When recorded, return to: Greg A. Nielsen
Snell & Wilmer
3100 Valley Bank Center
Phoenix, Arizona
===============================================================================
ASSIGNMENT, ASSUMPTION
AND
FURTHER AGREEMENT
dated as of July 31, 1986
between
PUBLIC SERVICE COMPANY OF NEW MEXICO,
and
THE FIRST NATIONAL BANK OF DBOSTON,
not in its individual capacity, but solely as Owner Trustee under
a Trust Agreement, dated as of July 31, 1986, with Chase
Manhattan Realty Leasing Corporation
================================================================================
Sale and Leaseback of a 1.133333% Undivided Interest
in Palo Verde Nuclear Generating Station Unit 1
and a .377777% Undivided Interest in Certain Common
Facilities
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6091.5O.2831.56:l
ASSIGNMENT, ASSUMPTION AND FURTHER AGREEMENT, dated as of July
31, 1986, between PUBLIC SERVICE COMPANY OF NEW MEXICO, a New Mexico corporation
(PNM), and TEE FIRST NATIONAL BANK OF BOSTON, not in its individual capacity,
but solely as Owner Trustee (the Owner Trustee), under a Trust Agreement, dated
as of July 31, 1986, with Chase Manhattan Realty Leasing Corporation.
W I T N E S S E T H:
WHEREAS, PNM and the other ANPP Participants are parties to the
ANPP Participation Agreement (such terms and all other terms used in these
recitals without definition having the respective definitions to which reference
is made in Article I below); and
WHEREAS, PNM has sold, and the Owner Trustee has purchased, the
Undivided Interest and the Real Property Interest for and in consideration of
the payment to PNM by the Owner Trustee of the Purchase Price, the purchase
price of the Real Property Interest and the assignments and assumptions herein
set forth;
NOW, THEREFORE, in consideration of the premises and of other
good and valuable consideration, receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
For purposes hereof, capitalized terms used herein which are not
otherwise defined herein shall have the meanings assigned to such terms in
Appendix A hereto. References in this Agreement to articles, sections and
clauses are to articles, sections and clauses in this Agreement unless otherwise
indicated.
609l.50.2831.56:1
ARTICLE II
NONPARTITIONMENT
SECTION 2.01. Nonpartitionment. The Owner Trustee hereby waives
any rights it may have to partition Unit 1 or the Common Facilities1 whether by
partitionment in kind or by sale and division of proceeds, and further agrees
that it will not resort to any action at law or in equity to partition Unit 1 or
the Common Facilities, and it waives the benefits of all laws that may now or
hereafter authorize such partition for a term (i) which shall be coterminous
with the term of the ANPP Participation Agreement or (ii) which shall be for
such lesser period as may be required under Applicable Law.
ARTICLE III
ASSIGNMENTS; EXERCISE OF RIGHTS
SECTION 3.01. Assignment of Warranties. PNM hereby ASSIGNS to
the Owner Trustee an undivided interest, equal to the applicable Share, in, to
and under any and all warranties of and other claims against dealers,
manufacturers, vendors, contractors and subcontractors relating to Unit 1 and
the Common Facilities.
SECTION 3.02. Assignment of the ANPP Participation Agreement.
(a) PNM hereby ASSIGNS to the Owner Trustee an undivided interest, in, to and
under all of PNM's rights under the ANPP Participation Agreement, equal to
1.133333% to the extent that such rights relate to Unit 1 (including, but
without limitation, a percentage entitlement equal to 1.133333%, of the Net
Energy Generation and Available Generating Capability (as each such term is
defined in the ANPP Participation Agreement) of Unit 1) and equal to .377777% to
the extent such rights relate to the Common Facilities.
(b) The Owner Trustee hereby ASSIGNS to PNM the rights assigned
under paragraph (a) until the Lease Termination Date.
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SECTION 3.03. Exercise of Rights as Participant under the ANPP
Participation Agreement.(a) Except as provided in Sections 15.2.2, 15.6.4 and
Section 15.10 of the ANPP Participation Agreement (or any comparable successor
provision) PNM shall be and remain the sole "Participant" for all purposes of
the ANPP Participation Agreement and the sole representative (with power to
bind) in all dealings with the other ANPP Participants in relation to the
Undivided Interest, the Real Property Interest and the rights assigned to the
Owner Trustee pursuant to this Agreement; provided, however, that the foregoing
shall not limit in any way the effect of Sections 15 or 16 of the Facility Lease
or any liability or obligation that PNM may incur to the Owner Trustee or the
Owner Participant under any Transaction Document as a result thereof (including,
but without limitation, any liability that PNM may incur under Section 16 of the
Facility Lease as the result of an Event of Default).
(b) Unless the ANPP Participation Agreement shall otherwise
permit, any right conferred on the Owner Trustee by section 15.2.2 of the ANPP
Participation Agreement shall be exercised as required by Section 15.6.3.3 of
said Agreement.
(c) The provisions of this Section 3.03 shall remain in full
force and effect until such time as the ANPP Administrative Committee or the
ANPP Participants shall otherwise consent.
ARTICLE IV
ASSUMPTION; RELEASE
SUCTION 4.01. Assumption by Owner Trustee. Except as
contemplated by Section 5(a) of the Facility Lease, the Owner Trustee agrees
that, effective on and as of the Lease Termination Date (unless a transferee of
the Undivided Interest and the Real Property Interest (an ANPP transferee) shall
have qualified under Section 15.10 of the ANPP Participation Agreement or any
comparable successor provision), unless (i) a Default or Event of Default shall
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have occurred and be continuing or an Event of Loss or Deemed Lass Event shall
have occurred or (ii) such Lease Termination Date shall have occurred by reason
of a termination of the Facility Lease pursuant to Section 16 thereof, the Owner
Trustee shall assume and agree to pay, perform and discharge the Owner Trustee's
share of all liabilities and obligations of PNM under, or with respect to, the
ANPP Project Agreements, attributable to Unit 1 and the Common Facilities, other
than any and all costs relating to, allocable to, or incurred in connection
with, the decommissioning and retirement of Unit 1 from commercial service,
including, but without limitation, (x) the cost of removal, decontamination and
disposition of equipment and fixtures, the cost of safe storage for later
remova1,.decontamination and disposal and the cost of entombment of equipment
and fixtures, and (y) the cost of (i) the razing of Unit 1, (ii) the removal and
disposition of debris from the PVNGS Site, and (iii) the restoration of relevant
portions of the PVNGS Site.
SECTION 4.02. Release. Upon the assumption and agreement by an
ANPP Transferee pursuant to Section 4.01 (whether at the Lease Termination Date
or thereafter), the Owner Trustee shall therewith and thereupon be released and
discharged from its obligations under Section 4.01 arising on or after such
assumption and agreement.
ARTICLE V
NO RELEASE OF PNM; REIMBURSEMENT
SECITON 5.01. No Release of PNM. Notwithstanding the provisions
of Article IV or any other provision hereof or of any other Transaction
Document, and except to the extent provided in Section 15.10 of the ANPP
Participation Agreement (or any comparable successor provision), PNM shall not
be released from any liability or obligation under the ANPP Project Agreements,
or otherwise, with respect to PVNGS, and PNM shall remain liable for the payment
and performance of all such liabilities and obligations, including, but without
limitation, any and all liabilities and obligations not assumed by the Owner
Trustee or an ANPP Transferee pursuant to Section 4.01.
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SECTION 5.02. Reimbursement. Unless a Default or an Event of
Default shall have occurred and be continuing or an Event of Loss or Deemed Loss
Event shall have occurred, from and after the Lease Termination Date (except a
Lease Termination occurring by reason of a termination of the Facility Lease
pursuant to Section 16 thereof), upon the payment or performance by PNM of any
liability or obligation in respect of which the Owner Trustee shall also have
become obligated in consequence of Article XV or the ANPP Participation
Agreement, and for so long as the Owner Trustee shall be so liable, PNM shall be
entitled to prompt reimbursement by the Owner Trustee from the Trust Estate for
all amounts expended in connection with such payment or performance.
ARTICLE VI
FURTHER AGREEMENTS OF PNM AND THE
OWNER TRUSTEE
SECTION 8.01. Agreement to Sell or Lease Unit 1 Retained Assets.
Upon a transfer to an ANPP Transferee, PMM agrees in respect of the Undivided
Interest and the Real Property Interest, (i) if such ANPP Transferee is a
purchaser of the Undivided Interest and the Real Property Interest, to sell to
such ANPP Transferee, at a price equal to the then Fair Market sales value
(determined on the basis of the then actual condition of the Unit 1 Retained
Assets) thereof, an undivided interest, equal to 1.133333%, to the extent
related to Unit 1 and .377777%, to the extent related to the PVNGS common
facilities, in and to the Unit 1 Retained Assets, or (ii) if such ANPP
Transferee is a lessee of the Undivided interest and the Real Property Interest,
to lease or otherwise make available to such ANPP Transferee, at a rent equal to
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the then Fair Market Rental Value thereof, an undivided interest, equal to
1.133333%, to the extent related to Unit 1 and .377777% to the extent related to
the PVNGS common facilities, in and to the Unit 1 Retained Assets. Any such sale
or lease by PNM shall be accomplished by an appropriate bill of sale or lease.
SECTION 6.02. Agreement to Assign or Make Available ANPP Project
Agreements. Upon a transfer to an ANPP Transferee, PNM agrees in respect of the
Undivided Interest and the Real Property Interest, (i) if such ANPP Transferee
is a purchaser of the Undivided interest and the Real Property Interest, to
assign to such ANPP Transferee an undivided interest, equal to 1.133333%, to the
extent related to Unit 1, and .377777%, to the extent related to the PVNGS
common facilities, of the Project Agreements (other than the ANPP Participation
Agreement) and (ii) if such ANPP Transferee is a lessee of the Undivided
Interest and the Real Property Interest, to assign for the term of such lease to
such ANPP Transferee an undivided interest, equal to 1.133333%, to the extent
related to Unit 1, and .37777777% to the extent related to the PVNGS common
facilities, of the Project Agreements (other than the ANPP Participation
Agreement). Any assignment pursuant to this Section 6.02 shall be accomplished
by an appropriate instrument of assignment.
SECTION 6.03. Agreements to Seek Amendments to the ANPP
Participation Agreement and the License. PNM agrees to use its best efforts to
obtain any required amendments to the ANPP Participation Agreement and the
License to permit Inn to act as Agent of the Owner Trustee in the manner
contemplated by Section 7.01 hereof, if (a) (i) PNM shall not have elected to
purchase the Undivided Interest and the Real Property Interest as provided in
Section 13(b) of the Facility Lease and (ii) there shall not be an ANPP
Transferee in respect of the Undivided Interest and the Real Property Interest
or (b) PNM,. shall be obligated to surrender possession of the Undivided
Interest and the Real Property Interest pursuant to Section 5(a) of the Facility
Lease. PNM acknowledges and agrees that neither the Owner Trustee nor the Owner
Participant shall have any obligation whatsoever to assist PNM in obtaining any
such amendments.
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SECTION 6.04. Owner Trustee's Agreement. If PNM becomes
obligated to sell, lease, otherwise make available or assign in accordance with
Sections 6.01 and 6.02 hereof, the Owner Trustee shall (at the direction of the
Owner Participant) require or cause the AMP? Transferee to purchase, lease,
accept or assume, as the case may be, the property or rights being sold, leased,
made available or assigned by PNM.
ARTICLE VII
INTERIM AGENCY ARRANGEMENTS
SECTION 7.01. Designation of Agent. From and after surrender of
possession to the Owner Trustee (or its assigns) of the Undivided Interest and
the Real Property Interest pursuant to Section 5(a) of the Facility Lease (or
during such period on or after the Lease Termination Date that the Owner Trustee
shall have waived any Default or Event of Default with respect to the inability
of PNM to effectively surrender possession as required by such Section 5(a)) and
until a transfer to an ANPP Transferee in respect of the Undivided Interest and
the Real Property Interest (such period being referred to as the Agency Period),
PNM shall be, and the Owner Trustee hereby designates PNM, the initial agent
(the Agent) of the Owner Trustee in the exercise of all rights assigned to the
Owner Trustee hereunder.
SECTION 7.02. Operation of Unit 1. During the Agency Period, the
Agent shall administer the operation of the Undivided Interest and the Real
Property Interest in. accordance with this Agreement and all instructions. of
the Owner Trustee in accordance with Applicable Law. If, however, the Owner
Trustee and any User shall, prior to, or at any time during, the Agency Period,
enter into any joint ownership and operating agreement with other Persons having
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6091.50.2831.56:1
a legal right to, or right to use, any other undivided interest in Unit 1, the
Agent agrees to join in, and be bound by, the terms of such agreement if the
Agent's performance thereunder shall not violate, or result in a violation of,
any Applicable Law or the License. The Owner Trustee agrees to give the Agent
reasonable prior written notice of the commencement of the negotiation of any
such agreement.
SECTION 7.03. ANPP Participation Agreement. PNM agrees that, at
all times during the Agency Period, it will perform all obligations and
discharge all liabilities for which it is responsible as a "participant" under
the ANPP Participation Agreement in respect of the Undivided Interest and the
Real Property Interest. In the performance of the foregoing agreement, PNM shall
not exercise its rights as an ANPP Participant to cause Capital Improvements to
be made to Unit 1 and the Common Facilities unless the Owner Trustee shall have
agreed to provide funds for the payment of the Owner Trustee's Share of the cost
of such Capital Improvements to PNM prior to the date on which such amounts
shall be due with respect thereto under the ANPP Participation Agreement.
SECTION 7.04. Support. Except with respect to the Unit 1
Retained Assets for which provision is made in Section 7.06, PNM covenants and
agrees that, at all times during the Agency Period, it will provide, or make
available, to the Owner Trustee all PNM's rights in and to other assets owned by
PNM and the ANPP Project Agreements to the extent relating to the Undivided
interest and the Real Property Interest.
SECTION 7.05. Compensation. As compensation for its obligations
under Sections 7.02, 7.03 and 7.04, if no Event of Default based upon PNM's
failure to perform obligations under Section 5(a) of the Facility Lease has
occurred and is continuing, PNM shall be entitled to receive, and the Owner
Trustee hereby agrees to pay, an amount equal to the Owner Trustee's Share of
the aggregate of (i) amounts paid by PNM as provided in Section 7.03 to the
extent reasonably allocable to the Undivided Interest and the Real Property
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Interest and (ii) reasonable compensation for the Unit 1 Retained Assets and
(iii) out-of-pocket expenses incurred by PNN or the Agent, as the case may be,
in connection with the performance of its agreements in this Article III.
Compensation under this Section 7.05 shall be paid promptly in cash upon receipt
of an invoice from PNM.
SECTION 7.06. Transmission; Transmission Agreement. (a) ?PNM
covenants and agrees that, at all times during the Agency Period, the Owner
Trustee shall have the right to wheel, under normal transmission operating
conditions, the Owner Trustee's Share of the then rated capacity of Unit 1,
under normal transmission operating conditions, over transmission equipment in
which PNM now owns or may hereafter acquire an ownership interest, between Unit
1 and the ANPP Switchyard.
(b) Based upon the respective rights, duties and obligations of
the Owner Trustee and PNM set forth in Section 7.06(a), if PNM shall fail or
decline to give the notice of renewal of the facility Lease or purchase of the
Undivided Interest, in each case as provided in Section 13(a) of the Facility
Lease, PNM and the Owner Trustee shall forthwith commence the negotiation in
good faith of a definitive transmission agreement, not inconsistent with the
terms and provisions of Section 7.06(a), but containing sufficient detail for
the proper wheeling of power and energy, under normal transmission operating
conditions, over the equipment of PNM referred to in such Section 7.06(a) under
then existing circumstances, for the exercise or stipulation, as the case may
be, of the respective rights, duties and obligations of the Owner Trustee and
PNM set forth in Section 7.06(a). PNM and the Owner Trustee shall complete such
negotiations and execute such definitive transmission agreement prior to the
Lease Termination Date and such definitive transmission agreement shall provide
for compensation to PNM for the transmission services so provided at the Fair
Market Sales Value thereof.
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ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Successors and Assigns. This Agreement shall be
binding upon the successors and assigns of each of PNM and the Owner Trustee.
SECTION 8.02. Governing Law. The interpretation of this
Agreement and the rights and obligations of the parties hereto shall be governed
by and construed and enforced in accordance with the law of the State of New
York.
SECTION 8.03. Counterpart Execution. This Agreement may be
executed in any number of counterparts and by each of the parties hereto on
separate counterparts1 all such counterparts together constituting but one and
the same instrument.
SECTION 8.04. Amendments. The terms of this Agreement shall
not be waived, altered, modified, amended, supplemented or terminated in any
manner whatsoever, except by written instrument signed by Inn and the Owner
Trustee.
SECTION 8.05. Survival. All agreements and covenants contained
in this Agreement or any agreement, document or certificate delivered pursuant
hereto or in connection herewith shall survive the execution and delivery of
this Agreement.
SECTION 8.06. Severability of Provisions. Any provision of
this Agreement which may be determined by competent authority to be prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and no such prohibition or
unenforceability in any jurisdiction shall invalidate or render unenforceable
such provisions in any other jurisdiction. To the extent permitted by Applicable
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Law, PNM hereby waives any provision of law which renders any provision hereof
prohibited or unenforceable in any respect.
SECTION 8.07. Headings. The division of this Agreement into
sections, the provision of a table of contents and the insertion of headings are
for convenience of reference only and shall not affect the construction or
interpretation of this Agreement.
SECTION 8.08. Disclosure of Beneficiary. Pursuant to Arizona
Revised Statutes S33-40l, the beneficiary of the Trust Agreement is Chase
Manhattan Realty Leasing Corporation, a New York corporation, whose address is
One Chase Manhattan Plaza (20th Floor) New York, New York 10081, Attention of
Leasing Administrator. A copy of the Trust Agreement is available for inspection
at the offices of the Owner Trustee at 100 Federal Street, Boston, Massachusetts
02110, Attention of Corporate Trust Division.
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IN WITNESS WHEREOF, the parties hereto have each caused this
Agreement to be duly executed in New York, New York by their respective officers
thereunto duly authorized.
PUBLIC SERVICE COMPAMY OF NEW MEXICO
By
--------------------------------
Senior Vice President and
Chief Financial Officer
THE FIRST NATIONAL BANK OF BOSTON, not in
its individual capacity, but solely as
Owner Trustee under a Trust Agreement,
dated as of July 31, 1986, with Chase.
Manhattan Realty Leasing Corporation
By:
-------------------------------
Assistant Vice President
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STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
The foregoing instrument was acknowledged before me this 30th
day of July, 1986, by A.J. Robison, Senior Vice President and Chief Financial
Officer of PUBLIC SERVICE COMPANY OF NEW MEXICO, a New Mexico corporation, on
behalf of the corporation.
/s/ Delia T. Santiago
----------------------
Notary Public
DELIA T SANTIAGO
Notary Public, State of New York
No. 41-3451l60
Qualified In Queens County
Commission Expire, March 30,1987
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK )
The foregoing instrument was acknowledged before me this 30th
day of July, 1986, by __________ M P. HENRY, , an Assistant Vice President of
THE FIRST NATIONAL BANK OF BOSTON, a national banking association, on behalf of
the banking association under that certain Trust Agreement dated as of July 31,
1986 with Chase Manhattan Realty Leasing Corporation.
/s/ David A. Spivak
----------------------
Notary Public
Notary Public, State of New York
No.31-4693488
Qualified in New York County
Commission Expires March 30. 1987
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