UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ARIZONA PUBLIC
SERVICE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER , PLEDGE, OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
ARIZONA PUBLIC SERVICE COMPANY
Floating Rate Note Due 2001
No. 1 $250,000,000
CUSIP No. 040555BZ6
Arizona Public Service Company, a corporation duly organized and existing
under the laws of Arizona (herein called the "Company", which term includes any
successor Person under the Indenture hereinafter referred to), for value
received, hereby promises to pay to Cede & Co., or registered assigns, the
principal sum of Two Hundred Fifty Million Dollars on November 15, 2001, and to
pay interest thereon from November 8, 1999 or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, quarterly in
arrears on February 15, May 15, August 15 and November 15 in each year,
commencing February 15, 2000, at the rate of LIBOR plus 0.72%, until the
principal hereof is paid or made available for payment.
The calculation agent, initially The Chase Manhattan Bank, will calculate
the interest rate on this Security. The interest rate will be equal to LIBOR
plus 0.72%. The interest rate in effect for the period from November 8, 1999 to
February 15, 2000, the initial Interest Reset Date, will be LIBOR, as determined
on November 4, 1999, plus 0.72% (the "Initial Interest Rate"). The calculation
agent will reset the interest rate on each Interest Payment Date (each such day
an "Interest Reset Date"). The second London Business Day preceding an Interest
Reset Date will be the "Interest Determination Date" for that Interest Reset
Date. The interest rate in effect on each day that is not an Interest Reset Date
will be the interest rate determined as of the Interest Determination Date
pertaining to the immediately preceding Interest Reset Date. The interest rate
in effect on any day that is an Interest Reset Date will be the interest rate
determined as of the Interest Determination Date pertaining to that Interest
Reset Date, except that the interest rate in effect for the period from and
including November 8, 1999 to the first Interest Reset Date will be the Initial
Interest Rate. The amount of interest payable for any period will be computed on
the basis of a 360-day year for the actual number of days elapsed. If any
Interest Payment Date (other than the Stated Maturity hereof or a Redemption
Date herefor) would otherwise be a day that is not a Business Day, the Interest
Payment Date will be postponed to the next succeeding Business Day, except that
if such Business Day falls in the next succeeding calendar month, such Interest
Payment Date shall be the immediately preceding Business Day. If the Stated
Maturity hereof or any Redemption Date herefor is not a Business Day, then
payment of principal and interest payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), in each case with the same force and
effect as if made on such date. A "Business Day" shall mean any day, except a
Saturday, a Sunday or a legal holiday in The City of New York on which banking
institutions are authorized or required by law, regulation or executive order to
close; provided that the day is also a London Business Day. "London Business
Day" means any day on which dealings in United States dollars are transacted in
the London interbank market.
The calculation agent will determine "LIBOR" in accordance with the
following provisions:
(i) With respect to any Interest Determination Date, LIBOR will be the rate
for deposits in United States dollars having a maturity of three months
commencing on the first day of the applicable Interest Period that appears
on Telerate Page 3750 as of 11:00 A.M., London time, on that Interest
Determination Date. If no rate appears, LIBOR, in respect to that Interest
Determination Date, will be determined in accordance with the provisions
described in (ii) below.
(ii) With respect to an Interest Determination Date on which no rate
appears on Telerate Page 3750, as specified in (i) above, the calculation
agent will request the principal London offices of each of four major
reference banks in the London interbank market, as selected by the
calculation agent, to provide the calculation agent with its offered
quotation for deposits in United States dollars for the period of three
months, commencing on the first day of the applicable Interest Period, to
prime banks in the London interbank market at approximately 11:00 A.M.,
London time, on that Interest Determination Date and in a principal amount
that is representative for a single transaction in United States dollars in
that market at that time. If at least two quotations
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are provided, then LIBOR on that Interest Determination Date will be the
arithmetic mean of those quotations. If fewer than two quotations are
provided, then LIBOR on the Interest Determination Date will be the
arithmetic mean of the rates quoted at approximately 11:00 A.M., in The
City of New York, on the Interest Determination Date by three major banks
in The City of New York selected by the calculation agent for loans in
United States dollars to leading European banks, having a three-month
maturity and in a principal amount that is representative for a single
transaction in United States dollars in that market at that time; provided,
however, that if the banks selected by the calculation agent are not
providing quotations in the manner described by this sentence, LIBOR
determined as of that Interest Determination Date will be LIBOR in effect
on that Interest Determination Date.
"Telerate Page 3750" means the display designated as "Page 3750" on Bridge
Telerate, Inc., or any successor service, for the purpose of displaying the
London interbank rates of major banks for United States dollars.
"Interest Period" means the period from and including November 8, 1999, to,
and excluding, the first Interest Payment Date thereafter and then from, and
including, the immediately preceding Interest Payment Date to which interest has
been paid or duly provided for to, but excluding, the next Interest Payment Date
or the Maturity hereof, as the case may be.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in such Indenture, be paid to the Person
in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the fifteenth calendar day immediately preceding the
Interest Payment Date (whether or not a Business Day). Any such interest not so
punctually paid or duly provided for will forthwith cease to be payable to the
Holder on such Regular Record Date and may either be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is registered at the
close of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee, notice whereof shall be given to Holders of
Securities of this series not less than 10 days prior to such Special Record
Date, or be paid at any time in any other lawful manner not inconsistent with
the requirements of any securities exchange on which the Securities of this
series may be listed, and upon such notice as may be required by such exchange,
all as more fully provided in said Indenture.
Payment of the principal of (and premium, if any) and any interest on this
Security will be made at the office or agency of the Company maintained for that
purpose in The City of New York, in such coin or currency of the United States
of America as at the time of payment is legal tender for payment of public and
private debts; provided, however, that at the option of the Company payment of
interest may be made by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
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Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
ARIZONA PUBLIC SERVICE COMPANY
By Michael V. Palmeri
-------------------------------------
Vice President, Finance
Attest:
Betsy A. Pregulman
- --------------------------------
Associate Secretary
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This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of January 15, 1998 (herein called the
"Indenture", which term shall have the meaning assigned to it in such
instrument), between the Company and The Chase Manhattan Bank, as Trustee
(herein called the "Trustee", which term includes any successor trustee under
the Indenture), and reference is hereby made to the Indenture for a statement of
the respective rights, limitations of rights, duties and immunities thereunder
of the Company, the Trustee and the Holders of the Securities and of the terms
upon which the Securities are, and are to be, authenticated and delivered. This
Security is one of the series designated on the face hereof, limited in
aggregate principal amount to $250,000,000.
The Securities of this series are subject to redemption upon not less than
30 days' notice by mail at the option of the Company, in whole or in part, from
time to time on any Interest Payment Date on or after November 15, 2000 at a
Redemption Price equal to the principal amount of the Securities of this series
to be redeemed plus interest accrued to the Redemption Date (the "Redemption
Price") .
If notice has been given as provided in the Indenture and funds for the
redemption of any Securities (or any portion thereof) called for redemption
shall have been made available on the Redemption Date referred to in such
notice, such Securities (or any portion thereof) will cease to bear interest on
the date fixed for such redemption specified in such notice and the only right
of the Holders of such Securities will be to receive payment of the Redemption
Price.
Notice of any optional redemption of Securities of this series (or any
portion thereof) will be given to Holders at their addresses, as shown in the
Security Register for such Securities, not more than 60 nor less than 30 days
prior to the date fixed for redemption. The notice of redemption will specify,
among other items, the Redemption Price and the principal amount of the
Securities of this series held by such Holder to be redeemed. If less than all
of the Securities of this series are to be redeemed at the option of the
Company, the Trustee shall select, in such manner as it shall deem fair and
appropriate, the portion of such Securities to be redeemed in whole or in part.
The Securities of this series will not be subject to any sinking fund.
In the event of redemption of this Security in part only, a new Security or
Securities of this series and of like tenor for the unredeemed portion hereof
will be issued in the name of the Holder hereof upon the cancellation hereof.
If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the
5
Holders of the Securities of each series to be affected under the Indenture at
any time by the Company and the Trustee without the consent of such Holders in
certain limited circumstances or with the consent of the Holders of 66-2/3% in
principal amount of the Securities at the time Outstanding of each series to be
affected. The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such series,
to waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be conclusive and binding
upon such Holder and upon all future Holders of this Security and of any
Security issued upon the registration of transfer hereof or in exchange herefor
or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Security.
As provided in and subject to the provisions of the Indenture, the Holder
of this Security shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee or for
any other remedy thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity, and the Trustee
shall not have received from the Holders of a majority in principal amount of
Securities of this series at the time Outstanding a direction inconsistent with
such request, and shall have failed to institute any such proceeding, for 60
days after receipt of such notice, request and offer of indemnity. The foregoing
shall not apply to any suit instituted by the Holder of this Security for the
enforcement of any payment of principal hereof or any premium or interest hereon
on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and any premium and interest
on this Security at the times, place and rate, and in the coin or currency,
herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registrable in the Security Register,
upon surrender of this Security for registration of transfer at the office or
agency of the Company in any place where the principal of and any premium and
interest on this Security are payable, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Securities of this series
and of like tenor, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
The Securities of this series are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.
6
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
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CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK
AS TRUSTEE
By T. J. Foley
-------------------------------------
AUTHORIZED OFFICER
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