Exhibit 1.1
PINNACLE WEST CAPITAL CORPORATION
SECURITIES
UNDERWRITING AGREEMENT
March 21, 2001
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
Banc of America Securities LLC
BNY Capital Markets, Inc.
Credit Suisse First Boston Corporation
As Representatives of the Several Underwriters
c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sir or Madam:
1. INTRODUCTION. Pinnacle West Capital Corporation, an Arizona
corporation (the "Company"), proposes to issue and sell from time to time up to
$500,000,000 in aggregate principal amount of its unsecured debentures, notes or
other evidences of indebtedness (the "Securities") registered under the
registration statement referred to in Section 2(a). The Securities will be
issued under the Indenture, dated as of December 1, 2000, between the Company
and The Bank of New York, 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."
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. 333-52476) relating to $500,000,000
of the Securities was filed with the Securities and Exchange Commission
(the "Commission") and has become effective. Such registration statement,
as amended at the time of the Terms Agreement referred to in Section 3
relating to the Purchased Securities, together with any related 462(b)
registration statement or amendment thereto, is hereinafter referred to
collectively as the "Registration Statement" and such prospectus, as
supplemented as contemplated by Section 3 to reflect the terms of the
Purchased Securities and terms of offering thereof, including all material
incorporated by reference therein, is hereinafter referred to as the
"Prospectus."
(b) Each part of the Registration Statement relating to the
Securities, when such part became effective, conformed in all material
respects to the requirements of the Securities Act of 1933 (the "Act"), the
Trust Indenture Act of 1939 (the "Trust Indenture Act") and the rules and
regulations (the "Rules and Regulations") of the Commission and did not
include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading, and on the date of each Prospectus
Supplement referred to in Section 3, the Registration Statement and the
Prospectus will conform in all material respects to the requirements of the
Act, the Trust Indenture Act and the Rules and Regulations, and at such
date none of such documents will include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading; provided, however,
that the foregoing does not apply to (a) statements in or omissions from
any such documents based upon written information furnished to the Company
by any Underwriter specifically for use therein or (b) that part of the
Registration Statement that consists of the Statement of Eligibility and
Qualification (Form T-1) under the Trust Indenture Act of 1939 of The Bank
of New York, as Trustee under the Indenture.
(c) No approval or consent of a public body or authority is necessary
for the execution and delivery of the Supplemental Indenture relating to
the Purchased Securities or the validity of the issuance and sale of the
Purchased Securities, except as may be required under state securities or
blue sky laws.
3. PURCHASE AND OFFERING. The obligation of the Underwriters to
purchase, and the obligation of the Company to sell, the Purchased Securities
will be evidenced by an exchange of facsimile transmission or other written
communications (the "Terms Agreement") at the time the Company determines to
sell the Purchased Securities. The Terms Agreement shall specify (by
incorporation by reference or otherwise) the party or parties that will be
Underwriters, the principal amount to be purchased by each, the purchase price
to be paid by the Underwriters, any compensation or commissions to be paid to
Underwriters, the offering price, and the terms of the Purchased Securities not
already specified in the Indenture, including, but not limited to, interest
rates, maturity, redemption provisions, and sinking fund requirements, if any.
The Terms
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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 Registration
Statement, or the Prospectus. The Company will also advise the Underwriters
or the Representatives of the institution by the Commission of any stop
order proceedings in respect of the Registration Statement or of any part
thereof, and will use its best efforts to prevent the issuance of any such
stop order and to obtain as soon as possible its lifting, if issued.
(b) If, at any time when a prospectus relating to the Purchased
Securities is required to be delivered under the Act, any event occurs as a
result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact, or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time to amend or supplement the Registration Statement or
the Prospectus to comply with the Act, the Company promptly will prepare
and file with the Commission an amendment or supplement that will correct
such statement or omission or an amendment that will effect such
compliance.
(c) As soon as practicable, but not later than 18 months, after the
date of the Terms Agreement relating to the Purchased Securities, the
Company will make generally available to its security holders an earning
statement or statements (which need not be audited) covering a period of at
least 12 months beginning after the effective date of the Registration
Statement (as defined in Rule 158(c) under the Act), which will satisfy the
provisions of Section 11(a) of the Act and the rules and regulations
thereunder.
(d) The Company will furnish to the Underwriters or the
Representatives such copies of the Registration Statement (including one
copy of the Registration Statement for each Representative, or for each
Underwriter if there are no Representatives, and for the counsel for the
Underwriters, which is signed and includes all exhibits), any related
preliminary prospectus supplements and the Prospectus, including all
amendments or supplements to such documents, as may be reasonably
requested.
(e) The Company will arrange or cooperate in arrangements for the
qualification of the Purchased Securities for sale and the determination of
their eligibility for investment
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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 filed with the Commission, and (C) from time to time,
such other information concerning the Company as may reasonably be
requested. So long as the Company has active subsidiaries, such financial
statements will be on a consolidated basis to the extent the accounts of
the Company and its subsidiaries are consolidated.
(g) The Company will pay all expenses incident to the performance of
its obligations under this Agreement, and will reimburse the Underwriters
for any reasonable expenses (including reasonable fees and disbursements of
counsel) incurred by them in connection with the qualification of the
Purchased Securities with respect to which the Terms Agreement relating to
the Purchased Securities has been entered for sale, and the determination
of their eligibility for investment, under the laws of such jurisdictions
as the Representatives or, if there are no Representatives, the
Underwriters designate, and the printing of memoranda relating thereto, and
for any fees charged by investment rating agencies for the rating of the
Purchased Securities.
(h) The Company will not offer or sell any other of its Securities for
a period beginning at the time of execution of the Terms Agreement relating
to the Purchased Securities and ending on the Closing Date relating thereto
without prior consent of the Underwriter or the Representatives.
5. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The obligations
of the Underwriters to purchase and pay for the Purchased Securities will be
subject to the accuracy of the representations and warranties on the part of the
Company herein, to the accuracy of the statements of Company officers made
pursuant to the provisions hereof, to the performance by the 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
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are independent certified public accountants within the meaning of the Act
and the applicable published Rules and Regulations thereunder, and stating
in effect that (i) in their opinion the financial statements and schedules
of the Company audited by them and incorporated by reference in the
Registration Statement comply as to form in all material respects with the
applicable accounting requirements of the Securities Exchange Act of 1934
(the "1934 Act") and the published Rules and Regulations thereunder and
(ii) on the basis of a reading of the latest available interim financial
statements of the Company, inquiries of officials of the Company
responsible for financial and accounting matters, and other specified
procedures, nothing came to their attention that caused them to believe
that (A) the unaudited financial statements incorporated by reference, if
any, in the Registration Statement do not comply as to form in all material
respects with the applicable accounting requirements of the 1934 Act and
the published Rules and Regulations thereunder or are not stated on a basis
substantially consistent with that of the audited financial statements
incorporated by reference in the Registration Statement, (B) at the date of
the most recent available unaudited financial statements and at a specified
date not more than five days prior to the date of this Agreement, there was
any increase in the amounts of common stock, redeemable preferred stock, or
non-redeemable preferred stock of the Company or any increase, exceeding
$10,000,000, in long-term debt of the Company or, at the date of the most
recent available unaudited financial statements there was any decrease in
net assets as compared with amounts shown in the most recent financial
statements incorporated by reference in the Registration Statement, or (C)
for the twelve-month period ended at the date of the most recent available
unaudited financial statements there were any decreases, exceeding 3%, as
compared with the twelve-month period ended at the date of the most recent
financial statements incorporated by reference in the Registration
Statement, in the amounts of total revenues or net income, except in all
cases for increases or decreases which result from the declaration or
payment of dividends, or which the Registration Statement (including any
material incorporated by reference therein) disclose have occurred or may
occur, or which are described in such letter.
(b) No stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceedings for
that purpose shall have been instituted or, to the knowledge of the Company
or the Underwriters, shall be contemplated by the Commission.
(c) Subsequent to the execution of the Terms Agreement relating to the
Purchased Securities, (i) there shall not have occurred any change, or any
development involving a prospective change, in or affecting particularly
the business or properties of the Company or its subsidiaries which, in the
judgment of a majority in interest of the Underwriters under such Terms
Agreement, including any Representatives, materially impairs the investment
quality of the Purchased Securities, (ii) there shall not have occurred a
suspension or material limitation in trading in securities generally on the
New York Stock Exchange, (iii) there shall not have occurred a general
moratorium on commercial banking activities in New York declared by either
Federal or New York State authorities, (iv) no rating of any of the
Company's debt securities shall have been lowered and there shall have been
no public announcement that any such debt securities have been placed on
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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 ▇▇▇▇▇ & ▇▇▇▇▇▇ 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;
(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
benefits intended by such documents) and conform to the description
thereof in the Prospectus;
(iii) The Indenture has been duly authorized, executed, and
delivered, has been duly qualified under the Trust Indenture Act, and
constitutes a valid and binding instrument enforceable in accordance
with its terms except as the same may be limited by (a) general
principles of equity or by bankruptcy, insolvency, reorganization,
arrangement, moratorium, or other laws or equitable principles
relating to or affecting the enforcement of creditors' rights
generally and (b) the qualification that certain waivers, procedures,
remedies, and other provisions of the Purchased Securities and the
Indenture may be unenforceable under or limited by the law of the
State of Arizona; however, such law does not in such counsel's opinion
substantially prevent the practical realization of the benefits
intended by such documents;
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(iv) No approval, authorization, or consent of any public board
or body is necessary to the validity of the issuance and sale of the
Purchased Securities on the terms and conditions set forth or
contemplated herein and in the Prospectus and Terms Agreement relating
to the Purchased Securities or the execution and delivery of the
Supplemental Indenture relating to the Purchased Securities, 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;
(v) The Registration Statement has become effective under the
Act, and, to the best of the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been instituted or are
pending or contemplated under the Act, and each part of the
Registration Statement relating to the Securities, when such part
became effective, and the Prospectus, as of the date of the Prospectus
Supplement, and each amendment or supplement thereto, as of their
respective effective or issue dates, complied as to form in all
material respects with the requirements of the Act, the Trust
Indenture Act, and the published Rules and Regulations; such counsel
has no reason to believe that any part of the Registration Statement,
when such part became effective, or the Prospectus, as of the date of
the Prospectus Supplement, or as of the Closing Date, or any amendment
or supplement thereto, as of their respective effective or issue
dates, or as of the Closing Date, contained any untrue statement of a
material fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading; the descriptions in the Registration Statement and
Prospectus of statutes, legal and governmental proceedings and
contracts, and other documents are accurate and fairly present the
information required to be shown; and to the actual knowledge of those
persons in the lawyer group described in such opinion, there are no
legal or governmental proceedings required to be described in the
Prospectus that are not described as required, nor any contracts or
documents of a character required to be described in the Registration
Statement or Prospectus or to be filed as exhibits to the Registration
Statement that are not described and filed as required (it being
understood that such counsel need express no opinion as to the
financial statements or other financial data contained in the
Registration Statement or the Prospectus); and
(vi) This Agreement and the Terms Agreement have been duly
authorized, executed, and delivered by the Company.
In giving such opinion, (a) ▇▇▇▇▇ & ▇▇▇▇▇▇ 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
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rely on the opinion of Underwriters' counsel as to all matters governed by
the law of the State of New York; and (b) the lawyer group referred to in
such opinion will mean those lawyers in the offices of ▇▇▇▇▇ & ▇▇▇▇▇▇
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.
(e) The Underwriters or the Representatives shall have received from
counsel for the Underwriters such opinion or opinions, dated the Closing
Date, with respect to the incorporation of the Company, the validity of the
Purchased Securities, the Registration Statement, the Prospectus, and other
related matters as may reasonably be required, and the Company shall have
furnished to such counsel such documents as they request for the purpose of
enabling them to pass upon such matters. In rendering such opinion, such
counsel may rely as to the incorporation of the Company and all other
matters governed by the laws of the State of Arizona upon the opinion of
▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P.
(f) The Underwriters or the Representatives shall have received a
certificate of the President or any Vice President and a principal
financial or accounting officer of the Company, dated the Closing Date, in
which such officers, to the best of their knowledge after reasonable
investigation, shall state that the representations and warranties of the
Company in this Agreement are true and correct, that the Company has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to the Closing Date, that no stop order
suspending the effectiveness of the Registration Statement has been issued
and no proceedings for that purpose have been instituted or are
contemplated by the Commission, and that, subsequent to the date of the
most recent financial statements in the Prospectus, there has been no
material adverse change in the financial position or results of operations
of the Company and its subsidiaries except as set forth or contemplated in
the Prospectus or as described in such certificate.
(g) 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.
(h) 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
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controlling person may become subject, under the Act or otherwise, insofar
as such losses, claims, damages, or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any part of the
Registration Statement relating to the Securities, when such part became
effective, any preliminary prospectus or preliminary prospectus supplement,
the Prospectus, or any amendment or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading; and will reimburse each Underwriter and each such
controlling person for any legal or other expenses reasonably incurred by
such Underwriter or such controlling person in connection with
investigating or defending any such loss, claim, damage, liability, or
action; provided, however, that the Company will not be liable in any such
case to the extent that any such loss, claim, damage, or liability arises
out of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in any of such documents in reliance upon
and in conformity with written information furnished to the Company by any
Underwriter specifically for use therein. This indemnity agreement will be
in addition to any liability which the Company may otherwise have.
(b) Each Underwriter will severally indemnify and hold harmless the
Company, each of its directors, each of its officers who have signed the
Registration Statement, and each person, if any, who controls the Company
within the meaning of the Act, against any losses, claims, damages, or
liabilities to which the Company or any such director, officer, or
controlling person may become subject, under the Act or otherwise, insofar
as such losses, claims, damages, or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any part of the
Registration Statement relating to the Securities, when such part became
effective, any preliminary prospectus or preliminary prospectus supplement,
the Prospectus, or any amendment or supplement thereto, or arise out of or
are based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity
with written information furnished to the Company by such Underwriter
specifically for use therein; and will reimburse any legal or other
expenses reasonably incurred by the Company or any such director, officer,
or controlling person in connection with investigating or defending any
such loss, claim, damage, liability, or action. This indemnity agreement
will be in addition to any liability which such Underwriter may otherwise
have.
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party
under this Section, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not
relieve it from any liability that it may have to any indemnified party
otherwise than under this Section. In case any such action is brought
against any indemnified party, and it notifies the indemnifying party of
the commencement thereof, the
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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
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
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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
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 ▇.▇. ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, or delivered, or telecopied and confirmed to the
Company at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇.
11
10. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the parties hereto and the Underwriter or Underwriters as are named
in any Terms Agreement and their respective successors and the officers and
directors and controlling persons referred to in Section 6, and no other person
will have any right or obligation hereunder.
11. REPRESENTATION OF UNDERWRITERS. The Representatives, if any, may
act for the Underwriters in connection with any offering to which a Terms
Agreement may relate, and any action under this Agreement or such Terms
Agreement taken by the Representatives jointly or the Representative first named
in such Terms Agreement in such capacity will be binding upon the Underwriters
of Purchased Securities to which such Terms Agreement relates.
12. EXECUTION IN COUNTERPART. This Agreement and any Terms Agreement
may be executed in one or more counterparts, each of which shall be deemed to be
an original, but all such respective counterparts shall together constitute a
single instrument.
12
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,
PINNACLE WEST CAPITAL CORPORATION
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Treasurer
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
Banc of America Securities LLC
BNY Capital Markets, Inc.
Credit Suisse First Boston Corporation
By: Yukari Saegusa
----------------------------------
(▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.)
13
TERMS AGREEMENT
March 21, ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
Dear Sir:
Pinnacle West Capital Corporation (the "Company") hereby agrees to sell to
the several Underwriters (the "Underwriters") listed in the Company's Prospectus
Supplement (the "Prospectus Supplement") of even date herewith relating to
$300,000,000 in aggregate principal amount of its 6.40% Senior Notes due 2006
(the "Purchased Securities"), and the Underwriters hereby agree to purchase,
severally and not jointly, at a purchase price of 99.209% of the principal
amount thereof plus any accrued interest from the date of original issuance, the
respective principal amounts of Purchased Securities set forth opposite the
names of the Underwriters in the Prospectus Supplement. The sale of the
Purchased Securities by the Company and the purchase thereof by the Underwriters
shall be made on the basis of the representations, warranties, and agreements
contained in the Underwriting Agreement (the "Underwriting Agreement"), dated
March 21, 2001, relating to the issuance and sale of up to $500,000,000 of the
Company's Securities under the Company's Indenture, and shall be subject to the
terms and conditions set forth in such Underwriting Agreement. The provisions of
the Underwriting Agreement are incorporated herein by reference. As contemplated
by Section 3 of the Underwriting Agreement, certain terms of the Purchased
Securities are described in the Prospectus Supplement.
The Underwriters propose to offer the Purchased Securities to the public in
the manner and upon the terms set out in the Prospectus Supplement.
On March 27, 2001 the Company will deliver the Purchased Securities to the
Underwriters in book-entry form through the facilities of the Depository Trust
Company at the office of the Company, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇, against payment of the purchase price by transfer of funds by Fed Wire
from the Underwriters to the Company's account at a bank in Phoenix, Arizona
designated by the Company. Such purchase price will be deemed to have been
received by the Company upon the Company's receipt of the Fed Wire reference
number relating to such transfer of funds. Closing shall occur at the office of
the Company, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, Arizona, at 8:00 a.m. Phoenix
time, on March 27, 2001, or at such other time and date as the Underwriters and
the Company may agree upon in writing, such time and date being referred to as
the "Closing Date." All of the Purchased Securities referred to in
TERMS AGREEMENT
Page 2
this paragraph shall be in global form and registered in the name of Cede & Co.
and deposited with the Depository Trust Company, as depositary.
If the foregoing is acceptable to you, please sign below and transmit
evidence of such signing to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc. at your earliest
convenience. At that point, the agreement signified hereby will constitute the
Terms Agreement, as described in the Underwriting Agreement, with respect to the
$300,000,000 of Purchased Securities referred to herein.
All capitalized terms herein, not otherwise defined herein, are used as
defined in the Underwriting Agreement. This agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original, but all such
respective counterparts shall together constitute a single instrument.
Very truly yours,
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
BANC OF AMERICA SECURITIES LLC
BNY CAPITAL MARKETS, INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
(As Representatives of the Several
Underwriters)
By: Yukari Saegusa
------------------------------------
(▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.)
Confirmed and accepted as
of the date first above written.
PINNACLE WEST CAPITAL CORPORATION
By ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Treasurer