When Recorded, Return to: Xxxx X. Xxxxxxx, Esq.
Xxxxx & Xxxxxx
0000 Xxxxxx Xxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
CERTAIN RIGHTS OF THE LESSOR UNDER THE FACILITY LEASE AS AMENDED BY THIS
AMENDMENT NO. 1 THERETO HAVE BEEN ASSIGNED TO, AND ARE SUBJECT TO A SECURITY
INTEREST IN FAVOR OF, CHEMICAL BANK, AS INDENTURE TRUSTEE UNDER A TRUST
INDENTURE, MORTGAGE, SECURITY AGREEMENT AND ASSIGNMENT OF RENTS DATED AS OF
DECEMBER 15, 1986. THIS FACILIY LEASE HAS BEEN EXECUTED IN SEVERAL
COUNTERPARTS. SEE SECTION 22(e) OF THIS AMENDMENT NO1 FOR INFORMATION CONCERNING
THE RIGHTS OF HOLDERS OF VARIOUS COUNTERPARTS HEREOF.
THIS COUNTERPART IS NOT THE ORIGINAL COUNTERPART.
================================================================================
FACILITY LEASE
Dated as of August 12, 1986
between
THE FIRST NATIONAL BANK OF BOSTON,
not in its individual capacity ,a
but solely as Owner Trustee
under a Trust Agreement, dated as
of August 12, 1986,
with Xxxxxxx Leasing Corporation,
Lessor
and
PUBLIC SERVICE COMPANY OF NEW MEXICO,
Lessee
================================================================================
Sale and Leaseback of an Undivided Interest
in Palo Verde Nuclear Generating Station Unit 2 and
an Undivided Interest in
Certain Common Facilities
================================================================================
6091.XXXXXXX.1106.47:1
TABLE OF CONTENTS
Page
----
SECTION 1 Definitions............................................ 1
SECTION 2 Lease of Undivided
Interest; Term; Personal
Property............................................... 1
a Lease of Undivided
Interest............................................... 1
b Term................................................... 1
c Personal Property...................................... 2
d Description............................................ 2
SECTION 3 Rent; Adjustments to
Rent................................................... 2
a Basic Rent............................................. 2
b Supplement Rent........................................ 3
c Form of Payment........................................ 4
d Adjustments to Rent.................................... 4
e Further Adjustments.................................... 5
f Computation of
Adjustments............................................ 6
g Sufficiency of Basic
Rent and Supplemental
Rent................................................... 7
SECTION 4 Net Lease.............................................. 8
--i--
6091.XXXXXXX.1106.47:1
TABLE OF CONTENTS (Continued)
Page
----
SECTION 5 Return of the Undivided
Interest............................................... 11
a Return of the Undivided
Interest............................................... 11
b Disposition Services................................... 12
SECTION 6 Warranty of the Lessor................................. 13
a Quiet Enjoyment........................................ 13
b Disclaimer of Other
Warranties............................................. 13
c Enforcement of Certain
Warranties............................................. 14
SECTION 7 Liens ................................................ 15
SECTION 8 Operation and Maintenance;
Capital Improvements................................... 15
a Operation and
Maintenance............................................ 15
b Inspection............................................. 16
c Capital Improvements................................... 17
d Reports................................................ 18
e Title to Capital
Improvements........................................... 18
f Funding of the Cost of
Capital Improvements................................... 20
--ii--
6091.XXXXXXX.1106.47:1
TABLE OF CONTENTS (Continued)
Page
----
SECTION 9 Event of Loss; Deemed
Loss Event............................................. 22
a Damage or Loss......................................... 22
b Repair................................................. 23
c Payment of Casualty
Value.................................................. 23
d Payment of Special
Casualty Value......................................... 24
e Requisition of Use..................................... 25
f Termination of
Obligation............................................. 25
g Application of Payments
on an Event of Loss.................................... 26
h Application of Payments
Not Relating to an Event
of Loss................................................ 27
i Other Dispositions..................................... 27
j Assumption of Notes;
Creation of Lien on
Undivided Interest .................................... 27
SECTION 10 Insurance.............................................. 28
a Required Insurance..................................... 28
b Permitted Insurance.................................... 29
SECTION 11 Rights to Assign or
Sublease............................................... 30
--iii--
6091.XXXXXXX.1106.47:1
TABLE OF CONTENTS (Continued)
Page
----
a Assignment or Sublease
by the Lessee.......................................... 30
b Assignment by Lessor as
Security for Lessor's
Obligations............................................ 31
SECTION 12 Xxxxx Xxxxxxx.......................................... 31
SECTION 13 Notices for Renewal or
Purchase; Purchase
Options................................................ 31
a Notice, Determination of
Values, Appraisal
Procedure.............................................. 31
b Purchase Option at
Expiration of the Lease
Term................................................... 32
c Special Purchase Event................................. 32
SECTION 14 Termination for
Obsolescence........................................... 33
a Termination Notice..................................... 33
b Right of Lessor to
Retain Undivided
Interest upon
Termination............................................ 34
c Events on the
Termination Date....................................... 34
d Early Termination
Notice................................................. 35
--iv--
6091.XXXXXXX.1106.47:1
TABLE OF CONTENTS (Continued)
Page
----
e Events on the Early
Termination............................................ 36
SECTION 15 Events of Default...................................... 36
SECTION 16 Remedies............................................... 40
a Remedies............................................... 40
b No Release............................................. 44
c Remedies Cumulative.................................... 45
d Exercise of Other Rights
or Remedies............................................ 46
e Special Cure Right of
Lessee................................................. 46
SECTION 17 Notices................................................ 47
SECTION 18 Successors and Assigns................................. 47
SECTION 19 Right to Perform for
Lessee................................................. 47
SECTION 20 Additional Covenants................................... 48
SECTION 21 Lease of Real Property
Interest............................................... 49
SECTION 22 Amendments and
Miscellaneous.......................................... 49
a Amendments in Writing.................................. 49
b Survival............................................... 49
--v--
6091.XXXXXXX.1106.47:1
TABLE OF CONTENTS (Continued)
Page
----
c Severability of
Provisions............................................. 50
d True Lease............................................. 50
e Original Lease......................................... 50
f Governing Law.......................................... 50
g Headings............................................... 50
h Concerning the Owner Trustee........................... 50
i Disclosure............................................. 51
j Counterpart Execution.................................. 51
SCHEDULE 1 Casualty Values
SCHEDULE 2 Special Casualty Values
SCHEDULE 3 Termination Values
SCHEDULE 4 Description of Undivided Interest
SCHEDULE 5 Description of Real Property Interest
APPENDIX A Definitions
--vi--
6091.XXXXXXX.1106.47:1
FACILITY LEASE
THE FACILITY LEASE, dated as of August 12, 1986, between THE
FIRST NATIONAL BANK OF BOSTON, not in its individual capacity, but solely as
Owner Trustee under a Trust Agreement, dated as of August 12, 1986, with Xxxxxxx
Leasing Corporation, as Lessor (the Lessor), and PUBLIC SERVICE COMPANY OF NEW
MEXICO, a New Mexico corporation (the Lessee).
WITNESSETH:
WHEREAS, the Lessor owns the Undivided Interest and the Real
Property Interest;
WHEREAS, the Lessee desires to lease the Undivided Interest
and the Real Property Interest from the Lessor on the terms and conditions set
forth herein; and
WHEREAS, the Lessor is willing to lease the Undivided Interest
and the Real Property Interest to the Lessee on the terms and conditions set
forth herein;
NOW, THEREFORE, in consideration of the premises and of other
consideration, the receipt and sufficiency of which are hereby acknowledged, the
par-ties hereto agree as follows:
SECTION 1. Definitions.
For purposes hereof, capitalized terms used herein shall have
the meanings assigned to such terms in Appendix A hereto. References in this
Facility Lease to sections, paragraphs and clauses are to sections, paragraphs
and clauses in this Facility Lease unless otherwise indicated.
SECTION 2. Lease of Undivided Interest; Term; Personal Property.
(a) Lease of Undivided Interest. Upon the terms and subject to
the conditions of this Facility Lease, the Lessor hereby leases to the Lessee,
and the Lessee hereby lessee from the Lessor, the Undivided Interest.
6091. XXXXXXX. 1106.47:1
(b) Term. The term of this Facility Lease shall begin on the
Closing Date and shall end on the last day of the Lease Term.
(c) Personal Property. It is the express intention of the Lessor
and the Lessee that title to the Undivided Interest and every portion thereof
shall be severed, and shall be and remain severed, from title to the real estate
constituting the Real Property Interest and the PVNGS Site. The Lessor and the
Lessee intend that the Undivided Interest shall constitute personal property to
the maximum extent permitted by Applicable Law.
(d) Description. The Real Property Interest is described in
Schedule 4. The Undivided Interest is described in Schedule 5.
SECTION 3. Rent; Adjustments to Rent.
(a) Basic Rent. The Lessee shall pay to the Lessor, as basic
rent (herein referred to as Basic Rent) for the Undivided Interest and the Real
Property Interest, the following amounts:
(i) On January 15, 1987, an amount equal to 0.0244547%
of Facility Cost times the actual number of day. from and
including the Closing Date to, but excluding, January 15, 1987,
plus or minus the Rent Differential, if any, referred to in
Section 3(h);
(ii) On July 15, 1987 and on each Basic Rent Payment
Date thereafter to and including January 15, 2016, an amount
equal to 4.40184%, of Facility Cost, plus or minus the Rent
Differential, if any, referred to in Section 3(h); and (iii) if
the Lessee shall elect the Fixed Rate Renewal Term, on July 15,
2016, and on each Basic Rent Payment Date thereafter during the
Fixed Rate Renewal Term, an amount equal to one-half of an
amount determined by dividing the sum of all payments of Basic
Rent payable with respect to the Basic Lease Term pursuant to
clause (ii) of this Section 3(a) (taking into account any
adjustment pursuant to Sections 3(d) and ace) and any increases
and decreases pursuant to Section 3(h)), by 58.
-2-
6091.XXXXXXX. 1106.47:1
If an interest payment on any Note shall be due on a date other than a Basic
Rent Payment Date, the Lessee shall pay additional Basic Rent on such date in an
amount equal to such interest payment and such payment of additional Basic Rent
shall be credited against the Basic Rent due on the Basic Rent Payment Date next
succeeding the date that such additional Basic Rent shall have been paid.
(b) Supplemental Rent. The Lessee shall pay the following
amounts (herein referred to as Supplemental Rent):
(1) When due or, where no due date is specified, on
demand, any amount (other than Basic Rent, Casualty Value,
Termination Value and Special Casualty Value) which the Lessee
assumes the obligation to pay or agrees to pay to the Lessor,
the Owner Participant, the Indenture Trustee, the Collateral
Trust Trustee or any Indemnitee under this Facility Lease, any
other Transaction Document or the Collateral Trust Indenture;
(ii) When due any amount payable hereunder as Casualty
Value, Termination Value or Special Casualty Value, and an
amount equal to any premium or prepayment penalty with respect
to the Notes;
(iii) On demand and in any event on the Basic Rent Payment
Date next succeeding the date such amounts shall be due and
payable hereunder, to the extent permitted by Applicable Law,
interest (computed on the same basis as interest on the Notes is
computed) at a rate per annum equal to (A) the Overdue Interest
Rate, on that portion of the payment of Basic Rent or
Supplemental Rent distributable pursuant to clause "first" of
Section 5.1 or clause "second" of Section 5.3 of the Indenture
(determined prior to the computation of interest on overdue
payments referred to in such clauses) , and (B) the Penalty
Rate, on the balance of any such payment of Basic Rent or
Supplemental Rent
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6091.XXXXXXX.1106.47:1
(including, in the case of both clause (i) and clause (ii)
above, but without limitation, to the extent permitted by
Applicable Law, interest payable pursuant to this clause (iii))
not paid when due (without regard to any period of grace) for
any period for which the same shall be overdue.
The Lessor shall have all rights, powers and remedies provided for in this
Facility Lease, at law, in equity or otherwise, in the case of non-payment of
Basic Rent or Supplemental Rent.
(c) Form at Payment. Subject to Section 11(b), each payment of
Rent under this Facility Lease shall be made in immediately available funds no
later than 11:00 a.m., local time at the place of receipt, on the date each such
payment shall be due and payable hereunder and shall be paid either (A) in the
case of payments other than Excepted Payments, to the Lessor at its address
determined in accordance with section 17, or at such other address as the Lessor
may direct by notice in writing to the Lessee, or (B) in the case of Excepted
Payments, to such Person as shall be entitled to receive such payment at such
address as such Person may direct by notice in writing to the Lessee. If the
date on which any payment of Rent is due hereunder shall not be a Business flay,
the payment otherwise due thereon shall be due and payable on the preceding
Business Day, with the same force and effect as if paid on the nominal date
provided in this Facility Lease.
(d) Adjustments to Rent for Changes in Tax law. Basic Rent
shall be adjusted (upward or downward) to preserve Net Economic Return if there
is any Change in Tax Law. Any adjustments under this Section 3(d) shall be made
not more than once a year and shall be limited in the aggregate to the extent,
if any, necessary such that the Basic Rent (excluding any Rent Differential)
payable on the Basic Rent Payment Date immediately following such adjustment
shall not vary from the Basic Rent (excluding any Rent Differential) which would
have been payable on such Basic Rent Payment Date had no adjustments (other than
adjustments to reflect actual Transaction Expenses) been made pursuant to this
Section 3(d) or pursuant to Section 3(e), (i) prior to the Refunding Date, by
more than 14% and (ii) on at after the Refunding Date, by more than the
percentage that would cause the Weighted Factor to equal
-4-
6091.XXXXXXX.1106.47:1
11.08%; provided1 however, that if, by reason of the limitation set forth in
clause (i) above, any adjustment made prior to the Refunding Date is less than
the adjustment that would have been required to preserve Net Economic Return,
then after the Refunding Date there will be a further upward adjustment to Basic
Rent in order to preserve Net Economic Return, subject to the limitation set
forth in clause (ii) above, and if, by reason of the limitation set forth in
clause (i) or (ii) above, any upward adjustment contemplated by this Section
3(d) was less than the adjustment that would have been required to preserve Net
Economic Return, then the amount of any subsequent downward adjustments
otherwise required hereunder shall be reduced to the extent necessary to cause
the aggregate effect of such upward adjustment and such subsequent downward
adjustments to preserve Net Economic Return; and provided further, however, that
no downward adjustments shall be made pursuant to this section 3(4) in excess of
any upward adjustments made pursuant to this section 3(d) unless and until the
excess of the aggregate amount of all such downward adjustments aver the
aggregate of all such upward adjustments would exceed 1%.
For purposes of determining whether a statutory or regulatory
change constitutes a Change in Tax Law, the original Owner Participant shall be
deemed to be the Owner Participant notwithstanding any transfer of its interest
as such (whether or not permitted by Section 15 of the Participation Agreement),
provided1 however, that a successor Owner Participant shall be treated as the
Owner Participant for such purposes if the transfer to such successor Owner
Participant was permitted by Section 15 of the Participation Agreement and if
both the original Owner Participant and such successor Owner Participant are
members of the same affiliated group of corporations that files a consolidated
return for Federal income tax purposes.
The schedules of casualty Values, special Casualty Values and
Termination Values attached hereto shall be appropriately adjusted in the event
of any adjustment to Basic Rent under this section 3(d).
(e) Further Adjustments. Basic Rent and the schedules of
Casualty Values, Special Casualty Values and Termination Values attached hereto
shall be adjusted (upward or downward) to preserve Net Economic Return if (i) in
-5-
6O9S1.XXXXXXX. 1106.47:1
consequence of any releveraqing or refunding of the Notes or the issuance of
Additional Notes the unpaid principal amount of Notes Outstanding shall be
greater or less than the unpaid principal amount of Xxxxx Outstanding
immediately prior to such transaction, (ii) in consequence of events described
in clause (i) above, the schedule of amortization of principal of Notes
Outstanding after such transaction shall be other than the schedule of
amortization of principal of Notes immediately prior to such transaction or the
interest rate applicable to such Notes shall be other than contained in the
Pricing Assumptions, (iii) Transaction Expenses are paid by the Lessor in
amounts greater or less than an amount equal to 0.8% of Facility Cost, or (iv)
there is any change in the Pricing Assumptions.
(f) Computation of Adjustments. Upon the occurrence of an event
requiring an adjustment to Basic Rent payable pursuant to clause (ii) of Section
3(a), and the schedules of Casualty Values, special Casualty Values and
Termination Values attached hereto, pursuant to paragraph (d) or (e) of this
Section 3, the Owner Participant shall make the necessary computations and
furnish to the Lessee, the Loan Participant, the Lessor and the Indenture
Trustee the revised amounts and percentages, which amounts and percentages shall
be implemented upon delivery thereof and effective as of the date of occurrence
of the event requiring such adjustment (taking into account any payment of Basic
Rent already made) and shall remain effective until changed in consequence of
any verification procedure set forth below. Such revised amounts and percentages
shall be subject to verification (at the Lessee's request made within 45 days
after the Owner Participant shall have furnished the revised amounts to the
Lessee) by the Owner Participant's nationally recognized independent public
accountants (to whom the Owner Participant shall have provided all information
necessary to perform such verification), in which case such accountants shall
either (i) confirm to the Lessee in writing that such revised amounts were
computed on a basis consistent with the original calculations, or (ii) if such
accountants shall for any reason be unable to provide such confirmation, compute
and provide to the Lessee, the Lessor, the Owner Participant, the Loan
Participant and the Indenture Trustee revised amounts and percentages on such a
basis. The revised amounts and percentages, as so confirmed or computed if
applicable, shall be conclusive and binding upon the Lessee, the Lessor, and the
-6-
6091. XXXXXXX. 1106.47:1
Owner Participant. The cost of any such verification shall be borne by the
Lessee, unless such accountants shall require an adjustment to the revised
amounts and percentages originally provided by the Owner Participant which
differs by more than 10% from the amount of the adjustment so provided, in which
case such cost shall be divided and paid by the Lessee and the Owner Participant
in equal amounts. Each adjustment pursuant to paragraph (d) or (e) of this
Section 2 may, but need not, be evidenced by the execution and delivery of a
supplement to this Facility Lease in form and substance satisfactory to the
Lessee and the Owner Participant, but shall be effective as provided herein
without regard to the date on which such supplement to this Facility Lease is so
executed and delivered. Any adjustment referred to in this Section 3 shall
satisfy the provisions of Revenue Procedure 75-21, Revenue Procedure 75-28 and
any other applicable statute, regulation, revenue procedure, revenue ruling or
technical information release relating to the subject matter of Revenue
Procedure 75-21 or Revenue Procedure 75-2a, but, in the case of any upward
adjustment, shall be no less than the adjustment otherwise required pursuant to
this Section 3.
(g) Sufficiency of Basic Rent and Supplemental Rent.
Notwithstanding any other provision of this Facility Lease, any other
Transaction Document or any Financing Document, (i) the amount of Basic Rent
payable on each Basic Rent Payment Date shall be at least equal to the aggregate
amount of principal, premium, if any, and accrued interest payable on such Basic
Rent Payment Date on all Notes then Outstanding, and (ii) unless the Lessee
shall have assumed the Notes or acquired the Owner Participant's beneficial
interest in the Trust following the grant of a security interest in the
Undivided Interest and the Real Property Interest, in each case in accordance
with the terms of the Indenture, each payment of Casualty Value, Special
Casualty Value and Termination Value shall in no event be less (when added to
all other amounts other than Excepted Payments required to be paid by the Lessee
under this Facility Lease in respect of any Event of Loss or Deemed Loss Event
or the termination of this Facility Lease) than an amount sufficient, as of the
date of payment, to pay in full all principal of, and premium, if any, and
interest then due on all Notes Outstanding on and as of such date of payment.
-7-
6091. XXXXXXX.1106.47:1
(h) Rent Differential. Prior to the Refunding Date, each
installment (if any) of Basic Rent shall be increased or decreased, as the case
may be, by the Rent Differential. For purposes hereof, Rent Differential shall
mean, as of any Basic Rent Payment Date, the difference between (i) the
aggregate amount of interest due and payable on such Basic Rent Payment Date on
the Notes then Outstanding, and (ii) the aggregate amount of interest that would
have been due and payable on such Basic Rent Payment Date on such Notes if such
Notes had at all times during the relevant period borne interest at a rate equal
to 10.5% per annum (computed on the basis of a 36O-day year of twelve 30-day
months). If, as of any Basic Rent Payment Date, (A) the amount determined in
accordance with clause (y) of the immediately preceding sentence shall be
greater than the amount determined in accordance with clause (ii) of such
Sentence, the amount of Basic Rent due on such Basic Rent Payment Date shall be
increased by the Rent Differential, and (B) the amount determined in accordance
with such clause (ii) shall exceed the amount determined in accordance with such
clause (i), the amount of Basic Rent due on such Basic Rent Payment Date shall
be decreased by the Rent Differential.
SECTION 4. Net Lease.
This Facility Lease (as originally executed and as modified,
supplemented and amended from time to time) is a net lease, and the Lessee
hereby acknowledges and agrees that the Lessee's obligation to pay all Rent
hereunder, and the rights of the Lessor in and to such Rent, shall be absolute,
unconditional and irrevocable and shall not be affected by any circumstances of
any character, including, without imitation, (i) any set-off, abatement,
counterclaim, suspension, recoupement, reduction, rescission, defense or other
right or claim which the Lessee may have against the Lessor, the Owner
Participant, the Indenture Trustee, the Collateral Trust Trustee, the Loan
Participant, the Operating Agent, any ANPP Participant, any vendor or
manufacturer of any equipment or assets included in the Undivided Interest, Unit
2, any Capital Improvement, the Real Property Interest, the PVNGS site, PVNGS,
or any part of any thereof, or any other person for any reason whatsoever, (ii)
any defect in or failure of the title, merchantability, condition, design,
compliance with specifications, operation or fitness for use of all or any part
-8-
6091.XXXXXXX.1106.47:1
of the Undivided Interest, Unit 2, any Capital Improvement, the Real Property
Interest, the WNGS Site or PVNGS, (iii) any damage to, or removal, abandonment,
shutdown, salvage, scrapping, requisition, taking, loss, theft or destruction of
all or any part of the Undivided Interest, Unit 2, any Capital Improvement, the
Real Property Interest, the PVNGS Site or PVNGS, or any interference,
interruption or cessation in the use or possession thereof or of the Undivided
Interest by the Lessee or by any other Person (including, but without
limitation, the Operating Agent or any other ANPP Participant) for any reason
whatsoever or of whatever duration, (iv) any restriction, prevention or
curtailment of or interference with any use of all or any part of the Undivided
Interest, Unit 2, any Capital Improvement, the Real Property Interest, the PVNGS
Site or PVNGS, (v) any insolvency, bankruptcy, reorganization or similar
proceeding by or against the Lessee, the Lessor, the Owner Participant, the
Indenture Trustee, the Collateral Trust Trustee, the Loan Participant, the
Operating Agent, any other ANPP Participant or any other Person, (vi) the
invalidity, illegality or unenforceability of this Facility Lease, any other
Transaction Document, any Financing Document, the ANPP Participation Agreement
or any other instrument referred to herein or therein or any other infirmity
herein or therein or any lack of right, power or authority of the Lessor, the
Lessee, the Owner Participant, the Indenture Trustee, the Collateral Trust
Trustee, the Loan Participant or any other Person to enter into this Facility
Lease, any other Transaction Document or any Financing Occurrence, or any
doctrine of force majeure, impassability, frustration, failure of consideration,
or any similar legal or equitable doctrine that the Lessee's obligation to pay
Rent is excused because the Lessee has not received or will not receive the
benefit for which the Lessee bargained, it being the intent of the Lessee to
assume all risks from all causes whatsoever that the Lessee does not receive
such benefit, (vii) the breach or failure of any warranty or representation made
in this Facility Lease or any other Transaction Document or any Financing
Document by the Lessor, the Owner Participant, the Indenture Trustee, the
Collateral Trust Trustee, the Loan Participant or any other Person, (viii) any
amendment or other change of, or any assignment of rights under, this Facility
Lease, any other Transaction Document, any Financing Document or any ANPP
Project Agreement, or any waiver, action or inaction under or in respect of this
Facility Lease, any other Transaction Document, any Financing Document or any
-9-
6091. XXXXXXX. 1106.47:1
ANPP Project Agreement, or any exercise or non-exercise of any right or remedy.
under this Facility Lease, any other Transaction Document, any Financing
Document or any ANPP Project Agreement, including, without limitation, the
exercise of any foreclosure or other remedy under the Indenture, the Collateral
Trust Indenture or this Facility Lease, or the sale of Unit 2, any Capital
Improvement, the Undivided Interest, the Real Property Interest, the PVNGS Site
or PVNGS, or any part thereof or any interest therein, or (ix) any other
circumstance or happening whatsoever whether or not similar to any of the
foregoing. The Lessee acknowledges that by conveying the leasehold estate
created by this Facility Lease to the Lessee and by putting the Lessee in
possession of the Undivided Interest and the Real Property Interest, the Lessor
has performed all of the Lessor's obligations under and in respect of this
Facility Lease, except the covenant contained in section 6(a) hereof that the
Lessor and Persons acting for the Lessor will not interfere with the Lessee's
quiet enjoyment of the Undivided Interest and the Real Property Interest. The
Lessee hereby waives, to the extent permitted by Applicable Law, any and all
rights which it may flow have or which at any time hereafter may be conferred
upon it, by statute or otherwise, to terminate, cancel, quit or surrender this
Facility Lease or to effect or claim any diminution or reduction of Rent payable
by the Lessee here-under, including, without limitation, the provisions of
Arizona Revised Statutes Section 33-343, except in accordance with the express
terms hereof. If for any reason whatsoever this Facility Lease shall be
terminated in whole or in part by operation of law or otherwise, except as
specifically provided herein, the Lessee nonetheless agrees to pay to the Lessor
or other Person entitled thereto an amount equal to each installment of Basic
Rent and all Supplemental Rent at the time such payment would have become due
and payable in accordance with the terms hereof had this Facility Lease not been
terminated in whole or in part. Each payment of Rent made by the Lessee
hereunder shall be final and the Lessee shall not seek or have any right to
recover all or any part of such payment from the Lessor or any other Person for
any reason whatsoever. All covenants, agreements and undertakings of the Lessee
herein shall be performed at its cost, expense and risk unless expressly
otherwise stated. Nothing in this Section 4 or elsewhere shall be construed as a
guaranty by the Lessee of any residual value in the Undivided Interest or as a
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6091.XXXXXXX. 1106.47:1
guaranty of the Notes. Any provisions of Section 7(b)(2) or 8(C) of the
Participation Agreement to the contrary notwithstanding, if the Lessee shall
fail to make any payment of Rent to any Person when and as due (taking into
account applicable grace periods), such Person shall have the right at all
times, to the exclusion of the ANPP Participants, to demand, collect, sue for,
enforce obligations relating to and otherwise obtain all amounts due in respect
of such Rent.
SECTION 5. Return and Disposition.
(a) Return of the Undivided Interest and the Real Property
Interest. On the Lease Termination Date, the Lessee will surrender possession of
the Undivided Interest, at which time Unit 2 shall have a net rated power level
of at least 630 megawatts electric, and the Real Property Interest to the Lessor
(or to a Person specified by the Lessor to the Lessee in writing not less than 6
months prior to the Lease Termination Date) and will furnish to the Lessor:. (i)
copies certified by a senior officer of the Lessee of all Governmental Action
necessary to effect such surrender and receipt of possession ion (including, but
without limitation, appropriate amendments to the License), which Governmental
Action shall be in full force and effect; and (ii) an opinion of counsel (which
may be nudge Xxxx Xxxxxxx Xxxxxxxxx & Xxxxxx, Xxxxx & Xxxxxx or another counsel
experienced with NRC and other nuclear matters reasonably satisfactory to the
Owner Participant) to the effect that (A) the Lessee has obtained all
Governmental Action and action under the ANPP Participation Agreement necessary
to effect such surrender by the Lessee and receipt of possession by the Lessor
(or the Person so specified by the Lessor) and (B) such Governmental Action is
in full force and effect. At the time of such return the Lessee shall pay or
have paid all amounts due and payable, or to become due and payable, by it as an
ANPP Participant under each and every ANPP Project Agreement allocable or
chargeable (whether or not payable during or after the Lease Term) to the
Undivided Interest or the Real Property Interest in respect of any period or
periods ending on or prior to the Lease Termination Date (including, but without
limitation, unless the Lessor shall have transferred the Undivided Interest and
the Real Property Interest to another Person, all amounts payable with respect
to any and all Capital Improvements to Unit 2 or the PVNGS Site approved or
authorized (without the concurrence of the Owner Participant) prior to the end
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6O91.XXXXXXX.l106.47:1
of the Lease Term, whether or not implementation thereof has been completed on
or prior to the Lease Termination Date), and the undivided Interest and the Real
Property Interest shall be free and clear of all Liens (other than Permitted
Liens described in clauses (i), (iv), (v) (other than those arising by, through
or under the Lessee alone), (vi), (vii) (other than as aforesaid), (viii) (other
than as aforesaid), (ix), (x), (xi) and (xiii) of the definition of such term)
and in the condition and state of repair required by Section A. The Lessor shall
not abandon the Undivided Interest. In the event that on or prior to the Lease
Termination Date there shall have occurred a default by any ANPP Participant
(other than the Lessee) under the ANPP Participation Agreement and such default
shall not have been cured by the defaulting ANPP Participant, then (i) the
Lessee agrees to indemnify and hold the Lessor (and each successor, assign and
transferee thereof) harmless against any and all obligations under the ANPP
Participation Agreement with respect to contributions or payments required to be
made thereby as a result of such default and (ii) the Lessor (and each
successor, assign and transferee thereof) agrees to reimburse the Lessee for all
amounts paid by the Lessee pursuant to the foregoing clause (i) to the extent,
but only to the extent, that the Lessor (or such successor, assign or
transferee) shall have actually received proceeds from the sale of the
Generation Entitlement Share of the defaulting ANPP Participant as a result of
the payment made by the Lessee pursuant to the foregoing clause (i), and, to the
extent the Lessor (or such successor, assign or transferee) shall have received
such proceeds, the amount to be reimbursed to the Lessee pursuant to this clause
(ii) shall include interest at. the Prime Rate from the date of any payment by
the Lessee pursuant to the foregoing clause (i) through the date of
reimbursement of such amount pursuant to this clause (ii).
(b) Disposition. If the Lessee does not exercise its option to
renew or purchase as provided in Sections 12 and 13, respectively, then during
the last thirty-six months of the Lease Term, the Lessor will attempt to lease
or dispose of the Undivided Interest and the Real Property Interest. The Lessee
will fully cooperate with the Lessor in connection with the Lessor's efforts to
lease or dispose of the Undivided Interest and the Real Property Interest
including using the Lessee's reasonable efforts to lease or dispose of the
Undivided Interest and the Real Property Interest.
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6O91.XXXXXXX.1106.47:1
The Lessor agrees to reimburse the Lessee for reasonable out-of-pocket costs and
expenses of the Lessee incurred at the request of the Lessor or the Owner
Participant in connection with such cooperation and such efforts. The Lessor
agrees that it may not exercise the remedy contained in Section 16(a) (vii)
hereof as a result of the failure of the Lessee to comply with Section (5) a
hereof if the Lessor shall have failed to Transfer the Undivided Interest and
the Real Property Interest to a purchaser (which shall not be the Lessee or an
Affiliate of the Lessee) that shall have (i) submitted a bid on or before the
date on which such Event of Default arose which is the highest bona fide cash
bid so submitted and is in an amount not less than the fair market value of the
Undivided Interest and the Real Property Interest and (ii) tendered payment in
full to the Owner Participant prior to the date upon which payment by the Lessee
would otherwise be required from the Lessee under section 16(a) (vii).
SECTION 6. Warranty of the Lessor.
(a) Quiet Enjoyment. The Lessor warrants that until the Lease
Termination Date, so long as the Lessee is in compliance with each and every
provision of this Facility Lease and each other Transaction Document, the
Lessee's use and possession of Unit 2, including the Undivided Interest, shall
not be interrupted by the Lessor or any Person claiming by, through or under the
Lessor, and their respective successors and assigns.
(b) Disclaimer of Other Warranties. The warranty set forth in
Section 6(a) is in lieu of all other warranties of the Lessor or the Owner
Participant, whether written, oral or implied, with respect to this Facility
Lease, Unit 2, any Capital Improvement, the Undivided Interest, PVNGS, the Real
Property Interest or the PVNGS Site. As among the Owner Participant, the Loan
Participant, the Indenture Trustee, the Collateral Trust Trustee, the Lessor and
the Lessee, execution by the Lessee of this Facility Lessee shall be conclusive
proof of the compliance of Unit 2 (including any Capital Improvement) , the
Undivided Interest and the Real Property Interest with all requirements of this
Facility Lease, and the Lessee acknowledges and agrees that (i) NEITHER THE
LESSOR NOR THE OWNER PARTICIPANT IS A MANUFACTURER OR A DEALER IN PROPERTY OR
SUCH KIND AND (ii) THE LESSOR LEASES AND THE LESSEE TAKES THE UNDIVIDED INTEREST
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6091.XXXXXXX.1106.47:1
AND THE REAL PROPERTY INTEREST, AND SHALL TAKE EACH CAPITAL IMPROVEMENT, AND ANY
PART THEREOF, AS IS AND WHERE IS, and neither the Lessor nor the Owner
Participant shall be deemed to have made, and THE LESSOR AND THE OWNER
PARTICIPANT EACH HEREBY DISCLAIMS, ANY OTHER REPRESENTATION OR WARRANTY, EITHER
EXPRESS OR IMPLIED, AS TO ANY MATTER WHATSOEVER, INCLUDING, WITHOUT LIMITATION,
THE DESIGN OR CONDITION OF UNIT 2, ANY CAPITAL IMPROVEMENT, THE UNDIVIDED
INTEREST, THE REAL PROPERTY INTREST, THE PVNGS SITE OR PYNGS, OR ANY PART
TKEREOF, THE MERCKANTABIUTY IS OF OR THE FITNESS THEREOF FOR ANY PARTICULA
PURPOSE, TITLE TO UNIT 2, ANY CAPITAL IMPROVEMENT, THE UNDIVIDED INTEREST, THE
REAL PROPERTY INTEREST, THE PVNGS SITE OR PVNGS, OR ANY PART THEREOF, THE
QUALITY OF THE MATERIAL OR WORKMANSHIP THEREOF OR CONFORMITY THEREOF TO
SPECIFICATIONS, FREEDOM FROM PATENT OR TRADEMARK INFRINGEMENT OR THE ABSENCE OF
ANY LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, NOR SHALL THE LESSOR
OR THE OWNER PARTICIPANT BE LIABLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES
(INCLUDING LIABILITY IN TORT, STRICT OR OTHERWISE), it being agreed that all
such risks, as among the Owner Participant, the Loan Participant, the Collateral
Trust Trustee, the Indenture Trustee, the Lessor and the Lessee, are to be borne
by the Lessee. The provisions of this Section 6(b) have been negotiated, and,
except to the extent otherwise expressly provided in Section 5(a), the foregoing
provisions are intended to be a complete exclusion and negation of any
representations or warranties by the Lessor, the Owner Participant, the Loan
Participant, the Collateral Trust Trustee or the Indenture Trustee, express or
implied, with respect to Unit 2 (including any Capital Improvement), the
Undivided Interest, PVNGS, the Real Property Interest or the PVNGS Site that may
arise pursuant to any law now or hereafter in effect, or otherwise.
(c) Enforcement of Certain Warranties. The Lessor authorizes
the Lessee (directly or through agents, including the Operating Agent), at the
Lessee's expense, to assert for the Lessor's account, during the Lessee Term,
all of the Lessor's rights (if any) under any applicable warranty and any other
claims (under this Facility Lease or any Purchase Document) that the Lessee or
the Lessor may have against any vendor or manufacturer with respect to Unit 2
(including any Capital Improvement) or the Undivided Interest, and the Lessor
agrees to cooperate, at the Lessee's expense, with the Lessee and the Operating
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6091.XXXXXXX.1106.47:1
Agent in asserting such rights. Any amount receivable (without regard to any
right of setoff or other similar right of any Person against the Lessee) by the
Lessee as payment under any such warranty or other claim against any vendor or
manufacturer (or, if such warranty or claim relates to the Undivided Interest
and the Retained Assets, the portion of such received amount appropriately
allocable to the Undivided Interest) shall be applied in accordance with
Sections 9(g), (h) and (i).
SECTION 7. Liens.
The Lessee will not directly or indirectly create, incur, assume
or permit to exist any Lien on or with respect to the Undivided Interest, the
Real Property Interest, the Lessor's title thereto or any interest of the Lessor
or Lessee therein (and the Lessee will promptly, at its own expense, take such
action as may be necessary duly to discharge any such Lien), except Permitted
Liens.
SECTION 8. Operation and Maintenance; Capital Improvements.
(a) Operation and Maintenance. The Lessee agrees that it will
exercise its rights, powers, elections and options as an ANPP Participant under
the ANPP Project Agreements to cause the Operating Agent to (A) maintain Unit 2
in such condition that Unit 2 will have the capacity and functional ability to
perform, on a continuing basis (ordinary wear and tear excepted), in normal
commercial operation, the functions and substantially at the ratings at which it
is, from time to time, rated, (B) operate, service, maintain and repair Unit 2
and replace all necessary or useful parts and components thereof so that the
condition and operating efficiency of Unit 2 will be maintained and preserved,
ordinary wear and tear excepted, in all material respects in accordance with (1)
prudent utility practice for items of similar size and nature, (2) such
operating standards as shall be required to take advantage of and enforce all
available warranties and (3) the terms and conditions of all insurance policies
maintained in effect at any time with respect thereto, (C) use, possess, operate
and maintain Unit 2 in compliance with all material applicable Governmental
Actions (including the License) affecting PVNGS or Unit 2 or the use,
possession, operation and maintenance thereof and (D) otherwise act in
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6091.XXXXXXX. 1106.47:1
accordance with the standards set forth in the ANPP Participation Agreement. The
Lessee will comply with all its obligations under Applicable Law affecting Unit
2, the Undivided Interest, PVNGS, the Real Property Interest and the PVNGS Site,
and the use, operation and maintenance thereof. The Lessee agrees to (i)
exercise its rights under the ANPP Participation Agreement so that there will
always be an Operating Agent under the ANPP Participation Agreement and (ii)
maintain in full force and effect a license from the NRC adequate to possess the
Undivided Interest and the Real Property Interest under the circumstances
contemplated by the ANPP Participation Agreement. The Lessee will keep and
maintain proper books and records (i) relating to all Operating Funds (as
defined in the ANPP Participation Agreement) provided by it to the Operating
Agent under the ANPP Participation Agreement and (ii) upon receipt of the
requisite information from the Operating Agent, relating to the application of
such Operating Fund. to the operation and maintenance of Unit 2 and the
acquisition, construction and installation of Capital Improvements, all in
accordance with the Uniform System of Accounts. The Lessor shall not be obliged
in any way to maintain, alter, repair, rebuild or replace Unit 2, any Capital
Improvement, the Undivided Interest or the Real Property Interest, or any part
thereof, or, except as provided in Section 8(f), to pay the cost of alteration,
rebuilding, replacement, repair or maintenance of Unit 2, any Capital
Improvement, the Undivided Interest or the Real Property Interest, or any part
thereof, and the Lessee expressly waives the right to perform any such action at
the expense of the Lessor pursuant to any law at any time in effect.
(b) Inspection. The Lessor and the Owner Participant and their
respective authorized representatives shall have the right to inspect PVNGS
(subject, in each event, to the ANPP Participation Agreement, Applicable Law,
applicable confidentiality undertakings and procedures established by the
Operating Agent) at their expense. The Lessor and the Owner Participant, and
their respective authorized representatives, shall have the right to inspect, at
their expense, the books and records of the Lessee relating to PVNGS, and make
copies of and extracts therefrom (subject as aforesaid) and may, at their
expense, discuss the Lessee's affairs, finances and accounts with its executive
officers, all at such times and as often as may be reasonably requested. None of
the Lessor, the Owner Participant, the Indenture Trustee and the Collateral
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6091.XXXXXXX.1106.47:1
Trust Trustee shall have any duty whatsoever to make any inspection or inquiry
referred to in this Section a(b) and shall not incur any liability or obligation
by reason of not making any such inspection or inquiry.
(c) Capital Improvements. If and to the extent required by the
ANPP Participation Agreement, the Lessee shall, at its sole expense, promptly
participate in the making of any Capital Improvement to Unit 2. Of the net
proceeds of (i) any sale or other disposition of property removed from Unit 2
receivable (without regard to any right of setoff or other similar right of any
Person against the Lessee) by, or credited to the account of, the Lessee in
accordance with the ANPP; Participation Agreement and (ii) any insurance
proceeds receivable (without regard to any right of setoff or other similar
right of any Person against the Lessee) for the account of the Lessor or the
Lessee in respect of the loss or destruction of, or damage or casualty to, any
such property, the Lessor's Portion, in the case of property not constituting
Common Facilities, or the Common Facilities Interest, in the case of Common
Facilities, (of either) such amount shall be applied as provided in Section
9(g), (h) or (i)1 as the case may be. The Unit 2 Interest, in the case of
property not constituting Common Facilities, or the Unit 2 Common Facilities
Interest, in the case of Common Facilities, in property at any time removed from
Unit 2 or the Common Facilities shall remain the property of the Lessor, no
matter where located, until such time as a Capital Improvement constituting a
replacement of such property shall have been installed in unit 2 or the Common
Facilities or such removed property has been disposed of by the Operating Agent
in accordance with the ANPP Participation Agreement. Simultaneously with such
disposition by the Operating Agent, title to the Unit 2 Interest, in the case of
property not constituting Common Facilities, or the Unit 2 Common Facilities
Interest, in the case of Common Facilities, in the removed property shall vest
in the person designated by the Operating Agent, free and clear of any and all
claims or rights of the Lessor. Unless subparagraph (3) of Section 8(e) shall be
applicable, upon the incorporation of a Capital Improvement in Unit 2 or the
Common Facilities, without further act, (i) title to a Unit 2 Interest, in the
case of property not constituting Common Facilities, or the Unit 2 Common
Facilities Interest, in the case of Common Facilities, in such Capital
Improvement shall vest in the Lessor and (ii) such applicable undivided interest
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6091.BURNHAN.1106.47:1
in such Capital Improvement shall become subject to this Facility Lease and be
deemed to be part of the Undivided Interest for all purposes hereof to the same
extent that the Lessor had a like undivided interest in the property originally
incorporated or installed in Unit 2 or the Common Facilities. The Lessee
warrants and agrees that the Lessor's interest in all Capital Improvements shall
be free and clear of all Liens, except Permitted Liens other than the types
specified in clauses (iii), (xii) and (xiii) of the definition thereof.
(d) Reports. To the extent permissible, the Lessee shall
prepare and file in timely fashion, or, where the Lessor shall be required to
file, the Lessee shall prepare and deliver to the Lessor within a reasonable
time prior to the date for filing, any reports with respect to Unit 2, the
Undivided Interest or the Real Property Interest or the condition or operation
thereof that shall be required to be filed with any governmental or regulatory
authority. On or before March 1 of each year, commencing March 1, 1987, and on
the Lease Termination Date, the Lessee shall furnish the Lessor and the Owner
Participant with a report stating the total cost of all Capital Improvements and
describing separately and in reasonable detail each Capital Improvement (or
related group of Capital Improvements) made during the period from the date
hereof to December 31, 1926 in the case of the first such report or during the
period from the end of the period covered by the last previous report to the
December 31 prior to such report in the case of subsequent reports. On or before
March 1 in each year (commencing March 1, 1987) and at such other times as the
Lessor or the Owner Participant shall reasonably request in writing (which
request shall provide a reasonable period for response), the Lessee will report
in writing to the Lessor with respect to (i) the most recent annual capital
expenditure budget submitted by the Operating Agent to the Lessee in accordance
with the ANPP Participation Agreement and (ii) the then plans (if any) which the
Lessee may have for the financing of the same under Section 8(f).
(e) Title to capital Improvements. Title to the Unit 2 Interest,
in the case of property not constituting Common Facilities, or the Unit 2 Common
Facilities Interest, in the case of Common Facilities, in each Capital
Improvement to Unit 2 or the Common Facilities, as the case may be, shall vest
as follows:
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(1) in the case of each Nonseverable Capital Improvement,
whether or not the Lessor shall have financed or provided financing (in
whole or in part) for such undivided interest in such Capital
Improvement by an Additional Equity Investment or a Supplemental
Financing, or both, effective on the date such Capital Improvement shall
have been incorporated or installed in Unit 2 or the Common Facilities,
as the case may be, the Lessor shall, without further act, acquire title
to such undivided interest in such Capital Improvement;
(2) in the case of each Severable Capital Improvement, if the
Lessor shall have financed (by an Additional Equity Investment or a
Supplemental Financing, or both) 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 the cost of
such Capital Improvement, the Lessor shall, without further act, acquire
title to such undivided interest in such Capital Improvement; and
(3) in the case of each Severable Capital Improvement, if the
Lessor shall not have financed (by either an Additional Equity
Investment or a Supplemental Financing, or both) 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 the
cost of such Capital Improvement, the Lessee shall retain title to such
undivided interest in such Capital Improvement.
Immediately upon title to such a Unit 2 Interest, in the case of
property not constituting Common Facilities, or such a Unit 2 Common Facilities
Interest, in the case of Common Facilities, in any Capital Improvement vesting
in the Lessor pursuant to sub-paragraph (1) or sub-paragraph (2) of this Section
S (e) , such undivided interest in such Capital Improvement shall, without
further act, become subject to this Facility Lease and be deemed part of the
Undivided Interest and Unit 2 or the Common Facilities, as the case may be, for
all purposes hereof.
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6091.XXXXXX.1106.47:1
(f) Funding of the Cost of Capital Improvements. Before
placing in service any Capital Improvement to Unit 2 or the Common Facilities
the cost of which exceeds $100,000,000 in respect of the interests of all ANPP
Participants, the Lessee shall give the Lessor and the owner Participant
reasonable advance notice thereof. The Owner Participant shall have the option,
in its sole discretion, of financing through the Lessor a Unit 2 Interest, in
the case of property not constituting Common Facilities6 or a Unit 2 Common
Facilities interest, in the case of Common Facilities, of the cost of any such
Capital Improvement, or any other Capital Improvement presented to the Owner
Participant for financing, including or not including the making of an
investment by the Owner Participant (an Additional Equity Investment) and the
issuance of Additional Notes, all on terms acceptable to the Lessee and the
Owner Participant. If the Owner Participant does not finance, or arrange the
financing of, 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 the cost of such Capital Improvement, the Lessee may cause the
Lessor to issue, if and to the extent permitted by the Indenture, to one or more
Persons (other than the Lessee or any Person affiliated with the Lessee within
the meaning of section 318 of the Code) Additional Notes and to use the proceeds
thereof to pay the applicable percentage of the cost of such Capital
Improvement, subject, however, to satisfaction of the following conditions:
(i) there shall be no more than one Supplemental Financing
in any calendar year;
(ii) the sum of the supplemental Financing Amounts in any
calendar year shall equal or exceed the Lessor's Portion of
$5,000,000;
(iii) the Lessee may include in any request for a
Supplemental Financing only Capital Improvements not previously
financed in any Supplemental Financing and which have been
installed or affixed no earlier than three calendar years before
the beginning of the calendar year in which such Supplemental
Financing occurs;
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6091. XXXXXXX.1106.47:1
(iv) the total amount of all Supplemental Financing during
the Basic Lease Term shall not exceed the Lessor's Portion of
$100, 000,0007
(v) unless waived by the Owner Participant, the Bonds
issued and outstanding under the Collateral Trust Indenture
shall be rated no less than "investment grade", as determined by
Standard & Poor's Corporation and Xxxxx'x Investors Service,
Inc.,
(vi) the sum of the Supplemental Financing Amount and
any Additional Equity Investment shall not exceed that portion
of the cost of Capital Improvements which, when financed, will
constitute an addition to the Owner Participant's basis under
section 1012 or 1016 of the Code;
(vii) in the opinion of independent tax counsel to the
Owner Participant, such Supplemental Financing shall not result
in adverse tax consequences to the Owner Participant or
adversely affect the status of this Facility Lease as a "true
lease" for Federal tax purposes, and the Owner Participant and
the Lessee shall have agreed upon the amount and manner of
payment of the indemnity, if any, payable by the Lessee as a
consequence of such Supplemental Financing;
(viii) the Additional Xxxxx shall have a final maturity date
no later than January 15, 2016;
(ix) the Lessee shall have made such representations,
warranties and covenants regarding the tax characteristics of
the Lessor's undivided interest in each Capital Improvement as
the Owner Participant reasonably requests, and the Tax
Indemnification Agreement shall have been appropriately
modified;
(x) appropriate adjustments to Basic Rent and the
schedules of Casualty Values, Special Casualty Values and
Termination Values shall have been agreed to by the Owner
Participant;
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6091.XXXXXXX.1106.47:1
(xi) the Lessee shall pay to the Lessor an amount equal
to all out-of-pocket costs and expenses reasonably incurred by
the Lessor or the Owner Participant and not financed as a part
of such Supplemental Financing or reflected in adjustments to
Basic Rent;
(xii) no Default or Event of Default shall have occurred and
be continuing:
(xiii) the Lessee shall enter into such agreements and shall
have provided such tax indemnities, representations, warranties,
covenants, opinions, certificates and other documents as the
Owner Participant shall reasonably request; and
(xiv) in the reasonable opinion of the Owner Participant,
such Supplemental Financing shall not result in any adverse
accounting or financial consequences to the Owner Participant.
(g) Useful Life. If the Lessee shall not theretofore have
exercised its option under Section 13 to purchase the Undivided Interest and the
Real Property Interest, then (i) if the Lessee shall not theretofore have
exercised its option to renew the Lease pursuant to Section 12, on January .15,
2015, the Lessee shall initiate the Appraisal Procedure to determine the
remaining Economic Useful Life of Unit 2 as of July 15, 2015 and (ii) on the
Rent Payment Date occurring one year prior to the end of the Renewal Term, if
any, the Lessee shall initiate the Appraisal Procedure to determine the
remaining Economic Useful Life of Unit 2 as of the date six months prior to the
end of the Renewal Term. The Lessee and the Lessor agree to use their best
efforts to ensure that such determination of remaining economic useful life is
made no later than July 15, 2015 (in the case of the first such determination)
and six months prior to the end of the Renewal Term (in the case of the second
such determination)
SECTION 9. Event of Loss; Deemed Loss Event.
(a) Damage or Loss. In the event that Section 16.2 of the ANPP
Participation Agreement (as in effect on the date hereof) or any similar
provision of the ANPP Participation Agreement (as in effect on such date) shall
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6091.XXXXXXX.1106.47:l
become applicable, or an Event of Loss, a Requisition of Use or a Requisition of
Title shall occur, or Unit 2 or the Common Facilities or any substantial part
thereof shall suffer destruction, damage, loss, condemnation, confiscation,
theft or seizure for any reason whatsoever, such fact shall promptly, and in any
case within five Business Days following any such event, be reported by the
Lessee to the Lessor and the Owner Participant.
(b) Repair. The Lessee shall promptly make any and all payments
required of the Lessee under the provisions of the ANPP Participation Agreement
relating to damage or destruction or the like to Unit 2 or the Common Facilities
or any portion thereof; provided, however, that the Lessee shall in no event be
obligated to make or join in any agreement under Section 16.2 of the ANPP
Participation Agreement (as in effect on the date hereof) concerning repairs to
or reconstruction of Unit 2 or the Common Facilities.
(a) Payment of Casualty Value. Except as otherwise provided in
the definition of the term "Final Shutdown", an Event of Loss shall not occur
unless. and until the Owner Participant delivers to the Lessor and the Lessee a
written notice identifying the applicable event and declaring that such event
constitutes an Event of Loss hereunder. On the Basic Rent Payment Date next
following receipt by the Lessee of a written notice from the Lessor that an
Event of Loss has occurred, the Lessee shall pay to the Lessor all Basic Rent
due on such Basic Rent Payment Date, plus an amount equal to the excess of (i)
Casualty Value determined as of such Basic Rent Payment Date over (ii) the
unpaid principal amount of the Notes Outstanding on such date after giving
effect to the payment, if any, of the principal installment due and payable on
such date. (a) Upon compliance in full by the Lessee with the foregoing
provisions of this Section 9(c) and assumption by the Lessee of all the
obligations and liabilities of the Owner Trustee under the Indenture and the
Notes pursuant to Section 3.9(b) of the Indenture, the Lessor shall (so long as
no Default or Event of Default shall have occurred and be continuing), and (b)
at any time after the occurrence of an Event of Loss the Lessor may:
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6091.XXXXXXX.1106.47:l
(i) if Section 16.2 of the ANPP Participation Agreement
(as in effect on the date hereof) or any similar provision of
the ANPP Participation Agreement (as in effect on such date)
shall be applicable and the Lessee shall have declined, but one
or more of the other ANPP Participants shall have elected, to
reconstruct or restore Unit 2, as permitted by the ANPP
Participation Agreement, Transfer the Undivided Interest and the
Real Property Interest to such electing ANPP Participants, as
required by, and in the proportions set forth in, the ANPP
Participation Agreement, in which case the Lessee shall be
entitled to receive the "salvage value" purchase price allocable
to the Undivided Interest and he Real Property Interest; or
(ii) if clause (i) above shall not be applicable,
Transfer the Undivided Interest and the Real Property Interest
to the Lessee.
If the Lessee shall not have assumed all the obligations and liabilities of the
Owner Trustee under the Indenture and the Notes in accordance with Section
3.9(b) of the Indenture, but the Owner Participant shall have received under
Section 5.2 of the Indenture all amounts required to be paid by the Lessee
pursuant to this section 9(c) (including interest, if any, thereon pursuant to
section 3(b) (iii) hereof, the Lessor shall retain the Undivided Interest and
the Real Property Interest, subject to the terms of this Facility Lease and
section 7(b) (4) of the Participation Agreement; provided, however, that (i) the
obligation of the Lessee to pay further Basic Rent shall be reduced to an amount
on each Basic Rent Payment Date equal to the aggregate amount of principal,
premium, if any, and accrued interest then payable on all Notes then outstanding
and (ii) this Facility Lease shall become a security agreement for all purposes
of Applicable Law.
(d) Payment of special Casualty Value. A Deemed Loss Event
shall not occur unless and until the Owner Participant delivers to the Lessee a
written notice identifying the applicable event and declaring that such event
constitutes a Deemed Loss Event hereunder. On the fifteenth day of the month
during which a Deemed Loss Event shall have occurred (or, if such Deemed Loss
Event shall occur after the fifteenth day of such month, the fifteenth day of
the next following month), the Lessee shall pay to the Lessor (x) an amount
equal to the excess of (i) special Casualty Value determined as of the date such
payment is due over
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6O91.XXXXXXX.1106.47:1
(ii) the principal amount of the Notes Outstanding on such date after giving
effect to the payment, if any, of the principal installment due and payable on
such day, plus (y) if such fifteenth day is a Basic Rent Payment Date, all Basic
Rent due on such Basic Rent Payment Date. (a) Upon compliance in full by the
Lessee with the foregoing provisions of this Section 9(d) and assumption by the
Lessee of all the obligations and liabilities of the Owner Trustee under the
Indenture and the Notes pursuant to Section 3.9(b) of the Indenture, the Lessor
shall (so long as no Default or Event of Default shall have occurred and be
continuing), and (b) at any time after the occurrence of a Deemed Loss Event,
the Lessor may, Transfer the Undivided Interest and the Real Property Interest
to the Lessee. If the Lessee shall not have assumed all the liabilities and
obligations of the Owner Trustee under the Indenture and the Notes in accordance
with section 3.9(b) of the Indenture, but the Owner Participant shall have
received under Section 5.2 of the Indenture all amounts required to be paid by
the Lessee pursuant to this section 9(d) (including interest, if any, thereon
pursuant to Section 3(b) (iii)), the Lessor shall retain the Undivided Interest
and the Real Property Interest, subject to the terms of this Facility Lease and
Section 7(b)(4) of the Participation Agreement; provided, however, that (i) the
obligation of the Lessee to pay further Basic Rent shall be reduced to an amount
on each Basic Rent Payment Date equal to the aggregate amount of principal,
premium, if any, and accrued interest then payable on all Notes Outstanding and
(ii) this Facility Lease shall become a security agreement for all purposes of
Applicable Law.
(e) Requisition of Use. In the case of a Requisition of Use
not constituting an Event of Loss, this Facility Lease shall continue, and each
and every obligation of the Lessee hereunder and under each Transaction Document
shall remain in full force and effect, So long as no Default or Event of Default
shall have occurred and be continuing, the Lessee shall be entitled to all sums
received by reason of any such Requisition of Use for the period ending on the
Lease Termination Date, and the Lessor shall be entitled to all sums received by
reason of any such Requisition of Use for the period after the Lease Termination
Date.
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(f) Termination or Continuation of Obligations. Until the
Lessee shall have made the payments specified in Section 9(c) or 9(d), the
Lessee shall make all payments of Rent when due; and the Lessee shall thereafter
be required to make all payments of Supplemental Rent as and when due. In the
event that the Lessee shall assume all the obligations and liabilities of the
Owner Trustee under the Indenture and the Notes pursuant to Section 3.9(b) of
the Indenture, upon receipt by the Owner Participant under Section 5.2 of the
Indenture of the payments specified in Section 9(c) or 9 (d) and payment by the
Lessee of all other Rent due and owing through and including the date of payment
(including Basic Rent due on or accrued through such date, as the case may be),
the Lease Term shall end and the Lessee's obligation to pay further Basic Rent
shall cease. So long as no Event of Default shall have occurred and be
continuing, if as a consequence of a Deemed Loss Event, a Special Purchase
Event, an exercise of the Cure Option or otherwise, the Lessee is required to
purchase the Undivided Interest and the Real Property Interest, this Facility
Lease shall not be terminated nor shall the use or possession of the Undivided
Interest or the Real Property Interest be transferred by the Lessee to the
Lessor or to any other Person prior to the actual purchase of the Undivided
Interest and the Real Property Interest by the Lessee.
(g) Application of Payments on an Event of Loss. My payments
received at any time by the Lessor or the Lessee (other than insurance placed by
the Owner Trustee or the Owner Participant pursuant to Section 10(b)) from any
Governmental Authority, insurer or other Person (except the Lessee) as a result
of the occurrence of an Event of Loss shall be applied as follows:
(i) all such payments shall be promptly paid to the
Lessor for application pursuant to the following provisions of
this Section 9(g), except that the Lessee may retain any amounts
that would at the time be payable to the Lessee as reimbursement
under the provisions of clause (ii) below;
(ii) so much of such payments as shall not exceed the
amount required to be paid by the Lessee pursuant to Section
9(c) (ignoring, for this purpose, clause (ii) of the first
sentence thereof) shall be applied in reduction of the Lessee's
obligation to pay
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such amount if not already paid by the Lessee or, if already
paid by the Lessee, shall be applied to reimburse the Lessee
for its payment of such amount; and
(iii) the balance, if any, of such payments remaining
thereafter shall be divided bet'4een the Lessor and the Lessee,
as their interests may appear.
(xi) Application of Payments Not Relating to an Event of Loss.
Payments received at any time by the Lessor (other than insurance placed by the
Owner Trustee or the Owner Participant pursuant to Section 10(b)) or the Lessee
from any Governmental Authority, insurer or other Person with respect to any
destruction, damage, loss, condemnation, confiscation, theft or seizure of or
requisition of title to or requisition of use of, Unit 2 or the Common
Facilities, or any part thereof, not constituting an Event of Loss shall be
applied first to reimburse the Lessee for all amounts expended in respect of the
repair, replacement or reconstruction of Unit 3 or the Common Facilities, or any
part thereof, as provided in Section 9(b), and second the balance, if any, of
such payments shall be divided between the Lessor and the Lessee as their
interests may appear.
(i) Disposition at rise of Event of Default. Notwithstanding
the foregoing provisions of this Section 9, if an Event of Default shall have
occurred and be continuing, any amount that would otherwise be payable to or for
the account of, or that would otherwise be retained by, the Lessee pursuant to
Section 10 or this Section 9 shall be paid to the Lessor as security for the
obligations of the Lessee under this Facility Lease and, at such time thereafter
as the Lessee shall have cured any such Event of Default, such amount shall be
paid promptly to the Lessee unless this Facility Lease shall have theretofore
been declared to be in default, in which event such amount shall be disposed of
in accordance with the provisions hereof and of the Indenture.
(j) Assumption of Notes; Creation of Lien on Undivided
Interest. In connection with a declared Event of Loss, a declared Deemed Loss
Event or the exercise of the Cure Option, (i) the Lessee agrees to use its best
efforts to comply with the conditions respecting its assumption of all the
obligations and liabilities of the
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Owner Trustee under the Indenture and the Outstanding Notes set forth in Section
3.9(b) of the Indenture, and (ii) the Lessor agrees that, if the Lessee fails to
assume all the obligations and liabilities of the Owner Trustee under the
Indenture and the Outstanding Notes in accordance with Section 3.9(b) of the
Indenture, not later than two Business Days prior to the date on which the
Lessee is required to make the payments specified in Section 9(c), 9(d) or
16(e), the Lessor will cause the Undivided Interest and the Real Property
Interest to be subjected to the Lien of the Indenture by executing and
delivering to the Indenture Trustee the Undivided Interest Indenture Supplement.
SECTION 10. Insurance.
(a)Required Insurance. The Lessee will use its best efforts to
cause the Operating Agent to carry and maintain insurance required under the
ANPP Participation Agreement and will make all payments required of the Lessee
under the ANPP Participation Agreement in respect of such insurance. The Lessee
will at all times maintain, directly or through the Operating Agent, policies of
casualty and nuclear liability and other liability in5urance with respect to the
Undivided Interest and the Real Property Interest in such amounts and with such
coverage as shall be adequate in accordance with prudent utility practice. Any
policies of insurance in respect of destruction, damage, loss, theft or other
casualty to the Undivided Interest, the Real Property Interest, Unit 2, the
Caution Facilities or any part thereof shall name the Lessor (and, to the extent
practicable, the Owner Participant) as an additional insured, as its Interest
(or their interests) may appear, and any policies with respect to nuclear
liability insurance with respect to the Undivided Interest, the Real Property
Interest, Unit 2, the Common Facilities, or any part thereof, shall include all
Indemnitees as insureds, through an omnibus definition of "insureds" or through
endorsement; provided, however, that if the Operating Agent, as trustee, shall
become the loss payee under any policy of insurance constituting Project
Insurance, then the Lessor and the Owner Participant shall be and be made
beneficiaries of the trust arrangement under which the Operating Agent acts as
trustee. The Lessee shall, on or before March 1 of each year, commencing March
1, 1987, furnish to the Lessor and the Owner Participant (A) a report signed by
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the broker or brokers for the PVNGS insurance (or if insurance is placed
directly by the Operating Agent, by the Operating Agent) (i) showing the
insurance then maintained by the ANPP Participants with respect to PVNGS, (ii)
stating that no premiums are then delinquent, and (iii) stating that the
insurance maintained by the ANPP Participants with respect to PVNGS is in
accordance with the terms of (1) the ANPP Participation Agreement and (2) this
Section 10 (B) a report signed by the broker or brokers for the Lessees
insurance (or if insurance is placed directly by the Lessee, a certificate
signed by the Lessee) showing the separate insurance, if any, then maintained by
the Lessee with respect to its interest in PVNGS and stating that no premiums
under such insurance are delinquent; (C) a certificate signed by the Lessee
stating that the insurance maintained by the ANPP Participants and by the
Lessee, identified on the reports to be delivered pursuant to clauses (A) and
(B), is in accordance with prudent utility practice within the nuclear industry,
the ANPP Participation Agreement and this Section 10; and (0) upon the request
of the Lessor or the Owner Participant, copies (to the extent permitted by the
issuers of such policies) of policies so maintained. Any report by an insurance
broker with respect to clause (A) (iii) (1) may be made in reliance upon a
schedule provided by the Lessee (a copy of which shall be attached) identifying
the insurance (by coverage, limits, insureds and other pertinent details)
required to be maintained under the ANPP Participation Agreement. Any report
with respect to clause (A) (iii) (2) may be made in reliance upon a similar
schedule provided by the Lessee (a copy of which shall be attached) identifying
the insurance required to be maintained under this Section 10. All insurance
proceeds paid in respect of damage, destruction, loss, theft or other casualty
to the Undivided Interest or the Real Property Interest shall be applied as
provided in Section 9(g), (h) or (i), as the case may be, subject, however, to
any priority allocations of such proceeds to decontamination and debris removal
set forth in the insurance policies or required under Applicable Law. In the
event that either the Operating Agent or the Lessee delivers a certificate
pursuant to clause (A) or (B) above, the Owner Participant shall be entitled to
receive (if it so requests and if the insurer will issue the same) a report from
any insurer listed in such certificate.
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(b) Permitted Insurance. Nothing in this Section 10 shall
prohibit the Lessee from placing, at its expense, insurance on or with respect
to the cost of purchasing replacement power, naming the Lessee as insured and/or
loss payee, unless such insurance would conflict with or otherwise limit the
availability of insurance to be provided or maintained in accordance with
Section 10(a). Nothing in this Section 10 shall prohibit the Lessor or the Owner
Participant from placing at its expense other insurance on or with respect to
Unit 2, the Common Facilities, the Undivided Interest or the Real Property
Interest or the operation of Unit 2, naming the Lessor or the Owner Participant
as insured and/or loss payee, unless such insurance would conflict with or
otherwise limit the insurance to be provided or maintained in accordance with
Section 10(a).
SECTION 11. Rights to Assign or Sublease.
(a) Assignment or Sublease by the Lessee. Without the prior
written consent of the Lessor, the Lessee shall not encumber (except for
Permitted Liens), or assign, sublease or transfer its leasehold interest in the
Undivided Interest or the Real Property Interest under this Facility Lease,
except that the Lessee may assign its leasehold interest under this Facility
Lease in the Undivided Interest or the Real Property Interest to a wholly owned
subsidiary of the Lessee or of the Lessee's parent if such subsidiary's
obligations under this Facility Lease and any other Transaction Documents which
may be assumed by such subsidiary shall be guaranteed by the original Lessee
under this Facility Lease pursuant to a valid and enforceable guarantee
satisfactory in all respects to the Lessor and the Owner Participant. The Lessee
shall not, without the prior written consent of the Lessor and the Owner
Participant, part with the possession of, or suffer or allow to pass out of its
possession, the Undivided Interest, the Real Property Interest or any interest
therein, except to the extent required pursuant to the ANPP Participation
Agreement or expressly permitted by the provisions of this Facility Lease
(including, without limitation, the first sentence of this Section 11(a)), or
any other Transaction Document.
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(b) Assignment by Lessor as Security for Xxxxxx's Obligations.
To secure the indebtedness evidenced by the Notes, the Lessor will assign to the
Indenture Trustee (x) its right, title and interest to receive certain payments
of Rent (not including, in any event, Excepted Payments), to the extent provided
in the Indenture and (y) if and when required by Section 9(j), its right, title
and interest in the Undivided Interest and the Real Property Interest. The
Lessee hereby (a) consents to such assignment pursuant to clause (x) of the
first sentence of this paragraph (b) and the terms of the Indenture, (b) agrees
to pay directly to the Indenture Trustee at the Indenture Trustee's Office (50
long as the lien of the Indenture has not been satisfied and discharged and the
Lessor is obligated thereunder) all amounts of Rent (other than Excepted
Payments) due or to become due to the Lessor that shall be required to be paid
to the Indenture Trustee pursuant to the Indenture, Cc) agrees that the right of
the Indenture Trustee to any such payments shall be absolute and unconditional
and shall not be affected by any circumstances whatsoever, including, without
limitation, those circumstances set forth in Section 4, and (4) agrees that, to
the extent provided in the Indenture and until the Indenture is discharged in
accordance with its terms, the Indenture Trustee shall have all the right. of
the Lessor hereunder with respect to Assigned Payments as if the Indenture
Trustee had originally been named herein as the Lessor.
SECTION 12. Lease Renewal.
Subject to the notice requirements set forth in Section 13(a),
at the end of the Basic Lease Term, provided, that no Default or Event of
Default shall have occurred and be continuing hereunder, or Event of Loss or
Deemed Loss Event shall have occurred, and all Notes shall have been paid in
full, the Lessee shall have the right to renew the term of this Facility Lease
for a period commencing January 15, 2016, and ending on January 15, 2018 (the
Fixed Rate Renewal Term), during which period the Basic Rent payable shall be
the rental provided in Section 3(a)(iii).
SECTION 13. Notices for Renewal or Purchase; Purchase Options.
(a) Notice; Determination of Values; Appraisal Procedure. Not
later than (i) three years nor earlier than five years prior to the expiration
date of the Basic Lease Term or (ii) two years, six-months prior to the
expiration date of the Renewal Term, as the case may be, the Lessee shall give
to the Lessor written notice of its election either to (A) return the Undivided
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Interest and the Real Property Interest to the Lessor pursuant to Section 5 or
(B) (x) in the case of clause (i) above, (I) exercise the renewal option
permitted by Section 12 or (II) exercise the purchase option permitted by
Section 13(b) or (y) in the case of clause (ii) above, exercise such purchase
option. If the notice specified in clause (B) (x) of the preceding sentence is
given then not later than two years prior to the expiration date of the Basic
Lease Term the Lessee will give the Lessor written notice of its election either
to exercise the purchase option permitted by Section 13(b) or the renewal option
permitted by Section 12. Any such election shall be irrevocable as to the
Lessee, but no such election shall be binding on the Lessor if, on the effective
date thereof, an Event of Default shall have occurred and be continuing or an
Event of Loss or a Deemed Loss Event shall have occurred. Promptly after giving
notice pursuant to clause (B) (x) (II) or (B) (y) of the first sentence of this
Section 13(a), the Lessee and the Owner Participant shall agree upon the Fair
Market Sales value of the Undivided Interest and the Real Property Interest, or,
if within three months after the date of the Lessee's notice the Lessee and the
Owner Participant shall be unable so to agree, such values shall be determined
by the Appraisal Procedure.
(b) Purchase Option at Expiration of the Term Subject to the
notice requirements set forth in Section 13(a), unless an Event of Default shall
have occurred and be continuing, or an Event of Loss or a Deemed Loss Event
shall have been declared, on the date of the expiration of the Basic Lease Term
or the Renewal Term (if elected) the Lessee shall have the right to purchase the
Undivided Interest and the Real Property Interest for a purchase price equal to
the Fair Market Sales Value thereof.
(C) Special Purchase Event. If, or before the Refunding Date,
the Owner Participant shall reasonably determine (in consultation with Milbank,
Tweed, Xxxxxx & XxXxxx and Xxxxx, Dickason, Xxxxx, Xxxx & Xxxx, P.A.), or if the
Lessee, in its reasonable judgment, shall determine, that there is a material
risk that the Weighted Factor will exceed ll.25%, then, unless (subject to
Section 3(h) hereof in all events) by unilateral action of the Lessor the Basic
Rent shall have been reduced such that the Weighted Factor does not exceed
11.25%, the Lessee shall purchase the Undivided Interest and the Real Property
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Interest from the Lessor, on a Business Day specified by the Lessor to. the
Lessee by not less than 30 days (or, if there is a material risk that the
Weighted Factor will exceed 11.25% within a shorter period, a number of days one
day less than such shorter period) prior notice, for a purchase price equal to
the greater of (i) the Fair Market Sales Value thereof and (ii) Casualty Value
as of the Basic Rent Payment Date first preceding the date of such purchase or
as of the date of such purchase, if such date shall be a Basic Rent Payment
Date, plus, if such purchase date shall not be a Basic Rent Payment Date, a
proration of Basic Rent to the date of purchase.
(d) Purchase of the Undivided Interest; Payment, Etc. If the
Lessee shall have elected or be required to purchase the Undivided Interest and
the Real Property Interest pursuant to section 13(b) or 13(c), payment by the
Lessee of the purchase price for the Undivided Interest and the Real Property
Interest shall be made in immediately available fund., whereupon the Lessor
shall Transfer the Undivided Interest and the Real Property Interest to the
Lessee.
SECTION 14. Termination for Obsolescence.
(a) Termination Notice. Notwithstanding any provision herein
contained to the contrary, unless a Default or an Event of Default shall have
occurred and be continuing, or an Event of Loss or Deemed Loss Event shall have
occurred, the Lessee shall, if the Lessee's Board of Directors has adopted and
there is in effect on or after January 15, 1997 and on or prior to January 15,
2013 a resolution determining that Unit 2 is (A) uneconomic to the Lessee or (B)
economically obsolete for any reason, give prompt written notice (a Termination
Notice) to the Lessor, the Owner Participant and the Indenture Trustee (which
notice shall be irrevocable) of such resolution and shall terminate this
Facility Lease on the first Basic Rent Payment Date occurring after the later of
January 1, 1997 and the date of such resolution (the Termination Date). If the
Lessee shall give the Lessor a Termination Notice, the Lessee shall, as agent
for the Lessor, use its best efforts to obtain cash bids for the purchase of the
Undivided Interest and the Real Property Interest, together with the interest of
the Lessor under the Assignment and Assumption. The Lessor shall also have the
right to obtain such cash bids, either directly or through agents other than the
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Lessee. The Lessee shall certify to the Lessor within ten days after the
Lessee's receipt of each bid (and, in any event, prior to the Termination Date)
the amount and terms thereof and the name and address of the party (which shall
not be the Lessee or any Affiliate of the Lessee) submitting such bid.
(b) Right of Lessor to Retain Undivided Interest upon
Termination. The Lessor may elect to retain, rather than sell, the Undivided
Interest and the Real Property Interest by giving notice to the Lessee and the
Indenture Trustee prior to the Termination Date. It shall be a condition
precedent to the Lessor's right to retain the Undivided Interest and the Real
Property Interest that on or prior to the Termination Date the Lessor shall have
paid (or made provision for payment) to the Indenture Trustee, the unpaid
principal amount of all Notes Outstanding on such date and all premium, if any,
and interest accrued and unpaid on the date of payment. If the Lessor elects to
retain the Undivided Interest and the Real Property Interest pursuant to this
section L4(b), the Lessee shall pay to the Lessor on the Termination Date the
Basic Rent and any other Rent due or accrued, as the case may be, to and
including the Termination Date, together with an amount equal to the excess, if
any, of the Termination Value as of the Termination Date aver the highest bona
tide offer received pursuant to section 14(a).
(C) Events on the Termination Date. If the Lessor has not
elected to retain the Undivided Interest and the Real Property Interest as
provided in section 14(b), on the Termination Date the Lessor shall (upon
receipt of the sale price and all additional payments specified in the next
sentence) Transfer the Undivided Interest and the Real Property Interest for
cash to the bidder (which shall not be the Lessee or an Affiliate of the Lessee)
that shall have submitted the highest bid on or before the Termination Date. The
total sale price realized at such sale shall be retained by the Lessor (subject,
however, to the terms of the Indenture and the requirement that there shall have
been paid, or provision for payment made, to the Indenture Trustee the unpaid
principal amount of all Notes outstanding on the Termination Date and all
premium, if any, and interest accrued and unpaid on the date of payment) and, in
addition, on the Termination Date the Lessee shall pay to the Lessor (A) the
excess, if any, of the Termination Value as of the Termination Date over the net
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sale price of the Undivided Interest and the Real Property Interest and (B) any
Basic Rent due or accrued, as the case may be, to and including the Termination
Date and shall pay to the Person or Persons entitled thereto all Supplemental
Rent (other than Termination Value). Upon compliance by the Lessee with the
applicable provisions of this Section 14, the obligation of the Lessee to pay
Basic Rent due hereunder for any period after the Termination Date shall cease
and the Basic Lease Term shall end on the Termination Date; provided however,
that, in the event of termination of this Facility Lease pursuant to this
Section 14, the obligations of the Lessee under the ANPP Participation Agreement
(except as therein expressly provided in section 15.10 thereof) and the
Assignment and Assumption shall continue in full force and effect and shall not
be impaired by reason of any such termination. If, other than as a result of the
Lessor's election to retain the Undivided Interest and the Real Property
Interest as provided in section 14(b), on or as of the Termination Date no such
sale shall occur or the Lessee shall not have complied in full with this Section
14, this Facility Lease shall continue in full force and effect in accordance
with its terms without prejudice to the Lessee's right to exercise its rights
under this section 14 thereafter, except that the Lessee shall not be entitled
to deliver another Termination Notice during the 3-year period following such
Termination Date. The Lessor shall be under no duty to solicit bids, to inquire
into the efforts of the Lessee to obtain bids or otherwise take any action in
connection with any such sale other than, if the Lessor has not elected to
retain the Undivided Interest and the Real Property Interest, to Transfer the
Undivided Interest and the Real Property Interest to the purchaser named in the
highest bid certified by the Lessee to the Lessor or obtained by the Lessor,
against receipt of the payments provided for herein (but only if such purchaser
has obtained all requisite Governmental Action in connection therewith)
(d) Early Termination Notice. In the event that the Lessee
shall fail to exercise its renewal option or purchase option within the time
limit provided by Section 13(a), the Lessor shall have the option, on any Basic
Rent Payment Date thereafter, on at least 120 days prior written notice (an
Early Termination Notice) to the Lessee and the Indenture Trustee, to terminate
this Facility Lease on the Basic Rent Payment Date specified in such notice (the
Early Termination Date). Any Early Termination Notice may be revoked by the
Lessor at any time on or prior to the Early Termination Date.
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(e) Events on the Early Termination Date. On the Early
Termination Date the Lessor shall, at its option, (i) Transfer the Undivided
Interest and the Real Property Interest to the bidder (other than the Lessee or
any Affiliate of the Lessee) selected by the Lessor or (ii) retain the Undivided
Interest and the Real Property Interest. It shall be a condition precedent to
the Lessor's right to sell or retain the Undivided Interest and the Real
Property Interest that on or prior to the Early Termination Date the Lessor
shall have paid (or made provision for payment) to the Indenture Trustee on such
date the unpaid principal amount of all Notes outstanding on such date and all
premium, if any, and interest accrued and unpaid on the date of payment. The
total sale price realized at any such sale shall be retained by the Lessor and,
in addition, on the Early Termination Date the Lessee shall pay to the Lessor
any Basic Rent due or accrued, as the case may be, to and including the Early
Termination Date, and shall pay to the Person or Persons entitled thereto all
Supplemental Rent (other than Termination Value). Upon compliance by the Lessee
with the applicable provisions of this Section 14, the obligation of the Lessee
to pay Basic Rent due hereunder for any period after the Early Termination Date
shall cease and the Lease Term shall end on the Early Termination Date;
provided, however, that in the event of the termination of this Facility Lease
pursuant to this Section 14, the obligations of the Lessee under the ANPP
Participation Agreement (except as therein expressly provided in Section 15.10
thereof) and the Assignment and Assumption shall continue in full force and
effect and shall not be impaired by reason of any such termination.
SECTION 15. Events of Default.
The term Event of Default, wherever used herein, shall mean any
of the following events (whatever the reason for such Event of Default and
whether it shall be voluntary or involuntary, or come about or be effected by
operation of law, or be pursuant to or in compliance with any Applicable Law or
Governmental Action):
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(i) the Lessee shall fail to make, or cause to be made,
(x) payment of Casualty Value, Termination Value, Special
Casualty Value or payment due pursuant to exercise of the Cure
Option when due, (y) any payment of Basic Rent within S Business
Days after the same shall become due or (z) any payment of
Supplemental Rent (other than Casualty Value, Termination Value,
Special Casualty Value or payment due pursuant to exercise of
the Cure Option) within 20 days after the same shall become due
or demanded, as the case may be: or
(ii) the Lessee shall fail to perform or observe any
covenant, condition or agreement to be performed or observed by
it under Section 10(b) (3) (i) , 10(b) (3) (ii), 10(b) (3) (iii)
or 10(b) (3) (iv) of the Participation Agreement or section 7,
10 (other than failure of the Lessee to cause to be delivered
the insurance certificates (other than the Certificate of the
Lessee) described therein provided that the Owner Participant
shall have received within S Business Days after its request
therefor other confirmation reasonably satisfactory to it of the
existence in full force and effect of the insurance referred to
in Section 10), or it of this Facility Lease; or
(iii) the remaining Economic Useful Life of Unit 2, as
determined under Section 8(g) if required thereby to be so
determined, shall be (x) as of the date six months prior to the
end of the Basic Lease Term, less than five and one-half years
or (y) as of the date six months prior to the end of the Renewal
Term, three and one-half years: or
(iv) the Lessee shall fail to perform or observe any
covenant or agreement to be performed or observed by it under
Section 10(b) (3) (viii) of the Participation Agreement and such
failure shall continue for a period of 30 days after there shall
have been given to the Lessee by the Lessor or the Owner
Participant a notice specifying such failure and requiring it to
be remedied and stating that such notice is a "Notice of
Default" hereunder; or
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(v) the Lessee shall fail to perform its agreements set
forth in the first sentence of Section 5(a); or
(vi) the Lessee shall fail to perform or observe any
covenant, condition or agreement (other than those referred to
in clauses (i) through (v) above) to be performed or observed by
it under this Facility Lease or any other Transaction Document,
and such failure shall continue for a period of 30 days after
there shall have been given to the Lessee by the Lessor or the
Owner Participant a notice specifying such failure and requiring
it to be remedied and stating that such notice is a "Notice of
Default" hereunder: or
(vii) any representation or warranty made by the Lessee in
this Facility Lease, any other Transaction Document (other than
the Tax Indemnification Agreement) or any agreement, document or
certificate delivered by the Lessee in connection herewith or
therewith shall prove to have been incorrect in any material
respect when any such representation or warranty was made or
given and shall remain material and materially incorrect at the
time in question: or
(viii) the Lessee (which term shall include, for purposes
of this clause (viii) and clauses (ix), (x) and (xi) below, any
predecessor Lessee that guarantees the obligations of the Lessee
hereunder pursuant to Section 11(a) hereof) shall commence a
voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its
debts under any bankruptcy, insolvency or other similar law now
or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it
or any substantial part of its property, or shall consent to any
such relief or to the appointment of or taking of possession by
any such official in an involuntary case or other proceeding
commenced against it, or shall make a general assignment for the
benefit of creditors, or shall take any corporate action
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to authorize any of the foregoing; or an involuntary case or
other proceeding shall be commenced against the Lessee seeking
liquidation, reorganization or other relief with respect to it
or its debts under any bankruptcy, insolvency or other similar
law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property, and
such involuntary case or other proceeding shall remain
undismissed or unstayed for a period of 60 consecutive days; or
(ix) final judgment for the payment of money in excess of
$1,000,000 shall be rendered against the Lessee and the Lessee
shall not have discharged the same or provided for its discharge
in accordance with its terms or bonded the same or procured a
stay of execution thereof within 6O day. from the entry thereof:
or
(x) (1) a default by the Lessee under the ANPP
Participation Agreement in consequence of which the Lessee's
right to receive its Generation Entitlement Share in PVNGS is
suspended by the other ANPP Participants, or (2) the giving by
any ANPP Participant of a notice under Section 23.2 (or any
comparable successor provision) of the ANPP Participation
Agreement respecting a default thereunder by the Lessee and the
lapse of 20 Business Days from the giving of such notice without
the Lessee having cured such default: provided, however, that
for purposes of this clause (2) if the Lessee shall have in good
faith disputed the existence or nature of a default and such
dispute shall have become the subject of an arbitration under
Section 24 (or any comparable successor provision) of the ANPP
Participation Agreement, such 20 Business Day period shall
commence on the date of the final determination of the board of
arbitrators under such Section 24; or
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6091.XXXXXXX.1106.47:l
(xi) (1) the Lessee shall fail to pay when due (whether
by scheduled maturity, required prepayment, acceleration, demand
or otherwise) any Debt and such failure shall continue after the
applicable grace period, if any, specified in the agreement or
instrument relating to such Debt, but only if the Lessee shall
have received notice of such failure or a Responsible Officer of
the Lessee shall have actual knowledge of such failure; or (2)
any other default under any agreement or instrument relating to
any such Debt, or any other event, shall occur and shall
continue after the applicable grace period, if any, specified in
such agreement or instrument, if the effect of such default or
event is to accelerate, or to permit the acceleration of, the
maturity of such Debt, but only if the Lessee shall have
received notice of such default or event or a Responsible
officer of the Lessee shall have actual knowledge of such
default or event.
SECTION 16. Remedies.
(a) Remedies. Upon the occurrence of any Event of Default and so
long as the same shall be continuing, the Lessor may, at its option, declare
this Facility Lease to be in default by written notice to such effect given to
the Lessee, and may, except as hereinbelow expressly otherwise set forth,
exercise one or more of the following remedies as the Lessor in its sole
discretion shall elect:
(i) the Lessor may, by notice to the Lessee, rescind or
terminate this Facility Lease;
(ii) the Lessor may (x) demand that the Lessee, and
thereupon the Lessee shall, return possession of the Undivided
Interest and the Real Property Interest promptly to the Lessor
in the manner and condition required by, and otherwise in
accordance with the provisions of, this Facility Lease as if the
undivided Interest oand the Real Property Interest were being
returned at the end of the Lease Term and the Lessor shall not
be liable for the reimbursement of the Lessee for any costs and
expenses incurred by the Lessee in connection therewith and (y)
subject to Applicable Law, enter upon the PVNGS Site and take
immediate possession of (to the exclusion of the Lessee)
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6091.XXXXXXX.1106.47:l
the Undivided Interest and the Real Property Interest, by
summary proceedings or otherwise, all without liability to the
Lessee for or by reason of such entry or taking of possession,
whether for the restoration of damage to property caused by such
taking or otherwise:
(iii) the Lessor may sell the Undivided Interest and the
Real Property Interest, or any part thereof, together with any
interest of the Lessor under the Assignment and Assumption, at
public or private sale in a commercially reasonable manner, as
the Lessor may determine, free and clear of any rights of the
Lessee in the undivided Interest and the Real Property Interest
and without any duty to account to the Lessee with respect to
such action or inaction or any proceeds with respect thereto
(except to the extent required by clause (v) or (vi) below if
the Lessor shall elect to exercise its rights thereunder), in
which event the Lessee's obligation to pay Basic Rent hereunder
for periods commencing after the date of such sale shall be
terminated or proportionately reduced, as the case may be
(except to the extent that Basic Rent is to be included in
computations under clause (V) or (vi) below if the Lessor shall
elect to exercise its rights thereunder);
(iv) the Lessor may hold, keep idle or lease to others
all or any part of the Undivided Interest and the Real Property
Interest, as the Lessor in its sole discretion may determine,
free and clear of any rights of the Lessee and without any duty
to account to the Lessee with respect to such action or inaction
or for any proceeds with respect to such action or inaction,
except that the Lessee's obligation to pay Basic Rent for
periods commencing after the Lessee shall have been deprived of
use of the Undivided Interest and the Real Property Interest
pursuant to this clause (iv) shall be reduced by an amount equal
to the net proceeds, if any, received by the Lessor from leasing
the Undivided Interest and the Real Property Interest to any
Person other than the Lessee for the same periods or any portion
thereof;
-41-
6091.XXXXXXX.1106.47:l
(v) except in the case of an Event of Default specified
in clause (iii) or clause (v) of Section 15 (subject, however,
to the proviso to the first sentence of Section 16(c) hereof),
the Lessor may, whether or not the Lessor shall have exercised
or shall thereafter at any time exercise its rights under clause
(i), (ii), (iii) or (iv) above, demand, by written notice to the
Lessee specifying a payment date which shall be a Basic Rent
Payment Date not earlier than 10 days after the date of such
notice, that the Lessee pay to the Lessor, and the Lessee shall
pay to the Lessor, on the Basic Rent Payment Date specified in
such notice, as liquidated damages for loss of a bargain and not
as a penalty (in lieu of the Basic Rent due after the Basic Rent
Payment Date specified in such notice), any unpaid Rent due
through the Basic Rent Payment Date specified in such notice
plus whichever of the following amounts the Lessor, in its sole
discretion, shall specify in such notice (together with interest
on such amount at the interest rate specified in Section 3(b)
(iii) from the Basic Rent Payment Date specified in such notice
to the date of actual payment) (and, in the case of (D) below,
upon receipt of such payment the Lessor shall (or may prior to
the receipt of such payment) Transfer to the Lessee the
Undivided Interest and the Real Property Interest):
(A) an amount equal to the excess, if any, of
(1) Casualty Value, computed as of the Basic Rent
Payment Date specified in such notice, over (2) the
Fair Market Rental Value of the Undivided Interest and
the Real Property Interest (determined on the basis of
the then actual condition of Unit 2) until the end of
the remaining useful life of Unit 2, after discounting
such Fair Market Rental value semi-annually to present
value as of the Basic Rent Payment Date specified
in such notice at a rate of ; of per annum;
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6091.XXXXXXX.1106.47:1
(B) an amount equal to the excess, if any, of
(1) such Casualty Value over (2) the Fair Market Sales
Value of the Undivided Interest and the Real Property
Interest (determined on the basis of the then actual
condition of Unit 2) as of the Basic Rent Payment Date
specified in such notice;
(C ) an amount equal to the excess, if any, of
(1) the present value as of the Basic Rent Payment Date
specified in such notice of all installments of Basic
Rent until the end of the Basic Lease Term or the
Renewal Term, as the case may be, discounted
semi-annually at a rate of 10% per annum, over (2) the
present value as of such Basic Rent Payment Date of the
Fair Market Rental Value of the Undivided Interest and
the Real Property Interest (determined on the basis of
the then actual condition of Unit 2) until the end of
the Basic Lease Term or the Renewal Term, as the case
may be, discounted semi-annually at a rate of 10% per
annum; or
(D) an amount equal to higher of (1) the
Casualty Value, computed as of the Basic Rent Payment
Date specified in such notice or (2) the Fair Market
Sales Value of the Undivided Interest and the Real
Property Interest;
(vi) if the Lessor shall have sold all the Undivided
Interest and the Real Property Interest pursuant to clause (iii)
above, the Lessor, in lieu of exercising its rights under clause
(V) above with respect to the Undivided Interest and the Real
Property Interest may, if it shall so elect, but not in the case
of an Event of Default specified in clause (iii) or clause (v)
of Section 15 (except as provided in the proviso to the first
sentence of Section 16(c) hereof), demand that the Lessee pay to
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6091.XXXXXXX.1106.47:1
the Lessor and the Lessee shall pay to the Lessor on the date of
such sale, as liquidated damages for loss of a bargain and not
as a penalty (in lieu of Basic Rent due for periods commencing
after the next Basic Rent Payment Date following the date of
such sale), any unpaid Basic Rent due through such Basic Rent
Payment Date, plus the amount of any difference between the sale
Proceeds and Casualty Value, computed as of such Basic Rent
Payment Date, together with interest at the interest rate
specified in section 3(b) (iii) on the amount of such Rent and
such deficiency from the date of such sale until the date of
actual payment:
(vii) subject to section 5(b) hereof, in the case of an
Event of Default specified in clause (iii) or clause (v) of
Section 15, the Lessor may demand, by written notice to the
Lessee specifying a payment date which shall be, in the case of
an Event of Default specified in said clause (iii), the last
Basic Rent Payment Date of the Lease Term, or, in the case of an
Event of Default specified in said clause (V), the date thirty
day. after the last Basic Rent Payment Date, that the Lessee pay
to the Lessor, and the Lessee shall pay to the Lessor, on such
payment date, as liquidated damages for loss of a bargain and
not as a penalty, any unpaid Rent due through such Basic Rent
Payment Date plus an amount (not less than zero) equal to the
Fair Market Sales Value of the Undivided Interest and the Real
Property Interest determined as of such Basic Rent Payment Date
(together with interest on such amount at the interest rate
specified in section 3(b) (iii) from the payment date specified
in such notice to the date of actual payment) and upon receipt
of such payment the Lessor shall (and may prior to receipt of
such payment) Transfer to the Lessee the Undivided Interest and
the Real Property Interest.
(b) No Release. No rescission or termination of this Facility
Lease, in whole or in part, or repossession of the Undivided Interest or the
Real Property Interest or exercise of any remedy under paragraph (a) of this
Section 16 shall, except as specifically provided therein, relieve the Lessee of
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6O91.XXXXXXX.l1O6.47:l
any of its liabilities and obligations hereunder. In addition, the Lessee shall
be liable, except as otherwise provided above, for any and all unpaid Rent due
hereunder before, after or during the exercise of any of the foregoing remedies,
including all reasonable legal fees and other costs and expenses incurred by the
Lessor or the Owner Participant by reason of the occurrence of any Event of
Default or the exercise of the Lessor's remedies with respect thereto. At any
sale of the Undivided Interest, the Real Property Interest or any part thereof
pursuant to this section 16, the Owner Participant, the Lessor or the Indenture
Trustee may bid for and purchase such property.
(C) Remedies Cumulative. Except as expressly set forth therein,
no remedy under paragraph (a) of this section 16 is intended to be exclusive,
but each shall be cumulative and in addition to any other remedy provided under
such paragraph (a) or otherwise available to the Lessor at law or in equity;
provided, that if the Lessee is in default of its payment obligations under
Section 16(a)(vii), the Lessor may exercise its other remedies under section
16(a) (except that the maximum amount payable by the Lessee in the event of the
exercise by the Lessor of any of the remedies provided for in Section 16(a) (V)
or (vi) shall not exceed the total amount payable by the Lessee under Section
16(a) (vii) minus the amount provided in subclause (2) of clause (A), (B) or (C)
of such Section 16(a) (v), if the Lessor elects a remedy specified in said
clause (A), (B) or (C) , or the difference referred to in Section 16(a)(vi), if
the Lessor elects the remedy specified in section 16(a) (vi) hereof. No express
or implied waiver by the Lessor of any Default or Event of Default hereunder
shall in any way be, or be construed to be, a waiver of any future or subsequent
Default or Event of Default. The failure or delay of the Lessor in exercising
any right granted it hereunder upon any occurrence of any of the contingencies
set forth herein shall not constitute a waiver of any such right upon the
continuation or recurrence of any such contingencies or similar contingencies
and any single or partial exercise of any particular right by the Lessor shall
not exhaust the same or constitute a waiver of any other right provided herein.
To the extent permitted by Applicable Law, the Lessee hereby waives any rights
now or hereafter conferred by statute or otherwise which may require the Lessor
to sell, lease or otherwise use the Undivided Interest (including the related
Generation Entitlement Share) or Unit 2 in mitigation of the Lessor's damages as
set forth in paragraph (a) of this Section 16 or which may otherwise limit or
modify any of the Lessor's rights and remedies provided in this Section 16.
-45-
6091.XXXXXXX.1106.47:1
(d) Exercise at Other Rights or Remedies. In addition to all
other rights and remedies provided in this Section 16, the Lessor may, except to
the extent expressly limited by the provisions of this Section 16, exercise any
other right or remedy that may be available to it under Applicable Law or
proceed by appropriate court action to enforce the terms hereof or to recover
damage. for the breach hereof.
(e) Special Cure Right of Lessee. In the event a "Notice of
Default" is given under Section l5(iv), the Lessee may, on or prior to the
occurrence of an Event of Default resulting therefrom, give written notice to
the Lessor stating that the Lessee has elected to exercise the option (the Cure
Option) provided in this Section 16(e), which election shall be irrevocable as
to the Lessee. Promptly after the giving of such notice, the Lessee and the
Owner Participant shall agree upon the Fair Market Sales Value of the Undivided
Interest and. the Real Property Interest or, if they shall be unable so to agree
within one month after the date of the Lessee's notice, such value shall be
determined by the Appraisal Procedure; provided, however, that such Value, for
purposes of this paragraph (e), shall be determined on the assumption that the
purchaser shall be required to pay the full amount of the decommissioning cost
of the Undivided Interest. On the Basic Rent Payment Date next following the
date that such Fair Market Sales Value shall have been determined, the Lessee
shall pay to the Lessor all Rent due on such Basic Rent Payment Date, plus an
amount equal to the excess of (i) the greater of such Fair Market Sales Value
and the Casualty Value determined as of such Basic Rent Payment Date over (ii)
the unpaid principal amount of the Notes Outstanding on such date after giving
effect to the payment, if any, of the principal installment due and payable on
such date. Upon compliance in full by the Lessee with the foregoing provisions
of this paragraph (a) and assumption by the Lessee of all the obligations and
liabilities of the Owner Trustee under the Indenture and the Notes pursuant to
Section 3.9(b) of the Indenture, the Lessor shall Transfer the Undivided
Interest and the Real Property Interest to the Lessee. If the Lessee shall not
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609l.XXXXXXX.ll06.47:l
have assumed all the obligations and liabilities of the Owner Trustee under the
Indenture and the Notes in accordance With Section 3.9(b) of the Indenture, but
the Owner Participant shall have received under Section 5.2 of the Indenture all
amounts required to be paid by the Lessee pursuant to this paragraph (e)
(including interest, if any, thereon pursuant to Section 3(b) (iii)), the Lessor
shall retain the Undivided Interest and the Real Property Interest, subject to
the terms of this Facility Lease and Section 7(b) (4) of the Participation
Agreement: in which case, without further act an the part of the Lessor or the
Lessee, (i) the obligation of the Lessee to pay further Basic Rent shall be
reduced to an amount on each Basic Rent Payment Date equal to the aggregate
amount of principal, premium, if any, and accrued interest then payable on all
Notes then Outstanding and (ii) this Facility Lease shall become a security
agreement for all purposes of Applicable Law.
SECTION 17. Notices.
All communications and notices provided for in this Facility
Lease shall be in writing and shall be given in person or by means of telex,
telecopy, or other wire transmission, or mailed by registered or certified mail,
or delivered by express delivery service, addressed as provided in the
Participation Agreement. All such communications and notices given in such
manner shall be effective on the date of receipt of such communication or
notice.
SECTION 18. Successors and Assigns.
This Facility Lease, including all agreements, covenants,
indemnities, representations and warranties, shall be binding upon and inure to
the benefit of the Lessor and its successors and permitted assigns, and the
Lessee and its successors and, to the extent permitted hereby, assigns.
SECTION 19. Right to Perform for Lessee.
If the Lessee shall fail to make any payment of Rent to be made
by it, or shall fail to perform or comply with any of its other agreements
contained herein, or fail to make any payment to be made by it under any ANPP
Project Agreement, or shall fail to perform or comply with any of its other
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6091.XXXXXXX.ll06.47:1
agreements contained in any ANPP Project Agreement, either the Lessor or the
Owner Participant may, but shall not be obligated to (i) if permitted by
Applicable Law, tender such payment, or (ii) if permitted by Applicable Law and
the ANPP Project Agreements, effect such performance or compliance, and the
amount of such payment and the amount of all costs and expenses (including,
without limitation, attorneys' and other professionals' fees and expenses) of
the Lessor or the Owner Participant, as the case may be, incurred in connection
with such payment or the performance of or compliance with such agreement, as
the case may be, together with interest thereon at the Penalty Rate, shall be
deemed Supplemental Rent, payable by the Lessee upon demand. In the event that
the Lessor or the Owner Participant shall cure any default by the Lessee under
the ANPP Participation Agreement, then (so long as an Event of Default has
occurred and is continuing) the Lessor, together with each other Person
contributing to such cure, shall be entitled (to the full extent enforceable in
accordance with Applicable Law and the ANPP Project Agreements) to receive the
Generation Entitlement Share of the Lessee under the ANPP Participation
Agreement (not limited to Unit 2), with each contributor to such cure to receive
a percentage of such Generation Entitlement Share equal to the percentage of the
cure contributed thereby.
SECTION 20. Additional Covenants.
The Lessee agrees to comply with and to pay, as Supplemental
Rent, all amounts payable by it under the provisions of Section 13 of the
Participation Agreement and under the provisions of the Tax Indemnification
Agreement and to pay all amounts (if any) which are to be paid by the Lessee
under the terms of the Indenture, which provisions are incorporated herein by
this reference as fully as if set forth in full at this place. The Lessee agrees
to comply with its covenants and agreements set forth in Sections 7(b)(4),
10(b), 14 and 16 of the Participation Agreement and Articles III, IV, V and VI
of the Assignment and Assumption, which covenants and agreements are
incorporated herein by this reference as fully as if set forth in full at this
place.
-43-
6091.XXXXXXX.1106.47:1
SECTION 21. Lease of Real Property Interest.
Pursuant to the Deed and the Assignment of Beneficial Interest,
the Lessee has sold to the Lessor the Real Property Interest. The Lessor hereby
grants to the Lessee a leasehold Interest in the Real Property Interest, such
leasehold to be coterminous with the lease of the undivided Interest hereunder.
SECTION 22. Amendments and Miscellaneous.
(a) Amendments in writing. The terms of this Facility Lease may
not be waived, altered, modified, amended, supplemented or terminated in any
manner whatsoever except by written instrument signed by the Lessor and the
Lessee.
(b) Survival. (1) All indemnities, representations and
warranties contained in this Facility Lease and the other Transaction Documents
and the Financing Documents and in any agreement, document or certificate
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive, and continue in effect following, the execution and delivery of
this Facility Lease and the expiration or other termination of. this Facility
Lease.
(2) The obligations of the Lessee to pay Supplemental Rent and
the obligations of the Lessee under Sections 5, 16, 19 and 20 hereof shall
survive the expiration or termination of this Facility Lease. The extension of
any applicable statute of limitations by the Owner Trustee, the Indenture
Trustee, the Lessee, the Owner Participant, the Loan Participant or any
Indemnitee shall not affect such survival. The obligations of the Lessee under
section 20 are expressly made for the benefit of, and shall be enforceable by,
any Indemnitee, separately or together, without declaring this Facility Lease to
be in default and notwithstanding any assignment by the Lessor of this Facility
Lease or any of its rights thereunder or any disposition of all or any part of
any interest in the Undivided Interest, the Real Property Interest, Unit 2 or
any other property referred to in this Facility Lease or any other Transaction
Document or Financing Document. All payments required to be made pursuant to
Section 20 shall be made directly to, or as otherwise requested by, the
Indemnitee entitled thereto upon written demand by such Indernnitee.
-49-
6091.XXXXXXX.1106.47:1
(c) Severability of Provisions. Any provision of this Facility
Lease which may be determined by competent authority to be prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof or thereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by Applicable Law, the Lessee hereby waives any provision of law which renders
any provision hereof prohibited or unenforceable in any respect.
(d) True Lease. This Facility Lease is intended as and shall
constitute an agreement of lease and nothing herein or elsewhere contained shall
be construed as conveying to the Lessee any right, title or interest in or to
the Undivided Interest or the Real Property Interest, except as lessee only.
(e) Original Lease The single executed original of this
Facility Lease marked "THIS CONTERPART IS THE ORIGINAL COUNTERPART" and
containing the receipt of the Indenture Trustee thereon ohall be the "Original"
of this Facility Lease. To the extent that this Facility Lease constitutes
chattel paper, as such term is defined in the Uniform Commercial Code as in
effect in any applicable jurisdiction, no security interest in this Facility
Lease may be created through the transfer or possession of any counterpart other
than the "Original".
(f) Governing Law. This Facility Lease shall be governed by
and construed in accordance with the law of the state of New York, except to the
extent that pursuant to the law of the State of Arizona the law of the State of
Arizona is mandatorily applicable thereto.
(g) Headings. The division of this Facility Lease into sections,
the provision of a table of contents and the insertion of headings are for
convenience of reference only and shall not affect the construction or
interpretation of this Facility Lease.
-50-
6091. XXXXXXX. 1106.47:1
(h) Concerning the Owner Trustee. FNB is entering into this
Facility Lease solely as Owner Trustee under the Trust Agreement and not in its
individual capacity. Anything herein to the contrary notwithstanding, all and
each of the representations, warranties, undertakings and agreements herein made
on the part of the Owner Trustee are made and intended not as personal
representations, warranties, undertakings and agreements by or for the purpose
or with the intention of binding FNB personally but are made and intended for
the purpose of binding only the Trust Estate, and this Facility Lease is
executed and delivered by the Owner Trustee solely in the exercise of the powers
expressly conferred upon it as trustee under the Trust Agreement; and no
personal liability or responsibility is assumed hereunder by or shall at any
time be enforceable against FNB or any successor in trust or the Owner
Participant on account of any representation, warranty, undertaking or agreement
hereunder of the Owner Trustee, either expressed or implied, all such personal
liability, if any, being expressly waived by the Lessee, except that the Lessee
or any Person claiming by, through or under it, making claim hereunder, may look
to the Trust Estate for satisfaction of the same and the Owner Trustee or its
successor in trust, as applicable, shall be personally liable for its own gross
negligence or willful misconduct. If a successor owner trustee is appointed in
accordance with the terms of the Trust Agreement, such successor owner trustee
shall, without any further act, succeed to all the rights, duties, immunities
and obligations of the Owner Trustee hereunder and the predecessor owner trustee
shall be released from all further duties and obligations hereunder.
(i) Disclosure. Pursuant to Arizona Revised Statutes Section
33-401, the beneficiary of the Trust Agreement is Xxxxxxx Leasing Corporation, a
New York corporation, whose address is so 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 000 Xxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention of Corporate Trust Division.
(j) Counterpart Execution. This Facility Lease may be executed
in any number of counterparts and by each of the parties hereto or thereto on
separate counterparts, all such counterparts together constituting but one and
the same instrument.
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6091.XXXXXXX. 1106.47:1
IN WITNESS WHEREOF, each of the parties hereto has caused this
Facility Lease to be duly executed in New York, New York by an officer thereunto
duly authorized.
THE FIRST NATIONAL BANK OF
BOSTON, not in its individual capacity,
but solely as Owner Trustee under a
Trust Agreement dated as of
August 12, 1986, with
Xxxxxxx Leasing Corporation
By
--------------------------------
Assistant Vice President
PUBLIC SERVICE COMPANY OF NEW MEXICO
By
--------------------------------
Vice President, Revenue Management
6O9l.XXXXXXX.1106.47B:l
State of New York )
)ss:
County of New York )
The foregoing instrument was acknowledged before me this 17th
day of August, 1986, by X.X. XXXXXX, the Vice President, Revenue Management of
PUBLIC SERVICE CONPANY OF NEW MEXICO, a New Mexico corporation, on behalf of
said corporation.
---------------------------
Notary Public
Xxxxx X. Xxxxxx
Notary Public, State of New York
No. 00-0000000
Qualified In New York County
Commission Expires March 30, 1987
State of Rev York )
)ss:
County of New York )
The foregoing instrument was acknowledged before me this 17th
day of August, 1986, by X. .X.Xxxxx, an Assistant Vice President of THE FIRST
NATIONAL BANK OF BOSTON, a national banking association, on behalf of the
banking association as trustee under that certain Trust Agreement, dated as of
August 12, 1986, with Xxxxxxx Leasing Corporation.
---------------------------
Notary Public
Xxxxx X. Xxxxxx
Notary Public, State of New York
No. 00-0000000
Qualified In New York County
Commission Expires March 30, 1987
6091.XXXXXXX.1106.47B:1
SCHEDULE 1
to
AMENDMENT NO. 1
SCHEDULE OF CASUALTY VALUES
Basic Basic
Rent Rent
Payment Percentage of Payment Percentage of
Date Facility Cost Date Facility Cost
------- ------------- ------- -------------
7/15/1987 107.3214792 1/15/2005 68.4786850
1/15/1988 109.3866622 7/15/2005 65.9549845
7/15/1988 108.7324908 1/15/2006 63.6084475
1/15/1989 110.2890342 7/15/2006 61.2034113
7/15/1989 109.1565103 1/15/2007 58.7383750
1/15/1990 110.2811458 7/15/2007 56.2081600
7/15/1990 108.7437008 1/15/2008 53.5961840
1/15/1991 109.4409749 7/15/2008 50.9465850
7/15/1991 107.4430512 1/15/2009 48.4068189
1/15/1992 107.6449054 7/15/2009 46.0019776
7/15/1992 105.1184914 1/15/2010 43.8093499
1/15/1993 104.7898085 7/15/2010 41.8269965
7/15/1993 104.2034408 1/15/2011 40.1464641
1/15/1994 104.4621918 7/15/2011 38.7720939
7/15/1994 105.0746043 1/15/2012 37.4741344
1/15/1995 105.3313670 7/15/2012 36.0172097
7/15/1995 105.4258440 1/15/2013 34.4124193
1/15/1996 104.3460229 7/15/2013 32.5888575
7/15/1996 103.2076348 1/15/2014 30.5794579
1/15/1997 102.0075284 7/15/2014 28.3092521
7/15/1997 100.7423843 1/15/2015 25.8069882
1/15/1998 98.9769915 7/15/2015 22.9931020
7/15/1998 96.8379410 1/15/2016 20.0000000
1/15/1999 94.7183084
7/15/1999 92.3466042
1/15/2000 89.9930168
7/15/2000 87.3598679
1/15/2001 84.9164720
7/15/2001 83.2856328
1/15/2002 81.1200173
7/15/2002 79.4045153
1/15/2003 77.1226200
7/15/2003 75.3166896
1/15/2004 72.9124246
7/15/2004 71.0116226
Schedule 2
to
Lease
SCHEDULE OF SPECIAL CASUALTY VALUES
Percentage Percentage
Payment of Facility Payment of Facility
Date Cost Date Cost
------- ----------- ------- -----------
1986-Aug 102.1288350 Jul 107.9900354
Sep 103.551082 Aug 106.3566164
Oct 104.7577969 Sep 107.2079214
Nov 105.9690500 Oct 108.0387451
Dec 107.1890001 Nov 108.8729188
1987-Jan 104.7469334 Dec 109.7104940
Feb 105.8953117 1991-Jan 106.1221028
Mar 107.0514101 Feb 106.9356524
Apr 108.1807222 Mar 107.7523828
May 109.2806319 Apr 108.5615682
June 110.3875084 May 109.3499550
July 107.0603718 June 110.1411302
Aug 105.6584574 July 106.5057575
Sep 106.7443686 Aug 104.7904266
Oct 107.8004092 Sep 105.5587490
Nov 108.8628041 Oct 106.3059750
Dec 109.9316515 Nov 107.0554541
1988-Jan 106.5659987 Dec 107.8072206
Feb 107.6060402 1992-Jan 104.1319920
Mar 108.6522601 Feb 104.8572360
Apr 109.6884203 Mar 105.5845013
May 110.6998752 Apr 106.3032497
June 111.7170637 May 107.0033501
July 108.3047423 June 107.7050799
Aug 106.8162363 July 103.9820366
Sep 107.8143593 Aug 104.6586589
Oct 108.7874341 Sep 105.3366619
Nov 109.7657228 Oct 105.9957573
Dec 110.7493057 Nov 106.6559602
1989-Jan 107.3029779 Dec 107.3172872
Feb 108.2610033 1993-Jan 103.5533963
Mar 109.2240893 Feb 104.1884686
Apr 110.1786578 Mar 104.8243968
May 111.1134663 Apr 105.4521169
June 112.0529737 May 106.0605617
July 108.5676894 June 106.6694473
Aug 107.0049947 July 102.8524714
Sep 107.9279406 Aug 103.4335629
Oct 108.8309099 Sep 104.4997786
Nov 109.7381681 Oct 105.0764842
Dec 110.6497812 Nov 105.6532650
1990-Jan 107.1363037 Dec 106.8642699
Feb 108.0260386 1994-Jan 103.0346527
Mar 108.9199462 Feb 103.6028310
Apr 109.8071307 Mar 104.4553998
May 110.6740871 Apr 105.6489107
June 111.5448610 May 106.2173221
Schedule 2
to
Lease
SCHEDULE OF SPECIAL CASUALTY VALUES (Continued)
Percentage Percentage
Payment of Facility Payment of Facility
Date Cost Date Cost
------- ----------- ------- -----------
Jun 107.4102001 May 98.3566627
July 103.5719724 June 98.5366882
Aug 104.1313271 Jul 94.6108969
Sep 105.3057290 Aug 95.0805240
Oct 105.8652448 Sep 95.2326961
Nov 106.4248420 Oct 95.7025449
Dec 107.5978253 Nov 96.1725056
1995-Jan 103.7505297 Dec 96.3225100
Feb 104.3005918 1999-Jan 92.3853005
Mar 105.1260528 Feb 92.8385708
Apr 106.2796494 Mar 93.1561225
May 106.8299640 Apr 93.2768904
June 107.6204041 May 93.7328080
July 103.7635586 June 93.8524921
Aug 104.3038346 July 89.8985362
Sep 104.8441977 Aug 90.3393038
Oct 105.3846483 Sep 90.4281252
Nov 105.9251870 Oct 90.8691330
Dec 106.4658145 Nov 91.3102621
1996-Jan 102.5989118 Dec 91.3966737
Feb 103.1288819 2000-Jan 87.4275047
Mar 103.6589425 Feb 87.8526842
Apr 104.1890943 Mar 88.1248451
May 104.7193378 Apr 88.1788585
June 105.2496736 May 88.6044141
July 101.3721795 June 88.6572213
Aug 101.8912963 July 84.6720319
Sep 102.4105073 Aug 85.0807963
Oct 102.9298132 Sep 85.0994062
Nov 103.4492145 Oct 85.5084307
Dec 103.9687120 Nov 85.9175865
1997-Jan 100.0800638 Dec 85.9335180
Feb 100.3877511 2001-Jan 82.1020842
Mar 101.0955363 Feb 82.4951670
Apr 101.6034203 Mar 82.7186145
May 102.1114036 Apr 83.1119670
June 102.6194869 May 83.5181857
July 98.7190924 June 83.9247396
Aug 99.2147432 July 80.3579202
Sep 99.5644633 Aug 80.7448529
Oct 100.0603188 Sep 80.7128549
Nov 100.5562777 Oct 81.1000693
Dec 100.7636596 Nov 81.4874259
1998-Jan 96.8508951 Dec 81.8749247
Feb 97.3338705 2002-Jan 78.0511202
Mar 97.6923678 Feb 78.4253795
Apr 97.8733668 Mar 78.6152248
Schedule 2
to
Lease
SCHEDULE OF SPECIAL CASUALTY VALUES (Continued)
Percentage Percentage
Payment of Facility Payment of Facility
Date Cost Date Cost
------- ----------- ------- -----------
Apr 78.9897761 Mar 59.8452512
May 79.3779493 Apr 60.1390817
June 79.7664805 May 60.4501342
July 76.2061444 June 60.7617674
Aug 76.5739367 July 56.6826356
Sep 76.4988577 Aug 56.9579842
Oct 76.8669550 Sep 57.2335405
Nov 77.2352064 Oct 57.5266386
Dec 77.6036117 Nov 57.8202176
2003-Jan 73.7716915 Dec 58.1142829
Feb 74.1261158 2007-Jan 54.0165502
Mar 74.2855097 Feb 54.2784579
Apr 74.6402503 Mar 54.5405818
May 75.0093948 Apr 54.8105461
June 75.3789216 May 55.0987103
July 71.8254603 June 55.3874938
Aug 72.1730779 July 51.2861507
Sep 72.0525336 Aug 51.5366040
Oct 72.4004815 Sep 51.7872821
Nov 72.7485963 Oct 52.0564975
Dec 73.0968779 Nov 52.3262265
2004-Jan 69.2563525 Dec 52.5964750
Feb 69.5898695 2008-Jan 48.4746932
Mar 69.7172195 Feb 48.7144424
Apr 70.0510791 Mar 48.9545044
May 7034001690 Apr 49.2029319
June 70.7496674 May 49.4707190
July 67.2035191 June 49.7392476
Aug 67.5298725 July 45.6106931
Sep 67.3613448 Aug 45.8719451
Oct 67.6880560 Sep 46.1342662
Nov 68.0149478 Oct 46.4175034
Dec 68.3420203 Nov 46.7021465
2005-Jan 64.4924555 Dec 46.9882150
Feb 64.8039363 2009-Jan 42.8781341
Mar 64.8974848 Feb 43.1578937
Apr 65.2093366 Mar 43.4394544
May 65.5372924 Apr 43.7314754
June 65.8656845 May 44.0464023
July 61.08013766 June 44.3636692
Aug 62.1003736 July 40.2859016
Sep 62.3995624 Aug 40.5982101
Oct 62.7153385 Sep 40.9132931
Nov 63.0315647 Oct 41.2531699
Dec 63.3482461 Nov 41.5962444
2006-Jan 59.2725820 Dec 41.9425639
Feb 59.5588168 2010-Jan 37.8950478
Schedule 2
to
Lease
SCHEDULE OF SPECIAL CASUALTY VALUES (Continued)
Percentage Percentage
Payment of Facility Payment of Facility
Date Cost Date Cost
------- ----------- ------- -----------
Feb 38.2377974 2014-Jan 22.4047630
Mar 38.5842871 Feb 22.6613287
Apr 38.9441336 Mar 22.9213712
May 39.3311627 Apr 23.1965436
June 39.7226118 May 23.5015807
July 35.7216245 June 23.8108366
Aug 36.1113307 July 19.7486393
Sep 36.5060251 Aug 19.9665246
Oct 36.9301379 Sep 20.1872659
Nov 37.3597676 Oct 20.4370098
Dec 37.7949972 Nov 20.6900970
2011-Jan 33.8392989 Dec 20.9465759
Feb 34.2746875 2015-Jan 16.8307614
Mar 34.7163197 Feb 16.9941762
Apr 35.1748850 Mar 17.1595803
May 35.6657370 Apr 17.3386034
June 36.1636855 May 17.5459565
July 32.2888086 June 17.7559696
Aug 32.7192845 July 13.5929463
Sep 33.1560274 Aug 13.7083977
Oct 33.6251963 Sep 13.8250716
Nov 34.1012270 Oct 13.9690892
Dec 34.5842234 Nov 14.1147652
2012-Jan 30.6985566 Dec 14.2621213
Feb 31.0958065 2016-Jan 10.0000000
Mar 31.4987908
Apr 31.9191123
May 32.3716265
June 32.8307241
July 28.9207704
Aug 29.2933390
Sep 29.6712416
Oct 30.0806639
Nov 30.4959860
Dec 30.9172966
2013-Jan 26.9689514
Feb 27.3025146
Mar 27.6407882
Apr 27.9954449
May 28.3812389
June 28.7725446
July 24.7937101
Aug 25.0962920
Sep 25.4030845
Oct 25.7402557
Nov 26.0821678
Dec 26.4288911
Schedule 3
to
Lease
SCHEDULE OF TERMINATION VALUES
Basic Basic
Rent Percentage Rent Percentage
Payment of Facility Payment of Facility
Date Cost Date Cost
------- ----------- ------- -----------
7/15/1987 106.2908686 1/15/2005 64.3187250
1/15/1988 105.8330228 7/15/2005 61.6258250
7/15/1988 107.6163400 1/15/2006 59.1032129
1/15/1989 106.6463755 7/15/2006 56.5149370
7/15/1989 107.9477195 1/15/2007 53.8592081
1/15/1990 106.5420793 7/15/2007 51.1305447
7/15/1990 107.4345809 1/15/2008 48.3120487
1/15/1991 105.5974986 7/15/2008 45.4475301
7/15/1991 103.0252750 1/15/2009 42.6841030
1/15/1992 103.6003535 7/15/2009 40.0465039
7/15/1992 103.5830405 1/15/2010 37.6116513
1/15/1993 103.1919068 7/15/2010 41.8269965
7/15/1993 102.5405483 1/15/2011 40.1464641
1/15/1994 102.7316651 7/15/2011 38.7720939
7/15/1994 103.2736925 1/15/2012 37.4741344
1/15/1995 103.4572075 7/15/2012 36.0172097
7/15/1995 103.4754575 1/15/2013 34.4124193
1/15/1996 102.3163090 7/15/2013 32.5888575
7/15/1996 101.0953671 1/15/2014 30.5794579
1/15/1997 99.8093493 7/15/2014 28.3092521
7/15/1997 98.4547994 1/15/2015 25.8069882
1/15/1998 96.5933646 7/15/2015 22.9931020
7/15/1998 94.3604877 1/15/2016 20.0000000
1/15/1999 92.1400906
7/15/1999 89.6635235
1/15/2000 87.2008083
7/15/2000 84.4540929
1/15/2001 81.8925115
7/15/2001 80.1386799
1/15/2002 77.8450696
7/15/2002 75.9963669
1/15/2003 73.5758532
7/15/2003 71.6256665
1/15/2004 69.0712779
7/15/2004 67.0142464
SCHEDULE 4
to
FACLILITY LEASE
REAL ESTATE INTEREST DESCRIPTION
The Real Property Undivided Interest is a (i) 0.6548444%
undivided interest in the land described in I below, a (ii) 0.7555556% undivided
interest in the rights and interests described in II below, and (iii) a
0.7515556% undivided Interest in the right and interests described in III below.
I. PVNGS PLAHT SITE
PARCEL NO. 1: Lot Four (4); the Southwest quarter of the Northwest quarter; and
the West half of the Southwest quarter, all in Section Two (2), Township One (1)
South, Range Six (6) West of the Qua and Salt River Base and Meridian, Maricopa
County, Arizona.
PARCEL NO. 2: All of Section Three (3), Township One (1) South, Range Six (6)
West of the Gila and Salt River Base and Meridian, Maricopa County, Arizona.
PARCEL NO. 3: The East half of Section Four (4), Township One (1) South, Range
Six (6) West of the Gila and Salt River Base and Meridian, Maricopa County,
Arizona.
PARCEL NO. 4: The West half of Section Twenty-six (26), Township One (1) North,
Range Six (6) West of the Gila and Salt River Base and Meridian, Maricopa
County, Arizona.
PARCEL NO. 5: Section Twenty-seven (27), Township One (1) North, Range Six (6)
West of the Gila and Salt River Base and Meridian, Maricopa County, Arizona;
EXCEPT the Northwest quarter of Section 27.
PARCEL NO. 6: The Southeast quarter of Section Twenty-eight (28), Township One
(1) North, Range Six (6) West of the Gila and Salt River Base and Meridian,
Maricopa County, Arizona: EXCEPT 50% of~a11 oil, gas and other mineral deposits
and geothermal resources recovered from or developed on the property, as
reserved in instrument recorded May 10, 1974 in Docket 10647, page 136.
6091. XXXXXXX. 1106.47:1
PARCEL NO. 7: The East half of Section Thirty-three (33), Township One (1)
North, Range Six (6) West of the Gila and salt River Base and Meridian, Maricopa
County, Arizona.
PARCEL NO. 8: All of Section Thirty-four (34), Township One (1) North, Range Six
(6) West of the Gila and Salt River Base and Meridian, Maricopa County, Arizona.
PARCEL NO. 9: The West half of section Thirty-five (35), Township One (1) North,
Range Six (6) West of the Qua and Salt River Base and Meridian, Maricopa County,
Arizona.
PARCEL NO. 10: The Southeast quarter of Section Nine (9), Township One (1)
South, Range Six (6) West of the Gila and Salt River Base and Meridian, Maricopa
County, Arizona; EXCEPT the Northwest quarter thereof.
PARCEL NO. 11: All of Section Ten (10), Township One (1) South, Range Six (6)
West of the Gila and Salt River Base and Meridian, Maricopa County, Arizona;
EXCEPT the East half of the Southeast quarter thereof; and EXCEPT the North half
of the South half of the Northwest quarter of the Northwest quarter thereof.
PARCEL NO. 12: That part of the East half of the Southwest quarter of Section
Twenty-three (23), Township One (1) North, Range Six (6) West of the Gila and
Salt River Base and Meridian, Maricopa County, Arizona, more particularly
described as follows:
BEGINNING at the Southeast corner of the said East half of the Southwest quarter
of Section 23; thence West, an assumed bearing along the South line of the said
East half of the Southwest quarter of Section 23, for a distance of 762.04 feet;
thence North 0 degrees 03 minutes 39 seconds West; parallel to the East line of
the said East half of the Southwest quarter of Section 23, for a distance of
1946.46 feet to a point on the South right-of-way line of the 200 foot wide
HM5AYAMPA-5ALCME HIGHWAY, as recorded in Book 12 of Road Maps, page 82, Maricopa
County Recorder, Maricopa County, Arizona; thence continuing North 0 degrees 03
minutes 39 seconds West for a distance of 234.15 feet to a point on the North
right-of-way line of said highway; thence South 58 degrees 43 minutes 35 seconds
-2-
60911.XXXXXXX.1106.47:1
East, along aid North right-of-way line for a distance of 892.17 feet to a point
on the said East line of the East half of the Southwest quarter of Section 23;
thence South 0 degrees 03 minutes 39 seconds East, along said East line for a
distance of 234.15 feet to a point on the said South right-of-way line: thence
continuing South 0 degrees 03 minutes 39 seconds East for a distance of 1483.31
feet to the true point of beginning;
EXCEPT the East 305 feet of the South 305 feet thereof; and
EXCEPT one-half of the minerals and mineral rights and mineral
estates of every kind and nature, as set forth in Deed recorded in
Docket 11652, page 53, Maricopa County Records.
PARCEL NO. 13: The North half of the South half of the Northwest quarter of the
Northwest quarter of Section Ten (10), Township One (1) South, Range Six (6)
West of the Gila and Salt River Base and Meridian, Maricopa County, Arizona.
II. HASSAYAMPA PUMPING STATION AND EFFLUENT PIPELINE
All real property, leases, licenses, easements, rights-of-way
and other property held by Title USA Company of Arizona Trust NO. 530
established by that certain Trust Agreement dated October 15, 1975, as amended,
but excluding therefrom all improvements.
III. MISCELLANEOUS REAL PROPERTY INTERESTS
Those ANPP Project Agreements (as defined in the ANPP
Participation Agreement), in addition to the Trust Agreement for Title USA
Company of Arizona Trust 530, consisting of leases, licenses, easements, and
permits, which provide land and land rights for (a) the pipeline to supply waste
water effluent to PVNGS from the 91st Avenue sewage treatment plant serving the
Phoenix Metropolitan area and (b) railroad access to the Nuclear Plant Site (as
defined in the ANPP Participation Agreement).
-3-
6091.XXXXXXX.1106.47:l
SCHEDULE 5
to
FACILITY LEASE
UNDIVIDED Interest DESCRIPTION
The Undivided interest is (i) a 2.2666667% undivided interest
in and to the property described under A below and (ii) a 0.7555556% undivided
interest in and to the property described in B below.
A. Unit 2 of the Palo Verde Nuclear Generating Station
(PNVGS), located in Maricopa County, Arizona, approximately 55 miles west of the
City of Phoenix, Arizona, and approximately 16 miles west of the City of
Buckeye, Arizona, consisting of:
I. Unit 2 Combustion Engineering "System 80" pressurized
water reactor nuclear steam supply system (the MISS). The NO
is comprised of a reactor vessel containing 241 fuel
assemblies with approximately 100 tons of enriched uranium
(fuel assemblies, however, are not part of Unit 2 and are
not included in the Undivided Interest being sold), two
steam generators, four reactor coolant pumps and various
additional systems and subsystems. The licensed thermal
rating of the NSSS is 3800 MW.
II. Unit 2 GE TCEF-43, 1800 RPM tandem-compound, six flow,
reheat turbine-generator including turbine, generator,
moisture separator-reheater, exciter, controls, and
auxiliary subsystems. The turbine-generator is conductor
cooled and rated at 1,554 DWA at 24,000 V, 3 phase, 60 HZ,
1.5 in Hg ASS back pressure, and approximately 1,363 MW
maximum gross electric output.
III. Unit 2 146 ft. inside diameter, steel-lined,
prestressed concrete cylindrical containment building with a
hemispherical dome designed for 60 psig. The containment
building houses the reactor system.
psig. The containment building houses the reactor system.
6091.XXXXXXX.1106.47:1
IV. Unit 2 auxiliary systems and equipment including
engineered safeguards systems, reactor auxiliary systems
and turbine-generator auxiliary Systems associated with
items I, II, and III above, extending to and including the
Unit 2 start-up transformer.
V. Unit 2 cooling tower system consisting of three (3)
mechanical draft cooling towers, including a closed cycle
circulating water system, make-up water systems and
essential spray ponds.
VI. Unit 2 radioactive waste treatment system, including
liquid, gaseous, and solid waste subsystems, controls,
instrumentation, storage, handling and shipment facilities.
VII. Unit 2 emergency diesel-generator system, including a
diesel-generator building which contains two diesel
generators, fuel oil systems, storage tanks, control and
instrumentation systems and otner equipment.
VIII. Unit 2 internal communication systems, including
associated interconnections and computer data links.
BUT EXCLUDING:
I. Nuclear fuel for Unit 2, including spare fuel assemblies.
II. Spare Parts (Unit 2)
III. Transmission facilities (including any and all facilities
and equipment providing interconnection between the Unit 2
turbine generator and the ANPP High Voltage Switchyard,
including step-up transformers and standby equipment and
Systems).
-2-
6091.XXXXXXX.1106.47:1
IV. Oil and diesel fuel inventories (Unit 2)
B. All PVNGS common facilities, INCLUDING BUT NOT LIMITED TO:
I. Surveillance systems, including associated radioactive
monitoring systems and equipment.
II. Water treatment facilities and transport systems forsupply
of waste water effluent.
BUT EXCLUDING:
I. Nuclear fuel, including spare fuel assemblies.
II. All transmission and ANPP High Voltage
Switchyard facilities.
III Administration Building.
IV. Administration Annex Building.
V. Technical Support Center.
VI. Visitor Center.
VII. External communication systems and equipment, including
associated interconnections and computer data links.
VIII. Parking lot improvements, road improvements, fencing and
dikes.
IX. Spare parts (common facilities).
X. Simulator.
XI. Oil and diesel fuel inventories.
XII. Real property, beneficial interest in Title USA Company of
Arizona Trust No. 530, and Project Agreement interests
described in Schedule 4.
XIII. Warehouse.
-3-
6091.XXXXXXX.1106.47:1
Appendix A.
DEFINITION OF TERMS
The terms defined herein relate to the participation Agreement
(as defined below) and certain Transaction Documents executed, 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", "herein", "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 Bards 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.XXXXXXX.1106.47:1
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.
-2-
609l.XXXXXXX.ll06.55:l
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 owner-ship, construction, operation and
maintenance of which are governed by the AN?? High Voltage switchyard
Participation Agreement executed as of August 20, 1921 (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 laws, 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
-3-
6091.XXXXXXX.1106.47:1
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 5 shall 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.
-4-
6091.XXXXXXX.1106.47:1
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 Tern 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.
-5-
6091.XXXXXXX.1106.55:1
Bonds shall mean all bonds, notes and other evidences of
indebtedness from time to time issued and outstanding under the Collateral Trust
rndenture, 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 capital ized, 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 corrurencement
of the itenewal Term over the period from such commencemant 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),
-6-
6091.XXXXXXX.llO6.55:l
a 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.
Change in Tax raw 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 Ci) 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 law, 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 PNN as the chief financial officer of PNM.
Claim 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.XXXXXXX.1106.47:1
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 rtem 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 sarnings (before
taxes and excluding allowance for funds used during construction) of the
-8-
6091. XXXXXXX. 1106.55:1
Surviving Lessee for a twelve-month period ending no earlier than 135 days prior
to the date of such transaction, and Cy) such denominator.
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 ot produced incident to the p05session 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 p05sess 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
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6091.XXXXXXX.1106.47:1
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.
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) dr the lease of
the Undivided Interest or the Real Property rnterest 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
Cl), such Deemed Loss Event shall be deemed not to have occurred so long
as (i) such contest does not involve ariy danger of the foreclosure,
sale, forfeiture or loss of, or the creation of any Lien
-10-
6091.XXXXXXX.1106.47:1
on, the Undivided Interest, the Real property rnterest 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
rnterest 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) Xxxxx-Xxxxxxxx Act Change. If there shall be, at any time
during the Lease Term, any change in the xxxxx-Xxxxxxxx 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 xxxxx-Xxxxxxxx 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
xxxxx-Xxxxxxxx Act) exceeds the amount of financial protection
established by the NRC as a condition to the License, unless the change
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6091.XXXXXXX.1106.47:1
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 Zncident,
(iii) the amount of financial protection required, including but flat
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 sub-sequent 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 Cx) 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
Event9' 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;
-12-
6091. XXXXXXX. 1106.55:1
(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 ANPF
Participation Agreement) or ~ecommissioning 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 Transaction 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 XXX 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
manner which may expose the owner Trustee or
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6091.XXXXXXX.1106.47:1
the Owner Participant, either during or subsequent to the Lease Term1
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, urdess 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
exposed1 either during or subsequent to the Lease Term, to any
increased real or potential liability in respect of a Nuclear rncident
as a consequence of such suapenston, 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 Tru5tee 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 l4Cd) 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 ci) and Cii) below cease to
-14-
6091.XXXXXXX.1106.47:1
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 f6r the generation of electric pdwer'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); (g) 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
amount of electric power and energy equivalent to the generating
-15-
6O9l.XXXXXXX. 1106.55:1
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 S h a 1 1 h ave 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 (a) 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
br 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
-16-
6091. XXXXXXX. 1106.55:1
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 self-insured) 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 Tuust 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 hereof, 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: "any event causing a discharge or dispersal of source, special
nuclear, or byproduct material from its intended place of confinement in amounts
offaite, 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 off-site 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
determination shall be made. As used in this subsection, 'offsite' means away
fron 'the location' or 'the contract location' as defined in the applicable
Commission indemnity agreement, enterea into pursuant to section 2210 of this
title."
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6091. XXXXXXX. 1106.55:1
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 Xxxxxx, and the owner Trustee, as Lessor.
Fair Market Rental value or Fair Market Sale' 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 selt), 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 Lease,
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.XXXXXXX.1106.47:1
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. section 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 (3) 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 e however, this subsection (B) shall not
apply in respect of a Nuclear Incident arising solely from a fuel handling
accident; or
-l9-
6091. BURNMAM. 1106.55:1
(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 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 PYNGS Site
or (B) a discharge or dispersal of Source, special Nuclear or Byproduct Material
from its intended place of confinement in amounts of f 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 priot to
the day sixty calendar months after the date of such agreement and (B)
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6091.XXXXXXX.1106.47:1
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 Xxxx 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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6091. XXXXXXX. 1106.55:1
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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6091.XXXXXXX.1106.47:1
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 ANYP 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 iri 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 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, 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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6091. XXXXXXX. 1106.55:1
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 Xxxx shall mean the nonrecourse promissory
note,. 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 set 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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6091. XXXXXXX. 1106.55:1
Lessee shall mean Public Service Company of New Mexico, a flew
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 1055 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
Xxxxx 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, niB 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-5l,
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.
-25-
EQgl.XXXXXXX. 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 S h a 1 1 m a a n (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 Xxxxxxxx, APS and Salt River, dated June 12, 1981, as
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6091.XXXXXXX. 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 An, 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 Cy) (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) times (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 economWc yield
and periodic after-tax cash flows (after all Federal, state and local taxes) and
the periodic return on investment and the timing of tecognition 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 cojnputation 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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6091.XXXXXXX. 1106.55:1
Net Worth means the excess of assets over liabilities
determined by the Lesseets 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, l986 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 s h a 1 1 m e a n (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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6091. XXXXXXX. 1106.55:1
Notice of Closing shall have the meaning set forth in Section
5(a) of the Participation Agreement.
NRC shall mean the Nuclear Regulatory Commissiofl 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 rx 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. XXXXXXX. 1106.55:1
Officers' Certificate Shall m e a n 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 contaming 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 theretofare 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
pledge. 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 Cd) Notes in exchange for, or in lieu of,
which other Notes have been issued, authenticated and delivered pursuant to the
rndenture; 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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6091.XXXXXXX.1106.47:1
Owner Participant shall mean Xxxxxxx 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 bf 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 Sank 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 Aqrecment 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
interests 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. XXXXXXX. 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', workmen'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) xxxxxx 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) xxxxxx 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 ANFP participation Agreement.
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6091.XXXXXXX.1106.47:1
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.
PNM shall mean Public Service Company of New Mexico, a New
Mexico corporation.
Xxxxx-Xxxxxxxx Act shall mean the xxxxx-Xxxxxxxx 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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6091.XXXXXXX. 1106.55:1
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 rnterest shall mean the right, title and
interest of the Owner Trustee acquired pursuant to the Deed and the Assignment
of Beneficial rnterest.
Reasonable Basis for a pcsition 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 19865, issued, authenticated and delivered under the Collateral
Trust rndenture, 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 Sand
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-fl, 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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6091.XXXXXXX.llO6.55:1
Regulations shall mean the income tax regulations issued,
published or promulgated under the Code.
Releveraging Amount shall (i) mean the mitial 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 Bands 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 roan 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. Rent shall mean Basic Rent
and Supplemental.
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6091.XXXXXXX.1106.47:1
Rent Differential shall have the meaning set forth in Section
3(h) of the Facility Lease.
Requisition of Title shall mean any circumstance 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 Urn 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 President, 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.
-36-
6091.XXXXXXX.1106.47:1
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 improvements
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.
-37-
6091. XXXXXXX. 1106.55:1
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.
-38-
6091.XXXXXXX.1l06.55:l
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 Leessee 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, documentation, 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, tines, 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 Agreemant 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 Indentre shall mean the Series 19868
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.
-39-
6091. XXXXXXX. 1106.55:1
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 ANPP 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
-40-
6091.XXXXXXX.1106.47:1
and warranties in a 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 Agrement shall mean the Trust Agreement, dated as of
August 12, 1986, between Xxxxxxx 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, casts, 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.
-41-
6091.XXXXXXX.1l06.55:l
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 Xxxxxx Facilities. Where the
context so requires, the Undivided Interest includes the related Generation
Entitlement Share.
Undivided Interest Indenture Supplment 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
ot the Federal Power Act (Class A and Class B), 18 CER 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.
-42-
6091. BURNMAM. 1106.55:1
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 Stem A of Exhibit B to the Bill of Sale and (ii) all
equipment and personal and real property constituting PVNOS common facilities
under the ANPP Participatipn Agreement but excluded from the Common Facilities
as set forth in Stem B of Exhibit a 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 Snterest 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 SIC 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 PUn pursuant to the authority granted by the NMPSC Order) Ci) as such
percentage rates may be adjusted from time to time pursuant to the terms of the
Facility Lease and the rrc Leases or the Non-STC 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 rrc 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.
-43-
6091.XXXXXXX.1106.47:1
When Recorded, Return to: Xxxx X. Xxxxxxx
Xxxxx & Xxxxxx
0000 Xxxxxx Xxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
CERTAIN RIGHTS OF THE LESSOR UNDER THE FACILITY LEASE AS AMENDED BY THIS
AMENDMENT NO. 1 THERETO HAVE BEEN ASSIGNED TO, AND ARE SUBJECT TO A SECURITY
INTEREST IN FAVOR OF, CHEMICAL BANK, AS INDENTURE TRUSTEE UNDER A TRUST'
INDENTURE, MORTGAGE, SECURITY AGREEMENT AND ASSIGNMENT OR RENTS DATED AS OF
AUGUST 12, 1986, AS AMENDED. THIS AMENDMENT NO.1 HAS BEEN EXECUTED IN SEVERAL
COUNTERPARTS. SEE SECTION 3(f) OF THIS AMENDMENT NO. 1 FOR INFORMATION
CONCERNING THE RIGHTS OF HOLDERS OF VARIOUS COUNTERPARTS HEREOF.
THIS COUNTERPART IS NOT THE ORIGINAL COUNTERPART.
================================================================================
AMENDMENT NO.1
Dated as of November 18, 1986
to
FACILITY LEASE
Dated as of August 12, 1986
between
THE FIRST NATIONAL BANK OF BOSTON
not in its individual capacity,
but solely as Owner Trustee
under a Trust Agreement, dated as
of August 12, 1986 with Xxxxxxx
Leasing Corporation
Lessor
and
PUBLIC SERVICE COMPANY OF NEW MEXICO,
Lessee
================================================================================
Original Facility Lease Recorded on August 18, 1986,
as Instrument No. 86-439392 in Maricopa County
Recorder's Office.
================================================================================
6O91.XXXXXXX.DEBT.146:1
AMENDMENT NO. 1, dated as of November 18, 1986 (Amendment No.
1), to the Facility Lease dated as of August 12, 1986 between THE FIRST NATIONAL
BANK OF BOSTON, a national banking association, not in its individual capacity,
but solely as Owner Trustee under a Trust Agreement, dated as of August 12,
1986, with Xxxxxxx Leasing Corporation, a New York corporation (the Lessor), and
PUBLIC SERVICE COMPANY OF NEW MEXICO, a New Mexico corporation (the Lessee).
WITNESSETH:
WHEREAS, the Lessee and the Lessor have heretofore entered
into a Facility Lease dated as of August 12, 1986 (the Facility Lease),
providing for the lease by the Lessor to the Lessee of the Undivided Interest
and the Real Property Interest;
WHEREAS, Section 3(e) of the Facility Lease provides for an
adjustment to Basic Rent and to the schedules of Casualty Values, Special
Casualty Values and Termination Values in the event, among other things, of the
refunding (by issuance of the Fixed Rate Notes) of the Initial Series Note;
WHEREAS, the Fixed Rate Notes are being issued pursuant to
Supplemental Indenture No. 1, dated as of November 18, 1986, to the Indenture;
WHEREAS, Section 3(d) of the Facility Lease provides for an
adjustment to Basic Rent and to the schedules of Casualty Values, Special
Casualty Values and Termination Values in the event of a Change in Tax Law; and
WHEREAS, a Change in Tax Law has occurred;
NOW, THEREFORE, in consideration of the premises and of other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. Definitions.
For purposes hereof, capitalized terms used herein and not
otherwise defined herein or in the recitals shall have the meanings assigned to
such terms in Appendix A to the Facility Lease.
6091.XXXXXXX.DEBT.146:l
SECTION 2. Amendments.
(a) Section 3(a)(i) of the Facility Lease is amended to read
in its entirety as follows:
"(i) on January 15, 1987, an amount equal to .024553111% of Facility
Cost times the actual number of days from and including August 18, 1986
to, but excluding, January 15, 1987, plus or minus the Rent
Differential, if any, referred to in Section 3(h);"
(b) (1) Section 3(a)(ii) of the Facility Lease is amended to
read in its entirety as follows:
"(ii) on July 15, 1987 and on each Basic Rent Payment Date thereafter to
and including January 15, 2016, an amount equal to 4.4195600% of
Facility Cost;".
(2) Section 3(a) (iii) is amended to delete from the
parenthetical contained therein the phrase "and any increases and decreases
pursuant to Section 3(h)".
(c) Section 3 (e) (iii) of the Facility Lease is hereby
amended to replace "0.8% of Facility Cost" with "1.3% of Facility Cost". Section
3(e) (iv) is hereby amended to insert (x) "(other than a change in items 4, 9
(as to the basis for amortization of Transaction Expenses), 15, 17 and 19, but
without limiting the effect of Section 3(d) hereof)" immediately following the
word "change" and (y) the word "Current" before the phrase "Pricing
Assumptions." Section 3(e) of the Facility Lease is hereby further amended to
insert at the end thereof the following new sentence: "Current Pricing
Assumptions shall mean the assumptions attached to the letter from the Lessee to
the Owner Participant dated November 25, 1986, as such letter may be replaced
from time to time with the written consent of the Owner Participant."
(d) Schedule 1 to the Facility Lease (Schedule of Casualty
Values) is hereby replaced with Schedule 1 hereto.
(e) Schedule 2 to the Facility Lease (Schedule of Special
Casualty Values) is hereby replaced with Schedule 2 hereto.
-2-
6091.XXXXXXX.DEBT.146:l
(f) Schedule 3 to the Facility Lease (Schedule of Termination
Values) is hereby replaced with Schedule 3 hereto.
(g) Section 3(h) of the Facility Lease is hereby amended to
read in its entirety as follows:
"(h) Rent Differential. The installment of Basic Rent due January 15,
1987 shall be increased or decreased, as the case may be, by the Rent
Differential. For purposes hereof, Rent Differential shall mean the
difference between (i) the aggregate amount of interest paid or payable
on the Initial Series Notes on or before November 25, 1986 and (ii) the
aggregate amount of interest that would have been paid on such Initial
Series Notes if such Notes had at all times from the date of issuance
thereof to November 25, 1986 borne interest at a rate equal to 7.54978%
per annum (computed on the basis of a 360-day year of twelve 30-day
months). If (A) the amount determined in accordance with clause (i) of
the immediately preceding sentence shall be greater than the amount
determined in accordance with clause (ii) of such sentence, the amount
of Basic Rent due on January 15, 1987 shall be increased by the Rent
Differential, and (B) the amount determined in accordance with such
clause (ii) shall exceed the amount determined in accordance with such
clause (i), the amount of Basic Rent due on January 15, 1987 shall be
decreased by the Rent Differential."
(h) (1) The second sentence of Section 9(d) is hereby amended
to read in its entirety as follows:
"On the fifteenth day of the month during which a Deemed Loss
Event shall have occurred (or, if such Deemed Loss Event shall occur
after the fifteenth day of such month, the fifteenth day of the next
following month), the Lessee shall pay to the Lessor an amount equal to
the excess of (i) Special Casualty Value determined as of the date such
payment is due over (ii) the principal amount of the Notes Outstanding
on such date after giving effect to the payment, if any, of the
principal installment due and payable on such day."
-3-
6091.XXXXXXX.DEBT.146:l
(2) The following new sentence is hereby inserted immediately following
the second sentence of Section 9(d), as amended by the preceding paragraph (1):
"If such fifteenth day is a Basic Rent Payment Date, the portion of such
amount equal to Basic Rent otherwise due on such date shall be deemed to be
an installment of Basic Rent for all purposes hereof and of Sections 5.1
and 5.2 of the Indenture."
SECTION 3. Miscellaneous.
(a) Partial Prepayment of Rent. In accordance with the last sentence of
Section 3(a) of the Facility Lease, the Lessee shall pay an amount equal to
$1,512,636.49 on November 25, 1986, such amount (i) being equal to the interest
payment due on the Initial Series note on such date and (ii) to be credited
against Basic Rent due on January 15, 1987.
(b) Effective Date of Amendments. The amendments set forth in Section 2
hereof shall be and become effective upon the execution hereof by the parties
hereto.
(c) Counterpart Execution. This Amendment No. 1 may be executed in any
number of counterparts and by each of the parties hereto on separate
counterparts; all such counterparts shall together constitute but one and the
same instrument.
(d) Governing Law. This Amendment No. 1 has been negotiated and
delivered in the State of New York and shall be governed by, and be construed in
accordance with, the laws of the State of New York, except to the extent that
pursuant to the law of the State of Arizona such law is mandatorily applicable
hereto,
(e) Disclosure. Pursuant to Arizona Revised Statutes Section 33-401,
the beneficiary of the Trust Agreement is Xxxxxxx Leasing Corporation, a New
York corporation. The address of the beneficiary is 00 Xxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Assistant Treasurer. A copy of the Trust Agreement is
available for inspection at the offices of the Owner Trustee at 000 Xxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention of Corporate Trust Division.
-4-
609l.XXXXXXX.DEBT.146:l
(f) Amendment No. 1. The single executed original of this Amendment No.
1 marked "THIS COUNTERPART IS. THE ORIGINAL COUNTERPART" and containing the
receipt of the Indenture Trustee thereon shall be the "Original" of this
Amendment No. 1. To the extent that this Amendment No. 1 constitutes chattel
paper, as such term is defined in the Uniform Commercial Code as in effect in
any applicable jurisdiction, no security interest in this Amendment No. 1 may be
created or continued through the transfer or possession of any counterpart other
than the "Original".
-5-
6091.XXXXXXX.DEBT. 146:1
IN WITNESS WHEREOF, each of the parties hereto has caused this
Amendment No. 1 to Facility Lease to be duly executed in New York, New York by
an officer thereunto duly authorized.
THE FIRST NATIONAL BANK OF BOSTON,
not in its individual capacity,
but solely as Owner Trustee
under a Trust Agreement, dated
as of August 12, 1986, with
Xxxxxxx Leasing Corporation
By
--------------------------------
Assistant Vice President
PUBLIC SERVICE COMPANY OF NEW MEXICO,
By /s/ X. X. Xxxxxx
--------------------------------
Vice President and Corporate
Controller
-6-
6091.XXXXXXX.DEBT.146:l
State of New York )
) ss:
County of New York )
The foregoing instrument was acknowledged before me this 24th
day of November, 1986, by X.X. XXXXXX, Vice President and Corporate Controller
of PUBLIC SERVICE COMPANY OF NEW MEXICO, a New Mexico corporation, on behalf of
the corporation.
/s/ Xxxxx X. Xxxxxxxx
--------------------------
Notary Public
Xxxxx X. Xxxxxxxx
Notary Public, State of New York
No. 41-345160
Qualified in Queens County
Commission Expires March 30, 1987
State of New York )
) ss:
County at New York )
The foregoing instrument was acknowledged before me this 24th
day of November, 1986, by Xxxxxx X. Xxxxx, Assistant Vice President at THE FIRST
NATIONAL BANK OF BOSTON, a national banking association, on behalf of the
banking association as Owner Trustee under the Trust Agreement dated as of
August 12, 1986 with Xxxxxxx Leasing Corporation.
/s/ Xxxxx X. Xxxxxx
--------------------------
Notary Public
Xxxxx X. Xxxxxx
Notary Public, State of New York
No. 00-0000000
Qualified in New York County
Commission Expires March 30, 1987
-7-
6091.XXXXXXX.DEBT.146:l
SCHEDULE 1
to
AMENDMENT NO. 1
SCHEDULE OF CASUALTY VALUES
Payment Percentage of Payment Percentage of
Date Facility Cost Date Facility Cost
------- ------------- ------- -------------
1/15/1987 104.0505748 1/15/2005 69.0763910
7/15/1987 105.8018101 7/15/2005 67.3933069
1/15/1988 105.1525583 1/15/2006 64.7514850
7/15/1988 104.5152596 7/15/2006 62.6287747
1/15/1989 105.4381490 1/15/2007 60.4185648
7/15/1989 104.4749057 7/15/2007 58.1488078
1/15/1990 105.0854100 1/15/2008 55.7958028
7/15/1990 103.7620773 7/15/2008 53.3846790
1/15/1991 104.0421878 1/15/2009 51.0230738
7/15/1991 102.4512318 7/15/2009 48.7033199
1/15/1992 102.4826532 1/15/2010 46.4482298
7/15/1992 100.6234215 7/15/2010 44.2745691
1/15/1993 100.3856266 1/15/2011 42.2110179
7/15/1993 100.0054158 7/15/2011 40.2799103
1/15/1994 99.4690803 1/15/2012 38.5171132
7/15/1994 98.7690349 7/15/2012 36.9518951
1/15/1995 97.8900254 1/15/2013 33.3071917
7/15/1995 98.6232891 7/15/2013 33.4139011
1/15/1996 98.9722892 1/15/2014 31.2993913
7/15/1996 97.6544891 7/15/2014 28.9352572
1/15/1997 95.9561142 1/15/2015 26.3007332
7/15/1997 94.0536182 7/15/2015 23.3623639
1/15/1998 92.1839260 1/15/2016 20.6281891
7/15/1998 90.3855211
1/15/1999 88.8457839
7/15/1999 87.6920480
1/15/2000 86.0511887
7/15/2000 84.8210534
1/15/2001 83.0720147
7/15/2001 81.7621018
1/15/2002 79.8978801
7/15/2002 78.3031112
1/15/2003 76.5162549
7/15/2003 75.0312334
1/15/2004 72.9138145
7/15/2004 71.3328071
SCHEDULE 2
to
AMENDMENT NO. 1
SCHEDULE OF SPECIAL CASUALTY VALUES
Payment Percentage of Payment Percentage of
Date Facility Cost Date Facility Cost
------- ------------- ------- -------------
15 SEP 1986 104.59195 15 SEP 1989 103.39672
15 OCT 1986 105.17691 15 OCT 1989 104.20612
15 NOV 1986 106.23461 15 NOV 1989 105.04647
15 DEC 1986 106.43730 15 DEC 1989 105.89036
15 JAN 1987 106.45542 15 JAN 1990 106.69602
15 FEB 1987 104.51180 15 FEB 1990 103.05927
15 MAR 1987 105.58777 15 MAR 1990 103.88038
15 APR 1987 106.58044 15 APR 1990 104.68615
15 MAY 1987 107.56967 15 MAY 1990 105.46547
15 JUN 1987 108.61131 15 JUN 1990 106.27527
15 JUL 1987 109.58322 15 JUL 1990 107.04630
15 AUG 1987 106.13307 15 AUG 1990 103.39445
15 SEP 1987 105.38861 15 SEP 1990 102.42679
15 OCT 1987 106.32935 15 OCT 1990 103.17890
15 NOV 1987 107.32841 15 NOV 1990 103.96101
15 DEC 1987 108.33354 15 DEC 1990 104.74578
15 JAN 1988 107.06393 15 JAN 1991 105.49135
15 FEB 1988 103.54673 15 FEB 1991 101.84293
15 MAR 1988 104.48928 15 MAR 1991 102.61596
15 APR 1988 105.40607 15 APR 1991 103.37303
15 MAY 1988 106.29643 15 MAY 1991 104.10341
15 JUN 1988 107.22367 15 JUN 1991 104.86331
15 JUL 1988 108.10805 15 JUL 1991 105.58423
15 AUG 1988 104.55589 15 AUG 1991 101.91001
15 SEP 1988 103.70422 15 SEP 1991 100.89844
15 OCT 1988 104.56406 15 OCT 1991 101.60677
15 NOV 1988 105.46229 15 NOV 1991 102.34412
15 DEC 1988 106.36498 15 DEC 1991 103.08359
15 JAN 1989 107.22039 15 JAN 1992 103.78420
15 FEB 1989 103.64084 15 FEB 1992 100.08898
15 MAR 1989 104.52005 15 MAR 1992 100.81485
15 APR 1989 105.38040 15 APR 1992 101.52442
15 MAY 1989 106.21814 15 MAY 1992 102.21227
15 JUN 1989 107.08726 15 JUN 1992 102.92533
15 JUL 1989 107.91856 15 JUL 1992 103.60454
15 AUG 1989 104.30785 15 AUG 1992 99.88324
Page 1 of 5
6091.XXXXXXX.DEBT.146:1
SCHEDULE 2
to
AMENDMENT NO. 1
SCHEDULE OF SPECIAL CASUALTY VALUES
Payment Percentage of Payment Percentage of
Date Facility Cost Date Facility Cost
------- ------------- ------- -------------
15 SEP 1992 100.58271 15 SEP 1995 96.07057
15 OCT 1992 101.24859 15 OCT 1995 96.62388
15 NOV 1992 101.93917 15 NOV 1995 97.17727
15 DEC 1992 102.63130 15 DEC 1995 97.73075
15 JAN 1993 103.28980 15 JAN 1996 98.28432
15 FEB 1993 99.54696 15 FEB 1996 94.41009
15 MAR 1993 100.22467 15 MAR 1996 94.95505
15 APR 1993 100.88807 15 APR 1996 95.50010
15 MAY 1993 101.52839 15 MAY 1996 96.04524
15 JUN 1993 102.19280 15 JUN 1996 96.59048
15 JUL 1993 102.82365 15 JUL 1996 97.13581
15 AUG 1993 99.05227 15 AUG 1996 93.25294
15 SEP 1993 99.70108 15 SEP 1996 93.78927
15 OCT 1993 100.61661 15 OCT 1996 94.32570
15 NOV 1993 100.95566 15 NOV 1996 94.86223
15 DEC 1993 101.59566 15 DEC 1996 95.39884
15 JAN 1994 102.20232 15 JAN 1997 95.93556
15 FEB 1994 98.40583 15 FEB 1997 92.04367
15 MAR 1994 99.02924 15 MAR 1997 92.57099
15 APR 1994 99.63812 15 APR 1997 93.09841
15 MAY 1994 100.22395 15 MAY 1997 93.62592
15 JUN 1994 100.83260 15 JUN 1997 94.15354
15 JUL 1994 101.40799 15 JUL 1997 94.68125
15 AUG 1994 97.57920 15 AUG 1997 90.77860
15 SEP 1994 98.16994 15 SEP 1997 91.29515
15 OCT 1994 98.72770 15 OCT 1997 91.81180
15 NOV 1994 99.30764 15 NOV 1997 92.32856
15 DEC 1994 99.8784 15 DEC 1997 92.84542
15 JAN 1995 100.43497 15 JAN 1998 93.36238
15 FEB 1995 96.57690 15 FEB 1998 89.44841
15 MAR 1995 97.13802 15 MAR 1998 89.95364
15 APR 1995 97.69922 15 APR 1998 90.45898
15 MAY 1995 98.26050 15 MAY 1998 90.96443
15 JUN 1995 98.82187 15 JUN 1998 91.97065
15 JUL 1995 99.32333 15 JUL 1998 91.97065
15 AUG 1995 95.51766 15 AUG 1998 88.05147
15 SEP 1998 88.54650
Page 2 of 5
6091.XXXXXXX.DEBT.146:1
SCHEDULE 2
to
AMENDMENT NO. 1
SCHEDULE OF CASUALTY VALUES
Payment Percentage of Payment Percentage of
Date Facility Cost Date Facility Cost
------- ------------- ------- -------------
15 OCT 1998 89.04164 15 OCT 2001 79.51497
15 NOV 1998 89.53689 15 NOV 2001 79.95860
15 DEC 1998 90.03225 15 DEC 2001 80.40237
15 JAN 1999 90.54443 15 JAN 2002 80.86667
15 FEB 1999 86.59955 15 FEB 2002 76.86359
15 MAR 1999 87.08502 15 MAR 2002 77.29734
15 APR 1999 87.57060 15 APR 2002 77.72925
15 MAY 1999 88.07359 15 MAY 2002 78.18240
15 JUN 1999 88.56545 15 JUN 2002 78.62197
15 JUL 1999 89.07486 15 JUL 2002 79.08297
15 AUG 1999 85.11106 15 AUG 2002 75.05889
15 SEP 1999 85.58995 15 SEP 2002 75.48268
15 OCT 1999 86.06895 15 OCT 2002 75.90663
15 NOV 1999 86.54808 15 NOV 2002 76.33074
15 DEC 1999 87.02733 15 DEC 2002 76.75500
15 JAN 2000 87.52455 15 JAN 2003 77.20119
15 FEB 2000 83.56212 15 FEB 2003 73.47885
15 MAR 2000 84.03082 15 MAR 2003 73.59029
15 APR 2000 84.49964 15 APR 2003 74.00189
15 MAY 2000 84.98907 15 MAY 2003 74.43620
15 JUN 2000 85.46259 15 JUN 2003 74.85099
15 JUL 2000 85.95688 15 JUL 2003 75.29869
15 AUG 2000 81.97426 15 AUG 2003 71.25179
15 SEP 2000 82.43595 15 SEP 2003 71.6575
15 OCT 2000 82.89776 15 OCT 2003 72.05788
15 NOV 2000 83.35970 15 NOV 2003 72.46117
15 DEC 2000 83.82178 15 DEC 2003 72.86463
15 JAN 2001 84.30306 15 JAN 2004 73.29153
15 FEB 2001 80.3292 15 FEB 2004 69.24602
15 MAR 2001 80.77274 15 MAR 2004 69.63631
15 APR 2001 81.22369 15 APR 2004 70.02626
15 MAY 2001 81.69453 15 MAY 2004 70.44049
15 JUN 2001 82.15265 15 JUN 2004 70.83920
15 JUL 2001 82.63083 15 JUL 2004 71.26239
15 AUG 2001 78.62814 15 AUG 2004 67.19117
15 SEP 2001 79.07148 15 SEP 2004 67.57192
Page 3 of 5
6091.XXXXXXX.DEBT.146:1
SCHEDULE 2
to
AMENDMENT NO. 1
SCHEDULE OF CASUALTY VALUES
Payment Percentage of Payment Percentage of
Date Facility Cost Date Facility Cost
------- ------------- ------- -------------
15 OCT 2004 67.95285 15 OCT 2007 53.98194
15 NOV 2004 68.53396 15 NOV 2007 54.29457
15 DEC 2004 68.71525 15 DEC 2007 54.60760
15 JAN 2005 69.12158 15 JAN 2008 54.95157
15 FEB 2005 65.05242 15 FEB 2008 50.77987
15 MAR 2005 65.41912 15 MAR 2008 51.06719
15 APR 2005 65.78600 15 APR 2008 51.36810
15 MAY 2005 66.17882 15 MAY 2008 51.69209
15 JUN 2005 66.55506 15 JUN 2008 51.99590
15 JUL 2005 66.93746 15 JUL 2008 52.53180
15 AUG 2005 62.86032 15 AUG 2008 48.20391
15 SEP 2005 63.21740 15 SEP 2008 48.49580
15 OCT 2005 63.57466 15 OCT 2008 48.82139
15 NOV 2005 63.93213 15 NOV 2008 49.12621
15 DEC 2005 64.78979 15 DEC 2008 49.43193
15 JAN 2006 64.57421 15 JAN 2009 49.77180
15 FEB 2006 60.57791 15 FEB 2009 45.64596
15 MAR 2006 60.91863 15 MAR 2009 45.91033
15 APR 2006 61.27117 15 APR 2009 46.25020
15 MAY 2006 61.64393 15 MAY 2009 46.58662
15 JUN 2006 61.99900 15 JUN 2009 46.90166
15 JUL 2006 62.38217 15 JUL 2009 47.25303
15 AUG 2006 58.24530 15 AUG 2009 43.13635
15 SEP 2006 58.57439 15 SEP 2009 43.44146
15 OCT 2006 58.93160 15 OCT 2009 43.73421
15 NOV 2006 59.27049 15 NOV 2009 44.10493
15 DEC 2006 59.60975 15 DEC 2009 44.42770
15 JAN 2007 59.97797 15 JAN 2010 44.79614
15 FEB 2007 55.83424 15 FEB 2010 40.68098
15 MAR 2007 56.14877 15 MAR 2010 40.99417
15 APR 2007 56.47601 15 APR 2010 41.32551
15 MAY 2007 56.82482 15 MAY 2010 41.63727
15 JUN 2007 57.15472 15 JUN 2010 42.02655
15 JUL 2007 57.51465 15 JUL 2010 42.40673
15 AUG 2007 83.34818 15 AUG 2010 38.31557
15 SEP 2007 53.64975 15SEP2010 38.64649
15 OCT 2009 39.02069
15 NOV 2009 39.37173
15 DEC 2009 39.72610
Page 4 of 5
6091.XXXXXXX.DEBT.146:1
SCHEDULE 2
to
AMENDMENT NO. 1
SCHEDULE OF CASUALTY VALUES
Payment Percentage of Payment Percentage of
Date Facility Cost Date Facility Cost
------- ------------- ------- -------------
15 JAN 2011 40.12442 15 OCT 2013 26.39005
15 FEB 2011 36.04908 15 NOV 2013 26.73997
15 MAR 2011 36.39654 15 DEC 2013 27.09489
15 APR 2011 36.76528 15 JAN 2014 27.50297
15 MAY 2011 37.16883 15 FEB 2014 23.14938
15 JUN 2011 37.54874 15 MAR 2014 23.42703
15 JUL 2011 37.97548 15 APR 2014 23.72939
15 AUG 2011 33.92654 15 MAY 2014 24.06982
15 SEP 2011 34.30133 15 JUN 2014 24.38303
15 OCT 2011 34.72530 15 JUL 2014 24.74872
15 NOV 2011 35.12507 15 AUG 2014 20.35295
15 DEC 2011 35.52991 15 SEP 2014 20.59892
15 JAN 2012 35.98474 15 OCT 2014 20.87032
15 FEB 2012 31.96165 15 NOV 2014 21.12698
15 MAR 2012 32.36322 15 DEC 2014 21.32693
15 APR 2012 32.78981 15 JAN 2015 21.69851
15 MAY 2012 33.25636 15 FEB 2015 17.24736
15 JUN 2012 33.69833 15 MAR 2015 17.42486
15 JUL 2012 34.19360 15 APR 2015 17.62597
15 AUG 2012 30.04604 15 MAY 2015 17.86351
15 SEP 2012 30.44516 15 JUN 2015 18.07216
15 OCT 2012 30.89753 15 JUL 2015 13.33161
15 NOV 2012 31.32460 15 AUG 2015 13.82749
15 DEC 2012 31.75991 15 SEP 2015 13.95116
15 JAN 2013 32.24565 15 OCT 2015 14.12428
15 FEB 2013 27.97353 15 NOV 2015 14.26748
15 MAR 2013 28.33295 15 DEC 2015 14.41234
15 APR 2013 28.71865 15 JAN 2016 14.60697
15 MAY 2013 29.14395
15 JUN 2013 29.54340
15 JUL 2013 29.99673
15 AUG 2013 25.68962
15 SEP 2013 26.01349
Page 5 of 5
6091.XXXXXXX.DEBT.146:1
SCHEDULE 3
to
AMENDMENT NO. 1
SCHEDULE OF CASUALTY VALUES
Payment Percentage of Payment Percentage of
Date Facility Cost Date Facility Cost
------- ------------- ------- -------------
1/15/1987 103.0602435 1/15/2005 64.9164310
7/15/1987 104.7711995 7/15/2005 63.0641505
1/15/1988 102.3213300 1/15/2006 60.2462503
7/15/1988 103.3991088 7/15/2006 57.9403004
1/15/1989 102.5379014 1/15/2007 55.5393979
7/15/1989 103.2661149 7/15/2007 53.0711925
1/15/1990 102.0687545 1/15/2008 50.5116675
7/15/1990 102.4529575 7/15/2008 47.8856240
1/15/1991 100.9211226 1/15/2009 45.3003578
7/15/1991 101.0334556 7/15/2009 42.7478461
1/15/1992 99.2485124 1/15/2010 40.2505313
7/15/1992 99.0879706 7/15/2010 37.8247939
1/15/1993 98.7877249 1/15/2011 35.4989135
7/15/1993 98.3425233 7/15/2011 33.2948070
1/15/1994 97.7385536 1/15/2012 31.2489074
7/15/1994 96.9681431 7/15/2012 29.3870317
1/15/1995 96.0158658 1/15/2013 27.4346454
7/15/1995 96.6729025 7/15/2013 25.221157
1/15/1996 96.9425753 1/15/2014 22.7734275
7/15/1996 95.5422215 7/15/2014 20.0625201
1/15/1997 93.7579350 1/15/2015 17.0671186
7/15/1997 91.7660333 7/15/2015 13.7531940
1/15/1998 89.8052991 1/15/2016 10.6291891
7/15/1998 87.9080679
1/15/1999 86.2675661
7/15/1999 85.0089674
1/15/2000 83.5589801
7/15/2000 81.9152784
1/15/2001 80.0480541
7/15/2001 78.6151489
1/15/2002 76.6229324
7/15/2002 75.0949627
1/15/2003 72.9694881
7/15/2003 71.3402103
1/15/2004 69.0726678
7/15/2004 67.3354309
6091.XXXXXXX.DEBT.146:1
When Recorded, Return to: Xxxx X. Xxxxxxx
Xxxxx & Xxxxxx
0000 Xxxxxx Xxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
CERTAIN RIGHTS OF THE LESSOR UNDER THE FACILITY LEASE AS HERETOFORE
AMENDED AND AS FURTHER AMENDED BY THIS AMENDMENT NO. 2 THERETO HAVE BEEN
ASSIGNED TO, AND ARE SUBJECT TO A SECURITY INTEREST IN FAVOR OF, CHEMICAL BANK,
AS INDENTURE TRUSTEE UNDER A TRUST INDENTURE, MORTGAGE, SECURITY AGREEMENT AND
ASSIGMIENT OF RENTS DATED AS OF AUGUST 12, 1986, AS HERETOFORE AMENDED. THIS
AMENDMENT NO. 2 HAS BEEN EXECUTED IN SEVERAL COUNTERPARTS. SEE SECTION 3(e) OF
THIS AMENDMENT NO. 2 FOR INF0RMATION CONCERNING THE RIGHTS OF HOLDERS or VARIOUS
COUNTERPARTS HEREOF.
THIS COUNTERPART IS NOT THE ORIGINAL COUNTERPART.
================================================================================
AMENDMENT NO. 2
Dated as of November 25, 1986
to
FACILITY LEASE
Dated as of August 12, 1986,
am heretofore amended,
between
THE FIRST NATIONAL BANK OF BOSTON
not in its individual capacity,
but solely as Owner Trustee
under a Trust Agreement, dated as
of August 12, 1986, with Xxxxxxx
Leasing Corporation, as
Lessor
and
PUBLIC SERVICE COMPANY OF NEW MEXICO, as
Lessee
================================================================================
Original Facility Lease Recorded on August 18, 1986,
as Instrument No. 86-439392 and Amendment No.1 to
the Facility Lease Recorded on November 25, 1986, as
Instrument No. 86-650751, all in Maricopa county
Recorder's office.
================================================================================
AMENDMENT N0. 2, dated as of November 25, 1986 (Amendment No.
2), to the Facility Lease dated as of August 12, 1986, as heretofore amended,
between THE FIRST NATIONAL BANK OF BOSTON, a national banking association, not
in its individual capacity, but solely as Owner Trustee under a Trust Agreement,
dated as of August 12, 1986, with Xxxxxxx Leasing Corporation, a New York
Corporation (the Lessor), and PUBLIC SERVICE COMPANY OF NEW MEXICO, a New Mexico
corporation (the Lessee).
W I T N E S S E T H:
WHEREAS, the Lessee and the Lessor have heretofore entered
into a Facility Lease, dated as of August 12, 1986 (the Facility Lease),
providing for the lease by the Lessor to the Lessee of the Undivided Interest
and the Real Property Interest;
WHEREAS, the Leases and the Lessor have heretofore entered
into Amendment No.1 to the Facility Lease, dated as of November 18, 1986
(Amendment No. 1), providing for, among other things, certain amendments to
section 3(a) of the Facility Lease;
WHEREAS, the Lessee and the Lessor desire to make a correction
to Amendment No. 1, to correct a mathematical mistake made in the calculation of
Basic Rent in connection therewith; and
WHEREAS, the Indenture Trustee has consented to this Amendment
No. 2 pursuant to the Request, Instruction and Consent effective on December 15,
1986;
NOW, THEREFORE, in consideration of the premises and of other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. Definitions.
For purposes hereof, capitalized terms used herein and not
otherwise defined herein or in the recitals shall have the meanings assigned to
such terms in Appendix A to the Facility Lease.
SECTION 2. Amendments.
(a) section 3(a) (i) of the Facility Lease (as amended by
Amendment No. 1) is deleted in its entirety.
(b)(l) section 3(a)(ii) of the Facility Lease, as amended by
Amendment No. 1, becomes "Section 3(a)(i)" and is further amended to read in its
entirety as follows:
"(i) on January 15, 1987 and on each Basic Rent Payment Date thereafter
to and including January 15, 2016, an amount equal to 4.4195613% of
Facility Cost, plus or minus the Rent Differential, if any, referred to
in section 3(h) hereof; and".
(2) section 3(a)(iii) of the Facility Lease becomes section 3(a)
(ii) and the phrase "clause (ii) of this Section 3 (a)" immediately preceding
the parenthetical is deleted and replaced by the phrase "clause (i) of this
section 3(a)".
SECTION 3. Miscellaneous.
(a) Effective Date of Amendments. The amendments set forth in
section 2 hereof shall be and became effective upon the execution hereof by the
parties hereto.
(b) Counterpart Execution. This Amendment No. 2 may be executed
in any number of counterparts and by each of the parties hereto on separate
counterparts; all such counterparts shall together constitute but one and the
same instrument.
(c) Governing Law. This Amendment No. 2 has been negotiated and
delivered in the State of New York and shall be governed by, and construed in
accordance with, the laws of the State of New York, except to the extent that
pursuant to the law of the state of Arizona such law is mandatorily applicable
hereto.
-2-
(d) Disclosure. Pursuant to Arizona Revised Statutes Section
33-401, the beneficiary of the Trust Agreement is Xxxxxxx Leasing Corporation, a
New York Corporation. The address of the beneficiary is 00 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Assistant Treasurer. A copy of the Trust
Agreement is available for inspection at the offices of the Owner Trustee at 000
Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention of Corporate Trust
Division.
(e) Amendment No. 2. The single executed original of this
Amendment No. 2 marked "THIS COUTTERPART IS THE ORIGINAL COUNTERPART" and
containing the receipt of the Indenture Trustee thereon shall be the "Original"
of this Amendment No. 2. To the extent that this Amendment No. 2 constitutes
chattel paper, as such term is defined in the Uniform Commercial Code as in
effect in any applicable jurisdiction, no security interest in this Amendment
No. 2 may be created or continued through the transfer or possession of any
counterpart other than the "Original".
-3-
IN WITNESS WHEREOF, each of the parties hereto has caused this
Amendment No. 2 to Facility tease to be duly executed in New York, New York by
an officer thereunto duly authorized.
THE FIRST NATIONAL BANK OF BOSTON,
not in its individual capacity,
but solely as Owner Trustee under
a Trust Agreement, dated as of
August 12, 1986, with Xxxxxxx
Leasing Corporation
By /s/ Xxxxxx X. Xxxxx
------------------------------
Assistant Vice President
PUBLIC SERVICE COMPANY OF NEW MEXICO,
By /s/ X. X. Xxxxxxx
-----------------------------
Senior Vice President and
Chief Financial officer
6091.XXXXXXX.DEBT.146A:
State of New York )
) ss:
County of New York )
The foregoing instrument was acknowledged before me this 15th
day of December, 1986, by X. X. XXXXXXX, Senior vice President and Chief
Financial Officer of PUBLIC SERVICE COMPANY OF NEW MEXICO, a New Mexico
Corporation, on behalf of the corporation.
----------------------------
/s/ Xxxxx X. Xxxxxxxx
Notary Public
XXXXX X. XXXXXXXX
Notary Public State of New York
No 00-0000000
Qualified In Queens County
Commission Expires March 30, 1987
State of New York )
) ss:
County of New York )
The foregoing instrument was acknowledged before me this 15th
day of December, 1986, by Xxxxxx X. Xxxxx, Assistant vice President of THE FIRST
NATIONAL BANK of BOSTON, a national banking association, on behalf of the
banking association as Owner Trustee under the Trust Agreement dated as of
August 12, 1985, with Xxxxxxx Leasing Corporation.
/s/ Xxxxx X. Xxxxxx
-------------------------
Notary Public
XXXXX X. XXXXXX
Notary Public, State of New York
No. 00-0000000
Qualified in New York County
Commission Expires March 30, 1987
