ARIZONA PUBLIC SERVICE COMPANY UNDERWRITING AGREEMENT
Exhibit 1.1
ARIZONA PUBLIC SERVICE COMPANY
August 17, 2005
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 $600,000,000 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 (the “Original Indenture”), between the
Company and JPMorgan Chase Bank, N.A. (formerly known as The Chase Manhattan Bank), as trustee (the
“Trustee”), 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, including the Ninth Supplemental Indenture (as
defined below) 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 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) Two
registration statements on Form S-3 (File Nos. 333-106772 and 333-121512) in respect
of the Purchased Securities (and certain other securities) have been filed with the Securities and
Exchange Commission (the “Commission”) (the earliest of such registration statements being
sometimes called the “First Registration Statement” and the later the “Second Registration
Statement”) and have become effective. Each 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 Rule 462(b) registration statement or amendment thereto, including all exhibits thereto
and the documents incorporated by reference in the prospectus contained in the registration
statements, are hereinafter collectively called the “Registration
Statement” and the combined prospectus included in the Second Registration Statement when it
became effective, as supplemented at the time of the Terms Agreement referred to in Section 3
relating to the Purchased Securities, including by a Prospectus Supplement (as defined below), to
reflect the terms of the Purchased Securities and the terms of the offering thereof, including all
material incorporated by reference therein, is hereinafter referred to as the “Prospectus.” The
details of the terms of the offering of the Purchased Securities shall be reflected in the
Prospectus Supplement. Any reference herein to any preliminary prospectus relating to the
Purchased Securities, the Prospectus, or any amendment or supplement thereto, shall be deemed to
refer to and include the documents incorporated by reference therein pursuant to the applicable
form under the Securities Act of 1933, as amended (the “Act”), as of the date of such preliminary
prospectus, the Prospectus, or any amendment or supplement thereto, as the case may be; any
reference to any amendment or supplement to any preliminary prospectus relating to the Purchased
Securities, the Prospectus, or any amendment or supplement thereto, shall be deemed to refer to and
include any documents filed after the date of such preliminary prospectus, Prospectus, or any
amendment or supplement thereto, as the case may be, under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), and incorporated by reference in such preliminary prospectus, the
Prospectus, or any amendment or supplement thereto, as the case may be; and any reference to any
amendment to the Registration Statement shall be deemed to refer to and include any report of the
Company filed pursuant to Section 13(a) or 15(d) of the Exchange Act after the effective date of
the Registration Statement that is incorporated by reference in the Registration Statement.
(b) Each part of the Registration Statement relating to the Securities, when the Company filed
its most recent Annual Report on Form 10-K or on the effective date of the Registration Statement
or the effective date of any post-effective amendment thereto, whichever is later, conformed in all
material respects to the requirements of the Act, the Trust Indenture Act of 1939, as amended (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. Any preliminary prospectus filed pursuant to Rule 424(b) under the Act complied when so
filed in all material respects with the Act and the Rules and Regulations. On the date of the
Prospectus and on the date hereof, 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 neither the Registration Statement nor the Prospectus will include
any untrue statement of a material fact or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they are made, 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 Statement that consists of the
Statement of Eligibility (Form T-1) under the Trust Indenture Act of 1939 of JPMorgan Chase Bank,
N.A. as Trustee under the Indenture. The Company hereby consents to the use of the Prospectus in
connection with the sale and distribution of the Purchased Securities by the Underwriters.
(c) The consummation of the transactions herein contemplated and the fulfillment of the terms
hereof will not conflict with, or result in a breach of, or constitute a default under, any
indenture or mortgage or other material agreement, instrument or deed of trust to which the Company
is now a party or violate the Articles of Incorporation or by-laws of the Company or any law,
administrative regulation or, to the knowledge of the Company, court decree applicable to the
Company in such a way that could impact the validity of the Purchased Securities.
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(d) The Original Indenture has been duly qualified under the Trust Indenture Act and has been
duly authorized, executed and delivered by the Company and is a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms, subject to applicable
bankruptcy, insolvency or similar laws affecting creditors’ rights generally and general principles
of equity.
(e) The
Ninth Supplemental Indenture, to be dated as of August 15, 2005, establishing the terms
of the Purchased Securities (the “Ninth Supplemental Indenture”) has been duly authorized by the
Company and, when executed and delivered by the Company, will be a valid and binding agreement of
the Company, enforceable against the Company in accordance with its terms, subject to applicable
bankruptcy, insolvency or similar laws affecting creditors’ rights generally and general principles
of equity.
(f) The Purchased Securities have been duly authorized and, when executed and authenticated in
accordance with the provisions of the Indenture and delivered to and paid for by the Underwriters
in accordance with the terms of this Agreement, will be entitled to the benefits of the Indenture,
will be valid and binding obligations of the Company, in each case enforceable against the Company
in accordance with their respective terms, subject to applicable bankruptcy, insolvency or similar
laws affecting creditors’ rights generally and general principles of equity and will conform to the
description of the Purchased Securities contained in the Prospectus.
(g) An order of the Arizona Corporation Commission has been granted authorizing 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. No other
approval or consent of any public body or governmental authority is necessary for such issuance and
sale of the Purchased Securities, except the registration of the Purchased Securities under the
Act, the qualification of the Indenture under the Trust Indenture Act, and such consents,
approvals, authorizations, registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and distribution of the Purchased
Securities by the Underwriters.
(h) 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, license or permit is procured,
(iii) certain franchises, licenses or permits 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 Prospectus, (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.
(i) This Agreement has been, and the Terms Agreement will be, duly authorized, executed and
delivered by the Company.
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(j) The Company is not an “investment company” or 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”).
(k) The Company is a corporation duly formed under the laws of the State of Arizona, is in
good standing in the State of Arizona, and has the power to enter into and has duly authorized, by
proper corporate action, the execution and delivery of this Agreement and the Terms Agreement and
all other documents contemplated hereby to be executed by the Company.
(l) The financial statements of the Company referred to, incorporated by reference or
contained in the Prospectus present fairly in all material respects the financial position of the
Company as of the dates indicated and the results of its operations for the periods specified, and
the financial statements have been prepared in conformity with generally accepted accounting
principles consistently applied in all material respects with respect to the periods involved
except as stated therein; and the Company maintains systems of internal accounting controls and
processes sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with management’s general or specific authorizations; (ii) transactions are recorded as
necessary to permit preparation of financial statements in conformity with generally accepted
accounting principles; and (iii) assets are safeguarded from loss or unauthorized use.
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 the execution and
delivery of a Terms Agreement substantially in the form of Exhibit A hereto (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 and filed pursuant to Rule 424(b) under the Act (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 file the Prospectus with the Commission pursuant to and in accordance
with Rule 424(b) under the Act not later than the second business day following the Closing Date.
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(b) The Company will advise the Representatives promptly of any proposed amendment or
supplementation of the Registration Statement, or the Prospectus which it proposes to make in the
period between the date of the Terms Agreement and the Closing Date (other than any periodic report
to be filed by the Company under the Exchange Act during such period). The Company will provide
the Underwriters and their counsel with a draft of such amendment or supplement prior to filing and
will reasonably consider any changes proposed in writing by counsel to the Underwriters based on
legal grounds. The Company will also advise the Representatives, or if there are no
Representatives, the Underwriters 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.
(c) 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 applicable law, the Company promptly will
notify the Underwriters of such event and will promptly 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 conditions set forth in
Section 5 hereof.
(d) The Company, at its expense, will furnish or cause to be furnished to the Underwriters,
copies of the Prospectus and all amendments and supplements thereto, in each case as soon as
available and in such quantities as the Representatives or Underwriters may reasonably request.
(e) 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.
(f) The Company will furnish to the Representatives such copies of the Registration Statement
(including one copy of the Registration Statement for the counsel for the Underwriters, which is
signed and includes all exhibits), including all amendments or supplements thereto, as may be
reasonably requested.
(g) The Company will arrange or cooperate in arrangements for the qualification of the
Purchased Securities for sale under the laws of such jurisdictions as the Representatives or, if
there are no Representatives, the Underwriters, 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.
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(h) 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 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. It is understood, however, that, except as provided in this Section 4(h) and
Section 6 and 7, the Underwriters will pay all of their own costs and expenses.
(i) The Company will not, for a period beginning at the time of execution of the Terms
Agreement relating to the Purchased Securities and ending on the Closing Date, offer, sell,
contract to sell, pledge or otherwise dispose of, directly or indirectly, or file with the
Commission a registration statement under the Act relating to any additional debt securities of the
Company (or warrants to purchase debt securities of the Company) that mature more than one year
after the Closing Date and that are substantially similar to the Purchased Securities, without the
prior written consent of the Representatives or, if there are no Representatives, the Underwriters.
(j) During the period of two years after the date of the Terms Agreement, the Company will
furnish to the Representatives 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 changes
in common stock equity of the Company as at the end of and for such year, all in reasonable detail
and certified by independent registered 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 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. Information required to be delivered pursuant to this provision will be deemed to
have been delivered on the date on which the Company provides notice to the Representatives that
such information has been posted on the Company’s parent’s
website at xxx.xxxxxxxxxxxx.xxx, on the
Internet at xxx.xxx/xxxxx/xxxxxxxx.xxx, or at another website identified in such notice and
accessible by 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) On the date of the Terms Agreement, the Underwriters shall have received a letter from
Deloitte & Touche LLP, dated the date of the Terms Agreement, confirming that they are independent
registered public accountants within the meaning of the Act and the applicable published Rules and
Regulations thereunder, and stating in effect that
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(i) in their opinion the financial statements and financial statement schedule audited by them
and incorporated by reference in the Prospectus comply as to form in all material respects with the
applicable accounting requirements of the Act and the related published Rules and Regulations;
(ii) they have performed the procedures specified by the American Institute of Certified
Public Accountants for a review of interim financial information as described in Statement of
Auditing Standards No. 100, Interim Financial Information, on any unaudited financial statements,
if any, included in the Registration Statement;
(iii) on the basis of the review referred to in clause (ii) above, a reading of the latest
available interim financial statements of the Company, inquiries of officials of the Company who
have responsibility 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, if any, included in the Prospectus do
not comply as to form in all material respects with the applicable accounting
requirements of the Act and the related published Rules and Regulations or any
material modifications should be made to such unaudited financial statements and
summary of earnings for them to be in conformity with generally accepted accounting
principles;
(B) if any unaudited “capsule” information is contained in the Prospectus, the
unaudited operating revenues, gross income, net income and net income per share
amounts or other amounts constituting such “capsule” information and described in
such letter do not agree with the corresponding amounts set forth in the unaudited
financial statements or were not determined on a basis substantially consistent with
that of the corresponding amounts in the audited statements of income;
(C) at the date of the latest available balance sheet read by such accountants,
or at a subsequent specified date not more than three business days prior to the
date of such letter, there was any change 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
current assets or common stock equity as compared with amounts shown in the most
recent financial statements included in the Prospectus, except in all cases for
changes, increases or decreases which result from the declaration or payment of
dividends; or
(D) for the period from the closing date of the latest income statement
included in the Prospectus to the closing date of the latest available income
statement read by such accountants there were any decreases, as compared with the
corresponding period of the previous year and with the period of corresponding
length ended the date of the latest income statement included in the Prospectus, in
the amounts of total revenues or net income;
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except in all cases set forth in clauses (C) and (D) above for changes, increases or
decreases which the Prospectus discloses have occurred or may occur or which are described
in such letter; and
(iv) they have compared specified dollar amounts (or percentages derived from such
dollar amounts) and other financial information contained in the Prospectus (in each case to
the extent that such dollar amounts, percentages and other financial information are derived
from the general accounting records of the Company and its subsidiaries subject to the
internal controls of the Company’s accounting system or are derived directly from such
records by analysis or computation) with the results obtained from inquiries, a reading of
such general accounting records and other procedures specified in such letter and have found
such dollar amounts, percentages and other financial information to be in agreement with
such results, except as otherwise specified in such letter.
All financial statements and schedules included in material incorporated by reference into the
Prospectus shall be deemed included in the Prospectus for purposes of this subsection.
(b) No stop order suspending the effectiveness of the Registration Statement or any part
thereof shall have been issued, and no order directed to the adequacy of any document incorporated
by reference in the Prospectus, and no proceedings for either purpose shall have been instituted or
threatened 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
and prior to the Closing Date, (i) there shall not have occurred any change, or any development
involving a prospective change, in or affecting particularly the financial position, business or
properties of the Company and its subsidiaries taken as a whole which, in the reasonable judgment
of the 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 in the Company’s securities, (iii) there shall not have
occurred any downgrading or withdrawal in the rating of any of the Company’s debt securities, 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 Standard & Poor’s, a division of The XxXxxx-Xxxx Companies, Inc. or Xxxxx’x
Investor Service’s, Inc., (iv) there shall not have occurred a general moratorium on commercial
banking activities in New York declared by either Federal or New York State authorities, (v) there
shall not have occurred any material disruption of settlements of securities or clearance services
in the United States, and (vi) 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 the
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. If the Underwriters elect not to purchase the Purchased Securities as a
result of the occurrence of one of the events specified in this Section 5(c), the Representatives
will promptly notify the Company.
(d) The Underwriters shall have received an opinion of Xxxxx & Xxxxxx L.L.P., counsel for the
Company, dated the Closing Date, to the effect that:
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(i) The Company is a corporation duly organized, validly existing, and in good standing under
the laws of the State of Arizona with corporate power and authority to carry on its business as
described in the Prospectus; and the Company is duly qualified as a foreign corporation to do
business in the States of New Mexico, California, Oregon, Washington, Montana, Wyoming, and Texas;
(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, (B) generally
applicable rules of law that limit the enforceability of provisions releasing, exculpating, or
exempting a party from, or requiring indemnification of a party for, liability for its own action
or inaction, to the extent the action or inaction involves negligence, gross negligence,
recklessness, willful misconduct, or unlawful conduct, or where such provisions would violate
public policy, and (C) 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 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, license or permit is procured, (C) certain franchises, licenses or permits 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;
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(v) The Company is organized and operating in the State of Arizona, and its securities issues,
including the issuance and sale of the Purchased Securities, are regulated by the ACC under the
laws of the State of Arizona. 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, and the registration under the Act of the Purchased Securities and
the qualification of the Indenture under the Trust Indenture Act;
(vi) The Registration Statement has become effective under the Act, and, to 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, other than
financial statements and schedules and other financial, statistical or accounting data included or
incorporated by reference therein or omitted therefrom, as to which such counsel need express no
opinion, complied as to form in all material respects with the requirements of the Act, the Trust
Indenture Act, and the published Rules and Regulations. Although such counsel does not assume any
responsibility for the accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus and has not independently verified any of such statements
except as stated in such opinion, such counsel has no reason to believe that (1) any part of the
Registration Statement, when the Company filed its most recent Annual Report on Form 10-K or on the
effective date of the Registration Statement or the effective date of any post-effective amendment
thereto, whichever is later, other than financial statements and schedules, and other financial,
statistical or accounting data included or incorporated by reference therein or omitted therefrom,
as to which such counsel need express no opinion, 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, or (2) the Prospectus, as of the date of the Prospectus
Supplement and at the Closing Date, other than financial statements and schedules, and other
financial, statistical or accounting data included or incorporated by reference therein or omitted
therefrom, as to which such counsel need express no opinion, contained or contains any untrue
statement of a material fact or omitted or omits to state a material fact necessary to make the
statements therein, in light of the circumstances under which they are made, not misleading; and to
the knowledge of such counsel 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 that are not described and filed as required (it being
understood that such counsel need express no opinion as to the statements of eligibility and
qualification of the trustee under the Indenture);
(vii) This Agreement and the Terms Agreement have been duly authorized, executed, and
delivered by the Company;
10
(viii) The Company is not and, after giving effect to the offering and sale of the Purchased
Securities, will not be an “investment company” or an entity “controlled” by an “investment
company”, as such terms are defined in the 1940 Act; and
(ix) Neither the execution nor delivery by the Company of this Agreement or the Terms
Agreement, nor the consummation by the Company of the transactions therein contemplated, nor the
fulfillment by the Company of the terms, conditions or provisions thereof (1) violates or results
in a breach of any law, administrative regulation or, to the knowledge of such counsel, court
decree applicable to the Company, (2) contravenes or constitutes a default under any of the terms,
conditions or provisions of the Articles of Incorporation or by-laws of the Company or of any
material agreement or instrument listed in a certificate provided by the Company, to which the
Company is a party or by which it is bound, or (3) will result in the creation or imposition of any
lien, charge or encumbrance of any nature whatsoever upon any of the properties or assets of the
Company, except as contemplated therein; and
Whenever the opinions required by this Agreement are stated to be “to the knowledge of such
counsel” or “to such counsel’s knowledge”, such statements are intended to signify that those
attorneys in the firm responsible for preparing the opinion or who have given substantive attention
to the transactions contemplated by this Agreement, after consultation with such other attorneys in
such firm who have worked on legal matters related to the Company and its subsidiaries as they
considered appropriate, do not have current actual knowledge of the inaccuracy of such statement.
However, except where expressly stated otherwise, such counsel need not undertake any special or
independent investigation to determine the existence or absence of such facts, and no inference as
to such counsel’s knowledge of the existence or absence of such facts should be drawn from its
representation of the Company in connection with this transaction or otherwise.
In giving such opinion, Xxxxx & Xxxxxx L.L.P. may rely to the extent such counsel deems
appropriate 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, and may rely on the opinion of Pillsbury
Xxxxxxxx Xxxx Xxxxxxx LLP, counsel for the Underwriters, as to all matters governed by the law of
the State of New York, and further may rely upon the opinion of Xxxxxx, Xxxxx & Bockius LLP,
delivered to you at the Closing Date, as to all matters under the Public Utility Holding Company
Act of 1935, as amended, and the Federal Power Act, as amended.
(e) The Underwriters shall have received evidence that the Purchased Securities have been
rated Baa1 or higher by Xxxxx’x Investors Service and BBB or higher by Standard & Poor’s
Corporation.
(f) The Underwriters 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
11
(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 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 to the extent such counsel deems
appropriate upon certificates of the Company as to any factual matters upon which any such opinions
are based and may rely upon the certificates of public officials concerning the legal existence and
good standing of the Company.
(g) The Underwriters shall have received from Pillsbury Xxxxxxxx Xxxx Xxxxxxx LLP, counsel for
the Underwriters, an opinion or opinions, dated the Closing Date, with respect to such matters as
they may reasonably require 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 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.
(h) The Underwriters 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 such 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.
(i) The Underwriters 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 with such conformed copies of such opinions,
certificates, letters, and documents as may be reasonably requested.
12
6. Indemnification.
(a) The Company will indemnify and hold harmless each Underwriter, its directors and officers
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 relating the Securities, 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, as incurred, 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 through the Representatives
specifically for use therein and provided, further, that with respect to any untrue statement or
alleged untrue statement in or omission or alleged omission from any preliminary prospectus
relating to the Securities or the Prospectus, as amended or supplemented, the indemnity agreement
contained in this subsection (a) shall not inure to the benefit of any Underwriter from whom the
person asserting any such losses, claims, damages or liabilities purchased the Securities
concerned, insofar as such indemnity relates to an untrue statement or alleged untrue statement in
or omission or alleged omission from any preliminary prospectus relating to the Securities or the
Prospectus, but eliminated or remedied prior to the consummation of such sale in the Prospectus, or
any amendment or supplement thereto, furnished on a timely basis by the Company to the
Underwriters, unless a copy of the Prospectus (in the case of such a statement or omission made in
such preliminary prospectus) or such amendment or supplement (in the case of such a statement or
omission made in the Prospectus) (excluding, however, any document then incorporated or deemed to
be incorporated by reference in the Prospectus or such amendment or supplement) is furnished, if
legally required to be furnished, by such Underwriter to such person (i) with or prior to the
written confirmation of the sale involved or (ii) as soon as available after such written
confirmation (if it is made available on a timely basis to the Underwriters prior to settlement of
such sale). 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
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 relating to the Securities,
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
13
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 through the Representatives specifically for use therein; and will reimburse any
legal or other expenses reasonably incurred, as 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 an indemnifying party under this Section, notify the indemnifying party of the
commencement thereof; but the failure to notify the indemnifying party shall not relieve it from
any liability that it may have under subsection (a) or (b) above except to the extent that it has
been materially prejudiced (including through the forfeiture of substantive rights or defenses) by
such failure; and provided further that the failure to notify the indemnifying party shall not
relieve it from any liability that it may have to an indemnified party otherwise than under
subsection (a) or (b) above. 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 assumption of 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. Notwithstanding the indemnifying party’s election to appoint counsel to represent
the indemnified party in an action, the indemnified party shall have the right to employ separate
counsel (including local counsel), and the indemnifying party shall bear the reasonable fees, costs
and expenses of such separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of interest, (ii) the
actual or potential defendants in, or targets of, any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have reasonably concluded that
there may be legal defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the indemnifying party shall
not have employed counsel satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after notice of the institution of such action or (iv) the indemnifying
party shall authorize the indemnified party to employ separate counsel at the expense of the
indemnifying party. It is understood that the indemnifying party shall not, in respect of the
legal expenses of any indemnified party in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in
addition to any local counsel) for all such indemnified parties. Such firm shall be designated in
writing by the Representatives, in the case of parties indemnified pursuant to Section 6(a) above,
and by the Company, in the case of parties indemnified pursuant to Section 6(b) above. 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.
14
(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, then (A) 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 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 Company
and each of the Underwriters agree that it would not be just and equitable if contribution pursuant
to this subsection (d) were determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to above in this subsection
(d). 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 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.
15
7. Default of Underwriters; Termination by 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
Representatives or, if there are no Representatives, the Underwriters, 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
non-defaulting 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.
If this Agreement shall be terminated by the Underwriters because of any failure or refusal on
the part of the Company to comply with the terms or to fulfill any of the conditions of this
Agreement, or if for any reason the Company shall be unable to perform its obligations under this
Agreement, the Company shall not be liable to any Underwriter or to any member of any selling group
for the loss of anticipated profits from the transactions contemplated by this Agreement. However,
in such an event, the Company will reimburse the Underwriters for all out of pocket expenses
(including reasonable fees and disbursements of their counsel) reasonably incurred by the
Underwriters in connection with this Agreement and the offering contemplated hereunder; provided,
however, that if the Purchased Securities are not delivered by or on behalf of the Company solely
as a result of the failure to satisfy the condition set forth in Section 5(c) hereof, the Company
shall have no liability to the Underwriters except as provided in Sections 4(h) and 6 of this
Agreement.
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.
16
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 Representatives named in the Terms Agreement relating to such
Purchased Securities at the address furnished to the Company in writing for the purpose of
communications, or, if there are no Representatives, to 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
00000-0000, or delivered, or telecopied and confirmed to the Company at 000 Xxxxx Xxxxx Xxxxxx,
Xxxxxxx, Xxxxxxx 00000.
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
Representatives 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.
13. Applicable Law. This Agreement shall be governed by and construed in accordance
with the internal laws of the State of New York.
14. Headings. The headings of the sections of this Agreement have been inserted for
convenience of reference only and shall not be deemed a part of this Agreement.
17
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: | /s/ Xxxxxxx X. Xxxxx | |||||
| Name: Xxxxxxx X. Xxxxx | ||||||
| Title: Vice President and Treasurer | ||||||
The foregoing Underwriting Agreement is hereby confirmed and accepted as of the date first above
written.
| BNY CAPITAL MARKETS, INC. | ||||
By: |
/s/ Xxxxxx Xxxxxxx | |||
| Name: Xxxxxx Xxxxxxx | ||||
| Title: Managing Director | ||||
| UBS SECURITIES LLC | ||||
By:
|
/s/ Xxxxx X. Whiney | |||
| Name: Xxxxx X. Whiney | ||||
| Title: Executive Director | ||||
By:
|
/s/ Xxxx X. Xxxxxx | |||
| Name: Xxxx X. Xxxxxx | ||||
| Title: Associate Director | ||||
On their own behalf and, if applicable, as Representatives of the Underwriters named in a Terms
Agreement.
18
EXHIBIT A
TERMS AGREEMENT
August 17, 2005
Arizona Public Service Company
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Treasurer
Ladies and Gentlemen:
Arizona Public Service Company (the “Company”) hereby agrees to sell to the several
Underwriters (the “Underwriters”) named on Schedule I hereto and 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 5.50% Notes due 2035 (the “Purchased Securities”), and the
Underwriters hereby agree to purchase, severally and not jointly, the principal amount of the
Purchased Securities set forth opposite such Underwriter’s name in Schedule I hereto in the
principal amount and at the prices set forth therein. 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 August 17, 2005, relating to the issuance and sale of up to
$600,000,000 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 August 22, 2005 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 7:00 a.m. Phoenix time, on August 22, 2005, 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 BNY Capital Markets, Inc. and UBS Securities LLC, the Representatives, at your earliest
convenience. At that point, the agreement signified hereby will constitute the Terms Agreement, as
described in the Underwriting Agreement.
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, | ||||||
| BNY CAPITAL MARKETS, INC. | ||||||
| By: | /s/ Xxxxxx Xxxxxxx | |||||
| Name: Xxxxxx Xxxxxxx | ||||||
| Title: Managing Director | ||||||
| UBS SECURITIES LLC | ||||||
| By: | /s/ Xxxxx X. Xxxxxxx | |||||
| Name: Xxxxx X. Xxxxxxx | ||||||
| Title: Executive Director | ||||||
| By: | /s/ Xxxx X. Xxxxxx | |||||
| Name: Xxxx X. Xxxxxx | ||||||
| Title: Associate Director | ||||||
| As Representatives of the Several Underwriters. | ||||||
Confirmed and accepted as
of the date first above written.
of the date first above written.
ARIZONA PUBLIC SERVICE COMPANY
By:
|
/s/ Xxxxxxx X. Xxxxx | |||
| Name: Xxxxxxx X. Xxxxx | ||||
| Title: Vice President and Treasurer | ||||
20
SCHEDULE I
| Principal Amount of | ||||||||
| Underwriter | Purchased Securities | Purchase Price* | ||||||
BNY Capital Markets, Inc. |
$ | 87,500,000 | $ | 85,982,750 | ||||
UBS Securities LLC |
87,500,000 | 85,982,750 | ||||||
KBC Financial Products USA Inc. |
25,000,000 | 24,566,500 | ||||||
McDonald Investments Inc. |
25,000,000 | 24,566,500 | ||||||
Wedbush Xxxxxx Securities Inc. |
25,000,000 | 24,566,500 | ||||||
Total |
$ | 250,000,000 | $ | 245,665,000 | ||||
| * | Reflecting a purchase price of 98.266% of the principal amount of the Purchased Securities. |
