When Recorded, Return to: Gregg R. Neilsen
Snell & Wilmer
3100 Valley Bank Center
Phoenix, Arizona 85073
CERTAIN RIGHTS OF THE LESSOR UNDER THIS FACILITY LEASE HAVE BEEN
ASSIGNED TO, AND ARE SUBJECT TO A SECURITY INTEREST IN FAVOR OF, CHEMICAL BANK,
AS INDENTURE TRUSTEE UNDER A TRUST INDENTURE, MORTGAGE, SECURITY AGREEMENT AND
ASSIGNMENT OF RENTS DATED AS OF JULY 31, 1986. THIS FACILITY LEASE HAS BEEN
EXECUTED IN SEVERAL COUNTERPARTS. SEE SECTION 22 (e) OF THIS FACILITY LEASE FOR
INFORMATION CONCERNING THE RIGHTS OF HOLDERS OF VARIOUS COUNTERPARTS HEREOF.
THIS COUNTERPART IS NOT THE ORIGINAL COUNTERPART.
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FACILITY LEASE
Dated as of July 31, 1996
between
THE FIRST NATIONAL BANK OF BOSTON,
not in its individual capacity, but solely as Owner
Trustee under a Trustee Agreement, dated as of July 31,
1986 with Chase Manhattan Realty Leasing Corporation,
Lessor
and
PUBLIC SERVICE COMPANY OF NEW MEXICO
Lessee
================================================================================
Sale and Leaseback of a 1.13333%
Undivided Interest in
Palo Verde Nuclear Generating Station Unit 1
and a .377777% Undivided Interest
in Certain Common Facilities
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TABLE OF CONTENTS
Page
SECTION 1 Definitions............................................ 1
SECTION 2 Lease of Undivided
Interest; Term; Personal
Property............................................... 1
a Lease of Undivided
Interest............................................... 1
b Term................................................... 1
c Personal Property...................................... 1
d Description............................................ 2
SECTION 3 Rent; Adjustments to
Rent................................................... 2
a Basic Rent............................................. 2
b Supplement Rent........................................ 3
c Form of Payment........................................ 4
d Adjustments to Rent.................................... 4
e Further Adjustments.................................... 5
f Computation of
Adjustments............................................ 6
g Sufficiency of Basic
Rent and Supplemental
Rent................................................... 7
h Rent Differential...................................... 7
SECTION 4 Net Lease.............................................. 8
SECTION 5 Return of the Undivided
Interest............................................... 11
a Return of the Undivided
Interest............................................... 11
b Disposition Services................................... 13
SECTION 6 Warranty of the Lessor................................. 13
a Quiet Enjoyment........................................ 13
b Disclaimer of Other
Warranties............................................. 13
c Enforcement of Certain
Warranties............................................. 13
SECTION 7 Liens ................................................ 15
SECTION 8 Operation and Maintenance;
Capital Improvements................................... 16
a Operation and
Maintenance............................................ 16
b Inspection............................................. 17
c Capital Improvements................................... 18
d Reports................................................ 19
e Title to Capital
Improvements........................................... 19
f Funding of the Cost of
Capital Improvements................................... 21
SECTION 9 Event of Loss; Deemed
Loss Event............................................. 23
a Damage or Loss......................................... 24
b Repair................................................. 24
c Payment of Casualty
Value.................................................. 24
d Payment of Special
Casualty Value......................................... 25
e Requisition of Use..................................... 26
f Termination of
Obligation............................................. 26
g Application of Payments
on an Event of Loss.................................... 27
h Application of Payments
Not Relating to an Event
of Loss................................................ 28
I Other Dispositions..................................... 28
SECTION 10 Insurance.............................................. 29
a Required Insurance..................................... 29
b Permitted Insurance.................................... 31
SECTION 11 Rights to Assign or
Sublease............................................... 31
a Assignment or Sublease
by the Lessee.......................................... 31
b Assignment by Lessor as
Security for Lessor's
Obligations............................................ 32
SECTION 12 Lease Renewal.......................................... 32
SECTION 13 Notices for Renewal or
Purchase; Purchase
Options................................................ 33
a Notice, Determination of
Values, Appraisal
Procedure.............................................. 33
b Purchase Option at
Expiration of the Lease
Term................................................... 34
c Special Purchase Event................................. 34
d Purchase of the
Undivided Interest;
Payment, Etc........................................... 34
SECTION 14 Termination for
Obsolescence........................................... 35
a Termination Notice..................................... 35
b Right of Lessor to
Retain Undivided
Interest upon
Termination............................................ 35
c Events on the
Termination Date....................................... 36
d Early Termination
Notice................................................. 37
e Events on the Early
Termination............................................ 38
SECTION 15 Events of Default...................................... 38
SECTION 16 Remedies............................................... 42
a Remedies............................................... 42
b No Release............................................. 48
c Remedies Cumulative.................................... 48
d Exercise of Other Rights
or Remedies............................................ 49
e Special Cure Right of
Lessee................................................. 50
SECTION 17 Notices................................................ 51
SECTION 18 Successors and Assigns................................. 51
SECTION 19 Right to Perform for
Lessee................................................. 52
SECTION 20 Additional Covenants................................... 52
SECTION 21 Lease of Real Property
Interest............................................... 53
SECTION 22 Amendments and
Miscellaneous.......................................... 53
a Amendments in Writing.................................. 53
b Survival............................................... 53
c Severability of
Provisions............................................. 54
d True Lease............................................. 54
e Original Lease......................................... 54
f Governing Law.......................................... 55
g Headings............................................... 55
h Concerning the Owner Trustee........................... 55
i Disclosure............................................. 56
j Counterpart Execution.................................. 56
APPENDIX A Definitions
SCHEDULE 1 Casualty Values
SCHEDULE 2 Special Casualty Values
SCHEDULE 3 Termination Values
SCHEDULE 4 [Intentinally Omitted]
SCHEDULE 5 Real Estate Description
SCHEDULE 6 Undivided Interest Description
6091.50.2831.47:1
FACILITY LEASE, dated as of July 31, 1986, between THE FIRST
NATIONAL BANK OF BOSTON, a national banking association, 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 (the Lessor), and
PUBLIC SERVICE COMPANY OF NEW MEXICO, a New Mexico corporation (the Lessee).
WITNESSETH:
WHEREAS, the Lessor owns the Undivided interest and the Real
Property Interest;
WHEREAS, the Lessee desires to lease the Undivided Interest and the
Real Property Interest from the Lessor on the terms and conditions set forth
herein; and
WHEREAS, the Lessor is willing to lease the Undivided Interest and
the Real Property Interest to the Lessee on the terms and conditions set forth
herein;
NOW, THEREFORE, in consideration of the premises and of other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. Definitions.
For purposes hereof, capitalized terms used herein shall have the
meanings assigned to such terms in Appendix A hereto. References in this
Facility Lease to sections, paragraphs and clauses are to sections, paragraphs
and clauses in this Facility Lease unless otherwise indicated.
SECTION 2. Lease of Undivided Interest; Term; Personal Property.
(a) Lease of Undivided Interest. Upon the terms and subject to the
conditions of this Facility Lease, the Lessor hereby leases to the Lessee, and
the Lessee hereby leases from the Lessor, the Undivided Interest.
(b) Term. The term of this Facility Lease shall begin on August 1,
1986, and shall end on the last day of the Lease Term.
(c) Personal Property. It is the express intention of the Lessor and
the Lessee that title to the undivided Interest and every portion thereof be,
and hereby is, severed, and shall be and remain severed, from title to the real
estate constituting the Real Property Interest and the PVNGS Site. The Lessor
and the Lessee intend that the Undivided Interest shall constitute personal
property to the maximum extent permitted by Applicable Law.
(d) Description. The Real Property Interest is described on Schedule
S hereto. The Undivided Interest is described on Schedule 6 hereto.
SECTION 3. Rent; Adjustments to Rent.
(a) Basic Rent. The Lessee shall pay to the Lessor, as basic rent
(herein referred to as Basic Rent) for the Undivided Interest, the following
amounts:
(i) on January 15, 1987, an amount equal to .0257526% of the
Facility Cost for each day from, and including, August 1, 1986 to,
but excluding, January 15, 1987, plus or minus the Rent
Differential, if any, referred to in Section 3(h);
(ii) on July 15, 1987 and on each Basic Rent Payment Date
thereafter to and including January 15, 2015, an amount equal to
4.635455% of Facility Cost, plus or minus the Rent Differential, if
any, referred to in Section 3(h); and
(iii) if the Lessee shall elect the Renewal Term, on July 15,
2015 and on each Basic Rent Payment Date thereafter during the
Renewal Term, an amount equal to one-half of an amount determined by
dividing the aggregate amount of all payments of Basic Rent payable
with respect to the Basic Lease Term pursuant to clause (ii) of this
Section 3(a) (taking into account any adjustments pursuant to
Sections 3(d) and 3(e) and any increases or decreases pursuant to
Section 3(h)), by 56.
If an interest payment on any Note shall be due on a date other than a Basic
Rent Payment Date, the Lessee shall pay additional Basic Rent on such date equal
to such interest payment and such payment of additional Basic Rent shall be
credited against the Basic Rent due on the Basic Rent Payment Date next
succeeding. the date that such additional Basic Rent shall have been paid.
(b) Supplemental Rent. The Lessee shall pay the following
amounts(herein referred to as Supplemental Rent):
(i) when due or, where no due date is specified, on demand, any
amount (other than Basic Rent, Casualty Value, Termination Value and
Special Casualty Value) which the Lessee assumes the obligation to
pay or agrees to pay to the Lessor, the Owner Participant, the
Indenture Trustee, the Collateral Trust Trustee or any Indemnitee
under this Facility Lease, any other Transaction Document or the
Collateral Trust Indenture, any amount which is to be paid under
Section 6.9, 7.6 or 8.7 of the Indenture and any amount that the
Lessee is required to pay, or provide for the payment of, under
Section 8.5 of the Indenture;
(ii) when due, any amount payable hereunder as Casualty Value,
Termination Value or Special Casualty Value, and an amount equal to
any premium or prepayment penalty with respect to the Notes;
(iii) on demand and in any event on the Basic Rent Payment Date
next succeeding the date such amounts shall be due and payable
hereunder, to the extent permitted by Applicable Law, interest
(computed on the same basis as interest on the Notes is computed) at
a rate per annum equal to (A) the Overdue Interest Rate, on that
portion of the payment of Basic Rent or Supplemental Rent
distributable pursuant to clause "first" of Section 5.1 or clause
"second" of Section 5.3 of the Indenture (determined prior to the
computation of interest on overdue payments referred to in such
clauses), and (B) the Penalty Rate, on the balance of any such
payment of Basic Rent or Supplemental Rent (including, in the case
of both clause (i) and clause (ii) above, but without limitation, to
the extent permitted by Applicable Law, interest payable pursuant to
this clause (iii)) not paid when due (without regard to any period
of grace) for any period for which the same shall be overdue.
The Lessor shall have all rights, powers and remedies provided for in this
Facility Lease, at law, in equity or otherwise, in the case of non-payment of
Basic Rent or Supplemental Rent.
(c) Form of Payment. Subject to Section 11(b), each payment of Rent
under this Facility Lease shall be made in immediately available funds no later
than 11:00 a.m., local time at the place of receipt, on the date each such
payment shall be due and payable hereunder and shall be paid either (A) in the
case of payments other than Excepted Payments, to the Lessor at its address
determined in accordance with Section 17, or at such other address as the Lessor
may direct by notice in writing to the Lessee, or (B) in the case of Excepted
Payments, to such Person as shall be entitled to receive such payment at such
address as such Person may direct by notice in writing to the Lessee. If the
date on which any payment of Rent is due hereunder shall not be a Business Day,
the payment otherwise due thereon shall be due and payable on the preceding
Business Day, with the same force and effect as if paid on the nominal date
provided in this Facility Lease.
(d) Adjustments to Rent. Basic Rent and the schedules of Casualty
Values, Termination Values and Special Casualty Values attached hereto shall be
adjusted (upward or downward) to preserve Net Economic Return if there is any
Change in Tax Law other than a Change in respect of a minimum tax; provided,
however, that the aggregate amount of such downward adjustments shall not exceed
the aggregate amount of such upward adjustments. Adjustments under this
paragraph (d) shall be (1) made not more than once a year and (2) limited in the
aggregate to the extent necessary such that the aggregate amount of Basic Rent
theretofore and thereafter payable throughout the Basic Lease Term (computed for
such purposes only without regard to any adjustments theretofore made pursuant
to Section 3(e)) shall not be more than the following percentages of Basic Rent
pay able throughout the Basic Lease Term (calculated as aforesaid): (i) 22% in
the event that the Outstanding Notes have not been reoptimized in accordance
with their terms and (ii) 15.5% if the Outstanding Notes have been reoptimized
in full in accordance with their terms.
The provisions of this Section 3(d) to the contrary notwithstanding, if any
Change in Tax Law is, or becomes, applicable to the transaction contemplated by
this Facility Lease in consequence of the transfer of the Owner Participant's
beneficial interest in the Trust (whether or not permitted by Section 15 of the
Participation Agreement) or if such Change in Tax Law would not have been
applicable to such transaction had no such transfer occurred, then no adjustment
shall be, or be required to be, made pursuant to this paragraph (d); provided,
however, that this sentence shall not apply to the initial transfer of the Owner
Participant's beneficial interest in the Trust to one of its Affiliates.
(e) Further Adjustments. Basic Rent and the schedules of Casualty
Values, Special Casualty Values and Termination Values attached hereto shall be
appropriately adjusted (upward or downward) to preserve Net Economic Return if
there is (i) any issuance of the Fixed Rate Note, (ii) any Supplemental
Financing, (iii) the payment of Transaction Expenses in an amount which is other
than 2.0% of the Purchase Price or (iv) any change in the Pricing Assumptions.
(f) Computation of Adjustments. Upon the occurrence of an event
requiring an adjustment to Basic Rent payable pursuant to clause (ii) of Section
3(a), and the schedules of Casualty Values, Special Casualty Values and
Termination Values attached hereto, pursuant to paragraph (d) or (e) of this
Section 3, the Owner Participant shall make the necessary computations and
furnish to the Lessee, the Loan Participant, the Lessor and the Indenture
Trustee the revised amounts and percentages, which amounts and percentages shall
be implemented upon delivery thereof and effective as of the date of occurrence
of the event requiring such adjustment (taking into account any payment of Basic
Rent already made) and shall remain effective until changed in consequence of
any verification procedure set forth below. Such revised amounts and percentages
shall be subject to verification (at the Lessee's request within 90 days after
the Owner Participant furnishes the revised amounts to the Lessee, the Loan
participant the Lessor and the Indenture Trustee) by the Owner Participant's
nationally recognized independent public accountants, in which case such
accountants shall either (i) confirm to the Lessee in writing that such revised
amounts were computed on a basis consistent with the original calculations, or
(ii) compute and provide to the Lessee, the Lessor, the Owner Participant, the
Loan Participant and the Indenture Trustee revised amounts and percentages which
are on such a basis. The revised amounts and percentages, as so confirmed or
computed if applicable, shall be conclusive and binding upon the Lessee, the
Lessor, the Owner Participant, the Loan Participant and the Indenture Trustee.
The cost of any such verification shall be borne by the Lessee unless such
accountants shall require an adjustment to the revised amounts and percentages
originally provided by the Owner Participant which differs by more than 10% from
the adjustment so provided, in which case such cost shall be divided and paid by
the Lessee and the Owner Participant in equal amounts. Each adjustment pursuant
to paragraph (d) or (e) of this Section 3 may, but need not, be evidenced by the
execution and delivery of a supplement to this Facility Lease in form and
substance satisfactory to the Lessee and the Owner Participant, but shall be
effective as provided herein without regard to the date on which such supplement
to this Facility Lease is so executed and delivered. Any adjustment referred to
in this Section 3 shall satisfy the provisions of Revenue Procedure 75-21,
Revenue Procedure 75-28 and any other applicable statute, regulation, revenue
procedure revenue ruling or technical information release relating to the
subject matter of Revenue procedure 75-21 or Revenue Procedure 75-28, but, in
the case of any upward adjustment, shall be no less than the adjustment
otherwise required pursuant to this Section 3.
(g) Sufficiency of Basic Rent and Supplemental Rent. Notwithstanding
any other provision of this Facility Lease, any other Transaction Document or
any Financing Document, (i) the amount of Basic Rent payable on each Basic Rent
Payment Date shall be at least equal to the aggregate amount of principal,
premium, if any, and accrued interest payable on all Notes then Outstanding and
(ii) each payment of Casualty Value, Special Casualty Value and Termination
Value shall in no event be less (when added to all other amounts, other than
Excepted Payments, required to be paid by the Lessee under this Facility Lease
in respect of any Event of Loss or Deemed Loss Event or termination of this
Facility Lease) than an amount sufficient, as of the date of payment, to pay in
full all principal of, and premium, if any, and interest then due on all Notes
Outstanding on and as of such date of payment (taking into account any
assumption of the Notes by the Lessee).
(h) Rent Differential. So long as the Initial Series Note shall be
outstanding, each installment of Basic Rent shall be increased or decreased, as
the case may be, by the Rent Differential. For purposes hereof, "Rent
Differential" shall mean, as of any Basic Rent Payment Date, the difference
between (i) the aggregate amount of interest due and payable on each Basic Rent
Payment Date on the Initial Series Note, and (ii) the aggregate amount of
interest that would have been due and payable on such Basic Rent Payment Date on
such Note if such Note had at all times during the relevant period borne
interest at a rate equal to 10.0% per annum (computed on the basis of the actual
number of days elapsed in a year of 365 or 366 days, as the case may be). If, as
of any Basic Rent Payment Date, (A) the amount determined in accordance with
clause (i) of the immediately preceding sentence shall exceed the amount
determined in accordance with clause (ii) of such sentence, the amount of Basic
Rent due on such Basic Rent Payment Date shall be increased by the Rent
Differential, and (B) the amount determined in accordance with such clause (ii)
shall exceed the amount determined in accordance with such clause (i), the
amount of Basic Rent due on such Basic Rent Payment Date shall be decreased by
the Rent Differential.
SECTION 4. Net Lease.
This Facility Lease (as originally executed and as modified,
supplemented and amended from time to time) is a net lease, and the Lessee
hereby acknowledges and agrees that the Lessee's obligation to pay all Rent
hereunder, and the rights of the Lessor in and to such Rent, shall be absolute,
unconditional and irrevocable and shall not be affected by any circumstances of
any character, including, without limitation, (i) any set-off, abatement,
counterclaim, suspension, recoupment, reduction, rescission, defense or other
right or claim which the Lessee may have against the. Lessor, the Owner
Participant, the Indenture Trustee, the Collateral Trust Trustee, the Loan
Participant, the Operating Agent, any ANPP Participant, any vendor or
manufacturer of any equipment or assets included in the Undivided Interest, Unit
1, any Capital Improvement, the Real Property Interest, the PVNGS Site, PVNGS,
or any part of any thereof, or any other Person for any reason whatsoever, (ii)
any defect in or failure of the title, merchantability, condition, design,
compliance with specifications, operation or fitness for use of all or any part
of the Undivided Interest, Unit 1, any Capital Improvement, the Real Property
Interest, the PVNGS Site or PVNGS, (iii) any damage to, or removal, abandonment,
decommissioning, shutdown, salvage, scrapping, requisition taking, loss, theft
or destruction of all or any part of the Undivided Interest, Unit 1, any Capital
Improvement, the Real Property Interest, the PVNGS Site or PVNGS, or any
interference, interruption or cessation in the use or possession thereof or of
the Undivided Interest by the Lessee or by any other Person (including, but
without limitation, the Operating Agent for any other ANPP Participant) for any
reason whatsoever or of whatever duration, (iv) any restriction, prevention or
curtailment of or interference with any use of all or any part of the Undivided
Interest, Unit 1, any Capital Improvement, the Real Property Interest, the PVNGS
Site or PVNGS, (v) any insolvency, bankruptcy, reorganization or similar
proceeding by or against the Lessee, the Lessor, the Owner Participant, the
Indenture Trustee, the Collateral Trust Trustee, the Loan Participant, the
Operating Agent, any other ANPP Participant or any other Person, (vi) the
invalidity, illegality or unenforceability of this Facility Lease, any other
Transaction Document, any Financing Document, the ANPP Participation Agreement
or any other instrument referred to herein or therein or any other infirmity
herein or therein or any lack of right, power or authority of the Lessor, the
Lessee, the Owner Participant, the Indenture Trustee, the Collateral Trust
Trustee, the Loan Participant or any other Person to enter into this Facility
Lease, any other Transaction Document or any Financing Document, or any doctrine
of force majeure, impossibility, frustration, failure of consideration, or any
similar legal or equitable doctrine that the Lessee's obligation to pay Rent is
excused because the Lessee has not received or will not receive the benefit for
which the Lessee bargained, it being the intent of the Lessee to assume all
risks from all causes whatsoever that the Lessee does not receive such benefit,
(vii) the breach or failure of any warranty or representation made in this
Facility Lease or any other Transaction Document or any Financing Document by
the Lessor, the Owner Participant, the Indenture Trustee, the Collateral Trust
Trustee, the Loan Participant or any other Person, (viii) any amendment or other
change of, or any assignment of rights under, this Facility Lease, any other
Transaction Document, any Financing Document or any ANPP Project Agreement, or
any waiver, action or inaction under or in respect of this Facility Lease, any
other Transaction Document, any Financing Document or any ANPP Project
Agreement, or any exercise or non-exercise of any right or remedy under this
Facility Lease, any other Transaction Document, any Financing Document or any
ANPP Project Agreement, including, without limitation, the exercise of any
foreclosure or other remedy under the Indenture, the Collateral Trust Indenture
or this Facility Lease, or the sale of Unit 1, any Capital Improvement, the
Undivided Interest, the Real Property Interest, the PVNGS Site or PVNGS, or any
part thereof or any interest therein, or (ix) any other circumstance or
happening whatsoever whether or not similar to any of the foregoing. The Lessee
acknowledges that by conveying the leasehold estate created by this Facility
Lease to the Lessee and by putting the Lessee in possession of the Undivided
Interest and the Real Property Interest, the Lessor has performed all of the
Lessor's obligations under and in respect of this Facility Lease, except the
covenant under Section 6(a) hereof that the Lessor and Persons acting for the
Lessor will not interfere with the Lessee's quiet enjoyment of the Undivided
Interest and the Real Property Interest. The Lessee hereby waives, to the extent
permitted by Applicable Law, any and all rights which it may now have or which
at any time hereafter may be conferred upon it, by statute or otherwise, to
terminate, cancel, quit or surrender this Facility Lease or to effect or claim
any diminution or reduction of Rent payable by the Lessee hereunder, including
without limitation the provisions of Arizona Revised Statutes Section 33-343,
except in accordance with the express terms hereof. If for any reason whatsoever
this Facility Lease shall be terminated in whole or in part by operation of law
or otherwise, except as specifically provided herein, the Lessee nonetheless
agrees to pay to the Lessor or other Person entitled thereto an amount equal to
each installment of Basic Rent and all Supplemental Rent at the time such
payment would have become due and payable in accordance with the terms hereof
had this Facility Lease not been terminated in whole or in part. Each payment of
Rent made by the Lessee hereunder shall be final and the Lessee shall not seek
or have any right to recover all or any part of such payment from the Lessor or
any other Person for any reason whatsoever. All covenants, agreements and under
takings of the Lessee herein shall be performed at its cost, expense and risk
unless expressly otherwise stated. Nothing in this Section 4 shall be construed
as a guaranty by the Lessee of any residual value in the Undivided Interest or
as a guaranty of the Notes. Any provisions of Section 7(b)(2) or 8(c) of the
Participation Agreement to the contrary notwithstanding, if the Lessee shall
fail to make any payment of Rent to any Person when and as due (taking into
account appli cable grace periods), such Person shall have the right at all
times, to the exclusion of the ANPP Participants, to demand, collect, sue for,
enforce obligations relating to and otherwise obtain all amounts due in respect
of such Rent.
SECTION 5. Return of the Undivided Interest.
(a) Return of the Undivided Interest. On the Lease Termination Date,
the Lessee will surrender possession of the Undivided Interest and the Real
Property Interest to the Lessor (or to a Person specified by the Lessor to the
Lessee in writing not less than 6 months prior to the Lease Termination Date)
with full rights as a "Transferee" and the sole "Participant" with respect to
the Undivided Interest and the Real Property Interest within the meaning of
Section 15.10 of the ANPP Participation Agreement, and will furnish to the
Lessor: (i) copies certified by a senior officer of the Lessee of all
Governmental Action necessary to effect such surrender (including, but without
limitation, appropriate amendments to the License permitting the Lessor (without
the Lessor being required to change its business) or such Person to possess the
Undivided Interest and the Real Property Interest with or without the continued
involvement of the Lessee as Agent), which Governmental Action shall be in full
force and effect; and (ii) an opinion of counsel (which may be Mudge Rose
Guthrie Alexander & Ferdon, Snell & Wilmer or another counsel experienced with
NRC and other nuclear matters reasonably satisfactory to the Owner Participant)
to the effect that (A) the Lessee has obtained all Governmental Action and
action under the ANPP Participation Agreement necessary to effect such surrender
by the Lessee and receipt of possession by the Lessor (or to the Person so
specified by the Lessor) and (B) such Governmental Action is in full force and
effect. At the time of such return the Lessee shall pay or have paid all amounts
due and payable, or to become due and payable, by it as an ANPP Participant
under each and every ANPP Project Agreement allocable or chargeable (whether or
not payable during or after the Lease Term) to the Undivided Interest or the
Real Property Interest in respect of any period or periods ending on or prior to
the Lease Termination Date (including, but without limitation, all amounts
payable with respect to any and all discretionary Capital Improvements to Unit 1
or the PVNGS Site approved or authorized (without the concurrence of the Owner
Participant) within the 3-year period preceding the end of the Lease Term,
whether or not implementation thereof has been completed on or prior to the
Lease Termination Date), and the Undivided Interest and the Real Property
Interest shall be free and clear of all Liens (other than Permitted Liens
described in clauses (i), (v) (other than those arising by, through or under the
Lessee alone), (vi), (vii) (other than as aforesaid), (viii) (other than as
aforesaid), (ix) and (x) of the definition of such term) and in the condition
and state of repair required by Section 8. In the event that on or prior to the
Lease Termination Date there shall have occurred a default by any ANPP
Participant (other than the Lessee) under the ANPP Participation Agreement and
such default shall not have been cured by the defaulting ANPP Participant, then
(i) the Lessee agrees to indemnify and hold the Lessor (and each successor,
assign and transferee thereof) harmless against any and all obligations under
the ANPP Participation Agreement with respect to contributions or payments
required to be made thereby as a result of such default and (ii) the Lessor (and
each successor, assign and transferee thereof) agrees to reimburse the Lessee
for all amounts paid by the Lessee pursuant to the foregoing clause (i) to the
extent, but only to the extent, that the Lessor (or such successor, assign or
transferee) shall have actually received proceeds from the sale of the
Generation Entitlement Share of the defaulting ANPP Participant as a result of
the payment made by the Lessee pursuant to the foregoing clause (i), and, to the
extent the Lessor (or such successor, assign or transferee) shall have received
such proceeds, the amount to be reimbursed to the Lessee pursuant to this clause
(ii) shall include interest at the Prime Rate from the date of any payment by
the Lessee pursuant to the foregoing clause (i) through the date of
reimbursement of such amount pursuant to this clause (ii).
(b) Disposition Services. The Lessee agrees that if it does not
exercise its option to renew or purchase as provided in Sections 12 and 13,
respectively, then during the last thirty-six months of the Lease Term, the
Lessee will fully cooperate with the Lessor in connection with the Lessor's
efforts to lease or dispose of the Undivided Interest and the Real Property
Interest including using the Lessee's reasonable efforts to lease or dispose of
the Undivided Interest and the Real Property Interest. The Lessor agrees to
reimburse the Lessee for reasonable out-of-pocket costs and expenses of the
Lessee incurred at the request of the Lessor or the Owner Participant in
connection with such cooperation and such efforts.
SECTION 6. Warranty of the Lessor.
(a) Quiet Enjoyment. The Lessor warrants that until the Lease
Termination Date, so long as no Event of Default shall have occurred and be
continuing, the Lessee's use and possession of Unit 1, including the Undivided
Interest, shall not be interrupted by the Lessor or any Person claiming by,
through or under the Lessor, and their respective successors and assigns.
(b) Disclaimer of Other Warranties. The warranty set forth in
Section 6(a) is in lieu of all other warranties of the Lessor or the Owner
Participant, whether written, oral or implied, with respect to this Facility
Lease, Unit 1, any Capital Improvement, the Undivided Interest, PVNGS, the Real
Property Interest or the PVNGS Site. As among the Owner Participant, the Loan
Participant, the Indenture Trustee, the Collateral Trust Trustee, the Lessor and
the Lessee, execution by the Lessee of this Facility Lease shall be conclusive
proof of the compliance of Unit 1 (including any Capital Improvement), the
Undivided Interest and the Real Property Interest with all requirements of this
Facility Lease, and the Lessee acknowledges and agrees that (i) NEITHER THE
LESSOR NOR THE OWNER PARTICIPANT IS A MANUFACTURER OR A DEALER IN PROPERTY OF
SUCH KIND AND (ii) THE LESSOR LEASES AND THE LESSEE TAKES THE UNDIVIDED INTEREST
AND THE REAL PROPERTY INTEREST, AND SHALL TAKE EACH CAPITAL IMPROVEMENT, AND ANY
PART THEREOF, AS IS AND WHERE IS, and neither the Lessor nor the Owner
Participant shall be deemed to have made, and THE LESSOR AND THE OWNER
PARTICIPANT EACH HEREBY DISCLAIMS, ANY OTHER REPRESENTATION OR WARRANTY, EITHER
EXPRESS OR IMPLIED, AS TO ANY MATTER WHATSOEVER, INCLUDING, WITHOUT LIMITATION,
THE DESIGN OR CONDITION OF UNIT 1, ANY CAPITAL IMPROVEMENT, THE UNDIVIDED
INTEREST, THE REAL PROPERTY INTEREST, THE PVNGS SITE OR PVNGS, OR ANY PART
THEREOF, THE MERCHANTABILITY THEREOF OR THE FITNESS THEREOF FOR ANY PARTICULAR
PURPOSE, TITLE TO UNIT 1, ANY CAPITAL IMPROVEMENT, THE UNDIVIDED INTEREST, THE
REAL PROPERTY INTEREST, THE PVNGS SITE OR PVNGS, OR ANY PART THEREOF, THE
QUALITY OF THE MATERIAL OR WORKMANSHIP THEREOF OR CONFORMITY THEREOF TO
SPECIFICATIONS, FREEDOM FROM PATENT OR TRADEMARK INFRINGEMENT OR THE ABSENCE OF
ANY LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, NOR SHALL THE LESSOR
OR THE OWNER PARTICIPANT BE LIABLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES
(INCLUDING LIABILITY IN TORT, STRICT OR OTHERWISE), it being agreed that all
such risks, as among the Owner Participant, the Loan Participant, the Collateral
Trust Trustee, the Indenture Trustee, the Lessor and the Lessee, are to be borne
by the Lessee. The provisions of this Section 6(b) have been negotiated, and,
except to the extent otherwise expressly provided in Section 6(a), the foregoing
provisions are intended to be a complete exclusion and negation of any
representations or warranties by the Lessor, the Owner Participant, the Loan
Participant, the Collateral Trust Trustee or the Indenture Trustee, express or
implied, with respect to Unit 1 (including any Capital Improvement), the
Undivided Interest, PVNGS, the Real Property Interest or the PVNGS Site that may
arise pur suant to any law now or hereafter in effect, or otherwise.
(c) Enforcement of Certain Warranties. The Lessor authorizes' the
Lessee ('directly or through agents, including the Operating Agent), at the
Lessee's expense, to assert for the Lessor's account, during the Lease Term, all
of the Lessor's rights (if any) under any applicable warranty and any other
claims (under this Facility Lease or any Purchase Document) that the Lessee or
the Lessor may have against any vendor or manufacturer with respect to Unit 1
(including any Capital Improvement) or the Undivided Interest, and, the Lessor
agrees to cooperate, at the Lessee's expense, with the Lessee and the Operating
Agent in asserting such rights. Any amount receivable (without regard to any
right of setoff or other similar right of any Person against the Lessee) by the
Lessee as payment under any such warranty or other claim against any vendor or
manufacturer (or, if such warranty or claim relates to the Undivided Interest
and the Retained Assets, the portion of such received amount appropriately
allocable to the Undivided Interest) shall be applied in accordance with
Sections 9(g), (h) and (i).
SECTION 7. Liens.
The Lessee will not directly or indirectly create, incur, assume or
permit to exist any Lien on or with respect to the Undivided Interest, the Real
Property Interest, the Lessor's title thereto or any interest of the Lessor or
Lessee therein (and the Lessee will promptly, at its own expense, take such
action as may be necessary duly to discharge any such Lien), except Permitted
Liens. - 15 SECTION 8. Operation and Maintenance; Capital Improvements.
(a) Operation and Maintenance. The Lessee agrees that it will
exercise its rights, powers, elections and options as an ANPP Participant under
the ANPP Project Agreements to cause the operating Agent to (A) maintain Unit 1
in such condition that Unit 1 will have the capacity and functional ability' to
perform, on a continuing basis (ordinary wear and tear excepted), in normal
commercial operation, the functions and substan tially at the ratings at which
it is, from time to time, rated, (B) operate, service, maintain and repair Unit
1 and replace all necessary or useful parts and components thereof so that the
condition and operating efficiency will be maintained and preserved, ordinary
wear and tear excepted, in all material respects in accordance with (1) prudent
utility practice for items of similar size and nature, (2) such operating
standards as shall be required to take advantage of and enforce all available
warranties and (3) the terms and conditions of all insurance policies maintained
in effect at any time with respect thereto, (C) use, possess, operate and
maintain Unit 1 in compliance with all material applicable Governmental Actions
(including the License) affecting PVNGS or Unit 1 or the use, possession,
operation and maintenance thereof and (D) otherwise act in accordance with the
standards set forth in the ANPP Participation Agreement. The Lessee will comply
with all its obligations under Applicable Law affecting Unit 1, the Undivided
Interest, PVNGS, the Real Property Interest and the PVNGS Site, and the use,
operation and maintenance thereof. The Lessee agrees to (i) exercise its rights
under the ANPP Participation Agreement so that there will always be an Operating
Agent under the ANPP Participation Agreement and (ii) maintain in full force and
effect a license from the NRC adequate to possess the Undivided Interest and the
Real Property Interest under the circumstances contemplated by the ANPP
Participation Agreement. The Lessee will keep and maintain proper books and
records (i) relating to all Operating Funds (as defined in the ANPP
Participation Agreement) provided by it to the Operating Agent under the ANPP
Participation Agreement and (ii) upon receipt of the requisite information from
the Operating Agent, relating to the application of such Operating Funds to the
operation and maintenance of Unit 1 and the acquisition, construction and
installation of Capital Improvements, all in accordance with the Uniform System
of Accounts. The Lessor shall not be obliged in any way to maintain, alter,
repair, rebuild or replace Unit 1, any Capital Improvement, the Undivided
Interest or the Real Property Interest, or any part thereof, or, except as
provided in Section 8(f), to pay the cost of alteration, rebuilding,
replacement, repair or maintenance of Unit 1, any Capital Improvement, the
Undivided Interest or the Real Property Interest, or any part thereof, and the
Lessee expressly waives the right to perform any such action at the expense of
the Lessor pursuant to any law at any time in effect.
(b) Inspection. The Lessor and the Owner Participant and their
respective authorized representatives shall have the right to inspect PVNGS
(subject, in each event, to the ANPP Participation Agreement, Applicable Law,
applicable confidentiality undertakings and procedures established by the
Operating Agent) at a their expense. The Lessor and the Owner Participant and
their respective authorized representatives shall have the right to inspect, at
their expense, the books and records of the Lessee relating to PVNGS, and make
copies of and extracts therefrom (subject as aforesaid) and may, at their
expense, discuss the Lessee's affairs, finances and accounts with its executive
officers and its independent public accountants (and by this provision, the
Lessee authorizes such accountants, in the presence of the Lessee, to discuss
with the Lessor and the Owner Participant and their respective authorized
representatives the affairs, finances and accounts of the Lessee), all at such
times and as often as may be reasonably requested. None of the Lessor, the Owner
Participant, the Indenture Trustee and the Collateral Trust Trustee shall have
any duty whatsoever to make any inspection or inquiry referred to in this
Section 8(b) and shall not incur any liability or obligation by reason of not
making any such inspection or inquiry.
(c) Capital Improvements. If and to the extent required by the ANPP
Participation Agreement, the Lessee shall, at its sole expense, promptly
participate in the making of any Capital Improvement to Unit 1. Of the net
proceeds of (i) any sale or other disposition of property removed from Unit 1
receivable (without regard to any right of setoff or other similar right of any
Person against the Lessee) by, or credited to the account of the Lessee in
accordance with the ANPP Participation Agreement and (ii) any insurance proceeds
receivable (without regard to any right of setoff or other similar right of any
Person against the Lessee) for the account of the Lessor or the Lessee in
respect of the loss or destruction of, or damage or casualty to, any such
property, 11.1111% in the case of Unit 1, or 3.7037% in the case of Common
Facilities, of either such amount shall be applied as provided in Section 9(g),
(h), or (i), as the case may be. A 1.133333%, in the case of Unit 1, or
.377777%, in the case of Common Facilities, undivided interest in property at
any time removed from Unit 1 shall remain the property of the Lessor, no matter
where located, until such time as a Capital Improvement constituting a
replacement of such property shall have been installed in Unit 1 or such removed
property has been disposed of by the Operating Agent in accordance with the ANPP
Participation Agreement. Simultaneously with such disposition by the Operating
Agent, title to a 1.133333%, in the case of Unit 1, or .377777%, in the case of
Common Facilities, undivided interest in the removed property shall vest in the
Person designated by the Operating Agent, free and clear of any and all claims
or rights of the Lessor. Unless subparagraph (3) of Section 8(e) shall be
applicable, upon the incorporation of a Capital Improvement in Unit 1, without
further act, (i) title to a 14133333%, in the case of Unit 1, or .377777%, in
the case of Common Facilities, undivided interest in such Capital Improvement
shall vest in the Lessor and (ii) such applicable undivided interest in such
Capital Improvement shall become subject to this Facility Lease and be deemed to
be part of the Undivided Interest for all purposes hereof to the same extent
that the Lessor had a like undivided interest in the property originally
incorporated or installed in Unit 1. The Lessee warrants and agrees that the
Lessor's 1.133333% undivided interest in all Capital Improvements shall be free
and clear of all Liens, except Permitted Liens other than the type specified in
clauses (ii), (iii) and (xii) of the definition thereof.
(d) Reports. To the extent permissible, the Lessee shall prepare and
file in timely fashion, or, where the Lessor shall be required to file, the
Lessee shall prepare and deliver to the Lessor within a reason-able time prior
to the date for filing, any reports with respect to Unit 1, the Undivided
Interest or the Real Property Interest or the condition or operation thereof
that shall be required to be filed with any governmental or regulatory
authority. On or before March 1 of each year (commencing on March 1, 1987) and
on the Lease Termination Date, the Lessee shall furnish the Lessor and the Owner
Participant with a report stating the total cost of all Capital Improvements and
describing separately and in reasonable detail each Capital Improvement (or
related group of Capital Improvements) made during the period from the date
hereof to December 31, 1986 in the case of the first such report or during the
period from the end of the period covered by the last previous report to the
December 31 prior to such report in the case of subsequent reports. On or before
March 1 in each year (commencing March 1, 1987) and at such other times as the
Lessor or the Owner Participant shall reasonably request in writing (which
request shall provide a reasonable period for response) , the Lessee will report
in writing to the Lessor with respect to (i) the most recent annual capital
expenditure budget submitted by the Operating Agent to the Lessee in accordance
with the ANPP Participation Agreement and (ii) the then plans (if any) which the
Lessee may have for the financing of the same under Section 8(f).
(e) Title to Capital Improvements. Title to a 1.133333%, in the case
of Unit 1, or .377777%, in the case of Common Facilities, undivided interest in
each Capital Improvement to Unit 1 or the Common Facilities, as the case may be,
shall vest as follows:
(1) in the case of each Nonseverable Capital Improvement, whether or
not the Lessor shall have financed or provided financing (in whole or in
part) for such undivided interest in such Capital Improvement by an
Additional Equity Investment or a Supplemental Financing, or both,
effective on the date such Capital Improvement shall have been
incorporated or installed in Unit 1 or the Common Facilities, as the case
may be, the Lessor shall, without further act, acquire title to such
undivided interest in such Capital Improvement;
(2) in the case of each Severable Capital Improvement, if the Lessor
shall have financed (by an Additional Equity Investment or a Supplemental
Financing, or both) 1.133333%, in the case of Unit 1, or .377777%, in the
case of Common Facilities, of the cost of such Capital Improvement, the
Lessor shall, without further act, acquire title to such undivided
interest in such Capital Improvement; and
(3) in the case of each Severable Capital Improvement, if the Lessor
shall not have financed (by an Additional Equity Investment or a
supplemental Financing, or both) 1.133333%, in the case of Unit 1, or
.377777%, in the case of Common Facilities, of the cost of such Capital
Improvement, the Lessee shall retain title to such undivided interest in
such Capital Improvement Immediately upon title to such 1.133333%, in the
case of Unit 1, or .377777%, in the case of Common Facilities, undivided
interest in any Capital Improvement vesting in the Lessor pursuant to
subparagraph (1) or sub-paragraph (2) of this Section 8(e), such undivided
interest in such Capital Improvement shall, without further act, become
subject to this Facility Lease and be deemed part of the Undivided
Interest for all purposes hereof.
(f) Funding of the Cost of Capital Improvements. Before placing in
service any Capital Improvement to Unit 1 or the Common Facilities the cost of
which exceeds $100,000,000 in respect of the inter ests of all ANPP
Participants, the Lessee shall give the Lessor and the Owner Participant
reasonable advance notice thereof. The Owner Participant shall have the option,
in its sole discretion, of financing through the Lessor' 1.133333%, in the case
of Unit 1, or .377777%, in the case of Common Facilities, of the cost of any
such Capital Improvement, or any other Capital Improvement presented to the
Owner Participant for financing, including or not including the making of an
investment by the Owner Participant (an Additional Equity Investment) and the
issuance of one or more Additional Notes, all on terms acceptable to the Lessee
and the Owner Participant. If the Owner Participant does not finance, or arrange
the financing of, 1.133333%, in the case of Unit 1, or .377777%, in the case of
Common Facilities, of the cost of such Capital Improvement, the Lessee may cause
the Lessor to issue, if and to the extent permitted by the Indenture, to one or
more Persons (other than any Person affiliated with the Lessee within the
meaning of Section 318 of the Code)one or more Additional Notes and to use the
proceeds thereof to pay the applicable percentage of the cost of such Capital
Improvement, subject to satisfaction of the following conditions:
(i) there shall be no more than one Supplemental Financing in any
calendar year;
(ii) the sum of the Supplemental Financing Amounts in any calendar
year shall equal or exceed 1.133333% of $5,000,000;
(iii) the Lessee may include in any request for a Supplemental
Financing only Capital Improvements not previously financed in any
Supplemental Financings and which have been installed or affixed no
earlier than three calendar years before the beginning of the calendar
year in which such Supplemental Financing occurs;
(iv) the total amount of all Supplemental Financings during the
Basic Lease Term shall not exceed one-ninth of $100,000,000;
(v) unless waived by the Owner Participant, the Bonds issued and
outstanding under the Collateral Trust Indenture shall be rated no less
than "investment grade", as determined by Standard & Poor's Corporation
and Moody's Investors Service, Inc.;
(vi) the Supplemental Financing Amount shall not exceed that portion
of the cost of Capital Improvements which, when financed, will constitute
an addition to the Owner Participant's basis under section 1012 of the
Code;
(vii) in the opinion of independent tax counsel to the Owner
Participant, such Supplemental Financing shall not result in adverse tax
consequences to the Owner Participant or adversely affect the status of
this Facility Lease as a "true lease" for Federal, New York State or New
York City tax purposes, and the Owner Participant and the Lessee shall
have agreed upon the amount and manner of payment of the indemnity (if
any) payable by the Lessee as a consequence of such Supplemental
Financing;
(viii) the Additional Notes shall have a final maturity date no
later than January 15, 2015;
(ix) the Lessee shall have made such representations, warranties and
covenants regarding the tax characteristics of the Lessor's undivided
interest in each Capital Improvement as the Owner Participant reasonably
requests, and the Tax Indemnification Agreement shall have been
appropriately modified;
(x) appropriate adjustments to Basic Rent and the schedules of
Casualty Values, Special Casualty Values and Termination Values shall have
been agreed to by the Owner Participant to support the amortization of the
Additional Notes issued in respect of such Supplemental Financing and to
preserve Net Economic Return; (xi) the Lessee shall pay to the Lessor an
amount equal to all out-of-pocket costs and expenses reasonably incurred
by the Lessor or the Owner Participant and not financed as a part of such
Supplemental Financing or reflected in adjustments to Basic Rent;
(xii) no Default or Event of Default shall have occurred and be
continuing; and
(xiii) the Lessee shall enter into such agreements and shall have
provided such tax indemnities, representations warranties, covenants,
opinions, certificates and other documents as the Owner Participant shall
reasonably request.
SECTION 9. Event of Loss; Deemed Loss Event.
(a) Damage or Loss. In the event that Section 16.2 of the ANPP
Participation Agreement (as in effect on the date hereof) shall become
applicable, or an Event of Loss, a Requisition of Use or a Requisition of Title
shall occur, or Unit 1 or any substantial part thereof shall suffer destruction,
damage, loss, condemn nation, confiscation, theft or seizure for any reason
whatsoever, such fact shall promptly, and in any case within five Business Days
following such event, be reported by the Lessee to the Lessor and the Owner
Participant.
(b) Repair. The Lessee shall promptly make any and all payments
required of the Lessee under the provisions of the ANPP Participation Agreement
relating to damage or destruction or the like to Unit 1 or any portion thereof;
provided, however, that the Lessee shall in no event be obligated to make or
join in any agreement under Section 16.2 of the ANPP Participation Agreement (as
in effect on the date hereof) concerning repair's to or reconstruction of Unit
1.
(c) Payment of Casualty Value. On the Basic Rent Payment Date next
following receipt by the Lessee of a written notice from the Lessor that an
Event of Loss has occurred, the Lessee shall pay to the Lessor all Basic Rent
due on such Basic Rent Payment Date, plus an amount equal to the excess of (i)
Casualty Value determined as of such Basic Rent Payment Date, over (ii) the
unpaid principal amount of the Notes Outstanding on such date after giving
effect to the payment, if any, of the principal installment due and payable on
such date. An Event of Loss shall not be deemed to have occurred unless and
until the Lessor delivers the notice specified in the preceding sentence. Upon
compliance in full by the Lessee with the foregoing provisions of this Section
(c) and assumption by the Lessee of all the obligations and liabilities of the
Owner Trustee under the Indenture and the Notes pursuant to Section 3.9(b) of
the Indenture, the Lessor shall (so long as no Default or Event of Default shall
have occurred and be continuing), and at any time after the occurrence of an
Event of Loss, the Lessor may:
(1) in the case of an Event of Loss arising from a Final Shutdown,
if the Lessee shall have declined, but one or more of the other ANPP
Participants shall have elected, to reconstruct or restore Unit 1, as
permitted by the ANPP Participation Agreement, Transfer the Undivided
Interest and the Real Property Interest to such electing ANPP
Participants, as required by and in the proportions set forth in the ANPP
Participation Agreement, in which case the Lessee shall be entitled to
receive the portion of the "salvage value" purchase price allocable to the
Undivided Interest; or
(2) if clause (1) shall not be applicable, Transfer the Undivided
Interest and the Real Property Interest to the Lessee.
If the Lessee shall not have assumed all the obligations and liabilities of the
Owner Trustee under the Indenture and the Notes in accordance with Section
3.9(b) of the Indenture, but the Owner Participant shall have received under
Section 5.2 of the Indenture all amounts required to be paid by the Lessee
pursuant to this Section 9(c) (including interest, if any, thereon pursuant to
Section 3(b)(iii) hereof), the Lessor shall retain the Undivided Interest and
the Real Property Interest subject to the terms of this Facility Lease and
Section 7(b,)(4) of the Participation Agreement; provided, however, that (i) the
obligation of the Lessee to pay further Basic Rent shall be reduced to an amount
on each Basic Rent Payment Date equal to the aggregate amount of principal,
premium, if any, and accrued interest then payable on all Notes then Outstanding
and (ii) this Facility Lease shall become a security agreement for all purposes
of Applicable Law.
(d) Payment of Special Casualty Value. If a Deemed Loss Event
occurs, the party hereto having knowledge thereof shall promptly notify the
other thereof (provided that the failure by the Lessor to furnish to the Lessee
the foregoing notification shall not impair the right of the Lessor to exercise
the option referred to below) and, at the Lessor's option, exercisable by
delivery of written notice to the Lessee, on the day (specified in Schedule 2)
of the month next following the month during which such notice is delivered to
the Lessee, the Lessee shall pay to the Lessor an amount equal to the excess of
(i) Special Casualty Value deter mined as of the date such payment is due over
(ij) the principal amount of the Notes Outstanding on such date after giving
effect to the payment, if any, of the principal installment due and payable on
such day. Upon compliance in full by the Lessee with the foregoing provisions of
this Section 9(d) and assumption by the Lessee of all the obligations and
liabilities of the Owner Trustee under the Indenture and the Notes pursuant to
Section 3.9(b) of the Indenture, the Lessor shall (so long as no Default or
Event of Default shall have occurred and be continuing) , and at any time after
the occurrence of a Deemed Loss Event, the Lessor may, Transfer the Undivided
Interest and the Real Property Interest to the Lessee. If the Lessee shall not
have assumed all the' liabilities and obligations of the Owner Trustee under the
Indenture and the Notes in accordance with Section 3.9(b) of the Indenture, but
the Owner Participant shall have received under Section 5.2 of the Indenture all
amounts required to be paid by the Lessee pursuant to this Section 9(d)
(including interest, if any, thereon pursuant to Section 3(b)(iii)), the Lessor
shall retain the Undivided Interest and the Real Property Interest subject to
the terms of this Facility Lease and Section 7(b) (4) of the Participation
Agreement; provided, however, that (i) the obligation of the Lessee to pay
further Basic Rent shall be reduced to an amount on each Basic Rent Payment Date
equal to the aggregate amount of principal, premium, if any, and accrued
interest then payable on all Notes Outstanding and (ii) this Facility Lease
shall become a security agreement for all purposes of Applicable Law.
(e) Requisition of Use. In the case of a Requisition of Use not
constituting an Event of Loss, this Facility Lease shall continue, and each and
every obligation of the Lessee hereunder and under each Transaction Document
shall remain in full force and effect. So long as no Default or Event of Default
shall have occurred and be continuing, the Lessee shall be entitled to all sums
received by reason of any such Requisition of Use for the period ending on the
Lease Termination Date, and the Lessor shall be entitled to all sums received by
reason of any such Requisition of Use for the period after the Lease Termination
Date.
(f) Termination of Obligation. Until the Lessee shall have made the
payments specified in Section 9(c) or 9(d), the Lessee shall make all payments
of Rent when due; and the Lessee shall thereafter be required to make all
payments of Supplemental Rent as and when due. In the event that the Lessee
shall assume all the obligations and liabilities of the Owner Trustee under the
Indenture and the Notes pursuant to Section 3.9(b) of the Indenture, upon
receipt by the Owner Participant under Section 5.2 of the Indenture of the
payments specified in Section 9(c) or 9(d) and payment by the Lessee of all
other Rent due and owing through and including the date of payment (including
Basic Rent due on or accrued through such date, as the case may be), the Lease
Term shall end and the Lessee's obligation to pay further Basic Rent shall
cease.
(g) Application of Payments on an Event of Loss. Any payments
receivable (without regard to any right of setoff or other similar right of any
Person against the Lessee) at any time by the Lessor or the Lessee (other than
insurance placed by the Owner Trustee or the Owner Participant pursuant to
Section 10(b)) from any Governmental Authority, insurer or other Person (except
the Lessee, the Owner Trustee or the Owner Participant) as a result of the
occurrence of an Event of Loss shall be applied as follows:
(i) all such payments received at any time by the Lessee shall be
promptly paid to the Lessor for application pursuant to the following
provisions of this Section 9(g), except that the Lessee may retain any
amounts that would at the time be payable to the Lessee as reimbursement
under the provisions of clause (ii) below;
(ii) so much of such payments as shall not exceed the amount
required to be paid by the Lessee pursuant to Section 9(c) (ignoring, for
this purpose, clause (ii) of the first sentence thereof) shall be applied
in reduction of the Lessee's obligation to pay such amount if not already
paid by the Lessee or, if already paid by the Lessee, shall be applied to
reimburse the Lessee for its payment of such amount; and
(iii) the balance, if any, of such payments remaining thereafter
shall be divided between the Lessor and the Lessee as their interests may
appear.
(h) Application of Payments Not Relating to an Event of Loss.
Payments receivable (without regard to anyright of setoff or other similar right
of any Person against the Lessee) at any time by the Lessor (other than
insurance placed by the Owner Trustee or the Owner Participant pursuant to
Section 10(b)) or the Lessee from any Governmental Authority, insurer or other
Person with respect to any destruction, damage, loss, condemnation,
confiscation, theft or seizure of or Requisition of Title to or Requisition of
Use of the Undivided Interest or any part thereof not constituting an Event of
Loss shall be applied first to reimburse the Lessee for all amounts expended in
respect of the repair, replacement or reconstruction of the Undivided Interest
or any part thereof as provided in Section 9(b), and second the balance, if any,
of such payments shall be divided between the Lessor and the Lessee as their
interests may appear.
(i) Other Dispositions. Notwithstanding the foregoing provisions of
this Section 9, 50 long as a Default or Event of Default shall have occurred and
be continuing, any amount that would otherwise be payable to or for the account
of, or that would otherwise be retained by, the Lessee pursuant to Section 10 or
this Section 9 shall be paid to the Lessor as security for the obligations of
the Lessee under this Facility Lease and, at such time thereafter as no Default
or Event of Default shall be continuing, such amount shall be paid promptly to
the Lessee unless this Facility Lease shall have theretofore been declared to be
in default, in which event such amount shall be disposed of in accordance with
the provisions hereof, of the Indenture and of the Trust Agreement.
(j) Assumption of Notes; Creation of Lien on Undivided Interest. In
connection with an Event of Loss, a Deemed Loss Event or the exercise of the
Cure Option, (i) the Lessee agrees to use its best efforts to comply with the
conditions respecting its assumption of all the obligations and liabilities of
the Owner Trustee under the Indenture and the Notes set forth in Section 3.9(b)
of the Indenture, and (ii) the Lessor agrees that, if the Lessee fails to assume
all the obligations and liabilities of the Owner Trustee under the Indenture and
the Notes in accordance with Section 3.9(b) of the Indenture, not later than two
Business Days prior to the date on which the Lessee is required to make the
payments specified in Section 9(c) or 9(d), the Lessor will cause the Undivided
Interest and the Real Property Interest to be subjected to the Lien of the
Indenture by executing and delivering to the Indenture Trustee the Undivided
Interest Indenture Supplement.
SECTION 10. Insurance.
(a) Required Insurance. The Lessee will use its best efforts to
cause the Operating Agent to carry and maintain insurance required under the
ANPP Participation Agreement and will make all payments required of the Lessee
under the ANPP Participation Agreement in respect of such insurance. The Lessee
will at all times maintain, directly or through the Operating Agent, policies of
casualty and liability insurance with respect to the Undivided Interest and the
Real Property Interest in such amounts and with such coverage as shall be
adequate in accordance with prudent utility practice. Any policies of insurance
in respect of destruction, damage, loss, theft or other casualty to the
Undivided Interest, the Real Property Interest, Unit 1 or any part thereof shall
name the Lessor (and, to the extent practicable, the Owner Participant) as an
additional insured, as its interest (or their interests) may appear, and any
policies with respect to nuclear liability insurance with respect to the
Undivided Interest, the Real Property Interest, Unit 1, or any part thereof,
shall include all Indemnitees as insureds through an omnibus definition of
"insured" or through endorsement; provided, however, that if the Operating
Agent, as trustee, shall become the loss payee under any policy of insurance
constituting Project Insurance, then the Lessor and the Owner Participant shall
be and be made beneficiaries of the trust arrangement under which the Operating
Agent acts as trustee. The Lessee shall, on or before March 1 of each year,
commencing March 1, 1987, furnish to the Lessor and the Owner Participant (A) a
report signed by the broker or brokers for the PVNGS insurance (or if insurance
is placed directly by the Operating Agent, a certificate signed by the Operating
Agent) (i) showing the insurance then main tained by the ANPP Participants with
respect to PVNGS, (ii) stating that no premiums are then delinquent, and (iii)
stating that the insurance maintained by the ANPP Participants with respect to
PVNGS is in accordance with the terms of (1) the ANPP Participation Agreement
and (2) this Section 10, (B) a report signed by the broker or brokers for the
Lessee's insurance (or if insurance is placed directly by the Lessee, a
certificate signed by the Lessee) showing the separate insurance, if any, then
maintained by the Lessee with respect to its interest in PVNGS and stating that
no premiums under such insurance are delinquent; (C) a certificate signed by the
Lessee stating that the insurance maintained by the ANPP participants and by the
Lessee, identified on the reports to be delivered pursuant to clauses (A) and
(B), is in accordance with prudent utility practice within the nuclear industry,
the ANPP Participation Agreement and this Section 10; and (D) upon the request
of the Lessor or the Owner Participant, copies (to the extent permitted by the
issuers of such policies) of policies so maintained. Any report by an insurance
broker with respect to clause (A)(iii)(1) may be made in reliance upon a
schedule provided by the Lessee (a copy of which shall be attached) identifying
the insurance (by coverage, limits, insureds and other pertinent details)
required to be maintained under the ANPP Participation Agreement. Any report
with respect to clause (A)(iii)(2) may be made in reliance upon a similar
schedule provided by the Lessee (a copy of which shall be attached) identifying
the insurance required to be maintained under this Section 10. All insurance pro
ceeds paid in respect of damage, destruction, loss, theft or other casualty to
the Undivided Interest or the Real Property Interest shall be applied as
provided in Section 9(g), (h) or (i), as the case may be, subject, however, to
any priority allocations of such proceeds to decontamination and debris removal
set forth in the insurance policies or required under Applicable Law. In the
event that either the Operating Agent or the Lessee delivers a certificate
pursuant to clause (A) or (B) of the foregoing, the Owner Participant shall be
entitled to receive (if it so requests and if the insurer will issue the same) a
report from any insurer listed in such certificate.
(b) Permitted Insurance. Nothing in this Section 10 shall prohibit
the Lessee from placing, at its expense, insurance on or with respect to the
cost of purchasing replacement power, naming the Lessee as insured and/or loss
payee, unless such insurance would conflict with or otherwise limit the
availability of insurance to be provided or maintained in accordance with
Section 10(a). Nothing in this Section 10 shall prohibit the Lessor or the Owner
Participant from placing at its expense other insurance on or with respect to
Unit 1, the Undivided Interest or the Real Property Interest or the operation of
Unit 1, naming the Lessor or the Owner Participant as insured and/or loss payee,
unless such insurance would conflict with or otherwise limit the insurance to be
provided or maintained in accordance with Section 10(a).
SECTION 11. Rights to Assign or Sublease.
(a) Assignment or Sublease by the Lessee. Without the prior written
consent of the Lessor, the Lessee shall not assign, sublease, transfer or
encumber (except for Permitted Liens) its leasehold interest in the Undivided
Interest or the Real Property Interest under this Facility Lease. The Lessee
shall not, without the prior written consent of the Lessor and the Owner
Participant, part with the possession of, or suffer or allow to pass out of its
possession, the Undivided Interest, the Real Property Interest or any interest
therein, except to the extent required pursuant to the ANPP Participation
Agreement or expressly permitted by the provisions of this Facility Lease or any
other Transaction Document.
(b) Assignment by Lessor as Security for Lessor's Obligations. To
secure the indebtedness evidenced by the Notes, the Lessor will assign to the
Indenture Trustee its right, title and interest to receive certain payments of
Rent (not including, in any event, Excepted Payments), to the extent provided in
the Indenture and may assign to the Indenture Trustee its right, title and
interest in the Undivided Interest and the Real Property Interest as
contemplated by Section 9(j). The Lessee hereby (a) consents to such assignment
pursuant to the terms of the Indenture, (b) agrees to pay directly to the
Indenture Trustee at the Indenture Trustee's Office (so long as the lien of the
Indenture has not been satisfied and discharged and the Lessor is obligated
thereunder) all amounts of Rent (other than Excepted Payments) due or to become
due to the Lessor that shall be required to be paid to the Indenture Trustee
pursuant to the Indenture, (c) agrees that the right of the Indenture Trustee to
any such payments shall be absolute and unconditional and shall not be affected
by any circumstances whatsoever, including, without limitation, those
circumstances set forth in Section 4 and (d) agrees that, to the extent provided
in the Indenture and until the Indenture is discharged in accordance with its
terms, the Indenture Trustee shall have all the rights of the Lessor hereunder
with respect to Assigned Payments as if the Indenture Trustee had originally
been named herein as the Lessor.
SECTION 12. Lease Renewal.
Subject to the notice requirements set forth in Section 13(a), at
the end of the Basic Lease Term, provided that no Default, Event of Default,
Event of Loss or Deemed Loss Event shall have occurred and be continuing and the
Notes shall have been paid in full, the Lessee shall have the right to renew the
term of this Facility Lease for a period commencing January 15, 2015, and ending
on the later of January 15, 2017 and the end of the Maximum Option Period (the
Renewal Term), during which the Basic Rent payable shall be the rental provided
in Section 3(a)(iii) and one-half of the rental provided in Section 21.
SECTION 13. Notices for Renewal or Purchase; Purchase Options.
(a) Notice; Determination of values; Appraisal Procedure. Not later
than three years nor earlier than five years prior to the expiration date of the
Basic Lease Term, and not later than three years nor earlier than five years
prior to the expiration date of the Renewal Term, as the case may be, the Lessee
shall give to the Lessor written notice of its election either to (A) return the
Undivided Interest and the Real Property Interest to the Lessor pursuant to
Section 5, or (B) exercise the renewal option permitted by Section 12 (in the
case of the notice delivered in respect of the expiration date of the Basic
Lease Term) or the purchase option permitted by Section 13(b). If the notice
specified in clause (B) of the preceding sentence is given three years prior to
the expiration of the Basic Lease Term, then not later than two years prior to
the expiration date of the Basic Lease Term, the Lessee will give the Lessor
written notice of its election either to exercise the renewal option permitted
by Section 12 or the purchase option permitted by Section 13(b). Any such
election shall be irrevocable as to the Lessee but no such election shall be
binding on the Lessor if, on the effective date thereof, an Event of Default
shall have occurred and be continuing or an Event of Loss or a Deemed Loss Event
shall have occurred. Promptly after giving notice, (i) in case the renewal
option has been elected, the Maximum Option Period shall be determined by the
Appraisal Procedure, or (ii) in case the purchase option permitted by Section
13(b) has been elected, the Lessee and the Owner Participant shall agree upon
the Fair Market Sales Value of the Undivided Interest and the Real Property
Interest, or, if within three months after the date of the Lessee's notice the
Lessee and the Owner Participant shall be unable so to agree, such value shall
be determined by the Appraisal Procedure.
(b) Purchase Option at Expiration of the Lease Term. Subject to the
notice requirements set forth in Section 13(a), 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, on the date of the expiration of the Basic Lease Term
or the Renewal Term (if elected), the Lessee shall have the right to purchase
the Undivided Interest and the Real Property Interest for a purchase price equal
to the Fair Market Sales Value thereof.
(c) Special Purchase Event. If, at or before the Refunding Date, the
Owner Participant shall reasonably determine (in consultation with Owner
Participant's Special Counsel and Owner Participant's Special New Mexico
Counsel) that the "weighted annual lease payment factor" (as such term is
defined in the New Mexico Order and as the same may be reasonably interpreted by
the Owner Participant, in consultation with counsel as aforesaid) for all "Lease
Transactions" (as so defined) exceeds 11.5% or there is a material risk that the
same will exceed 11.7% and so notifies the Lessor and the Lessee, or if the
Lessee, in its reasonable judgment, determines that such a material risk exists,
then the Lessee shall purchase the Undivided Interest and the Real Property
Interest from the Lessor, on a Business Day specified by the Lessor to the
Lessee by not less than 30 days prior notice, for a purchase price equal to the
greater of (i) the Fair Market Sales Value thereof and (ii) Casualty value as of
the Basic Rent Payment Date first preceding the date of such purchase or as of
the date of such purchase, if such date shall be a Basic Rent Payment Date plus,
if such purchase date shall not be a Basic Rent Payment Date, a pro ration of
Basic Rent to the date of purchase.
(d) Purchase of the Undivided Interest; Payment, Etc. If the Lessee
shall have elected or be required to purchase the Undivided Interest and the
Real Property Interest pursuant to Section 13(b) or 13(c), payment by the Lessee
of the purchase price for the Undivided Interest and the Real Property Interest
shall be made in immediately available funds, whereupon the Lessor shall
Transfer the Undivided Interest and the Real Property Interest to the Lessee.
SECTION 14. Termination for Obsolescence.
(a) Termination Notice. Notwithstanding any provision herein
contained to the contrary, unless a Default or an Event of Default shall have
occurred and be continuing or an Event of Loss or a Deemed Loss Event shall have
occurred, the Lessee shall have the option (provided that the Lessee shall have
delivered to the Lessor an Officers' Certificate to the effect that the Lessee's
Board of Directors has adopted and there is in effect a resolution determining
that Unit 1 is (A) uneconomic to the Lessee or (B) economically obsolete for any
reason; and provided that the Lessee shall be disposing of all its other leased
interests in Unit 1), on at least 360 days' prior written notice a (Termination
Notice) to the Lessor, the Owner Participant and the Indenture Trustee (which
notice shall be irrevocable)) to terminate this Facility Lease on any Basic Rent
Payment Date after January 15, 1998, and prior to January 15, 2012 (the
Termination Date). If the Lessee shall give the Lessor a Termination Notice, the
Lessee shall, as agent for the Lessor, use its best efforts to obtain cash bids
for the purchase of the Undivided Interest and the Real Property Interest,
together with the interest of the Lessor under the Assignment and Assumption.
The Lessor shall also have the right to obtain such cash bids, either directly
or through agents other than the Lessee. The Lessee shall certify to the Lessor
within ten days after the Lessee's receipt of each bid (and, in any event, prior
to the Termination Date) the amount and terms thereof and the name and address
of the party (which shall not be the Lessee or any Affiliate of the Lessee)
submitting such bid.
(b) Right of Lessor to Retain Undivided Interest upon Termination.
The Lessor may elect to retain, rather than sell, the Undivided Interest and the
Real Property Interest by giving notice to the Lessee and the Indenture Trustee
prior to the Termination Date. It shall be a condition precedent to the Lessor's
right to retain the Undivided Interest and the Real Property Interest that on or
prior to the Termination Date the Lessor shall have paid (or made provision for
payment) to the Indenture Trustee, the unpaid principal amount of all Notes
Outstanding on such date and all premium, if any, and interest accrued and
unpaid on the date of payment. If the Lessor elects to retain the Undivided
Interest and the Real Property Interest pursuant to this Section 14(b), the
Lessee shall pay to the Lessor on the Termination Date the Basic Rent and any
other Rent due or accrued, as the case may be, to and including the Termination
Date, together with an amount equal to the excess, if any, of the Termination
Value as of the Termination Date over the highest bona fide offer received
pursuant to Section 14(a).
(c) Events on the Termination Date. If the Lessor has not elected to
retain the Undivided Interest and the Real Property Interest as provided in
Section 14(b), on the Termination Date the Lessor shall (upon receipt of the
sale price and all additional payments specified in the next sentence) Transfer
the Undivided Interest and the Real Property Interest for cash to the bidder
(which shall not be the Lessee or an Affiliate of the Lessee) that shall have
submitted the highest bid on or before the Termination Date. The total sale
price realized at such sale shall be retained by the Lessor (subject, however,
to the terms of the Indenture and the requirement that there shall have been
paid, or provision for payment made, to the Indenture Trustee the unpaid
principal amount of all Notes Outstanding on the Termination Date and all
premium, if any, and interest accrued and unpaid on the date of payment) and, in
addition, on the Termination Date the Lessee shall pay to the Lessor (A) the
excess, if any, of the Termination Value as of the Termination Date over the net
sale price of the Undivided Interest and the Real Property Interest and (B) any
Basic Rent due or accrued, as the case may be, to and including the Termination
Date and shall pay to the Person or Persons entitled thereto all Supplemental
Rent (other than Termination Value). Upon compliance by the Lessee with the
applicable provisions of this Section 14, the obligation of the Lessee to pay
Basic Rent due hereunder for any period after the Termination Date shall cease
and the Basic Lease Term shall end on the Termination Date; provided, however,
that, in the event of termination of this Facility Lease pursuant to this
Section 14, the obligations of the Lessee under the ANPP Participation Agreement
(except as therein expressly provided) and the Assignment and Assumption shall
continue in full force and effect and shall not be impaired by reason of any
such termination. If, other than as a result of the Lessor's election to retain
the Undivided Interest and the Real Property Interest as provided in Section
14(b), on or as of the Termination Date no such sale shall occur or the Lessee
shall not have complied in full with this Section 14, this Facility Lease shall
continue in full force and effect in accordance with its terms without prejudice
to the Lessee's right to exercise its rights under this Section 14 thereafter,
except that the Lessee shall not be entitled to deliver another Termination
Notice during the 3-year period following such Termination Date. The Lessor
shall be under no duty to solicit bids, to inquire into the efforts of the
Lessee to obtain bids or otherwise take any action in connection with any such
sale other than, if the Lessor has not elected to retain the Undivided Interest
and the Real Property Interest, to Transfer the Undivided Interest and the Real
Property Interest to the purchaser named in the highest bid certified by the
Lessee to the Lessor or obtained by the Lessor, against receipt of the payments
provided for herein (but only if such purchaser has obtained all Governmental
Action by the NRC necessary in connection therewith).
(d) Early Termination Notice. In the event that the Lessee shall
fail to exercise its renewal option or purchase option within the time limit
provided by Section 13(a), the Lessor shall have the option, on any Basic Rent
Payment Date thereafter, on at least 120 days prior written notice (an Early
Termination Notice) to the Lessee and the Indenture Trustee, to terminate this
Facility Lease on the Basic Rent Payment Date specified in such notice (the
Early Termination Date). Any Early Termination Notice may be revoked by the
Lessor at any time on or prior to the Early Termination Date.
(e) Events on the Early Termination Date. On the Early Termination
Date the Lessor shall, at its option, (i) Transfer the Undivided Interest and
the Real Property Interest to the bidder (other than the Lessee or any Affiliate
of the Lessee) selected by the Lessor or (ii) retain the Undivided Interest and
the Real Property Interest. It shall be a condition precedent to the Lessor's
right to sell or retain the Undivided Interest and the Real Property Interest
that on or prior to the Early Termination Date the Lessor shall have paid (or
made provision for payment) to the Indenture Trustee the unpaid principal amount
of all Notes Outstanding on such date and all premium, if any, and interest
accrued and unpaid on the date of payment. The total sale price realized at any
such sale shall be retained by the Lessor and, in addition, on the Early
Termination Date the Lessee shall pay to the Lessor any Basic Rent due or
accrued, as the case may be, to and including the Early Termination Date, and
shall pay to the Person or Persons entitled thereto all Supplemental Rent (other
than Termination Value). Upon compliance by the Lessee with the applicable
provisions of this Section 14, the obligation of the Lessee to pay Basic Rent
due hereunder for any period after the Early Termination Date shall cease and
the Lease Term shall end on the Early Termination Date; provided, however, that
in the event of the termination of this Facility Lease pursuant to this Section
14, the obligations of the Lessee under the ANPP Participation Agreement (except
as therein expressly provided) and the Assignment and Assumption shall continue
in full force and effect and shall not be impaired by reason of any such
termination.
SECTION 15. Events of Default.
The term Event of Default, wherever used herein, shall mean any of
the following events (whatever the reason for such Event of Default and whether
it shall be voluntary or involuntary, or come about or be effected by operation
of law, or be pursuant to or in compliance with any Applicable Law or
Governmental Action)
(i) the Lessee shall fail to make, or cause to be made, (x) payment
of Casualty Value, Termination Value, Special Casualty Value or payment
due pursuant to exercise of the Cure Option when due, (y) any payment of
Basic Rent within 5 Business Days after the same shall become due or (z)
any payment of Supplemental Rent (other than Casualty Value, Termination
Value, Special Casualty Value or payment due pursuant to exercise of the
Cure Option) within 20 days after the same shall become due or demanded,
as the case may be; or
(ii) the Lessee shall fail to perform or observe any covenant,
condition or agreement to be performed or observed by it under Section 10
( b ) ( 3 ) ( i ) , 1 0 ( b )( 3 ) ( i i),10(b) (3) (iii) or 10(b) (3) (v)
of the Participation Agreement or Section 7, 10 (other than failure of the
Lessee to cause to be delivered the insurance certificates (other than a
certificate of the Lessee) described therein) or 11 of this Facility
Lease; or
(iii) the Lessee shall fail to perform or observe any covenant or
agreement to be performed or observed by it under Section 10(b)(3)(viii)
of the Participation Agreement and such failure shall continue for a
period of 30 days after there shall have been given to the Lessee by the
Lessor or the Owner Participant a notice specifying such failure and
requiring it to be remedied and stating that such notice is a "Notice of
Default" hereunder; or
(iv) the Lessee shall fail to perform its agreements set forth in
Section 5(a) hereof; or
(v) the Lessee shall fail to perform or observe any covenant,
condition or agreement (other than covenants, conditions or agreements
referred to in clauses (i) through (iv) above) to be performed or observed
by it under this Facility Lease or any other Transaction Document, and
such failure shall continue for a period of 30 days after there shall have
been given to the Lessee by the Lessor or the Owner Participant a notice
specifying such failure and requiring it to be remedied and stating that
such notice is a "Notice of Default" hereunder; or
(vi) any representation or warranty made by the Lessee in this
Facility Lease, any other Transaction Document (other than the Tax
Indemnification Agreement) or any agreement, document or certificate
delivered by the Lessee in connection herewith or therewith shall prove to
have been incorrect in any material respect when any such representation
or warranty was made or given and shall remain material and materially
incorrect at the time in question; or
(vii) the Lessee shall commence a voluntary case or other proceeding
seeking liquidation, reorganization or other relief with respect to itself
or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial
part of its property, or shall consent to any such relief or to the
appointment of or taking of possession by any such official in an
involuntary case or other proceeding commenced against it, or shall make a
general assignment for the benefit of creditors, or shall take any
corporate action to authorize any of the foregoing; or an involuntary case
or other proceeding shall be commenced against the Lessee seeking
liquidation, reorganization or other relief with respect to it or its
debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial
part of its property, and such involuntary case or other proceeding shall
remain undismissed or unstayed for a period of 60 consecutive days; or
(viii) final judgment for the payment of money in excess of
$1,000,000 shall be rendered against the Lessee and the Lessee shall not
have discharged the same or provided for its discharge in accordance with
its terms or bonded the same or procured a stay of execution thereof
within 60 days from the entry thereof; or
(ix) (1) a default by the Lessee under the ANPP Participation
Agreement in consequence of which the Lessee's right to receive its
Generation Entitlement Share in PVNGS is suspended by the other ANPP
Participants, or (2) the giving by any ANPP Participant of a notice under
Section 23.2 (or any comparable successor provision) of the ANPP
Participation Agreement respecting a default thereunder by the Lessee and
the lapse of 20 Business Days from the giving of such notice without the
Lessee having cured such default; provided, however, that for purposes of
this clause (2) if the Lessee shall have, in good faith, disputed the
existence or nature of a default and such dispute shall have become the
subject of an arbitration under Section 24 (or any comparable successor
provision) of the ANPP Participation Agreement, such 20 Business Day
period shall commence on the date of the final determination of the board
of arbitrators under such Section 24; or
(x) (1) the Lessee shall fail to pay when due (whether by scheduled
maturity, required (prepayment, acceleration, demand or otherwise) any
Debt (which term shall mean (A) indebtedness for borrowed money, (B)
obligations as lessee under leases and (C) obligations under direct or
indirect guarantees in respect of, and obligations (contingent or
otherwise) to purchase or otherwise acquire or otherwise to assure a
creditor against loss in respect of, indebtedness or obligations of others
of the kinds referred to in clause (A) or (B) above, in each case if the
principal amount (or equivalent) thereof (or in the case of any operating
lease, an equivalent on the assumption such lease were a lease required to
be capitalized in accordance with generally accepted accounting
principles) is greater than $20,000,000 ($5,000,000 in the case of any
PVNGS operating lease)) of the Lessee, and such failure shall continue
after the applicable grace period, if any, specified in the agreement or
instrument relating to such Debt, but only if the Lessee shall have
received notice of such failure or a Responsible Officer of the Lessee
shall have actual knowledge of such failure; or (2) any other default
under any agreement or instrument relating to any such Debt, or any other
event, shall occur and shall continue after the applicable grace period,
if any, specified in such agreement or instrument, if the effect of such
default or event is to accelerate, or to permit the acceleration of, the
maturity of such Debt, but only if the Lessee shall have received notice
of such default or event or a Responsible Officer of the Lessee shall have
actual knowledge of such default or event.
SECTION 16. Remedies.
(a) Remedies. Upon the occurrence of any Event of Default and so
long as the same shall be continuing, the Lessor may, at its option, declare
this Facility Lease to be in default by written notice to such effect given to
the Lessee, and may exercise one or more of the following remedies as the Lessor
in its sole discretion shall elect:
(i) the Lessor may, by notice to the Lessee, rescind or terminate
this Facility Lease;
(ii) the Lessor may (x) demand that the Lessee, and thereupon the
Lessee shall, return possession of the Undivided Interest and the Real
Property Interest promptly to the Lessor in the manner and condition
required by, and otherwise in accordance with the provisions of, this
Facility Lease as if the Undivided Interest and the Real Property Interest
were being returned at the end of the Lease Term and the Lessor shall not
be liable for the reimbursement of the Lessee for any costs and expenses
incurred by the Lessee in connection therewith and (y) subject to
Applicable Law, enter upon the PVNGS Site and take immediate possession of
(to the exclusion of the Lessee) the Undivided Interest and the Real
Property Interest, by summary proceedings or otherwise, all without
liability to the Lessee for or by reason of such entry or taking of
possession, whether for the restoration of damage to property caused by
such taking or otherwise;
(iii) the Lessor may sell the Undivided Interest and the Real
Property Interest, or any part thereof, together with any interest of the
Lessor under the Assignment and Assumption, at public or private sale in a
commercially reasonable manner, as the Lessor may determine, free and
clear of any rights of the Lessee in the Undivided Interest and the Real
Property Interest and without any duty to account to the Lessee with
respect to such action or inaction or any proceeds with respect thereto
(except to the extent required by clause (v) or (vi) below if the Lessor
shall elect to exercise its rights thereunder) , in which event the
Lessee's obligation to pay Basic Rent hereunder for periods commencing
after the date of such sale shall be terminated or proportionately
reduced, as the case may be (except to the extent that Basic Rent is to be
included in computations under clause (v) or (vi) below if the Lessor
shall elect to exercise its rights thereunder);
(iv) the Lessor may hold, keep idle or lease to others all or any
part of the Undivided Interest and the Real Property Interest, as the
Lessor in its sole discretion may determine, free and clear of any rights
of the Lessee and without any duty to account to the Lessee with respect
to such action or inaction or for any proceeds with respect to such action
or inaction, except that the Lessee's obligation to pay Basic Rent for
periods commencing after the Lessee shall have been deprived of use of the
Undivided Interest and the Real Property Interest pursuant to this clause
(iv) shall be reduced by an amount equal to the net proceeds, if
any, received by the Lessor from leasing the Undivided Interest and the
Real Property Interest to any Person other than the Lessee for the same
periods or any portion thereof; Lessee shall pay to the Lessor, on the
Basic Rent Payment Date specified in such notice, as liquidated damages
for loss of a bargain and not as a penalty (in lieu of the Basic Rent due
after the Basic Rent Payment Date speci fied in such notice), any unpaid
Rent due through the Basic Rent Payment Date specified in such notice plus
whichever of the following amounts the Lessor, in its sole discretion,
shall specify in such notice (together with interest on such amount at the
interest rate specified in Section 3(b)(iii) from the Basic Rent Payment
Date specified in such notice to the date of actual payment) (and, in the
case of (D) below, upon receipt of such payment the Lessor shall (or may
prior to the receipt of such payment) Transfer to the Lessee the Undivided
Interest and the Real Property Interest):
(A) an amount equal to the excess, if any, of (1) Casualty
Value, computed as of the Basic Rent Payment Date specified in such
notice, over (2) the Fair Market Rental Value of the Undivided
Interest and the Real Property Interest (determined on the basis of
the then -actual condition of Unit 1) until the end of the remaining
useful life of Unit 1, after discounting such Fair Market Rental
Value semi-annually to present value as of the Basic Rent Payment
Date specified in such notice at a rate of 10% per annum;
(B) an amount equal to the excess, if any, of (1) such
Casualty Value over (2) the Fair Market Sales Value of the Undivided
Interest and the Real Property Interest (determined on the basis of
the then actual condition of Unit 1) as of the Basic Rent Payment
Date specified in such notice;
(C) an amount equal to the excess, if any, of (1) the present
value as of the Basic Rent Payment Date specified in such notice of
all installments of Basic Rent until the end of the Basic Lease Term
or the Renewal Term, as the case may be, discounted semi-annually at
a rate of 10% per annum, over (2) the present value as of such Basic
Rent Payment Date of the Fair Market Rental Value of the Undivided
Interest and the Real Property Interest (determined on the basis of
the then actual condition of Unit 1) until the end of the Basic
Lease Term or the Renewal Term, as the case may be, discounted
semi-annually at a rate of 10% per annum; or
(D) an amount equal to higher of (1) the Casualty Value
(Special Casualty Value if the Event of Default is an event
specified in clause (v), (viii) or (x)(2) of Section 15 hereof),
computed as of the Basic Rent Payment Date specified in such notice
or (2) the Fair Market Sales Value of the Undivided. Interest and
the Real Property Interest;
(vi) if the Lessor shall have sold all the Undivided Interest and
the Real Property Interest pursuant to clause (iii) above, the Lessor, in
lieu of exercising its rights under clause (v) above with respect to the
Undivided Interest and the Real Property Interest may, if it shall so
elect, demand that the Lessee pay to the Lessor and the Lessee shall pay
to the Lessor on the date of such sale, as liquidated damages for loss of
a bargain and not as a penalty (in lieu of Basic Rent due for periods
commencing after the next Basic Rent Payment Date following the date of
such sale), any unpaid Basic Rent due through such Basic Rent Payment
Date, plus the amount of any deficiency of the Sale Proceeds under the
Casualty Value, computed as of such Basic Rent Payment Date, together with
interest at the interest rate specified in Section 3(b)(iii) on the amount
of such Rent and such deficiency from the date of such sale until the date
of actual payment; or
(vii) in the case of an Event of Default specified in clause (iv) of
Section 15, the Lessor may demand, by written notice to the Lessee
specifying a payment date which shall be not earlier than the date 30 days
after the last Basic Rent Payment Date of the Lease Term, that the Lessee
pay to the Lessor, and the Lessee shall pay to the Lessor, on such last
payment date, as liquidated damages for loss of a bargain and not as a
penalty, any unpaid Rent due through such last Basic Rent Payment Date
plus an amount (not less than zero) equal to the Fair Market Sales Value
(determined without regard to the obligation of the Lessee under Section
10(b)(3)(xi) of the Participation Agreement) of the Undivided Interest and
the Real Property Interest (determined on the basis of the actual
condition of Unit 1) determined as of such last Basic Rent Payment Date
(together with interest on such amount at the interest rate specified in
Section 3(b)(iii) from such last Basic Rent Payment Date to the date of
actual payment) and upon receipt of such payment the Lessor shall (or may
prior to the receipt of such payment) Transfer to the Lessee the Undivided
Interest and the Real Property Interest); provided, however, that the
Lessor may not exercise the foregoing remedy if the Lessor shall have
failed to Transfer the Undivided Interest and the Real Property Interest
to the bidder (which shall not be the Lessee or an Affiliate of the
Lessee) that shall have submitted the highest cash bid on or before the
date on which such Event of Default arose excluding, however, any such
cash bid which the Lessor or the Owner Participant determines was not
submitted in good faith, or as to which the bidder fails to certify to the
Lessor such information as the Lessor or Owner Participant may reasonably
request in order to determine whether or not such bid was submitted in
good faith (and the Lessor agrees that it will, if and to the extent so
requested by the Lessee on or after the date 90 days preceding such last
Basic Rent Payment Date, use reasonable efforts (at the expense of the
Lessee) for a period ending on the day 90 days after such last Basic Rent
Payment Date, to find a Person willing to submit such cash bid; provided,
however, that the failure of the Lessor to do so shall not relieve the
Lessee of its obligations under this clause (vii)).
(b) No Release. No rescission or termination of this Facility Lease,
in whole or in part, or repossession of the Undivided Interest or the Real
Property Interest or exercise of any remedy under paragraph (a) of this Section
16 shall, except as specifically provided therein, relieve the Lessee of any of
its liabilities and obligations hereunder. In addition, the Lessee shall be
liable, except as otherwise provided above, for any and all unpaid Rent due
hereunder before, after or during the exercise of any of the foregoing remedies,
including all reasonable legal fees and other costs and expenses incurred by the
Lessor or the Owner Participant by reason of the occurrence of any Event of
Default or the exercise of the Lessor's remedies with respect thereto. At any
sale of the Undivided Interest, the Real Property Interest or any part thereof
pursuant to this Section 16, the Owner Participant, the Lessor or the Indenture
Trustee may bid for and purchase such property.
(c)Remedies Cumulative. No remedy under paragraph (a) of this
Section 16 is intended to be exclusive, but each shall be cumulative and in
addition to any other remedy provided under such paragraph (a) or otherwise
available to the Lessor at law or in equity; provided, however, that
notwithstanding anything to the contrary set forth in this Facility Lease, the
remedy set forth in Section l6(a)(vii) shall be the sole and exclusive remedy
under this Section 16 in the case of an Event of Default specified in clause
(iv) of Section 15, unless the Lessee is in default of its payment obliga tions
under Section 16(a)(vii), in which case the Lessor may exercise its other
remedies under Section 16(a); (except that the maximum amount payable by the
Lessee in the event of the exercise by the Lessor of any of the remedies
provided for in Section 16(a)(v) or (vi) shall not exceed the total amount
payable by the Lessee under Section 16(a)(vii) minus the amount provided in
subclause (2) of clause (A), (B) or (C) of such Section 16(a)(v), if the Lessor
elects a remedy speci fied in said clause (A), (B) or (C), or the deficiency
referred to in Section 16(a)(vi), if the Lessor elects the remedy specified in
Section 16(a)(vi) hereof). No express or implied waiver by the Lessor of any
Default or Event of Default hereunder shall in any way be, or be construed to
be, a waiver of any future or subsequent Default or Event of Default. The
failure or delay of the Lessor in exercising any right granted it hereunder upon
any occurrence of any of the contingencies set forth herein shall not constitute
a waiver of any such right upon the continuation or recurrence of any such
contingencies or similar contingencies and any single or partial exercise of any
particular right by the Lessor shall not exhaust the same or constitute a waiver
of any other right provided herein. To the extent permitted by Applicable Law,
the Lessee hereby waives any rights now or hereafter conferred by statute or
otherwise which may require the Lessor to sell, lease or otherwise use the
Undivided Interest or Unit 1 in mitigation of the Lessor's damages as set forth
in paragraph (a) of this Section 16 or which may otherwise limit or modify any
of the Lessor's rights and remedies provided in this Section 16.
(d) Exercise of Other Rights or Remedies. In addition to all other
rights and remedies provided in this Section 16, the Lessor may, except to the
extent expressly limited by provisions of this Section 16, exercise any other
right or remedy that may be available to it under Applicable Law or proceed by
appropriate court action to enforce the terms hereof or to recover damages for
the breach hereof.
(e) Special Cure Right of Lessee. In the event a "Notice of Default"
is given under Section 15(iii), the Lessee may, on or prior to the occurrence of
an Event of Default resulting therefrom, give written notice to the Lessor
stating that the Lessee has elected to exercise the option (the Cure Option)
provided in this Section 16(e), which election shall be irrevocable as to the
Lessee. Promptly after the giving of such notice, the Lessee and the Owner
Participant shall agree upon the Fair Market Sales Value of the Undivided
Interest and the Real Property Interest or; if they shall be unable so to agree
within one month after the date of the Lessee's notice, such value shall be
determined by the Appraisal Procedure. On the Basic Rent Payment Date next
following the date that such Fair Market Sales Value shall have been determined,
the Lessee shall pay to the Lessor all Rent due on such Basic Rent Payment Date,
plus an amount equal to the excess of (i) the greater of such Fair Market Sales
Value and the Casualty Value determined as of such Basic Rent Payment Date over
(ii) the unpaid principal amount of the Notes Outstanding on such date after
giving effect to the payment, if any, of the principal installment due and
payable on such date. Upon compliance in full by the Lessee with the foregoing
provisions of this paragraph (e) and assumption by the Lessee of all the
obligations and liabilities of the Owner Trustee under the Indenture and the
Notes pursuant to Section 3.9(b) of the Indenture, the Lessor shall (so long as
no Default or Event of Default shall have occurred and be continuing) Transfer
the Undivided Interest and the Real Property Interest to the Lessee. If the
Lessee shall not have assumed all the obligations and liabilities of the Owner
Trustee under the Indenture and the Notes in accordance with Section 3.9(b) of
the Indenture, but the Owner Participant shall have received under Section 5.2
of the Indenture all amounts required to be paid by the Lessee pursuant to this
paragraph (e) (including interest, if any, thereon pursuant to Section
3(b)(iii)), the Lessor shall retain the Undivided Interest and the Real Property
Interest subject to the terms of this Facility Lease and Section 7(b) (4) of the
Participation Agreement; provided, however, that the obligation of the Lessee to
pay further Basic Rent shall be reduced to an amount on each Basic Rent Payment
Date equal to the aggregate amount of principal, premium, if any, and accrued
interest then payable on all Notes then Outstanding and this Facility Lease
shall become a secu rity agreement for all purposes of Applicable Law. The
Lessee agrees to Use its best efforts to comply with the conditions respecting
its assumption set forth in Section 3.9(b) of the Indenture and, failing such
assumption, agrees to accept a transfer of the Owner Participant's right, title
and interest in the Trust Estate pursuant to Section 7(b)(4) of the
Participation Agreement.
SECTION 17. Notices.
All communications and notices provided for in this Facility Lease
shall be in writing and shall be given in person (with signed receipt of an
officer of the Owner Participant in the case of a delivery to the Owner
Participant) or by means of telex, telecopy, or other wire transmission, or
mailed by registered or certified mail, or delivered by express delivery
service, addressed as provided in the Participation Agreement. All such
communications and notices given in such manner shall be effective on the date
of receipt of such communication or notice.
SECTION 18. Successors and Assigns.
This Facility Lease, including all agreements, covenants,
indemnities, representations and warranties, shall be binding upon and inure to
the benefit of the Lessor and its successors and permitted assigns, and the
Lessee and its successors and, to the extent permitted hereby, assigns.
SECTION 19. Right to Perform for Lessee.
If the Lessee shall fail to make any payment of Rent to be made by
it, or shall fail to perform or comply with any of its other agreements
contained herein, or fail to make any payment to be made by it under any ANPP
Project Agreement, or shall fail to perform or comply with any of its other
agreements contained in any ANPP Project Agreement, either the Lessor or the
Owner Participant may, but shall not be obligated to, tender such payment, or
effect such performance or compliance, and the amount of such payment and the
amount of all costs and expenses (including, without limitation, attorneys' and
other professionals' fees and expenses) of the Lessor or the Owner Participant,
as the case may be, incurred in connection with such payment or the performance
of or compliance with such agreement, as the case may be, together with interest
thereon at the Penalty Rate, shall be deemed Supplemental Rent, payable by the
Lessee upon demand. In the event that the Lessor or the Owner Participant shall
cure any default by the Lessee under the ANPP Participation Agreement, then (so
long as an event of Default has occurred and is continuing) the Lessor, together
with each other Person contributing to such cure, shall be entitled (to the full
extent enforceable in accordance with Applicable Law) to receive the Generation
Entitlement Share of the Lessee under the ANPP Participation Agreement (not
limited to Unit 1), with each contributor to receive a percentage of such
Generation Entitlement Share equal to the percentage of the cure contributed
thereby.
SECTION 20. Additional Covenants.
The Lessee agrees to comply with and to pay, as Supplemental Rent,
all amounts payable by it under the provisions of Section 13 of the
Participation Agreement and under the provisions of the Tax Indemnification
Agreement, which provisions are incorpo rated herein by this reference as fully
as if set forth in full at this place. The Lessee agrees to comply with its
covenants and agreements set forth in Sections 10(b), 14 and 16 of the
Participation Agreement and Articles III, IV, V and VI of the Assignment and
Assumption which covenants and agreements are incorporated herein by this
reference as fully as if set forth in full at this place.
SECTION 21. Lease of Real Property Interest.
Pursuant to the Deed and the Assignment of Beneficial Interest, the
Lessee has sold to the Lessor the Real Property Interest. The Lessor hereby
grants to the Lessee a leasehold interest in the Real Property Interest, such
leasehold to be coterminous with the lease of the Undivided Interest hereunder
and to be at a rent per annum equal to 4.635455% of the Real Estate Investment,
payable by the Lessee to the Lessor in arrears in equal semiannual installments
on each Basic Rent Payment Date during the Lease Term.
SECTION 22. Amendments and Miscellaneous.
(a) Amendments in Writing. The terms of this Facility Lease may not
be waived, altered, modified, amended, supplemented or terminated in any manner
whatsoever except by written instrument signed by the Lessor and the Lessee.
(b) Survival. (1) All indemnities, representations and warranties
contained in this Facility Lease and the other Transaction Documents and the
Financing Documents and in any agreement, document or certificate delivered
pursuant hereto or thereto or in connection herewith or therewith shall survive,
and continue in effect following, the execution and delivery of this Facility
Lease and the expiration or other termination of this Facility Lease.
(2) The obligations of the Lessee to pay Supplemental Rent and the
obligations of the Lessee under Sections 5, 16, 19 and 20 hereof shall survive
the expiration or termination of this Facility Lease. The extension of any
applicable statute of limitations by the Owner Trustee, the Indenture Trustee,
the Lessee, the Owner Participant, the Loan Participant or any Indemnitee shall
not affect such survival. The obligations of the Lessee under Section 20 are
expressly made for the benefit of, and shall be enforceable by, any Indemnitee,
separately or together, without declaring this Facility Lease to be in default
and notwithstanding any assignment by the Lessor of this Facility Lease or any
of its rights thereunder or any disposition of all or any part of any interest
in the Undivided Interest, the Real Property Interest, Unit 1 or any other
property referred to in this Facility Lease or in this Facility Lease or any
other Transaction Document or Financing Document. All payments required to be
made pursuant to Section 20 shall be made directly to, or as otherwise requested
by, the Indemnitee entitled thereto upon written demand by such Indemnitee.
(c) Severability of Provisions. Any provision of this Facility Lease
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 or thereof, and any such prohibition or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction. To the extent permitted by Applicable Law, the Lessee
hereby waives any provision of law which renders any provision hereof prohibited
or unenforceable in any respect.
(d) True Lease. This Facility Lease shall constitute an agreement of
lease and nothing herein or elsewhere shall be construed as conveying to the
Lessee any right, title or interest in or to the Undivided Interest or the Real
Property Interest, except as lessee only.
(e) Original Lease. The single executed original of this Facility
Lease marked "THIS COUNTERPART IS THE ORIGINAL COUNTERPART" and containing the
receipt of the Indenture Trustee thereon shall be the "Original" of this
Facility Lease. To the extent that this Facility Lease constitutes chattel
paper, as such term is defined in the Uniform Commercial Code as in effect in
any applicable jurisdiction, no security interest in this Facility Lease may be
created through the transfer or possession of any counterpart other than the
"Original".
(f) Governing Law. This Facility Lease shall be governed by and
construed in accordance with the law of the State of New York, except to the
extent that pursuant to the law of the State of Arizona the law of the State of
Arizona is mandatorily applicable hereto.
(g) Headings. The division of this Facility Lease 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 Facility Lease.
(h) Concerning the Owner Trustee. FNB is entering into this Facility
Lease solely as Owner Trustee under the Trust Agreement and not in its
individual capacity. Anything herein to the contrary notwithstanding, all and
each of the representations, warranties, undertakings and agreements herein made
on the part of the Owner Trustee are made and intended not as personal
representations, warranties, undertakings and agreements by or for the purpose
or with the intention of binding FNB personally but are made and intended for
the purpose of binding only the Trust Estate, and this Facility Lease is
executed and delivered by the Owner Trustee solely in the exercise of the powers
expressly conferred upon it as trustee under the Trust Agreement; and no
personal liability or responsibility is assumed hereunder by or shall at any
time be enforceable against FNB or any successor in trust or the Owner
Participant on account of any representation, warranty, undertaking or agreement
hereunder of the Owner Trustee, either expressed or implied, all such personal
liability, if any, being expressly waived by the Lessee, except that the Lessee
or any Person claiming by, through or under it, making claim hereunder, may look
to the Trust Estate for satisfaction of the same and the Owner Trustee or its
successor in trust, as applicable, shall be personally liable for its own gross
negligence or willful misconduct. If a successor owner trustee is appointed in
accordance with the terms of the Trust Agreement, such successor owner trustee
shall, without any further act, succeed to all the rights, duties, immunities
and obligations of the Owner Trustee hereun der and the predecessor owner
trustee shall be released from all further duties and obligations hereunder.
(i) Disclosure. Pursuant to Arizona Revised Statutes Section 33-401,
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. The
address of the beneficiary is also therein described. 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.
(j) Counterpart Execution. This Facility Lease may be executed in
any number of counterparts and by each of the parties hereto or thereto on
separate counterparts, all such counterparts together constituting but one and
the same instrument.
SCHEDULE 1
to
LEASE
SCHEDULE OF CASUALTY VALUES
Basic Rent Percentage of Basic Rent Percentage of
Payment Date Facility Cost Payment Date Facility Cost
------------ ------------- ------------ -------------
15JAN87 109.10599 15JAN98 105.02054
15JUL87 114.76002 15JUL98 103.97373
15JAN88 113.17994 15JAN99 102.04367
15JUL88 117.70456 15JUL99 100.81532
15JAN89 116.07167 15JAN100 98.74684
15JUL89 119.65174 15JUL100 97.31725
15JAN90 117.95016 15JAN101 95.09237
15JUL90 120.53475 15JUL101 93.43984
15JAN91 118.69682 15JAN102 91.07806
15JUL91 120.25014 15JUL102 89.28211
15JAN92 118.20917 15JAN103 86.84308
15JUL92 118.72285 15JUL103 84.92967
15JAN93 116.54349 15JAN104 82.40638
15JUL93 116.42005 15JUL104 80.36623
15JAN94 114.56122 15JAN105 77.75328
15JUL94 114.08476 15JUL105 75.57905
15JAN95 112.43357 15JAN106 72.87080
15JUL95 111.75470 15JUL106 70.55479
15JAN96 110.14794 15JAN107 67.74535
15JUL96 109.41227 15JUL107 65.27947
15JAN97 107.71163 15JAN108 62.36264
15JUL97 106.82849 15JUL108 59.73841
SCHEDULE 1
to
LEASE
SCHEDULE OF CASUALTY VALUES
Basic Rent Percentage of Basic Rent Percentage of
Payment Date Facility Cost Payment Date Facility Cost
- ------------ ------------- ------------ -------------
15JAN109 56.70765
15JUL109 53.91617
15JAN110 50.76464
15JUL110 47.79658
15JAN111 44.51710
15JUL111 41.36264
15JAN112 37.94767
15JUL112 34.59656
15JAN113 31.03819
15JAN113 27.47963
15JAN114 23.76956
15JUL114 21.85439
15JAN115 20.00000
SCHEDULE 2
to
LEASE
SCHEDULE OF SPECIAL CASUALTY VALUES
Basic Rent Percentage of Basic Rent Percentage of
Payment Date Facility Cost Payment Date Facility Cost
- ------------ ------------- ------------ -------------
15AUG86 104.099993 15JAN90 119.27824
15SEP86 103.18569 15FEB90 119.43084
15OCT86 103.65043 15MAR90 119.58739
15NOV86 104.12325 15APR90 118.85885
15DEC86 104.25292 15MAY90 118.98243
15JUN90 117.38007
15JAN87 110.52963 15JUL90 117.48130
15FEB87 110.99000 15AUG90 117.57940
15MAR87 111.45839 15SEP90 116.81803
15APR87 110.27755 15OCT90 116.89414
15MAY87 110.71365 15NOV90 116.97322
15JUN87 108.65107 15DEC90 116.89842
15JUL87 109.06029
15AUG87 109.45859 15JAN91 119.94867
15SEP87 108.52150 15FEB91 120.00169
15OCT87 108.89348 15MAR91 120.05744
15NOV87 109.27223 15APR91 119.44437
15DEC87 109.34400 15MAY91 119.46653
15JUN91 117.99211
15JAN88 114.66863 15JUL91 117.99154
15FEB88 115.00952 15AUG91 117.98593
15MAR88 115.35674 15SEP91 117.25913
15APR88 114.64228 15OCT91 117.23086
15MAY88 114.65149 15NOV91 117.20427
15JUN88 112.75517 15DEC91 117.06632
15JUL88 113.04087
15AUG88 113.32361 15JAN92 119.40380
15SEP88 112.45267 15FEB92 119.34830
15OCT88 112.71259 15MAR92 119.29420
15NOV88 112.97776 15APR92 118.77580
15DEC88 112.99499 15MAY92 118.68865
15JUN92 117.32935
15JAN89 117.49595 15JUL92 117.21979
15FEB89 117.73796 15AUG92 117.10314
15MAR89 117.73796 15SEP92 116.39871
15APR89 117.12413 15OCT92 116.25944
15MAY89 117.33793 15NOV92 116.12050
15JUN89 115.59881 15DEC92 115.90990
15JUL89 115.79155
15AUG89 115.98287 15JAN93 117.56857
15SEP89 115.17614 15FEB93 117.39844
15OCT89 115.34705 15MAR93 117.22832
15NOV89 115.52210 15APR93 116.79146
15DEC89 115.49943 15MAY93 116.62105
SCHEDULE 2
to
LEASE
SCHEDULE OF SPECIAL CASUALTY VALUES
Basic Rent Percentage of Basic Rent Percentage of
Payment Date Facility Cost Payment Date Facility Cost
- ------------ ------------- ------------ -------------
15JUN93 115.39274 15NOV96 106.46442
15JUL93 115.22233 15DEC96 10622464
15AUG93 115.04340
15SEP93 114.40251 15JAN97 106.54943
15OCT93 114.22358 15FEB97 106.29766
15NOV93 114.04465 15MAR97 106.04588
15DEC93 113.83133 15APR97 105.79411
15MAY97 105.54233
15JAN94 114.91015 15JUN97 104.83831
15FEB94 114.72228 15JUL97 104.58654
15MAR94 114.53440 15AUG97 104.32218
15APR94 114.26601 15SEP97 103.94549
15MAY94 114.07813 15OCT97 103.68113
15JUN94 113.04848 15NOV97 103.41677
15JUL94 112.86060 15DEC97 103.15240
15AUG94 112.66333
15SEP94 112.13060 15JAN98 103.41930
15OCT94 111.93333 15FEB98 103.14172
15NOV94 111.73605 15MAR98 102.86414
15DEC94 111.53878 15APR98 102.58656
15MAY98 102.30898
15JAN95 112.17156 15JUN98 101.60285
15FEB95 111.96443 15JUL98 101.32527
15MAR95 111.75729 15AUG98 101.03381
15APR95 111.55016 15SEP98 100.63964
15MAY95 111.34302 15OCT98 100.34818
15JUN95 110.51294 15NOV98 100.05672
15JUL95 110.30581 15DEC98 99.76526
15AUG95 110.08832
15SEP95 109.66372 15JAN99 99.97051
15OCT95 109.44623 15FEB99 99.66448
15NOV95 109.22874 15MAR99 99.35845
15DEC95 109.01125 15APR99 99.05241
15MAY99 98.74638
15JAN96 109.39052 15JUN99 98.03656
15FEB96 109.16216 15JUL99 97.73053
15MAR96 108.93379 15AUG99 97.40920
15APR96 108.70542 15SEP99 96.99494
15MAY96 108.47706 15OCT99 96.67361
15JUN96 107.77372 15NOV99 96.35228
15JUL96 107.54535 15DEC99 96.03094
15AUG96 107.30557
15SEP96 106.94399 15JAN100 96.17040
15OCT96 106.70421 15FEB100 95.83299
SCHEDULE 2
to
LEASE
SCHEDULE OF SPECIAL CASUALTY VALUES
Basic Rent Percentage of Basic Rent Percentage of
Payment Date Facility Cost Payment Date Facility Cost
- ------------ ------------- ------------ -------------
15MAR100 95.49559 15AUG103 79.14289
15APR100 95.15819 15SEP103 78.64881
15MAY100 94.82079 15OCT103 78.21004
15JUN100 94.10556 15NOV103 77.77126
15JUL100 93.76816 15DEC103 77.33249
15AUG100 93.41388
15SEP100 92.97666 15JAN104 77.24112
15OCT100 92.62239 15FEB104 76.79259
15NOV100 92.26812 15MAR104 76.34407
15DEC100 91.91385 15APR104 75.89555
15MAY104 75.44709
15JAN101 91.98295 15JUN104 74.71978
15FEB101 91.61096 15JUL104 74.28869
15MAR101 91.23898 15AUG104 73.82803
15APR101 90.86699 15SEP104 73.31576
15MAY101 90.49501 15OCT104 72.85509
15JUN101 89.77244 15NOV104 72.39443
15JUL101 89.40045 15DEC104 71.93376
15AUG101 89.00987
15SEP101 88.54651 15JAN105 71.79757
15OCT101 88.15593 15FEB105 71.32668
15NOV101 87.76535 15MAR105 70.85579
15DEC101 87.37476 15APR105 70.38490
15MAY105 69.91403
15JAN102 87.36846 15JUN105 69.18425
15FEB102 86.96239 15JUL105 68.73164
15MAR102 86.55632 15AUG105 68.24801
15APR102 86.15026 15SEP105 67.71661
15MAY102 85.74426 15OCT105 67.23297
15JUN102 85.01636 15NOV105 66.74934
15JUL102 84.62523 15DEC105 66.26571
15AUG102 84.20767
15SEP102 83.72773 15JAN106 66.08259
15OCT102 86.31017 15FEB106 65.58823
15NOV102 82.89261 15MAR106 65.09388
15DEC102 82.47505 15APR106 64.59952
15MAY106 64.10516
15JAN103 82.42598 15JUN106 63.37272
15FEB103 81.99878 15JUL106 62.89753
15MAR103 81.57158 15AUG106 62.38980
15APR103 81.14438 15SEP106 61.83828
15MAY103 80.71726 15OCT106 61.33055
15JUN103 79.99225 15NOV106 60.82282
15JUL103 79.58167 15DEC106 60.31509
SCHEDULE 2
to
LEASE
SCHEDULE OF SPECIAL CASUALTY VALUES
Basic Rent Percentage of Basic Rent Percentage of
Payment Date Facility Cost Payment Date Facility Cost
- ------------ ------------- ------------ -------------
15JAN107 60.08285 15JUN110 37.08524
15FEB107 59.56387 15JUL110 36.50803
15MAR107 59.04489 15AUG110 35.89146
15APR107 58.52591 15SEP110 35.24859
15MAY107 58.00692 15OCT110 34.63202
15JUN107 57.27166 15NOV110 34.01544
15JUL107 56.77277 15DEC110 33.39887
15AUG107 56.23975
15SEP107 55.66708 15JAN111 32.94594
15OCT107 55.13407 15FEB111 32.31573
15NOV107 54.60106 15MAR111 31.68553
15DEC107 54.06805 15APR111 31.05532
15MAY111 30.42512
15JAN108 53.78438 15JUN111 29.67637
15FEB108 53.23957 15JUL111 29.07045
15MAR108 52.69475 15AUG111 28.42323
15APR108 52.14993 15SEP111 27.75454
15MAY108 51.60511 15OCT111 27.10732
15JUN108 50.86681 15NOV111 26.46011
15JUL108 50.34306 15DEC111 25.81290
15AUG108 49.78352
15SEP108 49.18861 15JAN112 25.29813
15OCT108 48.62907 15FEB112 24.63662
15NOV108 48.06953 15MAR112 23.97510
15DEC108 47.50999 15APR112 23.31359
15MAY112 22.65208
15JAN109 47.17248 15JUN112 21.89937
15FEB109 46.60056 15JUL112 21.26330
15MAR109 46.02864 15AUG112 20.58394
15APR109 45.45671 15SEP112 19.88810
15MAY109 44.88479 15OCT112 19.20874
15JUN109 44.14324 15NOV112 18.52938
15JUL109 43.59340 15DEC112 17.85002
15AUG109 43.00602
15SEP109 42.38774 15JAN113 17.27048
15OCT109 41.80036 15FEB113 16.57612
15NOV109 41.21299 15MAR113 15.88176
15DEC109 40.62562 15APR113 15.18740
15MAY113 14.49304
15JAN110 40.23173 15JUN113 13.73610
15FEB110 39.63137 15JUL113 13.06842
15MAR110 39.03100 15AUG113 12.35533
15APR110 38.43064 15SEP113 11.63096
15MAY110 37.83027 15OCT113 10.91787
SCHEDULE 2
to
LEASE
SCHEDULE OF SPECIAL CASUALTY VALUES
Basic Rent Percentage of Basic Rent Percentage of
Payment Date Facility Cost Payment Date Facility Cost
- ------------ ------------- ------------ -------------
15NOV113 10.20479
15DEC113 9.49170
15JAN114 8.84431
15FEB114 8.11549
15MAR114 7.38666
15APR114 6.65783
15MAY114 5.92901
15JUN114 5.16757
15JUL114 4.46671
15AUG114 3.71824
15SEP114 2.96389
15OCT114 2.21541
15NOV114 1.46694
15DEC114 0.71846
15JAN115 0.00000
SCHEDULE 3
to
LEASE
SCHEDULE OF TERMINATION VALUES
Basic Rent Percentage Basic Rent Percentage Basic Rent Percentage
Payment of Facility Payment of Facility Payment of Facility
Date Cost Date Cost Date Cost
- ---------- ----------- ---------- ----------- ---------- -----------
15JAN87 109.01599 15JAN98 105.02054 15JAN109 56.70765
15JUL87 114.76002 15JUL98 103.97373 15JUL109 53.91617
15JAN88 113.17994 15JAN99 102.04367 15JAN110 50.76464
15JUL87 117.70456 15JUL99 100.81532 15JUL110 47.79658
15JAN89 116.07167 15JAN100 98.74684 15JAN111 44.51710
15JUL89 119.65174 15JUL100 97.31725 15JUL111 41.36264
15JAN90 117.95016 15JAN101 95.09237 15JAN112 37.94767
15JUL90 120.53475 15JUL101 93.43984 15JUL112 34.59656
15JAN91 118.69682 15JAN102 91.07806 15JAN113 31.03819
15JUL91 120.25014 15JUL102 89.28211 15JUL113 27.47963
15JAN92 118.20917 15JAN103 86.84308 15JAN114 23.76956
15JUL92 118.72285 15JUL103 84.92967 15JUL114 21.85439
15JAN93 116.54349 15JAN104 82.40638 15JAN115 20.00000
15JUL93 116.42005 15JUL104 80.36623
15JAN94 114.56122 15JAN105 77.75328
15JUL94 114.08476 15JUL105 75.57905
15JAN95 112.43357 15JAN106 72.87080
15JUL95 111.75470 15JUL106 70.55479
15JAN96 110.14794 15JAN107 67.74535
15JUL96 109.41227 15JUL107 65.27947
15JAN97 107.71163 15JAN108 62.36264
15JUL97 106.82849 15JUL108 59.73841
SCHEDULE 5
to
FACILITY LEASE
REAL ESTATE INTEREST DESCRIPTION
The Real Estate Interest is a (i) .333333% a undivided interest in
the land described in I below, a (ii) .377777% undivided interest in the rights
and interests described in II below, and (iii) a .377777% undivided interest in
the right and interests described in III below.
I. PVNGS PLANT SITE
PARCEL NO. 1: Lot Four (4); the Southwest quarter of the Northwest quarter; and
the West half of the Southwest quarter, all in Section Two (2), Township One (1)
South, Range Six (6) West of the Gila and Salt River Base and Meridian, Maricopa
County, Arizona
PARCEL NO. 2: All of Section Three (3), Township One (1) South, Range Six (6)
West of the Gila and Salt River Base and Meridian, Maricopa County, Arizona
PARCEL NO. 3: The East half of Section Four (4), Township One (1) South, Range
Six (6) West of the Gila and Salt River Base and Meridian, Maricopa County,
Arizona
PARCEL NO. 4: The West half of Section Twenty-six (26), Township One (1) North,
Range Six (6) West of the Gila and Salt River Base and Meridian, Maricopa
County, Arizona.
PARCEL NO. 5: Section Twenty-seven (27), Township One (1) North, Range Six (6)
West of the Gila and Salt River Base and Meridian, Maricopa County, Arizona;
EXCEPT the Northwest quarter of Section 27
PARCEL NO. 6: The Southeast quarter of Section Twenty-eight (28), Township One
(1) North, Range Six (6) West of the Gila and Salt River Base and Meridian,
Maricopa County, Arizona; EXCEPT 50% of all oil, gas and other mineral deposits
and geothermal resources recovered from or developed on the property, as
reserved in instrument recorded May 10, 1974 in Docket 10647, page 136.
PARCEL NO. 7: The East half of Section Thirty-three (33), Township One (1)
North, Range Six (6) West of the Gila and Salt River Base and Meridian, Maricopa
County, Arizona.
PARCEL NO.8: All of Section Thirty-four (34), Township One (1) North, Range Six
(6) West of the Gila and Salt River Base and Meridian, Maricopa County, Arizona.
PARCEL NO. 9: The West half of Section Thirty-five (35), Township One (1) North,
Range Six (6) West of the Gila and Salt River Base and Meridian, Maricopa
County, Arizona.
PARCEL NO. 10: The Southeast quarter of Section Nine (9), Township One (1)
South, Range Six (6) West of the Gila and Salt River Base and Meridian, Maricopa
County, Arizona; EXCEPT the Northwest quarter thereof.
PARCEL NO. 11: All of Section Ten (10), Township One (1) South, Range Six (6)
West of the Gila and Salt River Base and Meridian, Maricopa County, Arizona;
EXCEPT the East half of the Southeast quarter thereof; and EXCEPT the North half
of the South half of the Northwest quarter of the Northwest quarter thereof.
PARCEL NO. 12: That part of the East half of the Southwest quarter of Section
Twenty-three (23), Township One (1) North, Range Six (6) West of the Gila and
Salt River Base and Meridian, Maricopa County, Arizona, more particularly
described as follows:
BEGINNING at the Southeast corner of the said East half of the
Southwest quarter of Section 23; thence West, an assumed bearing along the
South line of the said East half of the Southwest quarter of Section 23,
for a distance of 762.04 feet; thence North 0 degrees 03 minutes 39
seconds West; parallel to the East line of the said East half of the
Southwest quarter of Section 23, for a distance of a 1946.46 feet to a
point on the South right-of-way line of the 200 foot wide
HASSAYAMPA-SALOME HIGHWAY, as recorded in Book 12 of Road Maps, page 82,
Maricopa County Recorder, Maricopa County, Arizona; thence continuing
North 0 degrees 03 minutes 39 seconds West for a distance of 234.15 feet
to a point a on the North right-of-way line of said highway; thence South
58 degrees 43 minutes 35 seconds East, along said North right-of-way line
for a distance of 892.17 feet to a point on the said East line of the East
half of the Southwest quarter of Section 23; thence South 0 degrees 03
minutes 39 seconds East, along said East line for a distance of 234.15
feet to a point on the said South right-of-way line; thence continuing
South 0 degrees 03 minutes 39 sec onds East for a distance of 1483.31 feet
to the true point of beginning;
EXCEPT the East 305 feet of the South 305 feet thereof; and
EXCEPT one-half of the minerals and mineral rights and mineral
estates of every kind and nature, as set forth in Deed recorded in Docket
11652, page 52, Maricopa County Records.
PARCEL NO. 13: The North half of the South half of the Northwest quarter of the
Northwest quarter of Section Ten (10), Township One (1) South, Range Six (6)
West of the Gila and Salt River Base and Meridian, Maricopa County, Arizona.
II. HASSAYAMPA PUMPING STATION AND EFFLUENT PIPELINE
All real property, leases, licenses, easements, rights-of-way and
other property held by Title USA Company of Arizona Trust No. 530 established by
that certain Trust Agreement dated October 15, 1975, as amended, but excluding
therefrom all improvements.
III. MISCELLANEOUS REAL PROPERTY INTERESTS
Those ANPP Project Agreements (as defined in the ANPP Participation
Agreement), in addition to the Trust Agreement for Title USA Company of Arizona
Trust 530, consisting of leases, licenses, easements, and permits, which provide
land and land rights for (a) the pipeline to supply waste water effluent to
PVNGS from the 91st Avenue sewage treatment plant serving the Phoenix
Metropolitan area and (b) railroad access to the Nuclear Plant Site (as defined
in the ANPP Participation Agreement).
SCHEDULE 6
to
FACILITY LEASE
UNDIVIDED INTEREST DESCRIPTION
The Undivided Interest is a (i) 1.133333% undivided interest in and
to the property described under A below and (ii) a .377777% undivided interest
in and to the property described in B below.
A. Unit 1 of the Palo Verde Nuclear Generating Station (PVNGS),
located in Maricopa County, Arizona, approximately 55 miles west of the City of
Phoenix, Arizona, and approximately 16 miles west of the City of Buckeye,
Arizona, consisting of:
I. Unit 1 Combustion Engineering "System 80" pressurized water
reactor nuclear steam supply system (the NSSS). The NSSS is
comprised of a reactor vessel containing 241 fuel assemblies
with approximately 100 tons of enriched uranium (fuel
assemblies, however, are not part of Unit 1 and are not
included in the Undivided Interest being sold), two steam
generators, four reactor coolant pumps and various additional
systems and subsystems. The licensed thermal rating of the
NSSS is 3800 MW.
II. Unit 1 GE TC6F-43, 1800 RPM tandem-compound, six flow, reheat
turbine-generator including turbine, generator, moisture
separator-reheater, exciter, controls, and auxiliary
subsystems. The turbine-generator is conductor cooled and
rated at 1,554 MVA at 24,000 V, 3 phase, 60 Hz, 1.5 in Hg ABS
back pressure, and approximately 1,363 MW maximum gross
electric output.
III. Unit 1 146 ft. inside diameter, steel-lined, prestressed
concrete cylindrical containment building with a hemispherical
dome designed for 60 psig. The containment building houses the
reactor system.
IV. Unit 1 auxiliary systems and equipment including engineered
safeguards systems, reactor auxiliary systems and
turbine-generator auxiliary systems associated with items I,
II, and III above, extending to and including the Unit 1
start-up transformer.
V. Unit 1 cooling tower system consisting of three (3) mechanical
draft cooling towers, including a closed cycle circulating
water system, make-up water systems and essential spray ponds.
VI. Unit 1 radioactive waste treatment system, including liquid,
gaseous, and solid waste subsystems, controls,
instrumentation, storage, handling and shipment facilities.
VII. Unit 1 emergency diesel-generator system, including a
diesel-generator building which contains two diesel
generators, fuel oil systems, storage tanks, control and
instrumentation systems and other equipment.
VIII. Unit 1 internal communication systems, including associated
interconnections and computer data links.
BUT EXCLUDING:
I. Nuclear fuel for Unit 1, including spare fuel assemblies.
When Recorded, Return to: Greg R. Nielsen
Snell & Wilmer
3100 Valley Bank Center
Phoenix, Arizona 85073
CERTAIN RIGHTS OF THE LESSOR UNDER THE FACILITY LEASE AS AMENDED BY THIS
AMENDMENT NO. 1 THERETO HAVE BEEN ASSIGNED TO, AND ARE SUBJECT TO A SECURITY
INTEREST IN FAVOR OF, CHEMICAL BANK, AS INDENTURE TRUSTEE UNDER A TRUST
INDENTURE, MORTGAGE, SECURITY AGREEMENT AND ASSIGNMENT OF RENTS DATED AS OF JULY
31, 1986, AS AMENDED. THIS AMENDMENT NO.1 HAS BEEN EXECUTED IN SEVERAL
COUNTERPARTS. SEE SECTION 3(f) OF THIS AMENDMENT NO. 1 FOR INFORMATION
CONCERNING THE RIGHTS OF HOLDERS OF VARIOUS COUNTERPARTS HEREOF.
THIS COUNTERPART IS NOT THE ORIGINAL COUNTERPART.
================================================================================
AMENDMENT NO.1
Dated as of November 18, 1986
to
FACILITY LEASE
Dated as of July 31, 1986
between
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, 1926 with Chase
Manhattan. Realty Leasing
Corporation
Lessor
and
PUBLIC SERVICE COMPANY OF NEW MEXICO,
Lessee
================================================================================
Original Facility Lease Recorded on August 1, 1986,
as Instrument No. 86-404570 in Maricopa County
Recorder's Office.
================================================================================
6091.CHASE.DEBT.146:1
AMENDMENT NO. 1, dated as of November 18, 1986 (Amendment No.
1), to the Facility Lease dated as of July 31, 1986 between THE FIRST NATIONAL
BANK OF BOSTON, a national banking association, not in its individual capacity,
but solely as Owner Trustee under a Trust Agreement, dated as of July 31, 1985,
with Chase Manhattan Realty Leasing Corporation, a New York corporation (the
Lessor), and PUBLIC SERVICE COMPANY OF NEW MEXICO, a New Mexico corporation (the
Lessee).
W I T N E S S E T H
WHEREAS, the Lessee and The Lessor have heretofore entered
into a Facility Lease dated as of July 31, 1986 (the Facility Lease), providing
for the lease by the Lessor to the Lessee of the Undivided Interest and the Real
Property Interest;
WHEREAS, Section 3(e) of the Facility Lease provides for an
adjustment to Basic Rent and to the schedules of Casualty Values, Special
Casualty Values and Termination Values in the event, among other things, of the
refunding (by issuance of the Fixed Rate Notes) of the Initial Series Note;
WHEREAS, the Fixed Rate Notes are being issued pursuant to
Supplemental Indenture No. 1, dated as of November 18, 1986, to the Indenture;
WHEREAS, Section 3(d) of the Facility Lease provides for an
adjustment to Basic Rent and to the schedules of Casualty Values, Special
Casualty Values and Termination Values in the event of a Change in Tax Law; and
WHEREAS, a Change in Tax Law has occurred;
NOW, THEREFORE, in consideration of the premises and of other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. Definitions.
For purposes hereof, capitalized terms used herein and not
otherwise defined herein or in the recitals shall have the meanings assigned to
such terms in Appendix A to the Facility Lease.
6091.CHASE.DEBT. 146:1
SECTION 2. Amendments
(a) Section 3(a)(i) of the Facility Lease is amended to read
in its entirety as follows:
"(i) on January 15, 1987, an amount equal to .02643205% of the Facility
Cost for each day from, and including August 1, 1986 to, but excluding
January 15, plus or minus the Rent Differential, if any, referred to in
Section 3(h):"
(b) (1) Section 3(a) (ii) of the Facility Lease is amended to
read in its entirety as follows:
"(ii) on. July 15, 1987 and on each Basic Rent Payment Date thereafter
to and including January 15, 2015, an amount equal to 4.757769% of
Facility Cost;".
(2) Section 3(a) (iii) is amended to delete from the
parenthetical contained therein the phrase" and any increases and decreases
pursuant to Section 3(h)".
(c) Section 3(e) (iii) of the Facility Lease is hereby amended
to replace "2.0% of the Purchase Price" with "2.2% of the Purchase Price".
Section 3(e) (iv) is hereby amended to insert (x) "(other than a change in items
4, 5, 8 (as to the basis for amortization of Transaction Expenses), 14, 13 and
17, but without limiting the effect of Section 3(d) hereof)" immediately
following the word "change" and (y) the word "Current" before the phrase
"Pricing Assumptions." Section 3(e) of the Facility Lease is hereby further
amended to insert at the end thereof the following new sentence: "Current
Pricing Assumptions shall mean the assumptions attached to the letter from the
Lessee to the Owner Participant dated November 25, 1986, as such letter may be
replaced from time to time with the written consent of the Owner Participant."
(d) Schedule 1 to the Facility Lease (Schedule of Casualty
Values) is hereby replaced with Schedule 1 hereto.
(e) Schedule 2 to the Facility Lease (Schedule of Special
Casualty Values) is hereby replaced with Schedule 2 hereto.
-2-
6O91.CHASE.DEBT.146:1
(f) Schedule 3 to The Facility Lease (Schedule of Termination
Values) is hereby replaced with Schedule 3 hereto.
(g) Section 3(h) of the Facility Lease is hereby amended to
read in its entirety as follows:
"(h) Rent Differential. The installment of Basic Rent due
January 15, 1987 shall be increased or decreased, as the case may be,
by the Rent Differential. For purposes hereof, Rent Differential
shall mean the difference between (i) the aggregate amount of
interest paid or payable on the Initial Series Notes on or before
November 25, 1986 and (ii) the aggregate amount of interest that
would have been paid on such Initial Series Notes if such Notes had
at all times from the date of issuance thereof to November 25, 1986
borne interest at a rate equal to 9.9024175% per annum (computed on
the basis of a 360-day year of twelve 30-day months). If (A) the
amount determined in accordance with clause (i) of the immediately
preceding sentence shall be greater than the amount determined in
accordance with clause (ii) of such sentence, the amount of Basic
Rent due on January 15, 1987 shall be increased by the Rent
Differential, and (B) the amount determined in accordance with such
clause (ii) shall exceed the amount determined in accordance with
such clause (i), the amount of Basic Rent due on January 15, 1987
shall be decreased by the Rent Differential."
SECTION 3. Miscellaneous.
(a) Partial Prepayment of Rent. In accordance with the last
sentence of section 3(a) of the Facility Lease, the Lessee shall pay an
amount equal to $336,986.30 on November 25, 1986, such amount (i) being
equal to the interest payment due on the Initial Series Note on such date
and (ii) to be credited against Basic Rent due on January 15, 1987.
(b) Effective Date of Amendments. The amendments set forth in
Section 2 hereof shall be and become effective upon the execution hereof by the
parties hereto.
-3-
6091.CHASE.DEBT.146:1
(c) Counterpart Execution. This Amendment No. 1 may be
executed in any number of counterparts and by each of the parties hereto on
separate counterparts; all much counterparts shall together constitute but one
and the same instrument.
(d) Governing Law. This Amendment No. 1 has been negotiated
and delivered in the State of New York and shall be governed by, and be
construed in accordance with, the laws of the State of New York, except to the
extent that pursuant to the law of The State of Arizona such law is mandatory
applicable hereto.
(e) Disclosure. Pursuant to Arizona Revised Statutes Section
33-401, the beneficiary of the Trust Agreement is Chase Manhattan Realty Leasing
Corporation, a New York corporation. The address of the beneficiary is One Chase
Manhattan Plaza, New York, New York 10005. 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.
(f) Amendment No. 1. The single executed original of this
Amendment No. 1 marked "THE COUNTERPART IS THE ORIGINAL COUNTERPART" and
containing the receipt of the Indenture Trustee thereon shall be the "Original"
of this Amendment No. 1. To The extent that this Amendment No. 1 constitutes
chattel paper, as such term is defined in the Uniform Commercial Code as in
effect in any applicable jurisdiction, no security interest in this Amendment
No. 1 may be created or continued through the transfer or possession of any
counterpart other than the "Original".
-4-
6091.CHASE.DEBT.146:1
IN WITNESS WHEREOF, each of the parties hereto has caused this
Amendment No. 1 to Facility Lease to be duly executed in New York, New York by
an officer there-unto duly authorized.
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, 1936, with chase
Manhattan Realty Leasing
Corporation
By:
----------------------------
Assistant Vice President
PUBLIC SERVICE COMPANY OF
NEW MEXICO,
By:
----------------------------
Vice President and
Corporate Controller
-5-
6O9l.CHASE.DEBT.146:l
State of New York )
)ss:
County of New York)
The foregoing instrument was acknowledged before me this 24th
day of November, 1986, by B.D. LACKEY, Vice President and Corporate Controller
of PUBLIC SERVICE COMPANY OF NEW MEXICO, a New Mexico corporation, on behalf of
the corporation.
/s/ Delia T. Santiago
-----------------------
Notary Public
Delia T. Santago
Notary Public State of New York
No 41-3451160
Qualified In Queens County
Commission Expires March 30, 1987
State of New York )
) ss:
County of New York)
The foregoing instrument was acknowledged before me this 24th day of November,
1986, by Martin P. Henry, Assistant Vice President of THE FIRST NATIONAL BANK OF
BOSTON, a national banking association, on behalf of the banking association as
Owner Trustee under the Trust Agreement dated as of July 31, 1986 with Chase
Manhattan Realty Leasing Corporation.
/s/ David A. Spivak
------------------------
Notary Public
David A. Spivak
Notary Public, State of New York
No. 31-4693488
Qualified in New York County
Commission Expires March 10, 1987
6091.CHASE.DEBT. 146:1
SCHEDULE 1
to
AMENDMENT NO.1
SCHEDULE OF CASUALTY VALUES
Basic Basic
Rent Percentage Rent Percentage
Payment of Facility Payment of Facility
Date Cost Date Cost
------- ----------- ------- -----------
15JAN87 108.39224 15JAN98 102.28809
15JUL87 107.23024 15JUL98 100.70917
15JAN88 101.51081 15JAN99 99.63607
15JUL88 107.60714 15JUL99 97.93951
15JAN89 110.72584 15JAN100 96.69628
15JUL89 109.72664 15JUL100 94.89680
15JAN90 112.19177 15JAN101 93.52454
15JUL90 111.06507 15JUL101 91.63860
15JAN91 112.87839 15JAN102 90.12880
15JUL91 111.69339 15JUL102 88.15050
15JAN92 112.92483 15JAN103 86.51027
15JUL92 111.68018 15JUL103 84.43301
15JAN93 112.35208 15JAN104 82.66793
15JUL93 111.01255 15JUL104 80.48337
15JAN94 111.08451 15JAN105 78.58288
15JUL94 109.60551 15JUL105 76.28283
15JAN95 109.08161 15JAN106 74.23710
15JUL95 107.62209 15JUL106 71.81301
15JAN96 106.87515 15JAN107 69.61205
15JUL96 105.47391 15JUL107 67.05595
15JAN97 104.68407 15JAN108 64.69021
15JUL97 103.20804 15JUL108 61.99287
Page 1 of 2
6091.CHASE.DEBT.146:l
SCHEDULE 1
to
AMENDMENT NO.1
SCHEDULE OF CASUALTY VALUES
Basic Basic
Rent Percentage Rent Percentage
Payment of Facility Payment of Facility
Date Cost Date Cost
------- ----------- ------- -----------
15JAN109 59.45078
15JUL109 56.60203
15JAN110 53.87142
15JUL110 50.86047
15JAN111 47.92842
15JUL111 44.74379
15JAN112 41.59654
15JUL112 38.22608
15JAN113 34.84909
15JUL113 31.27985
15JAN114 27.65763
15JUL114 23.87600
15JAN115 20.00000
Page 2 of 2
6091.CHASE.DEBT.146:l
SCHEDULE 2
to
AMENDMENT NO. 1
SCHEDULE OF SPECIAL CASUALTY VALUES
Percentage Percentage
Payment of Facility Payment of Facility
Date Cost Date Cost
------- ----------- ------- -----------
15AUG86 104.27687 11JAN89 110.51760
15SEP86 103.32804 15FEB89 110.68360
15OCT86 103.76229 15MAR89 110.85374
15NOV86 104.20441 15APR89 110.27364
15DEC86 104.30295 15MAY89 110.42615
15JUN89 109.30420
15JAN87 108.37051 15JUL89 109.44686
15FEB87 108.74577 15AUG89 109.57477
15MAR87 109.12807 15SEP89 109.04477
15APR87 108.15899 15OCT89 109.16270
15MAY87 108.51711 15NOV89 109.28411
15JUN87 106.84559 15DEC89 109.27124
15JUL87 107.18467
15AUG87 107.50988 15JAN90 111.81873
15SEP87 101.74809 15FEB90 111.91504
15OCT87 107.05454 11MAR90 112.01453
15NOV87 107.36708 15APR90 111.49867
15DEC87 107.42871 15MAY90 111.58039
15JUN90 110.52636
15JAN88 108.41911 11JUL90 110.59665
15FEB88 108.66143 15AUG90 110.65880
15MAR88 108.90895 15SEP90 110.14733
15APR88 108.24364 15OCT90 110.19806
15MAY88 108.46860 15NOV90 110.25136
15JUN88 107.25568 15DEC90 110.19663
15JUL88 107.46881
15AUG88 107.66817
15SEP88 107.10979
15OCT88 107.29730
15NOV88 107.48926
15DEC88 107.51542
Page 1 of 6
6091.CHASE.DEBT.146:l
SCHEDULE 2
to
AMENDMENT NO. 1
SCHEDULE OF SPECIAL CASUALTY VALUES
Percentage Percentage
Payment of Facility Payment of Facility
Date Cost Date Cost
------- ----------- ------- -----------
15JAN91 112.29286 15JAN94 109.57539
15FEB91 112.33172 15FEB94 109.42999
15MAR91 112.37308 15MAR94 109.28510
15APR91 111.92973 15APR94 109.01130
15MAY91 111.95239 15MAY94 108.84777
15JUN91 110.97827 15JUN94 108.08218
15JUL91 110.98863 15JUL94 107.90562
15AUG91 110.11543 15AUG14 107.73011
15SEP91 110.51243 15SEP94 107.28037
15OCT91 110.50706 15OCT94 107.09027
15NOV91 110.50366 15NOV94 106.90017
15DEC91 110.41809 15DEC94 106.69743
15JAN92 112.07912 15JAN95 107.16923
15FEB92 112.05940 15FEB95 106.97064
15MAR92 112.04153 15MAR95 106.77204
11APR92 111.66699 15APR95 106.56219
15MAY92 111.63146 15MAY95 106.36360
15JUN92 110.73818 15JUN95 105.69371
15JUL92 110.69141 15JUL95 105.49511
15AUG92 110.63926 15AUG95 105.28762
15SEP92 110.18044 15SEP95 104.90076
15OCT92 110.11712 15OCT95 104.69328
15NOV92 110.05513 15DEC95 104.48579
15DEC92 109.93623 15DEC95 104.27831
15JAN93 111.19851
15FEB93 111.11931
15MAR93 111.04133
15APR93 110 72175
15MAY93 110.62612
15JUN93 109.79976
15JUL93 109.69206
15AUG93 109.57771
15SEP93 109.13192
15OCT93 109.00545
15NOV93 108.87964
15DEC93 108.71924
Page 2 of 6
6091.CHASE.DEBT.146.1
SCHEDULE 2
to
AMENDMENT NO.1
SCHEDULE OF SPECIAL CASUALTY VALUES
Percentage Percentage
Payment of Facility Payment of Facility
Date Cost Date Cost
------- ----------- ------- -----------
15JAN96 104.51184 15JAN99 95.63381
15FEB96 104.29506 15FEB99 95.34538
15MAR96 104.07829 15MAR99 95.05694
15APR96 103.64474 15APR99 94.76851
15MAY96 103.08893 15MAY99 94.48007
15JUN96 103.08893 15JUN99 93.91569
15JUL96 102.87215 15JUL99 93.62726
15AUG96 102.64567 15AUG99 93.32418
15SEP96 102.31721 15SEP99 92.94856
15OCT96 102.09072 15OCT99 92.64548
15NOV96 101.86424 15NOV99 92.34241
15DEC96 101.63776 15DEC99 92.03933
15JAN97 101.82213 15JAN100 92.05232
15FEB97 101.58551 15FEB100 91.73903
15MAR97 101.34889 15MAR100 91.42574
15APR97 101.11227 15APR100 91.11244
15MAY97 101.87564 15MAY100 90.79915
15JUN97 100.32043 15JUN100 90.23230
15JUL97 100.08381 15JUL100 89.91901
15AUG97 99.83518 15AUG100 89.59431
15SEP97 99.49429 15SEP100 89.20709
15OCT97 99.24566 15OCT100 88.88238
15NOV97 98.99704 15NOV100 88.55767
15DEC97 98.74841 15DEC100 88.23297
15JAN98 98.87984
15FEB98 98.61859
15MAR98 98.35735
15APR98 98.09611
15MAY98 97.83487
15JUN98 97.27602
15JUL98 97.01478
15AUG98 96.74028
15SEP98 96.38332
15OCT98 96.10882
15NOV98 95.83432
15DEC98 95.55982
Page 3 of 6
6091.CHASE.DEBT
SCHEDULE 2
to
AMENDMENT NO.1
SCHEDULE OF SPECIAL CASUALTY VALUES
Percentage Percentage
Payment of Facility Payment of Facility
Date Cost Date Cost
------- ----------- ------- -----------
15JAN101 88.19119 15JAN104 74.98028
15FEB101 87.85568 15FEB104 74.57432
15MAR101 87.50217 15MAR104 74.16836
15APR101 87.18466 15APR104 73.76240
15MAY101 86.84914 15MAY104 73.35645
15JUN101 86.28309 15JUN104 72.77247
15JUL101 85.94758 15JUL104 72.36651
15AUG101 85.59993 15AUG104 71.94734
15SEP101 85.19988 15SEP104 71.49457
15OCT101 84.85223 15OCT104 71.07541
15NOV101 84.50458 15NOV104 70.65624
15DEC101 84.15692 15DEC104 70.23707
15JAN102 84.05837 15JAN105 70.01508
15FEB102 83.69956 15FEB105 69.58389
15MAR102 83.34075 15MAR105 69.15270
15APR102 82.98193 15APR105 68.72151
15MAY102 82.62312 15MAY105 68.29032
15JUN102 82.05737 15JUN105 67.69316
15JUL102 81.69856 15JUL105 67.26197
15AUG102 81.32745 15AUG105 66.81677
15SEP102 80.91417 15SEP105 66.34036
15OCT102 80.54306 15OCT105 65.89515
15NOV102 80.17196 15NOV105 65.44994
15DEC102 79.80085 15DEC105 65.00473
15JAN103 79.65508
15FEB103 79.27288
15MAR103 78.89068
15APR103 78.50847
15MAY103 78.12627
15JUN103 77.55465
15JUL103 77.17245
15AUG103 77.77780
15SEP103 76.34724
15OCT103 75.95260
15NOV103 75.55795
15DEC103 75.16331
Page 4 of 6
6091.CHASE.DEBT
SCHEDULE 2
to
AMENDMENT NO.1
SCHEDULE OF SPECIAL CASUALTY VALUES
Percentage Percentage
Payment of Facility Payment of Facility
Date Cost Date Cost
------- ----------- ------- -----------
15JAN106 64.74147 15JAN109 46.88549
15FEB106 64.28351 15FEB109 46.33693
15MAR106 63.82555 15MAR109 45.78837
15APR106 63.36759 15APR109 45.23980
15MAY106 62.90964 15MAY109 44.69124
15JUN106 62.29843 15JUN109 44.03206
15JUL106 61.84047 15JUL109 43.48830
15AUG106 61.36763 15AUG109 42.92193
15SEP106 60.86610 15SEP109 42.33510
15OCT106 60.39326 15OCT109 41.76873
15NOV106 59.92042 15NOV109 41.20236
15DEC106 59.44759 15DEC109 40.63600
15JAN107 59.14089 15JAN110 40.18753
15FEB107 58.65452 15FEB110 39.60498
15MAR107 58.16816 15MAR110 39.02243
15APR107 57.68179 15APR110 38.43988
15MAY107 57.19542 15MAY110 37.85732
15JUN107 56.56925 15JUN110 37.18000
15JUL107 56.08404 15JUL110 36.60430
15AUG107 55.58188 15AUG110 36.00284
15SEP107 55.05365 15SEP110 35.38392
15OCT107 54.55149 15OCT110 34.78247
15NOV107 54.04933 15NOV110 34.18101
15DEC107 53.54716 15DEC110 33.57955
15JAN108 53.19582
15FEB108 52.67929
15MAR108 52.16275
15APR108 51.64622
15MAY108 51.12968
15JUN108 50.48754
15JUL108 49.97390
15AUG108 49.44059
15SEP108 48.88395
15OCT108 48.35064
15NOV108 47.81733
15DEC108 47.28402
Page 5 of 6
6091.CHASE.DEBT.
SCHEDULE 2
to
AMENDMENT NO.1
SCHEDULE OF SPECIAL CASUALTY VALUES
Percentage Percentage
Payment of Facility Payment of Facility
Date Cost Date Cost
------- ----------- ------- -----------
15JAN111 33.07824 15JAN114 9.02244
15FEB111 32.45960 15FEB114 8.28170
15MAR111 31.84096 15MAR114 7.54095
15APR111 31.22233 15APR114 6.80021
15MAY111 30.60369 15MAY114 6.05946
15JUN111 29.90703 15JUN114 5.29694
15JUL111 29.29748 15JUL114 4.57315
15AUG111 28.65877 15AUG114 3.80841
15SEP111 28.00574 15SEP114 3.03971
15OCT111 27.36703 15OCT114 2.27497
15NOV111 26.72832 15NOV114 1.51023
15DEC111 26.08961 15DEC114 0.74549
15JAN112 25.53238 15JAN115 (-.00001)
15FEB112 24.87545
15MAR112 24.21851
15APR112 23.56157
15MAY112 22.90463
15JUN112 22.18738
15JUL112 21.54195
15AUG112 20.86371
15SEP112 20.17443
15OCT112 19.49619
15NOV112 18.81794
15DEC112 18.13969
15JAN113 17.52326
15FEB113 16.82565
15MAR113 16.12805
15APR113 15.43044
15MAY113 14.73283
15JUN113 13.99364
15JUL113 13.31020
15AUG113 12.58999
15SEP113 11.86219
15OCT113 11.14197
15NOV113 10.42176
15DEC113 9.70154
Page 6 of 6
6091.CHASE.DEBT.
SCHEDULE 3
to
AMENDMENT NO.1
SCHEDULE OF TERMINATION VALUES
Basic Basic
Rent Percentage Rent Percentage
Payment of Facility Payment of Facility
Date Cost Date Cost
------- ----------- ------- -----------
15JAN87 108.37051 15JAN99 95.63381
15JUL87 107.18467 15JUL99 93.62726
15JAN88 108.41911 15JAN100 92.05232
15JUL88 107.46881 15JUL100 89.91901
15JAN89 110.51760 15JAN101 88.19119
15JUL89 109.44686 15JUL101 85.94758
15JAN90 111.81873 15JUL102 84.05837
15JUL90 110.59665 15JUL102 81.69856
15JAN91 112.29286 15JAN103 79.65508
15JUL91 110.69141 15JUL103 77.17245
15JAN92 112.07912 15JUL104 74.98028
15JUL92 110.69141 15JUL104 72.36651
15JAN93 111.19851 15JAN105 70.01508
15JUL93 109.69206 15JUL105 67.26197
15JAN94 109.57539 15JAN106 64.74147
15JUL94 107.90562 15JUL106 61.84047
15JAN95 107.16923 15JAN107 59.14089
15JUL95 105.49511 15JUL107 56.08404
15JAN96 104.51184 15JAN108 53.19582
15JUL96 102.87215 15JUL108 49.97390
15JAN97 101.82213 15JAN109 46.88549
15JUL97 100.08381 15JUL109 43.48830
15JAN98 98.87984 15JAN110 40.18753
15JUL98 97.01478 15JUL110 36.60430
Page 1 of 2
6091.CHASE.DEBT.
SCHEDULE 3
to
AMENDMENT NO.1
SCHEDULE OF TERMINATION VALUES
Basic Basic
Rent Percentage Rent Percentage
Payment of Facility Payment of Facility
Date Cost Date Cost
------- ----------- ------- -----------
15JAN111 33.07824
15JUL111 29.29748
15JAN112 25.53238
15JUL112 21.54195
15JAN113 17.52326
15JUL113 13.31020
15JAN114 9.02244
15JUL114 4.57315
15JAN115 0.0
Page 2 of 2
6091.CHASE.DEBT
When Recorded, Return to: Greg R. Nielsen
Snell & Wilmer
3100 Valley Bank Center
Phoenix, Arizona 85073
CERTAIN RIGHTS OF THE LESSOR UNDER THE FACILITY LEASE AS HERETOFORE AMENDED
AND AS FURTHER AMENDED BY THIS AMENDMENT NO. 2 THERETO HAVE BEEN ASSIGNED TO,
AND ARE SUBJECT TO A SECURITY INTEREST IN FAVOR OF, CHEMICAL BANK, AS INDENTURE
TRUSTEE UNDER A TRUST INDENTURE, MORTGAGE, SECURITY AGREEMENT AND ASSIGMIENT OF
RENTS DATED AS OF JULY 31, 1986, AS HERETOFORE AMENDED. THIS AMENDMENT NO. 2 HAS
BEEN EXECUTED IN SEVERAL COUNTERPARTS. SEE SECTION 3(e) OF THIS AMENDMENT NO. 2
FOR INF0RMATION CONCERNING THE RIGHTS OF HOLDERS or VARIOUS COUNTERPARTS HEREOF.
THIS COUNTERPART IS NOT THE ORIGINAL COUNTERPART.
================================================================================
AMENDMENT NO.2
Dated as of December 11, 1986
to
FACILITY LEASE
Dated as of July 31, 1986,
as heretofore amended,
between
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
Lessor
and
PUBLIC SERVICE COMPANY OF NEW MEXICO,
Lessee
================================================================================
Original Facility Lease Recorded on August 1, 1986, as Instrument No. 86-404570
and Amendment No.1 to the Facility Lease Recorded on November 25, 1986, as
Instrument No. 86-650771, all in Maricopa County Recorder's Office.
================================================================================
AMENDMENT N0. 2, dated as of December 11, 1986 (Amendment No. 2), to
the Facility Lease dated as of July 31, 1986, as heretofore amended, between THE
FIRST NATIONAL BANK OF BOSTON, a national banking association, 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, a New York
corporation (the Lessor), and PUBLIC SERVICE COMPANY OF NEW MEXICO, a New Mexico
corporation (the Lessee).
WITNESSETH:
WHEREAS, the Lessee and the Lessor have heretofore entered into a
Facility Lease dated as of July 31, 1986, as heretofore amended (the Facility
Lease), providing for the lease by the Lessor to the Lessee of the Undivided
Interest and the Real Property Interest;
WHEREAS, the Lessee and the Lessor desire to execute this Amendment No.
2, to eliminate an overpayment of rent by the Lessee;
WHEREAS, the Indenture Trustee has consented to this Amendment No. 2
pursuant to the Request, Instruction and Consent effective on December 15, 1986;
NOW, THEREFORE, in consideration of the premises and of other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. Definitions.
For purposes hereof, capitalized terms used herein and not otherwise
defined herein or in the recitals shall have the meanings assigned to such tents
in Appendix A to the Facility Lease.
SECTION 2. Amendments.
(a) Section 3(a) of the Facility Lease is hereby amended by inserting
the phrase "and the Real Property Interest" immediately following the term
"Undivided Interest".
(b) Section 21 of the Facility Lease is hereby amended to read in its
entirety as follow:
"Pursuant to the Deed and the Assignment of Beneficial Interest,
the Lessee has sold to the Lessor the Real Property Interest. The Lessor
hereby grants to the Lessee a leasehold interest in the Real Property
Interest, such leasehold to be coterminous with the lease of the
Undivided Interest hereunder and to be at a rent per annum equal to the
respective percentages of the Real Estate Investment for the applicable
period set forth or derived from the respective percentages of Facility
Cost in clauses (i), (ii) and (iii) respectively, of Section 3 (a)
hereof (which rent is included as part of Basic Rent payable pursuant to
Section 3(a) hereof)."
SECTION 3. Miscellaneous.
(a) Effective Date of Amendments. The amendments set forth in section
.2 hereof shall be and become effective upon the execution hereof by the parties
hereto.
(b) Counterpart Execution. This Amendment No. 2 may be executed in any
number of counterparts and by each of the parties hereto on separate
counterparts; all such counterparts shall together constitute but one and the
same instrument.
(c) Governing Law. This Amendment No. 2 has been negotiated and
delivered in the State of New York and shall be governed by, and be construed in
accordance with, the laws of the State of New York, except to the extent that
pursuant to the law of the State of Arizona such law is mandatorily applicable
hereto.
(d) Disclosure. Pursuant to Arizona Revised Statutes Section 33-401,
the beneficiary of the Trust Agreement is Chase Manhattan Realty Leasing
Corporation, a New York corporation. The address of the beneficiary is One chase
Manhattan Plaza, New York, New York 10005. 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.
-2-
(e) Amendment No.2. The single executed original of this Amendment No.
2 marked "THIS COUNTERPART IS THE ORIGINAL COUNTERPART" and containing the
receipt of the Indenture Trustee thereon shall be the "Original" of this
Amendment No. 2. To the extent that this Amendment No. 2 constitutes chattel
paper, as such term is defined in the Uniform Commercial Code as in effect in
any applicable jurisdiction, no security interest in this Amendment No. 2 may be
created or continued through the transfer or possession of any counterpart other
than the "Original".
-3-
IN WITNESS WHEREOF, each of the parties hereto has caused this
Amendment No. 2 to Facility Lease to be duly executed in New York, New York by
an officer thereunto duly authorized.
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, 1966, with Chase
Manhattan Realty Leasing
Corporation
By
--------------------------------
Assistant Vice President
PUBLIC SERVICE COMPANY OF NEW MEXICO,
By /s/ A. J. Robison
--------------------------------
Senior Vice President and
Chief Financial Officer
State of New York )
) ss:
County of New York )
The foregoing instrument was acknowledged before me 15th day of
December, 1986, by A.J. ROBINSON, 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. Santago
Notary Public State of New York
No 41-3451160
Qualified In Queens County
Commission Expires March 30, 1987
State of New York )
) ss:
County of New York )
The foregoing instrument was acknowledged before me this 15th day of
December, 1986, by Martin P. Henry, Assistant Vice President of the NATIONAL
BANK OF BOSTON, a national banking association, on behalf of the banking
association as Owner Trustee under the Trust Agreement dated as of July 31, 1986
with Chase Manhattan Realty Leasing Corporation.
/s/ David A. Spivak
------------------------
Notary Public
David A. Spivak
Notary Public, State of New York
No. 31-4693488
Qualified in New York County
Commission Expires March 10, 1987
When Recorded, Return to: Greg R. Nielsen, Esq.
Snell & Wilmer
3100 Valley Bank Center
Phoenix, Arizona 85073
CERTAIN RIGHTS OF THE LESSOR UNDER TIE FACILITY LEASE AS HERETOFORE
AMENDED AND AS FURTHER AMENDED BY THIS AMENDMENT NO. E THERETO HAVE BEEN
ASSIGNED TO, AND ARE SUBJECCT TO A SECURITY INTEREST IN FAVOR OF, CHEMICAL BANK,
AS INDENTURE TRUSTEE UNDER A TRUST INDENTRURE, MORTAGAGE, SECURITY AGREEMENT AND
ASSIGNEMNT OF RENTS DATED AS OF JULYY 31, 1986, AS HERETOFORE AMENDED. THIS
AMENDMENT NO. 3 HAS BEEN EXECUTED IN SERVERAL COUNTERPARTS. SEE SECTION 3(e) OF
THIS AMENDMENT NO. 3 FOR INFORMATION CONCERNING THE RIGHTS OF HOLDRS OF VAROUS
COUNTERPARTS HEREOF.
THIS COUNTERPART IS NOT THE ORIGINIAL COUNTERPART.
================================================================================
AMENDMENT NO. 3
Dated as of April 8, 1987
to
FACILITY LEASE
Dated as of July 31, 1986,
as heretofore amended,
between
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,
Lessor
and
PUBLIC SERVICE COMPANY OF NEW MEXICO,
Lessee
================================================================================
Original Facility Lease Recorded on, August 1, 1986, as Instrument No.
86-404570, Amendment No. 1 Recorded on November 25, 1986, as instrument No.
86-650771, and Amendment No. 2 Recorded on December 17, 1986, as Instrument No.
86-695945, all in Maricopa County Recorder's Office.
================================================================================
6091CHASE.DEBT.160:1
AMENDMENT NO. 3, dated as of April 8, 1987 (Amendment No. 3),
to the Facility Lease dated as of July 31, 1986, as heretofore amended, between
THE FIRST NATIONAL BANK OF BOSTON, a national banking association, 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, a New York
corporation (the Lessor), and PUBLIC SERVICE COMPANY OF NEW MEXICO, a New Mexico
corporation (the Lessee).
WITNESSETH
WHEREAS, the Lessee and Lease the Lessor have heretofore entered
into a Facility dated as of July 31, 1986, as heretofore amended (the Facility
Lease), providing for the lease by the Lessor to the Lessee of the Undivided
Interest and the Real Property Interest;
WHEREAS, the Lessee and the Lessor desire to amend the
Facility Lease as set forth in Section 2 hereof; and
WHEREAS, the Indenture Trustee has consented to this Amendment
No. 3 pursuant to the Request, Instruction and Consent effective on April 8,
1987;
NOW, THEREFORE, in consideration of the premises and of other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. Definitions.
For purposes hereof, capitalized terms used herein and not
otherwise defined herein or in the recitals shall have the meanings assigned to
such terms in Appendix A to the Facility Lease.
6091.CHASE.DEBT.160:l
Section 2. Amendments.
(a) Section 5(a) of the Facility Lease is hereby amended to
read in its entirety as follows:
"(a) Return of the undivided Interest. On the Lease Termination
Date, the Lessee will (1) surrender possession of the Undivided Interest
and the Real Property Interest to the Lessor (or to a Person specified
by the Lessor to the Lessee in writing not less than 6 months prior to
the Lease Termination Date) (i) with full rights as a "Transferee" and
the sole "Participant" with respect to the Undivided Interest and the
Real Property Interest within the meaning of Section 15.10 of the ANPP
Participation Agreement and (ii) without a Price-Anderson Event (as
hereinafter defined) having arisen prior to, or arising upon, or
immediately following, such surrender and (2) furnish to the Lessor: (i)
copies certified by a senior officer of the Lessee of all Governmental
Action necessary to effect such surrender (including, but without
limitation, appropriate amendments to the License permitting the Lessor
(without the Lessor being required to change its business) or such
Person to possess the Undivided Interest and the Real Property Interest
with or without the continued involvement of the Lessee as Agent), which
Governmental Action shall be in full force and effect; and (ii) an
opinion of counsel (which may be nudge Rose Guthrie Alexander & Ferdon,
Snell & Wilmer or another counsel experienced with NRC and other nuclear
matters reasonably satisfactory to the Owner Participant) to the effect
that (A) the Lessee has obtained all Governmental Action and action
under the ANPP Participation Agreement necessary to effect such
surrender by the Lessee and receipt of possession by the Lessor (or by
the Person so specified by the Lessor) and (3) such Governmental Action
is in full force and effect. At the time of such return the Lessee shall
pay or have paid all amounts due and payable, or to become due and
payable, by it as an ANPP Participant under each and every ANPP Project
-2-
609l.CHASE.DEBT.160:l
Agreement allocable or chargeable (whether or not payable during or
after the Lease Term) to the Undivided Interest or the Real Property
Interest in respect of any period or periods ending on or prior to the
Lease Termination Date (including, but without limitation, all amounts
payable with respect to any and all discretionary Capital Improvements
to Unit 1 or the PVNGS Site approved or authorized (without the
concurrence of the Owner Participant) within the 3-year period preceding
the end of the Lease Term, whether or not implementation thereof has
been completed on or prior to the Lease Termination Date), and the
Undivided Interest and the Real Property Interest shall be free and
clear of all Liens (other than Permitted Liens described in clauses (i),
(V) (other than those arising by, through or under the Lessee alone),
(vi), (vii) (other than as aforesaid), (viii) (other than as aforesaid)1
(ix) and (x) of the definition of such term) and in the condition and
state of repair required by Section 8. In the event that on or prior to
the Lease Termination Date there shall have occurred a default by any
ANPP Participant (other than the Lessee) under the ANPP Participation
Agreement and such default shall not have been cured by the defaulting
ANPP Participant, then (i) the Lessee agrees to indemnify and hold the
Lessor (and each successor, assign and transferee thereof) harmless
against any and all obligations under the ANPP Participation Agreement
with respect to contributions or payments required to be made thereby as
a result of such default and (ii) the Lessor (and each successor, assign
and transferee thereof) agrees to reimburse the Lessee for all amounts
paid by the Lessee pursuant to the foregoing clause (i) to the extent,
but only to the extent, that the Lessor (or such successor, assign or
transferee) shall have actually received proceeds from the sale of the
Generation Entitlement share of the defaulting ANPP Participant as a
result of the payment made by the Lessee pursuant to the foregoing
clause (i), and, to the extent the Lessor (or such successor, assign or
transferee) shall have received such proceeds, the amount to be
-3-
6091.CHASE.DEBT.160:l
reimbursed to the Lessee pursuant to this clause (ii) shall include
interest at the Prime Rate from the date of any payment by the Lessee
pursuant to the foregoing clause (i) through the date of reimbursement
of such amount pursuant to this clause (ii). For purposes of this
Section 5(a) a "Price-Anderson Event" shall mean any Change in, or new
interpretation by Governmental Authority having jurisdiction of,
Applicable Law, including without limitation the Price-Anderson Act, the
Atomic Energy Act and the regulations of the NRC, in each case as in
effect on the Closing Date, but only if such change is specified in
clauses (2) (i) through (iv) of the definition of "Deemed Loss Event"
(other than a change which is specified in clause (A) of the definition
of "Acceptable Change")."
(b) A new section 8(g) of the Facility Lease is inserted
therein, to read in its entirety as follows:
"(g) Useful Life. If the Lessee shall not theretofore have
exercised its option under section 13 to purchase the Undivided Interest
and the Real Property Interest, then (i) if the Lessee shall not
theretofore have exercised its option to renew the Lease pursuant to
Section 12, on January 15, 2014, the Lessee shall initiate the Appraisal
Procedure to determine the remaining Economic Useful Life of Unit 1 as
of July 15, 2014 and (ii) on the Rent Payment Date occurring one year
prior to the end of the Renewal Term, if any, the Lessee shall initiate
the Appraisal Procedure to determine the remaining Economic Useful Life
of Unit 1 as of the date six months prior to the end of the Renewal
Term. The Lessee and the Lessor agree to use their best efforts to
ensure that such determination of remaining economic useful life is made
no later than July 15, 2014 (in the case of the first such
determination) and six months prior to the end of the Renewal Term (in
the case of the second such determination) "
-4-
6091.CHASE.DEBT. 160:1
(c) Section 15(iv) of the Facility Lease is hereby amended to
read in its entirety as follows:
"(iv) (1) the Lessee shall fail to perform its agreements set
forth in Section 5(a) hereof or (2) the remaining Economic Useful Life
of Unit 1, as determined under Section 8(g) if required thereby to be so
determined, shall be (x) as of the data six months prior to the end of
the Basic Lease Term, less than five and one-half years or (y) as of the
date six months prior to the end of the Renewal Term, three and one-half
years; or"
(d) Section 16(a) (vii) of the Facility Lease is hereby
amended to read in its entirety as follows:
"(vii) in the case of an Event of Default specified in clause
(iv) of Section 15, the Lessor may demand, by written notice to the
Lessee specifying a payment date which shall be (A) in the case of an
Event of Default specified in subclause (1) of said clause (iv), not
earlier than the data 30 days after the last Basic Rent Payment Date of
the Lease Term, and (B), in the case of an Event of Default specified in
subclause (2) of said clause (iv), the last Basic Rent Payment Date of
the Lease Term, that the Lessee pay to the Lessor, and the Lessee shall
pay to the Lessor, on such payment date, as liquidated damages for loss
of a bargain and not as a penalty, any unpaid Rent due through such last
Basic Rent Payment Date plus an amount (not less than zero) equal to the
Fair Market Sales Value (determined without regard to the obligation of
the Lessee under Section l0(b)(3)(xi) of the Participation Agreement) of
the Undivided Interest and the Real Property Interest (determined on the
basis of the actual condition of Unit 1) determined as of such last
Basic Rent Payment Date (together with interest on such amount at the
interest rate specified in Section 3(b) (iii) from such last Basic Rent
Payment Date to the date of actual payment) and upon receipt of such
payment the Lessor shall (or may prior to the receipt of such payment)
-5-
609l.CHASE.DEBT. 160:1
Transfer to the Lessee the Undivided Interest and the Real Property
Interest); provided, however, that the Lessor may not exercise the
foregoing remedy if the Lessor shall have failed to Transfer the
Undivided Interest and the Real Property Interest to the bidder (which
shall not be the Lessee or an Affiliate of the Lessee) that shall have
submitted the highest cash bid on or before the date on which such Event
of Default arose excluding, however, any such cash bid which the Lessor
or the Owner Participant determines was not submitted in good faith, or
as to which the bidder fails to certify to the Lessor such information
as the Lessor or Owner Participant may reasonably request in order to
determine whether or not such bid was submitted in good faith (and the
Lessor agrees that it will, if and to the extent so requested by the
Lessee on or after the date 90 days preceding such last Basic Rent
Payment Date, use reasonable efforts (at the expense of the Lessee) for
a period ending on the day 90 days after such last Basic Rent Payment
Date, to find a Person willing to submit such cash bid; provided,
however, that the failure of the Lessor to do so shall not relieve the
Lessee of its obligations under this clause (vii))."
(e) The definition of "Acceptable Change" set forth in
Appendix A to the Facility Lease is hereby amended to read in its entirety as
follows:
"Acceptable Change shall mean any change in or new
interpretation by Governmental Authority having jurisdiction of the
Price-Anderson Act or the Atomic Energy Act (or the regulations of the NRC
relating thereto) if, after giving effect to such change or new interpretation:
(A) (a) the "aggregate liability" for a single "nuclear incident" of
"persons indemnified" shall not exceed $6.563 billion (assuming 101
operating nuclear facilities participating in the deferred premium or
similar plan referred to in clause (c) below and subject to adjustment
in an amount not exceeding (X) $63 million for each increase or decrease
in said number of operating nuclear facilities and (V)
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6091.CHASE.DEBT.l60:l
the aggregate of all changes in such "aggregate liability" to reflect
the effects of inflation contemplated pursuant to clause (c) below);
(b) the "aggregate liability" for a single "nuclear incident" of
"persons indemnified" shall not exceed the sum of, without duplication,
(X) the amount of insurance coverage available from commercial insurance
underwriters on terms substantially equivalent (in the reasonable
opinion of the owner Participant) to the terms in effect on the closing
Date under Applicable Law and required to be maintained by each licensee
with respect to any single nuclear facility, and (IC) the maximum
aggregate amount payable with respect to a single. "nuclear incident" by
all licensees of nuclear facilities participating in any deferred
premium or similar plan required under Applicable Law, by more than $40
million.
(c) the amount payable by all licensees of a single nuclear facility
with respect to such facility under any deferred premium or similar plan
required under Applicable Law shall not exceed $63 million per "nuclear
incident" (subject to an annual adjustment upward for each calendar year
after the enactment of a change in the Price-Anderson Act (if such
change increases the standard deferred premium) by an amount equal to,
if specified by such change or otherwise by Applicable law, (X) the
annual percentage change during the immediately prior calendar year in
the implicit price deflator for the Gross National Product published by
the United States Department of Commerce or (Y) the annual percentage
change in the consumer price index since the immediately prior calendar
year; provided, however, that (i) in the event that Applicable Law shall
not specify an inflation adjustment, then the inflation adjustment
permitted by this parenthetical shall be that specified in the preceding
subclause (X) and (ii) in the event that Applicable Law shall specify a
standard deferred premium below $63 million, the inflation adjustment
factor shall not be available to increase the standard deferred premium
permissible under this clause (c) beyond $63 million until such lower
deferred premium (as so inflated) equals or exceeds $63 million);
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6091.CHASE.DEBT.160:l
(d) the amount payable by all licensees of a single nuclear facility
with respect to such facility in any one year with respect to any one
"nuclear incident" under any deferred premium or similar plan required
under Applicable Law shall not exceed $12 million;
(e) insurance or other financial protection shall be in effect under
which the providers of such insurance or other financial protection
shall agree to pay any amount payable by any licensee under any deferred
premium or similar plan upon a default in such payment by such licensee
up to a maximum aggregate amount for all such defaults in payment of not
less than $30 million;
(f) a provision shall be included (X) which authorizes (whether or not
subject to appropriation acts) the NRC or other Governmental Authority
to barrow from the United States Treasury (1) to make payments on behalf
of any licensees under any deferred premium or similar plan and (2) to
make payments to claimants in the event that funds available to pay
valid claims in any year are insufficient as a result of any limitation
on the amount of deferred premiums that may be required of a licensee
under Applicable Law (in both cases the reimbursement obligation of such
licensees in any calendar year shall not exceed $12 million, plus
interest), or CY) which makes the exclusive source of payments for
public liability claims the funds provided by financial protection
required by Applicable Law and, where appropriate, funds provided as a
result of NRC or other Governmental Authority borrowings or (Z) which
establishes another mechanism under which the maximum potential
liability of all Persons during any calendar year as a result of a
"nuclear incident" shall not exceed the amount of insurance or other
financial protection required to be available during such calendar year
to pay all amounts which may become payable by any such person, when and
as they become payable, in respect of such liability;
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609l.CHASE.DEBT.160:l
(g) there shall be no claim, liability or expense excluded (1) from the
limitation of liability established by the Price-Anderson Act (as in
effect on the closing Date) (through modification of the definitions of
"aggregate liability", "persons indemnified", "nuclear incident" or
otherwise) or (2) under commercially available insurance or other
financial protection required under Applicable Law (as in effect on the
closing Date) (other than an exclusion of the coats of investigating and
settling claims and defending suits for damages), except, for purposes
of subclauses (1) and (2) of this clause (g), to the extent excluded
pursuant to Applicable Law as in effect on the closing Date;
(h) subject only to clause (b) above, policies of insurance, including
policies in respect of any deferred premium or similar plan, shall
provide, or shall have been amended or modified to provide, in both
timing and amount, and make available, or shall have been mended or
modified to make available, financial protection required under
Applicable Law; and
(i) neither the Owner Trustee nor the Owner Participant shall be (in the
opinion of independent counsel to the Owner Participant) exposed to any
other increase in its real or potential liability with respect to a
Nuclear incident", either during or subsequent to the Lease Term; or
(B) at all times from the date of such Change to, but not
including, the Lease Termination Date,
(a) a provision shall be included,. with language reasonably
satisfactory to the Owner Participant, which exempts the Owner Trustee
and the Owner Participant from all real or potential liability in
respect of a "nuclear incident" so long as neither the owner Trustee nor
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6091.CHASE.DEBT.l6O:l
the Owner Participant is in actual possession and control of Unit 1 or
the Undivided Interest, unless (in the opinion of independent counsel to
the Owner Participant) (x) a court could reasonably hold that the
statute incorporating such provision is unconstitutional or (y) there
shall have occurred a subsequent change in, or new interpretation by
Governmental Authority having jurisdiction of, the exemption from
liability provided by such provision as to interests of the Owner
Trustee and the Owner Participant in Unit 1 which change or new
interpretation renders ineffective such exemption;
(b) the "aggregate liability" for a single "nuclear incident" of
"persons indemnified" shall not exceed $13 billion (assuming 101
operating nuclear facilities participating in the deferred premium or
similar plan referred to in clause (c) of paragraph (A) above and
subject to adjustment in an amount not exceeding (X) $126 million for
each increase or decrease in said number of operating nuclear facilities
and (Y) the aggregate of all changes in such "aggregate liability" to
reflect the effects of inflation contemplated pursuant to clause (C) of
paragraph (A) above (but without giving effect to clause (ii) of the
proviso set forth in such clause)); and
(c) the amount payable by all licensees of a single nuclear facility in
respect of such facility in any one year and with respect to any one
"nuclear incident" under any deferred premium or similar plan required
by Applicable Law shall not exceed $36 million (subject to adjustment as
provided in subclause CY) of the preceding clause (b)).
For purposes at this definition, "nuclear facility" shall mean and refer
to a facility designed for producing substantial amounts of electricity
and having a rated capacity of 100,000 electrical kilowatts or more."
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6091.CHASE.DEBT.l6O:1
(f) A new definition is hereby added to Appendix A to the
Facility Lease, to read in its entirety as follows:
"Decommissioning shall mean the ecommissioning and retirement
from service of Unit 1, and the related possession, maintenance and
disposal of radioactive material used in or produced incident to the
possession and operation of Unit 1, including, without limitation, (i)
placement and maintenance of Unit 1 in a state of protective storage,
(ii) in-place entombment and maintenance of Unit 1, (iii) dismantlement
of Unit 1, (iv) any other form of decommissioning and retirement from
service required by or acceptable to the NRC and (v) all activities
undertaken incident to the implementation thereof and to the obtaining
of NRC authority therefor, including, without limitation, maintenance,
storage, custody, removal, decontamination, and disposition of
materials, equipment and fixtures, razing of Unit 1, removal and
disposition of debris from the PYNGS site, and restoration of the PVNCS
Site related to Unit 1 for unrestricted use."
(g) A new definition is hereby added to Appendix A to the
Facility Lease, to read in its entirety as follows:
"Decommissioning Costs shall mean all costs, liabilities and
expenses relating or allocable to, or incurred in connection with, the
Decommissioning of Unit 1, including, without limitation, (i) any and
all costs of activities undertaken to terminate NRC licensing authority
and requirements to own, operate and possess Unit 1 and to possess
radioactive material used in or produced incident to the possession and
operation of Unit 1; and (ii) any and all costs of activities
undertaken, prior to termination of all NRC licensing authority and
requirements with respect to Unit 1 and the radioactive material used in
or produced incident to the possession and operation of Unit 1, to
possess, maintain, and dispose of radioactive material used in or
produced incident to the possession and operation of Unit 1."
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6091.CHASE.DEBT.l60:l
(h) A new definition is hereby added to Appendix A to the
Facility Lease, to read in its entirety as follows:
"Economic Useful Life shall mean that period (commencing on
the date as of which the determination of Economic Useful Life is to be
made as provided in Section 8(g) of the Facility Lease and ending on the
date upon which either of the states of affairs described in clauses (i)
and (ii) below ceases to apply, or can reasonably be expected to cease
to apply, to Unit 1) during which (i) Unit 1 will be useful to, and
usable by, any owner or lessee thereof as a facility for the generation
of electric power and (ii) Unit 1 is an economic and commercially
practical facility for the generation of electric power capable of
producing (after taking into account costs of capital) a reasonable
economic return to the owner thereof. For the purposes of determinations
under clauses (i) and (ii) above, the following factors, among others,
shall be taken into account (as such factors obtain on the date of
determination and as such factors are reasonably expected to obtain in
the future): (a) provisions of the ANPP Project Agreements (including,
without limitation, the ANPP Participation Agreement and the Material
Project Agreements (or substitutes for such Material Project Agreements
in effect on the date of determination)); (b) the actual condition and
performance of Unit it (c) the actual condition and performance of such
other facilities constituting PVNGS (including, without limitation, the
Common Facilities) as are integral to the operation of Unit 1; (d) the
actual condition of, and access of the ANPP Participants to, the ANPP
Switchyard and such other transmission facilities as are available and
necessary to permit the transmission of the maximum amount of power
generated by PVNGS; (e) the cost of obtaining, handling, storing and
disposing of nuclear fuel for Unit it (f) the projected cost (including,
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6091.CHASE.DEBT.l60:l
without limitation, costs attributable to obligations to fund any
reserve fund maintained (or funded) by licensed owners and/or lessees of
Unit 1 to the extent dedicated to (or attributable to and freely
available with respect to) Unit 1 (the Unit 1 Fund)) or the
Decommissioning or retirement from service of Unit 1 including, without
limitation, Decommissioning Costs (taking into account the balance (plus
projected investment earnings thereon) of the Unit 1 Fund): (g) the cost
of Capital improvements to Unit 1 then planned to be made, or reasonably
expected to be made; (h) the cost of acquiring or leasing the Unit 1
Retained Assets; (i) the current status of all Governmental Action with
respect to Unit 1 (including, without limitation, the License) required
to permit licensed owners and/or lessees to possess and (in the case of
the operating Agent) to operate Unit 1 and such other facilities
constituting PVNGS (including, without limitation, the Common
Facilities) as are integral to the operation of Unit 1; and (j) the
relative cost of producing an amount of electric power and energy
equivalent to the generating capacity of Unit 1 from other facilities
then available in the region serviced, or reasonably expected to be
serviced, by PVNGS."
SECTION 3. Miscellaneous.
(a) Effective Date of Amendments. The amendments set forth in
section 2 hereof shall be and became effective upon the execution hereof by the
parties hereto.
(b) Counterpart Execution. This Amendment No. 3 may be
executed in any number of counterparts and by each of the parties hereto on
separate counterparts: all such counterparts shall together constitute but one
and the same instrument.
(c) Governing Law. This Amendment No. 3 has been negotiated
and delivered in the State of New York and shall be governed by, and be
construed in accordance with, the laws of the state of New York, except to the
extent that pursuant to the law of the State of Arizona such law is mandatorily
applicable hereto.
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6091.CHASE.DEBT.16O:l
(d) Disclosure. Pursuant to Arizona Revised Statutes Section
33-401, the beneficiary of the Trust Agreement is Chase Manhattan Realty Leasing
Corporation, a New York corporation. The address of the beneficiary is One Chase
Manhattan Plaza, New York, New York 10081. 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.
(e) Amendment No. 3. The single executed original of this
Amendment No. 3 marked "THIS COUNTERPART IS THE ORIGINAL COUNTERPART" and
containing the receipt of the Indenture Trustee thereon shall be the "Original"
of this Amendment No. 3. To the extent that this Amendment No. 3 constitutes
chattel paper, as such term is defined in the Uniform Commercial Code as in
effect in any applicable jurisdiction, no security interest in this Amendment
No. 3 may be created or continued through the transfer or possession of any
counterpart other than the "Original".
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609l.CHASE.DEBT.l60:l
IN WITNESS WHUBOF, each of the parties hereto has caused this
Amendment No. 3 to Facility Lease to be duly executed by an officer thereunto
duly authorized.
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
PUBLIC SERVICE COMPANY OF NEW MEXICO
By
---------------------------------
Vice President and
Corporate Controller
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6091.CHASE.DEBT.l60:l
IN WITNESS WHEREOF, each of the parties hereto has caused this
Amendment No. 3 to Facility Lease to be duly executed by an officer thereunto
duly authorized.
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 Cashier
PUBLIC SERVICE COMPANY OF NEW MEXICO
By
--------------------------------
Vice President and
Corporate Controller
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6091 CHASE. DEBT. 160:1
State of New Mexico )
) ss:
County of Bernalillo )
The foregoing instrument was acknowledged before me this 8th
day of April, l987, by B. D. Lackey, the Vice President and Corporate Controller
of PUBLIC SERVICE COMPANY OF NEW MEXICO, a New Mexico corporation, on behalf of
the corporation.
---------------------
Notary Public
Commonwealth of Massachusetts )
) ss:
County of Suffolk )
The foregoing instrument was acknowledged before me this 8th day
of April, 1987, by James E. Mogavero, Assistant Cashier of THE FIRST NATIONAL
BANK OF BOSTON, a national banking association, on behalf of the banking
association as Owner Trustee under the Trust Agreement dated as of July 31, 1986
with Chase Manhattan Realty Leasing Corporation.
/s/ Carol Malley
---------------------
Notary Public
CAROL MALLEY
Notary Public
6091.CHASE.DEBT.160:l
State of New Mexico )
)ss:
County of Bernalillo )
The foregoing instrument was acknowledged before me this 8th
day of April, 1987, by B. D. lackey, the Vice President and Corporate Controller
of PUBLIC SERVICE COMPANY OF NEW MEXICO, a New Mexico corporation, on behalf of
the corporation.
---------------------
Notary Public
Commonwealth of Massachusetts )
)ss:
County of Suffolk )
The foregoing instrument was acknowledged before me this 8th day
of April, 1987, by James E. Mogavero, Assistant cashier of THE FIRST NATIONAL
BANK OF BOSTON, a national banking association, on behalf of the banking
association as Owner Trustee under the Trust Agreement dated as of July 31, 1986
with Chase Manhattan Realty Leasing corporation.
/s/ Carol Malley
---------------------
Notary Public
CAROL MALLEY
Notary Public
609l.CHASE.DEBT.160:l