When Recorded, Return to: Greg R. Nielsen, Esq.
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
DECEMBER 15, 1986. THIS FACILIY LEASE HAS BEEN EXECUTED IN SEVERAL
COUNTERPARTS. SEE SECTION 22(e) OF THIS AMENDMENT NO1 FOR INFORMATION CONCERNING
THE RIGHTS OF HOLDERS OF VARIOUS COUNTERPARTS HEREOF.
THIS COUNTERPART IS NOT THE ORIGINAL COUNTERPART.
================================================================================
FACILITY LEASE
Dated as of December 15, 1986
between
THE FIRST NATIONAL BANK OF BOSTON,
not in its individual capacity ,a
but solely as Owner Trustee
under a Trust Agreement, dated as
of December 15, 1986,
with Chase Manhattan Realty
Leasing Corporation,
Lessor
and
PUBLIC SERVICE COMPANY OF NEW MEXICO,
Lessee
================================================================================
Sale and Leasebaaack of a 1.700000% Undivided Interest
in Palo Verde Nuclear Generating Station Unit 1 and
a 5.666667% Undivided Interest in Certain Common
Facilities
================================================================================
6091 CHASEU1 LEASE 47:1
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...................................... 2
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............................................ 5
g Sufficiency of Basic
Rent and Supplemental
Rent................................................... 6
SECTION 4 Net Lease.............................................. 7
--i--
6091.CHASEU1.LEASE.47:1
TABLE OF CONTENTS (Continued)
Page
----
SECTION 5 Return of the Undivided
Interest............................................... 9
a Return of the Undivided
Interest............................................... 9
b Disposition Services................................... 11
SECTION 6 Warranty of the Lessor................................. 12
a Quiet Enjoyment........................................ 12
b Disclaimer of Other
Warranties............................................. 12
c Enforcement of Certain
Warranties............................................. 13
SECTION 7 Liens ................................................ 13
SECTION 8 Operation and Maintenance;
Capital Improvements................................... 14
a Operation and
Maintenance............................................ 14
b Inspection............................................. 15
c Capital Improvements................................... 15
d Reports................................................ 16
e Title to Capital
Improvements........................................... 17
f Funding of the Cost of
Capital Improvements................................... 18
--ii--
6091.CHASEU1.LEASE.47:1
TABLE OF CONTENTS (Continued)
Page
----
SECTION 9 Event of Loss; Deemed
Loss Event............................................. 20
a Damage or Loss......................................... 20
b Repair................................................. 21
c Payment of Casualty
Value.................................................. 21
d Payment of Special
Casualty Value......................................... 22
e Requisition of Use..................................... 23
f Termination of
Obligation............................................. 23
g Application of Payments
on an Event of Loss.................................... 24
h Application of Payments
Not Relating to an Event
of Loss................................................ 24
i Other Dispositions..................................... 25
j Assumption of Notes;
Creation of Lien on
Undivided Interest .................................... 25
SECTION 10 Insurance.............................................. 25
a Required Insurance..................................... 25
b Permitted Insurance.................................... 27
SECTION 11 Rights to Assign or
Sublease............................................... 27
--iii--
6091.CHASEU1.LEASE.47:1
TABLE OF CONTENTS (Continued)
Page
----
a Assignment or Sublease
by the Lessee.......................................... 27
b Assignment by Lessor as
Security for Lessor's
Obligations............................................ 28
SECTION 12 Lease Renewal.......................................... 28
SECTION 13 Notices for Renewal or
Purchase; Purchase
Options................................................ 29
a Notice, Determination of
Values, Appraisal
Procedure.............................................. 29
b Purchase Option at
Expiration of the Lease
Term................................................... 29
c Special Purchase Event................................. 30
SECTION 14 Termination for
Obsolescence........................................... 30
a Termination Notice..................................... 30
b Right of Lessor to
Retain Undivided
Interest upon
Termination............................................ 31
c Events on the
Termination Date....................................... 31
d Early Termination
Notice................................................. 32
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6091.CHASEU1.LEASE.47:1
TABLE OF CONTENTS (Continued)
Page
----
e Events on the Early
Termination............................................ 32
SECTION 15 Events of Default...................................... 33
SECTION 16 Remedies............................................... 37
a Remedies............................................... 37
b No Release............................................. 42
c Remedies Cumulative.................................... 42
d Exercise of Other Rights
or Remedies............................................ 43
e Special Cure Right of
Lessee................................................. 43
SECTION 17 Notices................................................ 44
SECTION 18 Successors and Assigns................................. 45
SECTION 19 Right to Perform for
Lessee................................................. 46
SECTION 20 Additional Covenants................................... 46
SECTION 21 Lease of Real Property
Interest............................................... 46
SECTION 22 Amendments and
Miscellaneous.......................................... 46
a Amendments in Writing.................................. 46
b Survival............................................... 46
--v--
6091.CHASEU1.LEASE.47:1
TABLE OF CONTENTS (Continued)
Page
----
c Severability of
Provisions............................................. 47
d True Lease............................................. 47
e Original Lease......................................... 47
f Governing Law.......................................... 48
g Headings............................................... 48
h Concerning the Owner Trustee........................... 48
i Disclosure............................................. 49
j Counterpart Execution.................................. 49
APPENDIX A Definitions
SCHEDULE 1 Casualty Values
SCHEDULE 2 Special Casualty Values
SCHEDULE 3 Termination Values
SCHEDULE 4 Real Property Interest Description
SCHEDULE 5 Undivided Interest Description
--vi--
6091.CHASEU1.LEASE.47:1
FACILITY LEASE, dated as of December 15, 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
December 15, 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
December 17, 1986, and shall end on the last day of the Lease Term.
6091.CHASEU1.LEASE.47:1
(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 4 hereto. The Undivided Interest is described on Schedule 5 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 and the Real
Property Interest, the following amounts:
(i) on January 15, 1987, an amount equal to .02583079%
of the Facility Cost for each day from, and including,
December 17, 1986 to, but excluding, January 15, 1987;
(ii) on July 15, 1987 and on each Basic Rent Payment
Date thereafter to and including January 15, 2015, an amount
equal to 4.649542% of Facility Cost: and
(iii) if the Lessee shall elect the Renewal Term1 on
July 15, 2015 and on each Basic Rent Payment flats 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)),
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.
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6091. CHASEUl. LEASE. 47:1
(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.
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6091.CHASEU1.LEASE.47:1
The Lessor shall have all rights, powers and remedies provided for in this
Facility Lease, at law, in equity or other-tie, 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 exceed by more than 4% the aggregate
amount of Basic Rent which would have been payable throughout the Basic Lease
Term (calculated as aforesaid) had no such adjustments been made.
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
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6091. CHASEUl LEASE .47:1
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 Section 3.(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 Supplemental Financing, (ii) the payment of
Transaction Expenses in an amount which is other than 1.5% of the Purchase Price
or (iii) any other change (other than a change in items 4, 5, a (as to the basis
for amortization of Transaction Expenses), 14, 15 and 17, but without limiting
the effect of Section 3(d) hereof) 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 or' a basis consistent with the original calculations, or
(ii) compute and provide to the Lessee, the Lessor, the Owner Participant, the
-5-
6091.CHASEU1.LEASE.47:1
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 arid 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 Rant 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).
-6-
6091 CHASEUl. LEASE. 47:1
SECTION 4. Net Lease.
This Facility Lease (as originally executed and as -a tied,
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 or any
other ANPF 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
-7-
6091.CHASEU1.LEASE.47:1
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
-8-
6091.CHASEU1.LEASE.47:1
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 32-343, 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 undertakings 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 9(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 applicable 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 (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
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6091.CHASEUl.LEASE.47:l
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 (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
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6091.CHASEU1.LEASE.47:1
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 transfered 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). 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) 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.
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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 Intere5t 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 INPROVEENT, 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 HERESY 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 FINGS, 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
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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 pursuant 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 received (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.
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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 substantially 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 its
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
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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 l 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 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.
(a) 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 or the Common
Facilities. Of the net proceeds of (i) any sale or other disposition of property
removed from Unit 1 or the Common Facilities 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
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6091. CHASEUl. LEASE. 47:1
Agreement and (ii) any insurance proceeds receivable (without regard to any
right of setoff or other similar right at 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, lo.6o6666% in the case of Unit 1, or
5.555555% in the case off Common Facilities, of either such amount shall be
applied as provided in section 9(g), (h) or (i), as the case may be. A
1.700000%, in the case of Unit 1, or .566667%, in the case of Common Facilities,
undivided interest in property at any time removed from Unit 1 or the Common
Facilities 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 the Common Facilities 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 1.700000%, in the case of Unit 1, or .566667%, 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
or the Common Facilities, without further act, (i) title to a 1.700000%, in the
case of Unit 1, or .566667%, 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 or the
Common Facilities. The Lessee warrants and agrees that the Lessor's 1.700000% or
.566667%, as the case may be, 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 reasonable time prior to
the date for filing, any reports with. respect to Unit 1, the Undivided Interest
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or the Real Property Interest or the condition or operation thereof that shall
be requited to be filed with any governmental or regulatory authority. On or
before March 1 of each year (commencing on March 1, 1988) 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, 1987 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 1.700000%, in
the case of Unit 1, or .566667%, 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) 1.700000%, in the case of Unit 1, or
.566667%, in the case of Common Facilities, of the cost of such
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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) 1.700000%, in the case of Unit 1, or
.566667%, 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 1.700000%, in the case of Unit 1,
or .566667%, 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 at 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 interests 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 1.700000%, in the case
of Unit 1, or .566667%, 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, 1.700000%, in the case or Unit 1, or .566667%, 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
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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
it' any calendar year;
(ii) the sum of the Supplemental Financing Amounts in any
calendar year, shall equal or exceed 1.700000% 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 Financing 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 16.666666% 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;
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(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 Lessor1s 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,
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damage, loss, condemnation, 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
Participants.
(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 repairs 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
9(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
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(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 determined as of the date such payment is due over
(ii) 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
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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))L,, 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 a~1 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 Motes 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.
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(g) Application of Payments on an Event of Lass. 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 any right 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
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respect of the repair, replacement or reconstruction of the undivided Interest
or any cart 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 flay appear.
(i) Other Dispositions. Notwithstanding the foregoing
provisions of this Section 9, so 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
therefore 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.
(1) 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
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will at all times maintain, directly or through the perating 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 tinder 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 maintained 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, (3) 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 (C) '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
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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
proceeds 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
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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 at 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
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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 (S) 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
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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 sates Value thereof.
(c) 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), 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 Officers1 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 an Affiliate of the Lessee)
submitting such bid.
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(b) Right of Lessor to Retain Undivided Interest upon
Termination. If a Termination Notice has been delivered pursuant to Section
14(a), 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 tide 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
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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 inter 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 with-out
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).
(4) 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.
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(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
an 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 Votes 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
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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) , 10(b) (3) (ii),. 10 (b ) C 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
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(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
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(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
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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;
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(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;
(v) except in the case of an Event of Default specified
in clause (iv) of Section 15 (subject, however, to the provisos
to the first sentence of Section 16(c) hereof), the Lessor may,
whether or not the Lessor shall have exercised or shall
thereafter at any time exercise its rights under clause (i),
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(ii), (iii) or (iv) above, demand, by written notice to the
Lessee specifying a payment date which shall be a Basic Rent
Payment Date not earlier than 10 days after the date of such
notice, that the Lessee pay to the Lessor, and the 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 Datespecified 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 (C) 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;
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6091.CHASEU1.LEASE.47:1
(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 I)
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 the 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
-40-
6091.CHASEU1.LEASE.47:1
(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 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) 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
-41-
6091.CHASEU1.LEASE.47:1
after the date 90 days preceding such last Basic rent payment
Date, use reasonable efforts (at the expense off the Lessee)
for a period ending :n 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 16(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 obligations
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), (3) or (C) of such Section 16(a) (v) , if the
-42-
6091.CHASEU1.LEASE.47:1
Lessor elects a remedy specified 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) hereto). 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 td
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 l5(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,
-43-
6091.CHASEU1.LEASE.47:1
the Lessee shall pay to the Lessor all Rent due on such Basic Rent Payment Date,
plus an amount equal to the excess at (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 (a) and assumption by the Lessee of all the
obligations and liabilities of the Owner Trustee under the Indenture and the
Motes 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 (a) (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 security 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
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6091.CHASEU1.LEASE.47:1
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.
-45-
6091.CHASEU1.LEASE.47:1
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 incorporated 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 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 incorporated as
part of Basic Rent payable pursuant to Section 3(a) hereof).
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.
-46-
609l.CHASEUl. LEASE. 47:1
(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.
(a) 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 or 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".
-47-
6091.CHASEU1. LEASE. 47:1
(f) Governing Law. This Facility Lease shall be governed by and construed in
accordance with the law of the state of flew 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 con-tents 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 interest, 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
-48-
6091. CHASEUlLEASE. 47:1
and obligations of the Owner Trustee hereunder 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.
-49-
6091.CHASEU1.LEASE.47:1
IN WITNESS WHEREOF, each of the parties hereto has caused this 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 December
15, 1986, with Chase Manhattan
Realty Leasing Corporation
By
-----------------------------
Assistant Vice President
PUBLIC SERVICE COMPANY
OF NEW MEXICO
By
-----------------------------
Senior Vice President and
Chief Financial Officer
6091.CHASEU1.LEASE.47:1
State of New York )
) ss:
County of New York )
The foregoing instrument was acknowledged before me this 15th day of December,
1986, by A.J. Robison, Senior Vice President and Chief Financial Officer of
Public Service Company of New Mexico, a New Mexico Corporation, on behalf of the
corporation.
/s/ Delia T. Santiago
-----------------------
Notary Public
Delia T. 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 F. Henry, Assistant Vice President of The First Natiohal Bank of
Boston, a national banking association, on behalf of the banking association as
Owner Trustee under that certain Trust Agreement dated as of December 15, 1986.
/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
SCHEDULE 1
TO FACILITY
LEASE
SCHEDULE OF CASUALTY VALUES
BASIC RENT PERCENTAGE OF
PAYMENT DATE FACILITY COST
- ------------ -------------
15JAN87 105.94334
15JUL87 104.82779
15JAN88 106.20642
15JUL88 105.17772
15JAN89 108.21549
15JUL89 107.07107
15JAN90 109.47569
15JUL90 108.31785
15JAN91 110.15808
15JUL91 108.97072
15JAN92 110.21149
15JUL92 108.95844
15JAN93 109.62035
15JUL93 108.26330
15JAN94 108.30191
15JUL94 106.80048
15JAN95 106.29835
15JUL95 104.89817
15JAN96 104.18824
15JUL96 102.85333
15JAN97 102.10833
15JUL97 100.70463
15JAN98 99.83623
15JUL98 98.33687
15JAN99 97.32303
15JUL99 95.71397
15JAN100 94.53854
15JUL100 92.80428
15JAN101 91.45971
15JUL101 89.82730
SCHEDULE OF CASUALTY VALUES
BASIC RENT PERCENTAGE OF
PAYMENT DATE FACILITY COST
- ------------ -------------
15JAN102 88.14857
15JUL102 86.22766
15JAN103 84.62272
15JUL103 82.60677
15JAN104 80.88149
15JUL104 78.76212
15JAN105 76.90592
15JUL105 74.67525
15JAN106 72.67859
15JUL106 70.32818
15JAN107 68.18158
15JUL107 65.70404
15JAN108 63.39779
15JUL108 60.78382
15JAN109 58.30671
15JUL109 55.54644
15JAN110 52.88659
15JUL110 49.96951
15JAN111 47.11428
15JUL111 44.02926
15JAN112 40.96522
15JUL112 37.70042
15JAN113 34.41334
15JUL113 30.95620
15JAN114 27.43099
15JUL114 23.76819
15JAN115 20.00000
SCHEDULE 2
TO
FACILITY LEASE
SCHEDULE OF SPECIAL CASUALTY VALUES
BASIC RENT PERCENTAGE OF BASIC RENT PERCENTAGE OF
PAYMENT DATE FACILITY COST PAYMENT DATE FACILITY COST
- ------------ ------------- ------------ -------------
15JAN87 105.93953 15JUN90 107.84240
15FEB87 106.39611 15JUL90 107.91093
15MAR87 106.86087 15AUG90 107.97717
15APR87 105.85050 15SEP90 107.46000
15MAY87 106.19610 15OCT90 107.51432
15JUN87 104.47466 15NOV90 107.57126
15JUL87 104.79951 15DEC90 107.51733
15AUG87 105.11218
15SEP87 104.31547 15JAN91 109.64942
15OCT87 104.60756 15FEB91 109.69166
15NOV87 104.90548 15MAR91 109.73644
15DEC87 104.94556 15APR91 109.28655
15MAY91 109.31183
15JAN88 106.14985 15JUN91 108.32723
15FEB88 106.38006 15JUL91 108.33966
15MAR88 106.61522 15AUG91 108.34874
15APR88 105.91697 15SEP91 107.86031
15MAY88 106.12748 15OCT91 107.85663
15JUN88 104.87501 15NOV91 107.85491
15JUL88 105.07218 15DEC91 107.76886
15AUG88 105.25702
15SEP88 104.66908 15JAN92 109.45422
15OCT88 104.84050 15FEB92 109.43576
15NOV88 105.01603 15MAR92 109.41913
15DEC88 105.02104 15APR92 109.03902
15MAY92 109.00388
15JAN89 108.05718 15JUN92 108.10129
15FEB89 108.20650 15JUL92 108.05429
15MAR89 108.35960 15AUG92 108.00214
15APR89 107.74554 15SEP92 107.53770
15MAY89 107.87894 15OCT92 107.47373
15JUN89 106.71734 15NOV92 107.41103
15JUL89 106.83931 15DEC92 107.28985
15AUG89 106.95663
15SEP89 106.40377 15JAN93 108.56550
15OCT89 106.50984 15FEB93 108.48510
15NOV89 106.61914 15MAR93 108.40583
15DEC89 106.59029 15APR93 108.08086
15MAY93 107.98296
15JAN90 109.16669 15JUN93 107.14780
15FEB90 109.26305 15JUL93 107.03709
15MAR90 109.36257 15AUG93 106.91991
15APR90 108.83335 15SEP93 106.46755
15MAY90 108.91403 15OCT93 106.33746
SCHEDULE OF SPECIAL CASUALTY VALUES
BASIC RENT PERCENTAGE OF BASIC RENT PERCENTAGE OF
PAYMENT DATE FACILITY COST PAYMENT DATE FACILITY COST
- ------------ ------------- ------------ -------------
15NOV93 106.20789 15MAR97 98.92106
15DEC93 106.04267 15APR97 98.69482
15MAY97 98.46857
15JAN94 106.90052 15JUN97 97.92681
15FEB94 106.75067 15JUL97 97.70056
15MAR94 106.60116 15AUG97 97.46285
15APR94 106.32122 15SEP97 97.13509
15MAY94 106.15192 15OCT97 96.89738
15JUN94 105.37730 15NOV97 96.65967
15JUL94 105.20324 15DEC97 96.42196
15AUG94 105.02141
15SEP94 104.58183 15JAN98 96.55907
15OCT94 104.40000 15FEB98 96.30932
15NOV94 104.21817 15MAR98 96.05956
15DEC94 104.02334 15APR98 95.80980
15MAY98 95.56004
15JAN95 104.50146 15JUN98 95.01569
15FEB95 104.31151 15JUL98 94.76594
15MAR95 104.12156 15AUG98 94.50352
15APR95 103.92206 15SEP98 94.16087
15MAY95 103.73211 15OCT98 93.89845
15JUN95 103.07090 15NOV98 93.63604
15JUL95 102.88096 15DEC98 93.37362
15AUG95 102.68252
15SEP95 102.30494 15JAN99 93.45452
15OCT95 102.10651 15FEB99 93.17880
15NOV95 101.90807 15MAR99 92.90309
15DEC95 101.70963 15APR99 92.62737
15MAY99 92.35165
15JAN96 101.94689 15JUN99 91.80293
15FEB96 101.73958 15JUL99 91.52721
15MAR96 101.53228 15AUG99 91.23752
15APR96 101.32498 15SEP99 90.87752
15MAY96 101.11768 15OCT99 90.58782
15JUN96 100.57447 15NOV99 90.29813
15JUL96 100.36717 15DEC99 90.00844
15AUG96 100.15060
15SEP96 99.83425 15JAN100 90.02972
15OCT96 99.61768 15FEB100 89.72534
15NOV96 99.40112 15MAR100 89.42096
15DEC96 99.18455 15APR100 89.11658
15MAY100 88.81220
15JAN97 99.37356 15JUN100 88.25712
15FEB97 99.14731 15JUL100 87.95274
SCHEDULE OF SPECIAL CASUALTY VALUES
BASIC RENT PERCENTAGE OF BASIC RENT PERCENTAGE OF
PAYMENT DATE FACILITY COST PAYMENT DATE FACILITY COST
- ------------ ------------- ------------ -------------
15AUG100 87.63464 15JAN104 73.32182
15SEP100 87.25627 15FEB104 72.92437
15OCT100 86.93817 15MAR104 72.52692
15NOV100 96.62007 15APR104 72.12947
15DEC100 86.30198 15MAY104 71.73202
15JUN104 71.15925
15JAN101 86.26162 15JUL104 70.76180
15FEB101 85.93294 15AUG104 70.35147
15MAR101 85.60426 15SEP104 69.90958
15APR101 85.27558 15OCT104 69.49925
15MAY101 84.94690 15NOV104 69.08892
15JUN101 84.39059 15DEC104 68.67859
15JUL101 84.06191
15AUG101 93.72136 15JAN105 68.46113
15SEP101 83.33069 15FEB105 68.03909
15OCT101 82.99014 15MAR105 67.61705
15NOV101 82.64959 15APR105 67.19500
15DEC101 82.30904 15MAY105 66.77296
15JUN105 66.18738
15JAN102 82.21225 15JUL105 65.76533
15FEB102 81.86080 15AUG105 65.32961
15MAR102 81.50935 15SEP105 64.86454
15APR102 81.15790 15OCT105 64.42882
15MAY102 80.80645 15NOV105 63.99309
15JUN102 80.25110 15DEC105 63.55736
15JUL102 79.89965
15AUG102 79.53619 15JAN106 63.29973
15SEP102 79.13288 15FEB106 62.85157
15OCT102 78.76943 15MAR106 62.40341
15NOV102 78.40598 15APR106 61.95525
15DEC102 78.04252 15MAY106 61.50709
15JUN106 60.90786
15JAN103 77.89921 15JUL106 60.45970
15FEB103 77.52494 15AUG106 59.99702
15MAR103 77.15066 15SEP106 59.50733
15APR103 76.77639 15OCT106 59.04465
15MAY103 76.40211 15NOV106 58.58197
15JUN103 75.84136 15DEC106 58.11930
15JUL103 75.46709
15AUG103 75.08068 15JAN107 57.81968
15SEP103 74.66059 15FEB107 57.34380
15OCT103 74.27418 15MAR107 56.86793
15NOV103 73.88776 15APR107 56.39205
15DEC103 73.50135 15MAY107 55.91618
SCHEDULE OF SPECIAL CASUALTY VALUES
BASIC RENT PERCENTAGE OF BASIC RENT PERCENTAGE OF
PAYMENT DATE FACILITY COST PAYMENT DATE FACILITY COST
- ------------ ------------- ------------ -------------
15JUN107 55.30241 15NOV110 33.40813
15JUL107 54.82804 15DEC110 32.82000
15AUG107 54.33674
15SEP107 53.82087 15JAN111 32.33061
15OCT107 53.32957 15FEB111 31.72573
15NOV107 52.83828 15MAR111 31.12085
15DEC107 52.34698 15APR111 30.51597
15MAY111 29.91109
15JAN108 52.00389 15JUN111 29.22912
15FEB108 51.49859 15JUL111 28.63357
15MAR108 50.99328 15AUG111 28.00911
15APR108 50.48798 15SEP111 27.37107
15MAY108 49.98267 15OCT111 26.74661
15JUN108 49.35342 15NOV111 26.12215
15JUL108 48.85134 15DEC111 25.49770
15AUG108 48.32967
15SEP108 47.78597 15JAN112 24.95370
15OCT108 47.26430 15FEB112 24.31147
15NOV108 46.74262 15MAR112 23.66923
15DEC108 46.22095 15APR112 23.02700
15MAY112 22.38477
15JAN109 45.83185 15JUN112 21.68291
15FEB109 45.29531 15JUL112 21.05240
15MAR109 44.75877 15AUG112 20.38938
15APR109 44.22223 15SEP112 19.71588
15MAY109 43.68570 15OCT112 19.05287
15JUN109 43.03996 15NOV112 18.38985
15JUL109 42.50852 15DEC112 17.72684
15AUG109 41.95461
15SEP109 41.38135 15JAN113 17.12501
15OCT109 40.82744 15FEB113 16.44313
15NOV109 40.27353 15MAR113 15.76124
15DEC109 39.71962 15APR113 15.07936
15MAY113 14.39748
15JAN110 39.28180 15JUN113 13.67445
15FEB110 38.71211 15JUL113 13.00689
15MAR110 38.14242 15AUG113 12.30295
15APR110 37.57273 15SEP113 12.30295
15MAY110 37.00305 15OCT113 10.88784
15JUN110 36.33976 15NOV113 10.18390
15JUL10 35.77719 15DEC113 9.47996
15AUG110 35.18906
15SEP110 34.58439 15JAN114 8.81689
15OCT110 33.99626 15FEB114 8.09292
SCHEDULE OF SPECIAL CASUALTY VALUES
BASIC RENT PERCENTAGE OF BASIC RENT PERCENTAGE OF
PAYMENT DATE FACILITY COST PAYMENT DATE FACILITY COST
- ------------ ------------- ------------ -------------
15MAR114 7.36895
15APR114 6.64498
15MAY114 5.92101
15JUN114 5.17546
15JUL114 4.46863
15AUG114 3.72125
15SEP114 2.97008
15OCT114 2.22270
15NOV114 1.47531
15DEC114 0.72793
15JAN115 0.00000
Schedule 3
to
Facility Lease
SCHEDULE OF TERMINATION VALUES
BASIC RENT PERCENTAGE OF
PAYMENT DATE FACILITY COST
- ------------ -------------
15JAN87 105.94334
15JUL87 104.82779
15JAN88 106.20642
15JUL88 105.17772
15JAN89 108.21549
15JUL89 107.07107
15JAN90 109.47569
15JUL90 108.31785
15JAN91 110.15808
15JUL91 108.97072
15JAN92 110.21149
15JUL92 108.95844
15JAN93 109.62035
15JUL93 108.26330
15JAN94 08.30191
15JUL94 106.80048
15JAN95 106.29835
15JUL95 104.89817
15JAN96 104.18824
15JUL96 102.85333
15JAN97 102.10833
15JUL97 100.70463
15JAN98 99.83623
15JUL98 98.33687
15JAN99 97.32303
15JUL99 95.71397
15JAN100 94.53854
15JUL100 92.80428
15JAN101 91.45971
15JUL101 89.62720
SCHEDULE OF TERMINATION VALUES
BASIC RENT PERCENTAGE OF
PAYMENT DATE FACILITY COST
- ------------ -------------
15JAN102 88.14857
15JUL102 86.22766
15JAN103 84.62272
15JUL103 82.60677
15JAN104 80.88149
15JUL104 78.76212
15JAN105 76.90592
15JUL105 74.67525
15JAN106 72.67859
15JUL106 70.32818
15JAN107 68.18158
15JUL107 65.70404
15JAN108 63.39779
15JUL108 60.78382
15JAN109 58.30671
15JUL109 55.54644
15JAN110 52.88659
15JUL110 49.96951
15JAN111 47.11428
15JUL111 44.02926
15JAN112 40.96522
15JUL112 37.70042
15JAN113 34.41334
15JUL113 30.95620
15JAN114 27.43099
15JUL114 23.76819
15JAN115 20.0000
SCHEDULE 4
to
FACILITY LEASE
REAL PROPERTY INTEREST DESCRIPTlON
The Real Property Interest is a (i) 0.5% undivided interest in the land
described in I below, a (ii).566667% undivided interest in the rights and
interests described in II below, and (iii) a .566667% undivided interest in
the rights 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 (l) South,
Range Six (6) West of the Gila and Sa1t 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 Twentyeight (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.
6091. CHASEUl. LEASE.47:l
PARCEL No. 7: The East half of Section Thirty-three (33), Township One (1)
North, Range Six (6) West of the Gila ant 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 1946.46 feet to a
point on the South right-of-way line of the 200 foot wide
HASSAYAMPA-SALDME 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 on the North right-of-way line of said highway; thence South
-2-
609l.CHASEUl.LEASE.47:1
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 On minutes 39 seconds 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 (l) South, Range Six (6)
West of the Gila and Salt River Base and Meridian, Maricopa County, Arizona.
II. HASSAYAMA PUMPING STATION AND EFFLUENT PIPEINE
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).
-3-
6091. CHASEUl LEASE. 47:1
SCHEDULE 5
to
FACILITY LEASE
UNDIVIDED INTEREST DESCRIPTION
The Undivided Interest is a (i) 1.700000% undivided interest
in and to the property described under A below and (ii) a .566667% 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.
6091.CHASEUl.LEASE.47:1
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, includinq spare fuel assemblies.
II. Spare Parts (Unit 1)
III. Transmission facilities (including any and all facilities
and equipment providing interconnection between the Unit 1
turbine generator and the ANPP High Voltage Switchyard,
including step-up transformers and standby equipment and
systems).
-2-
6O91.CHASEUl. LEASE. 47:1
IV. Oil and diesel fuel inventories (Unit 1). =2219
=(2219)
B. All PVNGS common facilities, INCLUDING BUT NOT LIMITED
TO: =2221
=(2221)
I. Surveillance systems, including associated =2225
radioactive monitoring systems and equipment. =2226
=(2226)
II. Water treatment facilitaies and transport systems for supply =2228
of waste water effluent. =2229
=(2229)
III. Warehouse and related storage facilities =2231
and equipment. =(2231)
BUT EXCLUDING:
I. Nuclear fuel, including spare fuel =2236
assemblies. =(2236)
II. All transmission and ANPP High Voltage Switchyard =2238
facilities. =(2238)
III. Adminstration Building. =2240
IV. Adminstration Annex Builidng. =2242
V. Technical Support Center. =2244
VI. Visitor Center. =2246
VII. External communication systems and equipment, =2248
including associated interconnections and computer =2249
data links. =(2249)
VIII. Parking lot improvements, road improvemnts, fencing =2251
and dikes. =2252
IX. Spare parts (common facilities). =2254
X. Simulator. =2256
XI. Oil and diesel fuel inventories. =2258
XII. Real property, beneficial interest in Title USA Company of =2260
Arizona Trust No. 530, and Project Agreement interests =2261
described in Schedule 4.
-3-
6091.CHASEU1.LEASE.47:1
When Recorded, Return to: Greg R. Nielsen, Esq.
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
DECEMBER 15, 1986. THIS AMENDMENT NO.1 HAS BEEN EXECUTED IN SEVERAL
COUNTERPARTS. SEE SECTION 3(e) OF THIS AMENDMENT NO1 FOR INFORMATION CONCERNING
THE RIGHTS OF HOLDERS OF VARIOUS COUNTERPARTS HEREOF.
THIS COUNTERPART IS NOT THE ORIGINAL COUNTERPART.
================================================================================
AMENDMENT NO.1
Dated as of April 8, 1987
to
FACILITY LEASE (Unit 1)
Dated as of December 15, 1986
between
THE FIRST NATIONAL BANK OF BOSTON,
not in its individual capacity ,a
but solely as Owner Trustee
under a Trust Agreement, dated as
of December 15, 1986,
with Chase Manhattan Realty
Leasing Corporation,
Lessor
and
PUBLIC SERVICE COMPANY OF NEW MEXICO,
Lessee
================================================================================
Original Facility Lease Recorded on DECEMBER 17, 1986,
as Instrument No. 86-695925, in Maricopa County
Recorder's Office.
================================================================================
6091 CHASEU1 LEASE 204:1
AMENDMENT NO. 1, dated as of April 8, 1987 (Amendment No. 1),
to the Facility Lease dated as of December 15, 1986, between THE FIRST NATIONAL
BANK or BOSTON, a national banking association, not in its individual capacity,
but solely as Owner Trustee under a Trust Agreement, dated as of December 15,
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 December 15, 1986 (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. 1 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 ante in Appendix A to the Facility Lease.
6091.CHASEEU1.LEASE.204:1
SECTION 2. Amendments.
(a)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) an 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)
(b) section l5(iv) of the Facility Lease is hereby amended to
read in its entirety as follows:
"(iv) (1) the Lessee shall fail to per-form its agreements set
forth in section 5(a) hereof or (2) the remaining Economic Useful Life
of Unit 1, as determined under Section e(g) if required thereby to be so
determined, shall be (x) as of the date 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"
-2-
6091.CHASEU1.LEASE.204:1
(C) 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 date 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 1o(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 a the Lessor may
not exercise the foregoing I. 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
-3-
6091.CHASEU1.LEASE.204.1
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 Cat 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))."
(d) A new definition is hereby added to Appendix A to the
Facility Lease, to read in its entirety as follows:
"Decommissioning shall mean the decommissioning 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 PVNGS Site, and restoration of the PVNGS
Site related to Unit 1 for unrestricted use."
(e) A new definition is hereby added to Appendix A to the
Facility Lease, to read in its entirety as follows:
-4-
6091.CHASEU1.LEASE.204:1
"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."
(f) A new definition is hereby added Appendix A to the
Facility Lease, to read in 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 I 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
-5-
6091.CHASEU1.LEASE.204:1
the future): (a) provisions of the 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 17 (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 17 (f) the projected cost (including, 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 a 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 then 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."
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(e) Paragraph (B) (a) of the definition of "Acceptable Change"
set forth in Appendix A to the Facility Lease is hereby amended to read in its
entirety as follows:
"(a) 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 (V) of the preceding clause (b))."
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. 1 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 raw. 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 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 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.
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6091.CHASEU1.LEASE.204:1
(e) Amendment No. 1. The single executed original of this
Amendment No. 1 marked "THIS 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".
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6091.CHASEU1.LEASE.204:1
IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment No. 1
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 December 15, 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.CHASEUl.LEASE.204:l
IN WITNESS WHEREOF, each of the Parties hereto has caused this
Amendment No. 1 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 December 15, 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.CHASEU1.LEASE.204:1
State of New York )
)ss:
County or 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, an Assistant Cashier of THE FIRST NATIONAL
BANK OF BOSTON,THE FIRST NATIONAL BANK, a national banking association, on
behalf of the banking association as Owner Trustee under the Trust Agreement
dated as of December 15, 1986 with Chase Manhattan Realty Leasing Corporation.
/s/ Carol Malley
-----------------------------
Notary Public
CAROL MALLEY
Notary Public
My Commission Expires January 28, 1994
6091.CHASEU1.LEASE.204:1