WHEN RECORDED RETURN TO:
GREG R. NIELSEN
SNELL & WILMER
3100 VALLEY BANK CENTER
PHOENIX, ARIZONA 85073
RECORDED IN OFFICIAL RECORDS OF
MARICOPA COUNTY, ARIZONA
Aug 18, '86 - 455
Keith Poletis, County Recorder
Fee-PGS 56 I.G.
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ASSIGNMENT, ASSUMPTION
AND
FURTHER AGREEMENT
dated as of August 12, 1986
between
PUBLIC SERVICE COMPANY OF NEW MEXICO
and
THE FIRST NATIONAL BANK OF BOSTON,
not in its individual capacity, but
solely as Owner Trustee under a Trust
Agreement with Burnham
Leasing Corporation
================================================================================
Sale and Leaseback of an Undivided Interest
in Palo Verde Nuclear Generating Station Unit 2
and an Undivided Interest in
Certain Common Facilities
================================================================================
BURNHAM LEASING CORPORATION
THIS ASSIGNMENT, ASSUMPTION AND FURTHER AGREEMENT, dated as of
August 12, 1986, between PUBLIC SERVICE COMPANY OF NEW MEXICO, a New Mexico
corporation (PNM), and THE FIRST NATIONAL BANK OF BOSTON, not in its individual
capacity, but solely as Owner Trustee (the Owner Trustee), under a Trust
Agreement, dated as of August 12, 1986, with BURNHAM LEASING CORPORATION, a New
York corporation, as Owner Participant (the Owner Participant).
WITNESSETH:
WHEREAS, PNM and the other ANPP Participants are parties to the
ANPP Participation Agreement (such terms and all other terms used in these
recitals without definition having the respective definitions to which reference
is made in Article I below);
WHEREAS, PNM has sold, and the Owner Trustee has purchased, the
Undivided Interest and the Real Property Interest for and in consideration of
the payment to PNM by the Owner Trustee of the Purchase Price, the purchase
price of the Real Property Interest and the assignments and assumptions herein
set forth; and
WHEREAS, PNM has leased from the Owner Trustee the Undivided
Interest and the Real Property Interest pursuant to the Facility Lease;
NOW, THEREFORE, in consideration of the premises and of other
good and valuable consideration, receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
For purposes hereof, capitalized terms used herein shall have
the meanings assigned to such terms in Appendix A hereto. References in this
Agreement to articles, sections and clauses are to articles, sections and
clauses in this Agreement unless otherwise indicated.
6091.BURNHAM.1106.07:1
ARTICLE II
NONPARTITIONMENT
SECTION 2.01. Nonpartitionment. The Owner Trustee hereby waives
any rights it may have to partition Unit 2, the Common Facilities or the PVNGS
Site, whether by partitionment in kind or by sale and division of proceeds, and
further agrees that it will not resort to any action at law or in equity to
partition Unit 2 or the Common Facilities, and it waives the benefits of all
laws that may now or hereafter authorize such partition for a term (i) which
shall be coterminous with the term of ANPP Participation Agreement or (ii) which
shall be for such lesser period as may be required under Applicable Law.
ARTICLE III
ASSIGNMENTS; EXERCISE OF RIGHTS
SECTION 3.01. Assignment of Warranties. PNM hereby ASSIGNS to
the Owner Trustee an undivided interest, equal to a Unit 2 Interest, in the case
of property not constituting Common Facilities, or a Common Facilities Interest,
in the case of Common Facilities, in, to and under any and all warranties of and
other claims against dealers, manufacturers, vendors, contractors and
subcontractors relating to Unit 2 and the Common Facilities.
SECTION 3.02. Assignment of the ANPP Participation Agreement.
(a) In furtherance of the purchase and sale referred to above, PNM hereby
ASSIGNS to the Owner Trustee an undivided interest, in, to and under all of
PNM's rights under the ANPP Participation Agreement, equal to 2.2666667% to the
extent that such rights relate to Unit 2 (including, but without limitation, a
percentage entitlement equal to 2.2666667% of the Net Energy Generation and
Available Generating Capability (as each such term is defined in the ANPP
Participation Agreement) of Unit 2) and equal to 0.7555556% to the extent such
rights relate to the Common Facilities.
(b) In furtherance of the lease of the Undivided Interest and
the Real Property Interest the Owner Trustee hereby ASSIGNS to PNM the rights
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609l.BURNHAM.1106.07:1
assigned under paragraph (a) until the Lease Termination Date, subject to the
terms of the Facility Lease.
SECTION 3.03. Exercise of Rights as Participant under the ANPP
Participation Agreement. (a) Except as provided in Sections 15.2.2, 15.6.4 and
Section 15.10 of the ANPP Participation Agreement (or any comparable successor
provision) PNM shall be and remain the sole "Participant" for all purposes of
the ANPP Participation Agreement and the sole representative (with power to
bind) in all dealings with the other ANPP Participants in relation to the
Undivided Interest, the Real Property Interest and the rights assigned to the
Owner Trustee pursuant to this Agreement; provided, however, that the foregoing
shall not limit in any way any liability or obligation that PNM may incur to the
Owner Trustee or the Owner Participant under any Transaction Document as a
result of the exercise by PNM of rights as a "Participant", under the ANPP
Participation Agreement (including, but without limitation, any liability that
PNM may incur under Section 16 of the Facility Lease as a result of an Event of
Default).
(b) Unless the ANPP Participation Agreement shall otherwise
permit, any right conferred on the Owner Trustee by Section 15.2.2 of the ANPP
Participation Agreement shall be exercised as required by Section 15.6.3.3 of
said Agreement.
(c) The provisions of this Section 3.03 shall remain in full
force and effect until such time as the ANPP Administrative Committee or the
ANPP Participants shall otherwise consent.
ARTICLE IV
ASSUMPTION; RELEASE
SECTION 4.01. Assumption by Owner Trustee. Except as
contemplated by Section 5(a) of the Facility Lease, the Owner Trustee agrees
that, effective on and as of the Lease Termination Date, unless (i) a Default or
Event of Default shall have occurred and be continuing or an Event of Loss or
Deemed Loss Event shall have occurred or (ii) such Lease Termination Date
occurred by reason of a termination of the Facility Lease pursuant to Section 16
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6091.BURNHAM.1106.07:1
thereof, the Owner Trustee or, if a Person shall become a transferee of the
Undivided Interest and the Real Property Interest pursuant to Section 15.10 of
the ANPP Participation Agreement (an ANPP Transferee), such ANPP Transferee?
shall assume and agree to pay, perform and discharge a portion equal to a Unit 2
Interest, in the case of property not constituting Common Facilities, or a Unit
2 Common Facilities Interest, in the case of Common Facilities, of all
liabilities and obligations of PNM under, or with respect to, the ANPP Project
Agreements, attributable to Unit 2 and the Common Facilities, other than any and
all costs relating to, allocable to, or incurred in connection with,
Decommissioning.
SECTION 4.02. Release. Upon the assumption and agreement by an ANPP
Transferee pursuant to Section 4.01 (whether at the Lease Termination Date or
thereafter), the Owner Trustee shall therewith and thereupon be released and
discharged from its obligations under Section 4.01 arising on or after such
assumption and agreement.
ARTICLE V
NO RELEASE OF PNM; REIMBURSEMENT
SECTION 5.01. No Release of PNM. Notwithstanding the provisions
of Article IV or any other provision hereof or of any other Transaction
Document, and except to the extent provided in Section 15.10 of the ANPP
Participation Agreement (or any comparable successor provision), PNM shall not
be released from any liability or obligation under the ANPP Project Agreements,
or otherwise, with respect to PVNGS, and PNM shall remain liable for the payment
and performance of all such liabilities and obligations.
SECTION 5.02. Reimbursement. Unless a Default or an Event of
Default shall have occurred and be continuing or an Event of Loss or Deemed Loss
Event shall have occurred, from and after the Lease Termination Date (except a
Lease Termination occurring by reason of a termination of the Facility Lease
pursuant to Section 16 thereof), upon the payment or performance by PNM of any
liability or obligation in respect of which the Owner Trustee shall also have
become obligated in consequence of Article IV or the ANPP Participation
Agreement, and for so long as the Owner Trustee shall be so liable, PNM shall be
entitled to prompt reimbursement by the Owner Trustee from the Trust Estate for
all amounts expended in connection with such payment or performance.
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6091.BURNHAM.1106.07:1
ARTICLE VI
FURTHER AGREEMENTS OF PNM
SECTION 6.01. Agreement to Sell or Lease Unit 2 Retained Assets.
Upon a transfer to an ANPP Transferee, PNM agrees in respect of the Undivided
Interest and the Real Property Interest, (i) if such ANPP Transferee is a
purchaser of the Undivided Interest and the Real Property Interest, to sell to
such ANPP Transferee, at a price equal to the then Fair Market Sales Value
thereof (determined on the basis of the then actual condition of the Unit 2
Retained Assets), an undivided interest, equal to 2.2666667%, to the extent
related to Unit 2 and O.755S556%, to the extent related to the PVNGS common
facilities, in and to the Unit 2 Retained Assets, or (ii) if such ANPP
Transferee is a lessee of the Undivided Interest and the Real Property Interest,
to lease or otherwise make available to such ANPP Transferee, at a rent equal to
the then Fair Market Rental Value (determined on the basis of the then actual
condition of the Unit 2 Retained Assets) thereof, an undivided interest, equal
to 2.2666667%, to the extent related to Unit 2 and 0.7555556%, to the extent
related to the PVNGS common facilities, in and to the Unit 2 Retained Assets. If
such ANPP Transferee and PNM cannot agree on the Fair Market Sales Value or the
Fair Market Rental Value of the Unit 2 Retained Assets, the ANPP Transferee may
initiate the Appraisal Procedure. Any such sale or lease by PNM shall be
accomplished by an appropriate bill of sale or lease.
SECTION 6.02. Agreement to Assign or Make Available ANPP Project
Agreements. Upon a transfer to an ANPP Transferee, PNM agrees in respect of the
Undivided Interest and the Real Property Interest, (i) if such ANPP Transferee
is a purchaser of the Undivided Interest and the Real Property Interest, to
assign to such ANPP Transferee an undivided interest, equal to 2.2666667%, to
the extent related to Unit 2 and 0.7555556%, to the extent related to the PVNGS
common facilities or the ANPP Project Agreements (other than the ANPP
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609l.BURNHAM.1106.07:l
Participation Agreement), and (ii) if such ANPP Transferee is a lessee of the
Undivided Interest and the Real Property Interest, to assign for the term of
such lease to such ANPP Transferee an undivided interest, equal to 2.2666667%,
to the extent related to Unit 2 and 0.7555556% to the extent related to the
PVNGS common facilities of the ANPP Project Agreements (other than the ANPP
Participation Agreement). Any assignment pursuant to this Section 6.02 shall be
accomplished by an appropriate instrument of assignment.
SECTION 6.03. Agreements to Seek Amendments to the ANPP
Participation Agreement and the License. PNM agrees to use its best efforts to
obtain any required amendments to the ANPP Participation Agreement and the
License and all other Governmental Actions necessary to permit PNM to act as
Agent of the Owner Trustee in the manner contemplated by Section 7.01 hereof, if
(a) (i) PNM shall not have elected to purchase the Undivided Interest and the
Real Property Interest as provided in Section 13(b) of the Facility Lease and
(ii) there shall not be an ANPP Transferee in respect of the Undivided Interest
and the Real Property Interest or (b) PNM shall be obligated to surrender
p05session of the Undivided Interest and the Real Property Interest pursuant to
Section 5(a) of the Facility Lease, PNM acknowledges and agrees that neither the
Owner Trustee nor the Owner Participant shall have any obligation whatsoever to
assist PNM in obtaining any such amendments and Governmental Actions.
SECTION 6.04. Owner Trustee's Agreement. If PNM becomes
obligated to sell, lease, otherwise make available or assign in accordance with
Sections 6.01 and 6.02 hereof, the Owner Trustee shall (at the direction of the
Owner Participant) require or cause the ANPP Transferee to purchase, lease,
accept or assume, as the case may be, the property or rights being sold, leased,
made available or assigned by PNM.
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6091.BURNHAM.1106.07:1
ARTICLE VII
INTERIM AGENCY ARRANGEMENTS
SECTION 7.01. Designation of Agent. From and after the Lease
Termination Date and until a transfer to an ANPP Transferee in respect of the
Undivided Interest and the Real Property Interest (such period being referred to
as the Agency Period), PNM shall be, and the Owner Trustee hereby designates PNM
as, the initial agent (PNM or any other Person appointed in its place by the
Owner Trustee being herein called the Agent) of the Owner Trustee in the
exercise of all rights assigned to the Owner Trustee hereunder.
SECTION 7.02. Operation of Unit 2. During the Agency Period1 the
Agent shall administer the operation of the Undivided Interest and the Real
Property Interest in accordance with this Agreement and all instructions of the
Owner Trustee in accordance with Applicable Law. If, however, the Owner Trustee
and any User shall, prior to, or at any time during, the Agency Period, enter
into any joint ownership and operating agreement with other Persons having a
legal right to, or right to use, any other undivided interest in Unit 2, the
Agent agrees to join in, and be bound by, the terms of such agreement if the
Agent's performance thereunder shall not violate, or result in a violation of,
any Applicable Law or the License. The Owner Trustee agrees to give the Agent
reasonable prior written notice of the commencement of the negotiation of any
such agreement.
SECTION 7.03. ANPP Participation Agreement. PNM agrees that,
at all times during the Agency Period, it will perform all obligations and
discharge all liabilities for which it is responsible as a "Participant" under
the ANPP Participation Agreement in respect of the Undivided Interest and the
Real Property Interest. In the performance of the foregoing agreement, PNM shall
not exercise its rights as an ANPP Participant to cause Capital Improvements to
be made to Unit 2 and the Common Facilities unless the Owner Trustee shall have
agreed to provide funds for the payment of the Owner Trustee's Share of the cost
of such Capital Improvements to PNM prior to the date on which such amounts
shall be due with respect thereto under the ANPP Participation Agreement.
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6091.BURNHAM.1106.07:1
SECTION 7.04. Support. Except with respect to the Unit 2
Retained Assets for which provision is made in Section 7.06, PNM covenants and
agrees that, at all times during the Agency Period, it will provide, or make
available, to the Owner Trustee all PNM'S rights in and to the Unit 2 Retained
Assets and the ANPP Project Agreements to the extent relating to the Undivided
Interest and the Real Property Interest.
SECTION 7.05. Compensation. As compensation for its obligations
under Sections 7.02, 7.03 and 7.04, if no Event of Default based upon PNM's
failure to perform its obligations under Section 5(a) of the Facility Lease
shall have occurred and be continuing, PNM shall be entitled to receive, and the
Owner Trustee hereby agrees to pay, an amount equal to the Owner Trustee's share
of the aggregate of (i) amounts paid by PNM as provided in Section 7.03 to the
extent reasonably allocable to the Undivided Interest and the Real Property
Interest and (ii) reasonable compensation for the Unit 2 Retained Assets and
(iii) out-of-pocket expenses incurred by PNM or the Agent, as the case may be,
in connection with the performance of its agreements in this Article VII.
Compensation under this Section 7.05 shall be paid promptly in cash upon receipt
of an invoice from PNM.
SECTION 7.06. Transmission; Transmission Agreement. {a) PNM
covenants and agrees that, (i) at all times during the Agency Period, the Owner
Trustee shall have the right to wheel, under normal transmission operating
conditions, the Owner Trustee's share of power and energy in respect of the
Undivided Interest over transmission equipment in which PNM now owns or may
hereafter acquire an ownership interest, between Unit 2 and the ANPP Switchyard
and (ii) PNM will wheel such Owner Trustee's share to the extent of transmission
capacity available to PNM not subject to existing commitments and not required
by customers of PNM at the time such wheeling arrangement is entered into.
(b) Based upon the respective rights, duties obligations of the
Owner Trustee and PNM set forth in Section 7.06(a), if PNM shall fail or decline
to give the notice of renewal of the Facility Lease or purchase of the Undivided
Interest, in each case as provided in Section 13(a) of the Facility Lease, PNM
and the Owner Trustee shall forthwith commence the negotiation in good faith of
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6091.BURNHAM.1106.07:l
a definitive transmission agreement, not inconsistent with the terms and
provisions of Section 7.06 (a), but containing sufficient detail for the proper
wheeling of power and energy, under normal transmission operating conditions,
over the equipment of PNM referred to in such Section 7.06 (a) under then
existing circumstances, for the exercise or stipulation, as the case may be, of
the respective rights, duties and obligations of the Owner Trustee shall
complete such negotiations and execute such definitive transmission agreement
prior to the Lease Termination Date and such definitive transmission agreement
shall provide for compensation to PNM for the transmission services so provided
at the Fair Market Sales Value thereof.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Successors and Assigns. This Agreement shall be
binding upon the successors and assigns of each of PNM and the Owner Trustee.
SECTION 8.02. Governing Law. The interpretation of this
Agreement and the rights and obligations of the parties hereto-shall be governed
by and construed and enforced in accordance with the law of the State of New
York.
SECTION 8.03. Counterpart Execution. This Agreement may be
executed in any number of counterparts and by each of the parties hereto on
separate counterparts, all such counterparts together constituting but one and
the same instrument.
SECTION 8.04. Amendments. The terms of this Agreement shall not
be waived, altered, modified, amended, supplemented or terminated in any manner
whatsoever, except by written instrument signed by PNM and the Owner Trustee.
SECTION 8.05. Survival. All agreements and covenants contained
in this Agreement or any agreement, document or certificate delivered pursuant
hereto or in connection herewith shall survive the execution and delivery of
this Agreement.
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6091.BURNHAM.1106.07:1
SECTION 8.06. Severability of Provisions. Any provision of this
Agreement which may be determined by competent authority to be prohibited or
unenforceable in any jurisdiction shall1 as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and no such prohibition or unenforceability in any
jurisdiction shall invalidate or render unenforceable such provisions in any
other jurisdiction. To the extent permitted by Applicable Law, PNM hereby waives
any provision of law which renders any provision hereof prohibited or
unenforceable in any respect.
SECTION 8.07. Headings. The division of this Agreement into
sections, the provision of a table of contents and the insertion of headings are
for convenience of reference only and shall not affect the construction or
interpretation of this Agreement.
SECTION 8.08. Disclosure of Beneficiary. Pursuant to Arizona
Revised Statutes i33-401, the beneficiary of the Trust Agreement is Burnham
Leasing Corporation, a New York corporation, whose address is 60 Broad Street,
New York, New York 10004, Attention: Assistant Treasurer. A copy of the Trust
Agreement is available for inspection at the offices of the Owner Trustee at 100
Federal Street, Boston, Massachusetts 02110 Attention of Corporate Trust
Division.
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IN WITNESS WHEREOF, the parties hereto have each caused this
Agreement to be duly executed in New York, New York by their respective officers
thereunto duly authorized.
PUBLIC SERVICE COMPANY OF NEW MEXICO
By
---------------------------------
Vice President, Revenue
Management
THE FIRST NATIONAL BANK OF
BOSTON, not in its individual capacity, but
solely as Owner Trustee under a Trust
Agreement, dated as of August 12, l986, with
Burnham Leasing Corporation
By:
---------------------------------
AUTHORIZED OFFICER
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6091.BURNHAM.1106.07:1
STATE OF NEW YORK )
) ss:
COUNTY OF NEW YORK )
The foregoing instrument was acknowledged before me this 17th
day of August, 1986, by J.E. Sterba, the Vice President, Revenue Management of
PUBLIC SERVICE COMPANY OF NEW MEXICO, a New Mexico corporation, on behalf of the
corporation.
----------------
Notary Public
David A. Spivak
Notary Public, State of New York
No. 31-4693468
Qualified in New York County
Commission Expires March 30, 1987
STATE OF NEW YORK )
)SS.
COUNTY OF NEW YORK )
The foregoing instrument was acknowledged before me this 17th
day of August, 1986, by K. D. Woods, Vice President of the THE FIRST NATIONAL
BANK OF BOSTON, a national banking association, on behalf of the banking
association under that certain Trust Agreement dated as of August 12, 1986.
----------------------
Notary Public
David A. Spivak
Notary Public, State of New York
No. 31-4693468
Qualified in New York County
Commission Expires March 30, 1987
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6091.BURNHAM.1106.07:1
Appendix A
DEFINITION OF TERMS
The terms defined herein relate to the Participation Agreement
(as defined below) and certain Transaction Documents executed1 or to be
executed, in connection with the Participation Agreement. Such terms include the
plural as well as the singular. Any agreement defined or referred to below shall
include each amendment, modification and supplement thereto and waiver thereof
as may become effective from time to time, except where otherwise indicated. Any
term defined below by reference to any agreement shall have such meaning whether
or not such document is in effect. The terms "hereof", "here in", "hereunder"
and comparable terms refer to the entire agreement with respect to which such
terms are used and not to any particular article, section or other subdivision
thereof.
If, and to the extent that, either the Participation Agreement
or any other Transaction Document which incorporates this Appendix shall be
amended from time to time pursuant to the respective terms thereof, this
Appendix shall be, or be deemed to have been, amended concurrently with the
execution and delivery of each such amendment in order to conform the
definitions herein to the new or amended definitions set forth in or required by
each such amendment.
Additional Bonds shall mean Bonds in addition to the Initial
Series Bonds.
Additional Equity Investment shall have the meaning specified in
Section 8(f) of the Facility Lease.
Additional Notes shall have the meaning set forth in the
recitations in the Indenture, which Additional Notes shall be issued, if at all,
pursuant to Section 3.5 of the Indenture.
Affiliate, with respect to any Person, shall mean any other
Person directly or indirectly controlling or controlled by, or under direct or
indirect common control with, such Person. For purposes of this definition, the
6091.BURNHAM.1106.55:l
term "control' (including the correlative meanings of the terms "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management policies of such Person., whether through the
ownership of voting securities or by contract or otherwise
After Tax Basis shall mean, with respect to any payment received
or deemed to have been received by any Person, the amount of such payment
supplemented by a further payment to that Person so that the sum of the two
payments shall, after deduction of all taxes and other charges (taking into
account any credits or deductions arising therefrom and the timing thereof)
computed at the highest marginal statutory tax rate resulting from the receipt
(actual or constructive) of such two payments imposed under any Applicable Law
or by any Governmental Authority, be equal to such payment received or deemed to
have been received.
Agent and Agency period shall have the respective meanings set
forth in Section 7.01 of the Assignment and Assumption.
ANPP Administrative Committee shall mean the committee
established pursuant to Section 6.1.1 of the ANPP Participation Agreement (or
any comparable successor provision).
ANPP Operating Committee shall mean the committee established
pursuant to Section 6.1.2 of the ANPP Participation Agreement (or any comparable
successor provision).
ANPP Participants shall have the meaning assigned to the word
Participant under the ANPP Participation Agreement.
ANPP Participation Agreement shall mean the Arizona Nuclear
Power Project Participation Agreement, dated as of August 23, 1973, among APS,
Salt River, Southern California, PNM, El Paso, LADWP and SCPPA, as heretofore
and hereafter amended pursuant to the terms thereof.
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ANPP Project Agreements shall mean the ANPP Participation
Agreement and the other Project Agreements (as such term is defined in the ANPP
Participation Agreement).
ANPP Switchyard shall mean the ANPP High Voltage Switchyard
located at the PVNGS Site, the ownership, construction, operation and
maintenance of which are governed by the ANPP High Voltage Switchyard
Participation Agreement executed as of August 20, 1981 (APS Contract No.
2252-419,00), the parties to which are APS, PNM, Salt River, El Paso, LADWP and
Southern California.
ANPP Transferee shall have the meaning set forth in Section 4.01
of the Assignment and Assumption.
Applicable Law shall mean all applicable taws, statutes,
treaties, rules, codes, ordinances, regulations, permits, certificates, orders,
licenses and permits of any Governmental Authority, interpretations of any of
the foregoing by a Governmental Authority having jurisdiction, and judgments,
decrees, injunctions, writs, orders or like action of any court, arbitrator or
other judicial or quasi judicial tribunal (including those pertaining to health,
safety, the environment or otherwise).
Appraisal Procedure shall mean a procedure whereby two
independent appraisers, one chosen by the Lessee and one by the Lessor, shall
mutually agree upon the value, period. or amount (including Economic Useful
Life) then the subject of an appraisal. If either the Lessor or the Lessee, as
the case may be, shall determine that a value, period or amount to be determined
(other than fair market value under Section 5(b) of the Facility Lease) under
the Facility Lease or any other Transaction document cannot be established
promptly by mutual agreement, such party shall appoint its appraiser and deliver
a written notice thereof to the other party. Such other party shall appoint its
appraiser within 15 days after receipt from the other party of the foregoing
written notice. If within 20 days after appointment of the two appraisers, as
described above, the two appraisers are unable to agree upon the value, period
or amount in question, a third independent appraiser shall be chosen within ten
days thereafter by the mutual consent of such first two appraisers or, if such
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first two appraisers fail to agree upon the appointment of a third appraiser
within such period, such appointment shall be made by the American Arbitration
Association, or any organization successor thereto, from a panel of arbitrators
having experience in the business of operating a nuclear electric generating
plant and a familiarity with equipment used or operated in such business. The
decision of the third appraiser so appointed and chosen shall be given within
ten days after the selection of such third appraiser. If three appraisers shall
be so appointed and the determination of one appraiser is disparate from the
middle determination by more than twice the amount, period or value by which the
third determination is disparate from the middle determination, then the
determination of such appraiser shall be excluded, the remaining two
determinations shall be averaged and such average shall be binding and
conclusive on the Lessor and the Lessee; otherwise the average of all three
determinations shall be binding and conclusive on the Lessor and the Lessee. The
fees and expenses of appraisers incurred in connection with any Appraisal
Procedure relating to any transaction contemplated by any provision of any
Transaction Document shall be divided equally between the Lessor and the Lessee
(except pursuant to Section 16 of the Facility Lease, which shall be paid solely
by the Lessee).
APS shall mean Arizona Public Service Company, an Arizona
corporation.
Arizona Public Utility Act Sha11 mean Chapter 2, Title 40,
Arizona Revised Statutes.
Assigned Payments shall have the meaning specified in Section
2.1(1) of the Indenture.
Assignment and Assumption shall mean the Assignment, Assumption
and Further Agreement, dated as of August 12, 1986, between PNM and the Owner
Trustee.
Assignment of Beneficial Interest shall mean the Deed and
Assignment of Beneficial Interest under Title USA Company of Arizona Trust No.
530, dated as of August 18, 1986, from PNM to the Owner Trustee.
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Assumption Agreement shall mean the Assumption Agreement of PNM
substantially in the form of Exhibit B to the Indenture.
Assumptions shall mean the Pricing Assumptions and the Tax
Assumptions.
Atomic Energy Act shall mean the Atomic Energy Act of 1954, as
amended, and regulations from time to time issued, published or promulgated
pursuant thereto.
Authorized Officer shall mean, with respect to the Indenture
Trustee, any officer of the Indenture Trustee who shall be duly authorized by
appropriate corporate action to authenticate a Note and shall mean, with respect
to the Owner Trustee, any officer of the Owner Trustee who shall be duly
authorized by appropriate corporate action to execute any Transaction Document
Bankruptcy Code shall mean the Bankruptcy Reform Act of 1978 as
amended, and any law with respect to bankruptcy, insolvency or reorganization
successor thereto.
Basic Lease Term shall mean the initial term of the Facility
Lease, which shall begin on the closing Date and end on January 15, 2016, unless
earlier terminated.
Basic Rent shall have the meaning set forth in Section 3 (a) of
the Facility Lease.
Basic Rent Payment Dates shall mean and include January 15,
1987, and each January 15 and July 15 of each year thereafter through and
including January 15, 2016, and, if the Lessee shall elect the Renewal Term,
each January 15 and July 15 of each year during the Renewal Term, commencing
July 15, 2016 and ending on the last day of the Renewal Term.
Bill of Sale shall mean the Deed and Bill of Sale, dated as of
August 18, 1986, between PNM and the Owner Trustee.
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Bonds shall mean all bonds, notes and other evidences of
indebtedness from time to time issued and outstanding under the Collateral Trust
Indenture, including, but without limitation, the Initial Series Bonds, the
Releveraging Bonds, the Refunding Bonds and any other Additional Bonds.
Business Day shall mean any day other than a Saturday or Sunday
or other day on which banks in Albuquerque, New Mexico, New York, New York or
Boston, Massachusetts are authorized or obligated to be closed.
Capital Improvement shall mean (a) the addition, betterment or
enlargement of any property constituting part of Unit 2 or the Common Facilities
or the replacement of any such property with other property, irrespective of
whether (i) such replacement property constitutes an enlargement or betterment
of the property which it replaces, (ii) the cost of such addition, betterment,
enlargement or replacement is or may be capitalized, or charged to maintenance
or repairs, in accordance with the Uniform System of Accounts or (iii) such
addition, betterment or enlargement is or is not included or reflected in the
plans and specifications for Unit 2 or the Common Facilities, as built, and (b)
any alteration, modification, addition or improvement to Unit 2, other than
original, substitute or replacement parts incorporated into Unit 2 or the Common
Facilities.
Casualty Value, as of any Basic Rent Payment Date, shall mean
the percentage of Facility Cost set forth opposite such date in Schedule 1 to
the Facility Lease. Casualty Value as of any Basic Rent Payment Date during the
Renewal Term shall mean the unamortized portion as of such Basic Rent Payment
Date of the Fair Market Sales Value of the Undivided Interest, determined by the
straight-line amortization of such Fair Market Sales Value at the commencement
of the Renewal Term over the period from such commencement date through the
remaining term of the License determined pursuant to the Appraisal Procedure
undertaken in accordance with the last sentence of Section 13(a) of the Facility
Lease. Anything contained in the Participation Agreement or the Facility Lease
to the contrary notwithstanding, Casualty Value shall be, when added to all
other amounts which the Lessee is required to pay under Section 9(c) of the
Facility Lease (taking into account any assumption of Notes by the Lessee) under
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609l.BURNHAM.1106.55:1
any circumstances and in any event, in an amount at least sufficient to pay in
full, as of any Basic Rent Payment Date, the aggregate unpaid principal amount
of all Notes Outstanding at the close of business on such date, together with
accrued and unpaid interest on such Notes.
Change in Tax Law shall mean any change in the Code or successor
legislation enacted by either the Ninety-ninth or the One Hundredth Congress
(other than a change in respect of an alternative minimum tax or an add-on
minimum tax having the same effect as an alternative minimum tax), or if prior
to January 15, 1997 (i) there is enacted any technical correction thereto, or
(ii) there are adopted, promulgated, issued or published any proposed, temporary
or final Regulations resulting therefrom (regardless of the effective date of
such technical corrections or Regulations, but only if such technical
corrections or Regulations would affect Net Economic Return), provided, however,
that a Change in Tax Law shall occur in the event the provision set forth in
Section 1509(b) of H.R. 3838 as passed by the U.S. House of Representatives on
December 17, 1985 and Section 1809(b) of H.R. 3838 as passed by the U.S. Senate
on June 24, 1986 shall fail to be enacted into law in the form therein set forth
or, if such provision is so enacted into law1 it shall not apply to the Common
Facilities.
Chemical Bank shall mean Chemical Bank, a New York banking
corporation.
Chief Financial Officer shall mean the person designated by the
Board of Directors of PNM as the chief financial officer of PNM.
Claims shall mean liabilities, obligations, losses, damages,
penalties, claims (including, without limitation, claims involving liability in
tort, strict or otherwise), actions, suits, judgments, costs, interest, expenses
and disbursements, whether or not any of the foregoing shall be founded or
unfounded (including, without limitation, legal fees and expenses and costs of
investigation) of any kind and nature whatsoever without any limitation as to
amount.
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6091.BURNHAM.1106.55:1
Closing shall mean the proceedings which are contemplated by
Section 4 of the Participation Agreement.
Closing Date shall mean August 18, 1986.
Code shall mean the Internal Revenue Code of 1954, as amended,
or any comparable successor law.
Collateral Trust Indenture shall mean the Collateral Trust
Indenture, dated as of December 16, 1985, among PNM, Funding Corp. and the
Collateral Trust Trustee.
Collateral Trust Indenture Supplement shall mean a supplement to
the Collateral Trust Indenture.
Collateral Trust Trustee shall mean Chemical Bank, not in its
individual capacity, but solely as Collateral Trust Trustee under the Collateral
Trust Indenture, and the successors or assigns of such Trustee.
Common Facilities shall mean all PVNGS common facilities, as set
forth in Item B of Exhibit B to the Bill of Sale, other than common facilities
excluded therefrom in said item B.
Common Facilities Interest shall mean the Owner Trustee's
portion of the Lessee's original 10.2% undivided interest in all Common
Facilities at PVNGS, the percentage of which is set forth in Schedule 2 to the
Participation Agreement.
Coverage Ratio shall mean the fraction (i) the denominator of
which shall be the sum (calculated as of a date no earlier than 135 days prior
to the date of calculation) of (x) the interest that will be payable during the
twelve-month period following the date of the transaction with respect to which
a calculation is required to be made on the debt (both long-term and short-term)
of the Surviving Lessee, and (y) the interest portion of payments due during the
twelve-month period following the date of such transaction on lease obligations
of the Surviving Lessee with a term in excess of one year, and (ii) the
numerator of which shall be the sum of (x) the pro forma net earnings (before
taxes and excluding allowance for funds used during construction) of the
Surviving Lessee for a twelve-month period ending no earlier than 135 days prior
to the date of such transaction, and (y) such denominator.
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6091.BURNHAM.1106.55:1
Cure Option shall have the meaning set forth in Section 16(e) of
the Facility Lease.
Debt 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, if the principal amount (or equivalent) thereof is greater than
$20,000,000 for any one item of Debt or $30,000,000 in the aggregate for all
items of Debt of the Lessee).
Decommissioning shall mean the decommissioning and retirement
from service of Unit 2, and the related possession, maintenance and disposal of
radioactive material used in or produced incident to the possession and
operation of Unit 2, including, without limitation, (i) placement and
maintenance of Unit 2 in a state of protective storage, (ii) in-place entombment
and maintenance of Unit 2, (iii) dismantlement of -Unit 2, (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 2, removal and disposition of
debris from the PVNGS Site, and restoration of the PVNGS Site related to Unit 2
for unrestricted use.
Decommissioning Costs shall mean all costs, liabilities and
expenses relating or allocable to, or incurred in connection with, the
Decommissioning of Unit 2, including, without limitation, (i) any and all costs
of activities undertaken to terminate NRC licensing authority and requirements
to own, operate and possess Unit 2 and to possess radioactive material used in
or produced incident to the possession and operation of Unit 2; and (ii) any and
all costs of activities undertaken, prior to termination of all NRC licensing
authority and requirements with respect to Unit 2 and the radioactive material
used in or produced incident to the possession and operation of Unit 2, to
possess, maintain, and dispose of radioactive material used in or produced
incident to the possession and operation of Unit 2.
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6091.BURNHAM.1106.55:1
Deed shall mean the Deed, dated as of August 12, 1986, from PNM
to the Owner Trustee
Deemed Loss Event shall mean any of the following events (unless
waived by the Owner Participant, which waiver shall be in writing and may be
either indefinite or for a specified period):
(1) Regulation. If at any time after the Closing Date and
before the Lease Termination Date, the Owner Trustee or the Owner
Participant, by reason of the ownership of the Undivided Interest or the
Real Property Interest or any part thereof by the Owner Trustee (or any
beneficial interest therein by the Owner Participant) or the lease of
the Undivided Interest or the Real Property Interest to the Lessee or
any of the other transactions contemplated by the Transaction Documents
(the term Owner Participant, as used in this definition, not including
any Transferee who at the time of transfer to such Transferee is a
non-exempt entity of the type referred to in this clause (1), whether by
reason of such ownership or lease transactions, or otherwise) shall be
deemed by any Governmental Authority having jurisdiction to be, or shall
become subject to regulation (other than Non-Burdensome Regulation) as,
an "electric utility" or a "public utility" under any Applicable Law or
a holding company under the Holding Company Act, or as a consequence of
any Governmental Action, and the effect thereof on the Owner Trustee or
the Owner Participant would be, in the sole judgment of either such
Person, acting on advice of counsel, adverse, and the Owner Trustee and
the Owner Participant have not waived application of this definition,
except that if the Lessee, at its sole cost and expense, is contesting
diligently and in good faith any action by any Governmental Authority
which would otherwise constitute a Deemed Loss Event under this clause
(1), such Deemed Loss Event shall be deemed not to have occurred so long
as (i) such contest does not involve any danger of the foreclosure,
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6091.BURNHAM.1106.55:1
sale, forfeiture or loss of, or the creation of any Lien on, the
Undivided Interest, the Real Property Interest or any part thereof or
any interest therein, (ii) such contest does not adversely affect the
Undivided Interest, the Real Property Interest or any part thereof or
any other property, assets or rights of the Owner Trustee or the Owner
Participant or the Lien of the Indenture thereon, (iii) the Lessee shall
have furnished the Owner Trustee, the Owner Participant, and the
Indenture Trustee with an opinion of independent counsel satisfactory to
each such Person to the effect that there exists a reasonable basis for
contesting such determination and the effects thereof, (iv) such
determination and the effects thereof shall be effectively stayed or
withdrawn during such contest (and shall not be subject to retroactive
application at the conclusion of such contest) in a manner satisfactory
to the Owner Trustee and the Owner Participant, and the Owner
Participant shall have determined that the Owner Trustee's continued
ownership of the Undivided Interest and the Real Property Interest
during the pendency of such contest or such contest will not adversely
affect its or its Affiliates' business, and (V) the Lessee shall have
indemnified the Owner Trustee and the Owner Participant in a manner
satisfactory to each such Person for any liability or loss which either
such Person may incur as a result of the Lessee's contest;
(2) Price-Anderson Act Change. If there shall be, at any time
during the Lease Term, any change in the Price-Anderson Act, the Atomic
Energy Act or the regulations of the NRC, or any other Applicable Law,
in each case as in effect on the Closing Date, as a result of which, in
the opinion of independent counsel for the Owner Participant, (i) the
aggregate liability for a single Nuclear Incident of "persons
indemnified" (as each such term is defined in the Price-Anderson Act) is
increased, unless the change is such that neither the Owner Trustee nor
the Owner Participant may be exposed, either during or subsequent to the
Lease Term, to any increased real or potential liability in respect of a
Nuclear Incident, (ii) the aggregate liability for a single Nuclear
Incident of "persons indemnified" (as such term is defined in the
Price-Anderson Act) exceeds the amount of financial protection
established by the NRC as a condition to the License, unless the change
is such that neither the Owner Trustee nor
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6O91.BURNHAM.1106.55:1
the Owner Participant may be exposed, either during or subsequent to the
Lease Term, to any increased real or potential liability in respect of a
Nuclear Incident, (iii) the amount of financial protection required,
including but not limited to the limitation on the amount of deferred
premiums for such financial protection, is increased, unless the change
is such that neither the Owner Trustee nor the Owner Participant may be
exposed, either during or subsequent to the Lease Term, to any increased
real or potential liability in respect of a Nuclear Incident, or (iv)
either the Owner Trustee or the Owner Participant may be exposed to any
other increase in its real or potential liability in respect of a
Nuclear Incident, either during or subsequent to the Lease Term, it
being understood for purposes of this definition that the requirement or
existence of insurance, retrospective premiums, indemnities (whether by
the Lessee or any other person) or other forms of financial protection
(similar or dissimilar to the foregoing) shall not be deemed to reduce
or eliminate any exposure of the Owner Trustee or the Owner Participant
to real or potential liability in respect of a Nuclear Incident except
to the extent (x) such financial protection is provided by the United
States Government under Congressional action which does not require any
further appropriation or other act of Congress or any other Governmental
Authority, (y) the terms of such financial protection are otherwise
satisfactory to the Owner Trustee and the Owner Participant, and (z) the
Owner Trustee or Owner Participant may not otherwise be exposed, either
during or subsequent to the Lease Term, to any increased real or
potential liability in respect of a Nuclear Incident; provided, however,
that such change shall not constitute a "Deemed Loss Event" if such
change shall include a provision drafted in a manner reasonably
satisfactory to the Owner Participant which exempts the Owner Trustee
and the Owner Participant from all real and potential liability in
respect of a Nuclear Incident so long as neither the Owner Trustee or
the Owner Participant is in actual possession and control of Unit 2 or
the Undivided Interest, unless (in the opinion of independent counsel to
the Owner Participant) a court could reasonably hold that the statute
incorporating such provision is unconstitutional;
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609l.BURNHAM.1106.55:l
(3) Liability for Termination Obligation. If there shall be any
change in Applicable Law as a result of which the Owner Trustee shall
become liable in its individual capacity, or the Owner Participant shall
become liable in any capacity, in respect of any portion of the
Termination Obligation (as defined in the ANPP Participation Agreement)
or Decommissioning Costs or, during the Lease Term, any other liability
or obligation imposed as of the date hereof on licensees of the NRC;
(4) Illegality. If there shall be any change in Applicable Law
or any Governmental Action the effect of which is to make the
transactions contemplated by the Transaction Documents unauthorized,
illegal or otherwise contrary to Applicable Law;
(5) Limitation on Exercise of Rights. Any change in, or new
interpretation by Governmental Authority having jurisdiction of, the
License and the License Amendment (each as in effect on the Closing
Date) constituting an assertion to the effect that the exercise by the
Owner Trustee or the Owner Participant of any right (irrespective of the
event giving rise to such right) under any Transact ion Document would
constitute impermissible control over Unit 2 or the licensees of Unit 2,
other than an assertion that affects such rights in a manner consistent
with the second sentence of Section 184 of the Atomic Energy Act and the
NRC's regulations thereunder (including, without limitation, 10 CFR
Section 50.81, as now and hereafter in effect);
(6) Early Licensee Status. If as a result of any expiration,
revocation, suspension, amendment or interpretation by any Governmental
Authority of the License, the License Amendment or any other
Governmental Action or change in Applicable Law, either the Owner
Trustee or the Owner Participant shall be required to become a licensee
of the NRC prior to the Lease Termination Date;
(7) Suspension or Termination of Insurance. If any policy of
liability insurance with respect to Unit 2 shall be suspended or
terminated, or the coverage thereunder reduced, for any reason
whatsoever or shall be amended or supplemented, in either case in a
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609l.BURNHAM.1106.55:1
manner which may expose the Owner Trustee or the Owner Participant,
either during or subsequent to the Lease Term, to any increased real or
potential liability in respect of a Nuclear Incident and such policy of
insurance shall not be immediately replaced by insurance or other
financial protection satisfactory to the Owner Participant effective
immediately upon such suspension, termination, reduction, amendment or
supplementation which, in the reasonable opinion of the Owner
Participant, is at least as protective of it (in all respects deemed by
it to be material) as the policy of insurance so terminated, suspended,
reduced, amended or supplemented, unless the aggregate liability for a
Nuclear Incident of "persons indemnified" (as such term is defined in
the Atomic Energy Act of 1954, as amended) is reduced by an amount equal
to the amount of liability insurance so terminated, suspended, reduced,
amended or supplemented and, in the reasonable opinion of the Owner
Participant, it may not otherwise be exposed, either during or
subsequent to the Lease Term, to any increased real or potential
liability in respect of a Nuclear Incident as a consequence of such
suspension, termination, reduction, amendment or supplementation.
Default shall mean an event or condition which, with the giving
of notice or lapse of time, or both, would constitute an Event of Default.
Directive shall mean an instrument in writing executed in
accordance with the terms and provisions of the Indenture by the Holders, or
their duly authorized agents or attorneys-in-fact, representing a Majority in
Interest of Holders of Notes, directing the Indenture Trustee to take or refrain
from taking the action specified in such instrument.
Early Termination Date shall have the meaning specified in
Section 14(d) of the Facility Lease.
Early Termination Notice shall have the meaning specified in
Section 14(d) of the Facility Lease.
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 cease to
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6091.BURNHAM.1106.55:1
apply, or can reasonably be expected to cease to apply, to Unit 2) during which
(i) Unit 2 will be useful to, and usable by, any owner or lessee thereof as a
facility for the generation of electric power and (ii) Unit 2 is an economic and
commercially practical facility for the generation of electric power capable of
producing (after taking into account costs of capital) a reasonable economic
return to the owner thereof. For the purposes of determinations under clauses
(i) and (ii) above, the following factors, among others, shall be taken into
account (as such factors obtain on the date of determination and as such factors
are reasonably expected to obtain in the future): (a) provisions of the ANPP
Project Agreements (including, without limitation, the ANPP Participation
Agreement and the Material Project Agreements (or substitutes for such Material
Project Agreements in effect on the date of determination)); (b) the actual
condition and performance of Unit 2; (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 2; (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 2; (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 2 to the extent dedicated to (or attributable to and freely
available with respect to) Unit 2 (the Unit 2 Fund)) or the Decommissioning or
retirement from service of Unit 2 including, without limitation, Decommissioning
Costs (taking into account the balance (plus projected investment earnings
thereon) of the Unit 2 Fund); (q) the cost of Capital Improvements to Unit 2
then planned to be made, or reasonably expected to be made; (h) the cost of
acquiring or leasing the Unit 2 Retained Assets; (i) the current status of all
Governmental Action with respect to Unit 2 (including, without limitation, the
License) required to permit licensed owners and/or lessees to possess and (in
the case of the Operating Agent) to operate Unit 2 and such other facilities
constituting PVNGS (including, without limitation, the Common Facilities) as are
integral to the operation of Unit 2; and (j) the relative cost of producing an
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6091.BURNHAM.1106.55:1
amount of electric power and energy equivalent to the generating capacity of
Unit 2 from other facilities then available in the region serviced, or
reasonably expected to be serviced, by PVNGS.
El Paso shall mean El Paso Electric Company, a Texas corporation.
ERISA shall mean the Employee Retirement Income Security Act of
1974, as amended.
Estimated Transaction Expenses shall have the meaning set forth
in Section 5(a) of the Participation Agreement.
Event of Default shall have the meaning set forth in Section 15
of the Facility Lease.
Event of Loss shall mean any of the following events: (a) a
Final Shutdown, (b) a Requisition of Title, or (c) a Requisition of Use for an
indefinite period which can be reasonably expected to exceed, or a stated period
which ends on the last day of or after, the Lease Term (including the Renewal
Term only if the Renewal Term shall have been elected prior to such Requisition
of Use by the exercise of the renewal option provided in Section 12 of the
Facility Lease).
Excepted Payments shall mean (i) all payments of Supplemental
Rent, other than payments by the Lessee (x) of Casualty Value, Termination Value
or Special Casualty Value or in connection with the exercise of the Cure Option
or the occurrence of the Special Purchase Event or (y) of indemnity payments to
which either the Loan Participant or any Indemnitee other than the Owner Trustee
or the Owner Participant or any of their respective Affiliates (or the
respective successors, assigns, agents, officers, directors or employees
thereof) is entitled; (ii) any amounts payable under any Transaction Document to
reimburse the Lessor or the Owner Participant or any of their respective
Affiliates (including the reasonable expenses of the Lessor or the Owner
Participant incurred in connection with any such payment) for performing or
complying with any of the obligations of the Lessee under and as permitted by
any Transaction Document, (iii) any amount payable to the Owner Participant by
any Transferee as the purchase price of the Owner Participant's interest in the
Trust Estate, (iv) so long as no Indenture Default or Indenture Event of Default
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6091.BURNHAM.1106.55:l
shall have occurred and be continuing, all payments of Basic Rent in excess of
amounts then due and owing in respect of the principal of and premium, if any,
and interest on all Notes Outstanding; (v) any insurance proceeds with respect
to an Event of Loss in excess of amounts then due and owing in respect of the
principal of and premium, if any, and interest on all Notes Outstanding, (vi)
any insurance proceeds (or payments with respect to risks selfinsured) under
liability policies and (vii) any payments in respect of interest to the extent
attributable to payments referred to in clauses (i) through (vi) above.
Existing Mortgage shall mean the Indenture of Mortgage and Deed
of Trust dated as of June 1, 1947, between PNM and Irving Trust Company, as
heretofore supplemented by all Supplemental Indentures thereto.
Expenses shall mean liabilities, obligations, losses, damages,
taxes (other than taxes on income), claims, actions, suits, costs, expenses and
disbursements (including legal fees and expenses) of any kind and nature
whatsoever.
Extension letter shall mean the Extension Letter, dated August
18, 1986 and addressed to the Collateral Trust Trustee by the parties to the
Participation Agreement.
Extraordinary Nuclear Occurrence shall have its meaning as
defined in Section 11 of the Atomic Energy Act and the related NRC regulations,
as amended to the date hereof1 and as the meaning of such term shall be expanded
from time to time by future amendments thereof. The definition of "extraordinary
nuclear occurrence" contained in Section 11 of the Atomic Energy Act on the date
hereof is: If any event causing a discharge or dispersal of source, special
nuclear, or by-product material from its intended place of confinement in
amounts offsite, or causing radiation levels offsite, which the Commission
determines to be substantial, and which the Commission determines has resulted
or will probably result in substantial damages to persons offsite or property
offsite. Any determination by the Commission that such an event has, or has not,
occurred shall be final and conclusive, and no other official or any court shall
have power or jurisdiction to review any such determination. The Commission
shall establish criteria in writing setting forth the basis upon which such
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6091.BURNHAM.1106.55:1
determination shall be made. As used in this subsection, "offsite" means away
from "the location" or "the contract location" as defined in the applicable
Commission indemnity agreement, entered into pursuant to section 2210 of this
title."
Facility Cost shall mean the Purchase Price plus the sum of (x)
all Supplemental Financing Amounts, and (y) all Additional Equity Investment
amounts.
Facility Lease shall mean the Facility Lease, dated as of August
12, 1986, between PNM, as Lessee, and the Owner Trustee, as Lessor.
Fair Market Rental Value or Fair Market Sales Value of any
property or service shall mean (other than for purposes of Section 5(b) of the
Facility Lease) the value of such property or service for lease or sale
determined on the basis of an arm's-length transaction for cash between an
informed and willing lessee or purchaser (under no compulsion to lease or
purchase) and an informed and willing lessor or seller (under no compulsion to
lease or sell), and shall take into account the Lessor's rights and obligations
under the Assignment and Assumption and the Assignment of Beneficial Interest
and rights under the Deed and the Bill of Sale, but shall be without regard to
any rights of the Lessee (including any renewal options) under the Facility
Lease. Except pursuant to Section 6.01 of the Assignment and Assumption, Fair
Market Rental Value and Fair Market Sales Value of the Undivided Interest and
the Real Property Interest shall be determined on the assumption that (i) Unit 2
has been maintained in accordance with, and the Lessee has complied with, the
requirements of the Facility Lease1 the other Transaction Documents and the ANPP
Participation Agreement, and (ii) the Lessee or PNM, as possessor of the
Undivided Interest and the Real Property Interest, is otherwise in compliance
with the requirements of all Transaction Documents. Fair Market Rental Value
shall be determined on the assumption that rent will be payable in equal
semi-annual installments in arrears.
Federal Power Act shall mean the Federal Power Act, as amended.
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6091.BURNHAM.1106.55:1
Federal Securities shall have the meaning set forth in Section
2.3(c) of the Indenture.
FERC shall mean the Federal Energy Regulatory Commission of the
United States of America or any successor agency.
Final Prospectus shall mean the Prospectus included in the
Registration Statement on the date the same becomes effective, including
documents incorporated into said Prospectus by reference, including any
applicable prospectus supplements.
Final Shutdown shall mean the earlier to occur of:
(1) the expiration or revocation of the License or that portion
of the License that permits the operation of Unit 2 or the expiration,
suspension or revocation of the License or that portion of the License that
permits the possession by the Lessee of the Undivided Interest and the Real
Property Interest; or
(2) the suspension (pursuant to 10 C.F.R. 2.202, as amended, and
any successor provision) of the License or that portion of the License that
permits the operation of Unit 2, which suspension remains in effect for three
consecutive calendar months; or
(3) the permanent or temporary cessation of operation of Unit 2
as a result of a Nuclear Incident at Unit 2 (or if Unit 2 is not in operation
immediately prior to the occurrence of such Nuclear Incident, the failure to
resume operation thereof as a result of such Nuclear Incident) if (A) the Period
of such cessation or failure equals or exceeds twenty-four consecutive calendar
months, or (B) such Nuclear Incident causes the radiation level in the
containment building of Unit 2, as measured by the average of two high range
radiation monitors in such containment building of Unit 2 (or if only one such
monitor is operating at such time, such monitor) over one hour to equal or
exceed 500 rads per hour, provided, however, this subsection (B) shall not apply
in respect of a Nuclear Incident arising solely from a fuel handling accident;
or
(4) the permanent or temporary cessation of operation of Unit 2
as a result of a Nuclear Incident at Unit 1 or 3 (the Affected Unit) (or if Unit
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6091.BURNHAM.1106.55:1
2 is not in operation immediately prior to the occurrence of such Nuclear
Incident, the failure to resume operation thereof as a result of such Nuclear
Incident) if (A) the Period of such cessation or failure equals or exceeds
thirty-six consecutive calendar months: or (B) such Nuclear Incident causes the
radiation level in the containment building of the Affected Unit, as measured by
the average of two high range radiation monitors in such containment building
(or if only one such monitor is operating at such time, such monitor) over one
hour to equal or exceed 500 rads per hour: provided, however, this subsection
(B) shall not apply in respect of a Nuclear Incident arising solely from a fuel
handling accident:
(5) the occurrence of a Nuclear Incident at Unit 1, 2 or 3
causing (A) substantial injury or death to any person on or off the PVNGS Site
or (B) a discharge or dispersal of Source, Special Nuclear or Byproduct Material
from its intended place of confinement in amounts off the PVNGS Site or causing
radiation levels off the PVNGS Site such that, in the case of (B) above (x) the
NRC declares the occurrence of an Extraordinary Nuclear Occurrence or declares
any other event connoting an equivalent level of accident or (y) the surface
contamination dose rate measured off the PVNGS Site by a radiation monitor at 1
meter above the surface level equals or is greater at any time than 10
millirads/hour (0.10 milligray/hour) or in the case of noble gas plume passage,
the radiation dose rate equals or is greater than 10 rads (0.10 gray) integrated
over 24 hours, (or if the NRC shall at any time lower the radiation levels
required for the occurrence of an Extraordinary Nuclear Occurrence, such lower
levels as shall be consistent with such change by the NRC); or
(6) damage to or destruction of any portion of Unit 2 and,
unless the Lessee theretofore shall have exercised its purchase option under
Section 13(b) of the Facility Lease, the failure of the Lessee, or of the Lessee
and one or more other ANPP Participants, (A) to agree within eighteen calendar
months of such damage or destruction (or prior to such earlier date as of which
one or more other ANPP Participants shall agree to restore or reconstruct any
damaged portion of Unit 2 in accordance with Section 16.2 of the ANPP
Participation Agreement) to restore or reconstruct Unit 2 to completion prior to
the day sixty calendar months after the date of such agreement and (B)
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609l.BURNHAM.1106.55:1
thereafter to complete the restoration and reconstruction of Unit 2 within a
period of sixty calendar months after the date of such agreement, provided that
no Final Shutdown shall be deemed to have occurred pursuant to this clause (6)
if and so long as Unit 2 is in operation at a rated core power level of at least
1900 megawatts thermal; or
(7) the non-operation of Unit 2 or the operation of Unit 2 at a
net rated power level below 630 megawatts electric or any combination thereof
for any reason (including, without limitation, the occurrence of any Nuclear
Incident at any generating facility located anywhere in the world) for a Period
of thirty-six consecutive calendar months (or a period through the penultimate
day of the Lease Term if the Lessee shall have given notice of its intent to
exercise the purchase option permitted by Section 13(b) of the Facility Lease)
other than as a result of damage to or destruction of Unit 2.
For purposes of this definition, a Final Shutdown resulting from the occurrence
of an event described in clause (5) above shall be deemed to have occurred
immediately and automatically upon the decline of the water coolant within Unit
2 to a level three feet above the nuclear fuel.
Financing Documents shall mean the Collateral Trust Indenture,
the Term Note Supplemental Indenture, the Underwriting Agreement, the Term Loan
Agreement, the Supplemental Indenture of Pledge and the Refunding Supplemental
Indenture.
Fixed Rate Note shall mean the non-recourse promissory note or
notes to be issued by the Owner Trustee and authenticated by the Indenture
Trustee on the Refunding Date to refund the Initial Series Note.
Fixed Rate Renewal Term shall have the meanings set forth in
Section 12 of the Facility Lease.
FNB shall mean The First National Bank of Boston, in its
individual capacity, and its successors and assigns.
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Form U-7D-shall mean the certificate to be filed pursuant to
Rule 7(d) of the Holding Company Act for the purpose of exempting the Owner
Participant and the Owner Trustee from registration under the Holding Company
Act.
Funding Corp. shall mean First PV Funding Corporation, a
Delaware corporation.
Generating Unit shall mean Unit 1, 2, or 3.
Generation Entitlement Share shall have the meaning assigned
thereto in the ANPP Participation Agreement and (i) when used in reference to
Unit 2, shall mean the Generation Entitlement Share of PNM as the ANPP
Participant with respect to its interest in Unit 2, (ii) when used in reference
to the Undivided Interest, shall mean that portion of the Generation Entitlement
Share attributable to the Undivided Interest and (iii) when used in Section 19
of the Facility Lease, shall refer to the Generation Entitlement Share of the
Lessee in all Generating Units as PVNGS.
Governmental Action shall mean all authorizations, consents,
approvals, waivers, exceptions, variances, orders, licenses, exemptions,
publications, filings, notices to and declarations of or with any Governmental
Authority (other than routine reporting requirements the failure to comply with
which will not affect the validity or enforceability of any of the Transaction
Documents or have a material adverse effect on the transactions contemplated by
any Transaction Document or any Financing Document) or any other action in
respect of any Governmental Authority and shall include, without limitation, all
siting, environmental and operating permits and licenses which are required for
the use and operation of Unit 2, including the Undivided Interest and the Real
Property Interest.
Governmental Authority shall mean any Federal, state, county,
municipal, foreign, international, regional or other governmental authority,
agency, board, body, instrumentality or court, and the staff thereof pursuant to
their official responsibilities.
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609l.BURNHAM.1106.55:l
Holders shall mean the holders of the Notes or the Bonds, as the
case may be.
Holding Company Act shall mean the Public Utility Holding
Company Act of 1935, as amended.
Indemnitee shall mean the Owner Participant, the Owner Trustee,
FNB, the Loan Participant, the stockholder of Funding Corp. and its officers and
directors, Chemical Bank, the Indenture Trustee, each Holder of a Note from time
to time Outstanding, the Collateral Trust Trustee, the Trust, the Trust Estate,
the Lease Indenture Estate, the indenture estate under the Collateral Trust
Indenture, any Affiliate of any of the foregoing and the respective successors,
assigns, agents, officers, directors or employees of the foregoing, excluding,
however, any ANPP Participant other than the Owner Trustee or the Owner
Participant.
Indenture shall mean the Trust Indenture, Mortgage, Security
Agreement and Assignment of Rents, dated as of August 12, 1986, between the
Owner Trustee and the Indenture Trustee.
Indenture Default shall mean an event which, after giving of
notice or lapse of time, or both, would become an Indenture Event of Default.
Indenture Event of Default shall mean any of the events
specified in Section 6.2 of the Indenture.
Indenture Trustee shall mean Chemical Bank, a New York banking
corporation, not in its individual capacity, but solely as Indenture Trustee
under the Indenture and each successor trustee and co-trustee thereunder.
Indenture Trustee's Liens shall mean Liens against the Lease
Indenture Estate which result from acts of, or any failure to act by, or as a
result of claims against, the Indenture Trustee, in its individual capacity,
unrelated to the transactions contemplated by the Transaction Documents.
Indenture Trustee's Office shall mean the office of the
Indenture Trustee located at 55 Water Street, New York, New York 10041, or such
other office as may be designated by the Indenture Trustee to the Owner Trustee
and each Holder of a Note outstanding under the Indenture.
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Initial Series Bonds shall mean the promissory notes of Funding
Corp. evidencing the loans made to Funding Corp. under the Term Loan Agreement,
issued, authenticated and delivered under the Term Loan Agreement and the
Collateral Trust Indenture, as supplemented by the Term Note Supplemental
Indenture.
Initial Series Note shall mean the nonrecourse promissory note1
substantially in the form of Exhibit A to the Indenture, to be issued by the
Owner Trustee and authenticated by the Indenture Trustee on the Closing Date to
finance a portion of the Purchase Price.
Investment shall have the meaning set forth in Section 3 of the
Participation Agreement.
Investment Company Act shall mean the Investment Company Act of
1940, as amended.
Investment Percentage shall mean the percentage identified as
such in Schedule 2 to the Participation Agreement.
IRS shall mean the Internal Revenue Service of the United States
Department of the Treasury or any successor agency.
LADWP shall mean the Department of Water and Power of The City
of Los Angeles, a department organized and existing under the charter of the
City of Los Angeles, a municipal corporation of the State of California.
Lease Indenture Estate shall have the meaning forth in Section
2.1 of the Indenture.
Lease Term shall mean the aggregate of the Basic Lease Term and
the Renewal Term, if any.
Lease Termination Date shall mean the last day of the Lease Term
(whether occurring by reason of a termination or expiration of the Lease Term).
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Lessee shall mean Public Service Company of New Mexico, a New
Mexico corporation, and its successors and assigns, as lessee under the Facility
Lease and as party to the other Transactions Documents and Financing Documents
to which it is a signatory.
Lessee Request shall mean a request of the Lessee delivered
pursuant to Section 6.03 of the Collateral Trust Indenture.
Lessor shall mean the Owner Trustee, as lessor under the
Facility Lease (and for purposes of the definition of "Deemed Loss Event" and
where the context otherwise so requires, the Owner Trustee in its individual
capacity), and its successors and assigns.
Lessor's Interest shall have the meaning set forth in Section
8(c) (3) of the Participation Agreement.
Lessor's Liens or Owner Trustee's Liens shall mean Liens against
the Trust Estate or the Lease Indenture Estate (other than Permitted Liens
described in the definition of such term, except "Lessor's Liens" and "Owner
Participant's Liens" referred to in clause (vi) of such definition) for which
the Lessee is not responsible and which result from acts of, or any failure to
act by, or as a result of claims against, FNB or the Lessor, unrelated to the
ownership of the Undivided Interest or the Real Property Interest, the
administration of the Trust Estate or the transactions contemplated by the
Transaction Documents or the Financing Documents.
Lessor's Portion shall mean the Owner Trustee's portion of the
original 10.2% undivided interest of the Lessee in Unit 2, the percentage of
which is set forth in Schedule 2 to the Participation Agreement.
License shall mean NRC Facility Operating License No. NPF-51,
issued April 24, 1986 (superseding NRC Facility Operating License No. NPF-46,
issued on December 9, 1985), as the same may be amended, modified, extended,
renewed or superseded from time to time.
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6091.BURNHAM.1106.55:1
License Amendment shall mean amendment number No. 2 to the
License, issued August 12, 1986, approving the sale and leaseback transaction
contemplated by the Transaction Documents.
License Expiration Date shall mean December 9, 2025, or any
later or earlier date on which the License shall expire or be terminated.
Lien shall mean any mortgage, pledge, security interest,
encumbrance, lien, easement, servitude or charge of any kind, including, without
limitation, any conditional sale or other title retention agreement, any lease
in the nature thereof or the filing of, or agreement to give, any financing
statement under the Uniform Commercial Code of any jurisdiction.
Loan shall have the meaning set forth in Section 2(a) of the
Participation Agreement.
Loan Participant shall mean Funding Corp.
Loan Percentage shall mean the percentage identified as such in
Schedule 2 to the Participation Agreement.
Majority in Interest of Holders of Notes shall mean Holders of a
majority in principal amount of all Notes Outstanding under the Indenture at the
time of any such determination.
Material Project Agreements sha11 mean (i) Nuclear Fuel Contract
between Arizona Nuclear Power Project and Combustion Engineering, Inc. (CE),
dated as of August 20, 1973, (ii) Nuclear Steam Supply Contract between APS and
CE, dated as of August 20, 1973, as amended (iii) Turbine Generator Contract
between APS and General Electric Company, dated as of March 21, 1974, as amended
(iv) Uranium Enrichment Services Contract between the United States of America
(USA) and APS, dated November 15, 1984, as amended and the Associated
Supplemental Agreement of Settlement between USA and APS, dated November 15,
1984, (v) Contract between APS and Westinghouse Electric Corporation for fuel
fabrication services for reload batches of nuclear fuel, dated August 7, 1974,
as amended, (vi) Agreement for the Sale and Purchase of Waste Water Effluent
between the City of Tolleson, APS and Salt River, dated June 12, 1981, as
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6091.BURNHAM.1106.55:1
amended (vii) Agreement for Construction of Arizona Nuclear Power Project
between Bechtel Power Corporation (Bechtel) and APS, dated January 15, 1973,
(viii) Agreement for Engineering and Procurement Services between APS and
Bechtel, dated January 15, 1973, (ix) option and Purchase of Effluent dated
April 23, 1973, among the Cities of Phoenix, Glendale, Mesa, Tempe and
Scottsdale, the Town of Youngtown, APS and Salt River, APS, and Salt River,
dated April 23, 1973, (x) Agreement for Conversion Services between Allied
Chemical Corporation and APS, dated November 17, 1975, as amended, (xi) Uranium
Concentrate Sales Agreement between Energy Fuels Exploration Company and APS,
dated as of December 1, 1983, (xii) Uranium Concentrate Sales Agreement between
Energy Fuels Exploration and APS, dated as of October 23, 1981, as amended,
(xiii) Agreement for Sale of Uranium Concentrates between Pathfinder Mines
Corporation and APS, dated December 1, 1983, (xiv) Contract for Disposal of
Spent Nuclear Fuel and/or High Level Radioactive Waste between USA and APS,
dated July 21, 1984, and the ANPP Participation Agreement.
Minimum Net Worth means a Net Worth equal to the greater of (x)
$700,000,000 and (y) (1) $950,000,000 less (2) with respect to each Generating
Unit as to which PNM shall have entered into one or more transactions
constituting sale and leaseback transactions under the ANPP Participation
Agreement (including, but without limitation, the transaction contemplated by
the Participation Agreement), (A) $50,000,000 (in the case of Unit 1) and
$100,000,000 (in the case of each other Generating Unit) time5 (B) the aggregate
percentage of the Lessee's undivided interest in such PVNGS unit subject to such
transactions.
Mortgage Release shall mean the Indentures of Partial Release,
each dated August 18, 1986, under and with respect to the Existing Mortgage.
Net Economic Return shall mean the after-tax economic yield and
periodic after-tax cash flows (after all Federal, state and local taxes) and the
periodic return on investment and the timing of recognition of income originally
expected by the Owner Participant with respect to the Undivided Interest,
utilizing the same assumptions as used by the Owner Participant in making the
original computation upon which its evaluation of investment in the Undivided
Interest and the initial computation of Basic Rent, Casualty Value, Special
Casualty Value and Termination Value were based.
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Net Worth means the excess of assets over liabilities determined
by the Lessee's auditors on the basis of generally accepted accounting
principles.
New Mexico Public Utility Act shall mean the New Mexico Public
Utility Act, as amended.
NMPSC shall mean the New Mexico Public Service Commission
established pursuant to Section 62-5-1 of New Mexico Statutes Annotated, 1978.
NMPSC Order shall mean the order issued by the NMPSC on July 8,
1986, in Case No. 2019 (Phase I), approving, among other things, the terms of
the Facility Lease and the execution and delivery of the Facility Lease by PNM.
Non-Burdensome Regulation sha11 mean (i) regulation to which the
Owner Participant or the Owner Trustee is otherwise subject by reason of its
lease financing or other activities unrelated to the transactions contemplated
by the Transaction Documents, (ii) ministerial regulatory requirements which do
not impose limitations or regulatory requirements on the business or activities
of the Owner Participant and which are deemed, in the reasonable discretion of
the Owner Participant, not to be burdensome, (iii) regulation resulting from any
possession of the Undivided interest on or after the Lease Termination Date or
(iv) regulation of the Owner Trustee which would be terminated by the
appointment of a successor Owner Trustee or a co-Owner Trustee pursuant to the
terms of the Trust Agreement.
Nonseverable, when used with respect to any Capital Improvement,
shall mean any Capital Improvement which is not a Severable Capital Improvement.
Noteholder shall mean any Holder from time to time of a Note
Outstanding under the Indenture.
Notes shall mean the Initial Series Note and the Fixed Rate
Note, the Releveraging Note and any other Additional Notes.
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Notice of Closing shall have the meaning set forth in Section
5(a) of the Participation Agreement.
NRC shall mean the Nuclear Regulatory Commission of the United
States of America or any successor agency.
Nuclear Incident shall have its meaning as defined in Section 11
of the Atomic Energy Act, as amended to the date hereof and as the meaning of
such term may be expanded from time to time by future amendments thereof. The
definition of "nuclear incident" contained in the Atomic Energy Act on the date
hereof is "any occurrence, including an extraordinary nuclear occurrence, within
the United States causing, within or outside the United States, bodily injury,
sickness, disease, or death, or loss of or damage to property, or loss of use of
property, arising out of or resulting from the radioactive, toxic, explosive, or
other hazardous properties of source, special nuclear, or byproduct material:
Provided, however, that as the term is used in section 2210(1) of this title, it
shall include any such occurrence outside the United States: And provided
further, That as the term is used in section 2210(d) of this title, it shall
include any such occurrence outside the United States if such occurrence
involves source, special nuclear, or byproduct material owned by, and used by or
under contract with, the United States: And provided further, That as the term
is used in section 2210(c) of this title, it shall include any such occurrence
outside both the United States and any other nation if such occurrence arises
out of or results from the radioactive, toxic, explosive, or other hazardous
properties of source, special nuclear, or byproduct material licensed pursuant
to subchapters V, VI, VII, and IX of this chapter, which is used in connection
with the operation of a licensed stationary production or utilization facility
or which moves outside the territorial limits of the United States in transit
from one person licensed by the Commission to another person licensed by the
Commission."
Nuclear Waste Act shall mean the Nuclear Waste Policy Act of
1982, as amended, or any comparable successor law.
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6091.BURNHAM.1106.55:l
Officers' Certificate sha11 mean a certificate signed by the
President or any Vice President and by the Treasurer, any Assistant Treasurer,
'the Secretary or any Assistant Secretary of the Person with respect to which
such term is used.
Operating Agent shall have the meaning assigned thereto in the
ANPP Participation Agreement.
Original of the Facility lease shall mean the fully executed
counterpart of the Facility Lease, marked "This Counterpart is the Original
Counterpart", pursuant to Section 22(e) of the Facility Lease and containing the
receipt of the Indenture Trustee.
Outstanding, when used with respect to the Notes, shall mean, as
of the date of determination, all such Notes theretofore issued, authenticated
and delivered under the Indenture, except (a) Notes theretofore cancelled by the
Indenture Trustee or delivered to the Indenture Trustee for cancellation, (b)
Notes or portions thereof for the payment of which the Indenture Trustee holds
(and has notified the holders thereof that it holds) in trust for that purpose
an amount sufficient to make full payment thereof when due, (c) Notes or
portions thereof which have been pledged as collateral for any obligations of
the obligor thereof to the extent that an amount sufficient to make full payment
of such obligations when due has been deposited with the pledgee of such Notes
for the purpose of holding such amount in trust for the payment of such
obligations in accordance with the indenture or agreement under which such
obligations are secured and (d) Notes in exchange for, or in lieu of, which
other Notes have been issued, authenticated and delivered pursuant to the
Indenture; provided, however, that any Note owned by the Lessee or the Owner
Trustee or any Affiliate of either thereof shall be disregarded and deemed not
to be outstanding for the purpose of any Directive.
Overdue interest Rate shall mean the weighted average rate per
annum of interest payable with respect to overdue payments of principal on the
Notes outstanding, computed as set forth in such Notes.
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Owner Participant shall mean Burnham Leasing Corporation, and
the successors and assigns of such Person in accordance with the Trust Agreement
and the Participation Agreement.
Owner Participant's Liens shall mean Liens against the Trust
Estate or the Lease Indenture Estate (other than Permitted Liens described in
the definition of such term, except "Lessor's Liens" and "Owner Participant's
Liens" referred to in clause (vi) of such definition) for which the Lessee is
not responsible and which result from acts of, or any failure to act by, or as a
result of claims against, the Owner Participant unrelated to the transactions
contemplated by the Transaction Documents or the Financing Documents.
Owner Trustee shall mean The First National Bank of Boston, a
national banking association, not in its individual capacity, but solely as
Owner Trustee under the Trust Agreement (unless the context otherwise requires),
and each successor as trustee, separate trustee and co-trustee thereunder.
Participation Agreement shall mean the Participation Agreement,
dated as of August 12, 1986, among the Owner Trustee, the Indenture Trustee,
Funding Corp., the Owner Participant and PNM.
Penalty Rate shall mean 2% per annum in excess of the Prime
Rate.
Period of a stated duration in respect of any event shall mean
an indefinite period which can reasonably be expected to exceed the lesser of
such duration and the period remaining to the date which is three years prior to
the end of the remaining Basic Lease Term (or if such event occurs after the
date three years prior to the end of the remaining Basic Lease Term, the lesser
of six months and the period remaining to the day next preceding the end of the
Basic Lease Term) or a stated period in excess of the lesser thereof or an
actual period which continues in excess of the lesser thereof.
Permitted Liens shall mean (i) the respective rights and
int9rests of the Lessee, the Owner Participant, the Lessor, the Loan Participant
and the Indenture Trustee, as provided in the Transaction Documents; (ii) the
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6091.BURNHAM.1106.55:1
rights of any sublessee or assignee under a sublease or an assignment permitted
by the terms of the Facility Lease; (iii) the Lien of the Existing Mortgage on
the leasehold estate under the Facility Lease; (iv) Liens for taxes either not
yet due or which are being contested in good faith and by appropriate
proceedings diligently conducted, so long as such proceedings shall not (x)
involve any danger of the sale, forfeiture or loss of the Undivided Interest or
the Real Property Interest or any part thereof or interest therein of the Lessor
or the Owner Participant, (y) interfere with the use, possession or disposition
of the Undivided Interest or the Real Property Interest, or any part thereof or
interest therein, or (z) impair payment of Rent; (v) inchoate materialmen's,
mechanics', work-men's, repairmen's, employees', carriers', warehouse-men's, or
other like Liens arising in the ordinary course of business for PVNGS, and not
delinquent; (vi) Lessor's Liens, Owner Participant's Liens and Indenture
Trustee's Liens; (vii) choate Liens that have been. bonded for the full amount
in dispute or as to which other satisfactory security arrangements shall have
been made and which are being contested diligently by the appropriate party in
good faith and by appropriate proceedings so long as such proceedings shall not
violate clause (x), (y) or (z) of clause (iv) above; (viii) choate Liens of any
of the types described in clause (v) above that have been bonded for the full
amount in dispute or as to which other satisfactory security arrangements shall
have been made and which arise out of judgments or awards and with respect to
which (A) an appeal or proceeding for review is being prosecuted in good faith
and for the payment of which adequate reserves shall have been provided as
required by generally accepted accounting practice and (B) there shall have been
secured a stay of execution pending such appeal or proceeding for review, so
long as such proceedings shall not violate clause (x), (y) or (z) of clause (iv)
above; (ix) the rights and interests of the Lessee under the Assignment and
Assumption; (x) the rights of the NRC under the License; (xi) the rights of the
ANPP Participants (other than (i) the Lessee and (ii) any Person who shall
become an ANPP Participant in respect of the Undivided Interest and the Real
Property Interest) under the ANPP Participation Agreement or any other ANPP
Project Agreement; (xii) Liens on the undivided ownership interests in Unit 2 of
the ANPP Participants and other Persons (other than the Lessee) and (xiii) any
Liens arising by virtue of the ANPP Participation Agreement.
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Person shall mean any individual, partnership, corporation,
trust, unincorporated association or joint venture, a government or any
department or agency thereof, or any other entity.
PNN shall mean Public Service company of New Mexico, a New
Mexico corporation.
Price-Anderson Act shall mean the Price-Anderson Act, Pub. L.
No. 85-256, 71 Stat. 576 (1957), as amended to the Closing Date.
Pricing Assumptions shall mean the pricing assumptions set forth
in Schedule 2 to the Participation Agreement.
Prime Rate shall mean the rate of interest publicly announced
from time to time by Chemical Bank at its principal office in New York City as
its prime or base lending rate. Any change in the Prime Rate shall be effective
on the date such change in the Prime Rate is announced.
Project Insurance shall have the meaning assigned thereto in the
ANPP Participation Agreement.
Project Manager shall have the meaning assigned thereto in the
ANPP Participation Agreement.
Purchase Documents shall mean the Bill of sale, the Deed and the
Assignment of Beneficial Interest and such other documents as the Owner
Participant, the Owner Trustee, the Indenture Trustee, the Loan Participant or
their respective counsel shall deem desirable to convey good and marketable
title to the Undivided Interest and the Real Property Interest to the Trust.
Purchase Price shall have the meaning set forth in Section 4(a)
of the Participation Agreement.
PVNGS shall mean the Arizona Nuclear Power Project, as that term
is defined in the ANPP Participation Agreement
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PVNGS Site shall mean the beneficial interest in the Arizona
land trust and the real property described in Exhibit A to the Bill of Sale.
Real Estate Investment shall have the meaning set forth in
Section 3(a) of the Participation Agreement.
Real Property Interest shall mean the right, title and interest
of the Owner Trustee acquired pursuant to the Deed and the Assignment of
Beneficial Interest.
Reasonable Basis for a position shall exist if tax counsel may
properly advise reporting such position on a tax return in accordance with
Formal Opinion 85-352 issued by the Standing Committee on Ethics and
Professional Responsibility of the American Bar Association.
Refunding Bonds shall mean Funding Corp.'s Lease Obligation
Bonds Series 1986B, issued, authenticated and delivered under the Collateral
Trust Indenture, as supplemented by the Refunding Supplemental Indenture, as
described in the Underwriting Agreement.
Refunding Date shall mean the date of issuance of the Refunding
Bonds.
Refunding Loan shall have the meaning set forth in Section 2(d)
of the Participation Agreement.
Refunding Supplemental Indenture shall mean the Refunding Bond
Supplemental Indenture, among PNM, Funding Corp. and the Collateral Trust
Trustee, supplementing the Collateral Trust Indenture and providing, among other
things, for the issuance of the Refunding Bonds.
Registration Statement shall mean the registration statement on
Form S-3, as amended, and any other similar registration statement, including
all exhibits and all documents incorporated therein by reference, filed with the
SEC under the Securities Act in connection with the offer, issue and sale of the
Refunding Bonds.
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Regulations shall mean the income tax regulations issued,
published or promulgated under the Code.
Releveraging Amount shall (i) mean the initial principal amount
of each series of Releveraging Bonds, but only in an amount equal to the amount
of the related Note or Notes issued in connection with such Bonds, or (ii) the
initial principal amount of the Refunding Bonds to the extent such amount is in
excess of the Initial Series Bonds being refunded, but only in an amount equal
to the amount that the related Fixed Rate Note or Notes exceed the aggregate
amount of the Initial Series Note and any Releveraging Notes theretofore issued.
Releveraging Bonds shall. mean a series of securities issued,
authenticated and delivered under the Collateral Trust Indenture in accordance
with Section 2.03 thereof, part of the proceeds of which is used to refund to
the Owner Participant a portion of its Investment as provided in Section 3(b) of
the Participation Agreement.
Releveraging Date shall mean the date of issuance of the
Releveraging Bonds.
Releveraging Loan shall have the meaning specified in Section
2(c) of the Participation Agreement.
Releveraging Note shall mean the non-recourse promissory note,
substantially in the form of the Initial Series Note or, if the Refunding Date
shall have occurred, the Fixed Rate Note, to be issued by the Owner Trustee and
authenticated by the Indenture Trustee on the Releveraging Date to refund to the
Owner Trustee a portion of the Investment.
Renewal Term shall mean the Fixed Rate Renewal Term as provided
in Section 12 of the Facility Lease.
Rent shall mean Basic Rent and Supplemental Rent.
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Rent Differential shall have the meaning set forth in Section
3(h) of the Facility Lease.
Requisition of Title shall mean any circumstances or event in
consequence of which Unit 2 or the Undivided Interest shall be condemned or
seized or title thereto shall be requisitioned or taken by any Governmental
Authority under power of eminent domain or otherwise and all administrative or
judicial appeals opposing such condemnation, seizure or taking shall have been
exhausted or the period for such appeal shall have expired.
Requisition of Use shall mean any circumstance or event in
consequence of which the use of Unit 2 or the Undivided Interest shall be
requisitioned or taken by any Governmental Authority under power of eminent
domain or otherwise, other than a Requisition of Title.
Responsible Officer shall mean, with respect to the subject
matter of any covenant, agreement or obligation of any party contained in any
Transaction Document, the President1 or any Vice President, Assistant Vice
President, Treasurer, Assistant Treasurer or other officer who in the normal
performance of his operational responsibility would have knowledge of such
matter and the requirements with respect thereto.
Retained Assets shall mean (i) the Lessee's interest in PVNGS
(other than the Undivided Interest, the related Generation Entitlement Share,
and the Real Property Interest), (ii) Severable Capital Improvements title to
the undivided interest in which is retained by the Lessee in accordance with
Section 8(e) of the Facility Lease, and (iii) any additional interest in and to
PVNGS (other than the Undivided Interest, the related Generation Entitlement
Share and the Real Property Interest) to which the Lessee becomes entitled in
consequence of Sections 16.2 or 23.5 of the ANPP Participation Agreement (except
as otherwise provided in Section 5(a) or 19 of the Facility Lease).
Sale Proceeds shall mean, with respect to any sale of the
Undivided Interest and the Real Property Interest by the Lessor to any Person
other than the Lessee, the gross proceeds of such sale payable in cash, less all
costs and expenses whatsoever incurred by the Lessor and the Owner Participant
in connection therewith.
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Salt River shall mean Salt River Project Agricultural
Improvement and Power District, an Arizona agricultural improvement district.
SCPPA shall mean Southern California Public Power Authority, a
California joint powers agency (doing business in Arizona as Southern California
Public Power Authority Association).
SEC shall mean the Securities and Exchange Commission of the
United States of America, or any successor agency. Section. 6(c) Application
shall mean Funding Corp.'s Application for an Order under Section 6(c) of the
Investment Company Act of 1940 exempting First PV Funding Corporation from all
provisions of such Act, as filed with the SEC on September 20, 1985, as amended.
Secured obligations shall have the meaning set forth in Section
7(b)(4) of the Participation Agreement.
Securities Act shall mean the Securities Act of 1933, as
amended.
Securities Exchange Act shall mean the Securities Exchange Act
of 1934, as amended.
Severable, when used with respect to any Capital Improvement,
shall mean any Capital Improvement which can readily be removed from Unit 2 or
the Common Facilities without materially damaging Unit 2 or the Common
Facilities or materially diminishing or impairing the value, utility or
condition of Unit 2 or the Common Facilities.
Source, Special Nuclear or Byproduct Material shall have their
respective defined meanings as defined in Section 11 of the Atomic Energy Act of
1954,- as amended to the date hereof and as the meanings of such terms may be
expanded by future amendments thereof.
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Southern California shall mean Southern California Edison
Company, a California corporation.
Special Casualty Value as of any date, shall mean (i) during the
Basic Lease Term, the percentage of Facility Cost set forth opposite such date
in Schedule 2 to the Facility Lease, and (ii) during the Renewal Term, if any,
the unamortized portion of the Fair Market Sales Value of the Undivided Interest
determined by amortizing ratably the Fair Market Sales Value of the Undivided
Interest as of the day following the last day of the Basic Lease Term in
semi-annual steps over the period from such date to the License Expiration Date.
Anything contained in the Facility Lease to the contrary notwithstanding,
Special Casualty Value shall be, when added to all other amounts which the
Lessee is required to pay under Section 9(d) of the Facility Lease (taking into
account any assumption of Notes by the Lessee), under any circumstances and in
any event, in an amount at least sufficient to pay in full, as of any date of
payment, the aggregate unpaid principal amount of all Notes Outstanding at the
close of business on such date, together with accrued and unpaid interest on
such Notes.
Supplemental Financing shall mean a financing of the
Supplemental Financing Amount of Capital Improvements made pursuant to Section
8(f) of the Facility Lease.
Special Purchase Event shall have the meaning specified in
Section 13(c) of the Facility Lease.
Substituted lessee shall have the meaning specified in Section
6.8(c) of the Indenture.
Supplemental Financing Amount shall mean a Unit 2 Interest in
the cost of a Capital Improvement to Unit 2, and a Common Facilities Interest in
the cost of a Capital Improvement to the Common Facilities, or that portion of
such interest in such cost which shall not exceed (i) the amount of the
increase, if any, in the Owner Participant's basis in the Undivided Interest for
purposes of section 1012 or 1016 of the Code as a result of such Capital
Improvement less (ii) the amount of the related Additional Equity Investment of
the Lessor, if any.
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Supplemental Indenture of Pledge shall have the meaning
specified in the Term Note Supplemental Indenture.
Supplemental Rent shall have the meaning set forth in Section
3(b) of the Facility Lease.
Surviving lessee shall have the meaning specified in Section
10(b) (3) (ii) of the Participation Agreement.
Tax shall mean any and all fees (including, without limitation,
documentation1 recording, license and registration fees), taxes (including,
without limitation, net income, franchise, value added, ad valorem, gross
income, gross receipts, sales, use, property (personal or real, tangible or
intangible) excise and stamp taxes), levies, imposts, duties, charges,
assessments, or withholdings of any nature whatsoever, general or special,
ordinary or extraordinary, together with any and all penalties, fines, additions
to tax and interest thereon.
Tax Assumptions shall mean the assumptions set forth in Section
1(a) of the Tax Indemnification Agreement, with respect to the Federal income
tax consequences of the transactions contemplated by the Transaction Documents.
Tax Indemnification Agreement shall mean the Tax Indemnification
Agreement, dated as of August 12, 1986, between PNM and the Owner Participant.
Term Loan Agreement shall mean the Term Loan Agreement dated as
of August 12, 1986 among Funding Corp., PNM and the banks named on the signature
pages thereto.
Term Note Supplemental Indenture shall mean the Series 1986B
Term Note Supplemental Indenture dated as of August 12, 1986 among PNM, Funding
Corp. and the Collateral Trust Trustee, supplementing the Collateral Trust
Indenture and providing, among other things, for the issuance of the Initial
Series Bonds.
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Termination Date shall have the meaning set forth in Section
14(a) of the Facility Lease.
Termination Event shall mean any early termination of the
Facility Lease in accordance with Section 14 thereof.
Termination Notice shall have the meaning set forth in Section
14(a) of the Facility Lease.
Termination Obligation shall have the meaning set forth in
Section 15.10.2 of the A~PP Participation Agreement (or any comparable successor
provision).
Termination Value, as of any Basic Rent Payment Date during the
Basic Lease Term, shall mean the percentage of Facility Cost set forth opposite
such date in Schedule 3 to the Facility Lease. Anything contained in the
Facility Lease to the contrary notwithstanding, Termination Value shall be, when
added to all other amounts which the Lessee is required to pay under Section 14
of the Facility Lease, under any circumstances and in any event; in an amount at
least sufficient to pay in full as of any Basic Rent Payment Date the aggregate
unpaid principal amount of all Notes Outstanding at the close of business on
such date, together with accrued and unpaid interest on such Notes.
Transaction Documents shall mean the Participation Agreement,
the Facility Lease, the Trust Agreement, the Indenture, the Extension Letter,
the Tax Indemnification Agreement, the Mortgage Release, the Assignment and
Assumption, each Purchase Document and the Notes.
Transaction Expenses shall have the meaning set forth in Section
14(a) of the Participation Agreement.
Transfer shall mean the transfer, by bill of sale or otherwise,
by the Lessor of all the Lessor's right, title and interest in and to the
Undivided Interest and the Real Property Interest and under the Assignment and
Assumption on an "as is, where is" basis, free and clear of all Lessor's Liens
and Owner Participant's Liens, but otherwise without recourse, representation or
warranty (including an express disclaimer of representations and warranties in a
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manner comparable to that set forth in the second sentence of Section 6(b) of
the Facility Lease), together with the due assumption by the transferee of, and
the due release of the Lessor from, all of the Lessor's obligations under the
Assignment and Assumption and the Assignment of Beneficial Interest by an
instrument or instruments satisfactory in form and substance to the Lessor and
the Owner Participant.
Transferee shall have the meaning assigned thereto in Section 15
of the Participation Agreement.
Trust shall mean the trust created by the Trust Agreement.
Trust Agreement shall mean the Trust Agreement, dated as of
August 12, 1986, between Burnham Leasing Corporation and FNB.
Trust Estate shall have the meaning set forth in Section 2.03 of
the Trust Agreement.
Trust Indenture Act shall mean the Trust Indenture Act of 1939,
as amended.
Trustee's Expenses shall mean any and all liabilities,
obligations, costs, compensation, fees, expenses and disbursements (including,
without limitation, legal. fees and expenses) of any kind and nature whatsoever
(other than such amounts as are included in Transaction Expenses) which may be
imposed on, incurred by or asserted against the Indenture Trustee or any of its
agents, servants or personal representatives, in any way relating to or arising
out of the Indenture, the Lease Indenture Estate, the Participation Agreement or
the Facility Lease, or any document contemplated thereby, or the performance or
enforcement of any of the terms thereof, or in any way relating to or arising
out of the administration of such Lease Indenture Estate or the action or
inaction of the indenture Trustee under the Indenture; provided, however, that
such amounts shall not include any Taxes or any amount expressly excluded from
the Lessee's indemnity obligations pursuant to Section 13(a) or 13 (b) of the
Participation Agreement.
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UCC or Uniform Commercial Code shall mean the Uniform Commercial
Code as in effect in any applicable jurisdiction.
Underwriting Agreement shall mean the agreement with the
underwriters named therein relating to the purchase, sale and delivery of the
Refunding Bonds.
Undivided Interest shall mean the Unit 2 Interest in Unit 2 and
the Unit 2 Common Facilities Interest in the Common Facilities. Where the
context so requires, the Undivided Interest includes the related Generation
Entitlement Share.
Undivided Interest Indenture Supplement shall mean the
supplement to the Indenture, substantially in the form of Exhibit C thereto,
pursuant to which the Owner Trustee causes the Undivided Interest and the Real
Property Interest to be subjected to the Lien of the Indenture.
Uniform System of Accounts shall mean the Uniform System of
Accounts prescribed for Public Utilities and Licensees subject to the provisions
of the Federal Power Act (Class A and Class 3), 18 CFR 101, as in effect on the
date of execution of the Participation Agreement, as amended or modified from
time to time after such date.
Unit 1 and Unit 3 shall mean the Generating Units bearing such
designations at PVNGS.
Unit 2 shall mean the 1,270 megawatt unit, commonly known as
Unit 2, at PVNGS, all as more fully described in Item A of Exhibit B to the Bill
of Sale, together with all Capital Improvements thereto, but excluding all
Common Facilities.
Unit 2 Common Facilities Interest shall mean the Owner Trustee's
0.7555556% undivided interest in all Common Facilities.
Unit 2 Interest shall mean a percentage equal to the Owner
Trustee's 2.2666667% undivided interest in all of Unit 2.
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Unit 2 Retained Assets shall mean (i) all resident fuel
assemblies, equipment and personal property constituting part of the Generating
Unit (as defined in the ANPP Participation Agreement) designated as Palo Verde
Nuclear Generating Station Unit 2 (other than common facilities) but excluded
from Unit 2 as set forth in Item A of Exhibit B to the Bill of Sale and (ii) all
equipment and personal and real property constituting PVNGS common facilities
under the ANPP Participation Agreement but excluded from the Common Facilities
as Set forth in Item B of Exhibit B to the Bill of Sale.
User shall mean a Person unrelated to PNM (within the meaning of
Section 318 of the Code) possessing the Undivided Interest after the Lease
Termination Date.
Weighted Factor means. the weighted average of the annual
percentage rates (averaged over the Basic Lease Term and (x) if the Pricing
Assumptions contemplate the Lessor claiming investment tax credits, the basic
term of all other leases so contemplating (the ITC Leases) entered into by PNM
pursuant to the authority granted by the NMPSC Order or (y) if the Pricing
Assumptions do not contemplate the Lessor claiming investment tax credits, the
basic term of all other leases not so contemplating (the Non ITC Leases) entered
into by PNM pursuant to the authority granted by the NMPSC Order) (i) as such
percentage rates may be adjusted from time to time pursuant to the terms of the
Facility Lease and the ITC Leases or the Non-ITC Leases, as the case may be, but
excluding any such adjustments in connection with supplemental financing of
capital improvements, and (ii) adjusted to reflect the amortization over the
Basic Lease Term and the basic term of the ITC Leases or the Non-ITC Leases, as
the case may be, of any gain or loss to the Lessee from any hedging or interest
protection program implemented by the Lessee with respect to the Notes and with
respect to the comparable notes to be issued with respect to the ITC Leases or
the Non-ITC Leases, as the case may be, which, when multiplied by the aggregate
of the Purchase Price and the comparable purchase prices payable by the lessors
under the ITC Leases or the Non-ITC Leases, as the case may be, determines,
respectively, the amount of Basic Rent payable under the Facility Lease and the
comparable basic rent payable under the ITC Leases or the Non-ITC Leases, as the
case may be.
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