MEMORANDUM OF AGREEMENT
between
THE NAVAJO NATION
and
PUBLIC SERVICE COMPANY OF NEW MEXICO
THIS AGREEMENT is made and entered into this _____ day of June, 1997,
by and between THE NAVAJO NATION, a federally-recognized Indian nation,
hereinafter called the "Navajo Nation," whose address is P. O. Box 9000, Window
Rock, Navajo Nation (Arizona) 86515, and PUBLIC SERVICE COMPANY OF NEW MEXICO, a
New Mexico corporation, hereinafter called "PNM," whose address is Alvarado
Square MS.2101, Albuquerque, New Mexico 87158.
RECITALS
WHEREAS, on January 17, 1973, the Secretary granted a right-of-way to
PNM for a term of twenty (20) years, which ended on January 17, 1993, for the
Nine Mile Tap; and
WHEREAS, on or about January 1, 1973, without the consent of the Navajo
Nation or the Secretary, PNM constructed the Deza Bluff Microwave Communication
Tower on Navajo Nation-owned lands; and
WHEREAS, on July 9, 1971, the Navajo Nation entered into the San Juan
Diversion Weir Lease with PNM and Tucson Gas & Electric Company, now known as
Tucson Electric Power Company, for a term of fifty (50) years for a portion of
the San Juan Generating Station diversion weir across the San Juan River; and
WHEREAS, on June 7, 1968, the Secretary granted a right-of-way to PNM
for a term of fifty (50) years, ending June 7, 2018, for the FW Line; and
WHEREAS, on August 1, 1969, the Secretary granted a right-of-way to PNM
for a term of fifty (50) years, ending June 26, 2018, for the WW Line; and
WHEREAS, the Navajo Nation and PNM have negotiated tentative agreements
providing for a renewed grant of right-of-way for the Nine Mile Tap electric
transmission lines, a grant of lease for the Deza Bluff Microwave Communication
Tower site, amendment of the San Juan Diversion Weir Lease to increase the
annual rental thereunder, and compensation to the Navajo Nation for the
remainder of the 50-year terms of the FW Line and WW Line electric transmission
line rights-of-way, which the parties now wish to reduce to writing and
formalize by this Memorandum of Agreement;
NOW, THEREFORE, in consideration of the foregoing and the covenants,
promises, terms and conditions contained herein, the parties hereto hereby
mutually agree as follows:
OPERATIVE PROVISIONS
1. DEFINITIONS.
(A) "Deza Bluff Microwave Communication Tower" means that microwave
communication tower on 0.0194 acres, more or less, of Navajo Nation-owned lands
within projected Township 19 North, Range 18 West, NMPM, more particularly
described in Exhibit "B," attached hereto.
(B) "FW Line" means a 345 kV electric transmission line from the Four
Corners Power Plant, also known as the "West Mesa S.W. STA-A.P.S. 4 Corners"
line, over 525.975 acres, more or less, of Navajo Nation-owned lands commencing
in section 36, Township 29 North, Range 16 West, NMPM, and running to a point
within section 10, Township 10 North, Range 2 East, NMPM.
(C) "Nine Mile Tap" means two 345 kV electric transmission lines
between the Four Corners Power Plant and the San Juan Generating Station, over
100.606 acres, more or less, of Navajo Nation-owned lands within Township 29
North, Range 15 West, NMPM, more particularly described in Exhibit "A," attached
hereto.
(D) "NMPM" means New Mexico Principal Meridian.
(E) "San Juan Diversion Weir Lease" means that Lease No. SR-71-61,
dated July 9, 1971, between the Navajo Nation as Lessor and PNM and Tucson Gas &
Electric Company, now known as Tucson Electric Power Company, as Lessees, for a
portion of the San Juan Generating Station diversion weir across the San Juan
River, on 9.376 acres, more or less, of Navajo Nation-owned lands within
Township 29 North, Range 15 West, NMPM.
(F) "Secretary" means the Secretary of the United States Department of
the Interior or his duly authorized representative or successor.
(G) "WW Line" means a 345 kV electric transmission line from the San
Juan Generating Station, over 386.949 acres, more or less, of Navajo
Nation-owned lands commencing in section 10, Township 10 North, Range 2 East,
NMPM, and running to a point within section 36, Township 29 North, Range 16
East, NMPM.
2. GRANT OF RIGHT-OF-WAY.
Simultaneously with the approval of this Agreement by the Navajo
Nation, the Navajo Nation shall approve and consent to the grant of a
right-of-way to PNM for a term of twenty (20) years, beginning September 1,
1995, and ending August 31, 2015, for the Nine Mile Tap, subject to the terms
and conditions attached hereto as Exhibit "C."
3. GRANT AND AMENDMENT OF LEASES.
(A) Simultaneously with the execution of this Agreement by the parties,
the parties shall enter into and execute the lease agreement between the Navajo
Nation and PNM, a copy of which is attached hereto as Exhibit "D," for a term of
twenty (20) years, beginning September 1, 1995, and ending August 31, 2015, for
the Deza Bluff Microwave Communication Tower.
(B) Simultaneously with the execution of this Agreement by the parties,
the parties shall enter into and execute an amendment to section 4 of the San
Juan Diversion Weir Lease, a copy of which amendment is attached hereto as
Exhibit "E."
4. FEDERAL APPROVALS AND GRANT.
The Navajo Nation and PNM will cooperate fully with one another in
submitting to the Secretary the application by PNM for the Nine Mile Tap
right-of-way consented to pursuant to Paragraph 2 of this Agreement, securing
the grant by the Secretary of said right-of-way in accordance with this
Agreement, securing approval by the Secretary of the Deza Bluff Microwave
Communication Tower lease entered into pursuant to Paragraph 3 of this
Agreement, and securing approval by the Secretary of the amendment of the San
Juan Diversion Weir Lease entered into pursuant to Paragraph 3 of this
Agreement. Each party shall use its best efforts and shall take all such action
as may reasonably be necessary to obtain as soon as possible the grant of the
said right-of-way and approval of the said lease and lease amendment.
5. PAYMENT.
PNM hereby agrees to pay to the Navajo Nation the sum of Thirteen
Million Sixty-Eight Thousand Dollars ($13,068,000.00), together with simple
interest at the rate of Five and Two-Tenths Per Cent (5.2%) per annum for the
period beginning September 1, 1995, to and through the date of payment thereof,
plus Sixteen Thousand One Dollars ($16,001.00)(which PNM previously paid to the
Secretary on or about July 18, 1994, as compensation for the second one-half of
the fifty year term of the right-of-way for the WW Line and which was
subsequently returned to PNM by the Secretary on or about August 11, 1994). Such
sum shall be paid in full to the Controller of the Navajo Nation, in lawful
money of the United States within three (3) working days of the effective date
of this Agreement, as defined in Paragraph 22 of this Agreement, in the
following manner. Payment of Three Million Dollars ($3,000,000.00) of such sum
shall be in the form of common stock of PNM and payment of the entire remaining
balance of such sum shall be in cash, as hereinafter described. Payment in the
form of PNM common stock shall be made by wire transfer by PNM of the sum of
$3,000,000.00 plus related brokerage commissions to J.P. Morgan Securities,
Inc., (the "Broker"), with instructions to purchase the number of shares of PNM
common stock calculated as hereinafter provided in the name of the Navajo Nation
and to promptly forward such common stock, along with a statement reflecting the
details of said purchase, to the Controller of the Navajo Nation ("Controller").
The number of shares to be purchased shall be calculated by dividing (i) the sum
of $3,000,000.00 by (ii) the purchase price per share (as hereinafter
described), such number of shares to be rounded to the next lower whole share.
Cash shall be paid to the Navajo Nation in lieu of such fractional share, if
any, in accordance with the cash payment provisions hereof. The purchase of such
shares by the Broker shall be at the lowest purchase price of PNM common stock
obtainable by the Broker in making purchases on the New York Stock Exchange on
the date of purchase. PNM shall bear the expense of any brokerage commissions on
such purchase, as provided above. Payment of the entire cash balance shall be
made by wire transfer into the bank account of the Navajo Nation identified for
such purpose by the Controller. The Controller shall identify such account and
provide PNM with necessary routing and other information within twenty-four (24)
hours of approval of this Agreement by the Navajo Nation. The Navajo Nation
shall set aside Two Hundred Sixty Thousand Dollars ($260,000.00) out of said
cash payment to be used for the benefit of the Navajo Nation Chapters which are
affected by the Nine Mile Tap right-of-way.
6. WAIVER OF REPAYMENT.
PNM hereby irrevocably waives any right to repayment of the following
monies paid to the Secretary for the benefit of the Navajo Nation, together with
all interest accrued thereon: a) during or about 1979, in the amount of
Seventeen Thousand Four Hundred Sixty-Eight Dollars (($17,468.00), more or less,
which PNM paid in connection with an extension of the term of the right-of-way
for the 230 kV transmission line from Four Corners to Ambrosia Lake; b) during
or about 1979, in the amount of Four Thousand Seven Hundred Nine Dollars
($4,709.00), more or less, which PNM paid in connection with an extension of the
terms of the right-of-way for the Nine Mile Tap; c) on or about March 12, 1981,
in the amount of Eight Hundred Eighty-Nine Thousand Five Hundred Twenty-Two
Dollars ($889,522.00), more or less, which PNM paid in connection with certain
right-of-way applications which PNM filed and subsequently withdrew; d) during
or about 1987, in the amount of Eight Thousand One Hundred Thirty-Two Dollars
and Fifty Cents ($8,132.50), more or less, which PNM paid in connection with the
Four Corners-Ambrosia-Pajarito Transmission Project; e) on or about December 6,
1990, in the amount of Forty Thousand Two Hundred Forty-Two Dollars and Forty
Cents ($40,242.40), more or less, which PNM paid in connection with its
application for renewal of the Nine Mile Tap right-of-way; and f) on or about
May 24, 1993, in the amount of Twenty-Two Thousand Five Hundred Sixty-Four
Dollars ($22,564.00), more or less, which PNM paid as compensation for the
second one-half of the fifty-year term of the right-of-way for the FW Line. PNM
hereby assigns all such monies, together with all interest accrued thereon, to
the Navajo Nation.
7. RELEASES.
(A) Subject to compliance by PNM with the payment required by Paragraph
5 of this Agreement, the Navajo Nation hereby releases, acquits and discharges
PNM from any and all trespass claims, demands, warranties, debts, liabilities,
damages, obligations, costs, attorneys' fees, expenses, liens, actions and
causes of action, resulting from failure by PNM to have had valid rights to use,
operate or develop, on or before the effective date of this Agreement, the real
property subject to the Nine Mile Tap right-of-way consented to pursuant to
Paragraph 2 of this Agreement and the Deza Bluff Microwave Communication Tower
lease entered into pursuant to Paragraph 3 of this Agreement, from any rental
obligations under the San Juan Diversion Weir Lease arising prior to the
effective date of this Agreement, and from PNM's obligations to pay
consideration for the use of the FW Line and WW Line through the current terms
of the respective rights-of-way for said lines.
(B) PNM hereby releases, acquits and discharges the Navajo Nation from
any and all claims, demands, warranties, debts, liabilities, damages,
obligations, costs, attorneys' fees, expenses, liens, actions and causes of
action, resulting from or relating to PNM's failure to have had valid rights to
use, operate or develop, on or before the effective date of this Agreement, the
real property subject to the Nine Mile Tap right-of-way consented to pursuant to
Paragraph 2 of this Agreement and the Deza Bluff Microwave Communication Tower
lease entered into pursuant to Paragraph 3 of this Agreement, PNM's rental
obligations under the San Juan Diversion Weir Lease arising prior to the
effective date of this Agreement, and PNM's obligations to pay consideration for
the use of the FW Line and WW Line through the current terms of the respective
rights-of-way for said lines.
(C) Nothing contained in this Paragraph shall be construed to
constitute a release by either party of any of the following:
1) Any liability of PNM for damage to real or personal
property owned by the Navajo Nation for which PNM is or becomes liable
under any applicable federal, state or Navajo Nation law;
2) Any liability of PNM for use, operation or development of
any Navajo Nation-owned lands other than those which are the subject of
this Agreement;
3) Any obligation or liability of either party provided for
under the terms and conditions of the Nine Mile Tap right-of-way
consented to pursuant to Paragraph 2 of this Agreement, the Deza Bluff
Microwave Communication Tower lease entered into pursuant to Paragraph
3 of this Agreement, the San Juan Diversion Weir Lease, as amended
pursuant to Paragraph 3 of this Agreement, or under any other existing
right-of-way, lease, contract or other agreement between the Navajo
Nation and PNM; or
4) Any obligation or liability of either party arising after
the effective date of this Agreement.
8. DEZA BLUFF ASSISTANCE.
PNM will assist the Navajo Nation in identifying all other users of the
Deza Bluff Microwave Communication Tower site and the nature of their uses. Such
assistance will consist of conveying to the Navajo Nation such non-confidential
and non-proprietary information concerning such users and uses as PNM currently
may possess, or which may come into PNM's possession in the normal course of its
use of the said site, or which may come into PNM's possession upon reasonable
inquiry. As used herein, the term "non-confidential and non-proprietary
information" shall include, but not necessarily be limited to, the identity and
address of any such user, and any joint-use or similar agreement between PNM and
such user authorizing the use of such site.
9. QUIET ENJOYMENT.
(A) The Navajo Nation hereby covenants, promises and agrees that PNM
peaceably and quietly may have, hold, use, occupy, possess and enjoy the rights
conveyed by the right-of-way consented to pursuant to Paragraph 2 of this
Agreement, the lease and lease amendment entered into pursuant to Paragraph 3 of
this Agreement and the existing respective rights-of-way for the FW Line and WW
Line, in accordance with and subject to the terms and conditions contained
therein and applicable federal and Navajo Nation laws, without suit, molestation
or interruption by the Navajo Nation or any person or entity lawfully claiming
from the Navajo Nation.
(B) The Navajo Nation hereby covenants, promises and agrees that it
will not demand any further consideration from PNM for the FW Line and WW Line
rights-of-way during the balance of the current terms of said rights-of-way.
(C) The covenants, promises and agreements contained in subsections (A)
and (B) of this Paragraph are given by the Navajo Nation in its proprietary
capacity only, and shall not be construed to limit or impair the right of the
Navajo Nation to enforce compliance with the terms and conditions of said
rights-of-way and leases, nor to limit or impair the right of the Navajo Nation
to enforce applicable federal and Navajo Nation laws, nor to limit or impair the
otherwise lawful right or ability of the Navajo Nation to exercise governmental
authority.
10. ASSIGNMENT.
Neither this Agreement, nor any part hereof or interest herein, may be
assigned by either party without the prior written consent of the other party
and the Secretary.
11. REPRESENTATIONS AND WARRANTIES.
(A) PNM hereby represents and warrants to the Navajo Nation as follows:
(1) PNM is a corporation duly organized and in good standing
under the laws of the State of New Mexico.
(2) The execution and delivery of this Agreement by PNM and
consummation by PNM of the transactions contemplated hereby have been
duly authorized by all necessary corporate action on the part of PNM.
(3) This Agreement is a valid and legally binding obligation
of PNM, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting the enforcement of creditors' rights generally and to general
principles of equity, whether considered in a proceeding in equity or
at law.
(4) This Agreement and the execution and delivery hereof by
PNM do not, and compliance with the terms and conditions hereof and
consummation of the transactions contemplated hereby will not:
a) Violate or conflict with any provision of the
certificate of incorporation or bylaws of PNM, each as amended
to date;
b) Violate or conflict with, or, except as expressly
contemplated within this Agreement, require any consent,
authorization or approval under any provision of, any law or
administrative regulation or any judicial, administrative or
arbitration order, award, judgment, writ, injunction or decree
applicable to or binding upon PNM; or
c) Result in a breach of, constitute a default or
violation under, whether with notice of lapse of time or both,
or require any consent, authorization or approval under, any
mortgage, contract, indenture, loan or credit agreement or any
other agreement or instrument evidencing indebtedness for
money borrowed to which PNM is a party or by which any of its
properties or assets is bound.
(B) The Navajo Nation hereby represents and warrants to PNM as follows:
(1) The Navajo Nation is a federally-recognized Indian nation.
(2) The execution and delivery of this Agreement by the Navajo
Nation and consummation by the Navajo Nation of the transactions
contemplated hereby have been duly authorized by all necessary action
on the part of the Navajo Nation.
(3) This Agreement is a valid and legally binding obligation
of the Navajo Nation, enforceable against it in accordance with its
terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating
to or affecting the enforcement of creditors' rights generally and to
general principles of equity, whether considered in a proceeding in
equity or at law.
(4) This Agreement and the execution and delivery hereof by
the Navajo Nation do not, and compliance with the terms and conditions
hereof and consummation of the transactions contemplated hereby will
not:
a) Violate or conflict with, or, except as expressly
contemplated within this Agreement, require any consent,
authorization or approval under any provision of, any law,
treaty, custom or administrative regulation or any judicial,
administrative or arbitration order, award, judgment, writ,
injunction or decree applicable to or binding upon the Navajo
Nation; or
b) Result in a breach of, constitute a default or
violation under, whether with notice of lapse of time or both,
or require any consent, authorization or approval under, any
mortgage, contract, indenture, loan or credit agreement or any
other agreement or instrument evidencing indebtedness for
money borrowed to which the Navajo Nation is a party or by
which any of its properties or assets is bound.
12. NOTICES AND DEMANDS.
(A) Any notices, demands, requests or other communications to or upon
either party or the Secretary provided for in this Agreement, or given or made
in connection with it, (hereinafter referred to as "notices,") shall be in
writing and shall be addressed as follows:
To or upon the Navajo Nation:
President
The Navajo Nation
Office of the President/Vice-President
P.O. Box 9000
Window Rock, Navajo Nation (Arizona) 86515
Fax: 1-520-871-4025
To or upon PNM:
President
Public Service Company of New Mexico
ATTN: Right-of-Way Department
Alvarado Square MS.2101
Albuquerque, New Mexico 87158
Fax: 1-505-241-2376
To or upon the Secretary:
Area Director
Navajo Area Office
Bureau of Indian Affairs
United States Department of the Interior
301 West Hill Street
P.O. Box 1060
Gallup, New Mexico 87305
Fax: 1-505-863-8324.
(B) All notices shall be given by personal delivery, by registered or
certified mail, postage prepaid, by facsimile transmission or by telegram.
Notices shall be effective and shall be deemed delivered: if by personal
delivery, on the date of delivery if during normal business hours, or if not
during normal business hours on the next business day following delivery; if by
registered or certified mail, by facsimile transmission or by telegram, on the
next business day following actual delivery and receipt.
(C) Copies of all notices shall be sent to the Secretary.
(D) The parties hereto and the Secretary may at any time change its
address for purposes of this Section by notice.
13. GOVERNING LAW AND CHOICE OF FORUM.
Except as may be prohibited by applicable federal law, the law of the
Navajo Nation shall govern the construction, performance and enforcement of this
Agreement. Any action or proceeding brought by PNM against the Navajo Nation in
connection with or arising out of the terms and conditions of this Agreement
shall be brought only in the courts of the Navajo Nation, and no such action or
proceeding shall be brought by PNM against the Navajo Nation in any court or
administrative body of any state.
14. CONSENT TO JURISDICTION.
PNM hereby consents to the legislative, executive and judicial
jurisdiction of the Navajo Nation in connection with all activities conducted by
PNM within the Navajo Nation. Nothing contained in this Paragraph shall be
construed to abrogate or impair any right of PNM created or recognized by any
valid, prior contract, lease, grant of right-of-way or other agreement between
the Navajo Nation and PNM.
15. NO WAIVER OF SOVEREIGN IMMUNITY.
Nothing in this Agreement shall be interpreted as constituting a
waiver, express or implied, of the sovereign immunity of the Navajo Nation.
16. ENTIRE AGREEMENT; AMENDMENT.
(A) This Agreement, and the Exhibits attached hereto, supersede all
prior agreements between the parties, whether written or oral, with respect to
the subject matter hereof and are intended as a complete and exclusive statement
of the terms of the agreement between the parties with respect to said subject
matter.
(B) This Agreement may be modified or amended only by an agreement
signed by both parties and approved by the Secretary. Any modification of or
amendment to this Agreement shall not be valid or binding upon either party
until it is approved by the Secretary.
17. SEVERABILITY.
If any term or condition of this Agreement is held invalid, illegal or
incapable of being enforced for any reason by any court of competent
jurisdiction, such term or condition shall be deemed severed from this Agreement
and all other terms and provisions of this Agreement shall remain in full force
and effect, so long as the economic and legal substance of the transactions
contemplated hereby are not affected in any manner adverse to either party.
18. WAIVER.
No term or condition of this Agreement may be waived by either party
except by a writing signed by both parties.
19. HEADINGS.
The headings contained in this Agreement are for reference only and
shall not affect in any way the meaning or interpretation of this Agreement.
20. COUNTERPARTS.
This Agreement may be executed in any number of counterparts, and by
different parties in separate counterparts, each of which shall be deemed to be
an original, but all of which together shall constitute only one and the same
agreement.
21. SUCCESSORS AND ASSIGNS.
The terms and conditions contained herein shall extend to and be
binding upon the successors, assigns, employees and agents, including all
contractors and subcontractors, of the parties. Except as the context otherwise
requires, the terms "Public Service Company of New Mexico" and "PNM," as used in
this Agreement, shall be deemed to include all successors, assigns, employees
and agents, including contractors and subcontractors, of PNM.
22. EFFECTIVE DATE; VALIDITY.
This Agreement shall take effect on the later of the date of approval
by the Secretary of this Agreement, the grant by the Secretary of the
right-of-way consented to pursuant to Paragraph 2 of this Agreement, and the
approval by the Secretary of the Deza Bluff Microwave Communication Tower lease
and the amendment of the San Juan Diversion Weir Lease entered into pursuant to
Paragraph 3 of this Agreement. This Agreement shall not be valid or binding upon
either party until it is approved by the Secretary.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
THE NAVAJO NATION
By: ______________________________
Albert A. Hale, President
PUBLIC SERVICE COMPANY OF NEW MEXICO
By: ______________________________
Benjamin F. Montoya, President
& Chief Executive Officer
APPROVED pursuant to Secretarial Redelegation 209 DM 8,
Secretarial Redelegation Order Nos. 3150 and 3177, and
10 BIAM Bulletin 13, as amended.
Date : ______________________________
By: _________________________________
Acting Area Director
Navajo Area Office
Bureau of Indian Affairs
United States Department of the Interior