly
authorized by the Arizona Corporation Commission, said Commission had
jurisdiction in the premises, and no further approval, authorization,
or consent of any other public board or body is necessary to the
validity of such issuance and sale of such Purchased Securities or the
execution and delivery of such Supplemental Indenture, except as may
be required under state securities or blue sky laws, as to which laws
such counsel shall not be required to express an opinion;
(vi) The First Registration Statement and the Second Registration
Statement have become effective under the Act, and, to the best of the
knowledge of such counsel, no stop order suspending the effectiveness
of the First Registration Statement or the Second Registration
Statement has been issued and no proceedings for that purpose have
been instituted or are pending or contemplated under the Act, and each
part of the Registration Statements relating to the Securities, when
such part became effective, and the Prospectus, as of the date of the
Prospectus Supplement, and each amendment or supplement thereto, as of
their respective effective or issue dates, complied as to form in all
material respects with the requirements of the Act, the Trust
Indenture Act, and the published Rules and Regulations; such counsel
has no reason to believe that any part of the Registration Statements,
when such part became effective, or the Prospectus, as of the date of
the Prospectus Supplement, or as of the Closing Date, or any amendment
or supplement thereto, as of their respective effective or issue
dates, or as of the Closing Date, contained any untrue statement of a
material fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading; the descriptions in the Registration Statements and
Prospectus of statutes, legal and governmental proceedings and
contracts, and other documents are accurate and fairly present the
information required to be shown; and to the actual knowledge of those
persons in the lawyer group described in such opinion, there are no
legal or governmental proceedings required to be described in the
Prospectus that are not described as required, nor any contracts or
documents of a character required to be
8
described in the Registration Statements or Prospectus or to be filed
as exhibits to the Registration Statements that are not described and
filed as required (it being understood that such counsel need express
no opinion as to the financial statements or other financial data
contained in the Registration Statements or the Prospectus); and
(vii) This Agreement and the Terms Agreement have been duly
authorized, executed, and delivered by the Company.
(viii) The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in
the 1940 Act.
In giving such opinion, (x) Snell & Wilmer L.L.P. may rely (i) solely
upon certificates of the Company as to any factual matters upon which any
such opinions are based, (ii) upon the opinion of Keleher & McLeod, P.A.
and referred to below, as to all matters governed by the laws of the State
of New Mexico, but the opinion of Snell & Wilmer L.L.P. shall state that,
though they are members of the Arizona Bar and do not hold themselves out
as experts on the laws of the State of New Mexico, they have made a study
of the laws of such State insofar as such laws are involved in the
conclusions stated in their opinion, and from such study it is their
opinion that such laws support such conclusions and that, in their opinion,
the Underwriters and they are justified to such extent in relying upon the
opinion of Keleher & McLeod, P.A., (iii) upon the opinion of Morgan Lewis &
Bockius LLP as to all matters under the Public Utility Holding Company Act,
as amended, and the Federal Power Act, as amended, and (iv) upon the
opinion of Sullivan & Cromwell as to all matters governed by the laws of
the State of New York; and (y) the lawyer group referred to in such opinion
will mean those lawyers in the offices of Snell & Wilmer L.L.P. who (i)
have billed any time on the particular transaction to which such opinion
relates or (ii) have billed more than ten hours to any Company matter in
the twelve-month period preceding the date on which the list of such
lawyers was compiled for purposes of inquiry pursuant to such opinion.
(e) The Underwriters or the Representatives shall have received an
opinion of Keleher & McLeod, P.A., New Mexico counsel for the Company,
dated the Closing Date, to the effect that:
(i) The Company is duly qualified as a foreign corporation to do
business and is in good standing in the State of New Mexico and has
full corporate power and authority to engage in the State of New
Mexico in the business now conducted by it therein; and
(ii) The activities of the Company in the State of New Mexico to
date do not constitute it a "public utility" as that term is defined
in the relevant laws of the State of New Mexico, and accordingly, no
public utility franchises or certificates of convenience and necessity
are necessary under New Mexico law with respect to the
9
maintenance and operation of the Company's property and business as
now conducted in the State of New Mexico and no approval,
authorization, or consent of the New Mexico Public Regulation
Commission or any other public board or body of the State of New
Mexico is required for the issuance and sale of the Purchased
Securities on the terms and conditions herein and in the Prospectus
set forth or contemplated or for the execution of the Supplemental
Indenture relating to the Purchased Securities, except as may be
required under New Mexico state securities or blue sky laws, as to
which laws such counsel shall not be required to express an opinion.
In giving such opinion, Keleher & McLeod, P.A. may rely solely upon
certificates of the Company as to any factual matters upon which any such
opinions are based.
(f) The Underwriters or the Representatives shall have received from
counsel for the Underwriters such opinion or opinions, dated the Closing
Date, with respect to the incorporation of the Company, the validity of the
Purchased Securities, the Registration Statements, the Prospectus, and
other related matters as may reasonably be required, and the Company shall
have furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters. In rendering such
opinion, such counsel may rely as to the incorporation of the Company and
all other matters governed by the laws of the States of Arizona and New
Mexico upon the opinions of Snell & Wilmer L.L.P. and Keleher & McLeod,
P.A., referred to above.
(g) The Underwriters or the Representatives shall have received a
certificate of the President or any Vice President and a principal
financial or accounting officer of the Company, dated the Closing Date, in
which such officers, to the best of their knowledge after reasonable
investigation, shall state that the representations and warranties of the
Company in this Agreement are true and correct, that the Company has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to the Closing Date, that no stop order
suspending the effectiveness of the First Registration Statement or the
Second Registration Statement has been issued and no proceedings for that
purpose have been instituted or are contemplated by the Commission, and
that, subsequent to the date of the most recent financial statements in the
Prospectus, there has been no material adverse change in the financial
position or results of operations of the Company and its subsidiaries
except as set forth or contemplated in the Prospectus or as described in
such certificate.
(h) The Underwriters or the Representatives shall have received a
letter of Deloitte & Touche LLP, dated the Closing Date, which meets the
requirements of subsection (a) of this Section, except that the specified
date referred to in such subsection will be a date not more than five days
prior to the Closing Date for the purposes of this subsection.
10
The Company will furnish the Underwriters or the Representatives with such
conformed copies of such opinions, certificates, letters, and documents as may
be reasonably requested.
6. INDEMNIFICATION.
(a) The Company will indemnify and hold harmless each Underwriter and
each person, if any, who controls such Underwriter within the meaning of
the Act against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter or such controlling person 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 any untrue statement or alleged untrue statement of any material
fact contained in any part of the Registration Statements relating to the
Securities, when such part became effective, any preliminary prospectus or
preliminary prospectus supplement, the Prospectus, or any amendment or
supplement thereto, 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 each Underwriter and each such controlling person for any
legal or other expenses reasonably incurred by such Underwriter or such
controlling person in connection with investigating or defending any such
loss, claim, damage, liability, or action; provided, however, that the
Company will not be liable in any such case to the extent that any such
loss, claim, damage, or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made
in any of such documents in reliance upon and in conformity with written
information furnished to the Company by any Underwriter specifically for
use therein. This indemnity agreement will be in addition to any liability
which the Company may otherwise have.
(b) Each Underwriter will severally indemnify and hold harmless the
Company, each of its directors, each of its officers who have signed the
Registration Statements, and each person, if any, who controls the Company
within the meaning of the Act, against any losses, claims, damages, or
liabilities to which the Company or any such director, officer, or
controlling person 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 any untrue statement or alleged
untrue statement of any material fact contained in any part of the
Registration Statements relating to the Securities, when such part became
effective, any preliminary prospectus or preliminary prospectus supplement,
the Prospectus, or any amendment or supplement thereto, or arise out of or
are based upon the omission or the 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 reliance upon and in conformity
with written information furnished to the Company by such Underwriter
specifically for use therein; and will reimburse any legal or other
expenses reasonably incurred by the Company or any such director, officer,
or controlling person in connection with investigating or defending any
such loss, claim,
11
damage, liability, or action. This indemnity agreement will be in addition
to any liability which such Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party
under this Section, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not
relieve it from any liability that it may have to any indemnified party
otherwise than under this Section. In case any such action is brought
against any indemnified party, and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel satisfactory to such indemnified party (who shall not, without
the consent of the indemnified party, be counsel to the indemnifying
party), and after notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof, the indemnifying
party will not be liable to such indemnified party under this Section for
any legal or other expenses subsequently incurred by such indemnified party
in connection with the defense thereof other than reasonable costs of
investigation. An indemnifying party shall not be liable for any settlement
of a claim or action effected without its written consent, which shall not
be unreasonably withheld.
(d) If the indemnification provided for in this Section is unavailable
or insufficient to hold harmless an indemnified party for any loss, claim,
damage, liability, or action described in subsection (a) or (b) above, then
each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above on the following
basis: (i) if such loss, claim, damage, liability, or action arises under
subsection (a) above, (A) then in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and
the Underwriters on the other from the offering of the Securities or (B) if
the allocation provided by clause (A) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (A) above but also the relative fault of the
Company on the one hand and the Underwriters on the other in connection
with the statements or omissions which resulted in such losses, claims,
damages or liabilities as well as any other relevant equitable
considerations; and (ii) if such loss, claim, damage, liability, or action
arises under subsection (b) above, then in such proportion as is
appropriate to reflect the relative fault of the Company on the one hand
and the Underwriter on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities as
well as any other relevant equitable considerations. For the purposes of
clause (i) above, the relative benefits received by the Company on the one
hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company bear to the total underwriting discounts
and commissions received by the Underwriters. For the purposes of clauses
(i) and (ii) above, the 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
12
alleged omission to state a material fact relates to information supplied
by the Company or the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The amount paid by an indemnified party as a
result of the losses, claims, damages or liabilities referred to in the
first sentence of this subsection (d) shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any action or claim which is the
subject of this subsection (d). Notwithstanding the provisions of this
subsection (d), 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 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 Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this
subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
7. DEFAULT OF UNDERWRITERS. If any Underwriter or Underwriters default in
their obligations to purchase Purchased Securities pursuant to this Agreement
and the Terms Agreement and the principal amount of Purchased Securities that
such defaulting Underwriter or Underwriters agreed but failed to purchase is ten
percent (10%) or less of the principal amount of Purchased Securities to which
such Terms Agreement relates, the Underwriters or the Representatives may make
arrangements satisfactory to the Company for the purchase of such Purchased
Securities by other persons, including any of the Underwriters, but if no such
arrangements are made by the Closing Date the nondefaulting Underwriters shall
be obligated severally, in proportion to their respective commitments hereunder
and under such Terms Agreement, to purchase the Purchased Securities that such
defaulting Underwriter or Underwriters agreed but failed to purchase. If any
Underwriter or Underwriters so default and the aggregate principal amount of
Purchased Securities with respect to which such default or defaults occur is
more than the above-described amount and arrangements satisfactory to the
remaining Underwriters and the Company for the purchase of such Purchased
Securities by other persons are not made within thirty-six hours after such
default, the Terms Agreement will terminate without liability on the part of any
non-defaulting Underwriter or the Company, except as provided in Section 8. As
used in this Agreement, the term "Underwriter" includes any person substituted
for an Underwriter under this Section. Nothing herein will relieve a defaulting
Underwriter from liability for its default.
13
8. SURVIVAL OF CERTAIN REPRESENTATIONS AND OBLIGATIONS. The respective
indemnities, agreements, representations, warranties, and other statements of
the Company or its officers and of the Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect regardless of
any investigation, or statement as to the results thereof, made by or on behalf
of the Underwriters or the Company or any of its officers or directors or any
controlling person, and will survive delivery of and payment for the Purchased
Securities. If any Terms Agreement is terminated pursuant to Section 7, or if
for any reason a purchase pursuant to any Terms Agreement is not consummated,
the Company shall remain responsible for the expenses to be paid or reimbursed
by it pursuant to Section 4 and the respective obligations of the Company and
the Underwriters pursuant to Section 6 shall remain in effect.
9. NOTICES. All communications hereunder relating to any offering of
Purchased Securities will be in writing, and, if sent to the Underwriters, may
be mailed, delivered, or telecopied and confirmed to the Representative first
named in the Terms Agreement relating to such Purchased Securities or the
Underwriters at their addresses furnished to the Company in writing for the
purpose of communications; provided, however, that any notice to an Underwriter
pursuant to Section 6 will be mailed, delivered, or telecopied and confirmed to
each such Underwriter at its own address. All communications hereunder to the
Company shall be mailed to the Company, Attention: Treasurer, at P.O. Box 53999,
Phoenix, Arizona 85072-3999, or delivered, or telecopied and confirmed to the
Company at 400 North Fifth Street, Phoenix, Arizona 85004.
10. SUCCESSORS. This Agreement will inure to the benefit of and be binding
upon the parties hereto and the Underwriter or Underwriters as are named in any
Terms Agreement and their respective successors and the officers and directors
and controlling persons referred to in Section 6, and no other person will have
any right or obligation hereunder.
11. REPRESENTATION OF UNDERWRITERS. The Representatives, if any, may act
for the Underwriters in connection with any offering to which a Terms Agreement
may relate, and any action under this Agreement or such Terms Agreement taken by
the Representatives jointly or the Representative first named in such Terms
Agreement in such capacity will be binding upon the Underwriters of Purchased
Securities to which such Terms Agreement relates.
12. EXECUTION IN COUNTERPART. This Agreement and any Terms Agreement may be
executed in one or more counterparts, each of which shall be deemed to be an
original, but all such respective counterparts shall together constitute a
single instrument.
14
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to us the enclosed duplicate hereof, whereupon it will
become a binding agreement between the Company and the Underwriters in
accordance with its terms.
Very truly yours,
ARIZONA PUBLIC SERVICE COMPANY
By Barbara M. Gomez
-------------------------------------
Name: Barbara M. Gomez
Title: Treasurer
The foregoing Underwriting Agreement is hereby confirmed and accepted as of the
date first above written.
CREDIT SUISSE FIRST BOSTON CORPORATION
J.P. MORGAN SECURITIES INC.
BANC OF AMERICA SECURITIES LLC
SALOMON SMITH BARNEY INC.
BANC ONE CAPITAL MARKETS, INC.
BARCLAYS CAPITAL, INC.
By: J.P. MORGAN SECURITIES INC.
(As Representative of the Several Underwriters)
By: Kathryn Sayko
-----------------------------------
Kathryn Sayko
TERMS AGREEMENT
October 2, 2001
Arizona Public Service Company
400 North Fifth Street
Phoenix, Arizona 85004
Attention: Treasurer
Ladies and Gentlemen:
Arizona Public Service Company (the "Company") hereby agrees to sell to the
several Underwriters (the "Underwriters") listed in the Company's Prospectus
Supplement (the "Prospectus Supplement") of even date herewith relating to
$400,000,000 in aggregate principal amount of its 6.375% Notes Due 2011 (the
"Purchased Securities"), and the Underwriters hereby agree to purchase,
severally and not jointly, at a purchase price of 99.018% of the principal
amount thereof plus any accrued interest from the date of original issuance, the
respective principal amounts of Purchased Securities set forth opposite the
names of the Underwriters in the Prospectus Supplement. The sale of the
Purchased Securities by the Company and the purchase thereof by the Underwriters
shall be made on the basis of the representations, warranties, and agreements
contained in the Underwriting Agreement (the "Underwriting Agreement"), dated
October 2, 2001, relating to the issuance and sale of up to $725,000,000 of the
Company's Securities under the Company's Indenture, and shall be subject to the
terms and conditions set forth in such Underwriting Agreement. The provisions of
the Underwriting Agreement are incorporated herein by reference. As contemplated
by Section 3 of the Underwriting Agreement, certain terms of the Purchased
Securities are described in the Prospectus Supplement.
The Underwriters propose to offer the Purchased Securities to the public in
the manner and upon the terms set out in the Prospectus Supplement.
On October 5, 2001 the Company will deliver the Purchased Securities to the
Underwriters in book-entry form through the facilities of The Depository Trust
Company at the office of the Company, 400 North Fifth Street, Phoenix, Arizona
85004, against payment of the purchase price by transfer of funds by Fed Wire
from the Underwriters to the Company's account at a bank in Phoenix, Arizona
designated by the Company. Such purchase price will be deemed to have been
received by the Company upon the Company's receipt of the Fed Wire reference
number relating to such transfer of funds. Closing shall occur at the office of
the Company, 400 North Fifth Street, Phoenix, Arizona, at 8:00 a.m. Phoenix
time, on October 5, 2001, or at such other time and date as the Underwriters and
the Company may agree upon in writing, such time and date being referred to as
the "Closing Date." All of the Purchased
Securities referred to in this paragraph shall be in global form and registered
in the name of Cede & Co. and deposited with The Depository Trust Company, as
depositary.
If the foregoing is acceptable to you, please sign below and transmit
evidence of such signing to J.P. Morgan Securities Inc. at your earliest
convenience. At that point, the agreement signified hereby will constitute the
Terms Agreement, as described in the Underwriting Agreement, with respect to the
$400,000,000 of Purchased Securities referred to herein.
All capitalized terms herein, not otherwise defined herein, are used as
defined in the Underwriting Agreement. This agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original, but all of
such respective counterparts shall together constitute a single instrument.
Very truly yours,
CREDIT SUISSE FIRST BOSTON CORPORATION
J.P. MORGAN SECURITIES INC.
BANC OF AMERICA SECURITIES LLC
SALOMON SMITH BARNEY INC.
BANC ONE CAPITAL MARKETS, INC.
BARCLAYS CAPITAL, INC.
BY: J.P. MORGAN SECURITIES INC.
(As Representative of the
Several Underwriters)
By Kathryn Sayko
-------------------------------------
Kathryn Sayko
Confirmed and accepted as of the date first above written.
ARIZONA PUBLIC SERVICE COMPANY
By Barbara M. Gomez
-----------------------------
Barbara M. Gomez
Treasurer
EX-4.1
4
ex4-1.txt
FIFTH SUPPLEMENTAL INDENTURE
Exhibit 4.1
---------------------------------------------
ARIZONA PUBLIC SERVICE COMPANY
TO
THE CHASE MANHATTAN BANK
TRUSTEE
Fifth Supplemental Indenture
Dated as of October 1, 2001
To
Indenture
Dated as of January 15, 1998
6.375% Notes Due 2011
---------------------------------------------
FIFTH SUPPLEMENTAL INDENTURE, dated as of October 1, 2001, between Arizona
Public Service Company, a corporation duly organized and existing under the laws
of the State of Arizona (herein called the "Company"), having its principal
office at 400 North Fifth Street, Phoenix, Arizona 85004, and The Chase
Manhattan Bank, a New York banking corporation, as Trustee (herein called the
"Trustee") under the Indenture dated as of January 15, 1998 between the Company
and the Trustee (the "Indenture").
RECITALS OF THE COMPANY
The Company has executed and delivered the Indenture to the Trustee to
provide for the issuance from time to time of its unsecured debentures, notes or
other evidences of indebtedness (the "Securities"), said Securities to be issued
in one or more series as provided in the Indenture.
Pursuant to the terms of the Indenture, the Company desires to provide for
the establishment of a new series of its Securities to be known as its 6.375%
Notes Due 2011 (herein called the "Notes Due 2011"), the form and substance of
such Notes Due 2011 and the terms, provisions, and conditions thereof to be set
forth as provided in the Indenture and this Fifth Supplemental Indenture.
All things necessary to make this Fifth Supplemental Indenture a valid
agreement of the Company, and to make the Notes Due 2011, when executed by the
Company and authenticated and delivered by the Trustee, the valid obligations of
the Company, have been done.
NOW, THEREFORE, THIS FIFTH SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Notes Due
2011 by the Holders thereof, and for the purpose of setting forth, as provided
in the Indenture, the form and substance of the Notes Due 2011 and the terms,
provisions, and conditions thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Notes Due 2011, as follows:
ARTICLE ONE
GENERAL TERMS AND CONDITIONS OF
THE NOTES DUE 2011
SECTION 101. There shall be and is hereby authorized a series of Securities
designated the "6.375% Notes Due 2011" initially limited in aggregate principal
amount to $400,000,000, which amount shall be as set forth in any Company Order
for the authentication and delivery of Notes Due 2011. The Notes Due 2011 shall
mature and the principal shall be due and payable together with all accrued and
unpaid interest thereon on October 15, 2011, and shall be issued in the form of
registered Notes Due 2011 without coupons.
The foregoing principal amount of the Notes Due 2011 may be increased from
time to time as permitted by Section 301 of the Indenture. All Notes Due 2011
need not be issued at the same time and such series may be reopened at any time,
without notice to, or the consent of, the then
2
existing Holders, for issuances of additional Notes Due 2011. Any such
additional Notes Due 2011 will be equal in rank and have the same maturity,
payment terms, redemption features, and other terms, except for the payment of
interest accruing prior to the issue date of the further Notes Due 2011 and for
the first payment of interest following the issue date of the further Notes Due
2011, as those initially issued.
SECTION 102. The Notes Due 2011 shall be issued in certificated form,
except that the Notes Due 2011 shall be issued initially as a Global Security to
and registered in the name of Cede & Co., as nominee of The Depository Trust
Company, as Depositary therefor. Any Notes Due 2011 to be issued or transferred
to, or to be held by, Cede & Co. (or any successor thereof) for such purpose
shall bear the depositary legend in substantially the form set forth at the top
of the form of Note Due 2011 in Article Two hereof (in lieu of that set forth in
Section 204 of the Indenture), unless otherwise agreed by the Company, such
agreement to be confirmed in writing to the Trustee. Such Global Security may be
exchanged in whole or in part for Notes Due 2011 registered, and any transfer of
such Global Security in whole or in part may be registered, in the name or names
of Persons other than such Depositary or a nominee thereof only under the
circumstances set forth in Clause (2) of the last paragraph of Section 305 of
the Indenture, or such other circumstances in addition to or in lieu of those
set forth in Clause (2) of the last paragraph of Section 305 of the Indenture as
to which the Company shall agree, such agreement to be confirmed in writing to
the Trustee. Principal of, and premium, if any, and interest on the Notes Due
2011 will be payable, the transfer of Notes Due 2011 will be registrable and
Notes Due 2011 will be exchangeable for Notes Due 2011 bearing identical terms
and provisions, at the office or agency of the Company in the Borough of
Manhattan, The City and State of New York; PROVIDED, HOWEVER, that payment of
interest may be made at the option of the Company by check mailed to the
registered holder at such address as shall appear in the Security Register.
SECTION 103. Each Note Due 2011 will bear interest at the rate of 6.375%
from October 5, 2001 or from the most recent Interest Payment Date (as
hereinafter defined) to which interest has been paid or duly provided for until
the principal thereof is paid or made available for payment, payable on April 15
and October 15 of each year (each, an "Interest Payment Date"), commencing on
April 15, 2002, to the person in whose name such Note Due 2011 or any
Predecessor Security is registered, at the close of business on April 1 or
October 1, as the case may be, whether or not a Business Day, immediately
preceding the Interest Payment Date. Any such interest installment not
punctually paid or duly provided for shall forthwith cease to be payable to the
registered holders on such regular record date, and may be paid to the person in
whose name the Note Due 2011 (or one or more Predecessor Securities) is
registered at the close of business on a special record date to be fixed by the
Trustee for the payment of such defaulted interest, notice whereof shall be
given to the registered holders of the Notes Due 2011 not less than 10 days
prior to such special record date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Notes Due 2011 may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in the Indenture.
The amount of interest payable for any period will be computed on the basis
of a 360-day year of twelve 30-day months. Interest will accrue from October 5,
2001 to, but not including, the
3
relevant payment date. In the event that any date on which interest is payable
on the Notes Due 2011 is not a Business Day, then payment of interest payable on
such date will be made on the next succeeding day which is a Business Day (and
without any interest or other payment in respect of any such delay), in each
case with the same force and effect as if made on such date. A "Business Day"
shall mean any day, except a Saturday, a Sunday or a legal holiday in the City
of New York on which banking institutions are authorized or required by law,
regulation or executive order to close.
SECTION 104. The Company, at its option, may redeem all, or, from time to
time any part of the Notes Due 2011, upon notice as provided in the Indenture at
a Redemption Price equal to the greater of (a) the principal amount of the Notes
Due 2011 (or portion thereof) to be redeemed plus interest (if any) accrued to
the Redemption Date or (b) the Make-Whole Amount with respect to the Notes Due
2011 to be redeemed.
For purposes of this Section 104, the following terms shall have the
following meanings:
"MAKE-WHOLE AMOUNT" means the sum, as determined by a Quotation Agent,
of the present values of the principal amount of the Notes Due 2011 to be
redeemed, together with scheduled payments of interest (exclusive of interest to
the Redemption Date) from the Redemption Date to the Stated Maturity of the
Notes Due 2011, in each case discounted to the Redemption Date on a semi-annual
basis, assuming a 360-day year consisting of twelve 30-day months, at the
Adjusted Treasury Rate, plus accrued interest (if any) on the principal amount
of the Notes Due 2011 being redeemed to the Redemption Date.
"ADJUSTED TREASURY RATE" means, with respect to any Redemption Date,
(i) the yield, under the heading which represents the average for the
immediately preceding week, appearing in the most recently published statistical
release designated "H.15 (519)" or any successor publication which is published
weekly by the Board of Governors of the Federal Reserve System and which
establishes yields on actively traded U.S. Treasury securities adjusted to
constant maturity under the caption "Treasury Constant Maturities," for the
maturity corresponding to the Comparable Treasury Issue (if no maturity is
within three months before or after the remaining term of the Notes Due 2011,
yields for the two published maturities most closely corresponding to the
Comparable Treasury Issue shall be determined and the Adjusted Treasury Rate
shall be interpolated or extrapolated from such yields on a straight line basis,
rounding to the nearest month) or (ii) if such release (or any successor
release) is not published during the week preceding the calculation date or does
not contain such yields, the rate per year equal to the semi-annual equivalent
yield to maturity of the Comparable Treasury Issue, calculated using a price for
the Comparable Treasury Issue (expressed as a percentage of its principal
amount) equal to the Comparable Treasury Price for such Redemption Date, in each
case calculated on the third Business Day preceding the Redemption Date, plus in
each case 0.25%.
"COMPARABLE TREASURY ISSUE" means the U.S. Treasury security selected
by the Quotation Agent as having a maturity comparable to the remaining term
from the Redemption Date to the Stated Maturity of the Notes Due 2011 that would
be utilized, at the time of selection and in
4
accordance with customary financial practice, in pricing new issues of corporate
debt securities of comparable maturity to the remaining term of the Notes Due
2011.
"QUOTATION AGENT" means the Reference Treasury Dealer selected by the
Trustee after consultation with the Company.
"REFERENCE TREASURY DEALER" means a primary U.S. Government securities
dealer selected by the Company.
"COMPARABLE TREASURY PRICE" means, with respect to any Redemption
Date, if clause (ii) of the definition of Adjusted Treasury Rate is applicable,
the average of three, or such lesser number as is obtained by the Trustee,
Reference Treasury Dealer Quotations for such Redemption Date.
"REFERENCE TREASURY DEALER QUOTATIONS" means, with respect to each
Reference Treasury Dealer and any Redemption Date, the average, as determined by
the Trustee, of the bid and asked prices for the Comparable Treasury Issue,
expressed in each case as a percentage of its principal amount, quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York
City time, on the third Business Day preceding such Redemption Date.
The Trustee shall be under no duty to inquire into, may conclusively
presume the correctness of, and shall be fully protected in acting upon the
Company's calculation of any Redemption Price, including any Make-Whole Amount.
The Company shall give the Trustee written notice of the Redemption Price,
promptly after the calculation thereof.
Notwithstanding Section 1104 of the Indenture, any notice of redemption
given pursuant to said Section with respect to the foregoing redemption need not
set forth the Redemption Price but only the manner of calculation thereof.
SECTION 105. The Notes Due 2011 shall be defeasible pursuant to Section
1302 or 1303 of the Indenture.
ARTICLE TWO
FORM OF NOTES DUE 2011
SECTION 201. The Notes Due 2011 and the Trustee's certificate of
authentication to be endorsed thereon are to be substantially in the following
forms:
Form of Face of Security:
5
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ARIZONA PUBLIC
SERVICE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
ARIZONA PUBLIC SERVICE COMPANY
6.375% Note Due 2011
No. _________ $400,000,000
CUSIP No. 040555 CC 6
Arizona Public Service Company, a corporation duly organized and existing
under the laws of Arizona (herein called the "Company", which term includes any
successor Person under the Indenture hereinafter referred to), for value
received, hereby promises to pay to Cede & Co., or registered assigns, the
principal sum of Four Hundred Million Dollars on October 15, 2011, and to pay
interest thereon from October 5, 2001 or from the most recent Interest Payment
Date to which interest has been paid or duly provided for, semi-annually in
arrears on April 15 and October 15 in each year, commencing April 15, 2002, at
the rate of 6.375%, until the principal hereof is paid or made available for
payment.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in such Indenture, be paid to the Person
in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be April 1 or October 1, as the case may be, immediately
preceding the Interest Payment Date (whether or not a Business Day). Any such
interest not so punctually paid or duly provided for will forthwith cease to be
payable to the Holder on such Regular Record Date and may either be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Securities of this series not less than 10 days prior to
such Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Securities of this series may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in said Indenture.
Payment of the principal of (and premium, if any) and any interest on this
Security will be made at the office or agency of the Company maintained for that
purpose in the City of New York, in such coin or currency of the United States
of America as at the time of payment is legal tender for
6
payment of public and private debts; provided, however, that at the option of
the Company payment of interest may be made by check mailed to the address of
the Person entitled thereto as such address shall appear in the Security
Register.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
ARIZONA PUBLIC SERVICE COMPANY
By
-------------------------------------
Vice President, Finance
Attest:
---------------------------------
Vice President and Secretary
Form of Reverse of Security.
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of January 15, 1998 (herein called the
"Indenture", which term shall have the meaning assigned to it in such
instrument), between the Company and The Chase Manhattan Bank, as Trustee
(herein called the "Trustee", which term includes any successor trustee under
the Indenture), and reference is hereby made to the Indenture for a statement of
the respective rights, limitations of rights, duties and immunities thereunder
of the Company, the Trustee and the Holders of the Securities and of the terms
upon which the Securities are, and are to be, authenticated and delivered. This
Security is one of the series designated on the face hereof, which is unlimited
in aggregate principal amount.
The Securities of this series are subject to redemption upon not less than
30 days' notice by mail at the option of the Company, in whole or in part, from
time to time at a Redemption Price equal to the greater of (a) the principal
amount of the Securities (or portion thereof) of this series to be redeemed plus
interest (if any) accrued to the Redemption Date or (b) the Make-Whole Amount
7
(as defined below) with respect to the Securities of this series to be redeemed
(the "Redemption Price").
If notice has been given as provided in the Indenture and funds for the
redemption of any Securities (or any portion thereof) called for redemption
shall have been made available on the Redemption Date referred to in such
notice, such Securities (or any portion thereof) will cease to bear interest on
the date fixed for such redemption specified in such notice and the only right
of the Holders of such Securities will be to receive payment of the Redemption
Price.
Notice of any optional redemption of Securities of this series (or any
portion thereof) will be given to Holders at their addresses, as shown in the
Security Register for such Securities, not more than 60 nor less than 30 days
prior to the date fixed for redemption. The notice of redemption will specify,
among other items, the Redemption Price or, if not then known, the manner of
calculation thereof, and the principal amount of the Securities of this series
held by such Holder to be redeemed. If less than all of the Securities of this
series are to be redeemed at the option of the Company, the Trustee shall
select, in such manner as it shall deem fair and appropriate, the portion of
such Securities to be redeemed in whole or in part.
As used herein:
"MAKE-WHOLE AMOUNT" means the sum, as determined by a Quotation Agent,
of the present values of the principal amount of the Securities of this series
to be redeemed, together with scheduled payments of interest (exclusive of
interest to the Redemption Date) from the Redemption Date to the Stated Maturity
of the Securities of this series, in each case discounted to the Redemption Date
on a semi-annual basis, assuming a 360-day year consisting of twelve 30-day
months, at the Adjusted Treasury Rate, plus accrued interest (if any) on the
principal amount of the Securities of this series being redeemed to the
Redemption Date.
"ADJUSTED TREASURY RATE" means, with respect to any Redemption Date,
(i) the yield, under the heading which represents the average for the
immediately preceding week, appearing in the most recently published statistical
release designated "H.15 (519)" or any successor publication which is published
weekly by the Board of Governors of the Federal Reserve System and which
establishes yields on actively traded U.S. Treasury securities adjusted to
constant maturity under the caption "Treasury Constant Maturities," for the
maturity corresponding to the Comparable Treasury Issue (if no maturity is
within three months before or after the remaining term of the Securities of this
series, yields for the two published maturities most closely corresponding to
the Comparable Treasury Issue shall be determined and the Adjusted Treasury Rate
shall be interpolated or extrapolated from such yields on a straight line basis,
rounding to the nearest month) or (ii) if such release (or any successor
release) is not published during the week preceding the calculation date or does
not contain such yields, the rate per year equal to the semi-annual equivalent
yield to maturity of the Comparable Treasury Issue, calculated using a price for
the Comparable Treasury Issue (expressed as a percentage of its principal
amount) equal to the Comparable Treasury Price for such Redemption Date, in each
case calculated on the third Business Day preceding the Redemption Date, plus in
each case 0.25%.
8
"COMPARABLE TREASURY ISSUE" means the U.S. Treasury security selected
by the Quotation Agent as having a maturity comparable to the remaining term
from the Redemption Date to the Stated Maturity of the Securities of this series
that would be utilized, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate debt securities
of comparable maturity to the remaining term of the Securities of this series.
"QUOTATION AGENT" means the Reference Treasury Dealer selected by the
Trustee after consultation with the Company.
"REFERENCE TREASURY DEALER" means a primary U.S. Government securities
dealer selected by the Company.
"COMPARABLE TREASURY PRICE" means, with respect to any Redemption
Date, if clause (ii) of the definition of Adjusted Treasury Rate is applicable,
the average of three, or such lesser number as is obtained by the Trustee,
Reference Treasury Dealer Quotations for such Redemption Date.
"REFERENCE TREASURY DEALER QUOTATIONS" means, with respect to each
Reference Treasury Dealer and any Redemption Date, the average, as determined by
the Trustee, of the bid and asked prices for the Comparable Treasury Issue,
expressed in each case as a percentage of its principal amount, quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York
City time, on the third Business Day preceding such Redemption Date.
The Securities of this series will not be subject to any sinking fund.
In the event of redemption of this Security in part only, a new Security or
Securities of this series and of like tenor for the unredeemed portion hereof
will be issued in the name of the Holder hereof upon the cancellation hereof.
The Indenture contains provisions for defeasance at any time of the entire
indebtedness of the Security or certain restrictive covenants and Events of
Default with respect to this Security, in each case upon compliance with certain
conditions set forth in the Indenture.
If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee without
the consent of such Holders in certain limited circumstances or with the consent
of the Holders of 66-2/3% in principal amount of the Securities at the time
Outstanding of each series to
9
be affected. The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such series,
to waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be conclusive and binding
upon such Holder and upon all future Holders of this Security and of any
Security issued upon the registration of transfer hereof or in exchange herefor
or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Security.
As provided in and subject to the provisions of the Indenture, the Holder
of this Security shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee or for
any other remedy thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity, and the Trustee
shall not have received from the Holders of a majority in principal amount of
Securities of this series at the time Outstanding a direction inconsistent with
such request, and shall have failed to institute any such proceeding, for 60
days after receipt of such notice, request and offer of indemnity. The foregoing
shall not apply to any suit instituted by the Holder of this Security for the
enforcement of any payment of principal hereof or any premium or interest hereon
on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and any premium and interest
on this Security at the times, place and rate, and in the coin or currency,
herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registrable in the Security Register,
upon surrender of this Security for registration of transfer at the office or
agency of the Company in any place where the principal of and any premium and
interest on this Security are payable, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Securities of this series
and of like tenor, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
The Securities of this series are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.
10
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
Form of Trustee's Certificate of Authentication.
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
Dated: _____________________ THE CHASE MANHATTAN BANK
AS TRUSTEE
By
-------------------------------------
AUTHORIZED OFFICER
ARTICLE THREE
ORIGINAL ISSUE OF NOTES DUE 2011
SECTION 301. Subject to Section 101, the Notes Due 2011 in the aggregate
principal amount of $400,000,000 may, upon execution of this Fifth Supplemental
Indenture, or from time to time thereafter, be executed by the Company and
delivered to the Trustee for authentication, and the Trustee shall thereupon
authenticate and deliver said Notes Due 2011 in accordance with a Company Order
delivered to the Trustee by the Company, without any further action by the
Company.
ARTICLE FOUR
PAYING AGENT AND REGISTRAR
SECTION 401. The Chase Manhattan Bank will be the Paying Agent and Security
Registrar for the Notes Due 2011.
11
ARTICLE FIVE
SUNDRY PROVISIONS
SECTION 501. Except as otherwise expressly provided in this Fifth
Supplemental Indenture or in the form of Notes Due 2011 or otherwise clearly
required by the context hereof or thereof, all terms used herein or in said form
of Notes Due 2011 that are defined in the Indenture shall have the several
meanings respectively assigned to them thereby.
SECTION 502. The Indenture, as heretofore supplemented and amended, and as
supplemented by this Fifth Supplemental Indenture, is in all respects ratified
and confirmed, and this Fifth Supplemental Indenture shall be deemed part of the
Indenture in the manner and to the extent herein and therein provided.
SECTION 503. The Trustee hereby accepts the trusts herein declared,
provided, created, supplemented, or amended and agrees to perform the same upon
the terms and conditions herein and in the Indenture, as heretofore supplemented
and amended, set forth and upon the following terms and conditions:
The Trustee shall not be responsible in any manner whatsoever for or in
respect of the validity or sufficiency of this Fifth Supplemental Indenture or
for or in respect of the recitals contained herein, all of which recitals are
made by the Company solely. In general, each and every term and condition
contained in Article Six of the Indenture shall apply to and form a part of this
Fifth Supplemental Indenture with the same force and effect as if the same were
herein set forth in full with such omissions, variations, and insertions, if
any, as may be appropriate to make the same conform to the provisions of this
Fifth Supplemental Indenture.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
12
IN WITNESS WHEREOF, the parties hereto have caused this Fifth Supplemental
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
ARIZONA PUBLIC SERVICE COMPANY
By: Barbara M. Gomez
------------------------------------
Barbara M. Gomez
Treasurer
Attest:
Faye Widenmann
------------------------------------
Faye Widenmann
Vice President and Secretary
THE CHASE MANHATTAN BANK, as Trustee
By: Natalia Rodriguez
------------------------------------
Natalia Rodriguez
Assistant Vice President
Attest:
------------------------------------
Name:
Title:
13
STATE OF ARIZONA )
) ss.:
COUNTY OF MARICOPA )
On the ____ day of October, 2001, before me personally came Barbara M.
Gomez, to me known, who, being by me duly sworn, did depose and say that she is
the Treasurer of Arizona Public Service Company, one of the corporations
described in and which executed the foregoing instrument; that she knows the
seal of said corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by authority of the Board of Directors of
said corporation; and that she signed her name thereto by like authority.
----------------------------------------
Notary Public
My Commission Expires:
------------------------------------
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the ___ day of October, 2001, before me personally came ______________,
to me known, who, being by me duly sworn, did depose and say that he/she is a
Vice President of The Chase Manhattan Bank, one of the corporations described in
and which executed the foregoing instrument; that he/she knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation; and that he/she signed his/her name thereto by like authority.
----------------------------------------
Notary Public
My Commission Expires:
------------------------------------
14
EX-4.2
5
ex4-2.txt
SPECIMEN OF NOTE OF 6.375% NOTES DUE 2011
Exhibit 4.2
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ARIZONA PUBLIC
SERVICE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
ARIZONA PUBLIC SERVICE COMPANY
6.375% Note Due 2011
No. 1 $400,000,000
CUSIP No. 040555 CC 6
Arizona Public Service Company, a corporation duly organized and existing
under the laws of Arizona (herein called the "Company", which term includes any
successor Person under the Indenture hereinafter referred to), for value
received, hereby promises to pay to Cede & Co., or registered assigns, the
principal sum of Four Hundred Million Dollars on October 15, 2011, and to pay
interest thereon from October 5, 2001 or from the most recent Interest Payment
Date to which interest has been paid or duly provided for, semi-annually in
arrears on April 15 and October 15 in each year, commencing April 15, 2002, at
the rate of 6.375%, until the principal hereof is paid or made available for
payment.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in such Indenture, be paid to the Person
in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be April 1 or October 1, as the case may be, immediately
preceding the Interest Payment Date (whether or not a Business Day). Any such
interest not so punctually paid or duly provided for will forthwith cease to be
payable to the Holder on such Regular Record Date and may either be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Securities of this series not less than 10 days prior to
such Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Securities of this series may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in said Indenture.
Payment of the principal of (and premium, if any) and any interest on this
Security will be made at the office or agency of the Company maintained for that
purpose in the City of New York, in such coin or currency of the United States
of America as at the time of payment is legal tender for payment of public and
private debts; provided, however, that at the option of the Company payment of
interest may be made by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
ARIZONA PUBLIC SERVICE COMPANY
By
-------------------------------------
Vice President, Finance
Attest:
---------------------------------
Vice President and Secretary
2
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of January 15, 1998 (herein called the
"Indenture", which term shall have the meaning assigned to it in such
instrument), between the Company and The Chase Manhattan Bank, as Trustee
(herein called the "Trustee", which term includes any successor trustee under
the Indenture), and reference is hereby made to the Indenture for a statement of
the respective rights, limitations of rights, duties and immunities thereunder
of the Company, the Trustee and the Holders of the Securities and of the terms
upon which the Securities are, and are to be, authenticated and delivered. This
Security is one of the series designated on the face hereof, which is unlimited
in aggregate principal amount.
The Securities of this series are subject to redemption upon not less than
30 days' notice by mail at the option of the Company, in whole or in part, from
time to time at a Redemption Price equal to the greater of (a) the principal
amount of the Securities (or portion thereof) of this series to be redeemed plus
interest (if any) accrued to the Redemption Date or (b) the Make-Whole Amount
(as defined below) with respect to the Securities of this series to be redeemed
(the "Redemption Price").
If notice has been given as provided in the Indenture and funds for the
redemption of any Securities (or any portion thereof) called for redemption
shall have been made available on the Redemption Date referred to in such
notice, such Securities (or any portion thereof) will cease to bear interest on
the date fixed for such redemption specified in such notice and the only right
of the Holders of such Securities will be to receive payment of the Redemption
Price.
Notice of any optional redemption of Securities of this series (or any
portion thereof) will be given to Holders at their addresses, as shown in the
Security Register for such Securities, not more than 60 nor less than 30 days
prior to the date fixed for redemption. The notice of redemption will specify,
among other items, the Redemption Price or, if not then known, the manner of
calculation thereof, and the principal amount of the Securities of this series
held by such Holder to be redeemed. If less than all of the Securities of this
series are to be redeemed at the option of the Company, the Trustee shall
select, in such manner as it shall deem fair and appropriate, the portion of
such Securities to be redeemed in whole or in part.
As used herein:
"MAKE-WHOLE AMOUNT" means the sum, as determined by a Quotation Agent,
of the present values of the principal amount of the Securities of this series
to be redeemed, together with scheduled payments of interest (exclusive of
interest to the Redemption Date) from the Redemption Date to the Stated Maturity
of the Securities of this series, in each case discounted to the Redemption Date
on a semi-annual basis, assuming a 360-day year consisting of twelve 30-day
months, at the Adjusted Treasury Rate, plus accrued interest (if any) on the
principal amount of the Securities of this series being redeemed to the
Redemption Date.
"ADJUSTED TREASURY RATE" means, with respect to any Redemption Date,
(i) the yield, under the heading which represents the average for the
immediately preceding week, appearing in the most recently published statistical
release designated "H.15 (519)" or any successor publication which is published
weekly by the Board of Governors of the Federal Reserve System and which
establishes yields on actively traded U.S. Treasury securities adjusted to
constant maturity under the caption "Treasury Constant Maturities," for the
maturity corresponding to the Comparable Treasury Issue (if no maturity is
within three months before or after the remaining term of the Securities of this
series, yields for the two published maturities most closely corresponding to
the Comparable Treasury Issue
3
shall be determined and the Adjusted Treasury Rate shall be interpolated or
extrapolated from such yields on a straight line basis, rounding to the nearest
month) or (ii) if such release (or any successor release) is not published
during the week preceding the calculation date or does not contain such yields,
the rate per year equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, calculated using a price for the Comparable Treasury
Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such Redemption Date, in each case calculated on
the third Business Day preceding the Redemption Date, plus in each case 0.25%.
"COMPARABLE TREASURY ISSUE" means the U.S. Treasury security selected
by the Quotation Agent as having a maturity comparable to the remaining term
from the Redemption Date to the Stated Maturity of the Securities of this series
that would be utilized, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate debt securities
of comparable maturity to the remaining term of the Securities of this series.
"QUOTATION AGENT" means the Reference Treasury Dealer selected by the
Trustee after consultation with the Company.
"REFERENCE TREASURY DEALER" means a primary U.S. Government securities
dealer selected by the Company.
"COMPARABLE TREASURY PRICE" means, with respect to any Redemption
Date, if clause (ii) of the definition of Adjusted Treasury Rate is applicable,
the average of three, or such lesser number as is obtained by the Trustee,
Reference Treasury Dealer Quotations for such Redemption Date.
"REFERENCE TREASURY DEALER QUOTATIONS" means, with respect to each
Reference Treasury Dealer and any Redemption Date, the average, as determined by
the Trustee, of the bid and asked prices for the Comparable Treasury Issue,
expressed in each case as a percentage of its principal amount, quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York
City time, on the third Business Day preceding such Redemption Date.
The Securities of this series will not be subject to any sinking fund.
In the event of redemption of this Security in part only, a new Security or
Securities of this series and of like tenor for the unredeemed portion hereof
will be issued in the name of the Holder hereof upon the cancellation hereof.
The Indenture contains provisions for defeasance at any time of the entire
indebtedness of the Security or certain restrictive covenants and Events of
Default with respect to this Security, in each case upon compliance with certain
conditions set forth in the Indenture.
If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee without
the consent of such Holders in certain limited circumstances or with the consent
of the Holders
4
of 66-2/3% in principal amount of the Securities at the time Outstanding of each
series to be affected. The Indenture also contains provisions permitting the
Holders of specified percentages in principal amount of the Securities of each
series at the time Outstanding, on behalf of the Holders of all Securities of
such series, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Security shall be conclusive
and binding upon such Holder and upon all future Holders of this Security and of
any Security issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Security.
As provided in and subject to the provisions of the Indenture, the Holder
of this Security shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee or for
any other remedy thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity, and the Trustee
shall not have received from the Holders of a majority in principal amount of
Securities of this series at the time Outstanding a direction inconsistent with
such request, and shall have failed to institute any such proceeding, for 60
days after receipt of such notice, request and offer of indemnity. The foregoing
shall not apply to any suit instituted by the Holder of this Security for the
enforcement of any payment of principal hereof or any premium or interest hereon
on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and any premium and interest
on this Security at the times, place and rate, and in the coin or currency,
herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registrable in the Security Register,
upon surrender of this Security for registration of transfer at the office or
agency of the Company in any place where the principal of and any premium and
interest on this Security are payable, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Securities of this series
and of like tenor, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
The Securities of this series are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
5
Prior to due presentment of this Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
Dated: October __, 2001 THE CHASE MANHATTAN BANK
AS TRUSTEE
By
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AUTHORIZED OFFICER
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