Number B-1 $50,000,000
APS
ARIZONA PUBLIC SERVICE COMPANY
FIRST MORTGAGE BOND,
SENIOR NOTE SERIES B
Arizona Public Service Company, a corporation of the State of Arizona
(hereinafter called the Company), for value received, hereby promises to pay to
THE BANK OF NEW YORK, as Trustee, or registered assigns, the principal sum of
Fifty Million Dollars on April 1, 1999, and to pay interest thereon from April
10, 1997 or from the most recent Interest Payment Date (as defined below) with
respect to which interest has been paid or duly provided for, semianually, on
April 1 and October 1 in each year (each an "Interest Payment Date"), commencing
October 1, 1997, at the rate of 6.72% per annum (calculated on the basis of a
360-day year of twelve 30-day months), until the principal hereof is paid or
made available for payment to the holder of record of this bond on the March 15
or September 15, as the case may be, next preceding such Interest Payment Date,
unless such day is a legal holiday or a day on which banking institutions in The
City of New York are authorized to remain closed, in which case on the next
preceding day which shall not be a legal holiday or day on which such
institutions are authorized by law to remain closed. Payment of the principal of
(and premium, if any) and interest on this bond will be made at the office or
agency of the Company maintained for that purpose in the Borough of Manhattan,
The City of New York, New York, in such coin or currency of the United States of
America as, at the time of payment is legal tender for payment of public and
private debts, provided, however, that payment of interest may be made at the
option of the Company by check mailed to the address of the person entitled
thereto as such address shall appear on the registration books of the Company.
This bond shall not become obligatory until The Bank of New York, the
Trustee under the Mortgage, or its successor thereunder, shall have signed the
form of authentication certificate endorsed hereon.
IN WITNESS WHEREOF, Arizona Public Service Company has caused this bond
to be signed in its corporate name by its President or one of its Vice
Presidents and its corporate seal to be impressed or imprinted hereon and
attested by its Secretary or one of its Assistant Secretaries.
DATED: April 10, 1997
ARIZONA PUBLIC SERVICE COMPANY
George A. Schreiber, Jr.
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Executive Vice President and
Chief Financial Officer
ATTEST:
Nancy C. Loftin
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Vice President, Chief Legal Counsel
and Secretary
TRUSTEE'S AUTHENTICATION CERTIFICATE
This bond is one of the bonds, of the series herein designated,
described or provided for in the within mentioned Mortgage.
THE BANK OF NEW YORK, AS TRUSTEE
By Walter N. Gitlin
------------------------------
Authorized Signatory
ARIZONA PUBLIC SERVICE COMPANY
First Mortgage Bond, Senior Note Series B
This bond is one of an issue of bonds of the Company issuable in series
and is one of a series known as its First Mortgage Bonds, Senior Note Series B,
all bonds of all series issued and to be issued under and equally secured
(except insofar as any sinking or other fund, established in accordance with the
provisions of the Mortgage hereinafter mentioned, may afford additional security
for the bonds of any particular series) by a Mortgage and Deed of Trust (herein,
together with any indenture supplemental thereto, including the supplemental
indentures dated as of December 1, 1947, April 1, 1949, February 1, 1950,
December 1, 1950, February 1, 1953, November 1, 1953, March 1, 1954, October 1,
1957, March 1, 1959, November 1, 1961, June 1, 1962, December 1, 1962, September
1, 1963, September 1, 1967, April 1, 1970, March 15, 1972, April 1, 1974,
February 15, 1975, June 1, 1975, November 15, 1975, April 15, 1977, January 15,
1978, March 1, 1979, October 15, 1979, May 15, 1980, February 2, 1982, April 15,
1982, July 1, 1983, October 15, 1983, June 15, 1984, January 15, 1985, May 1,
1985, June 1, 1985, November 1, 1985, January 15, 1986, March 1, 1986, May 1,
1986, February 1, 1987, June 1, 1987, November 15, 1987, April 1, 1989, February
15, 1990, May 15, 1990, April 15, 1991, December 15, 1991, January 15, 1992,
March 1, 1992, June 15, 1992, February 1, 1993, August 1, 1993, August 1, 1993,
September 15, 1993, March 1, 1994, November 15, 1996, and April 1, 1997, called
the Mortgage) dated as of July 1, 1946, executed by the Company to The Bank of
New York, as Trustee. Reference is made to the Mortgage for a description of the
property mortgaged and pledged, the nature and extent of the security, the
rights of the holders of the bonds and of the Trustee in respect thereof, the
duties and immunities of the Trustee, the terms and conditions upon which the
bonds are and are to be secured, and the circumstances under which additional
bonds may be issued. With the consent of the Company and to the extent permitted
by and as provided in the Mortgage, the rights and obligations of the Company
and/or the rights of the holders of the bonds and/or the terms and provisions of
the Mortgage may be modified or altered by affirmative vote of the holders of at
least seventy per centum (70%) in principal amount of the bonds then outstanding
under the Mortgage and, if the rights of the holders of one or more, but less
than all, series of bonds then outstanding are to be affected, then also by
affirmative vote of the holders of at least seventy per centum (70%) in
principal amount of the bonds then outstanding of each series of bonds so to be
affected (excluding in any case bonds disqualified from voting by reason of the
Company's interest therein as provided in the Mortgage); provided that, without
the consent of the holder hereof, no such modification or alteration shall,
among other things, impair or affect the right of the holder to receive payment
of the principal of and interest on this bond and other amounts, if any, payable
upon the redemption hereof on or after the respective due dates expressed
herein, or permit the creation of any lien equal or prior to the lien of the
Mortgage or deprive the holder of the benefit of a lien on the mortgaged and
pledged property.
The Company has issued Fifty Million Dollars ($50,000,000) in aggregate
principal amount of its 6.72% Senior Notes Due 1999 (the "Senior Notes Due
1999") pursuant to the provisions of the Indenture dated as of November 15, 1996
(the "Senior Note Indenture"), between the Company and The Bank of New York, as
trustee (said trustee or any successor trustee under the Senior Note Indenture
being hereinafter referred to as the "Senior Note Trustee"), as supplemented by
the First Supplemental Indenture, dated as of November 15, 1996, and the Second
Supplemental Indenture dated as of April 1, 1997 between the Company and the
Senior Note Trustee (each, the "First Supplemental Indenture" and the "Second
Supplemental Indenture," and collectively, the "Supplemental Indentures").
The Company has issued the bonds of this series to secure the Company's
obligation to pay principal, premium, if any, and interest on the Senior Notes
Due 1999 prior to the Release Date (as hereinafter defined).
The Company's obligation to make payments with respect to the
principal, premium and/or interest on the bonds of this series shall be fully or
partially, as the case may be, satisfied and discharged to the extent that, at
the time that any such payment shall be due, the corresponding amount of
principal of, premium, if any, and/or interest then due on the Senior Notes Due
1999 shall have been fully or partially paid, as the case may be, or there shall
have been deposited with the Senior Note Trustee pursuant to Section 501,
Section 1103, Section 1205 or Article Fourteen of the Senior Note Indenture
trust funds sufficient under the provisions of said Sections and Article to
fully or partially pay, as the case may be, the corresponding amount of
principal, premium, if any, and/or interest then due on the Senior Notes Due
1999.
Upon payment of the principal of, premium, if any, and interest due on
the Senior Notes Due 1999, whether at maturity or prior to maturity by
redemption or otherwise, or upon provision for the payment thereof having been
made in accordance with Section 501 or Section 1402 of the Senior Note
Indenture, bonds of this
series in a principal amount equal to the principal amount of Senior Notes Due
1999 so paid or for which such provision for payment has been made shall be
deemed fully paid, satisfied and discharged and the obligations of the Company
thereunder shall be terminated and such bonds of this series shall be
surrendered to and cancelled by the Trustee. From and after such date as all
bonds issued under the Mortgage (other than Senior Note First Mortgage Bonds, as
such term is defined in the Senior Note Indenture) have been retired through
payment, redemption, or otherwise at, before or after maturity thereof (the
"Release Date"), the bonds of this series shall be deemed fully paid, satisfied
and discharged and the obligation of the Company hereunder shall be terminated.
On the Release Date, the bonds of this series shall be surrendered to and
cancelled by the Trustee.
This bond is transferable as prescribed in the Mortgage by the
registered owner hereof in person, or by his duly authorized attorney, at the
office or agency of the Company or at the office or agency of the Company in the
Borough of Manhattan, The City of New York, New York, upon surrender and
cancellation of this bond, and thereupon a new fully registered bond of the same
series for a like principal amount will be issued to the transferee in exchange
herefor as provided in the Mortgage.
In the manner prescribed in the Mortgage, bonds of this series, upon
surrender thereof, for cancellation, at the office or agency of the Company in
the Borough of Manhattan, The City of New York, New York, together with a
written instrument of transfer, if required by the Company or by the Trustee,
duly executed by the registered owner or by his duly authorized attorney, are
exchangeable for a like aggregate principal amount of bonds in registered form
of the same series of other authorized denominations. Bonds of this series are
issuable in denominations of One Thousand Dollars or any integral multiples
thereof.
No service charge shall be made for any such transfer or exchange, but
the Company may require the payment of a sum sufficient to cover any tax or
other governmental charge payable in connection therewith.
The bonds of this series shall be redeemed, in whole or in part, from
time to time, on the date on which a corresponding principal amount of Senior
Notes Due 1999 are redeemed as provided in the Senior Note Indenture and the
Second Supplemental Indenture upon the Senior Note Trustee's notification of the
Trustee of such redemption, at a redemption price equal to the redemption price
of such Senior Notes Due 1999 being so redeemed. Any such notice shall be
received by the Trustee no later than 5 days prior to any redemption date fixed
for the bonds of this series to be redeemed and shall specify the principal
amount of such bonds of this series to be redeemed, the redemption date, and the
amount of accrued interest and premium, if any, to be paid thereon. The Company
shall deposit in trust with the Trustee on the redemption date an amount of
money sufficient to pay the principal amount including accrued interest, if any,
and premium, if any, on the bonds of this series to be redeemed. Upon
presentation to the Trustee of any bonds of this series by the Senior Note
Trustee for payment, such bonds of this series so presented shall be redeemed
and paid in full.
In the event the principal of all Senior Notes Due 1999 is declared due
and payable or becomes automatically due and payable pursuant to Section 602 of
the Senior Note Indenture, upon the filing with the Trustee of a written demand
for the acceleration of the payment of principal of all the bonds, such bonds
shall become immediately due and payable.
Redemption of the bonds of this series shall be effected, without
further notice by the Company to the Trustee, by the payment by the Company of
the applicable redemption price specified in this bond at the place specified
for payment of principal of and interest on such bonds.
The Senior Note Series B Bonds will not be subject to prepayment or
redemption prior to maturity except as provided herein, notwithstanding the
provisions of Section 39 or Section 64 of the Mortgage, or with "Proceeds of
Released Property," as defined in the Mortgage.
The bonds of this series will not be subject to any sinking fund.
The Company covenants and agrees that, prior to Release Date, it will
not take any action (except as described in this bond) that would cause the
outstanding principal amount of the bonds of this series to be less than the
then outstanding principal amount of the Senior Notes Due 1999.
The Company and the Trustee may deem and treat the person in whose name
this bond is registered as the absolute owner hereof for the purpose of
receiving payment and for all other purposes, and neither the Company nor the
Trustee shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or
interest on this bond against any incorporator or any past, present or future
subscriber to the capital stock, stockholder, officer or director of the Company
or of any predecessor or successor corporation, as such, either directly or
through the Company or any predecessor or successor corporation, under any rule
of law, statute or constitution or by the enforcement of any assessment or
otherwise, all such liability of incorporators, subscribers, stockholders,
officers and directors being released by the holder or owner hereof by the
acceptance of this bond and being likewise waived and released by the terms of
the Mortgage.