EXHIBIT A to
1996 SUPPLEMENTAL INDENTURE
1996 REFUNDING NOTE
(DUE JANUARY 15, 2014)
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND MAY NOT BE TRANSFERRED,
SOLD OR OFFERED FOR SALE IN VIOLATION OF SUCH ACT
NONRECOURSE PROMISSORY NOTE, 1996 REFUNDING SERIES
(DUE JANUARY 15, 2014)
Issued at: New York, New York
Issue Date: As of July 15, 1996
STATE STREET BANK AND TRUST COMPANY, not in its individual
capacity, but solely as Owner Trustee (Owner Trustee) under a Trust Agreement
dated as of December 16, 1985 with MFS LEASING CORP. (the Owner Participant),
hereby promises to pay to PUBLIC SERVICE COMPANY OF NEW MEXICO, or registered
assigns, the principal sum of $32,256,000 (Thirty Two Million Two Hundred Fifty
Six Thousand Dollars) on January 15, 2014 together with interest (computed on
the basis of a 360-day year of twelve 30- day months) on the aggregate amount of
such principal sum remaining unpaid from time to time from the Issue Date of
this 1996 Refunding Note until due and payable, in arrears, at the rate of
10.30% per annum. Payments of principal installments of this 1996 Refunding Note
shall be made in the "principal amount payable" and on the "payment dates"
specified in Schedule 1 hereto, as such Schedule may be revised from time to
time in accordance with the Indenture and the terms contained herein. Payments
of accrued interest on this 1996 Refunding Note shall be made on January 15 and
July 15 in each year, commencing January 15, 1997, to and including the last
"payment date" specified in Schedule 1 hereto.
Capitalized terms used in this 1996 Refunding Note which are not
otherwise defined herein shall have the meanings ascribed thereto in the
Indenture (as hereinafter defined).
Interest on any overdue principal and premium, if any, and (to the
extent permitted by applicable law) any overdue interest, shall be paid, on
demand, from the due date thereof at the rate per annum equal to 11.30%
(computed on the basis of a 360-day year of twelve 30-day months) for the period
during which any such principal, premium or interest shall be overdue.
[3][MFS-1]
Page III-10
In the event any date on which a payment is due under this 1996
Refunding Note is not a Business Day, then payment thereof may be made on the
next succeeding Business Day with the same force and effect as if made on the
date on which such payment was due.
All payments of principal, premium, if any, and interest to be made
by the Owner Trustee hereunder and under the Trust Indenture, Mortgage, Security
Agreement and Assignment of Rents dated as of December 16, 1985, as at any time
heretofore or hereafter amended or supplemented in accordance with the
provisions thereof (the Indenture), between the Owner Trustee and The Chase
Manhattan Bank (formerly known as "Chemical Bank"), as trustee (the Indenture
Trustee), shall be made only from the Lease Indenture Estate and the Trust
Estate, and the Indenture Trustee shall have no obligation for the payment
thereof except to the extent that the Indenture Trustee shall have sufficient
income or proceeds from the Lease Indenture Estate to make such payments in
accordance with the terms of Article V of the Indenture. The Holder hereof, by
its acceptance of this 1996 Refunding Note, agrees that such Holder will look
solely to the Trust Estate and the income and proceeds from the Lease Indenture
Estate to the extent available for distribution to the Holder hereof as above
provided, and that neither the Owner Participant nor, except as expressly
provided in the Indenture, the Owner Trustee nor the Indenture Trustee is or
shall be personally liable to the Holder hereof for any amounts payable under
this 1996 Refunding Note or for any performance to be rendered under the
Indenture or any other Transaction Document or for any liability thereunder;
provided, however, that in the event the Lessee shall assume all the obligations
of the Owner Trustee hereunder and under the Indenture pursuant to Section
3.9(b) of the Indenture, then all the payments to be made under this 1996
Refunding Note shall be made only from payments made by the Lessee under this
1996 Refunding Note in accordance with the Assumption Agreement referred to in
said Section 3.9(b) and the Holder of this 1996 Refunding Note agrees that in
such event it will look solely to the Lessee for such payment.
The Holder hereof, by its acceptance of this 1996 Refunding Note,
agrees that each payment received by it hereunder shall be applied in the manner
set forth in Section 3.11 of the Indenture. The Holder of this 1996 Refunding
Note agrees, by its acceptance hereof, that it will duly note by appropriate
means all payments of principal or interest made hereon and that it will not in
any event transfer or otherwise dispose of this 1996 Refunding Note unless and
until all such notations have been duly made.
This 1996 Refunding Note is the 1996 Refunding Note referred to in
the Indenture. The Indenture permits the issuance of additional series of Notes,
as provided in Section 3.5 of the Indenture, and the several series may be for
varying aggregate principal amounts and may have different maturity dates,
interest
[3][MFS-1]
Page III-11
rates, redemption provisions and other terms. The properties of the Owner
Trustee included in the Lease Indenture Estate are pledged to the Indenture
Trustee to the extent provided in the Indenture as security for the payment of
the principal of and premium, if any, and interest on this 1996 Refunding Note
and all other Notes issued and outstanding from time to time under the
Indenture. Reference is hereby made to the Indenture for a statement of the
rights of the Holders of, and the nature and extent of the security for, this
1996 Refunding Note and of the rights of, and the nature and extent of the
security for, the Holders of the other Notes and of certain rights of the Owner
Trustee, as well as for a statement of the terms and conditions of the trust
created by the Indenture, to all of which terms and conditions the Holder hereof
agrees by its acceptance of this 1996 Refunding Note.
This 1996 Refunding Note is subject to prepayment in whole as
contemplated by Section 5.2 of the Indenture and in the circumstances therein
described. In addition, this 1996 Refunding Note may, at the option of the Owner
Trustee, be prepaid in whole or in part at any time by the Owner Trustee upon
the giving by the Owner Trustee of not less than two days' notice (as provided
in the Indenture) and at the following prepayment prices (expressed as a
percentage of the unpaid principal amount hereof), together with interest
accrued to the date fixed for prepayment:
Twelve Month Redemption
Period Beginning Price
January 15, 1996 106.180%
January 15, 1997 105.768
January 15, 1998 105.356
January 15, 1999 104.944
January 15, 2000 104.532
January 15, 2001 104.120
January 15, 2002 103.708
January 15, 2003 103.296
January 15, 2004 102.884
January 15, 2005 102.472
January 15, 2006 102.060
January 15, 2007 101.648
January 15, 2008 101.236
January 15, 2009 100.824
January 15, 2010 100.412
and thereafter at the principal amount thereof, together with interest accrued
to the date fixed for prepayment. This 1996 Refunding Note is not otherwise
subject to optional prepayment in whole or in part.
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Page III-12
In case an Indenture Event of Default shall occur and be
continuing, the unpaid balance of the principal of this 1996 Refunding Note and
any other Notes, together with all accrued but unpaid interest thereon, may,
subject to certain rights of the Owner Trustee or the Owner Participant
contained or referred to in the Indenture, be declared or may become due and
payable in the manner and with the effect provided in the Indenture.
The lien upon the Lease Indenture Estate is subject to being
legally discharged prior to the maturity of this 1996 Refunding Note upon the
deposit with the Indenture Trustee of cash or certain securities sufficient to
pay this 1996 Refunding Note when due or an assumption of the obligation of the
Owner Trustee under this 1996 Refunding Note and the Indenture, in each case in
accordance with the terms of the Indenture.
There shall be maintained at the Indenture Trustee's Office a
register for the purpose of registering transfers and exchanges of Notes in the
manner provided in the Indenture. The transfer of this 1996 Refunding Note is
registrable, as provided in the Indenture, upon surrender of this 1996 Refunding
Note for registration of transfer duly accompanied by a written instrument of
transfer duly executed by or on behalf of the registered Holder hereof, together
with the amount of any applicable transfer taxes. Prior to the due presentment
for registration of transfer of this 1996 Refunding Note, the Owner Trustee and
the Indenture Trustee may treat the person in whose name this 1996 Refunding
Note is registered as the owner hereof for the purpose of receiving payments of
principal of and premium, if any, and interest on this 1996 Refunding Note and
for all other purposes whatsoever, whether or not this 1996 Refunding Note be
overdue, and neither the Owner Trustee nor the Indenture Trustee shall be
affected by notice to the contrary.
Principal, premium, if any, and interest shall be payable, in the
manner provided in the Indenture, on presentment of this 1996 Refunding Note at
the Indenture Trustee's Office, or as otherwise provided in the Indenture.
This 1996 Refunding Note shall be governed by, and construed in
accordance with, the laws of the State of New York.
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Page III-13
IN WITNESS WHEREOF, the Owner Trustee has caused this 1996
Refunding Note to be duly executed as of the date hereof.
STATE STREET BANK AND TRUST
COMPANY, not in its individual
capacity, but solely as Owner
Trustee under a Trust Agreement
dated as of December 16, 1985
with MFS Leasing Corp.
By____________________________
Name:
Title:
This Note is one of the series of Notes referred to therein and in
the within-mentioned Indenture.
THE CHASE MANHATTAN BANK,
as Indenture Trustee
By __________________________
Name:
Title:
[3][MFS-1]
Page III-14
SCHEDULE 1
TO THE 1996 REFUNDING NOTE
(DUE JANUARY 15, 2014)
Schedule of Principal Amortization
$32,256,000 Principal Amount
Payment Principal Amount Principal Amount
Date Payable Paid
January 15, 1997 $ 820,000
July 15, 1997 863,000
January 15, 1998 906,000
July 15, 1998 737,000
January 15, 1999 536,000
July 15, 1999 551,000
January 15, 2000 566,000
July 15, 2000 582,000
January 15, 2001 597,000
July 15, 2001 614,000
January 15, 2002 631,000
July 15, 2002 648,000
January 15, 2003 666,000
July 15, 2003 684,000
January 15, 2004 703,000
July 15, 2004 722,000
January 15, 2005 741,000
July 15, 2005 763,000
January 15, 2006 783,000
July 15, 2006 804,000
January 15, 2007 827,000
July 15, 2007 850,000
January 15, 2008 871,000
July 15, 2008 897,000
January 15, 2009 925,000
July 15, 2009 946,000
January 15, 2010 973,000
July 15, 2010 1,006,000
January 15, 2011 1,141,000
July 15, 2011 1,173,000
January 15, 2012 1,205,000
July 15, 2012 1,540,000
January 15, 2013 2,385,000
July 15, 2013 2,507,000
January 15, 2014 1,093,000
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Principal Amount $32,256,000
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