As filed with the Securities and Exchange Commission on January 7, 2000
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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ARIZONA PUBLIC SERVICE COMPANY
(Exact name of Registrant as specified in its charter)
ARIZONA 86-0011170
(State of incorporation) (I.R.S. Employer
Identification Number)
400 North Fifth Street
Phoenix, Arizona 85004
(602) 250-1000
(Address, including zip code and telephone number, including area code,
of registrant's principal executive offices)
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MATTHEW P. FEENEY
Snell & Wilmer L.L.P.
One Arizona Center
Phoenix, Arizona 85073
(602) 382-6239
(Name, address, including zip code and telephone number,
including area code, of agent for service)
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Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement, as determined
by market conditions and other factors.
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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act Registration Statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [X]
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<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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Proposed Proposed
Maximum Maximum
Amount Offering Aggregate Amount of
Title of Each Class of to be Price Offering Registration
Securities to be Registered Registered Per Unit Price Fee
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<S> <C> <C> <C> <C>
First Mortgage Bonds ...... (1)(3) (2) (1)(2)(3) N/A
Debt Securities ............ (1)(4) (2) (1)(2)(4) N/A
Total .................... $500,000,000 (2) $500,000,000 $ 132,000(5)
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(1) In no event will the aggregate initial offering price of all securities
issued from time to time pursuant to this Registration Statement exceed
$500,000,000. If any such securities are issued at an original issue
discount, then the aggregate initial offering price as so discounted shall
not exceed $500,000,000, notwithstanding that the stated principal amount
of such securities may exceed such amount.
(2) The proposed maximum initial offering price per unit will be determined,
from time to time, by the Registrant in connection with the issuance by the
Registrant of the securities registered hereunder.
(3) Subject to Footnote (1), there are being registered hereunder an
indeterminate principal amount of First Mortgage Bonds as may be sold, from
time to time, by the Registrant.
(4) Subject to Footnote (1), there are being registered hereunder an
indeterminate principal amount of Debt Securities as may be sold, from time
to time, by the Registrant.
(5) Calculated pursuant to Rule 457(o) of the rules and regulations under the
Securities Act of 1933.
Pursuant to Rule 429 of the rules and regulations under the Securities Act
of 1933, this Registration Statement contains a combined prospectus relating to
the $500,000,000 principal amount of securities registered hereby and
$25,000,000 principal amount of securities registered on July 20, 1998 pursuant
to Registration No. 333-58445. The previously-paid filing fees associated with
the referenced securities registered under Registration No. 333-58445 totalled
$7,375.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES
IN ANY STATE WHERE AN OFFER OR SALE IS PROHIBITED.
SUBJECT TO COMPLETION, DATED JANUARY 7, 2000
Prospectus
ARIZONA PUBLIC SERVICE COMPANY
$525,000,000
First Mortgage Bonds
Debt Securities
We may offer and sell first mortgage bonds and debt securities from time to
time in one or more offerings. This prospectus provides you with a general
description of the first mortgage bonds and debt securities we may offer.
Each time we sell first mortgage bonds or debt securities, we will provide
a supplement to this prospectus that contains specific information about the
offering and the terms of the first mortgage bonds or debt securities. The
supplement may also add, update, or change information contained in this
prospectus. You should carefully read this prospectus and any supplement before
you invest in any of our first mortgage bonds or debt securities.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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The date of this prospectus is _________________ ___, 2000
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TABLE OF CONTENTS
Page
----
About This Prospectus........................................................ 3
Forward-Looking Statements................................................... 3
Where You Can Find More Information.......................................... 4
Business of Arizona Public Service Company................................... 5
Ratio of Earnings to Fixed Charges........................................... 5
Use of Proceeds.............................................................. 5
Description of First Mortgage Bonds.......................................... 5
Description of Debt Securities............................................... 9
Global Securities............................................................ 16
Regarding the Trustees....................................................... 18
Plan of Distribution......................................................... 18
Experts...................................................................... 19
Legal Opinions............................................................... 19
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ABOUT THIS PROSPECTUS
This prospectus is part of a shelf registration statement that we filed
with the United States Securities and Exchange Commission, or the SEC. You
should rely only on the information contained or incorporated by reference in
this prospectus and in any supplement. We have not authorized any other person
to provide you with different information. If anyone provides you with different
or inconsistent information, you should not rely on it. We will not make an
offer to sell these securities in any jurisdiction where the offer or sale is
not permitted. You should assume that the information appearing in this
prospectus and the supplement to this prospectus is accurate as of the dates on
their covers. Our business, financial condition, results of operations, and
prospects may have changed since those dates.
FORWARD-LOOKING STATEMENTS
This prospectus, any accompanying prospectus supplement, and the additional
information described under the heading "Where You Can Find More Information"
may contain forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements are subject to risks
and uncertainties and are based on the beliefs and assumptions of our
management, based on information currently available to our management. When we
use words such as "believes," "expects," "anticipates," "intends," "plans,"
"estimates," "should," or similar expressions, we are making forward-looking
statements.
Forward-looking statements are not guarantees of performance. They involve
risks, uncertainties, and assumptions. Our future results may differ materially
from those expressed in these forward-looking statements. Many of the factors
that will determine these results are beyond our ability to control or predict.
These factors include, but are not limited to, the ongoing restructuring of the
electric industry; the outcome of regulatory proceedings relating to the
restructuring; regulatory, tax, and environmental legislation; our ability to
successfully compete outside our traditional regulated markets; regional
economic conditions, which could affect customer growth; the cost of debt and
equity capital; weather variations affecting customer usage; technological
developments in the electric industry; Year 2000 issues; and other
uncertainties, all of which are difficult to predict and many of which are
beyond our control. You are cautioned not to put undue reliance on any
forward-looking statements. For those statements, we claim the protection of the
safe harbor for forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995.
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WHERE YOU CAN FIND MORE INFORMATION
AVAILABLE INFORMATION
We file annual, quarterly, and special reports, and other information with
the SEC. Our SEC filings are available to the public over the Internet at the
SEC's web site: http://www.sec.gov. You may also read and copy any document we
file at the SEC's public reference rooms in Washington, D.C., New York, New
York, and Chicago, Illinois. You may call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms. Reports and other information
concerning us can also be inspected and copied at the offices of the New York
Stock Exchange at 20 Broad Street, New York, New York 10005. You can also obtain
additional information about us at our web site: http://www.apsc.com.
INCORPORATION BY REFERENCE
The SEC allows us to incorporate by reference the information we file with
them, which means that we can disclose important information to you by referring
you to those documents. The information incorporated by reference is considered
to be part of this prospectus, and later information that we file with the SEC
will automatically update and supersede this information. We incorporate by
reference the documents listed below and any future filings we make with the SEC
under Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934
until all securities are sold under this prospectus.
* Annual Report on Form 10-K for the fiscal year ended December 31,
1998;
* Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31,
June 30, and September 30, 1999; and
* Current Reports on Form 8-K dated January 11, February 18, May 14,
August 26, September 21, and November 2, 1999.
You may request a copy of these filings and will receive a copy of these
filings, at no cost, by writing or telephoning us at the following address:
Arizona Public Service Company
Office of the Secretary
Station 8102
P.O. Box 53999
Phoenix, Arizona 85072-3999
(602) 379-2608
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BUSINESS OF ARIZONA PUBLIC SERVICE COMPANY
We were incorporated in 1920 under the laws of Arizona and are engaged
principally in serving electricity in the State of Arizona. We are Arizona's
largest electric utility. We are a wholly-owned subsidiary of Pinnacle West
Capital Corporation. Our principal executive offices are located at 400 North
Fifth Street, Phoenix, Arizona 85004, 602-250-1000.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the historical ratio of our earnings to
fixed charges for each of the indicated periods:
Nine Months Ended Twelve Months Ended
September 30, December 31,
- ----------------- ----------------------------------------------------------
1999 1998 1997 1996 1995 1994
---- ---- ---- ---- ---- ----
2.02 3.19 3.07 2.84 2.77 2.96
For the purposes of these computations, earnings are defined as the sum of
our pre-tax income plus our fixed charges and the fixed charges of our
subsidiaries. Fixed charges consist of interest on debt, amortization of debt
discount, premium, and expense, and an estimated interest factor in rentals.
USE OF PROCEEDS
We will add the net proceeds from any sale of first mortgage bonds or debt
securities to our general corporate funds. We will use the net proceeds to repay
debt and for general corporate purposes. A prospectus supplement may include
other uses of the net proceeds.
DESCRIPTION OF FIRST MORTGAGE BONDS
GENERAL
The following description highlights the general terms of the first
mortgage bonds. When we offer first mortgage bonds in the future, the prospectus
supplement will explain the particular terms of those securities and the extent
to which these general provisions will not apply.
Our mortgaged property will secure the first mortgage bonds. The first
mortgage bonds will be issued under a Mortgage and Deed of Trust, dated as of
July 1, 1946, between us and The Bank of New York. The Mortgage allows us to
issue first mortgage bonds in one or more series.
We have summarized selected provisions of the Mortgage below. The summary
is not complete. We have filed the form of the Mortgage as an exhibit to the
registration statement and you should read any provisions of the Mortgage that
may be important to you.
You should refer to the prospectus supplement attached to this prospectus
for the following information about a new series of first mortgage bonds:
* the aggregate principal amount of the first mortgage bonds;
* the date on which the first mortgage bonds mature;
* the interest rate;
* when the interest on the first mortgage bonds accrues and is payable;
* whether and when we can redeem the first mortgage bonds, and at what
price;
* the record dates for the payment of interest and principal;
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* whether the first mortgage bonds will be issued in the form of one or
more global securities; and
* any other terms.
We will pay interest to the person in whose name the first mortgage bonds
are registered at the close of business on the record date that precedes the
interest payment date. The supplemental indenture to the Mortgage that contains
the terms of the first mortgage bonds will also contain the record date. We will
issue the first mortgage bonds as fully registered bonds, without coupons, in
$1,000 denominations and multiples thereof. The holders of the first mortgage
bonds may transfer them at any time without any service or other charge, except
for transfer taxes and other governmental charges, if any. We, the trustee, and
any of our agents may treat the registered holder of a debt security as the
absolute owner for the purpose of making payments, giving notices, and for all
other purposes.
Other than the protections described in this prospectus and in the
prospectus supplement, holders of first mortgage bonds would not be protected by
the covenants in the Mortgage from a highly-leveraged transaction.
REDEMPTION
Unless indicated differently in a prospectus supplement, we may redeem the
first mortgage bonds at their principal amount plus accrued interest to the
redemption date in any of the following ways:
* in whole or in part using the proceeds when any of our mortgaged
property is taken under eminent domain;
* in whole or in part using the proceeds of the sale or other
disposition of property that is released from the lien of the
Mortgage;
* in whole, together with all other first mortgage bonds then
outstanding, within twelve months of a transaction involving the
transfer of substantially all of the property subject to the lien of
the Mortgage; or
* in whole or in part with cash deposited in a replacement fund.
SECURITY
The first mortgage bonds will rank on an equal basis with all first
mortgage bonds at any time outstanding under the Mortgage, except for any
sinking fund or similar fund that is provided for in a particular series. The
Mortgage creates a first mortgage lien on substantially all the property we own.
However, the lien does not cover a combined cycle plant that we lease or
interests in Unit 2 of the Palo Verde Nuclear Generating Station that we lease,
or any other property specifically excluded from the Mortgage. The Mortgage lien
and the title to some of our properties are subject to excepted encumbrances,
minor leases, defects, irregularities, and deficiencies, and are subject to the
considerations discussed below regarding the Four Corners Plant and Navajo Plant
locations. The Mortgage lien also extends to all property acquired after the
effective date of the Mortgage, other than specifically excluded property, for
which proper filings and recordings have been made. In the case of property
acquired after the effective date of the Mortgage lien, however, the Mortgage
lien is subject to encumbrances and to liens existing or placed on the property
at the time we acquire it.
Both the Four Corners Plant and the Navajo Plant are located on property
held under leases from the Navajo Tribe and easements from the Secretary of the
Interior. The leases extend from their effective dates in 1966 and 1969 for
terms of 50 years with rights of renewal for up to 25 additional years. The
easements are for 50-year terms from the same effective dates. Although we own
the rights granted to us by the leases from the Navajo Tribe, we do not make any
representation about the Navajo Tribe's
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interest in the lands leased, but we are not aware of any assertion of a
contesting claim to the lands. We also do not make any representations about the
enforceability of the leases against the Navajo Tribe.
The Mortgage requires us to keep our property encumbered in good repair and
working order as an operating system. However, we are permitted to permanently
discontinue or reduce the capacity of any property if:
* in the judgment of our Board of Directors, it is desirable in the
conduct of our business;
* a regulatory authority orders us to do so; or
* we are going to sell or dispose of the property.
If we are not in default under the Mortgage, we may obtain a release from
the Mortgage lien of:
* unserviceable, obsolete, or unnecessary property, but only if we
replace the property with property of equal value; or
* other property that we have sold or otherwise disposed of, but only if
we:
* deposit with the trustee cash in an amount equal to the released
property's fair value;
* use redeemed or retired first mortgage bonds in an amount equal to the
released property's fair value; or
* use as a credit additional property we acquired within the preceding
five years that has fair value equal to the released property's fair
value.
The trustee may, and upon our request must, cancel and discharge the
Mortgage lien and all supplemental indentures to the Mortgage when we have
repaid all of the debt secured by the Mortgage.
ISSUANCE OF ADDITIONAL FIRST MORTGAGE BONDS
We may issue additional first mortgage bonds under the Mortgage in a
principal amount equal to:
* 60% of net property additions;
* the principal amount of redeemed or retired first mortgage bonds;
and/or
* deposited cash,
but only if our adjusted net earnings over the twelve-month period within
fifteen months preceding the month in which we issue the bonds are at least two
times the annual interest on all outstanding first mortgage bonds after the
issuance and on debt secured by prior liens. There are exceptions to this
earnings coverage requirement for first mortgage bonds issued on the basis of
redeemed or retired first mortgage bonds when the redeemed or retired first
mortgage bonds had a higher rate of interest and when other conditions are
satisfied.
We can support the issuance of new first mortgage bonds by using property
located on leaseholds or easements, such as the Four Corners and Navajo Plants,
if the leasehold or easement has an unexpired term of, or the term is extendable
at our option for, at least 30 years after the date of issuance, or if we may
remove the property without compensation.
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As of September 30, 1999, we estimate that the Mortgage would have allowed
us to issue up to approximately $2.34 billion of additional first mortgage
bonds. In addition to complying with the Mortgage restrictions placed on the
issuance of additional first mortgage bonds, we must obtain the approval of the
Arizona Corporation Commission, which we refer to as the ACC, before incurring
long-term debt. Existing ACC orders allow us to have approximately $2.6 billion
in principal amount of long-term debt outstanding at any one time. We do not
expect these orders to limit our ability to meet our capital requirements.
REPLACEMENT FUND
So long as any of our first mortgage bonds are outstanding, the Mortgage
requires us to deposit cash with the trustee each calendar year in an amount
related to net additions to our mortgaged utility plant. However, we may satisfy
all or any part of this requirement by using redeemed or retired first mortgage
bonds, property additions, or property retirements. For 1998, our replacement
fund requirement was about $138 million. Any cash that we deposit may, upon our
request, be applied to the redemption or repurchase of first mortgage bonds. We
may withdraw the cash from the trustee by using additional property we acquire
or redeemed or retired first mortgage bonds. If we do not withdraw the cash from
the trustee within five years of deposit, the trustee must use the cash to
redeem outstanding first mortgage bonds. The prospectus supplement relating to a
particular series of first mortgage bonds may describe restrictions on our
ability to redeem the first mortgage bonds with cash we deposit with the trustee
to meet our replacement fund requirements.
EVENTS OF DEFAULT
The following are defaults under the Mortgage:
* our failure to pay the principal of any first mortgage bond when due
and payable;
* our failure to pay interest on any first mortgage bond within 60 days
after it is due and payable;
* our failure to pay any installment of any fund required to be applied
to the purchase or redemption of first mortgage bonds within 60 days
after it is due and payable;
* bankruptcy, insolvency, and reorganization events involving us; and
* our failure to perform any other covenant of the Mortgage which
continues for 90 days after notice by the trustee or holders of 15% in
principal amount of eligible bonds.
The Mortgage allows the trustee to withhold notice of defaults if the
trustee determines in good faith that withholding the notice is in the interests
of the bondholders. The trustee may not withhold notice of any default in the
payment of principal or interest or any sinking, improvement, replacement, or
purchase fund installment.
Those holding at least a majority in principal amount of the first mortgage
bonds may direct the time, method, and place of conducting any proceeding for
any remedy available to the trustee. However, the trustee may decline to follow
any direction under some circumstances, including the trustee's good faith
determination that it will not be sufficiently indemnified for any expenditures.
We are required to file with the trustee, on or before July 1 of each year, a
certificate stating we have complied with all of the provisions of the Mortgage
and that we are not in default and, if we have not complied, stating all known
defaults.
MODIFICATION OF THE MORTGAGE
The Mortgage and the rights of bondholders may be modified if the following
parties consent to the modification:
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* us;
* the trustee, if the trustee is affected by the modification;
* holders of at least 70% in principal amount of the first mortgage
bonds, if all series are affected by the modification; or
* holders of at least 70% in principal amount of any series of first
mortgage bonds affected by the modification, if all series are not
affected.
However, the holder of each first mortgage bond affected must consent to
any modification that would:
* affect the rights of the holder to receive payment of the principal,
premium, or interest on any first mortgage bonds on the dates due or
to institute suit to enforce such right;
* permit the creation of an additional lien ranking prior or equal to
the lien of the Mortgage to any of the mortgaged property;
* deprive any nonassenting bondholder of a lien upon the mortgaged
property for the security of the holder's first mortgage bonds; or
* reduce the percentage of bondholders required to consent to a
modification.
RESTRICTIONS ON DIVIDENDS
The Mortgage restricts the payment of dividends on our common stock under
conditions that have not existed in the past and do not currently exist.
DESCRIPTION OF DEBT SECURITIES
GENERAL
The following description highlights the general terms of the debt
securities. When we offer debt securities in the future, the prospectus
supplement will explain the particular terms of those securities and the extent
to which any of these general provisions will not apply.
The debt securities will be our unsecured obligations. The debt securities
may be issued in one or more new series under:
* an Indenture, dated as of January 1, 1995, between The Bank of New
York and us, in the case of subordinated debt securities; or
* an Indenture, dated as of January 15, 1998, between The Chase
Manhattan Bank and us, in the case of senior debt securities.
We have summarized selected provisions of the Indentures below. The summary
is not complete. We have filed the forms of the Indentures as exhibits to the
registration statement and you should read any provisions of the Indentures that
may be important to you. Although separate Indentures are used for subordinated
debt securities and senior debt securities, the description of the Indenture in
this section applies to both Indentures, unless otherwise noted.
You should refer to the prospectus supplement attached to this prospectus
for the following information about a new series of debt securities:
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* title of the debt securities;
* the aggregate principal amount of the debt securities or the series of
which they are a part;
* the date on which the debt securities mature;
* the interest rate;
* when the interest on the debt securities accrues and is payable;
* the record dates;
* places where principal, premium, or interest will be payable;
* periods within which, and prices at which we can redeem debt
securities at our option;
* any obligation on our part to redeem or purchase debt securities
pursuant to a sinking fund or at the option of the holder;
* denominations and multiples at which debt securities will be issued if
other than $1,000;
* any index or formula from which the amount of principal or any premium
or interest may be determined;
* any allowance for alternative currencies and determination of value;
* whether the debt securities are defeasible under the terms of the
Indenture;
* whether we are issuing the debt securities as global securities;
* any additional or different events of default and any change in the
right of the trustee or the holders to declare the principal amount
due and payable if there is any default;
* any addition to or change in the covenants in the Indenture; and
* any other terms.
We may sell the debt securities at a substantial discount below their
principal amount. The prospectus supplement may describe special federal income
tax considerations that apply to debt securities sold at an original issue
discount or to debt securities that are denominated in a currency other than
United States dollars.
Other than the protections described in this prospectus and in the
prospectus supplement, holders of debt securities would not be protected by the
covenants in the Indenture from a highly-leveraged transaction.
SUBORDINATION
The Indenture relating to the subordinated debt securities states that,
unless otherwise provided in a supplemental indenture or a board resolution, the
debt securities will be subordinate to all senior debt. This is true whether the
senior debt is outstanding as of the date of the Indenture or is incurred
afterwards. The balance of the information under this heading assumes that a
supplemental indenture or a board resolution results in a series of debt
securities being subordinated obligations.
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The Indenture states that we cannot make payments of principal, premium, or
interest on the subordinated debt if:
* the principal, premium or interest on senior debt is not paid when due
and the applicable grace period for the default has ended and the
default has not been cured or waived; or
* the maturity of any senior debt has been accelerated because of a
default.
The Indenture provides that we must pay all senior debt in full before the
holders of the subordinated debt securities may receive or retain any payment if
our assets are distributed to our creditors upon any of the following:
* dissolution;
* winding-up;
* liquidation;
* reorganization, whether voluntary or involuntary;
* bankruptcy;
* insolvency;
* receivership; or
* any other proceedings.
The Indenture provides that when all amounts owing on the senior debt are
paid in full, the holders of the subordinated debt securities will be subrogated
to the rights of the holders of senior debt to receive payments or distributions
applicable to senior debt.
The Indenture defines senior debt as the principal, premium, interest and
any other payment due under any of the following, whether outstanding at the
date of the Indenture or thereafter incurred, created or assumed:
* all of our debt evidenced by notes, debentures, bonds, or other
securities we sell for money, including all of our first mortgage
bonds;
* all debt of others of the kinds described in the preceding bullet
point that we assume or guarantee in any manner; and
* all renewals, extensions, or refundings of debt of the kinds described
in either of the two preceding bullet points.
However, the preceding will not be considered senior debt if the document
creating the debt or the assumption or guarantee of the debt states that it is
not superior to or that it is on equal footing with the subordinated debt
securities.
The Indenture does not limit the aggregate amount of senior debt that we
may issue. As of September 30, 1999, outstanding senior debt was approximately
$1 billion and subordinated debt was approximately $75 million. As of January
31, 2000, we will redeem all of our outstanding subordinated debt.
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FORM, EXCHANGE, AND TRANSFER
Each series of debt securities will be issuable only in fully registered
form and without coupons. In addition, unless otherwise specified in a
prospectus supplement, the debt securities will be issued in denominations of
$1,000 and multiples of $1,000. We, the trustee, and any of our agents may treat
the registered holder of a debt security as the absolute owner for the purpose
of making payments, giving notices, and for all other purposes.
The holders of debt securities may exchange them for any other debt
securities of the same series, in authorized denominations, like tenor, and
equal principal amount. However, this type of exchange will be subject to the
terms of the Indenture and any limitations that apply to global securities.
A holder may transfer debt securities by presenting the endorsed security
at the office of a security registrar or at the office of any transfer agent we
designate. The holder will not be charged for any exchange or registration of
transfer, but we may require payment to cover any tax or other governmental
charge in connection with the transaction. We have appointed the trustee under
each Indenture as security registrar. A prospectus supplement will name any
transfer agent we designate for any debt securities if different from the
security registrar. We may designate additional transfer agents or rescind the
designation of any transfer agent or approve a change in the office through
which any transfer agent acts at any time, except that we will maintain a
transfer agent in each place of payment for debt securities.
If the debt securities of any series and/or tenor are to be redeemed in
part, we will not be required to do any of the following:
* issue, register the transfer of, or exchange any debt securities of
that series and/or tenor beginning 15 days before the day of mailing
of a notice of redemption of any debt security that may be selected
for redemption and ending at the close of business on the day of the
mailing; or
* register the transfer of or exchange any debt security selected for
redemption, except for an unredeemed portion of a debt security that
is being redeemed in part.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in the applicable prospectus supplement, we will
pay interest on a debt security on any interest payment date to the person in
whose name the debt security is registered.
Unless otherwise indicated in the applicable prospectus supplement, the
principal, premium, and interest on the debt securities of a particular series
will be payable at the office of the paying agents that we may designate.
However, we may pay any interest by check mailed to the address, as it appears
in the security register, of the person entitled to that interest. Also, unless
otherwise indicated in the applicable prospectus supplement, the corporate trust
office of the trustee in The City of New York will be our sole paying agent for
payments with respect to debt securities of each series. Any other paying agent
that we initially designate for the debt securities of a particular series will
be named in the applicable prospectus supplement. We may at any time designate
additional paying agents or rescind the designation of any paying agent or
approve a change in the office through which any paying agent acts, except that
we will maintain a paying agent in each place of payment for the debt securities
of a particular series.
All money that we pay to a paying agent for the payment of the principal,
premium, or interest on any debt securities that remains unclaimed at the end of
two years after the principal, premium, or interest has become due and payable
will be repaid to us, and the holder of the debt security may look only to us
for payment.
12
<PAGE>
CONSOLIDATION, MERGER, AND SALE OF ASSETS
Unless otherwise indicated in the applicable prospectus supplement, we may
not:
* consolidate with or merge into any other entity;
* convey, transfer, or lease our properties and assets substantially as
an entirety to any entity; or
* permit any entity to consolidate with or merge into us or convey,
transfer, or lease its properties and assets substantially as an
entirety to us,
unless the following conditions are met:
* the successor entity is a corporation, partnership, trust, or
other entity organized and validly existing under the laws of any
domestic jurisdiction and assumes our obligations on the debt
securities and under the Indenture;
* immediately after giving effect to the transaction, no event of
default, and no event which, after notice or lapse of time or
both, would become an event of default, shall have occurred and
be continuing; and
* other conditions are met.
Upon any merger, consolidation, or transfer or lease of properties, the
successor person will be substituted for us under the Indenture, and,
thereafter, except in the case of a lease, we will be relieved of all
obligations and covenants under the Indenture and the debt securities.
EVENTS OF DEFAULT
Each of the following will be an event of default under the Indenture
with respect to debt securities of any series:
* our failure to pay principal of or any premium on any debt security of
that series when due;
* our failure to pay any interest on any debt securities of that series
when due, and the continuance of that failure for 30 days;
* our failure to deposit any sinking fund payment, when due, in respect
of any debt securities of that series;
* our failure to perform any of our other covenants in the Indenture
relating to that series and the continuance of that failure for 90
days after written notice has been given by the trustee or the holders
of at least 25% in principal amount of the outstanding debt securities
of that series;
* bankruptcy, insolvency, or reorganization events involving us; and
* any other event of default for that series described in the applicable
prospectus supplement.
If an event of default occurs and is continuing other than an event of
default relating to bankruptcy, insolvency, or reorganization, either the
trustee or the holders of at least 25% in aggregate principal amount of the
outstanding debt securities of the affected series may declare the principal
amount of the debt securities of that series to be due and payable immediately.
In the case of any debt
13
<PAGE>
security that is an original issue discount security or the principal amount of
which is not then determinable, the trustee or the holders of at least 25% in
aggregate principal amount of the outstanding debt securities of that series may
declare the portion of the principal amount of the debt security specified in
the terms of such debt security to be immediately due and payable upon an event
of default.
If an event of default involving bankruptcy, insolvency, or reorganization
occurs, the principal amount of all the debt securities of the affected series
will automatically, and without any action by the trustee or any holder, become
immediately due and payable. After any acceleration, but before a judgment or
decree based on acceleration, the holders of a majority in aggregate principal
amount of the outstanding debt securities of that series may rescind and annul
the acceleration if all events of default, other than the non-payment of
accelerated principal, have been cured or waived as provided in the Indenture.
The trustee will be under no obligation to exercise any of its rights or
powers under the Indenture at the request or direction of any of the holders,
unless the holders have offered the trustee reasonable indemnity. Subject to
provisions for the indemnification of the trustee, the holders of a majority in
principal amount of the outstanding debt securities of any series will have the
right to direct the time, method, and place of conducting any proceeding for any
remedy available to the trustee, or exercising any trust or power conferred on
the trustee, with respect to the debt securities of that series.
No holder of a debt security of any series will have any right to institute
any proceeding under the Indenture, or for the appointment of a receiver or a
trustee, or for any other remedy under the Indenture, unless:
* the holder has previously given the trustee written notice of a
continuing event of default with respect to the debt securities of
that series;
* the holders of at least 25% in aggregate principal amount of the
outstanding debt securities of that series have made written request,
and the holder or holders have offered reasonable indemnity, to the
trustee to institute the proceeding as trustee; and
* the trustee has failed to institute the proceeding, and has not
received from the holders of a majority in aggregate principal amount
of the outstanding debt securities of that series a direction
inconsistent with the request within 60 days after the notice,
request, and offer.
The limitations provided above do not apply to a suit instituted by a holder of
a debt security for the enforcement of payment of the principal, premium, or
interest on the debt security on or after the applicable due date.
We are required to furnish to the trustee annually a certificate of various
officers stating whether or not we are in default in the performance or
observance of any of the terms, provisions, and conditions of the Indenture and,
if so, specifying all known defaults.
MODIFICATION AND WAIVER
In limited cases the trustee, as well as us, may make modifications and
amendments to the Indenture without the consent of the holders of any series of
debt securities. The trustee may make modifications and amendments to the
Indenture with the consent of the holders of not less than 66-2/3% in aggregate
principal amount of the outstanding debt securities of each series affected by
the modification or amendment. However, without the consent of the holder of
each outstanding debt security affected, no modification or amendment may:
* change the stated maturity of the principal of, or any installment of
principal of or interest on, any debt security;
14
<PAGE>
* reduce the principal amount of, or any premium or interest on, any
debt security;
* reduce the amount of principal of an original issue discount security
or any other debt security payable upon acceleration of the maturity
of the security;
* change the place or currency of payment of principal of, or any
premium or interest on, any debt security;
* impair the right to institute suit for the enforcement of any payment
on or with respect to any debt security; or
* reduce the percentage in principal amount of outstanding debt
securities of any series, the consent of whose holders is required for
modification or amendment of the Indenture necessary for waiver of
compliance with certain provisions of the Indenture or of certain
defaults, or modify the provisions of the Indenture relating to
modification and waiver.
Compliance with certain restrictive provisions of the Indenture may be
waived by the holders of not less than 66-2/3% in aggregate principal amount of
the outstanding debt securities of any series. The holders of a majority in
principal amount of the outstanding debt securities of any series may waive any
past default under the Indenture, except:
* a default in the payment of principal, premium, or interest; and
* a default under covenants and provisions of the Indenture which cannot
be amended without the consent of the holder of each outstanding debt
security of the affected series.
In determining whether the holders of the requisite principal amount of the
outstanding debt securities have given or taken any direction, notice, consent,
waiver, or other action under the Indenture as of any date:
* the principal amount of an outstanding original issue discount
security will be the amount of the principal that would be due and
payable upon acceleration of the maturity on that date,
* if the principal amount payable at the stated maturity of a debt
security is not determinable, the principal amount of the outstanding
debt security will be an amount determined in the manner prescribed
for the debt security; and
* the principal amount of an outstanding debt security denominated in
one or more foreign currencies will be the U.S. dollar equivalent of
the principal amount of the debt security or, in the case of a debt
security described in the previous clause above, the amount described
in that clause.
If debt securities have been fully defeased or if we have deposited money
with the trustee to redeem debt securities, they will not be considered
outstanding.
Except in limited circumstances, we will be entitled to set any day as a
record date for the purpose of determining the holders of outstanding debt
securities of any series entitled to give or take any direction, notice,
consent, waiver, or other action under the Indenture. In limited circumstances,
the trustee will be entitled to set a record date for action by holders. If a
record date is set for any action to be taken by holders of a particular series,
the action may be taken only by persons who are holders of outstanding debt
securities of that series on the record date. To be effective, the action must
be taken by holders of the requisite principal amount of the debt securities
within a specified period following the record date. For any particular record
date, this period will be 180 days or any other shorter period as we may
specify. The period may be shortened or lengthened, but not beyond 180 days.
15
<PAGE>
DEFEASANCE AND COVENANT DEFEASANCE
We may elect to have the provisions of the Indenture relating to defeasance
and discharge of indebtedness, or defeasance of restrictive covenants in the
Indenture, applied to the debt securities of any series, or to any specified
part of a series. The prospectus supplement describing a series of debt
securities will state whether we can make these elections for that series.
DEFEASANCE AND DISCHARGE
We will be discharged from all of our obligations with respect to the debt
securities of a series if we deposit with the trustee money in an amount
sufficient to pay the principal, premium, and interest on the debt securities of
that series when due in accordance with the terms of the Indenture and the debt
securities. We can also deposit securities that will provide the necessary
monies. However, we will not be discharged from the obligations to exchange or
register the transfer of debt securities, to replace stolen, lost, or mutilated
debt securities, to maintain paying agencies, and to hold moneys for payment in
trust. The defeasance or discharge may occur only if we deliver to the trustee
an opinion of counsel stating that we have received from, or there has been
published by, the United States Internal Revenue Service a ruling, or there has
been a change in tax law, in either case to the effect that holders of such debt
securities:
* will not recognize gain or loss for federal income tax purposes as a
result of the deposit, defeasance, and discharge; and
* will be subject to federal income tax on the same amount, in the same
manner, and at the same times as would have been the case if the
deposit, defeasance, and discharge were not to occur.
DEFEASANCE OF COVENANTS
We may elect to omit compliance with restrictive covenants in the Indenture
and any additional covenants that may be described in the applicable prospectus
supplement for a series of debt securities. This election will preclude some
actions from being considered defaults under the Indenture for the applicable
series. In order to exercise this option, we will be required to deposit, in
trust for the benefit of the holders of debt securities, funds in an amount
sufficient to pay the principal, premium and interest on the debt securities of
the applicable series. We may also deposit securities that will provide the
necessary monies. We will also be required to deliver to the trustee an opinion
of counsel to the effect that holders of the debt securities will not recognize
gain or loss for federal income tax purposes as a result of such deposit and
defeasance of certain obligations and will be subject to federal income tax on
the same amount, in the same manner and at the same times as would have been the
case if the deposit and defeasance were not to occur. If we exercise this option
with respect to any debt securities and the debt securities are declared due and
payable because of the occurrence of any event of default, the amount of funds
deposited in trust would be sufficient to pay amounts due on the debt securities
at the time of their respective stated maturities but may not be sufficient to
pay amounts due on the debt securities on any acceleration resulting from an
event of default. In that case, we would remain liable for the additional
payments.
GOVERNING LAW
The law of the State of New York will govern the Indenture and the debt
securities .
GLOBAL SECURITIES
Some or all of the first mortgage bonds or debt securities of any series
may be represented, in whole or in part, by one or more global securities, which
will have an aggregate principal amount equal to that of the first mortgage
bonds or debt securities they represent. We will register each global security
in
16
<PAGE>
the name of a depositary or nominee identified in a prospectus supplement and
deposit the global security with the depositary or nominee. Each global security
will bear a legend regarding the restrictions on exchanges and registration of
transfer referred to below and other matters specified in a supplemental
indenture to the Mortgage or the Indenture.
No global security may be exchanged for first mortgage bonds or debt
securities registered, and no transfer of a global security may be registered,
in the name of any person other than the depositary for the global security or
any nominee of the depositary, unless:
* the depositary has notified us that it is unwilling or unable to
continue as depositary for the global security or has ceased to be
qualified to act as depositary;
* a default has occurred and is continuing with respect to the first
mortgage bonds or debt securities represented by the global security;
or
* any other circumstances exist that may be described in the applicable
supplemental indenture and prospectus supplement.
We will register all securities issued in exchange for a global security or
any portion of a global security in the names specified by the depositary.
As long as the depositary or its nominee is the registered holder of a
global security, the depositary or nominee will be considered the sole owner and
holder of the global security and the first mortgage bonds or debt securities
that it represents. Except in the limited circumstances referred to above,
owners of beneficial interests in a global security will not:
* be entitled to have the global security or first mortgage bonds or
debt securities registered in their names;
* receive or be entitled to receive physical delivery of certificated
first mortgage bonds or debt securities in exchange for a global
security; and
* be considered to be the owners or holders of the global security or
any first mortgage bonds or debt securities for any purpose under the
Mortgage or the Indenture.
We will make all payments of principal, premium, and interest on a global
security to the depositary or its nominee. The laws of some jurisdictions
require that purchasers of securities take physical delivery of securities in
definitive form. These laws make it difficult to transfer beneficial interests
in a global security.
Ownership of beneficial interests in a global security will be limited to
institutions that have accounts with the depositary or its nominee, referred to
as Participants, and to persons that may hold beneficial interests through
Participants. In connection with the issuance of any global security, the
depositary will credit, on its book-entry registration and transfer system, the
respective principal amounts of first mortgage bonds or debt securities
represented by the global security to the accounts of its Participants.
Ownership of beneficial interests in a global security will only be shown on
records maintained by the depositary or the Participant. Likewise, the transfer
of ownership interests will be effected only through the same records. Payments,
transfers, exchanges, and other matters relating to beneficial interests in a
global security may be subject to various policies and procedures adopted by the
depositary from time to time. Neither we, the trustee, nor any of our agents
will have responsibility or liability for any aspect of the depositary's or any
Participant's records relating to, or for payments made on account of,
beneficial interests in a global security, or for maintaining, supervising, or
reviewing any records relating to the beneficial interests.
17
<PAGE>
REGARDING THE TRUSTEES
The Bank of New York is the trustee under the Mortgage and trustee under
the Indenture relating to the subordinated debt securities. We maintain normal
banking arrangements with The Bank of New York, which include:
* a commitment in the aggregate principal amount of approximately $15.8
million by The Bank of New York pursuant to a reimbursement agreement
related to a letter of credit issued on our behalf in connection with
an issuance of pollution control bonds, the proceeds of which were
made available to us; and
* a $26.6 million commitment by The Bank of New York pursuant to a
revolving credit agreement, approximately $6.3 million of which was
outstanding at September 30, 1999.
The Bank of New York also serves as:
* trustee for the holders of several issues of pollution control bonds
issued on our behalf;
* trustee under our senior note indenture;
* investment manager for our nonunion post-retirement medical fund; and
* custodian of international fixed-income assets for our pension plan.
An affiliate of The Bank of New York is the remarketing agent for a series
of our pollution control bonds.
The Chase Manhattan Bank is the trustee under the Indenture relating to the
senior debt securities. We maintain normal banking arrangements with The Chase
Manhattan Bank. The Chase Manhattan Bank also:
* serves as trustee for the holders of several series of bonds issued by
a party unaffiliated with us, secured by, among other things, our
payments under our Palo Verde Nuclear Generating Station leases;
* serves as an issuing and paying agent with respect to our commercial
paper program; and
* has a commitment to lend us up to $49.4 million under a revolving
credit agreement, approximately $13.8 million of which was outstanding
as of September 30, 1999.
In addition, an affiliate of The Chase Manhattan Bank is the owner
participant under a trust to which we sold and leased back a portion of Unit 2
of the Palo Verde Nuclear Generating Station.
PLAN OF DISTRIBUTION
We intend to sell up to $525,000,000 in aggregate principal amount of the
offered securities to or through underwriters or dealers, and may also sell the
offered securities directly to other purchasers or through agents, as described
in the prospectus supplement relating to an issue of first mortgage bonds or
debt securities.
We may distribute the offered securities from time to time in one or more
transactions at a fixed price or prices, which may be changed, or at market
prices prevailing at the time of sale, at prices related to prevailing market
prices, or at negotiated prices.
18
<PAGE>
In connection with the sale of the offered securities, underwriters may
receive compensation from us or from purchasers of offered securities for whom
they act as agents in the form of discounts, concessions, or commissions.
Underwriters may sell offered securities to or through dealers, and the dealers
may receive compensation in the form of discounts, concessions, or commissions
from the underwriters and/or commissions from the purchasers for whom they act
as agents. Underwriters, dealers, and agents, who participate in the
distribution of offered securities, may be considered to be underwriters, and
any discounts or commissions received by them from us and any profit on the
resale of offered securities by them may be considered to be underwriting
discounts and commissions under the Securities Act of 1933. We will identify any
person considered to be an underwriter, and we will describe any compensation
received from us in the prospectus supplement.
We may agree to indemnify underwriters, dealers, and agents who participate
in the distribution of the offered securities against liabilities, including
liabilities under the Securities Act of 1933.
EXPERTS
The financial statements incorporated in this prospectus by reference from
APS' 1998 Annual Report on Form 10-K have been audited by Deloitte & Touche LLP,
independent auditors as stated in their report, which is incorporated herein by
reference, and have been so incorporated in reliance upon the report of such
firm given upon their authority as experts in accounting and auditing.
LEGAL OPINIONS
Snell & Wilmer L.L.P., One Arizona Center, Phoenix, Arizona 85004 will
opine on the validity of the offered securities. We currently anticipate that
Sullivan and Cromwell, 1888 Century Park East, Los Angeles, California 90067
will opine on the validity of the offered securities for any underwriters of
securities. In giving their opinions, Sullivan & Cromwell and Snell & Wilmer
L.L.P. may rely as to matters of New Mexico law upon the opinion of Keleher &
McLeod, P.A., Albuquerque Plaza, 201 Third NW, 12th Floor, Albuquerque, New
Mexico 87102. Snell & Wilmer L.L.P. may rely as to all matters of New York law
upon the opinion of Sullivan & Cromwell. Sullivan & Cromwell may rely as to all
matters of Arizona law upon the opinion of Snell & Wilmer L.L.P.
19
<PAGE>
$525,000,000
ARIZONA PUBLIC SERVICE COMPANY
FIRST MORTGAGE BONDS
DEBT SECURITIES
----------
APS
----------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Securities and Exchange Commission registration fee ........ $132,000
Printing, engraving, and postage expenses .................. 40,000*
Legal fees ................................................. 300,000*
Accounting fees ............................................ 30,000*
Rating Agency fees ......................................... 260,000*
Trustee's fees and expenses ................................ 25,000*
Blue Sky fees and expenses ................................. 30,000*
Miscellaneous .............................................. 8,000*
--------
Total ............................................. $825,000*
========
- ----------
* Estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The law of Arizona permits extensive indemnification of present and former
directors, officers, employees or agents of an Arizona corporation, whether or
not authority for such indemnification is contained in the indemnifying
corporation's articles of incorporation or bylaws. Specific authority for
indemnification of present and former directors and officers, under certain
circumstances, is contained in Article Fifth of the Company's Articles of
Incorporation. In addition, Section 7.01 of the Company's bylaws provides that
the Company will indemnify present and former directors and officers to the
fullest extent permitted by Arizona law.
Under the Arizona Business Corporation Act (the "ABCA"), in order for a
corporation to indemnify a director or officer, a majority of the corporation's
disinterested directors, independent legal counsel, or the shareholders must
find that the conduct of the individual to be indemnified was in good faith and
that the individual reasonably believed that the conduct was in the
corporation's best interests (in the case of conduct in an "official capacity"
with the corporation) or that the conduct was at least not opposed to the
corporation's best interests (in all other cases). In the case of any criminal
proceeding, the finding must be to the effect that the individual had no
reasonable cause to believe the conduct was unlawful. Indemnification is
permitted with respect to expenses, judgments, fines, and amounts paid in
settlement by such individuals.
Indemnification under the ABCA is permissive, except in the event of a
successful defense, in which case a director or officer must be indemnified
against reasonable expenses, including attorneys' fees, incurred in connection
with the proceeding. In addition, the ABCA requires Arizona corporations to
indemnify any "outside director" (a director who is not an officer, employee, or
holder of five percent or more of any class of the corporation's stock) against
liability unless (i) the corporation's articles of incorporation limit such
indemnification, (ii) the outside director is adjudged liable in a proceeding by
or in the right of the corporation or in any other proceeding charging improper
personal benefit to the director, or (iii) a court determines, before payment to
the outside director, that the director failed to meet the standards of conduct
described in the preceding paragraph. A court may also order that an individual
be indemnified if the court finds that the individual is fairly and reasonably
entitled to indemnification in light of all of the relevant circumstances,
whether or not the individual has met the standards of conduct in this and the
preceding paragraph.
In connection with the offering made by the prospectus which is a part of
this registration statement, as it may be amended or supplemented, the
underwriters of the securities, pursuant to the relevant underwriting agreement,
will severally agree to indemnify and hold harmless the Company, each of its
directors, each of its officers who have signed this registration statement, and
each person, if any, who controls the Company within the meaning of the
Securities Act of 1933, as amended (the "Act"),
II-1
<PAGE>
against certain losses, claims, damages, or liabilities, including liabilities
under the Act, that arise out of or are based upon written information furnished
by such underwriters to the Company for use in this registration statement or in
such prospectus.
Insurance is maintained on a regular basis (and not specifically in
connection with this offering) against liabilities arising on the part of
directors and officers out of their performance in such capacities or arising on
the part of the Company out of its foregoing indemnification provisions, subject
to certain exclusions and to the policy limits.
ITEM 16. LIST OF EXHIBITS.
EXHIBIT NO. DESCRIPTION
- ----------- -----------
1.1 Form of Underwriting Agreement for First Mortgage Bonds.
1.2 Form of Underwriting Agreement for Debt Securities.
4.1 Form(s) of Supplemental Indenture relating to First Mortgage Bonds
(to be filed as Exhibit(s) by means of Form 8-K).
4.2 Specimen(s) of First Mortgage Bonds (to be filed as Exhibit(s) by
means of Form 8-K).
4.3 Form(s) of Supplemental Indenture relating to Debt Securities (to
be filed as Exhibit(s) by means of Form 8-K).
4.4 Specimen(s) of Debt Securities (to be filed as Exhibit(s) by means
of Form 8-K).
5.1 Opinion of Snell & Wilmer L.L.P.
12.1 Computation of Ratio of Earnings to Fixed Charges.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Snell & Wilmer L.L.P. (included in Opinion filed as
Exhibit No. 5.1).
24.1 Power of Attorney (see II-6).
25.1 Form T-1 Statement of Eligibility under the Trust Indenture Act of
1939 of The Bank of New York, as Bond Trustee under the Mortgage.
25.2 Form T-1 Statement of Eligibility under the Trust Indenture Act of
1939 of The Bank of New York, as Trustee under the Indenture
relating to the subordinated Debt Securities.
25.3 Form T-1 Statement of Eligibility under the Trust Indenture Act of
1939 of The Chase Manhattan Bank, as Trustee under the Indenture
relating to the senior Debt Securities.
In addition to those Exhibits shown above, the Company hereby incorporates
the following Exhibits pursuant to Rule 411 of Regulation C promulgated under
the Securities Act of 1933 by reference to the filings set forth below:
<TABLE>
<CAPTION>
Exhibit Previously Filed Date
No. Description as Exhibit: File No. Effective
--- ----------- ----------- -------- ---------
<S> <C> <C> <C>
4.5 Mortgage and Deed of Trust 4.1 to September 1992 Form 1-4473 11-9-92
relating to Company's First 10-Q Report
Mortgage Bonds, together with
forty-eight indentures
supplemental thereto.
Forty-ninth Supplemental Indenture 4.1 to 1992 Form 10-K Report 1-4473 3-30-93
Fiftieth Supplemental Indenture 4.2 to 1993 Form 10-K Report 1-4473 3-30-94
Fifty-first Supplemental 4.1 to August 1, 1993 Form 8-K 1-4473 9-27-93
Indenture Report
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
Exhibit Previously Filed Date
No. Description as Exhibit: File No. Effective
--- ----------- ----------- -------- ---------
<S> <C> <C> <C>
Fifty-second Supplemental 4.1 to September 30, 1993 Form 1-4473 11-15-93
Indenture 10-Q Report
Fifty-third Supplemental 4.5 to Registration Statement No. 1-4473 3-1-94
Indenture 33-61228 by means of Febru-
ary 23, 1994 Form 8-K Report
Fifty-fourth Supplemental 4.1 to Registration Statements 1-4473 11-22-96
Indenture Nos. 33-61228, 33-55473,
33-64455 and 333-15379 by
means of November 19, 1996
Form 8-K Report
Fifty-fifth Supplemental 4.8 to Registration Statements 1-4473 4-9-97
Indenture Nos. 33-55473, 33-64455 and
333-15379 by means of April
7, 1997 Form 8-K Report
4.6 Agreement of Resignation, 4.1 to September 29, 1995 Form 1-4473 10-24-95
Appointment, Acceptance, 8-K Report
and Assignment dated as of
August 18, 1995 among the
Company, Bank of America
National Trust and Savings
Association and The Bank of
New York
4.7 Indenture dated as of January 1, 4.6 to January 1, 1995 Form 8-K 1-4473 1-11-95
1995 among the Company and Report
The Bank of New York, as
Trustee, relating to subordi-
nated Debt Securities
4.8 First Supplemental Indenture 4.4 to January 1, 1995 Form 8-K 1-4473 1-11-95
dated as of January 1, 1995, Report
relating to the issuance of
$75,000,000 of 10% Junior
Subordinated Deferrable
Interest Debentures, Series A,
Due 2025
4.9 Indenture dated as of January 4.10 to Registration Statement 1-4473 1-16-98
15, 1998 among the Company Nos. 333-15379 and 333-
and The Chase Manhattan 27551 by means of January
Bank, as Trustee, relating to 13, 1998 Form 8-K Report
Senior Debt Securities
4.10 First Supplemental Indenture 4.3 to Registration Statement 1-4473 1-16-98
dated as of January 15, 1998, Nos. 333-15479 and 333-
relating to the issuance of 27551 by means of January
$100,000,000 of 6-1/4% Notes 13, 1998 Form 8-K Report
Due 2005
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
Exhibit Previously Filed Date
No. Description as Exhibit: File No. Effective
--- ----------- ----------- -------- ---------
<S> <C> <C> <C>
4.11 Second Supplemental 4.3 to Registration Statement 1-4473 2-22-99
Indenture dated as of Nos. 333-27551 and 333-
February 15, 1999 58445 by means of February
18, 1999 Form 8-K Report
4.12 Third Supplemental Indenture 4.5 to Registration Statement 1-4473 11-5-99
dated as of November 1, 1999 No. 333-58445 by means of
November 2, 1999 Form 8-K
Report
</TABLE>
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement; notwithstanding the foregoing, any increase or decrease in the volume
of securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement; and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement; provided
however, that paragraphs (1)(i) and (1)(ii) do not apply if the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability under the Act, each
such post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(4) That, for purposes of determining any liability under the Act, each
filing of the registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(5) That, insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers, and controlling
persons of the registrant pursuant to the provisions referred to in Item 15 of
this Registration Statement, or otherwise, the Company has been advised that, in
the opinion of the Securities and Exchange Commission, such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against
II-4
<PAGE>
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer, or controlling person of the registrant in the
successful defense of any action, suit, or proceeding) is asserted by such
director, officer, or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
(6) That, for purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(7) That, for the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Phoenix, State of Arizona on the 7th day of January,
2000
ARIZONA PUBLIC SERVICE COMPANY
By William J. Post
---------------------------------------
(William J. Post, Chief Executive Officer)
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the dates indicated. Each person whose signature appears below
hereby authorizes Chris N. Froggatt, Barbara M. Gomez, and Michael V. Palmeri
and each of them, as attorneys-in-fact, to sign in his or her name and behalf,
individually and in each capacity designated below, and to file any amendments,
including post-effective amendments, to this registration statement, and any
related Rule 464(b) registration statement or amendment thereto.
Signature Title Date
--------- ----- ----
William J. Post Principal Executive Officer January 7, 2000
- -------------------------- and Director
(William J. Post,
Chief Executive Officer)
Michael V. Palmeri Principal Accounting and January 7, 2000
- -------------------------- Financial Officer
(Michael V. Palmeri,
Vice President, Finance)
Jack E. Davis Director January 7, 2000
- --------------------------
(Jack E. Davis, President,
Energy Delivery and Sales)
Michael L. Gallagher Director January 7, 2000
- --------------------------
(Michael L. Gallagher)
Martha O. Hesse Director January 7, 2000
- --------------------------
(Martha O. Hesse)
Marianne M. Jennings Director January 7, 2000
- --------------------------
(Marianne M. Jennings)
Robert E. Keever Director January 7, 2000
- --------------------------
(Robert E. Keever)
Robert G. Matlock Director January 7, 2000
- --------------------------
(Robert G. Matlock)
Kathryn L. Munro Director January 7, 2000
- --------------------------
(Kathryn L. Munro)
Bruce J. Nordstrom Director January 7, 2000
- --------------------------
(Bruce J. Nordstrom)
II-6
<PAGE>
Signature Title Date
--------- ----- ----
Director
- --------------------------
(Donald M. Riley)
Quentin P. Smith, Jr. Director January 7, 2000
- --------------------------
(Quentin P. Smith, Jr.)
Richard Snell Director January 7, 2000
- --------------------------
(Richard Snell)
William L. Stewart Director January 7, 2000
- --------------------------
(William L. Stewart,
President, Generation)
Diane C. Walker Director January 7, 2000
- --------------------------
(Dianne C. Walker)
Ben F. Williams, Jr. Director January 7, 2000
- --------------------------
(Ben F. Williams, Jr.)
II-7
<PAGE>
REGISTRATION NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
EXHIBITS TO
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
----------
ARIZONA PUBLIC SERVICE COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
================================================================================
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
1.1 Form of Underwriting Agreement for First Mortgage Bonds.
1.2 Form of Underwriting Agreement for Debt Securities.
4.1 Form(s) of Supplemental Indenture relating to First Mortgage Bonds
(to be filed as Exhibit(s) by means of Form 8-K).
4.2 Specimen(s) of First Mortgage Bonds (to be filed as Exhibit(s) by
means of Form 8-K).
4.3 Form(s) of Supplemental Indenture relating to Debt Securities (to
be filed as Exhibit(s) by means of Form 8-K).
4.4 Specimen(s) of Debt Securities (to be filed as Exhibit(s) by means
of Form 8-K).
5.1 Opinion of Snell & Wilmer L.L.P.
12.1 Computation of Ratio of Earnings to Fixed Charges.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Snell & Wilmer L.L.P. (included in Opinion filed as
Exhibit No. 5.1).
24.1 Power of Attorney (see II-6).
25.1 Form T-1 Statement of Eligibility under the Trust Indenture Act of
1939 of The Bank of New York, as Bond Trustee under the Mortgage.
25.2 Form T-1 Statement of Eligibility under the Trust Indenture Act of
1939 of The Bank of New York, as Trustee under the Indenture
relating to the subordinated Debt Securities.
25.3 Form T-1 Statement of Eligibility under the Trust Indenture Act of
1939 of The Chase Manhattan Bank, as Trustee under the Indenture
relating to the senior Debt Securities.
EXHIBIT 1.1
ARIZONA PUBLIC SERVICE COMPANY
FIRST MORTGAGE BONDS
UNDERWRITING AGREEMENT
------------------
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 $525,000,000
in aggregate principal amount of its First Mortgage Bonds (the "Bonds")
registered under the registration statements referred to in Section 2(a). The
Bonds will be issued under its Mortgage and Deed of Trust dated as of July 1,
1946, to The Bank of New York, as successor Trustee, as amended and supplemented
by fifty-five indentures supplemental thereto (the "Mortgage"), and as further
amended and supplemented by one or more additional Supplemental Indentures
relating to the Bonds (the "Supplemental Indentures") (the Mortgage as amended
and supplemented by such Supplemental Indentures being sometimes hereinafter
referred to as the "Indenture"). The Bonds 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 Bonds being determined at the time of sale. Particular issues of the Bonds
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 Bonds involved in any such offering are hereinafter referred
to as the "Purchased Bonds," the parties that agree to purchase the same are
hereinafter referred to as the "Underwriters" of such Purchased Bonds, 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."
<PAGE>
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. In connection with each
offering of the Purchased Bonds, the Company represents and warrants to, and
agrees with, the several Underwriters that:
(a) A registration statement (No. 333-58445) relating to $25,000,000
of the Bonds, unsecured debentures, notes, or other evidences of
indebtedness (the "Securities"), or the Company's senior notes and a
registration statement (No. 333-____) relating to $500,000,000 of the Bonds
or Securities (including a combined prospectus relating to up to
$525,000,000 of the Bonds or Securities) were filed with the Securities and
Exchange Commission (the "Commission") and have become effective. Such
registration statements, as each is amended at the time of the Terms
Agreement referred to in Section 3 relating to the Purchased Bonds, are
hereinafter referred to as the "First Registration Statement" and the
"Second Registration Statement," respectively, and, together with any
related Rule 462(b) registration statement or amendment thereto, are
hereinafter referred to collectively as the "Registration Statements," and
such prospectus, as supplemented as contemplated by Section 3 to reflect
the terms of the Purchased Bonds and terms of offering thereof, including
all material incorporated by reference therein, is hereinafter referred to
as the "Prospectus."
(b) Each part of the Registration Statements relating to the Bonds,
when such part became effective, conformed in all material respects to the
requirements of the Securities Act of 1933 (the "Act"), the Trust Indenture
Act of 1939 (the "Trust Indenture Act") and the rules and regulations (the
"Rules and Regulations") of the Commission and did not include any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading, and on the date of each Prospectus Supplement referred to in
Section 3, the Registration Statements and the Prospectus will conform in
all material respects to the requirements of the Act, the Trust Indenture
Act and the Rules and Regulations, and at such date none of such documents
will include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that the foregoing
does not apply to (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
Statements that consists of the Statement of Eligibility and Qualification
(Form T-1) under the Trust Indenture Act of 1939 of The Bank of New York,
as successor Trustee under the Mortgage.
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<PAGE>
(c) An order of the Arizona Corporation Commission shall have been
granted authorizing the execution and delivery of the Supplemental
Indenture relating to the Purchased Bonds and the issuance and sale of the
Purchased Bonds on the terms and conditions herein and in the Prospectus
and the Terms Agreement referred to in Section 3 relating to the Purchased
Bonds, 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 Bonds, except as may
be required under state securities or blue sky laws.
(d) Except for property specifically excepted from the lien of the
Indenture or released therefrom in accordance with the terms thereof, the
Company has good and marketable title in fee simple, except for items
described in (A), (B), and (C) below, to all of the real property purported
in the Indenture to be so held, good and valid leasehold interests in all
properties purported in the Indenture to be held under lease, and good and
valid title to all other properties described in the Indenture as subject
to the lien thereof (which property excludes (i) the combined cycle plant
referred to in Note 9 of Notes to Financial Statements in the Company's
Form 10-K Report for the fiscal year ended December 31, 1998 (the "1998
Form 10-K Report") incorporated by reference in the Registration Statements
but includes the Company's leasehold and related interests in that plant
and (ii) certain leased interests in Unit 2 of the Palo Verde Nuclear
Generating Station referred to in Note 9 of Notes to Financial Statements
in the 1998 Form 10-K Report), except that the transmission and
distribution lines of the Company, other than those located on land owned
in fee by the Company, and the property described in Section 15 of Article
IV of the Forty-first Supplemental Indenture, have been installed in public
streets or alleys and in highways under ordinances and permits granted by
the various governmental bodies having jurisdiction, or have been
constructed on leaseholds, easements or rights-of-way granted, with minor
exceptions, by the apparent owners of record of the land and such leases,
easements, or rights-of-way are subject to any defects in or encumbrances
on the title of the respective lessors of such leases or grantors of such
easements or rights-of-way; title to the aforesaid properties is subject
only to: (A) the lien of the Mortgage, (B) Excepted Encumbrances as defined
in the Mortgage, and (C) other liens, encumbrances or defects, none of
which, individually or in the aggregate, materially interfere with the
business or operations of the Company (with respect to leasehold interests
3
<PAGE>
on the Navajo Reservation, this representation is intended and shall be
understood to mean only that the Company is the owner of the rights
conferred upon it by the leases from the Navajo Tribe relating to the sites
on which the Navajo Plant and the Four Corners Plant are located, and that
while the Company is not aware of the assertion of any claim contesting the
interest of the Navajo Tribe in the lands leased, the Company does not give
any representation with respect to the interest of the Navajo Tribe in the
lands leased or with respect to the enforceability of such leases against
the Navajo Tribe); the Mortgage, subject only as above set forth in this
clause, now constitutes, and the Mortgage and the Supplemental Indentures
theretofore executed, subject only as above set forth in this clause, when
the latter shall have been duly recorded and filed, will constitute,
together and as a single instrument, a direct and valid first mortgage lien
upon said properties, which include all of the properties of the Company
(other than the classes or items of property expressly excepted in the
Mortgage); and all properties (other than the classes or items of property
expressly excepted in the Mortgage or expressly released from the lien
thereof) acquired by the Company after the date of the Supplemental
Indenture relating to the Purchased Bonds in each county in the States of
Arizona and New Mexico in which the Mortgage and the Supplemental Indenture
shall have been duly recorded and filed (and, as to which properties, with
respect to priority only, any necessary recordation and/or filing has been
accomplished, including therein any necessary descriptions of
after-acquired real property and real property upon which after-acquired
fixtures are affixed) will, upon such acquisition, become subject to the
first mortgage lien thereof, subject, however, to Excepted Encumbrances and
to liens, if any, existing or placed thereon at the time of the acquisition
thereof by the Company and, with respect to priority only, to liens, if
any, existing prior to the time of any necessary recordation and/or filing
by the Company.
(e) 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
4
<PAGE>
the Registration Statements, (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 Bonds 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
Bonds. The Terms Agreement shall specify (by incorporation by reference or
otherwise) the 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 Bonds 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 Bonds (the "Prospectus Supplement").
It is understood that the Underwriters will offer the Purchased Bonds for sale
as set forth in the Prospectus. The obligations of the Underwriters to purchase
the Purchased Bonds shall be several and not joint. Except as may otherwise be
set forth in the Terms Agreement, the Purchased Bonds 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
Bonds, the Company covenants and agrees with the several Underwriters that:
(a) The Company will advise the Underwriters or the Representatives
promptly of any proposed amendment or supplementation of the First
Registration Statement, the Second Registration Statement, or the
Prospectus. The Company will also advise the Underwriters or the
Representatives of the institution by the Commission of any stop order
proceedings in respect of the First Registration Statement, the Second
Registration 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.
5
<PAGE>
(b) If, at any time when a prospectus relating to the Purchased Bonds
is required to be delivered under the Act, any event occurs as a result of
which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact, or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it is necessary at any
time to amend or supplement the First Registration Statement, the Second
Registration Statement, or the Prospectus to comply with the Act, the
Company promptly will 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 Bonds, the Company
will make generally available to its securityholders an earning statement
or statements (which need not be audited) covering a period of at least 12
months beginning after the effective date of the Second Registration
Statement (as defined in Rule 158(c) under the Act), which will satisfy the
provisions of Section 11(a) of the Act and the rules and regulations
thereunder.
(d) The Company will furnish to the Underwriters or the
Representatives such copies of the Registration Statements (including one
copy of the Second Registration Statement for each Representative, or for
each Underwriter if there are no Representatives, and for the counsel for
the Underwriters, which is signed and includes all exhibits), any related
preliminary prospectus supplements and the Prospectus, including all
amendments or supplements to such documents, as may be reasonably
requested.
(e) The Company will arrange or cooperate in arrangements for the
qualification of the Purchased Bonds 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 Bonds, 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 Bonds, 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 Bonds, 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
6
<PAGE>
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 Bonds with respect to which the Terms Agreement relating to the
Purchased Bonds 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
Bonds.
(h) The Company will not offer or sell any of its First Mortgage Bonds
for a period beginning at the time of execution of the Terms Agreement
relating to the Purchased Bonds and ending on the Closing Date relating
thereto without prior consent of the Underwriters or the Representatives.
5. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The obligations of
the several Underwriters to purchase and pay for the Purchased Bonds will be
subject to the accuracy of the representations and warranties on the part of the
Company herein, to the accuracy of the statements of Company officers made
pursuant to the provisions hereof, to the performance by the Company of its
obligations hereunder, and to the following additional conditions precedent:
(a) The Underwriters or the Representatives shall have received a
letter from DELOITTE & TOUCHE LLP, dated the date of the Terms Agreement,
confirming that they are independent certified public accountants within
the meaning of the Act and the applicable published Rules and Regulations
7
<PAGE>
thereunder, and stating in effect that (i) in their opinion the financial
statements and schedules of the Company examined by them and incorporated
by reference in the Registration Statements comply as to form in all
material respects with the applicable accounting requirements of the
Securities Exchange Act of 1934 (the "1934 Act") and the published Rules
and Regulations thereunder and (ii) on the basis of a reading of the latest
available interim financial statements of the Company, inquiries of
officials of the Company responsible for financial and accounting matters,
and other specified procedures, nothing came to their attention that caused
them to believe that (A) the unaudited financial statements incorporated by
reference, if any, in the Registration Statements do not comply as to form
in all material respects with the applicable accounting requirements of the
1934 Act and the published Rules and Regulations thereunder or are not
stated on a basis substantially consistent with that of the audited
financial statements incorporated by reference in the Registration
Statements, (B) at the date of the most recent available unaudited
financial statements and at a specified date not more than five days prior
to the date of this Agreement, there was any increase in the amounts of
common stock, redeemable preferred stock, or non-redeemable preferred stock
of the Company or any increase, exceeding $10,000,000, in long-term debt of
the Company or, at the date of the most recent available unaudited
financial statements there was any decrease in net assets as compared with
amounts shown in the most recent financial statements incorporated by
reference in the Registration Statements, or (C) for the twelve-month
period ended at the date of the most recent available unaudited financial
statements there were any decreases, exceeding 3%, as compared with the
twelve-month period ended at the date of the most recent financial
statements incorporated by reference in the Registration Statements, in the
amounts of total revenues or net income, except in all cases for increases
or decreases which result from the declaration or payment of dividends, or
which the Registration Statements (including any material incorporated by
reference therein) disclose have occurred or may occur, or which are
described in such letter.
(b) No stop order suspending the effectiveness of the First
Registration Statement, the Second Registration Statement, or any part
thereof shall have been issued and no proceedings for that purpose shall
have been instituted or, to the knowledge of the Company or the
Underwriters, shall be contemplated by the Commission.
(c) Subsequent to the execution of the Terms Agreement relating to the
Purchased Bonds, (i) there shall not have occurred any change, or any
8
<PAGE>
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 Bonds, (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 Bonds.
(d) The Underwriters or the Representatives shall have received an
opinion of Snell & Wilmer L.L.P., counsel for the Company, dated the
relevant Closing Date, to the effect that:
(i) The Company is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Arizona
and has full corporate power and authority to carry on its business as
presently conducted; and the Company is duly qualified as a foreign
corporation to do business and is in good standing in the States of
New Mexico, California, Oregon, Washington, Montana, Wyoming, and
Texas, the only other jurisdictions in which it owns or leases
substantial properties or in which the conduct of its business
requires such qualification;
(ii) The Purchased Bonds have been duly authorized, executed,
authenticated, issued, and delivered, constitute valid and legally
binding obligations of the Company entitled to the benefits and
security 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 or the enforcement of the security provided by the
Indenture, (b) the necessity for compliance with the statutory
procedural requirements governing the exercise of remedies by a
secured creditor, and (c) the qualification that certain waivers,
procedures, remedies, and other provisions of the Purchased Bonds 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 or the enforcement of the security provided by the
Indenture, (b) the necessity for compliance with the statutory
procedural requirements governing the exercise of remedies by a
secured creditor, and (c) the qualification that certain waivers,
procedures,
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<PAGE>
remedies, and other provisions of the Purchased Bonds 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) Except for property specifically excepted from the lien of
the Indenture or released therefrom in accordance with the terms
thereof, the Company has good and marketable title in fee simple,
except for items described in (A), (B), and (C) below, to all of the
real property and fixtures thereon purported in the Indenture to be so
held and that are both located in the State of Arizona and described
in those title reports covering at least the Saguaro, Yucca, Cholla,
Ocotillo, West Phoenix, and Palo Verde plant sites that are listed on
an exhibit to such opinion (the "Title Documents") (in giving such
opinion, such counsel may rely solely upon the Title Documents and may
assume the accuracy thereof and of the real property descriptions
contained therein and may state that no other investigation or inquiry
has been made with respect thereto), and in giving the opinions
described below with respect to any liens, defects, and encumbrances
on such title to such personal property, such counsel may assume that
the Company has good and valid title to all of the personal property
located in the State of Arizona and described in the Indenture as
subject to the lien thereof (which property shall not include
fixtures), and such counsel may rely solely upon, and assume the
accuracy of, a search of the Uniform Commercial Code Financing
Statements filed in the records of the Arizona Secretary of State and
may assume that there are no liens or other encumbrances on personal
property (as used in the Arizona Uniform Commercial Code) of the
Company located in the State of Arizona other than liens or other
encumbrances that have been perfected by filing with the Arizona
Secretary of State under Arizona Revised Statutes ("A.R.S.") Section
47-9401.A; such title is subject only to: (A) the lien of the
Mortgage, (B) Excepted Encumbrances as defined in the Mortgage, and
(C) other liens, encumbrances, or defects, none of which, individually
or in the aggregate, in the opinion of such counsel, materially
interfere with the business or operations of the Company (in
determining whether any such other liens, encumbrances, or defects
materially interfere with the business or operations of the Company,
such counsel may rely solely upon a certificate of an officer or
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<PAGE>
engineer of the Company which shall be attached to such opinion and
such opinion may state that no other investigation or inquiry with
respect thereto has been made); the Mortgage, subject only as above
set forth in this clause, now constitutes, and the Mortgage and the
Supplemental Indentures theretofore executed, subject only as above
set forth in this clause, when the latter shall have been duly
recorded and filed, will constitute, together and as a single
instrument, a direct and valid first mortgage lien upon said property;
and all properties (other than the classes or items of property
expressly excepted in the Mortgage or expressly released from the lien
thereof) acquired by the Company after the date of the Supplemental
Indenture relating to the Purchased Bonds in each county in the State
of Arizona in which the Mortgage and the Supplemental Indenture shall
have been duly recorded and filed and, with respect to priority only,
any necessary recordation and/or filing has been accomplished
(including therein any necessary descriptions of after-acquired real
property and real property upon which after-acquired fixtures are
affixed) will, upon such acquisition, become subject to the first
mortgage lien thereof, subject, however, to Excepted Encumbrances and
to liens, if any, existing or placed thereon at the time of the
acquisition thereof by the Company and, with respect to priority only,
to liens, if any, existing prior to the time of any necessary
recordation and/or filing by the Company;
(v) The Company is the owner of the rights conferred upon it by
the leases from the Navajo Tribe relating to the site on which the
Navajo Plant is located and while such counsel is not aware of the
assertion of any claim contesting the title of the Navajo Tribe to the
lands leased, such counsel shall not be required to express any
opinion with respect to the interest of the Navajo Tribe in the lands
leased or with respect to the enforceability of such leases against
the Navajo Tribe;
(vi) 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
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<PAGE>
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;
(vii) The issuance and sale of the Purchased Bonds on the terms
and conditions set forth or contemplated herein and in the Prospectus
and the Terms Agreement relating to the Purchased Bonds and the
execution and delivery of the Supplemental Indenture relating to the
Purchased Bonds 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 Bonds 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;
(viii) The First Registration Statement and the Second
Registration Statement have become effective under the Act, and, to
the best of the knowledge of such counsel, no stop order suspending
the effectiveness of the First Registration Statement or the Second
Registration Statement has been issued and no proceedings for that
purpose have been instituted or are pending or contemplated under the
Act, and each part of the Registration Statements relating to the
Bonds, 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
12
<PAGE>
to form in all material respects with the requirements of the Act, the
Trust Indenture Act, and the published Rules and Regulations; such
counsel has no reason to believe that any part of the Registration
Statements, when such part became effective, or the Prospectus, as of
the date of the Prospectus Supplement, or as of the Closing Date, or
any amendment or supplement thereto, as of their respective effective
or issue dates, or as of the Closing Date, contained any untrue
statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading; the descriptions in the Registration
Statements and Prospectus of statutes, legal and governmental
proceedings and contracts, and other documents are accurate and fairly
present the information required to be shown; and to the actual
knowledge of those persons in the lawyer group described in such
opinion, there are no legal or governmental proceedings required to be
described in the Prospectus that are not described as required, nor
any contracts or documents of a character required to be described in
the Registration Statements or Prospectus or to be filed as exhibits
to the Registration Statements that are not described and filed as
required (it being understood that such counsel need express no
opinion as to the financial statements or other financial data
contained in the Registration Statements or the Prospectus); and
(ix) This Agreement and the Terms Agreement have been duly
authorized, executed, and delivered by the Company.
In giving such opinion, (a) Snell & Wilmer 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 Keleher & McLeod, P.A.,
referred to below, as to all matters governed by the laws of the State of New
Mexico, but the opinion of Snell & Wilmer L.L.P. shall state that, though they
are members of the Arizona Bar and do not hold themselves out as experts on the
laws of the State of New Mexico, they have made a study of the laws of such
State insofar as such laws are involved in the conclusions stated in their
opinion, other than such laws as relate to matters of title, and from such study
it is their opinion that such laws support such conclusions and that, in their
opinion, the Underwriters and they are justified to such extent in relying upon
the opinion of Keleher & McLeod, P.A.; and (b) the lawyer group referred to in
such opinion will mean those lawyers in the offices of Snell & Wilmer L.L.P. who
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<PAGE>
(i) have billed any time on the particular transaction to which such opinion
relates or (ii) have billed more than ten hours to any Company matter in the
twelve-month period preceding the date on which the list of such lawyers was
compiled for purposes of inquiry pursuant to such opinion.
(e) The Underwriters or the Representatives shall have received an
opinion of Keleher & McLeod, P.A., New Mexico counsel for the Company,
dated the Closing Date, to the effect that:
(i) The Company is duly qualified as a foreign corporation to do
business and is in good standing in the State of New Mexico and has
full corporate power and authority to engage in the State of New
Mexico in the business now conducted by it therein;
(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 Bonds 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 Bonds, 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;
(iii) Assuming that the Company has good and valid title to all
of the personal property located in the State of New Mexico and
described in the Indenture as subject to the lien thereof (which
property shall not include fixtures) ("Personal Property"), in giving
the opinions described below with respect to any liens, defects and
encumbrances on such title to such Personal Property, such counsel may
rely solely upon, and assume the accuracy of, a search of the Uniform
Commercial Code Financing Statements filed in the records of the New
Mexico Secretary of State and may assume that there are no liens or
other encumbrances on personal property (as used in the New Mexico
14
<PAGE>
Uniform Commercial Code) of the Company located in the State of New
Mexico other than liens or other encumbrances that have been perfected
by filing with the New Mexico Secretary of State under Section
55-9-401, New Mexico Statutes Annotated 1978; such title to such
Personal Property is subject only to: (A) the lien of the Mortgage,
(B) Excepted Encumbrances as defined in the Mortgage, and (C) other
liens, encumbrances, or defects, none of which, individually or in the
aggregate, in the opinion of such counsel, materially interfere with
the business or operations of the Company (in determining whether any
such other liens, encumbrances, or defects materially interfere with
the business or operations of the Company, such counsel may rely
solely upon a certificate of an officer or engineer of the Company
which shall be attached to such opinion and such opinion may state
that no other investigation or inquiry with respect thereto has been
made); the Mortgage, subject only as above set forth in this clause,
now constitutes, and the Mortgage and the Supplemental Indentures
theretofore executed, subject only as above set forth in this clause,
when the latter shall have been duly recorded and filed, will
constitute, together and as a single instrument, a direct and valid
first mortgage lien upon such Personal Property; and all properties
(other than the classes or items of property expressly excepted in the
Mortgage or expressly released from the lien thereof) acquired by the
Company after the date of the Supplemental Indenture relating to the
Purchased Bonds in each county in the State of New Mexico in which the
Mortgage and the Supplemental Indenture shall have been duly recorded
and filed and, with respect to priority only, any necessary
recordation and/or filing has been accomplished (including therein any
necessary descriptions of after-acquired real property and real
property upon which after-acquired fixtures are affixed) will, upon
such acquisition, become subject to the first mortgage lien thereof,
subject, however, to Excepted Encumbrances and to liens, if any,
existing or placed thereon at the time of the acquisition thereof by
the Company and, with respect to priority only, to liens, if any,
existing prior to the time of any necessary recordation and/or filing
by the Company; and
(iv) The Company is the owner of the rights conferred upon it by
the leases from the Navajo Tribe relating to the site on which the
Four Corners plant is located and while such counsel is not aware of
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<PAGE>
the assertion of any claim contesting the interest of the Navajo Tribe
in the lands leased, such counsel shall not be required to express any
opinion with respect to the interest of the Navajo Tribe in the lands
leased or with respect to the enforceability of such leases against
the Navajo Tribe.
In giving such opinion, Keleher & McLeod, P.A. may rely solely upon certificates
of the Company as to any factual matters upon which any such opinions are based.
(f) The Underwriters or the Representatives shall have received from
counsel for the Underwriters such opinion or opinions, dated the Closing
Date, with respect to the incorporation of the Company, the validity of the
Purchased Bonds, the Registration Statements, the Prospectus, and other
related matters as may reasonably be required, and the Company shall have
furnished to such counsel such documents as they request for the purpose of
enabling them to pass upon such matters. In rendering such opinion, such
counsel may rely as to the incorporation of the Company and all other
matters governed by the laws of the States of Arizona and New Mexico upon
the opinions of Snell & Wilmer L.L.P. and Keleher & McLeod, P.A., referred
to above.
(g) The Underwriters or the Representatives shall have received a
certificate of the President or any Vice President and a principal
financial or accounting officer of the Company, dated the Closing Date, in
which such officers, to the best of their knowledge after reasonable
investigation, shall state that the representations and warranties of the
Company in this Agreement are true and correct, that the Company has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to the Closing Date, that no stop order
suspending the effectiveness of the First Registration Statement or the
Second Registration Statement has been issued and no proceedings for that
purpose have been instituted or are contemplated by the Commission, and
that, subsequent to the date of the most recent financial statements in the
Prospectus, there has been no material adverse change in the financial
position or results of operations of the Company and its subsidiaries
except as set forth or contemplated in the Prospectus or as described in
such certificate.
(h) The Underwriters or the Representatives shall have received a
letter of DELOITTE & TOUCHE LLP, dated the Closing Date, which meets the
requirements of subsection (a) of this Section, except that the specified
date referred to in such subsection will be a date not more than five days
prior to the Closing Date for the purposes of this subsection.
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<PAGE>
The Company will furnish the Underwriters or the Representatives with such
conformed copies of such opinions, certificates, letters, and documents as may
be reasonably requested.
6. INDEMNIFICATION. (a) The Company will indemnify and hold harmless each
Underwriter and each person, if any, who controls such Underwriter within the
meaning of the Act against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter or such controlling person may become
subject, under the Act or otherwise, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any part of the Registration Statements relating to the Bonds, when such part
became effective, any preliminary prospectus or preliminary prospectus
supplement, the Prospectus, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading; and will reimburse each Underwriter and each such
controlling person for any legal or other expenses reasonably incurred by such
Underwriter or such controlling person in connection with investigating or
defending any such loss, claim, damage, liability, or action; provided, however,
that the Company will not be liable in any such case to the extent that any such
loss, claim, damage, or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
any of such documents in reliance upon and in conformity with written
information furnished to the Company by any Underwriter specifically for use
therein. This indemnity agreement will be in addition to any liability which the
Company may otherwise have.
(b) Each Underwriter will severally indemnify and hold harmless the
Company, each of its directors, each of its officers who have signed the
Registration Statements, and each person, if any, who controls the Company
within the meaning of the Act, against any losses, claims, damages, or
liabilities to which the Company or any such director, officer, or
controlling person may become subject, under the Act or otherwise, insofar
as such losses, claims, damages, or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any part of the
Registration Statements relating to the Bonds, 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
17
<PAGE>
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) or (b) above on the following
basis: (l) 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 Bonds or (ii) if the
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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 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. 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 Bonds pursuant to this Agreement and the
Terms Agreement and the principal amount of Purchased Bonds that such defaulting
Underwriter or Underwriters agreed but failed to purchase is ten percent (10%)
or less of the principal amount of Purchased Bonds to which such Terms Agreement
relates, the Underwriters or the Representatives may make arrangements
satisfactory to the Company for the purchase of such Purchased Bonds 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,
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<PAGE>
in proportion to their respective commitments hereunder and under such Terms
Agreement, to purchase the Purchased Bonds 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 Bonds 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 Bonds 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 several 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 any Underwriter or the Company or any of its officers or directors or any
controlling person, and will survive delivery of and payment for the Purchased
Bonds. 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 Bonds 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 Bonds or the Underwriters at
their addresses furnished to the Company in writing for the purpose of
communications; provided, however, that any notice to an Underwriter pursuant to
Section 6 will be mailed, delivered, or telecopied and confirmed to each such
Underwriter at its own address. All communications hereunder to the Company
shall be mailed to the Company, Attention: Treasurer, at P.O. Box 53999,
Phoenix, Arizona 85072-3999, or delivered, or telecopied and confirmed to the
Company at 400 North Fifth Street, Phoenix, Arizona 85004.
10. SUCCESSORS. This Agreement will inure to the benefit of and be binding
upon the parties hereto and such Underwriters as are named in Terms Agreements
and their respective successors and the officers and directors and controlling
20
<PAGE>
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 several 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 all the
Underwriters of Purchased Bonds 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.
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<PAGE>
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 several Underwriters in
accordance with its terms.
Very truly yours,
ARIZONA PUBLIC SERVICE COMPANY
By
-----------------------------------
Treasurer
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
By
-----------------------------------
EXHIBIT 1.2
ARIZONA PUBLIC SERVICE COMPANY
SECURITIES
UNDERWRITING AGREEMENT
----------
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 $525,000,000
in aggregate principal amount of its unsecured debentures, notes or other
evidences of indebtedness (the "Securities") registered under the registration
statements referred to in Section 2(a). The Securities will be issued under the
Indenture, dated as of January 15, 1998, between the Company and The Chase
Manhattan Bank, as Trustee, (the "Indenture"), as amended and supplemented by
one or more Supplemental Indentures between the Company and the Trustee (each, a
"Supplemental Indenture") (the Indenture as amended and supplemented by such
Supplemental Indentures being sometimes hereinafter referred to as the
"Indenture"). The Securities will be issued in one or more series, which series
may vary as to interest rates, maturities, redemption provisions, selling
prices, and other terms, with all such terms for any particular issue of the
Securities being determined at the time of sale. Particular issues of the
Securities may be sold from time to time to one or more of the firms to whom
this Agreement is addressed, and to such other purchasers as the Company shall
designate and as shall agree in writing to comply with the terms and conditions
of this Agreement, for resale in accordance with the terms of offering
determined at the time of sale. The Securities involved in any such offering are
hereinafter referred to as the "Purchased Securities," the party or parties that
agree to purchase the same are hereinafter referred to as the "Underwriters" of
such Purchased Securities, and the representative or representatives of the
Underwriters, if any, specified in a Terms Agreement referred to in Section 3
are hereinafter referred to as the "Representatives."
<PAGE>
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 $25,000,000
of the Securities, the Company's first mortgage bonds (the "Bonds"), or the
Company's senior notes and a registration statement (No. 333-____) relating
to $500,000,000 of the Securities or the Bonds (including a combined
prospectus relating to up to $525,000,000 of the Securities or Bonds) were
filed with the Securities and Exchange Commission (the "Commission") and
have become effective. Such registration statements, as each is amended at
the time of the Terms Agreement referred to in Section 3 relating to the
Purchased Securities, are hereinafter referred to as the "First
Registration Statement" and the "Second Registration Statement,"
respectively, and, together with any related 462(b) registration statement
or amendment thereto, are hereinafter referred to collectively as the
"Registration Statements" and such prospectus, as supplemented as
contemplated by Section 3 to reflect the terms of the Purchased Securities
and terms of offering thereof, including all material incorporated by
reference therein, is hereinafter referred to as the "Prospectus."
(b) Each part of the Registration Statements relating to the
Securities, when such part became effective, conformed in all material
respects to the requirements of the Securities Act of 1933 (the "Act"), the
Trust Indenture Act of 1939 (the "Trust Indenture Act") and the rules and
regulations (the "Rules and Regulations") of the Commission and did not
include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading, and on the date of each Prospectus
Supplement referred to in Section 3, the Registration Statements and the
Prospectus will conform in all material respects to the requirements of the
Act, the Trust Indenture Act and the Rules and Regulations, and at such
date none of such documents will include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading; provided, however,
that the foregoing does not apply to (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 Statements that consists of the Statement of Eligibility and
Qualification (Form T-1) under the Trust Indenture Act of 1939 of The Chase
Manhattan Bank, as Trustee under the Indenture.
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(c) An order of the Arizona Corporation Commission shall have been
granted authorizing the execution and delivery of the Supplemental
Indenture relating to the Purchased Securities and the issuance and sale of
the Purchased Securities on the terms and conditions herein and in the
Prospectus and the Terms Agreement referred to in Section 3 relating to the
Purchased Securities, and the approval or consent of no other public body
or authority is necessary to the execution and delivery of such
Supplemental Indenture or the validity of the issuance and sale of the
Purchased Securities, except as may be required under state securities or
blue sky laws.
(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 Statements, (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
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rates, maturity, redemption provisions, and sinking fund requirements, if any.
The Terms Agreement shall also specify (by incorporation by reference or
otherwise) the time and date of delivery and payment (the "Closing Date"), the
place of delivery and payment, and any details of the terms of offering that
should be reflected in the prospectus supplement relating to the offering of the
Purchased Securities (the "Prospectus Supplement"). It is understood that the
Underwriters will offer the Purchased Securities for sale as set forth in the
Prospectus. The obligations of the Underwriters to purchase the Purchased
Securities shall be several and not joint. Except as may otherwise be set forth
in the Terms Agreement, the Purchased Securities will be in definitive form and
in such denominations and registered in such names as the Underwriters may
request.
4. COVENANTS OF THE COMPANY. In connection with each offering of Purchased
Securities, the Company covenants and agrees with the several Underwriters that:
(a) The Company will advise the Underwriters or the Representatives
promptly of any proposed amendment or supplementation of the First
Registration Statement, the Second Registration Statement, or the
Prospectus. The Company will also advise the Underwriters or the
Representatives of the institution by the Commission of any stop order
proceedings in respect of the First Registration Statement, the Second
Registration Statement, or of any part thereof, and will use its best
efforts to prevent the issuance of any such stop order and to obtain as
soon as possible its lifting, if issued.
(b) If, at any time when a prospectus relating to the Purchased
Securities is required to be delivered under the Act, any event occurs as a
result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact, or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time to amend or supplement the First Registration
Statement, the Second Registration Statement, or the Prospectus to comply
with the Act, the Company promptly will 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
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least 12 months beginning after the effective date of the Second
Registration Statement (as defined in Rule 158(c) under the Act), which
will satisfy the provisions of Section 11(a) of the Act and the rules and
regulations thereunder.
(d) The Company will furnish to the Underwriters or the
Representatives such copies of the Registration Statements (including one
copy of the Second Registration Statement for each Representative, or for
each Underwriter if there are no Representatives, and for the counsel for
the Underwriters, which is signed and includes all exhibits), any related
preliminary prospectus supplements and the Prospectus, including all
amendments or supplements to such documents, as may be reasonably
requested.
(e) The Company will arrange or cooperate in arrangements for the
qualification of the Purchased Securities for sale and the determination of
their eligibility for investment under the laws of such jurisdictions as
the Underwriters or the Representatives designate and will continue such
qualifications in effect so long as required for the distribution of the
Purchased Securities, provided that the Company shall not be required to
qualify as a foreign corporation in any State, to consent to service of
process in any State other than with respect to claims arising out of the
offering or sale of the Purchased Securities, or to meet other requirements
deemed by it to be unduly burdensome.
(f) During the period of five years after the date of the Terms
Agreement relating to the Purchased Securities, the Company will furnish to
the Underwriters or the Representatives thereunder, and, upon request, each
of the other Underwriters, (i) as soon as practicable after the end of each
fiscal year, a balance sheet and statements of income and retained earnings
of the Company as at the end of and for such year, all in reasonable detail
and certified by independent public accountants, and (ii) (A) as soon as
practicable after the 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
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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 Company of its
obligations hereunder, and to the following additional conditions precedent:
(a) The Underwriters or the Representatives shall have received a
letter from DELOITTE & TOUCHE LLP, dated the date of the Terms Agreement,
confirming that they are independent certified public accountants within
the meaning of the Act and the applicable published Rules and Regulations
thereunder, and stating in effect that (i) in their opinion the financial
statements and schedules of the Company audited by them and incorporated by
reference in the Registration Statements comply as to form in all material
respects with the applicable accounting requirements of the Securities
Exchange Act of 1934 (the "1934 Act") and the published Rules and
Regulations thereunder and (ii) on the basis of a reading of the latest
available interim financial statements of the Company, inquiries of
officials of the Company responsible for financial and accounting matters,
and other specified procedures, nothing came to their attention that caused
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<PAGE>
them to believe that (A) the unaudited financial statements incorporated by
reference, if any, in the Registration Statements do not comply as to form
in all material respects with the applicable accounting requirements of the
1934 Act and the published Rules and Regulations thereunder or are not
stated on a basis substantially consistent with that of the audited
financial statements incorporated by reference in the Registration
Statements, (B) at the date of the most recent available unaudited
financial statements and at a specified date not more than five days prior
to the date of this Agreement, there was any increase in the amounts of
common stock, redeemable preferred stock, or non-redeemable preferred stock
of the Company or any increase, exceeding $10,000,000, in long-term debt of
the Company or, at the date of the most recent available unaudited
financial statements there was any decrease in net assets as compared with
amounts shown in the most recent financial statements incorporated by
reference in the Registration Statements, or (C) for the twelve-month
period ended at the date of the most recent available unaudited financial
statements there were any decreases, exceeding 3%, as compared with the
twelve-month period ended at the date of the most recent financial
statements incorporated by reference in the Registration Statements, in the
amounts of total revenues or net income, except in all cases for increases
or decreases which result from the declaration or payment of dividends, or
which the Registration Statements (including any material incorporated by
reference therein) disclose have occurred or may occur, or which are
described in such letter.
(b) No stop order suspending the effectiveness of the First
Registration Statement, the Second Registration Statement, or any part
thereof shall have been issued and no proceedings for that purpose shall
have been instituted or, to the knowledge of the Company or the
Underwriters, shall be contemplated by the Commission.
(c) Subsequent to the execution of the Terms Agreement relating to the
Purchased Securities, (i) there shall not have occurred any change, or any
development involving a prospective change, in or affecting particularly
the business or properties of the Company or its subsidiaries which, in the
judgment of a majority in interest of the Underwriters under such Terms
Agreement, including any Representatives, materially impairs the investment
quality of the Purchased Securities, (ii) there shall not have occurred a
suspension or material limitation in trading in securities generally on the
New York Stock Exchange, (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
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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 Snell & Wilmer L.L.P., counsel for the Company, dated the
relevant Closing Date, to the effect that:
(i) The Company is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Arizona
and has full corporate power and authority to carry on its business as
presently conducted; and the Company is duly qualified as a foreign
corporation to do business and is in good standing in the States of
New Mexico, California, Oregon, Washington, Montana, Wyoming, and
Texas, the only other jurisdictions in which it owns or leases
substantial properties or in which the conduct of its business
requires such qualification;
(ii) The Purchased Securities have been duly authorized,
executed, authenticated, issued, and delivered, constitute valid and
legally binding obligations of the Company entitled to the benefits
provided by the Indenture (except as the same may be limited by (a)
general principles of equity or by bankruptcy, insolvency,
reorganization, arrangement, moratorium, or other laws or equitable
principles relating to or affecting the enforcement of creditors'
rights generally and (b) the qualification that certain waivers,
procedures, remedies, and other provisions of the Purchased Securities
and the Indenture may be unenforceable under or limited by the law of
the State of Arizona; however, such law does not in such counsel's
opinion substantially prevent the practical realization of the
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<PAGE>
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,
arrange-ment, moratorium, or other laws or equitable principles
relating to or affecting the enforcement of creditors' rights
generally and (b) the qualification that certain waivers, procedures,
remedies, and other provisions of the Purchased Securities and the
Indenture may be unenforceable under or limited by the law of the
State of Arizona; however, such law does not in such counsel's opinion
substantially prevent the practical realization of the benefits
intended by such documents;
(iv) With certain exceptions, a public service corporation is
required to obtain certificates of convenience and necessity from the
Arizona Corporation Commission under A.R.S. Section 40-281.A for
construction of its lines, plant, services, or systems, or any
extensions thereof, within the State of Arizona, and to obtain
franchises or similar consents or permits from counties and
incorporated municipalities under A.R.S. Section 40-283.A for the
construction, operation, and maintenance of transmission lines within
the State of Arizona; to the best of such counsel's knowledge after
due inquiry, the Company holds such valid franchises, certificates of
convenience and necessity, consents, and permits pursuant to such
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
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<PAGE>
and exceptions may exist which, individually and in the aggregate, are
not deemed material, and (E) such counsel need not be required to
express any opinion regarding the geographical scope of any franchise,
certificate, license, or permit that is not specific as to its
geographical scope;
(v) The issuance and sale of the Purchased Securities on the
terms and conditions set forth or contemplated herein and in the
Prospectus and the Terms Agreement relating to the Purchased
Securities and the execution and delivery of the Supplemental
Indenture relating to the Purchased Securities have been duly
authorized by the Arizona Corporation Commission, said Commission had
jurisdiction in the premises, and no further approval, authorization,
or consent of any other public board or body is necessary to the
validity of such issuance and sale of such Purchased Securities or the
execution and delivery of such Supplemental Indenture, except as may
be required under state securities or blue sky laws, as to which laws
such counsel shall not be required to express an opinion;
(vi) The First Registration Statement and the Second Registration
Statement have become effective under the Act, and, to the best of the
knowledge of such counsel, no stop order suspending the effectiveness
of the First Registration Statement or the Second Registration
Statement has been issued and no proceedings for that purpose have
been instituted or are pending or contemplated under the Act, and each
part of the Registration Statements relating to the Securities, when
such part became effective, and the Prospectus, as of the date of the
Prospectus Supplement, and each amendment or supplement thereto, as of
their respective effective or issue dates, complied as to form in all
material respects with the requirements of the Act, the Trust
Indenture Act, and the published Rules and Regulations; such counsel
has no reason to believe that any part of the Registration Statements,
when such part became effective, or the Prospectus, as of the date of
the Prospectus Supplement, or as of the Closing Date, or any amendment
or supplement thereto, as of their respective effective or issue
dates, or as of the Closing Date, contained any untrue statement of a
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material fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading; the descriptions in the Registration Statements and
Prospectus of statutes, legal and governmental proceedings and
contracts, and other documents are accurate and fairly present the
information required to be shown; and to the actual knowledge of those
persons in the lawyer group described in such opinion, there are no
legal or governmental proceedings required to be described in the
Prospectus that are not described as required, nor any contracts or
documents of a character required to be described in the Registration
Statements or Prospectus or to be filed as exhibits to the
Registration Statements that are not described and filed as required
(it being understood that such counsel need express no opinion as to
the financial statements or other financial data contained in the
Registration Statements or the Prospectus); and
(vii) This Agreement and the Terms Agreement have been duly
authorized, executed, and delivered by the Company.
In giving such opinion, (a) Snell & Wilmer 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 Keleher & McLeod, P.A.,
referred to below, as to all matters governed by the laws of the State of New
Mexico, but the opinion of Snell & Wilmer L.L.P. shall state that, though they
are members of the Arizona Bar and do not hold themselves out as experts on the
laws of the State of New Mexico, they have made a study of the laws of such
State insofar as such laws are involved in the conclusions stated in their
opinion, and from such study it is their opinion that such laws support such
conclusions and that, in their opinion, the Underwriters and they are justified
to such extent in relying upon the opinion of Keleher & McLeod, P.A.; and (b)
the lawyer group referred to in such opinion will mean those lawyers in the
offices of Snell & Wilmer L.L.P. who (i) have billed any time on the particular
transaction to which such opinion relates or (ii) have billed more than ten
hours to any Company matter in the twelve-month period preceding the date on
which the list of such lawyers was compiled for purposes of inquiry pursuant to
such opinion.
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(e) The Underwriters or the Representatives shall have received an
opinion of Keleher & McLeod, P.A., New Mexico counsel for the Company,
dated the Closing Date, to the effect that:
(i) The Company is duly qualified as a foreign corporation to do
business and is in good standing in the State of New Mexico and has
full corporate power and authority to engage in the State of New
Mexico in the business now conducted by it therein; and
(ii) The activities of the Company in the State of New Mexico to
date do not constitute it a "public utility" as that term is defined
in the relevant laws of the State of New Mexico, and accordingly, no
public utility franchises or certificates of convenience and necessity
are necessary under New Mexico law with respect to the maintenance and
operation of the Company's property and business as now conducted in
the State of New Mexico and no approval, authorization, or consent of
the New Mexico Public Regulation Commission or any other public board
or body of the State of New Mexico is required for the issuance and
sale of the Purchased Securities on the terms and conditions herein
and in the Prospectus set forth or contemplated or for the execution
of the Supplemental Indenture relating to the Purchased Securities,
except as may be required under New Mexico state securities or blue
sky laws, as to which laws such counsel shall not be required to
express an opinion.
In giving such opinion, Keleher & McLeod, P.A. may rely solely upon
certificates of the Company as to any factual matters upon which any such
opinions are based.
(f) The Underwriters or the Representatives shall have received from
counsel for the Underwriters such opinion or opinions, dated the Closing
Date, with respect to the incorporation of the Company, the validity of the
Purchased Securities, the Registration Statements, the Prospectus, and
other related matters as may reasonably be required, and the Company shall
have furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters. In rendering such
opinion, such counsel may rely as to the incorporation of the Company and
all other matters governed by the laws of the States of Arizona and New
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Mexico upon the opinions of Snell & Wilmer L.L.P. and Keleher & McLeod,
P.A., referred to above.
(g) The Underwriters or the Representatives shall have received a
certificate of the President or any Vice President and a principal
financial or accounting officer of the Company, dated the Closing Date, in
which such officers, to the best of their knowledge after reasonable
investigation, shall state that the representations and warranties of the
Company in this Agreement are true and correct, that the Company has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to the Closing Date, that no stop order
suspending the effectiveness of the First Registration Statement or the
Second Registration Statement has been issued and no proceedings for that
purpose have been instituted or are contemplated by the Commission, and
that, subsequent to the date of the most recent financial statements in the
Prospectus, there has been no material adverse change in the financial
position or results of operations of the Company and its subsidiaries
except as set forth or contemplated in the Prospectus or as described in
such certificate.
(h) The Underwriters or the Representatives shall have received a
letter of DELOITTE & TOUCHE LLP, dated the Closing Date, which meets the
requirements of subsection (a) of this Section, except that the specified
date referred to in such subsection will be a date not more than five days
prior to the Closing Date for the purposes of this subsection.
The Company will furnish the Underwriters or the Representatives with such
conformed copies of such opinions, certificates, letters, and documents as may
be reasonably requested.
6. Indemnification.
(a) The Company will indemnify and hold harmless each Underwriter and
each person, if any, who controls such Underwriter within the meaning of
the Act against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter or such controlling person may become
subject, under the Act or otherwise, insofar as such losses, claims,
damages, or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any material
fact contained in any part of the Registration Statements relating to the
Securities, when such part became effective, any preliminary prospectus or
preliminary prospectus supplement, the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or
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alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading; and
will reimburse each Underwriter and each such controlling person for any
legal or other expenses reasonably incurred by such Underwriter or such
controlling person in connection with investigating or defending any such
loss, claim, damage, liability, or action; provided, however, that the
Company will not be liable in any such case to the extent that any such
loss, claim, damage, or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made
in any of such documents in reliance upon and in conformity with written
information furnished to the Company by any Underwriter specifically for
use therein. This indemnity agreement will be in addition to any liability
which the Company may otherwise have.
(b) Each Underwriter will severally indemnify and hold harmless the
Company, each of its directors, each of its officers who have signed the
Registration Statements, and each person, if any, who controls the Company
within the meaning of the Act, against any losses, claims, damages, or
liabilities to which the Company or any such director, officer, or
controlling person may become subject, under the Act or otherwise, insofar
as such losses, claims, damages, or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any part of the
Registration Statements relating to the Securities, when such part became
effective, any preliminary prospectus or preliminary prospectus supplement,
the Prospectus, or any amendment or supplement thereto, or arise out of or
are based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity
with written information furnished to the Company by such Underwriter
specifically for use therein; and will reimburse any legal or other
expenses reasonably incurred by the Company or any such director, officer,
or controlling person in connection with investigating or defending any
such loss, claim, 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
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under this Section, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not
relieve it from any liability that it may have to any indemnified party
otherwise than under this Section. In case any such action is brought
against any indemnified party, and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel satisfactory to such indemnified party (who shall not, without
the consent of the indemnified party, be counsel to the indemnifying
party), and after notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof, the indemnifying
party will not be liable to such indemnified party under this Section for
any legal or other expenses subsequently incurred by such indemnified party
in connection with the defense thereof other than reasonable costs of
investigation. An indemnifying party shall not be liable for any settlement
of a claim or action effected without its written consent, which shall not
be unreasonably withheld.
(d) If the indemnification provided for in this Section is unavailable
or insufficient to hold harmless an indemnified party for any loss, claim,
damage, liability, or action described in subsection (a) or (b) above, then
each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above on the following
basis: (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
15
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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 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
16
<PAGE>
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 P.O. Box 53999,
Phoenix, Arizona 85O72-3999, or delivered, or telecopied and confirmed to the
Company at 400 North Fifth Street, Phoenix, Arizona 85004.
10. SUCCESSORS. This Agreement will inure to the benefit of and be binding
upon the parties hereto and the Underwriter or Underwriters as are named in any
Terms Agreement and their respective successors and the officers and directors
and controlling persons referred to in Section 6, and no other person will have
any right or obligation hereunder.
11. REPRESENTATION OF UNDERWRITERS. The Representatives, if any, may act
for the Underwriters in connection with any offering to which a Terms Agreement
may relate, and any action under this Agreement or such Terms Agreement taken by
the Representatives jointly or the Representative first named in such Terms
17
<PAGE>
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.
18
<PAGE>
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
----------------------------------------
Treasurer
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
By
-----------------------------------
19
January 7, 2000
Arizona Public Service Company
400 North Fifth Street
Phoenix, Arizona 85004
Ladies and Gentlemen:
Reference is made to (a) your proposed offering of up to $ 525,000,000 of
your securities (the "Securities"), as contemplated by the combined prospectus
contained in the Registration Statement (the "Registration Statement") on Form
S-3 to be filed by you on January 7, 2000, with the Securities and Exchange
Commission under the Securities Act of 1933, as amended (the "Act"), which
Securities include (i) $ 500,000,000 of New Bonds, Debt Securities (as such
terms are defined in the Registration Statement), or any combination thereof, to
be registered pursuant to the Registration Statement, and (ii) $ 25,000,000 of
New Bonds, Debt Securities, or any combination thereof, previously registered
under Registration No. 333-58445; and (b) any registration statement registering
additional Securities pursuant to Rule 462(b) of the Act that relates to the
Registration Statement (the "Rule 462(b) Registration Statement").
We have examined originals or copies, certified or otherwise identified to
our satisfaction, of such corporate records, agreements, and other instruments,
certificates, orders, opinions, correspondence with public officials,
certificates provided by your officers and representatives, and other documents
as we have deemed necessary or advisable for the purposes of rendering the
opinions set forth herein.
Based on the foregoing, it is our opinion that after (i) the Registration
Statement, and the Rule 462(b) Registration Statement, if applicable, shall have
become effective, (ii) all required regulatory approvals have been obtained, and
(iii) you shall have entered into one or more underwriting or distribution
agreements with respect to the Securities then to be offered and the initial
public offering price for each of such Securities and the discounts therefrom
and commission therefor shall have been determined in accordance with such
underwriting or distribution agreements, pursuant to the authorization of your
Board of Directors and the applicable order of the Arizona Corporation
Commission, then, when (i) the Securities have been issued, sold, executed,
authenticated, and delivered, and (ii) the purchase price therefor has been paid
to you as contemplated in the Registration Statement and the Rule 462(b)
Registration Statement, if applicable (including the Exhibits thereto), and in
any relevant amendment thereto or in any Rule 424 supplement to the prospectus
contained in the Registration Statement; the Securities will be validly issued
and will constitute legal, valid, and binding obligations of you 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, or by equitable principles that limit the right to specific
performance or otherwise limit remedial action or the enforcement of any
security provided for the Securities, (b) the necessity for compliance with the
statutory procedural requirements governing the exercise of remedies by a
secured creditor, and (c) the qualification that certain waivers, procedures,
<PAGE>
remedies, and other provisions of the Securities may be unenforceable under or
limited by the law of the State of Arizona; however, such law does not in our
opinion substantially prevent the practical realization of the benefits thereof.
In giving the above opinion, we have assumed that the law of the jurisdiction or
jurisdictions that govern the Securities is substantially the same as the law of
the State of Arizona.
Consent is hereby given to the use of this opinion as part of the
Registration Statement and the Rule 462(b) Registration Statement, if
applicable, and to the use of our name wherever it appears in said Registration
Statement, the related prospectus, and the Rule 462(b) Registration Statement,
if applicable.
Very truly yours,
Snell & Wilmer L.L.P.
Snell & Wilmer L.L.P.
EXHIBIT 12.1
ARIZONA PUBLIC SERVICE COMPANY
COMPUTATION OF EARNINGS TO FIXED CHARGES
(THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
Nine Months
Ended Twelve Months Ended
-------------- --------------------------------------------------------
September 30 December 31
-------------- --------------------------------------------------------
1999 1998 1997 1996 1995 1994
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Earnings:
Net Income...................... 92,959(a) $255,247 $251,493 $243,471 $239,570 $243,486
Income taxes (1)................ 48,065 159,456 153,324 132,961 141,267 177,244
Fixed Charges................... 138,224 188,568 195,055 203,855 214,768 213,581
--------- -------- -------- -------- -------- --------
Total......................... 279,248 $603,271 $599,872 $580,287 $595,605 $634,311
========= ======== ======== ======== ======== ========
Fixed Charges:
Interest expense................ 105,612 $144,695 $150,335 $158,287 $168,175 $166,045
Amortization of debt discount,
premium and expense........... 5,604 7,580 7,791 8,176 8,622 8,854
Estimated interest portion of
annual rents (2).............. 27,008 36,293 36,929 37,392 37,971 38,682
--------- -------- -------- -------- -------- --------
Total......................... 138,224 $188,568 $195,055 $203,855 $214,768 $213,581
========= ======== ======== ======== ======== ========
Ratio of Earnings to Fixed Charges
(rounded down).................. 2.02 3.19 3.07 2.84 2.77 2.96
========= ======== ======== ======== ======== ========
(1) Income Taxes:
Charged to operations........... 166,945 $192,207 $184,737 $178,513 $178,865 $168,202
Income Tax Benefit-
Disallowance(b)............... (94,115) N/A N/A N/A N/A N/A
Charged (credited) to other
accounts...................... (24,765) (32,751) (31,413) (45,552) (37,598) 9,042
--------- -------- -------- -------- -------- --------
Total......................... 48,065 $159,456 $153,324 $132,961 $141,267 $177,244
========= ======== ======== ======== ======== ========
(2) Estimated interest portion of
Unit 2 lease payments included
in estimated interest portion
of annual rentals............... $ 25,384 $ 34,315 $ 34,720 $ 35,083 $ 35,422 $ 35,710
========= ======== ======== ======== ======== ========
</TABLE>
- ----------
(a) Net Income for nine months ended September 1999 reflects an
after-tax extraordinary charge of $140 million for a regulatory
disallowance.
(b) Income taxes reported on the Company's income statement are shown excluding
the effects of the regulatory disallowance.
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Arizona Public Service Company on Form S-3 of our report dated March 4, 1999,
appearing in the Annual Report on Form 10-K of Arizona Public Service Company
for the year ended December 31, 1998 and to the reference to us under the
heading "Experts" in the Prospectus, which is part of this Registration
Statement.
DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
Phoenix, Arizona
January 6, 2000
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) [ ]
----------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
----------
ARIZONA PUBLIC SERVICE COMPANY
(Exact name of obligor as specified in its charter)
Arizona 86-0011170
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
400 North Fifth Street
Phoenix, Arizona 85004
(Address of principal executive offices) (Zip code)
----------
First Mortgage Bonds
(Title of the indenture securities)
================================================================================
<PAGE>
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT
IS SUBJECT.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the 2 Rector Street, New York, N.Y. 10006,
State of New York and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045
Federal Deposit Insurance
Corporation Washington, D.C. 20429
New York Clearing House
Association New York, New York 10005
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE
INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE
7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17 C.F.R.
229.10(D).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
-2-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 21st day of December, 1999.
THE BANK OF NEW YORK
By: MICHAEL CULHANE
--------------------------------
Name: MICHAEL CULHANE
Title: VICE PRESIDENT
<PAGE>
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business September 30,
1999, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
In Thousands
------------
ASSETS
Cash and balances due from depository
institutions:
Noninterest-bearing balances and currency
and coin ................................................ $ 6,394,412
Interest-bearing balances ................................. 3,966,749
Securities:
Held-to-maturity securities ............................... 805,227
Available-for-sale securities ............................. 4,152,260
Federal funds sold and Securities purchased under
agreements to resell ...................................... 1,449,439
Loans and lease financing receivables:
Loans and leases, net of unearned income ........37,900,739
LESS: Allowance for loan and lease losses ....... 572,761
LESS: Allocated transfer risk reserve ........... 11,754
Loans and leases, net of unearned income,
allowance, and reserve .................................. 37,316,224
Trading Assets ............................................... 1,646,634
Premises and fixed assets (including
capitalized leases) ........................................ 678,439
Other real estate owned ...................................... 11,571
Investments in unconsolidated subsidiaries and
associated companies ...................................... 183,038
Customers' liability to this bank on acceptances
outstanding ............................................... 349,282
Intangible assets ............................................ 790,558
Other assets ................................................. 2,498,658
------------
Total assets ................................................. $ 60,242,491
============
<PAGE>
LIABILITIES
Deposits:
In domestic offices ....................................... $ 26,030,231
Noninterest-bearing .............................11,348,986
Interest-bearing ................................14,681,245
In foreign offices, Edge and Agreement
subsidiaries, and IBFs .................................. 18,530,950
Noninterest-bearing ............................. 156,624
Interest-bearing ................................18,374,326
Federal funds purchased and Securities sold under
agreements to repurchase .................................. 2,094,678
Demand notes issued to the U.S.Treasury ...................... 232,459
Trading liabilities .......................................... 2,081,462
Other borrowed money:
With remaining maturity of one year or less ............... 863,201
With remaining maturity of more than one year
through three years ..................................... 449
With remaining maturity of more than three years .......... 31,080
Bank's liability on acceptances executed and
outstanding ................................................ 351,286
Subordinated notes and debentures ............................ 1,308,000
Other liabilities ............................................ 3,055,031
------------
Total liabilities ............................................ 54,578,827
============
EQUITY CAPITAL
Common stock ................................................. 1,135,284
Surplus ...................................................... 815,314
Undivided profits and capital reserves ....................... 3,759,164
Net unrealized holding gains (losses) on
available-for-sale securities ............................. (15,440)
Cumulative foreign currency translation adjustments .......... (30,658)
------------
Total equity capital ......................................... 5,663,664
------------
Total liabilities and equity capital ......................... $ 60,242,491
============
<PAGE>
I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Thomas J. Mastro
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
Thomas A. Reyni ]
Alan R. Griffith ] Directors
Gerald L. Hassell ]
- --------------------------------------------------------------------------------
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) [ ]
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip Code)
ARIZONA PUBLIC SERVICE COMPANY
(Exact name of obligor as specified in its charter)
Arizona 86-0011170
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
400 North Fifth Street 85004
Phoenix, Arizona (Zip Code)
(Address of principal executive offices)
----------
Debt Securities
(Title of the indenture securities)
================================================================================
<PAGE>
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT
IS SUBJECT.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the 2 Rector Street, New York, N.Y. 10006,
State of New York and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045
Federal Deposit Insurance
Corporation Washington, D.C. 20429
New York Clearing House
Association New York, New York 10005
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE
INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE
7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17 C.F.R.
229.10(D).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
-2-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 21st day of December, 1999.
THE BANK OF NEW YORK
By: MICHAEL CULHANE
--------------------------------
Name: MICHAEL CULHANE
Title: VICE PRESIDENT
<PAGE>
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business September 30,
1999, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
In Thousands
------------
ASSETS
Cash and balances due from depository
institutions:
Noninterest-bearing balances and currency
and coin ................................................ $ 6,394,412
Interest-bearing balances ................................. 3,966,749
Securities:
Held-to-maturity securities ............................... 805,227
Available-for-sale securities ............................. 4,152,260
Federal funds sold and Securities purchased under
agreements to resell ...................................... 1,449,439
Loans and lease financing receivables:
Loans and leases, net of unearned income ........37,900,739
LESS: Allowance for loan and lease losses ....... 572,761
LESS: Allocated transfer risk reserve ........... 11,754
Loans and leases, net of unearned income,
allowance, and reserve .................................. 37,316,224
Trading Assets ............................................... 1,646,634
Premises and fixed assets (including
capitalized leases) ........................................ 678,439
Other real estate owned ...................................... 11,571
Investments in unconsolidated subsidiaries and
associated companies ...................................... 183,038
Customers' liability to this bank on acceptances
outstanding ............................................... 349,282
Intangible assets ............................................ 790,558
Other assets ................................................. 2,498,658
------------
Total assets ................................................. $ 60,242,491
============
<PAGE>
LIABILITIES
Deposits:
In domestic offices ....................................... $ 26,030,231
Noninterest-bearing .............................11,348,986
Interest-bearing ................................14,681,245
In foreign offices, Edge and Agreement
subsidiaries, and IBFs .................................. 18,530,950
Noninterest-bearing ............................. 156,624
Interest-bearing ................................18,374,326
Federal funds purchased and Securities sold under
agreements to repurchase .................................. 2,094,678
Demand notes issued to the U.S.Treasury ...................... 232,459
Trading liabilities .......................................... 2,081,462
Other borrowed money:
With remaining maturity of one year or less ............... 863,201
With remaining maturity of more than one year
through three years ..................................... 449
With remaining maturity of more than three years .......... 31,080
Bank's liability on acceptances executed and
outstanding ................................................ 351,286
Subordinated notes and debentures ............................ 1,308,000
Other liabilities ............................................ 3,055,031
------------
Total liabilities ............................................ 54,578,827
============
EQUITY CAPITAL
Common stock ................................................. 1,135,284
Surplus ...................................................... 815,314
Undivided profits and capital reserves ....................... 3,759,164
Net unrealized holding gains (losses) on
available-for-sale securities ............................. (15,440)
Cumulative foreign currency translation adjustments .......... (30,658)
------------
Total equity capital ......................................... 5,663,664
------------
Total liabilities and equity capital ......................... $ 60,242,491
============
<PAGE>
I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Thomas J. Mastro
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
Thomas A. Reyni ]
Alan R. Griffith ] Directors
Gerald L. Hassell ]
- --------------------------------------------------------------------------------
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
----------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
----------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
----------
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
----------
ARIZONA PUBLIC SERVICE COMPANY
(Exact name of obligor as specified in its charter)
ARIZONA 86-0011170
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
400 NORTH FIFTH STREET
PHOENIX, ARIZONA 85004 85005
(Address of principal executive offices) (Zip Code)
----------
DEBT SECURITIES
(Title of the indenture securities)
----------
<PAGE>
GENERAL
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which it
is subject.
New York State Banking Department, State House, Albany, New York 12110.
Board of Governors of the Federal Reserve System, Washington, D.C., 20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty Street, New
York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
- 2 -
<PAGE>
ITEM 16. LIST OF EXHIBITS
List below all exhibits filed as a part of this Statement of Eligibility.
1. A copy of the Articles of Association of the Trustee as now in effect,
including the Organization Certificate and the Certificates of Amendment dated
February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being contained
in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1
filed in connection with Registration Statement No. 333-76439, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act (see
Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 20TH day of DECEMBER, 1999.
THE CHASE MANHATTAN BANK
By T. J. Foley
-------------------------
T.J. Foley
Vice President
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<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business September 30,
1999, in accordance with a call made by the Federal
Reserve Bank of this District pursuant to the
provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS In Millions
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin ......... $ 13,497
Interest-bearing balances .................................. 6,388
Securities:
Held to maturity securities ..................................... 798
Available for sale securities ................................... 48,655
Federal funds sold and securities purchased under
agreements to resell ....................................... 30,373
Loans and lease financing receivables:
Loans and leases, net of unearned income ......... $ 132,392
Less: Allowance for loan and lease losses ........ 2,463
Less: Allocated transfer risk reserve ............ 0
---------
Loans and leases, net of unearned income,
allowance, and reserve ..................................... 129,929
Trading Assets .................................................. 47,413
Premises and fixed assets (including capitalized leases) ........ 3,287
Other real estate owned ......................................... 26
Investments in unconsolidated subsidiaries and
associated companies ....................................... 185
Customers' liability to this bank on acceptances
outstanding ................................................ 716
Intangible assets ............................................... 2,693
Other assets .................................................... 15,430
---------
TOTAL ASSETS .................................................... $ 299,390
=========
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<PAGE>
LIABILITIES
Deposits
In domestic offices ........................................ $ 100,324
Noninterest-bearing .............................. $ 41,601
Interest-bearing ................................. 58,723
---------
In foreign offices, Edge and Agreement
subsidiaries and IBF's ..................................... 88,064
Noninterest-bearing ................................... $ 6,363
Interest-bearing ................................. 81,701
Federal funds purchased and securities sold under
agreements to repurchase ...................................... 35,773
Demand notes issued to the U.S. Treasury ........................ 892
Trading liabilities ............................................. 33,565
Other borrowed money (includes mortgage indebtedness
and obligations under capitalized leases):
With a remaining maturity of one year or less .............. 4,434
With a remaining maturity of more than one year
through three years ................................. 14
With a remaining maturity of more than three years ....... 97
Bank's liability on acceptances executed and outstanding ........ 716
Subordinated notes and debentures ............................... 5,429
Other liabilities ............................................... 11,457
TOTAL LIABILITIES ............................................... 280,765
---------
EQUITY CAPITAL
Perpetual preferred stock and related surplus ................... 0
Common stock .................................................... 1,211
Surplus (exclude all surplus related to preferred stock) ........ 11,016
Undivided profits and capital reserves .......................... 7,333
Net unrealized holding gains (losses)
on available-for-sale securities ................................ (951)
Accumulated net gains (losses) on cash flow hedges .............. 0
Cumulative foreign currency translation adjustments ............. 16
TOTAL EQUITY CAPITAL ............................................ 18,625
---------
TOTAL LIABILITIES AND EQUITY CAPITAL ............................ $ 299,390
=========
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do
hereby declare that this Report of Condition has been prepared in conformance
with the instructions issued by the appropriate Federal regulatory authority and
is true to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
WILLIAM B. HARRISON, JR. ) DIRECTORS
SUSAN V. BERRESFORD )
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