ARIZONA PUBLIC SERVICE COMPANY
SECURITIES
UNDERWRITING AGREEMENT
November 2, 1999
Chase Securities Inc.
Credit Suisse First Boston Corporation
Xxxxxxx Xxxxx Xxxxxx Inc.
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 $275,000,000
in aggregate principal amount of its unsecured debentures, notes or other
evidences of indebtedness (the "Securities") registered under the registration
statement 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 "Original Indenture"), as amended and
supplemented by one or more Supplemental Indentures between the Company and the
Trustee (each, a "Supplemental Indenture") (the Original 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. 333-58445) relating to $350,000,000
of the Securities, the Company's first
mortgage bonds (the "Bonds"), or the Company's senior notes (the "Senior
Notes") (including a combined prospectus relating to up to $350,000,000 of
the Securities, Bonds or Senior Notes) was filed with the Securities and
Exchange Commission (the "Commission") and has become effective. Such
registration statement, as amended at the time of the Terms Agreement
referred to in Section 3 relating to the Purchased Securities, together
with any related 462(b) registration statement or amendment thereto, is
hereinafter referred to as the "Registration Statement" 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 Statement 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 Statement 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 (a) statements in or omissions from
any such documents based upon written information furnished to the Company
by any Underwriter specifically for use therein or (b) that part of the
Registration Statement 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 has 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 (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) 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 Statement, (E) certain minor defects and exceptions may
exist which, individually and in the aggregate, are not deemed material,
and (F) 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.
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:
3
(a) The Company will advise the Underwriters or the Representatives
promptly of any proposed amendment or supplementation of the 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 Registration 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 Registration Statement or
the Prospectus to comply with the Act, the Company promptly 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.
(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 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 Statement (including one
copy of the 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
4
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 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 mailed by the Company to stockholders or 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) 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
5
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 Statement 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 Statement 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
stated on a basis substantially consistent with that of the audited
financial statements incorporated by reference in the Registration
Statement, (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 Statement, 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 Statement, 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
Statement (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 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.
6
(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, (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.
(d) The Underwriters or the Representatives shall have received an
opinion of Xxxxx & Xxxxxx 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, and constitute valid
and legally binding obligations of the Company enforceable in
accordance with their terms, subject to bankruptcy, insolvency,
fraudulent transfer,
7
reorganization, moratorium, and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles 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 legally binding obligation of the Company
enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium, and
similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles;
(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
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
8
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 Registration Statement has become effective under the
Act, and, to the best of the knowledge of such counsel, no stop order
suspending the effectiveness of the 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 Statement 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 Statement,
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 Statement 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 described in the Registration
Statement or Prospectus or to be filed as exhibits to the Registration
Statement
9
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 Statement or the
Prospectus); and
(vii) This Agreement and the Terms Agreement have been duly
authorized, executed, and delivered by the Company.
In giving such opinion, (a) Xxxxx & Xxxxxx L.L.P. may rely solely upon
certificates of the Company as to any factual matters upon which any such
opinions are based and may rely upon the opinion of Xxxxxxx & XxXxxx, P.A.,
referred to below, as to all matters governed by the laws of the State of
New Mexico, but the opinion of Xxxxx & Xxxxxx 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 Xxxxxxx & XxXxxx, P.A.; and (b) the lawyer group referred to in
such opinion will mean those lawyers in the offices of Xxxxx & Xxxxxx
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.
In rendering such opinion, Xxxxx & Xxxxxx L.L.P. may rely as to all matters
governed by the laws of the State of New York upon the opinion of counsel
for the Underwriters referred to below.
(e) The Underwriters or the Representatives shall have received an
opinion of Xxxxxxx & XxXxxx, 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
10
necessary under New Mexico law with respect to the 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, Xxxxxxx & XxXxxx, 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 Statement, 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 Xxxxx & Xxxxxx L.L.P. and Xxxxxxx & XxXxxx, 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 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.
11
(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.
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 Statement 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 Statement, 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
12
statement of any material fact contained in any part of the Registration
Statement 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,
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)
13
or (b) above on the following basis: (1) if such loss, claim, damage,
liability, or action arises under subsection (a) above, then (i) 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 (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company 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 (2) 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 (1) 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 (1) and (2) 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 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). 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
14
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.
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 X.X. Xxx 00000,
Xxxxxxx, Xxxxxxx 00X00-0000, or delivered, or telecopied and confirmed to the
Company at 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxx 00000.
15
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.
16
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 Xxxxxxx X. Xxxxx
---------------------------------
Treasurer
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
CHASE SECURITIES INC.
By Xxxxxxx Xxxxxx Xxxxxx
-----------------------------------
Managing Director
CREDIT SUISSE FIRST BOSTON CORPORATION
By Xxxxxxxx X. Xxxxxxx
-----------------------------------
Director
XXXXXXX XXXXX XXXXXX INC.
By Xxxxxx Xxxxxx
-----------------------------------
Managing Director
17
TERMS AGREEMENT
November 2, 1999
Arizona Public Service Company
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Treasurer
Dear Madam:
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
$250,000,000 in aggregate principal amount of its Floating Rate Notes Due 2001
(the "Purchased Securities"), and the Underwriters hereby agree to purchase,
severally and not jointly, at a purchase price of 99.80% 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
November 2, 1999, relating to the issuance and sale of up to $275,000,000 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 November 8, 1999 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, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxx,
Xxxxxxx 00000, 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, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxx, Arizona, at 8:00 a.m.
Phoenix time, on November 8, 1999, 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 Chase 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
$250,000,000 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 such
respective counterparts shall together constitute a single instrument.
Very truly yours,
CHASE SECURITIES INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
XXXXXXX XXXXX XXXXXX INC.
By: CHASE SECURITIES INC.
(As Representative of the
Several Underwriters)
By Xxxxxxx Xxxxxx Xxxxxx
------------------------------
Managing Director
Confirmed and accepted as of
the date first above written.
ARIZONA PUBLIC SERVICE COMPANY
By Xxxxxxx X. Xxxxx
---------------------------------
Treasurer
